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After funding tech research, lawmakers look at risk of theft

Call to overhaul counterintelligence statute

Senate Intelligence Chair Mark Warner, D-Va., says
foreign intelligence threats are increasingly looking at the private sector to gain technological edge in key industries.
Senate Intelligence Chair Mark Warner, D-Va., says foreign intelligence threats are increasingly looking at the private sector to gain technological edge in key industries. (Tom Williams/CQ Roll Call file photo)

After passing legislation that could pump almost $250 billion into cutting-edge scientific research and semiconductor manufacturing, lawmakers are turning their attention to protecting the fruits of that spending from theft by America’s rivals, particularly China.

The Senate Intelligence Committee last week released a report and held a hearing to examine the counterintelligence threats not only to government entities but also to private companies and universities that are increasingly targeted by foreign spy agencies trying to steal the latest technological advances. 

“The classic spy versus spy model” of espionage that emerged in the aftermath of World War II “is pretty much in the historic dustbins at this point,” Sen. Mark Warner, D-Va., chairman of the committee, said at the hearing.

“Our nation now faces a dramatically different threat landscape than it did even a couple of decades ago,” Warner said. “Today’s foreign intelligence threats are not just obviously targeting the government … but are increasingly looking at the private sector to gain technological edge over our key industries.” 

The committee’s investigation, including classified briefings with intelligence officials and public discussions with private companies and U.S. universities, found that as much as $600 billion worth of U.S. intellectual property — in the form of designs, patents and breakthroughs — is stolen each year. 

The Senate Intelligence Committee plans to hold more hearings on the threat, with an eye toward updating the current counterintelligence law, which dates to 2002. 

In addition to traditional espionage, rival powers are exploiting “non-traditional human, cyber, advanced technical, and open-source intelligence operations to collect against U.S. plans and policies, sensitive technology, personally identifiable information, and intellectual property” to influence U.S. decision-making and public opinion, the Senate investigation found. 

But the National Counterintelligence and Security Center, or NCSC, which is part of the Office of the Director of National Intelligence, “lacks a clear mission as well as sufficient and well-developed authorities and resources to effectively confront this landscape,” the report said. 

Call for counterintelligence overhaul

Without an overhaul of counterintelligence efforts that include protecting academia from foreign espionage efforts, the U.S. may find itself buying Chinese goods made with stolen American know-how, said William Evanina, the CEO of the Evanina Group and a former director of the NCSC. Although Russia, Iran and North Korea also are looking for ways to steal U.S. technologies, China is the most aggressive, he said.

“Ten years from now, Congress cannot be holding hearings and asking how China stole all our organic ideas and capabilities and are selling them back to us,” Evanina told the Senate panel. “We have been victimized in this game already and must learn from the game. 

“The U.S private sector, academia, research and development entities and our core fabric of ideation has become the geopolitical battlespace for China,” he said. 

The NCSC’s current counterintelligence strategy focuses on five areas “where foreign intelligence services are targeting the United States,” including critical infrastructure, supply chains, the economy, American democracy, and cyber and technical operations. 

Lawmakers and experts said the strategy fails to capture the breadth of China’s effort to get U.S. technologies. 

Led by President Xi Jinping, China has set a goal of becoming the world leader in advanced technologies by 2030. Part of that plan involves targeting key U.S. technologies for acquisition by any means possible, Warner said.

Beijing is looking to obtain advances in “aerospace, advanced manufacturing, artificial intelligence, biotech, data analytics, new materials, semiconductors and renewables, in order to ensure PRC’s future dominance in these areas,” Warner said, referring to the People’s Republic of China. 

In early August, President Joe Biden signed into law legislation that provides $54 billion in grants to semiconductor manufacturers to produce chips in the U.S. and $24 billion in tax credits for that industry. The legislation also authorizes $81 billion to fund the National Science Foundation and $67 billion to the Energy Department to pursue advances in several high-tech areas that are likely to determine which country is the world’s technology leader in the coming decades.

MI5 model

Given the range and complexity of foreign intelligence threats facing universities and private companies, Warner asked whether it was “time to look seriously at the idea of an independent counterintelligence entity” modeled along the lines of MI5, the United Kingdom’s domestic security service.

U.S. counterintelligence efforts are conducted by agencies including the FBI, the CIA, the State Department and military services.

Evanina said the current law on counterintelligence needs to be updated to include foreign espionage efforts aimed at universities. 

Former National Counterintelligence Executive Michelle Van Cleave, whose office was a precursor to the NCSC, told lawmakers that the diversity of people and agencies overseeing U.S. counterintelligence was a strength. 

Creating an MI5-type agency would dilute the strength, Van Cleave said, adding that what was needed was a way to focus the efforts of the agencies on high-profile targets. 

Academic institutions as well as small- to medium-sized U.S. companies are beginning to understand the threats they face from foreign espionage efforts, experts told the committee. 

“Academia has come a long way in understanding, accepting and addressing the research security threat over the past five years,” said Kevin Gamache, the chief research security officer at the Texas A&M University System. “The danger facing university professors, students, and institutions from malign foreign actors and foreign intelligence is widely understood and accepted today.”

China, Russia and Iran operate talent recruitment programs that offer salaries, honorariums, research funding and other financial support to lure foreign-born American scientists and others at U.S. universities to transfer their scientific knowledge.

Universities are working to strike a balance between remaining open and welcoming to foreign-born scientists while also preserving intellectual property developed in U.S. research labs from being stolen or lost, Gamache said.

The White House National Science and Technology Council issued guidelines in January designed to ensure that scientists seeking federal grants don’t have conflicts of interest stemming from their participation in foreign talent recruitment programs. The guidelines address a presidential national security memorandum issued in early 2021. 

That memorandum required any research institution receiving more than $50 million in federal science and technology grants in a year to certify that it has a research security program that can identify conflicts of interest. 

The White House memo is a helpful start, Gamache said. “But I think there should be some guidance on, you know, what is important to protect and how we do that, from a federal level,” he said. 

As for cyberthreats, following several headline-grabbing cyberattacks, companies have invested in security programs to try and prevent becoming a victim of such an attack, said Robert Sheldon, director of public policy and strategy at CrowdStrike, a security research firm. 

“There is a little bit of an alert fatigue at this juncture, here where we stand at [in] 2022, where people have been told that they need to be concerned about cyber for a long period of time,” Sheldon said. “So if we don’t get really targeted messages to people that apply to them, they may find themselves ignoring it.” 

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