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A
When you finally find your thing, you want the whole world to know about that thing. So you use a thing called Canva to make it an even bigger and better thing. Whether you want to create flyers for that thing, make presentations for that thing, or design merch for that thing. You can do anything so people can see your thing, feel your thing, love your thing. The next thing you know, it's a thing. Canva, the thing that makes anything a thing.
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Some follow the noise. Bloomberg follows the money. Because behind every headline is a bottom line, whether it's the funds fueling AI or crypto's trillion dollar swings. There's a money side to every story. And when you see the money side, you understand what others miss. Get the money side of the story. Subscribe now@bloomberg.com
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welcome to the Watch Fort. I'm Sarah Adams. Would you know if someone was trying to use you to collect information? Because the cases we're gonna walk through today, pretty much no one thought about it until it was well after the fact. And it's because they were in universities, they were students, they were professors. When we think of espionage, we think of classified documents, covert meeting notes set under rocks. We always view it in this operational sense, like, oh, that's something that occurs overseas. It's so far away from life here. But a lot of the most valuable intelligence collection happens well outside of war zones or even outside the embassies. They happen in places like lecture halls, university labs, and across research partnerships that are happening right here on US soil. This isn't by accident. It's purely by design. When you look at how foreign SB espionage works, you know what's being collected, who's being targeted, the real cases that have happened, how those individuals were caught, and then of course, what the consequences look like. It's important to understand that a lot of those lines get crossed on US soil. Just think about it. If I'm collecting on Russia, I'm going to Russia to collect on it, obviously. China, I'm going to China to collect on it. When I collect on terrorists, I collect on Libyan terrorists in Libya, or at least where they go, Syria, Turkey, Afghanistan, et cetera. So for all of these individuals collecting on the US where are they collecting? Here in the United States. And it's somehow usually completely lost on people. And a lot of people have no concept that they could accidentally become part of not just an intelligence collection, but they can maybe even enable the enemy if they don't understand how this works.
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United States universities are among the most powerful research engines in the world. But lawmakers warn that that influence has also made them a target. On Capitol Hill, growing concerns that the Chinese Communist Party is using campuses as a battleground.
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This fall, the FBI informed me that I am being physically monitored on Stanford's campus by agents of the CC and that my family is also being watched.
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At Stanford University, student journalist Elsa Johnson says she experienced that firsthand. Johnson says she was approached by a man posing as a student suspected to be linked to the CCP.
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I was one of at least 10 female students he targeted since 2020.
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After publishing her investigation into Chinese influence, she says the intimidation only escalated.
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I began receiving intimidation calls where callers would switch to Mandarin, and in one case, the caller referenced my mother. I have also received threatening scam emails attempting to convince me to take down my reporting on this issue.
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To understand this threat, there's one thing that's really important to know. So some of the most important national security research in the United States is happening outside of classified facilities. So it's not happening in a private facility. It's happening in some of the most famous campuses across this country. So we have Department of Defense research or Department of War research funds going to universities all across the country. And they support a number of different organizations like darpa, the Office of Naval Research, Air Force Research Laboratory. This work includes all the cutting edge categories you can imagine. Artificial intelligence, advanced materials, biotechnology, quantum computing, autonomy. These aren't areas that are just going to affect the economic power of the United States. The people who master this will have the military dominance of the future. This is so critical for people to understand, and it's why our enemies target us, where we're doing the research long before it's ever in practice. There are some companies you talk about because you like the product, and there are some companies you talk about because of who they are. This is both Bubs. Naturals wasn't just built as a business. It was built on the memory and the legacy of Glen Bub Doherty, a good friend of mine who I served with in the trenches. It was built by people who knew him and loved him and understood the legacy, you know, of moving something forward and doing more. And they don't just say that they give 10% of their profits to charity. And one of those charities is dear to my heart, the Glen Daugherty Memorial Foundation. And this also hits differently for me. So when you're overseas, some of the best days are those days where you get a care package in the mail. Someone from overseas missed you, they wanted to send you a little piece of Something and they shipped it all the way across the world. Well, right after my book was published, I received a care package from bubs. I realized they're just as good to get when you're at home. And of course, it had an encouraging note inside of it that I put up on my fridge. Well, because life is full of ups, but then there's also downs. A few months later, I had a house fire. You know, I lost everything in the kitchen, including that note. Guess what came several days later. Yes, another care package from bubs. Right. Something they didn't need to do, but they did it anyway. I want you to understand who these people are now when we talk about the product. I've actually been using the Collagen peptide since 2023, so quite some time now. And when I started, it was because, you know, my joints were achy. I was having a hard time getting up and motivated in the morning, and I started taking it and started feeling a lot more youthful. And they make a number of other products. And another one I love and want to make sure you also look it up is their MCT Oil. But this isn't about collagen or MCT Oil. It's also about the people behind this. Right. They understand legacy, taking care of people and doing the right thing, even when no one is looking. That matters to me. Live better, longer. For a limited time, our listeners get 20% off at Bubs Naturals using code watch. At checkout, just go to BubsNaturals.com and you're all set. And after checkout, let them know the watch floor sent you. So most of this research is technically unclassified, but that does not mean it's not sensitive, does not mean we want to share it with the adversary. And that is why we're then targeted and why this information matters. Because it right now isn't in classified spaces. It's accessible. It's collaborative. You're sharing your work and your research. And it's in the hands of people who aren't operating with a security first mindset. They're not concerned about counterintelligence. They're a PhD student working 12 hours a day for a professor because they want to make their parents proud. They're not worried that, oh, the Chinese are going to use me to steal information for them. That's not the realm they're in. That's not even the universe they're thinking in. They're an engineering student. So we have to remember how ripe it is and how actually, at times, simple it is to Target this grouping of people, even someone at the professor level. Everything's about relationships, connections, joint projects, going to conferences, having the relationships you need all around the world in your subject matter area. Well, some of those relationships are with foreign intelligence officers, and you don't have a damn clue. A simple way to look at it is like foreign intelligence services aren't waiting for some finished weapon and then they're going to come and say steal it. They're targeting everything as it's being built and worked on. And so a PhD student working on new material is important. A lab that has some sort of breakthrough in data processing is important. You have a researcher who puts out a paper on a real hard problem. That's important. If you can access this information early, you get leaps and leaps ahead of your competition. And that's what our adversaries understand. That's the world they play in. Another part people miss is it's so much easier to access a person in a system, first off, that's not classified, but second, a university system, because you just reach out to them, you make a relationship, you build a friendship. They're not worrying that someone's only coming to them to steal secrets. They're not taught that that's not the world they live in. There's not some sort of tradecraft. They're sitting around wondering, right? The girl sits down at the table and becomes friends with them. And she's also a chemical engineering student. Great, we have someone now to collaborate with. It's not who could she be working for? What's she looking to steal? What's her angle? That's not even a thought. Let's talk for how this works in practice for a minute. We had Charles Lieber. He was the chair of Harvard's chemistry department. He was one of the top scientists in his field. He entered into an agreement with the Wuhan University of Technology. It was really just a part of one of those talent recruitment program programs. China's famous for these. And a lot of it is really made to look like collaboration, kind of help in funding projects. But of course, it's an influence operation. Well, what happened then is he received about $50,000 per month and then of course, another million dollars to establish a lab overseas. And at the time, same, same time, he was also working on US government research and taking US government funding and not disclosing any of these relationships he had with Chinese individuals. Again, he did not disclose the relationship. That's what's key.
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This morning, the FBI arrested Dr. Charles Lieber, the chair of the Department of Chemistry and Chemical Biology at Harvard University for making false statements regarding his involvement in China's Thousand Talents Plan and his affiliation with the Wuhan University of Technology. The complaint alleges that Dr. Lieber signed a contract with the Chinese university in Wuhan and was paid up to $50,000 per month, plus up to $158,000 in living expenses and awarded more than 1.4 million to set up a research lab at the Chinese School and work there on researching nanotechnology. Lieber also joined China's Thousand Talents Plan, according to the complaint, a Chinese government run program designed to entice scientists and researchers in the United States to share their research expertise with China. At the same time, Dr. Lieber was receiving US grant funds from the Department of Defense and the National Institutes of Health. National Institutes of Health spends up to $39 million a year funding medical research in the United States. Those programs required Dr. Lieber to disclose if he was working with including receiving funding from any foreign power. When questioned, Lieber hid his involvement with the Chinese entities, including specifically disavowing any connection to China's Thousand Talents Plan. Meanwhile, based on the complaint, it appears that China paid Lieber hundreds of thousands of dollars over the years for his involvement with the Chinese entities and for his work on research for Chinese gain.
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What's being targeted here is not a single document or piece of information. It was the Chinese trying to get access to this cutting edge nanotechnology research. And it had like applications and sensing, communications and of course, potentially defense systems. So we ask, how was he caught? Well, he wasn't just caught from the start. It wasn't something easy. It was really this broader scrutiny into kind of this undisclosed foreign funding. Eventually the FBI ended up getting involved. He lied about where his funding was coming from. And then of course, that led to his conviction. So this was not espionage in the traditional case of what we see in the movies. But his false statements and his failure to disclose kind of help seal the deal for him. He was convicted. He was sentenced to home confinement. Fine. And his career that was built over decades was effectively over. This is an important thing for people to understand. This kind of espionage in this place was given a foreign government access to this cutting edge research. But it's not exactly like the researcher. They know they're being paid a lot. They should think, why am I being paid so well? There should be some logic. But their first assumption isn't the fact that they are in this relationship with me to steal. They think, hey, I'm one of the best in my field. Of course they came to me. Why wouldn't you want to have a partnership with me? I'm at Harvard. And so you get a little bit of that hubris in there too. And it almost affects some of the critical thinking. If you're one of the smartest people on this, you should always ask, what's in it for you? Why are you interested in me? What's all this money for? And people get hung up all the time just not thinking through these things. And then unfortunately, like I said, they might aid and abet the enemy. There's been a groundbreaking discovery to help us all age healthier. And it's thanks to dolphins. Who doesn't love dolphins? That sounds completely random at first, but the science behind it is actually fascinating. Fatty15 co founder Dr. Stephanie Van Watts discovered the benefits of C15 while doing research with the US Navy to improve the health and welfare of aging dolphins. That research led to the discovery of C15, the first essential fatty acid discovered in over 90 years. As many as one in three people worldwide may have low C15 levels and four fragile cells. What caught my attention is really about cellular resistance and long term health. Based on over 100 studies, C15 helps strengthen our cells and support aging again down to the cellular level, which benefits areas like sleep, cognition, metabolism and overall wellness. I've started incorporating fatty 15 into my daily routine because we're all running hard under stress, not sleeping enough, and we put a lot of wear and tear in our bodies. Plus they have gummies. And as everyone knows, this crew here loves their gummies. Fatty 15 is on a mission to support healthy aging for all, including all ages and all stages. You can get an additional 15% off their starter kit by going to fatty15.comfloor and using code floor at checkout. Now, I want to look at a different kind of case because I don't want to say, oh, everybody's so naive. And that's why governments are able to do this. So in this case we had Zhao Sang Jung and he was a researcher with the Beth Israel Deconis Medical center center and that was affiliated with Harvard. In this case, it was like direct support to the Chinese government. He attempted to leave the United States carrying 21 vials of biological research material. These are basically cancer related samples, but they represented significant progress in that field. Like the Chinese have not reached that level of the research. So these vials were hidden in his socks, in his luggage. And what the Chinese government here was targeting was time they wanted to cut that timeline down. So they didn't have to put the years of effort into getting to the point they were already at at this medical center affiliated with Harvard. Right. Very simple, simple concept. And what they wanted to do really would have leaped them ahead in this research.
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Last week, this office indicted Zheng Xiao Zhang, a Chinese national sponsored by Harvard University who was doing cancer research at the Beth Israel Deaconess Medical Center. Zhang was charged with attempting to smuggle to Beijing vials of biological material along with other research materials that he had stolen from the lab at the Beth Israel Israel, where Zhang was working on cancer cell research. Before he boarded his flight, Customs officers discovered 21 vials of biological material in a sock in his baggage. When confronted by the officers, Zhang initially lied and said he was not traveling with any biological or research materials, chemistry, nanotechnology, polymer studies, robotics, computer science, biomedical research. This is not an accident or a coincidence. This is a small sample of China's ongoing campaign to siphon off American technology and know how for Chinese gain.
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When you have what's in this vial, you can take those years of research, and then you can replicate it in another lab incredibly quickly. So it's this problem a lot of people don't think about because we don't view time in that way. We view something as when it's complete, when it's successful, you know, when we're the lead on it, like artificial intelligence. But we forget all the costs and the time and the effort and the ingenuity that went into getting us there in the first place. So in this case, Jun was stopped at Boston Logan Airport. He was questioned, of course, his answers didn't line up. And then that's what led to the search. These samples were luckily discovered, and he was arrested and ultimately deported. So he knew very well what he was doing. Right. He had intent. So it's not like everything in this case, just China fools people. There are plenty of people in this country who want to do stuff for China. They feel that they need to, right, because they're born there. It's like a different thinking. You serve your government just like you would serve your parents there. And if your parents ask you to do it, you would do it too. It's kind of a different mentality than here. The majority of Americans don't feel like, oh, I have this need and duty to go out and do something on behalf of in support of our government. It's usually only people who volunteer to serve the government that have that mentality. But in China, it's. The majority of the population believes, hey, anything I do should be a benefit in some way to the government. That's why I'm here. I want to balance this out for a minute, because not every case is what it seems to be. In this case, we had Xi Shaoxing. They were a professor at Temple University and got accused of sharing restricted superconducting technology. This is a very serious allegation, as you can imagine. It suggested a transfer of sensitive designs that really weren't in the hands of the Chinese government to the Chinese government. The case ends up from falling apart, and it's because the evidence had been completely misinterpreted. The information shared isn't exactly what investigators thought it would be. And that's kind of one of those things too. Here you have people at the top of their industry, and you have people investigating them that don't work at all in that industry. Right. They know of these technologies, but they don't actually understand these technologies. So we can have information like in this case, where there's false positives. So it's important to know, you know, we're only looking for real threats. We're not trying to go after every single person doing an academic collaboration with an individual in China, because at the end of the day, there's lots of great research that needs to be done. And we want people to partner, you know, with the individuals they need to do to get to the end result.
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Professor Xi, you headed up the physics department at Temple University before your arrest. You are still employed there. I mean, you have your job, but it's not at the same position. Are you still pursuing the same research as well?
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I'm still doing my research, but this experience has dramatically impacted my research. So my research program is not as large as it used to be. At the time of my arrest, I have nine federal grants and the contract, and now I have two. And there were 15 students post out in the personal senior senior personnel at that time, and now I have three.
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So let's spend a little time talking about tradecraft, one of my favorite subjects. So if we take a step back and we look at all these cases, obviously the methods are different, but the patterns are consistent. Right. It starts with access, obviously, then comes some sort of engagement. Then we have this piece that gradually ends up being what we would call the intelligence community collection. Right? You get some sort of item, you get info, you get even a substance like we had with the vials. Now, sometimes when these relationships start, they can look completely legitimate. It was a conference invitation you got. It was a request to collaborate on A paper. It was a funding opportunity. One thing to understand then is different countries focus on different things. Obviously we all have gaps we need to fill. So Chinese linked programs historically focus heavily on technology transfer. Now that would include AI, semiconductors, biotech, advanced materials. And they do a lot of the talent recruitment, like I told you. And then of course these academic partnerships to like make their inroads into each of these buckets of technology. When it comes to Russian intelligence, they traditionally focus on physics, energy systems and then kind of those defense adjacent technologies or even like dual use technologies. And they will combine academic engagement, but also they'll just do classic intelligence methods and literally recruit a student to be an asset of theirs. When it comes to the Iranians, they focus on engineering cyber capabilities and then of course, as you can imagine, sanction sensitive technologies because they're trying to make their way around it. They'll sometimes leverage academic networks to of course bypass these restrictions our government has put on them. So the methods adapt. But the goal is consistent across any adversary. It's reduce the gap where they are and where the United States is. This is a race, this is a competition. They want to get ahead. So you have to stay as close as possible to edge up ahead. Obviously it's very simple. We all know how a race works. Let's just go back to the original question. Would you recognize if someone was trying to use you to collect information? I mean, the request could come in something as simple as a grant, right? You're working on a topic area. Wow, this grant meets your need. Yay. It's a huge win. And it came from a respected institution, the grant money. So there's no red flags. You're not going to question it right away, you're not going to be concerned. But here's the uncomfortable reality. Most of these interactions do not feel like espionage. It's nothing like the movies. They feel like an opportunity. And in your mind, you worked hard. This is what happens. When you work hard, you get great opportunities like this, Right? That's the way you're going to think. Let's for one second talk consequences, because there are real consequences here. So on the national level, if the adversary gets into one of these programs, it can of course accelerate something within their foreign military development. Also they can advance other technologies. Of course, one of the biggest concerns being AI, we saw how we got so behind with China and the hypersonics, where it really looked like our government was surprised when they saw how far along they were. That is a consequence when you think about it, universities are built on trust. That trust allows kind of then this invitation to. To happen where an adversary can reach out. That trust also makes that entire system vulnerable. Espionage isn't in place to break any systems. It uses systems. The question isn't whether it's happening. The question is can you recognize when it does and make sure you don't become part of the problem. Thanks for being here today on the watch floor.