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How DOJ uses legal action to target China over alleged espionage

The U.S. is countering China on several fronts, including economic, military and diplomatic. The Trump administration is also making a major push to challenge China through legal action, over allegations of intellectual property theft and spying. Nick Schifrin reports and talks to Assistant Attorney General John Demers, who leads the national security division at the Department of Justice.

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  • Judy Woodruff:

    Today, a member of the Chinese military appeared before a California court, accused of lying about her background to come to the U.S. as the — this as the U.S. takes on China on multiple fronts.

    There's a major push on the legal front, as Nick Schifrin reports, the Department of Justice has made combating alleged Chinese industrial and strategic espionage a top priority.

  • Nick Schifrin:

    In June 2018, the FBI caught China spying on camera. U.S. citizen Edward Peng didn't realize he was being filmed leaving an envelope of $20,000 in cash, and returning later to pick up an S.D. card with what he was told was classified U.S. intelligence to give to the People's Republic of China, or PRC.

  • David Anderson:

    The charges unsealed today provide a rare glimpse into the efforts of the PRC to obtain classified national security information of the United States.

  • Nick Schifrin:

    That glimpse is becoming less rare. The Department of Justice has charged Chinese hackers who act in association with Chinese intelligence, Chinese military officers who pose as students and researchers who live in the U.S., naturalized U.S. citizens who steal trade secrets for Chinese companies, and, just last week, Chinese hackers who broke into dissidents' accounts and private companies working for the state.

  • John Demers:

    These intrusions are yet another example of China's brazen willingness to engage in theft, through computer intrusions, contrary to their international commitments.

  • Nick Schifrin:

    That is Assistant Attorney General John Demers, who leads the Department of Justice's National Security Division.

    In the last 10 days, the division has made nine case announcements connected to Chinese behavior, including Juan Tang, who temporarily hid out in China's San Francisco consulate. In total, the Department of Justice says 80 percent of al economic espionage charges and 60 percent of all trade secret cases are tied to China.

  • Christopher Wray:

    We have now reached the point where the FBI is opening a new China-related counterintelligence case about every 10 hours.

  • Nick Schifrin:

    The Department of Justice's actions are part of a larger effort by the Trump administration to identify and punish Chinese behavior.

    And I'm now joined by Assistant Attorney General John Demers, who, as you just saw, leads the Department of Justice's National Security Division.

    John Demers, welcome to "NewsHour."

    Let's begin with the highest-profile action by the U.S. against China inside the United States. That is the closure last week of the Houston consulate. What made Houston the hub for more aggressive, more successful Chinese espionage than other Chinese actions?

  • John Demers:

    As you indicate, Nick, we didn't choose Houston at random among the Chinese consulates. It was at the forefront both of intellectual property theft, of participation in programs like the 1,000 Talents program Chinese have to help take U.S. intellectual property, and also of covert foreign influence activities.

    And so, once the decision was made to close a consulate here in the U.S., Houston was in many ways the obvious choice.

  • Nick Schifrin:

    The overall question, I think, is, the U.S. has been accuse the Chinese government of espionage for years.

    Is the increased tempo that it seems to be in indictments a sign that the threat has increased, or is that the U.S. ability to find espionage and willingness to call it out increased?

  • John Demers:

    Well, I think the theft has been steadily increasing.

    So, we have seen Chinese espionage, both traditional espionage, as you talked about in the Peng case in the opening, or on intellectual property side in these cyber cases, for many, many years.

    And over the years, the department has charged some of those cases. But the activity has increased over time, particularly with the Made In China 2025 plan. That was announced back in 2015.

    The scope, I think the persistence of this activity, the increased use of nontraditional collectors, like folks who are at companies and aren't necessarily intelligence officers or member of the military, to take intellectual property, the sophistication of the plans, their ability to do cyber-intrusions, has also increased over time.

    So, we have seen, I think, a steady increase on the part of the Chinese to take intellectual property in order to develop their economy, to develop their businesses.

    In addition, I think we have launched the China initiative here at the department, which was really meant about two years ago to make sure that, across the country, the U.S. attorney's offices and here at main Justice, we were focused on the threat that we were seeing every day in the intelligence briefings that we were getting about this threat of intellectual property threat from China.

  • Nick Schifrin:

    Let's zoom in on something that you mentioned before, what the Chinese call the 1,000 Talents program.

  • John Demers:


  • Nick Schifrin:

    The U.S. describes it as a campaign to recruit academics, recruit scientists to steal sensitive technology.

    Did the intelligence community actually really get that program, really only understand that program in the last few years?

  • John Demers:

    I think that we have understood the scope of that program over the last few years.

    I think that also, on the Chinese end, has been a program that's been developing and growing over time. And I think our appreciation for the way it's being used to take intellectual property has also grown over time.

    And in the cases that we have charged over the past couple of years, you see individuals, both on the business end of things and on the academic end of things, who are participating in this program, which isn't by itself illegal, but the problem is that they're doing so covertly.

    They're lying to their employers, they are lying to their company, they're lying to their university about whether they're receiving foreign funding. They're hiding their trips over to China. They're not declaring their affiliations with universities in China.

    And, at the same time, they're taking the intellectual property of the company or of the university, and they're transferring it over to China.

    So, it's not just a talent recruitment program. It is also an avenue for the Chinese to take American intellectual property.

  • Nick Schifrin:

    We went back to the Chinese government's responses to some of these cases and some of these claims.

    And a spokesman for the Ministry of Foreign Affairs recently said the Department of Justice's claims were — quote — "full of political lies exposing their ideological bias."

    Are you biased against China?

  • John Demers:

    Look — well, I'm pro-liberal democracy. So, I guess, to that extent, I'm biased against authoritarian communism.

    But what I'm doing here and what we're doing here is really going after illegal activity. That is theft of intellectual property.

    Our — we have brought many of these cases in court. We are able to prove them, and we have proved them using unclassified admissible evidence, beyond any reasonable doubt. So, I'm very confident in the cases that we have brought. I'm confident in the inferences that we have drawn from those cases.

    And we won't charge a case unless we're confident that there has been wrongdoing.

  • Nick Schifrin:

    The other day, the Chinese government spokesman called TikTok, a Chinese company, and there's reporting just this afternoon that the administration could ask TikTok's parent company to divest, or perhaps even Microsoft could purchase it.

    What is the threat that TikTok poses?

  • John Demers:


    So, look, without going into any potential transactions, the threat that we're worried about on the national security end from TikTok is both with respect to U.S. person data and with respect to foreign influence of the content of those apps.

    So, on the data side, it's, of course, you know, about 130 million users here in the U.S. who are providing their data voluntarily when they sign up and knowingly. But also, unknowingly, that app is collecting data from their phones, geolocation data, and then using advertising ideas even from other apps on their phone to see their behavior.

    To fully utilize the app, you have to consent, for instance, for the app to access your contact list. So, there's a lot of data that is being selected on U.S. persons that we're concerned about, because we have seen the Chinese acquire, either through theft or through attempted acquisitions, large quantities of sensitive personal data.

    And then, on the content side and on the foreign influence side, I think you're aware of the many reports, including from whistle-blowers within the company, of the company moderating some of the content on the app to exclude versions of Chinese behavior that Chinese government doesn't like, whether it's about Hong Kong, or the Uyghurs, or Taiwan, or Tibet, or any of the other sensitive issues in China.

    So, that is really our national security concern with TikTok. And I think, as the president himself said today, we continue to look at ways in which to mitigate those concerns.

  • Nick Schifrin:

    And I have to ask.

    Yesterday, President Trump asked on Twitter whether the election should be delayed. Secretary Pompeo yesterday said the Department of Justice would make a final judgment on that.

    Could the election be delayed?

  • John Demers:

    Well, the election is set by statute. I think you saw the responses from the Hill yesterday about the idea of changing that date.

    So, I don't know anything more than that. That's really outside my area of responsibility.

  • Nick Schifrin:

    John Demers, assistant attorney general, thank you very much.

  • John Demers:

    Thanks a lot, Nick.

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