The Scientist and the Spy

by Mara Hvistendahl

  As a reporter, I saw this transformation up close. Science journalists in the United States typically specialize in one area. They might cover infectious diseases or particle physics or climate change. China was developing so quickly, and the hunger for Chinese stories was so great, that I had to cover it all at once. I visited biosafety facilities where virologists studied highly pathogenic flu, tissue engineering labs where scientists saved lives by building artificial organs for transplant, and construction sites where archaeologists rushed to collect artifacts before they met the wrecking ball. (A building boom can be a godsend for researchers whose careers depend on digging.) At one point, I traveled to Guizhou province, one of the poorest regions of China, to tour the planned site of the largest radio dish telescope in the world. When I arrived, my astronomer host drove me to a ridge overlooking a verdant valley, where we looked out at a scene straight out of a classical Chinese painting. On the other side of the depression, mist obscured the peaks of limestone karst cliffs. The plan, he explained, was to build a dish covering an area the size of thirty football fields into the valley, where it would be cradled by the surrounding ridge. The telescope was completed in 2016, and since then astronomers have used it to discover eighty-four new pulsars.

  Much of the progress I witnessed in my job with Science was due to the efforts of earnest, well-meaning scientists. Many of the researchers I interviewed were accomplished scholars who had studied in the United States, Europe, or Japan. An unspoken urgency marked their work. No one kept to normal business hours. Sources would frequently call me on the weekend, or at eleven on a weeknight. On reporting trips, my hosts would often plan programs that lasted well into the evening. Once, I sat in a yurt in Inner Mongolia with a paleobotanist who was wooing the local officials he depended on for permits, watching as waiters slow-roasted an entire lamb. For the most part, I enjoyed these assignments. At a time when much of Chinese society was obsessed with making money, nerdy scientists made for refreshing company. On the same trip where the lamb was roasted, the paleobotanist discovered a new fossil. He generously named it after me: Aphlebia hvistendahliae.

  But that wasn’t the whole story. Lucrative incentives and readily available grant money bred corruption as well as excellence. As money for science increased, a portion was wasted on luxury cars, bribes, and mistresses. In the city of Foshan, Guangdong, science administrators reportedly pocketed 30 percent of the funds that they handled. While six months pregnant, I spent a few days reporting on biomedical research in a city outside Shanghai. As I climbed into the van that would take me back to Shanghai, the Chinese Communist Party secretary from the university gave me an envelope filled with cash. When I refused and handed it back to him, he threw it through the open window of the van, where it landed on my belly, and instructed the driver to pull away. I later concocted an excuse to meet the official so that I could return the money. At that meeting, he tried to give me a second bribe.

  China’s central government places a high priority on strategic breakthroughs, no matter how they are achieved. Science and technology plans are treated as critical directives, and Chinese universities pay bonuses to researchers who publish in top journals. No wonder, then, that some companies hire hackers to tunnel into the servers of their American competitors and swipe designs for their latest product, or that some researchers are tempted to steal work from elsewhere, particularly if it has commercial potential. Real research takes time. Theft is expedient—especially if there is little chance of getting caught.

  Chinese leaders are open about their interest in developing technologies in strategic sectors by any means possible. Party leaders have long charted a goal of “indigenous innovation,” or assimilating and adapting imported technologies in order to edge out foreign companies in the Chinese consumer market. A U.S. Chamber of Commerce report called one Chinese state document on indigenous innovation “a blueprint for technology theft on a scale the world has never seen before.” Finding technologies and know-how that can be brought back to China is also a major goal of the United Front Work Department, an arm of the Chinese Communist Party that focuses on expanding the country’s influence and neutralizing potential opposition forces.

  At first, the seed story seemed to combine both of these themes: the frenzied drive toward success and the willingness to take shortcuts. Robert Mo was an internationally trained scientist, a man who spent his twenties buried in arcane research only to be tempted toward vice later in life. But as I learned more, I realized that the story was not just about the theft of corn seed and how it served China, but also about the way that the United States reacted to that theft. If China is shaped by the dueling forces of copying and innovation, America is locked in its own internal struggle, between openness and security. And if China is an environment where intellectual property can be freely stolen, the United States is one where it is aggressively guarded by ever-larger corporations. In the case of the corn heist, the effort to protect an American product would cast two of the world’s most powerful agriculture companies in the role of victims.

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  • • •

  FOR U.S. COMPANIES that are deeply invested in China, intellectual property theft presents a thorny challenge. An array of policies limits non-Chinese companies’ market access while encouraging them to transfer technologies. Some foreign companies have been pressured into setting up local research and development centers. Others are in awkward embraces with joint venture partners that threaten to drive them out of business.

  Among foreign businesspeople working in the country, it was a widely held belief that China had reneged on the commitments to free trade it made when it joined the World Trade Organization in 2001. Incidents of industrial espionage merely added to their complaints. Randal Phillips, the former chief representative for the CIA in China, became a consultant with the Mintz Group in Beijing after retiring from intelligence. “I don’t think we’ve ever seen anything like it,” he told me, referring to China’s technology transfer efforts. “It’s brilliantly mercantilistic.”

  Before the FBI got involved, enforcing intellectual property rights in China entailed a great deal of creativity. Pioneer executives, for example, tried to deal with the situation by developing a seed line called Pioneer 335 exclusively for the Chinese market. Agricultural supply stores promptly filled with counterfeits. Duped farmers complained that seeds marketed as Pioneer 335 sometimes yielded putrid, black ears of corn. Western companies faced with counterfeiting issues often hired private detectives or risk consultants to identify the culprits and strong-arm them into compliance. The detectives would lean on the Chinese police to raid factories, but it could take multiple busts before they saw any results. Alex Theil, head of the investigative agency Harvest Moon, said that his basic strategy was to “push and push until it’s too much trouble to battle my company.”

  Theil mentioned the cautionary tale of the Chery QQ, a cute, compact hatchback produced by Chinese auto manufacturer Chery. When it debuted in May 2003, General Motors’ management balked. The vehicle was nearly indistinguishable from GM-Daewoo’s Matiz, which is marketed in China as the Chevy Spark. It wasn’t just that the Chinese auto company’s name, Chery, resembles Chevy. The doors of the two cars were interchangeable. GM sued in Chinese court, and the case ended in a settlement. At the time, Theil was director of Asia-Pacific investigations for General Motors. He said he knew the man who stole the designs, but taking further action against him was nearly impossible. “The difficulty in pursuing it is, where are you going to get the evidence? The car fits on a thumb drive.”

  In the end, there was no surefire way for companies to escape technological theft. This was underscored by a conversation I had with a Hong Kong lawyer named Joe Simone, who prefers the moniker “Mr. IP.” Simone runs a small consultancy called SIPS that advises businesses on protecting trade secrets in China. He told me that American start-ups that raised money on Kickstarter for product launches often found their
ideas swiped by a Chinese rival even before the money from backers had paid out.

  But concern about industrial espionage also obscured a broader truth. While executives at multinationals have not gotten as rich as they would have liked in China, over the past few decades many have turned considerable profits. KFC has nearly six thousand outlets in China. Starbucks has more than three thousand, and at one point it was opening a new store in the country every fifteen hours. Even with regulations restricting its market access in China, at the time that I read the New York Times article about Robert Mo, Pioneer claimed 12 percent of the country’s highly fragmented corn seed market. Despite the theft of its designs for the Matiz, General Motors sells more cars in China than it does in the United States. Pretty much the only people who have not made money on China’s rise are American wage workers and farmers, starting with the Iowans who grow inbred seed. Nor would they be helped by efforts to find the Chinese man accused of swiping corn.

  FOUR

  SUMMER–FALL 2011

  Two months before Deputy Bollman stopped the SUV near a Monsanto contract field, FBI Special Agent Mark Betten drove out to DuPont Pioneer’s headquarters with two other agents. It was a blistering hot Thursday just before the Fourth of July, the sort of day when no one wants to be in a hot car on the interstate. But the agents had work to do, so Mark steered the group to Johnston, a town ten miles north of Des Moines that revolves around Pioneer, eventually arriving at a low-slung brick building crowned by gigantic images of corn. Pioneer was the first commercial hybrid seed outfit in the United States. Even though it had been bought by the chemical conglomerate DuPont in 1999, it still clung to lore about feeding America.

  Mark had the tanned skin of the Marlboro Man, a close-cropped haircut left over from years in the Air Force, and a gravelly voice. His team’s appearance at Pioneer was supposed to be what the FBI calls a routine liaison visit—a chance to swap ideas with corporate security. The bureau’s leadership saw these visits as a crucial part of the effort to fight economic espionage. The FBI’s Office of Private Sector cultivates close relationships with U.S. corporations, and at companies under the DuPont umbrella the relationship is particularly cozy. DuPont often hires former federal agents as security, and by 2011, the U.S. Justice Department had brought at least four federal trade secrets theft cases on behalf of DuPont subsidiaries and affiliates. As the meeting with Pioneer got under way, Mark explained the bureau’s efforts to combat industrial espionage and tackle cybersecurity threats. Afterward, he asked if the seed company’s security officers had any concerns.

  One officer mentioned that in the spring, a Pioneer contract farmer in remote Tama County, Iowa, had found a Chinese national crouched on his knees in a cornfield. The man was digging up seeds as another man waited nearby in a parked car. When the contract farmer asked what he was doing, the kneeling man grew flushed and stammered out an excuse. He said he worked for the University of Iowa, and that he and his friend were on their way to an agricultural conference. Then the farmer’s cell phone rang, and the man seized the opportunity to bolt for the car and jump in the passenger seat. The driver sped away, veering through a ditch. The farmer notified Pioneer security, and security officers used the license plate number to trace the car back to a rental company at the Kansas City airport. It was registered to a man with a Florida driver’s license named Hailong Mo. He went by Robert.

  After the meeting, Mark drove back to the FBI field office in Des Moines and made a few calls. There were no records of a Hailong Mo or Robert Mo teaching at the University of Iowa. But that only confirmed that the encounter in the Tama County field was suspicious. He still had no idea who the man was.

  An analyst suggested that they contact another seed company in the area, Stine, to see if its executives had any useful information. Stine was a boutique breeding outfit that sold research on corn and soy seeds to Monsanto and Pioneer. A string of high-performing seeds had turned the company’s septuagenarian founder, Harry Stine, into one of the richest men in Iowa. Harry Stine had visited China in 1976, as it was just beginning to open up to the West, and he had kept up his ping-pong game ever since. Now he saw opportunity in the country’s growing demand for grain.

  At Stine’s headquarters in Adel, twenty minutes outside Des Moines, executives told Mark that they had just been to China, where they had met with several businesspeople from Chinese seed companies. Mark asked to see the business cards they received on the trip. Reviewing the list of contacts back at his office, his eyes alighted on one name: Hailong Mo. The card described Mo as an international business manager for DBN, an agricultural company in Beijing.

  Surely that can’t be the same guy, Mark thought. What are the chances?

  He called the Miami field office and asked agents there to hunt down a copy of Robert’s driver’s license. When the license arrived, Mark showed the photo to people at Stine and asked them if the man looked familiar. They confirmed he was the man they’d met in Beijing.

  Mark marveled at the implications. One of the men found near the Pioneer field was high-level management at a Chinese seed company that competed with Monsanto and Pioneer.

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  • • •

  IN SEPTEMBER, MARK STOOD IN the FBI’s Des Moines field office, chatting about this revelation with a colleague. The office occupied a suite in a T-shaped building in a suburb just west of Des Moines. The outpost was overseen by the bureau’s Omaha Division, and with the management mostly elsewhere, it was small and collegial. As Mark talked with his colleague, cars zoomed by on the parkway beyond on their way to Home Depot or the Olive Garden.

  He explained what he knew about the Pioneer field incident, recounting the uncanny discovery that one of the men from that encounter had met with Stine in Beijing. Just then a detective with the Polk County Sheriff’s Office who worked with the bureau’s Joint Terrorism Task Force happened to walk by and overhear. The detective was struck by the similarity to another encounter he’d heard about.

  “Hey,” he said to Mark. “One of our deputies was recently tipped off to a report of some Asian males acting suspiciously near a cornfield.”

  Asian males near a cornfield. When Mark got back to his desk, he tracked down the report that Deputy Bollman had filed. There it was again:

  Name: HAILONG MO

  His heart raced. The Chinese seed outfit appeared to be targeting not one but two major U.S. agriculture companies.

  A few years earlier, an attempt to swipe hybrid corn seed might have been a shaky premise for an investigation. But now that China was charting a bold economic and scientific rise, helped on in some areas by technological theft, the FBI had taken up the cause. The bureau’s economic espionage cases were increasing by 50 percent year on year, cropping up across the country—in states like Missouri and Wisconsin as well as California and New York. The vast majority of them involved China. The corn matter had the markers of a possible economic espionage operation. That it centered on genetically modified corn only made it the perfect case for Des Moines agents to take on.

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  • • •

  INDUSTRIAL ESPIONAGE IS AS OLD as industry itself. The oldest known recognition of intellectual property rights came thousands of years ago, in the ancient Greek city of Sybaris, when chefs presiding over extravagant feasts complained of scheming rivals stealing their recipes. The solution city leaders devised was to grant cooks exclusive rights to their concoctions for one year. Back then the target was literally the secret sauce. In the intervening centuries, as our choicest products progressed from gravy to engines to supercomputers, the metaphor remained.

  The Byzantine Empire, imperial China, the Ottomans, Great Britain, America: Theft of one nation’s technologies by another marked the transfer of power from one empire to the next almost as routinely as bloodshed. For most of history, industrial espionage was regarded as something that nations just did, much like spying for political or military
secrets. The victor was the one who stole the spoils, while the act of theft was typically forgotten. History remembers the East India Company and its vast colonial tea plantations, but not the British botanist who journeyed to China’s Fujian province improbably disguised as Qing nobility, his head shaved except for one long braid, to purloin the technique for processing tea leaves. It remembers delicate French white and blue ceramics, but not the Jesuit priest who traveled to China’s imperial kilns to filch the technique for making hard-paste porcelain. And it remembers the industrialist Francis Cabot Lowell, father of Lowell, Massachusetts, but not his 1810 trip to England and Scotland, where he spent weeks touring factories and memorizing the blueprints that would allow him to “invent” the power loom on the western side of the Atlantic.

  In most parts of the world until the mid-1990s, companies dealt with trade secrets theft through civil lawsuits. No international treaty or agreement explicitly tackled industrial espionage. In the United States just one federal statute did, and it only covered theft by a government employee. Then, a year before Mark Betten started his career at the FBI, President Clinton signed into law the Economic Espionage Act, which made trade secrets theft a federal crime. The 1996 law represented a seismic shift: It was the first time in American history that attacks on American business were branded as a national security threat.

  The act was born in the wake of the Cold War, as intelligence leaders cast about for a new mission. In some ways industrial espionage was a logical choice. Technologies of all sorts were rapidly increasing in value, making them attractive to spies. The dawn of the internet and breakthroughs in global communications, meanwhile, provided more weak points than ever before for siphoning off information.