Economic Espionage—China

We have talked, from time to time, about the perceived threat that China poses from a counterintelligence and technological standpoint. For example, there was controversy surrounding the State Departments planned use of Lenovo-brand computers, even though most computer components are manufactured outside the United States. And there was the story about the Mak brothers who apparently attempted to smuggle defense information out of the country.

Now comes news that “investigators are asking the Department of Justice to charge [Lan} Lee, and American citizen, and [Yuefei] Ge, a Chinese national, with … economic espionage to benefit China,” in addition to the theft of trade secrets charges already being considered against the two individuals.^[1] Economic espionage requires the government to prove beyond a reasonable doubt that the defendant stole, duplicated, communicated, or otherwise provided access to trade secrets without authorization, and that the defendant intended for the acts to benefit any foreign government.^[2] The punishment for economic espionage is very steep: a fine of up to $500,000 ($10,000,000 if committed by an organization), imprisonment for up to 15 years, or both.^[3]

According to the head of an FBI counterintelligence unit in San Jose, “’Silicon Valley is a hotbed’ of economic espionage”; the “valley is home to many of the estimated 3,000 Chinese front companies nationwide set up to steal secrets and acquire technology, according to the FBI.”^[4] While China is by no means the only country to attempt to gather technology from the United States (France and Israel, for example, also do it), most analysts agree that “China is ‘the No. 1 counterintelligence threat that the US faces.’”^[5]

To address this issue, the FBI recently established an economic espionage counterintelligence unit in San Jose, to go along with the one already functioning in Palo Alto.^[6] According to FBI director Robert Mueller, “espionage [is] the FBI’s number two priority—second only to terrorism.”^[7]

China, for its part, dismisses the accusations, with Chinese Embassy official Jianhua Li saying that there is no “evidence that the Chinese government is sending people to the United States to do this”^[8]

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[1] K. Oanh Ha, Stealing a Head Start, San Jose Mercury News, Sep. 28, 2006.
[2] 18 U.S.C. § 13831.
[3] Id.
[4] Ha, supra note 1.
[5] Id.
[6] Id.
[7] FBI, Investigative Programs—Counterintelligence Division, last visited Sep. 28, 2006.
[8] Ha, supra note 1.

NIE Leak—No Probe

Unlike what happened immediately after the leaks of Valerie Plame’s identity and the NSA warrantless wiretapping programs, there are no plans in place for an investigation into who leaked April’s National Intelligence Estimate^[1] [hereinafter NIE] to the media over the weekend.^[2]

According to Dana Perino aboard Air Force One, the President has not expressed any desire to launch an investigation.^[3] If that stance changes, however, the intelligence agency or agencies which created the National Intelligence Estimate would make a request to the Department of Justice; at this time, the President “has not made such a request.”^[4]

The NIE was partially released yesterday, and its “key judgments” are that “the global jihadist movement—which includes ql-Qa’ida, affiliated and independent terrorist groups, and emerging networks and cells—is spreading and adapting to counterterrorism efforts.”^[5] It also finds that “activist identifying themselves as jihadists, although a small percentage of Muslims, are increasing in both number and geographic dispersion,” that—if this trend continues—threats to US interests at home and abroad will become more diverse, and that there is a chance that more responsive political systems in Muslim majority nations could reverse this trend.^[6]

The NIE also states that Europe is becoming an “an important venue for attacking Western interests,” and that “the Iraq jihad is shaping a new generation of terrorist leaders and operatives,” with the Iraq conflict becoming “the ‘cause celebre’ for jihadists, breeding a deep resentment of US involvement in the Muslim world and cultivating supporters for the global jihadist movement.”^[7]

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[1] See, e.g., Gary Thomas, US Intelligence Report Leaked to Press a Mix of Conflict and Compromise, Voice of America, Sep. 27, 2006; see also Mark Mazzetti, Spy Agencies Say Iraq War Worsens Terrorism Threat, NY Times, Sep. 24, 2006.
[2] Dana Perino, Press Gaggle by Dana Perino, Whitehouse.gov, Sep. 27, 2006.
[3] Id.
[4] Id.
[5] Declassified Key Judgments of the National Intelligence Estimate “Trends in Global Terrorism: Implication for the United States,” Dated April 2006, (via NY Times), rel’d Sep. 26, 2006.
[6] Id.
[7] Id. at 2.

McNabb in the News (9/27/06) 2

Senior Principal Douglas McNabb was quoted in a Bloomberg article about Kobi Alexander.

The U.S. and Namibia don't have an extradition treaty, said attorney Douglas McNabb, a Washington-based extradition law expert. Namibia has a statute that permits the rendering of fugitives to a designated list of countries, which Namibia amended today to include the U.S.

``It allows Mr. Alexander to be detained under a provisional arrest warrant and gives the U.S. an opportunity to fully prepare a petition for extradition,'' said McNabb, who appeared as an expert witness for the defense in the extradition of three U.K. bankers to the U.S. to face charges stemming from the collapse of Enron Corp. They are now in Houston awaiting trial.

Alexander's lack of U.S. citizenship will have no effect on extradition, McNabb said. Pahukeni Titus, the first secretary of the Namibian embassy in Washington, didn't return a call seeking comment. Bryan Sierra, a Justice Department spokesman in Washington, declined to comment.^[1]

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[1] Allan Dodds Frank and Bob Van Voris, Former Comverse Chief Alexander Arrested in Namibia, Bloomberg, Sep. 27, 2006.

McNabb in the News (9/27/06)

Senior Principal Douglas McNabb has been quoted by DealBreaker.com’s John Carney regarding Jacob “Kobi” Alexander.

So what’s going on? DealBreaker turned to our favorite extradition expert, Douglas McNabb of McNabb Associates for an explanation.

“There is no extradition treaty between the two countries. However, any country can expel anyone they want. If he’s in the country illegally, they can deport him to the US. If he’s there with a visa, they can revoke his visa,” McNabb said. “From this report, it seems that they have passed special legislation—a unilateral extradition statute—that allows for the extradition of someone the US wants,”

McNabb told DealBreaker that similar legislation has been passed in the UK. The US has an extradition treaty with the UK, but the parliament has also unilaterally passed legislation reducing the burden of proof required for extradition from probable cause to a simple presentation of charges against the accused. McNabb served as an expert witness in the NatWest Three extradition case.

McNabb also noted that Costa Rica—which also has a treaty with the US—often doesn’t bother to go through a formal extradition process. “In Costa Rica they just revoke your visa. It becomes an immigration issue rather than an extradition issue. At that point, you are in the country illegally and so they take you to the airport, where US Marshalls are waiting,” McNabb said.

There aren’t many place where a fugitive can hide from US law enforcement, according to McNabb. “In the first place, most places that don’t have a treaty with the US aren’t places you would want to be. Second, as this case shows, just because there isn’t an extradition treaty, doesn’t mean that the US won’t get you,” McNabb said.^[1]

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[1] John Carney, DealBreaker Special Report: You Can Run, But You Cannot Hide, DealBreaker.com, Sep. 27, 2006.

Leaks of Classified Information—Shield Law Stalls

Ever since New York Times reporter Judith Miller went to jail for refusing to name her sources, Congress has toyed with the idea of enacting a federal shield law, which would give some protection to reporters who wish to keep their confidential sources anonymous.^[1] And right about now, the two reporters in San Francisco who leaked Grand Jury testimony about Barry Bonds—Lance Williams and Mark Fainaru-Wada—would presumably appreciate a shield law after US District Judge Jeffrey White issued an “order to jail them until they agree to testify about who leaked.”^[2]

It doesn’t look like such a law is in the cards however. The Senate Judiciary Committee “has postponed consideration of a federal shield law for journalists after hearing strong new objections to the measure from the Justice Department.”^[3] One of the points which earned the DOJ’s ire “is a provision that would require the Justice Department, to obtain a journalist’s testimony about sources of a leak of national security information, to convince a judge that the disclosure caused more harm to the government than benefit to the public.”^[4] In other words, the possible dangers to national security would be weighed against the public’s right to know; currently “no such balancing test is administered.”^[5]

One of the opponents of the bill, Senator John Kyl, wondered “how a court would determine whether the government had met the burden of showing damage to national security outweighed public interest.”^[6] Theodore B. Olson, solicitor general early in Bush’s administration, however, said that Congress and others “’do not recoil from judicial oversight of these types of decisions’ when judges issue secret warrants” under FISA.^[7]

Even if the measure sputters out in the Senate, it may be revived in the House. Indiana Representative Mike Pence “has made passing a federal media shield law personal crusade.”^[8] Currently, 32 States and the District of Columbia have media shield laws, and—according to the Indiana Republican—until Congress ensures that reporters will be protected, “the freedom of the press and public’s right to know will risk the same fate of these brave journalists” who have been imprisoned.^[9]

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[1] New York Times Reporter Jailed, CNN, Oct. 28, 2005.
[2] Marcus Wohlsen, Reporters to Appeal Order in Bonds Case, AP (via Yahoo!), Sep. 22, 2006.
[3] Walter Pincus, Senate Panel Freezes Bill on Legal Protection for Reporters, Washington Post, Sep. 24, 2006.
[4] Id.
[5] Id.
[6] Id.
[7] Id.
[8] Zachary Coile, Chronicle Case Proves Need for Law, House Sponsor Says, San Francisco Chronicle, Sep. 23, 2006.
[9] Id.