by Iris Chang
Of course, not all Chinese moguls of the information age made their wealth through dotcom firms. Some, like Morris Chang, earned their fortunes by enabling high-tech companies to outsource their manufacturing to Taiwan. Revered as the “godfather of high technology” in Taiwan, Chang, an electrical engineer educated at Harvard, MIT, and Stanford, pioneered the integrated circuit foundry industry as the founder and chairman of Taiwan Semiconductor Manufacturing Corporation (TSMC). Recognizing that fabricating chips required enormous startup capital (a semiconductor factory could cost literally billions of dollars), Chang’s company, largely funded by the government of the Republic of China in Taiwan, permitted small American chip companies to contract their fabrication work in Taiwan. Taiwan Semiconductor provided independent chip designers, who could not compete on their own against giants like Intel, Motorola, and NEC, access to affordable manufacturing services, freeing them to focus on creative design work. Thus Chang’s insight accelerated the pace of computer innovation worldwide. Thousands of entrepreneurs were now able to compete by offering their own innovations, instead of leaving the industry’s development to just a
Any gold rush has a few celebrity winners and many exhausted losers. Some Chinese immigrants found themselves in a quandary when Congress passed the Immigration Act of 1990, introducing the H1-B visa program for highly educated and skilled immigrant workers, but restricting the time such visa holders could work in the United States to a maximum of six years. The act abruptly reversed previous immigration policy, which had eagerly welcomed foreign immigrants with advanced education or professional occupations. After 1965, the government had imposed virtually no limits on the admission of Chinese foreign nationals with specialized training. In 1989, the foreign Chinese students who happened to be in the United States during the Tiananmen Square massacre were allowed to obtain green cards immediately. But for those who came after the 1990 act, it was a different story.
High-tech employers viewed the H1-B program as an attractive solution to their labor needs because it gave them a fresh crop of minds to exploit every six years. The policy was perceived as giving domestic industry the opportunity to harness the brainpower of foreign immigrants, but without granting these contributors the full rights and privileges of American citizenship. At first, Congress capped the program at 65,000 visas per year, but the 1990s high-tech boom created a massive shortage of computer programmers, engineers, and systems analysts, which companies hoped to rectify by recruiting from abroad. After intense lobbying from corporations like Microsoft, the U.S. government raised the cap on H1-B visas to 115,000 in 1998, then to 195,000 two years later. India provided the greatest number of skilled foreign workers in the program, followed by the People’s Republic of China.56
Critics soon denounced the H1-B visa program as “white-collar indentured servitude.” Middlemen recruiters took as much as half the salary of the workers they procured for companies, and visa holders were beholden to their employers, whom they needed as sponsors for permanent immigration status. If an H1-B visa holder wanted to switch companies, the potential new employer had to petition the Immigration and Naturalization Service, a process that could take several months. Those with H1- B visas had to wait years for a coveted green card, knowing that their visas might expire before they obtained one. Severe backlogs for green card applications developed because applicants from any one country could not make up more than 7 percent of the total number of green cards issued each year.
By the end of the decade, a few Chinese H1-B visa holders had begun to organize. In 1998, for example, Swallow Yan, a green card applicant from the PRC, helped create the Immigration Council of the Chinese Professionals and Entrepreneurs Association, a grassroots effort that lobbies politicians on behalf of H1-B visa holders. But in general, most H1-B visa holders were too terrified to voice their complaints to the press or lawmakers. While researching this book, I interviewed several Chinese on H1-B visas who spoke to me only on condition of anonymity.
One woman, whom I will call Sally Chung, asserted that the H1-B visa program had turned her into “a high-tech slave.” An immigrant from mainland China, she came to the United States in 1992 to obtain a bachelor’s degree in engineering. After graduation, she accepted a position as a software designer at a local company, where she was expected to work at least ten hours a day, including weekends, without raises or compensation for overtime. Though Chung was unhappy with her situation, she could not afford to leave—her appli-cation for a green card depended on being employed by this particular company. Quitting her job meant starting the paperwork all over again as well as forfeiting the $10,000 she had invested in legal fees for the green card. A backlog at INS caused the wait to stretch from months to several agonizing years. When she complained that she earned even less than entry-level workers in her field, her boss demoted her title from software engineer to librarian in order to justify her low wages. At the same time, however, he expected her to serve as a software engineer by programming a computer database for the company. “My boss enjoys calling me into his office, shutting the door, and then screaming at me,” she said. “He tells me I have to speak perfect English without an accent before I can get a raise. He says that if he lived in China for only one month, he would be able to speak perfect Chinese. My boss warned me that if I ask him for a raise one more time he will fire me.” Now, she says, “I’m scared to death I’ll lose my job.”
In addition to the H1-B visa system, another development worked against the interests of the “high-tech” Chinese. The sudden demise of the Soviet Union left a vacuum in the arena of international politics, helping China emerge from the cold war as the second greatest military power in the world after the United States. While the economies of Russia and the former Soviet republics were still paying the price for the arms race the Soviet Union could not afford, the economy of the People’s Republic of China was growing almost exponentially. After Mao’s death, the Chinese gross national product had almost tripled by the 1990s, giving rise to American fears of future competition. During the 1990s, economic experts and historians predicted that the next century would belong to mainland China.
One irony of the 1990s was that the United States would come to view China both as its great business partner and its most powerful rival. While the decade saw an explosion of Sino-American corporate partnerships, it also witnessed the dawn of a new era of suspicion regarding the People’s Republic. The Washington Post reported the emergence of an anti-PRC “Blue Team” in Washington, D.C., “a loose alliance of members of Congress, congressional staff, think tank fellows, Republican political operatives, conservative journalists, lobbyists for Taiwan, former intelligence officers and a handful of academics, all united in the view that a rising China poses great risks to America’s vital interests.” A spate of books published in the late 1990s or shortly afterward by members of this Blue Team—The Coming Conflict with China, by Richard Bernstein and Ross Munro; Hegemon: China’s Plan to Dominate Asia and the World, by Steven W. Mosher; The China Threat: How the People’s Republic Targets America, by Bill Gertz; Year of the Rat and Red Dragon Rising: Communist China’s Military Threat to America, by Edward Timperlak and William Triplett—suggested that a future showdown between the United States and the PRC was inevitable, echoing earlier cold war themes with only the name of the enemy changed.57
In 1999, Representative Christopher Cox (R-Calif.) released a seven-hundred-page report accusing mainland China of stealing classified data on American nuclear weapons. Although the report was later denounced by American scientists and missile experts as grossly distorted and erroneous, it received enormous media attention upon its release. In an initial response, Time magazine published a cover story about the possibility of the United States entering a new cold war, this time with China.
With this atmosphere of suspicion came greater scrutiny of ethnic Chinese scientists and engineers, greater fears that they might be potential spies. Historically, the fate of the Chinese American comm
unity has always been linked to the health of Sino-American relations, and the 1990s were no exception. Like Tsien Hsue-shen and other Chinese victims of the McCarthy era of the 1950s, Chinese intellectuals who worked in national defense in the 1990s found themselvessuspected of espionage because of their racial heritage and their great number within the high-tech industry.
In 1992, the NASA Ames Research Center fired Raymond Luh, an aerospace engineer and immigrant from Taiwan, for possessing “a paper with Chinese writing on it.” The following year, a court order confined Andrew Wang, a computer scientist, to his Denver home for almost a year after he e-mailed computer code to a friend in town. Wang’s employer had accused him of stealing the code to start a business with alleged Chinese financing. The FBI wanted to pursue the matter as an interstate crime—because Wang’s e-mail had been routed through the Internet by a switching system outside of Colorado—but the authorities later dropped the charges when they learned that Wang’s boss had given him permission to copy the information and that none of it was particularly important. David Lane, Wang’s attorney, attributed the entire matter to a “yellow high-tech peril” kind of fear, adding that his client’s life had been “virtually ruined” for more than a year.
Émigrés, even those reared and educated in Nationalist-controlled Taiwan, were soon being accused of passing information to Communist China. The new climate of suspicion prompted people to come out of the closet and speak frankly about their past treatment by the U.S. government. In 1982, Dr. Chih-Ming Hu had received an unexpected visit from an FBI agent. At the time, Hu, a graduate of National Taiwan University with a doctorate from the University of Maryland, was working on a nonclassified flight simulation project at Computer Sciences Corporation, a contractor for NASA Ames in Mountain View, California. The FBI agent asked Hu if he had ever given classified secrets and his doctoral dissertation to a friend in mainland China. No, Hu said, adding that he had no access to classified data and that his dissertation was already in the public domain, having been published in the Journal of Chemical Physics. A few days later, the agent reappeared, this time accusing Hu of lying and threatening to have him fired by NASA. Vehemently, Hu insisted he was telling the truth and even offered to take a polygraph test. The agent, who did not take up his offer, warned Hu that he suspected him of hiding something. A week later, NASA fired Hu for security reasons, even though he was never officially charged with anything.
Sadly enough, his initial impulse was to do nothing. “It happened so fast, and I was so shocked and scared that I did not know what to do,” Chih-Ming Hu later wrote. He feared that the United States government would retaliate if he fought back: “Most people from Taiwan still remember that during the 1950s to 1970s Taiwan was under Nationalist Party’s dictatorship. During that ‘White Horror’ period, [officials] there could arrest any citizen without court order and put that person in jail or make him/her disappear. So after NASA fired me, I worried so much about what the FBI would do to me next.”
Stigmatized by NASA’s treatment of him, Hu acted like a rape victim, withdrawing from society to hide the shame that had been inflicted upon him. Because he failed to take the natural next step, which many Americans would have done without hesitation—hiring a top lawyer on a contingency basis to sue NASA, Computer Sciences Corporation, and the FBI—his inaction was perceived as a concession of guilt. His peers began to believe that perhaps Hu had committed some sinister, though unspecified, crime. And so they kept their distance from him. During this period, which Hu describes as “a nightmare,” he remained unemployed for eight months. (“When I went to high-tech company job interviews no one dared to make me an offer after they heard my story,” he later told a reporter. “Who dare hire a spy?”) His friends shunned him, and his wife demanded a divorce. Desperate for money, Hu tried to sell real estate, then insurance, but few people wanted to be associated with him in any way. Finally, he secured a job in his field, but only after deciding not to disclose his previous contract with NASA.
The scars remained, however. When he finally broke his silence in the late 1990s, Hu had bitter regrets about not speaking out at the time. “I was scared,” he later told a reporter. “I should have fought back.” The memories still haunted and infuriated him: “I was 100 percent innocent! This was purely due to the FBI agent’s rudeness and power abuse! This kind of thing happened a lot in China during the Cultural Revolution. Who would expect this would happen in the U.S.?”
The most notorious case of unjustified treatment involved Dr. Wen Ho Lee, a Taiwanese American scientist at the Los Alamos National Laboratory in New Mexico. In March 1999, a New York Times article claimed that Los Alamos was the source of the W-88 nuclear warhead technology that the People’s Republic of China was believed to have obtained through espionage. Lee was abruptly fired without a hearing, and that December, authorities indicted him for allegedly transferring nuclear secrets from a classified computer network onto an insecure computer, and then onto ten portable tapes, seven of which were missing. FBI agents immediately arrested Lee and charged him with fifty-nine counts of mishandling sensitive information and secrecy violations of the Atomic Energy Act.
After a comprehensive three-year investigation involving more than 260 agents and a thousand interviews, during which time Lee was held in custody, under especially dreadful conditions, the United States Justice Department conceded it had no evidence that Lee had committed espionage. The U.S. government also admitted the embarrassing fact that they either knew, or should have learned early in the investigation, that the secret information in the design of the W-88 warhead in Beijing’s possession could not have come from Los Alamos. What China had was based not on the early-stage design used in Los Alamos, but a later-stage version distributed to at least 548 addresses within the U.S. government, available to hundreds if not thousands of people across America.
While many details of the Wen Ho Lee case remain classified, what has emerged is a pattern of government incompetence and outright misconduct. During an interrogation conducted on March 7, 1999, federal agents tried to coerce Dr. Lee to confess to espionage, resorting even to death threats. The FBI told him that he had failed his polygraph, when in fact he had passed it with flying colors. They hinted at the power of the government to manipulate the media by leaking information, and the power of the subsequent coverage to destroy his career and ruin his life, even if he were completely innocent. 58 Agents even warned Lee that he could be executed if he did not cop to a lesser plea and confess. “Do you know who the Rosenbergs are?” FBI agent Carol Covert asked Lee. “The Rosenbergs are the only people that never cooperated with the federal government in an espionage case. You know what happened to them? They electrocuted them, Wen Ho.”
When the Justice Department could find no evidence that Lee had spied for Beijing, they changed focus, seizing upon the fact that he had improperly handled data within Los Alamos National Laboratory. Lee later admitted that he had moved nuclear codes from a secure computer system to an insecure computer within the laboratory, but claimed he did it only as backup, to protect his files in the event of a system failure.
Most people who have lost important data due to a power-failure crash will understand how such a breach of regulations could occur. In his autobiography, My Country Versus Me, Lee described losing several important files in 1993 after the computers at Los Alamos were converted from one operating system to another. Determined not to experience such a loss again, he decided to make several backup files. Since he lacked his own tape drive, he borrowed one from a friend who worked in the insecure, unclassified region within the laboratory. After making the backups, Lee claimed he left the information on the open system as an extra precaution against future loss, protecting it with three levels of passwords. Later, he acknowledged that this was a mistake and a breach of security, but stressed he did it only “for my convenience, not for any espionage purposes.”
According to Lee’s colleagues, such security lapses were common, and the data
Lee had downloaded fell in a gray area of classification: “protect as restricted data,” or PARD. This meant the data had to be handled with care, as it might contain sensitive information, but did not merit the same kind of security precautions as “secret” or even “confidential” data. Scientists could leave PARD on their desks overnight, and a former weapons designer at Los Alamos admitted to the Times that he had committed his own blunder with PARD when the wind blew a sheaf of documents out a window. But after Lee’s arrest, the U.S. government reclassified the downloaded PARD files to a much higher level—as “secret restricted data”—a decision critics described as politically motivated, an attempt to justify what had already been done to Lee.
To put Lee’s actions into context, his supporters pointed to the contrasting treatment of John Deutch, a former director of the CIA, who had committed gross security violations. Wen Ho Lee had transferred PARD information from one computer to another within the laboratory, but Deutch had actually removed top-secret files from the CIA and carried them home in a briefcase. In December 1996, the CIA discovered that Deutch’s unprotected home computer contained seventeen thousand pages of documents that included ultrasecret “black programs,” presidentially approved covert operations, and even a twenty-six-volume personal diary of his tenure at the CIA and the Pentagon. An “alien resident” housekeeper had full access to the room with this computer whenever Deutch and his family were away from home. The computer was routinely used to access the Internet (including porn sites) through America Online, and neither encryption nor a secure phone line had shielded the computer from access by hackers. The CIA also learned that Deutch would leave important memory cards lying around in his car and kept extremely sensitive files on his laptop computer, which could have been easily copied or stolen.