Spy Schools

by Daniel Golden

  * * *

  A TRIP TO Kuang-Chi’s battleship-gray, twelve-story headquarters isn’t complete without stopping at the exhibit hall on the first floor, displaying the company’s latest technology. A guide touts the Metawifi, which uses metamaterials to eliminate interference and serve crowded areas such as shopping malls and concert arenas where traditional Wi-Fi is overloaded. Visitors can try the Photonic Systems, which, by scanning a fingerprint and then shining a beam on a receptor, offer more secure building access than key cards do. “There is no equipment that can decrypt it,” the guide says.

  The next section depicts Kuang-Chi’s space gadgetry, including the Traveler—a tourism pod attached to a balloon—and a blimp called the Cloud. Connected to fiber-optic cables, it’s “much cheaper than a satellite,” stays aloft 24/7, and tracks ships and cars, the guide says.

  A screen presentation introduces Kuang-Chi. One slide shows the founders, including Liu, his wife, Chunlin Ji, and two other Duke alumni. Another boasts that Kuang-Chi has filed 86 percent of all current patent applications for metamaterials worldwide. A third describes the company’s mission with the kind of grandiose rhetoric that has been Liu’s trademark since his Duke days: “empowering machines with souls and bringing happiness and human connection.”

  Since his return to China, Liu and his enterprises have made quite a splash, with official help. Kuang-Chi was the third recipient of funding under Shenzhen’s Peacock Program, initiated in 2010 to lure overseas professionals. Overall, municipal records show, Shenzhen and Guangdong Province have awarded $13.7 million to Kuang-Chi.

  “We do receive great support from the Shenzhen government,” Liu said in a March 2016 interview on Phoenix Television, a Hong Kong–based broadcaster.

  “Since 2010, Guangdong and Shenzhen have launched a lot of schemes to attract talents. We happened to catch these opportunities.”

  In 2012, Liu was chosen as a metamaterials expert for a national government committee overseeing scientific research and investment, the youngest person ever to hold such a position. That December, Liu escorted Xi Jinping around Kuang-Chi’s exhibit hall, showing off the Metawifi high-density coverage, the photonic security system, and other technology. The Communist Party leader was impressed.

  “After watching your research results and listening to Mr. Liu Ruopeng’s introduction just now, I am very glad to see such a young entrepreneurial team full of passion and enthusiasm,” Xi told Kuang-Chi executives, according to its news release. “The old generation of scientists, such as Qian Xuesen, overcame tremendous obstacles in USA, returned to China with the same patriotic obsession.… At the reform and opening-up era, you returned to China to realize Chinese dream.”

  Liu accompanied President Xi to New Zealand in November 2014 and met Glenn Martin, inventor of the “jetpack” flying machine. Its potential applications range from transport of emergency medical and rescue workers to military supply and surveillance. Soon afterward, Kuang-Chi Science bought a controlling share in Martin Aircraft. Visitors to Kuang-Chi’s exhibition hall are strapped into a jetpack simulator for practice flying. Kuang-Chi has taken stakes in other firms, too, such as Solar Ship, a Canadian maker of solar-powered airships to haul freight to remote locations; and Zwipe, a Norwegian start-up with U.S. offices in Illinois and Denver, which embeds fingerprints in credit cards to authenticate transactions.

  * * *

  KUANG-CHI HAS STOCKPILED intellectual property, applying for one patent after another. Most of its patents are in China, and it’s hard to tell how many of them are based on Duke research, or how important they may become. “I heard he patented a ton of stuff that was probably developed at Duke,” Schurig told me. There could have been “lots of ideas floating around the lab that nobody was going to pursue. It could represent a significant value.”

  Asked if Kuang-Chi had patented ideas nurtured at Duke, Liu scoffed. “We have three thousand patents,” he said. “I’m a talent that can generate three thousand patents from three years at Duke? Then call me Superman.” Later, he added, “We actually are going in a very different direction of the field, to build something greater and has no relationship to work we did in fundamental research because that is far away from the industry.”

  Kuang-Chi does hold twenty-six U.S. patents, primarily for advances in metamaterials, with Liu named as co-inventor on all of them. Kuang-Chi and Liu also have more than thirty pending applications for U.S. patents. On several filings, patent examiners questioned Liu’s purported inventions on the grounds that they were anticipated by Smith’s prior research.

  For example, Liu and two other Kuang-Chi scientists—including cofounder Lin Luan, who also received her doctorate at Duke—applied in September 2012 to patent a metamaterial structure for a small antenna. In April 2015, a U.S. patent examiner disallowed nineteen of their twenty claims. The examiner found that two of these supposed improvements had been anticipated by Smith, and others would have been “obvious to one of ordinary skill” who was familiar with Smith’s work. Although the rejection was labeled “final,” the inventors revised their claims, and a patent was issued in December 2015.

  Kuang-Chi’s website highlighted Liu’s time at Duke, crediting him with a pivotal contribution to the field of metamaterials. “With his diligence and wisdom, Doctor Liu received his PhD degree in less than four years,” it stated. “Dr. Liu is not only a visionary as well as a doer, he is also a charismatic team leader. During his graduate study, he developed the frontier technology with other Kuang-Chi founders.… In the beginning of 2010, holding the keys to the ‘invisible cloak,’ they returned to China.”

  Smith pointed out that his team conceived and executed its first invisibility cloak before Liu joined it. Liu “has not demonstrated any capabilities” to justify the website’s praise, he told me.

  Smith has forsaken invisibility research, at least temporarily. “The prospect of true invisibility and cloaking remain highly speculative,” he emailed me. “The path to a full cloak is fraught with enormous challenges and not very practical at this point. We’ve become more interested in research that might transition sooner.”

  Liu hasn’t given up. The Kuang-Chi Metamaterial Center, fifteen miles from the exhibit hall, produces ultrathin copper sheets that are treated with a film, then etched with patterns and rinsed in chemicals and water. “The structure is so tiny, so sensitive to certain waves with a particular waveband, it is able to fulfill the function of invisibility, so it cannot be detected by radar,” an engineer said, adding that it has military applications. In a control room, three workers used microscopes to measure patterns of metamaterials.

  * * *

  FROM AFAR, SMITH and members of his lab have followed Liu’s rise with both amazement and skepticism. Like some analysts and investors tracking Kuang-Chi’s stock, they wonder whether all the patents and plugs will translate into real scientific or commercial success. Could their discoveries at Duke end up benefiting China instead of the United States? Or is Liu fooling the Chinese government the way he once fooled them?

  “He’s good at inspiring people with grand ideas and grand ambitions, but I don’t think he can execute anything,” Gollub told me. “It takes more than contracts and intellectual property transfers to get things off the ground.”

  “Clearly, he’s a genius in terms of sensing what’s hype and how to sell it,” Aloyse Degiron added. “Scientifically, I’m not sure.”

  Smith minimized the loss. While Kuang-Chi’s accumulation of patents confirmed his suspicions about Liu, “Ruopeng was not really capable enough to figure out the real value of the research we were doing, so that the patents he has filed are really not clearly detrimental, even if they might infringe,” he said. “Most of them are not of great value.”

  Because he had pressed Liu to notify Duke about potential inventions, he said, “we were able to preserve the IP.” Otherwise, “certainly Ruopeng would have been patenting everything in China and we would have lost out on what has become a very imp
ortant technology.”

  Liu’s onetime rival, Nathan Kundtz, who also earned his Duke doctorate in 2009, runs a company that may be closer than Kuang-Chi to profiting from metamaterials innovations. Based in Redmond, Washington, Kymeta Corporation makes tiny flat antennas that replace satellite dishes and improve broadband service. Smith is a strategic adviser to Kymeta, which raised $62 million in January 2016 from a group of investors led by Bill Gates. In a sense, Kundtz and Liu are still competing, because the Kuang-Chi Metamaterial Center is experimenting with small portable antennas.

  The September 2015 FBI report on “Chinese Talent Programs” examined the Liu case and the role of Project 111. Without naming Smith, the report faulted him for letting himself be gulled.

  While Smith and Cui were supposed to share ideas, “the US researcher eventually realized most of the ideas were coming from his lab,” it said. “By convincing the US researcher to collaborate with Cui, Liu was able to freely share information and invite visitors to the lab. Although this was not restricted research, the metamaterials research could have both military and civilian applications. The US researcher risked his research by allowing visitors to come into his lab without personally looking at their background and being too trusting of his scientific relationship with Liu.”

  Smith disputed this conclusion. “At all points in this process, I took the steps that I thought were correct, and so did others at Duke,” he told me. “I don’t feel that I or Duke have risked anything, since we took it as seriously as we could have.”

  While Smith still takes Chinese students on government scholarships, he said that he would never accept direct funding from China or participate in China-funded collaborations, and that he sizes up candidates for his group more carefully. “I now look for signs of that sort of behavior—the overeagerness, the seeming agenda.”

  Asked whether he has returned to the United States since leaving Duke, Liu dodged the question. “Uh, my team has visited the U.S. many times,” he said. Pressed again, he said he hasn’t. “We don’t have business in the U.S.,” he explained, apparently forgetting the Zwipe offices. Given the FBI’s concerns about him, it seems likely that Liu would have difficulty obtaining a visa.

  He has contacted Smith only once. In 2011, Liu wrote to his former professor, asking him to collaborate. Smith had no desire to give him another chance. “I told him, ‘when you were here, you didn’t do things right. As you go forward, pay more attention to ethics.’”

  2

  THE CHINESE ARE COMING

  The phone rang at 3 a.m. in the White House bedroom of President Jimmy Carter and his wife, Rosalynn. Carter, who had given instructions not to wake him except for a crisis, thought, Oh my, there’s a tragedy somewhere in the United States.

  On the phone was Carter’s national science adviser, geologist Frank Press. “Frank, what’s happened, another Mount Etna, or something like that exploded?” Carter asked.

  “No, I’m in China with Deng Xiaoping,” Press said.

  “What has happened with Deng Xiaoping? What’s wrong?”

  “Deng Xiaoping insisted I call you now to see if you would permit five thousand Chinese students to come to American universities.”

  Furious over losing sleep, the president shouted, “Tell him to send a hundred thousand,” and slammed down the phone.

  Once he calmed down that morning in July 1978, Carter welcomed Deng’s overture. The United States had opposed the 1949 communist revolution in China, and afterward recognized the exiled Nationalist regime on the island of Taiwan as China’s true government. Academic contacts waned. Then, with visits to China by the U.S. table tennis team in 1971 and President Richard Nixon in 1972, the two powers began edging toward reconciliation.

  Carter’s administration, eager to normalize diplomatic relations through educational exchanges and other cooperative programs, expected China to send only a handful of students to American colleges. But Deng, who was emerging as a leader after Mao’s death two years before, was determined to modernize China. He had reopened universities that had been shuttered as part of the Cultural Revolution’s assault on scholars and intellectuals, and reinstituted competitive entrance exams.

  At the same time, he recognized that U.S. universities far surpassed China’s, especially in science and technology. Dispatching thousands of students across the Pacific would narrow the gap—especially if they returned home with the latest American innovations.

  The zeal of a famously insular communist country to expose so many of its young people to American capitalism and democracy startled even Americans who were fully awake. “I had no idea about the size of the exchange the Chinese were interested in, but my State Department advisors thought we should press for a large number, perhaps five hundred per side,” recalled National Science Foundation director Richard Atkinson, a member of Press’s delegation, who handled the negotiations in Beijing.

  During those talks, a Chinese vice premier, Fang Yi, asked Atkinson how many students from other nations were enrolled at U.S. colleges. Atkinson cited figures from six or seven countries, including 25,000 Iranians and 9,000 Taiwanese.

  “How many can China have?” Fang asked.

  Perhaps a thousand, Atkinson said, naming the highest total that the U.S. side dared hope for.

  “Why can’t we have as many as other countries?” Fang demanded.

  The Americans, Atkinson later wrote, were “stunned, but secretly delighted.”

  * * *

  THE OPENING OF China’s student pipeline to the United States would prove to be a pivotal moment in the globalization of American higher education—and in the rise of academic espionage. While other countries already used students and visiting scholars to filch academic research and penetrate U.S. government or business, China would take the strategy of targeting academia to a new level—and prompt the United States to respond in kind. In the last quarter of the twentieth century, “Chinese intelligence flooded the United States with students, scientists, businessmen, and émigrés from all walks of life to harvest America’s political, economic, and scientific secrets,” wrote Michael Sulick, the former director of the CIA’s clandestine service.

  Of the almost one million international students at U.S. universities in 2014–15, 31 percent (304,040) came from China, up nearly eightfold in two decades. Of the more than half a million foreign-born scientists and engineers working at U.S. universities in 2013, about 15 percent, or 78,000, were natives of China, more than of any other country, and up two-thirds from 47,000 in 2003. The vast majority pose no threat and, like other newcomers, infuse American universities with energy and fresh perspectives. Some, like Ruopeng Liu, may have other agendas that aren’t immediately apparent.

  Accustomed to hosting visiting scholars, Professor Daniel J. Scheeres didn’t hesitate to grant a request by Yu Xiaohong to study with him at the University of Michigan. She expressed a “pretty general interest” in Scheeres’s work on topics such as movement of celestial bodies in space, he told me.

  She cited an affiliation with the Chinese Academy of Sciences, a civilian organization. Yet the Beijing address Yu listed in the Michigan online directory was the same as the Academy of Equipment Command & Technology, where instructors train Chinese military cadets and officers. Scheeres wasn’t aware of that connection, nor that Yu cowrote a 2004 article on improving the precision of antisatellite weapons.

  Once Yu arrived, her questions made Scheeres uncomfortable, and he stopped accepting visiting scholars from China. “It was pretty clear to me that the stuff she was interested in probably had some military satellite-orbit applications,” he said. “Once I saw that, I didn’t really tell her anything new.”

  Positions in academic laboratories provide a plausible excuse for students from countries under U.S. export restrictions, such as China or Iran, to acquire advanced American technology, which they then smuggle home. “No one is going to pay attention to your name or ethnicity if you’re coming from an American university,” say
s Vince Houghton, curator of the International Spy Museum in Washington, D.C. “If you’re tied to the Ivies or a technical university like MIT, you’re beyond suspicion.”

  * * *

  WENTONG CAI COUNTED on being “beyond suspicion.” Born in Inner Mongolia, he enrolled in 2009 as a graduate student in veterinary microbiology at Iowa State University. In 2012 and 2013, using his university email address, he negotiated to buy one or more angular rate sensors from Applied Technology Associates in Albuquerque, New Mexico, pretending that he needed them for his research. Actually, these sensors are designed for line-of-sight stabilization and motion control systems in military and civilian planes and ground vehicles. They had no use in Cai’s research on how E. coli bacteria cause urinary tract disease.

  Wentong was acting on behalf of his cousin, Bo Cai, a businessman in China who wanted the sensors for an unnamed buyer. The U.S. government banned exporting them to China because of their military applications. So Bo drafted Wentong.

  “His status as a student at Iowa State would make it easier for us to commit this crime,” Bo Cai later explained. “We knew the manufacturer would not send ARS-14s to me or my customer in China but we figured the manufacturer would send ARS-14s to Iowa State and we could smuggle them to China from there.”

  “Me and my cousin Bo grew up like brothers,” Wentong later wrote. “Just because of the help and support I received, whenever my family and friends asked help from me, I don’t generally deny, considering as returning favor.”

  As he dickered over the sensors, Wentong let slip in an October 2013 email to Applied Technology that “we finally obtained support from a Chinese company that we constantly collaborate with. I am thinking if I should involve them in this order.” Aware of the U.S. embargo on sending military equipment to China, Applied Technology alerted the Department of Homeland Security. Posing as the firm’s international distributor, a DHS undercover agent contacted Wentong, who confided that the sensors were destined for China. Both cousins traveled to New Mexico in December 2013 to meet the distributor and check out the merchandise. Wentong, a devotee of the television drama Breaking Bad, also hoped to visit the Albuquerque locations where it was filmed. Ironically, the protagonist of Breaking Bad, like Wentong, was a scientist-turned-criminal.