Former Fed adviser gave U.S. tariff secrets to China, say prosecutors

John Harold Rogers, a former Federal Reserve Board adviser, has been charged with working as a longtime economic spy for China, supplying Chinese intelligence with U.S. tariff secrets, according to U.S. prosecutors in the case. A federal grand jury indictment unsealed last week reveals details of an extensive operation by Chinese intelligence between 2010 and 2021 to obtain secrets from the central bank's board.

The secrets included proprietary economic data sets, deliberations about tariffs targeting China, briefing books for designated governors, and sensitive information about Federal Open Market Committee deliberations and forthcoming announcements, according to the indictment outlining a multiyear investigation.

President Trump imposed tariffs on Beijing during his first administration, levies that were kept in place under President Biden. Mr. Trump slapped an additional 10% in tariffs on China this week, and the Chinese government responded with new tariffs of its own.

The Federal Reserve case is the latest example of Chinese intelligence penetration in the U.S. that officials say involves a large number of both human spying operations and cyberespionage. Mr. Rogers, 63, was arrested Friday and charged with conspiracy to commit economic espionage and lying to investigators.

A lawyer for Mr. Rogers did not immediately respond to a request for comment. Another lawyer rejected the charges: “Dr. Rogers denies the allegations as set forth in the indictment,” Jonathan Gitlen told The Associated Press.

Two Chinese intelligence officers, not identified by name, posed as graduate students at Shandong University of Finance and Economics and obtained trade secrets on the U.S. central bank's fiscal policies, according to the 18-page indictment. Prosecutors stated that supplying the trade secrets “could allow China to manipulate the U.S. market in a manner similar to insider trading.”

“China holds a large amount of U.S. foreign debt (approximately $1.146 trillion in August 2017 and approximately $816 billion as of October 2024),” the indictment states. “Gaining advance knowledge of U.S. economic policy, including advance knowledge of changes to federal funds, could provide China with an advantage when selling or buying U.S. bonds or securities.”

FBI Washington Field Office chief David Sunberg said the case demonstrated how Beijing is targeting American government financial institutions.

“The Chinese Communist Party has expanded its economic espionage campaign to target U.S. government financial policies and trade secrets in an effort to undermine the United States and become the sole superpower,” he said.

Mr. Rogers, prosecutors said, obtained sensitive information by downloading the information from Federal Reserve Board computers and emailing it to his house in Vienna, Virginia.

He then traveled to China, allegedly for teaching classes to the two intelligence officers in hotel rooms in Shandong University, about 265 miles south of Beijing. During the meetings Mr. Rogers would turn over the information in exchange for gifts and travel, including a beach vacation, the indictment states. 

Mr. Rogers also sent encrypted messages to set up the meetings.

Prior to a 2014 visit to China, Mr. Rogers was told by one of the officers, “Don’t worry about the cost of the trip. As you said, we don’t waste money but we can bear all necessary cost, you can choose a comfortable and convenient way for the trip.”

In 2015, Mr. Rogers said he was working on a project with a Chinese co-author on monetary policy. “I hope you and your boss like it!” Mr. Rogers was quoted as saying in the indictment.

One of the Chinese intelligence officers also sent Mr. Rogers a list of questions, including on measures the Federal Reserve Board was taking related to China.

Another encrypted message from Mr. Rogers to an intelligence officer asked for their meetings in China to appear as to be university classes — so they would look “legitimate in the eyes of the Fed.” According to prosecutors, China was given details of a briefing book for a designated Fed board member, his forecasts and how they are made.

In 2020, Mr. Rogers was interviewed by the Fed Office of the Inspector General and said he was offered money by the two Chinese officers in 2013 but turned it down. He also denied providing restricted information to the officers.

By 2023, however, Mr. Rogers, who holds a doctorate in economics, was paid around $448,000 to be a professor at a Chinese university, the indictment said.

Chinese AI powered by U.S.-trained experts

A survey of 52 senior Chinese scientists and officials engaged in artificial intelligence work reveals that more 16 are former Microsoft and other U.S. tech company computer experts and about half studied at American universities.

The survey by The Wire China newsletter highlights the downside of the 40-year U.S. policy of unfettered engagement before China was downgraded by the federal government in 2016 from nonthreatening power to strategic competitor and adversary.

Eight of 22 of the Chinese AI companies employing the experts are under sanctions from the U.S. government for their work with the Chinese military or their role in the repression of minority Uyghurs in western China.

The Chinese AI industry overall is growing rapidly and, with substantial state support, is working to overtake American AI models — despite U.S. government efforts to block advanced microchips used in its supercomputers from being exported to China.

“Around half [of China's AI experts] pursued graduate education in the West, while 16 have previously worked at Microsoft in some capacity in the United States or China; two have relinquished their U.S. citizenship,” the report said.

The most senior Chinese Communist Party official in the group is Ding Xuexiang, a close aide to President Xi Jinping and a member of the party’s seven-member Politburo Standing Committee. Mr. Ding is also the most senior leader in China for AI development and head of the Central Science and Technology Commission set up in 2023 to coordinate tech development.

Other names in the survey have clear ties to American corporations and research institutions: Jiang Daxin, chief executive of Shanghai-based open-source model company StepFun AI, spent 16 years working for Microsoft and holds a computer science degree from the University of Buffalo. That school also trained Robin Li, chief of Beidu and its AI arm, ERNIEBot.

Another former Microsoft computer scientist, Kai-Fu Lee, is chief executive of 01.AI, and also worked for Apple and Google. A naturalized U.S. citizen originally from Taiwan, Mr. Lee holds a doctorate from Carnegie Mellon University and gave up his American citizenship in 2011.

Another Carnegie Mellon computer scientist, Lu Qi, is the founder of MiraclePlus, which is helping Chinese AI firms. Mr. Lu worked for Microsoft and Yahoo and was recruited to work for OpenAI by company head Sam Altman.

Lin Dahua, the co-founder and chief scientist for AI infrastructure for SenseTime, received a doctorate in computer science from the Massachusetts Institute of Technology. Qi Yuan, dean of the Institute of Artificial Intelligence Innovation and Industry at Fudan University, holds a doctorate in machine learning from MIT.

Former longtime Microsoft robotics expert Harry Shum now works with Hong Kong University of Science and Technology, and holds a doctorate in robotics from Carnegie Mellon University. Carnegie Mellon also trained two other Chinese AI leaders.

Another former Microsoft technologist is Tian Qi, chief scientist at Huawei Terminal BG, Huawei Technologies AI unit.

Wang Zhongyuan, head of the state-controlled Beijing Academy of Artificial Intelligence, was a researcher for Microsoft Research Asia and Facebook.

The survey was derived from corporate documents, government statements, scholarly articles and media reports.

“The United States has not sanctioned any of the individuals on this list, and just one of the ten state-backed research institutions that appear,” the report said.

The report followed the stunning disclosure that the Chinese AI app DeepSeek was developed an AI model for a fraction of the cost of its U.S. counterparts. DeepSeek chief Liang Wenfeng also owns a hedge fund called High-Flyer that funds the AI app.

FBI posts photos of two Iranian spies linked to agent abduction

The FBI on Tuesday released photos of two Iranian counterspies who have been linked to the 2007 abduction of retired FBI agent Robert A. “Bob” Levinson from Kish Island, Iran.

The two intelligence officers were identified as Mohammad Baseri and Ahmad Khazai. The two men worked for Iran’s Ministry of Intelligence and Security (MOIS) in the abduction and detention and likely his subsequent death.

The photos' release is part of an ongoing FBI investigation that is seeking to solve the case “for his long-suffering family,” the FBI said in a statement.

“The FBI remains steadfast in our commitment to return Bob to his family," said Sanjay Virmani, head of the FBI Washington office counterterrorism branch. “Our extensive investigation continues to develop new leads and intelligence, and we will pursue all options to hold every Iranian official involved in his abduction accountable.”

The FBI and State Department are offering rewards of up to $25 million for information on the case. In March 2020, Levinson’s family said the U.S. government believed the former agent died in custody in Iran.

He disappeared on March 9, 2007, at a scheduled meeting with a source on the Iranian island while working as a private investigator.

Contact Bill Gertz on X @BillGertz.