A recent Pentagon report indicates that the Chinese assault on the U.S. Energy Department’s national laboratories is continuing. The victim this time appears to be the Ames Laboratory, located on the campus of Iowa State University. Ames is one of the Energy Department’s “science” labs. It focuses primarily on energy-related research in the materials, chemical, and biological sciences. But it also conducts research on behalf of national security clients.
This time around, the Chinese have acquired a so-called “smart material” known as Terfenol-D. Terfenol-D was originally developed by the Ames Lab in the 1970s under contract to the U.S. Navy. The Pentagon report said that the material is used in “militarily critical naval and aerospace applications.”
Bill Gertz, writing in the Washington Times, reported that the Navy uses the material in advanced sonar systems for tracking enemy submarines. U.S. officials told him that the Chinese could use the material to develop multiple-warhead ballistic missiles as part of their overall strategic nuclear force modernization. Gertz said that sales of the material are strictly controlled and require an export license.
The FBI has alleged that two Chinese students stole information about the material in a “computer hacking incident.” One of the students attended Iowa State and was said to have worked closely with the Ames Lab. One of the two students admitted supplying the Chinese military with the Terfenol-D data. Over the years, the U.S. Navy has spent millions of dollars in research to create the smart material. In 2003, the Congress appropriated over $5 million for continued research on the material.
The FBI cites this as a good example of how the Chinese are acquiring dual-use military technologies in the United States. In an interview with the Associated Press, a senior FBI official charged that many of the thousands of Chinese visitors, students, and businessmen come to the United States each year with tasking from Beijing to collect intelligence information. The Pentagon report labeled academic exchanges as one of the prime methods the Chinese use to collect sensitive technologies, like Terfenol-D. The report also said the authoritative Chinese journals have recommended an increase in the use of overseas ethnic Chinese scientists to acquire foreign technologies.
In the same Associated Press interview, the FBI official labeled China “the greatest espionage threat to the U.S. over the next ten to fifteen years.” Echoing the now largely forgotten Cox Report, he said the Chinese have set up more than three thousand “front” companies in the U.S. to run espionage operations. Overall, the FBI believes that there are now more foreign spies operating in the U.S. than ever before. To counter this threat, the FBI is trying to rebuild its counter-espionage capabilities. These were largely dismantled in the 1990s. The FBI sections devoted to Chinese espionage were hit especially hard. The Bureau is now trying to reconstitute that capability, but such a feat cannot be accomplished overnight.