The Chinese government “forcibly detained” an employee of the Federal Reserve several times, tapped his phones and computers, and threatened his family in order to get sensitive data about the American economy.
An investigation by the US Senate, found that the employee was detained on at least four separate occasions, when he visited Shanghai in 2019.
US Senate investigators claim that Chinese officials held the man hostage in his hotel room after monitoring his telephone conversations. They accused the Federal employee of committing crimes against China.
US investigators also claim, that Chinese government agents tapped the employee’s phones and computers, and copied the contact information of other Federal Reserve officials from the individual’s WeChat account.
During the three other times the employee was detained, Chinese agents approached the employee and demanded that he share confidential data with them. This data was published by the Senate Committee on Homeland Security and Governmental Affairs.
The report does not acknowledge whether the employee gave them any sensitive data at the time of being asked. The Senate referred the case to the State Department and the FBI, whose agents interviewed the man in question.
The incidents are part of a broader campaign by China to target, influence, and undermine the US Federal Reserve, since at least 2013. It hit out at Beijing for its long-running and brazen actions which target certain Federal Reserve employees. The employee was criticized in the report for failing to take adequate measures to safeguard data and beef up security for its personnel.
“As our investigation reveals, the Chinese government is using every tool at its disposal to infiltrate and steal valuable information,” Sen. Rob Portman (R-Oh.), the ranking member of the committee, said. “We cannot let the American taxpayer continue to unwittingly fund China’s military and economic rise which is why our report makes strong recommendations to enhance and protect our Federal Reserve.”
But Fed Chair Jerome Powell dismissed Portman’s concerns. Powell wrote in a letter to Portman, that he had strong concerns about assertions and implications.
Powell insisted, that everything we do at the Federal Reserve, is in service to our public mission to American households, businesses, and communities.
“We are confident that Federal Reserve staff understand their obligations and are committed to maintaining both the confidentiality of sensitive information and the integrity of our workforce,” Powell wrote in a letter Monday.
“Because we understand that some actors aim to exploit any vulnerabilities, our processes, controls and technology are robust and updated regularly. We respectfully reject any suggestions to the contrary.”
However, a Chinese government spokesperson highly denied the claims and stated, “The cooperation between China and the US in economic, financial and other fields is open and aboveboard, which has played an important role in enhancing mutual understanding and mutual trust between the two countries.”