FBI: Plot to steal seed corn a national security threat

Does protecting America's lucrative genetically modified seed corn industry warrant the use of national security laws intended to fight terrorists and government spies?

The FBI says yes, and it has invoked the broader powers afforded by the Foreign Intelligence Surveillance Act, or FISA, to surreptitiously gather evidence against two Chinese siblings accused of plotting to steal patented seed from Iowa cornfields, according to court records.

Stealing hybrid seeds enhanced with traits such as drought resistance doesn't pose the same immediate threat as a suicide bomber, but the FBI treats economic espionage and similar trade secret theft as dangerous threats to national security.

"It's people's lives," said Christopher Burgess, CEO of security consulting firm Prevendra and a former employee of the Central Intelligence Agency. "It's our livelihood. It's why we feed so much of the world is because we invest in research and development."

But defense attorneys argue the government tactics constitute an unprecedented, dangerous overreach on a case that is nothing more than a trade secret dispute.

The debate is emerging in the Iowa case against Mo Hailong and Mo Yun, siblings accused in a plot to steal patented seeds from companies including DuPont Pioneer and Monsanto. The plot was hatched so seeds could be smuggled back to China and counterfeited by a major Chinese agriculture company called the Beijing Dabeinong Technology Group, according to prosecutors.

If convicted, the two Chinese citizens could face a maximum 10-year prison sentence.

In 2013, Nicholas Klinefeldt, the U.S. Attorney for the Southern District of Iowa, indicted the siblings and five other Chinese citizens on charges of theft of trade secrets.

In a move that defense attorneys call "breathtaking," prosecutors plan to introduce evidence at trial gathered under FISA, which allows the FBI to bypass a traditional search warrant. Agents seeking evidence instead need only get approval from a secret Washington, D.C.-based court designed to hear complex national security cases.

Spy, businessman?

Such surveillance is worrisome in a trade secrets case, because corn seeds shouldn't be considered a national security priority, one of Mo Hailong's defense attorneys wrote this month in a motion to suppress evidence.

The motion from Des Moines attorney Mark Weinhardt asks a judge to stop prosecutors from introducing FISA evidence into the siblings' trial, scheduled for Sept. 14. Mo is a businessman, not a Chinese government spy, Weinhardt argued in the motion.

The Beijing Dabeinong Technology Group, also known as DBN Group, is a private business that is not owned or controlled by the Chinese government, he wrote.

"This case involves a breathtaking and unprecedented expansion of the government's use of the Foreign Intelligence Surveillance Act," Weinhardt wrote. "… For the first time in the statute's history (as far as our research reveals), the government used FISA to investigate a trade secret dispute between two privately owned companies."

But the FBI argues that the theft of trade secrets has broad security repercussions. Chinese companies are leading thieves of U.S. companies' intellectual property, largely in an effort to avoid the costs of research and development, according to Randall Coleman, an assistant director in the FBI's counterintelligence division.

In 2009, Chinese companies cost U.S. businesses an estimated $48.2 billion through intellectual property infringement, including trade secret theft, according to the U.S. International Trade Commission.

"By obtaining what it needs illegally, China avoids the expense and difficulty of basic research and unique product development," Coleman said in a statement last May to a terrorism subcommittee of the U.S. Senate Judiciary Committee.

In a recent court filing, a DuPont Pioneer attorney wrote that bringing hybrid corn seeds to market costs the company years of time and "hundreds of millions" of dollars in research and development.

Setting a precedent

Experts at Georgetown and New York universities' law schools agree the case is a unique use of FISA surveillance, at least in the public eye.

The secrecy surrounding the court makes it impossible to know the nature of all the cases brought before the 11 judges, they say. Because FISA court orders are confidential, defense attorneys can only guess what evidence was collected under that law.

It appears the court gave approval to bug vehicles and monitor telephone calls "associated" with Mo, Weinhardt wrote. It also appears FISA was used to monitor Mo's Yahoo and Gmail accounts.

In total, prosecutors have turned over to defense attorneys a mountain of more than 500,000 documents, 50 hours of audio tapes and two years' worth of surveillance footage generated by the investigation, according to court records.

Government ties?

Outlining DBN Group's relationship to the Chinese government is key, as FISA allows intelligence-gathering specifically on people spying for foreign governments or government-connected groups, experts say.

To bolster the defense's argument, University of Iowa Associate Professor Tong Yao wrote a six-page affidavit analyzing DBN Group's ownership. Yao's review found that the Chinese government owns only a small stake in the company. In 2014, a government fund owned 1.08 percent of the company's stock.

DBN Group, headquartered in Beijing, includes a 1,500-person research and development team, according to its website. Prosecutors claim the alleged seed-stealing plot was under the umbrella of one of 180 subsidiary companies, called Kings Nower Seed.

In motions, Weinhardt argues that if prosecutors had evidence of a connection to the Chinese government, the siblings would have been charged with economic espionage, rather than conspiracy to steal trade secrets. An economic espionage charge carries a lengthier prison sentence, but it requires prosecutors to prove that a defendant was acting for the benefit of a foreign government.

Ultimately, if the company had no Chinese government direction, using FISA evidence against Mo and his sister should spark civil liberties concerns, said Faiza Patel, a national security expert with the Brennan Center for Justice at New York University's law school.

"FISA was intended to capture information about national security-type threats," Patel said. "It wasn't meant to capture ordinary crime, such as violating trade secrets."

Federal prosecutors have until June to file their response to the suppression motion, said Assistant U.S. Attorney Kevin VanderSchel.

Communist role

Claims that DBN Group is completely free from Chinese government influence are misleading, said Fred Gale, a senior economist with the U.S. Department of Agriculture.

The company's website emphasizes support for the Communist Party of China's goals to boost the country's seed industry, Gale said. In 2012, the communist party made strengthening Chinese seed companies a top priority for the country's rural economy, he said.

"The company is a model of the Chinese regime's strategy of making a bargain with private companies to help them make money, with the expectation that they will help accomplish national goals," he said.

Also in 2012, the company received government support for a corn-focused genetic engineering project.

Like all major Chinese companies, the DBN Group has its own communist party organization that works to promote policy initiatives, Gale said.

An uphill battle

The murky intermingling between the agriculture giant and the Chinese government mean that Mo's defense attorneys likely have an uphill battle to stop prosecutors from using FISA evidence, said Laura Donohue, a professor at Georgetown University's law school who studies FISA.

Judges typically side with government prosecutors in court battles on FISA evidence, granting deference to national security claims, Donohue said.

"The shadow of potential Chinese government manipulation will be enough," she said.

Still, the case highlights concerns about whether FISA is being stretched beyond its original intent. Namely, there's a lack of transparency that makes challenging FISA evidence almost impossible, Patel said.

Mo's attorneys are blindfolded in attempts to challenge the surveillance because of unanswered questions, including who the FISA surveillance was even meant to target, she said.

"You're surveilling them pursuant to secret affidavits, secret orders," she said. "And they don't know what the basis is of the surveillance, so how can they possibly challenge it?"

The defendants

Prosecutors with the U.S. Attorney's Office for the Southern District of Iowa indicted seven Chinese citizens allegedly involved in a seed stealing plot on behalf of DBN Group. Only two siblings, Mo Hailong and Mo Yun, currently face prosecution. The other five are believed to have left the U.S. The information that follows is according to court documents.

• Mo Hailong: Investigators believe Mo worked as the director of international business for DBN Group. He is a lawful permanent resident of the United States, with a house in Boca Raton, Fla. The FBI's investigation into the seed stealing plot began in 2011, after a DuPont Pioneer field manager found Mo nervously digging in one of the company's test fields.

• Mo Yun: Mo is married to Dr. Shao Genhuo, the billionaire CEO of DBN Group. Prosecutors believe from text messages that she was involved in the seed stealing plot, at least during 2007 and 2008 while she led a DBN Group research division. Mo was arrested last year while visiting the United States with her two children.

• Li Shaoming: Li is believed to be the chief operating officer of Kings Nower Seed, a DBN Group subsidiary.

• Wang Lei: Wang is believed to be the vice chairman of Kings Nower Seed.

• Wang Hongwei: Wang was seen by the FBI moving boxes at an Illinois farm purchased by Kings Nower Seed. Wang was caught at the U.S.-Canada border with 44 bags hidden in a vehicle that contained corn kernels and a digital camera with photos of Monsanto and Pioneer production facilities.

• Ye Jian: Ye is believed to be a researcher for Kings Nower Seed. In August 2012, the FBI put a bug in a rental car driven by Ye and another employee, Lin Yong. Agents caught the two talking about the seed stealing plot, including Ye saying, "You can forget about ever coming to the U.S. again, assuming things go wrong."

• Lin Yong: Investigators captured Lin, a Kings Nower Seed employee, in a conversation with Ye Jian, that included Lin saying, "These are actually very serious offenses."

In a December 2013 criminal complaint, FBI Special Agent Mark Betten wrote that the bureau was also looking into potential "insiders" at U.S. seed companies who could have helped the plot by giving away GPS coordinates of test fields.

Foreign Intelligence Surveillance Act

Congress first passed the Foreign Intelligence Surveillance Act in 1978 to outline rules for surveillance in the wake of spying scandals, including Watergate.

The FISA court comprises 11 federal judges appointed for one seven-year term by the chief justice of the U.S. Supreme Court. There's also a three-judge FISA appeals court that hears appeals from government lawyers in cases where the FISA court denies surveillance.

Source: What Went Wrong With the FISA Court, a report from the Brennan Center for Justice at New York University School of Law

About the case

In May 2011, a DuPont Pioneer field manager found Mo Hailong digging in one of the company's Iowa test fields. When confronted, Mo reportedly lied and told the field manager that he was a University of Iowa scientist, according to a criminal complaint.

The discovery prompted the FBI to open a criminal investigation. On Sept. 27, 2011, Mo mailed a box labeled "corn samples" from West Des Moines to his home in Florida, according to the complaint. In April of the next year, the FBI learned that Mo was involved in the purchase of an Illinois farm that prosecutors believe was used as part of the seed-stealing plan.

Mo and five others were indicted on Dec. 17, 2013. Mo's sister, Mo Yun, was arrested in July 2014 while visiting California.

Mo Hailong defense attorney Mark Weinhardt has filed motions to suppress much of the evidence gathered against Mo, including a traffic stop made in Iowa.