The Chinese government “forcefully 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, it has been alleged.
An investigation by the US Senate found that the employee was detained at least four separate times when he visited Shanghai in 2019.
US Senate investigators allege that Chinese officials first detained the man in his hotel room after monitoring his telephone conversations.
The Fed employee was accused of “committing crimes against China,” according to the report.
US investigators also claim that Chinese government agents “allegedly tapped the employee’s phones and computers, and copied the contact information of other Federal Reserve officials from the individual’s WeChat account.”
On three other occasions, Chinese agents approached the Fed employee and demanded that he share confidential data, according to the report, which was published by the Senate Committee on Homeland Security and Governmental Affairs.
The report does not specify whether the Fed employee disclosed any sensitive data to Chinese authorities.
The Senate referred the case to the State Department and the FBI, whose agents interviewed the man in question.
The report said that 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 Fed 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.”
The investigation’s findings were first reported by Insider.
But Fed Chair Jerome Powell dismissed Portman’s concerns. In a letter to Portman which was obtained by Politico, Powell wrote that he had “strong concerns about assertions and implications” from the report.
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.”
The Post has sought comment from the Chinese embassy in Washington, DC.
A spokesperson for the Chinese government denied the claims and hit out at “Cold War zero-sum thinking” of certain members of Congress.
“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,” the spokesperson told The Wall Street Journal.