{"id":1571454,"date":"2022-07-26T11:23:38","date_gmt":"2022-07-26T15:23:38","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1571454"},"modified":"2022-07-26T11:23:46","modified_gmt":"2022-07-26T15:23:46","slug":"fed-not-adequately-prepared-to-thwart-chinese-information-gathering-report","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-not-adequately-prepared-to-thwart-chinese-information-gathering-report\/","title":{"rendered":"Fed not adequately prepared to thwart Chinese information gathering -report"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">20<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Ffed-not-adequately-prepared-to-thwart-chinese-information-gathering-report%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1571454&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>By Howard Schneider<\/p>\n<p>WASHINGTON (Reuters) \u2013     The Federal Reserve does not have adequate systems to counter a \u201cmalign\u201d effort by China to gather inside information on the U.S. economy and monetary policy, according to a report that was prepared by Republican staff of the Senate Homeland Security Committee, and promptly rejected by the Fed as \u201cunfair, unsubstantiated, and unverified.\u201d<\/p>\n<p>The report, which was released on Tuesday, relies heavily on information provided by the U.S. central bank itself, dating back to a 2015 internal probe of what came to be known as the \u201cP-Network,\u201d a group of 13 people at eight regional Fed banks whose patterns of \u201cforeign travel, emails, details in curricula vitae, and academic backgrounds\u201d raised concerns.<\/p>\n<p>The Fed\u2019s Washington-based Board of Governors and 12 quasi-independent regional banks employ thousands of economists, including many from other countries, China among them. That collaborative approach, the committee report agreed, enhances the Fed\u2019s ability to understand the economy and make policy.<\/p>\n<p>The incidents cited in the document, rather than intellectual collaboration, pointed to \u201ca sustained effort by China, over more than a decade, to gain influence over the Federal Reserve,\u201d according to the report.<\/p>\n<p>It is not clear what came of it. The committee report provided detailed case studies of five individuals, four of whom continue as Fed employees, and said that, despite their connections with Chinese officials and universities, the Fed found no instances where information had been shared in violation of policies.<\/p>\n<p>In a letter to outgoing Sen. Rob Portman, the ranking Republican on the Homeland Security Committee, Fed Chair Jerome Powell said he had \u201cstrong concerns about assertions and implications in the report,\u201d and detailed the background checks Fed staff undergo, and the technology used to prevent security breaches.<\/p>\n<p>\u201cWe would be concerned about any supportable allegation of wrongdoing, whatever the source,\u201d Powell wrote. \u201cIn contrast, we are deeply troubled by what we believe to be the report\u2019s unfair, unsubstantiated, and unverified insinuations about particular individual staff members.\u201d<\/p>\n<p>The activities discussed in the document raised red flags, at least several years ago, inside the Fed, according to the report. U.S. central bank officials often talk about the cyber-security risks they and all financial institutions face, but have not talked about being the target of human intelligence gathering.  <\/p>\n<p>Some staffers had kept in touch, for example, with a former regional Fed employee, identified only as \u201cZ,\u201d who had ties to a Chinese \u201ctalent recruitment program\u201d used by the Communist Party of China to develop sources inside U.S. technical institutions, the report said. The recruitment programs, including the \u201cThousand Talents Program,\u201d were highlighted in a prior Senate report as a key way China uses research grants, academic lecture positions, and other perks to try to learn about and export U.S. intellectual property.<\/p>\n<p>In this instance, the situation led Fed officials to worry \u201cthat there were organized efforts by foreign governments \u2026 to solicit Federal Reserve researchers,\u201d the report said.<\/p>\n<p>One of the employees involved, the report added, \u201cattempted to transfer large volumes of data\u201d to an external computer, though a committee aide said it is not clear if the effort succeeded or what data was involved.<\/p>\n<p>One Fed staffer \u201cprovided modeling code to a Chinese university with ties to\u201d China\u2019s central bank, the report said, though again there was no detail on the nature of the code or whether its distribution was restricted. Powell in his letter noted the Fed\u2019s \u201cmost important economic models\u201d are in the public domain, available for download from the Fed\u2019s Web site \u201cso that people can engage with us and these models.\u201d<\/p>\n<p>\u2018FORCIBLY DETAINED\u2019<\/p>\n<p>In perhaps the bluntest incident, \u201ca senior official at a Federal Reserve Bank\u201d was in 2019 \u201cforcibly detained\u201d by Chinese officials during a trip to the country and told under threat of imprisonment that he \u201cmust cooperate \u2026 and share sensitive, non-public economic data.\u201d<\/p>\n<p>The staffer reported the incident to the Fed, who reported it to the State Department and the FBI, the report stated.<\/p>\n<p>Still, the report argued the Fed should strengthen its counter-intelligence efforts and work more closely with agencies like the FBI.<\/p>\n<p>\u201cBecause we understand that some actors aim to exploit any vulnerabilities, our processes, controls and technology are robust and updated regularly,\u201d Powell wrote. \u201cWe respectfully reject any suggestions to the contrary.\u201d<\/p>\n<p> (Reporting by Howard Schneider; Editing by Paul Simao)<\/p>\n<p><a href=\"https:\/\/www.oann.com\/?attachment_id=2730576\"><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/07\/tagreuters.com2022binary_LYNXMPEI6P0AZ-VIEWIMAGE.jpg\" alt=\"tagreuters.com2022binary_LYNXMPEI6P0AZ-VIEWIMAGE\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Howard Schneider WASHINGTON (Reuters) \u2013 The Federal Reserve does not have adequate systems to counter a \u201cmalign\u201d effort by China to gather inside information on the U.S. economy and<\/p>\n","protected":false},"author":66,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1571454","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1571454","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/66"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1571454"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1571454\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1571454"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1571454"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1571454"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}