‘Criminal State’: Unmasking the CCP’s Whole-of-Society Espionage Playbook | Nicholas Eftimiades

[RUSH TRANSCRIPT BELOW] There are few people who understand the workings of Chinese espionage as well as Nicholas Eftimiades.

After a 34-year government career—including time at the CIA, Department of State, and Defense Intelligence Agency—he’s now a professor at Penn State University’s Homeland Security Program and a senior fellow at the Atlantic Council.

“China uses what we call a whole-of-society approach to conducting espionage. … We’re not talking about thousands [of people]. We’re talking about tens of thousands, if not hundreds of thousands of people engaged globally in carrying out the CCP’s will,” Eftimiades says.

Views expressed in this video are opinions of the host and the guest, and do not necessarily reflect the views of The Epoch Times.

RUSH TRANSCRIPT

Jan Jekielek:

Nicholas Eftimiades, such a pleasure to have you on American Thought Leaders.

Nicholas Eftimiades:

Thank you very much for having me.

Mr. Jekielek:

You have incredible in-depth knowledge about the espionage operations of the Chinese Communist Party [CCP] in America and Canada. How big, how deep of a problem is this really? 

Mr. Eftimiades:

One could argue at a strategic level, it presents the greatest threat to the U.S. and Canada that we’ve seen since the fall of the Soviet Union, and since Nazism. 

Mr. Jekielek:

Just justify that to me. 

Mr. Eftimiades:

China uses what we call a whole-of-society approach to conducting espionage. In the U.S. or Canada, whether it’s the RCMP [Royal Canadian Mounted Police] or CSIS [Canadian Security Intelligence Service] in Canada or the CIA or the FBI in the United States, the intelligence agencies work sort of unto themselves. You know, they recruit spies, they arrest spies. That’s what they do.

In China, China engages the entire society for not only collecting information but the subversion of other nation-states. So we’re not talking about hundreds, or we’re not talking about thousands. We’re talking about tens of thousands, if not hundreds of thousands, of people engaged globally in carrying out the CCP’s will. It’s really an extraordinary effort in magnitude and scale.

Mr. Jekielek:

Well, and here’s the thing that I find fascinating and incredibly difficult to deal with: there’s this very powerful incentive structure because of this whole-of-society approach that essentially could co-opt almost anybody.

Mr. Eftimiades:

Yes, there actually are two avenues at play. Number one is the incentive structure. And the incentive structure means that because the CCP has such dominant power control of China, if you want to get anything done, if you want to advance in China, your social credit scores, your businesses, your position, what you might have in China, the safety of your family, you have to be on good terms with the CCP. You don’t necessarily have to be a member of it, but you certainly have to be seen favorably by the CCP. Students who go abroad, people who are abroad, are questioned by the CCP. And so they have to do acts to prove themselves to the Chinese Communist Party. 

So what we find is collection efforts, people flying drones over military bases, classified facilities. We find people penetrating military bases. We find people doing all sorts of acts of espionage. There is also a concerted effort through the state-owned enterprises. China had 300,000; now they have about 150,000 state-owned enterprises, 50,000 of which are at the central government level, about 112, a really large scale, several hundred thousand employees. 

And those entities are controlled and they do some collection activities, theft of technology in particular, and economic espionage on behalf of the CCP. So you have that entire structure, which would be unheard of in free democracies. You have universities in the same way, you know, collecting on behalf of the CCP. I mean, we’ve seen this. I have, you know, over 50 some odd number of universities that have been identified in court documents in economic espionage cases. 

So we see this at the corporate level. We see this at the university level. We see it in China’s intelligence agencies. So this is what I mean  by a strategic threat. It’s a threat on a scale far vaster than any of our services, our counterintelligence, our security services are used to dealing with. And in our democracies, we just don’t have the structure to deal with this type of threat.

Mr. Jekielek:

There’s this whole approach of collection, which is to get a lot of little things and then put them all together back home. So a lot of this opportunistic intelligence gathering is actually part of the plan and actually useful, even though each single piece might not even be a criminal issue.

Mr. Eftimiades:

Right. We call this a grains-of-sand approach. And the old saying used to be if the Russians wanted to steal sand from a beach, they would surface a submarine at night. A bunch of commandos would paddle in from the shore. They would get a bucket of sand. They’d have a ring around it with guns. They’d get a bucket of sand. They’d paddle back out to the sub and disappear under the waves. 

China would send 10,000 bathers the next day. And everyone would come with some sand and brush themselves off. And we see this in their collection operations. Sometimes redundant, but sometimes self-guided, but massive. And there’s just no way to, you know, the way we are structured, the way our services are structured, we just can’t protect against that type of onslaught.

Mr. Jekielek:

I couldn’t help but notice that Professor Charles Lieber recently got a position at Tsinghua University. And so I don’t typically like to focus on specific individuals, but I think this case is kind of illustrative, especially since he was found guilty. Maybe if you could kind of paint me that picture and what it means that he’s now at Tsinghua University, of all places. 

Mr. Eftimiades: 

Professor Lieber was arrested because he was taking grants, in this case from the Air Force, for about $15 million and providing the same work to China. 

Mr. Jekielek:

I just want to mention, and nanotechnology, like some of the most sensitive, you know, cutting edge, he’s like one of the top nanotechnologists in the world. I have to mention that, but please continue. 

Mr. Eftimiades:

He’s one of many who do interesting things like that. We have at Los Alamos what they call the Los Alamos Club. We’ve had 116 ethnic Chinese who have worked with classified clearance, with clearances on critical technologies who have gone back to China. And we have been able to identify some of the areas, including nuclear submarines and weapons systems that they’ve worked on back in China because they publish on it. And so we’ve been able to track everything that they’ve worked on. Is this illegal? No. 

They say, I want to go back to China. China’s recognizing their citizenship and going back to it. Technically, should they be taking back the classified knowledge and using that in the development of China’s, in this case, military weapons systems? No, they shouldn’t be. But we’re paralyzed as a bureaucracy in doing anything about this. 

We have a similar situation with Canada. Two dozen Canadian pilots, military pilots, have been in China training the Chinese PLA Air Force. I mean, training them in NATO combat tactics. So we don’t have case law that says, hey, that’s against the law. We know you’re getting $300,000 a year, but you can’t do that. So situations like this come up all the time. 

Mr. Jekielek:

But what about this case of the, you know, incredibly prominent nanotechnology professor being found guilty? What exactly was he found guilty of? How serious was the punishment? And how is it that he’s now working for a Chinese university? 

Mr. Eftimiades:

The punishment should have been jail time, which he didn’t get. In this case, Professor Lieber lied to the government on a contract, and that’s called 18 U.S.C. 1001. What he did was he was working for China, the same thing that he was, you know, doing for the Air Force but not telling them. So you can do that, or you can go work for China, but then the Air Force would have said, you’re not taking our money, you know, you’re not doing your projects working here. 

But he didn’t do that. He specifically told them, you know, he wasn’t. He filled out the paperwork and said, I’m not working for China. So what these cases wind up being is not so much the term economic espionage, but fraud, a person really conducting fraud. It’s the easiest charge to get on this because it’s easily provable. 

But what you find is that there are many, many, many more cases of this with people working for China while they’re cutting-edge academics, working on nanotechnologies and biotechnologies in the United States. And they’re working for China at the same time. The only difference is it’s common in academia. The only difference is those are generally considered questions of ownership of the research and not a federal charge of fraud because they don’t have federal contracts. 

We see a number of universities, and this is extraordinary, U.S. universities that are working for China, developing technologies that the U.S. government has told China it cannot import. So you can’t export this technology. And China says, OK, one of our universities goes to partner with a U.S. university and develops a technology. Or Chinese companies like Huawei pay a U.S. nonprofit, which then turns around and sponsors research at a company, at a university in the United States to provide that technology to China. So, I mean, we’re leaking all over the place in critical technologies, technologies that give China a competitive edge commercially and militarily.

Mr. Jekielek:

I mean, it’s absolutely astonishing. I mean, I happen to know that this sort of thing is happening, but when you lay it out like this, it’s like, what are we doing?

Mr. Eftimiades:

Yes, it’s out of control.

Mr. Jekielek:

But even today, right, where the, let’s just say, the level of understanding of the China threat is the highest it’s been ever by a margin. I imagine you would agree with my statement here.

Mr. Eftimiades:

Yes, absolutely. I mean, I gave my first testimony before Congress in the 1990s based on my first book. Four times I testified before Congress. And one of the things I tried to leave with them was saying, look, do something about this problem now, because if you don’t do it, you’ll be calling me back in 20 years screaming, my God, how did it get this bad? Well, we’re 30 years later, and it’s worse than ever. The only difference now is the realization by the American policy apparatus that they’ve let it atrophy for so long that we’re in big trouble.

Mr. Jekielek:

When you say atrophy, you mean the counterintelligence work or what?

Mr. Eftimiades:

Not only counterintelligence work. It’s insider threat awareness. It’s the ability to deal with China’s cyber hacking campaigns and the theft of intellectual property and trade secrets through cyber means. Our response? Build bigger walls. I got it. That’s reasonably effective. We’re building bigger walls. And if you’re the government building bigger walls to protect yourself, then you and I, the taxpayer, pay for it. If you’re a company that’s building bigger walls, the consumer pays for it. There’s no cost to China. China just steals it like crazy. I mean, what kind of—you think about it.

Mr. Jekielek:

When you say walls, do you mean like cyber?

Mr. Eftimiades:

Yes, cyber walls. Defensive walls that build up. We invest in that, and they invest in offense. Generally, the offense is the one that wins. And we’ve seen criminal gangs that support the Ministry of State Security. Not only are they stealing technologies, but they’re actually conducting denial of service attacks and ransomware attacks, and they’re engaging in criminal activities in addition to that. You have a criminal state. It’s simply the bottom line. You have a criminal state that supports these activities to degrade the United States and to further the greatest transfer of wealth in history. 

Mr. Jekielek:

One of the things that’s that you highlight how human intelligence works hand in hand with technical collection, which I think, in our systems, isn’t typical, whereas in China, that is more the standard MO.

Mr. Eftimiades: 

Right. What we see is that in a number of cases, and by human we mean human intelligence, the actual collection of information from other individuals, working with technical collection, whether it’s penetration of laptops—usually, it’s often cyber work that’s done—and their operational tradecraft, as it’s called, often integrates both. 

And I’ll give you a couple of quick examples. There was a case about four years ago dealing with Safran, a French aerospace company, and, as it turns out, connected to General Electric as well. Out of that, from the main case officer in China, Xu Yanzhun, he had a human collection going. At the same time, he had people inside Safran—Chinese nationals inside Safran—who were directors of cybersecurity. 

So, of course, they were not only allowing the Chinese Ministry of State Security in, but then covering up and trying to thwart Safran’s own internal investigation. So he has a human collection component going and a cyber-collection component going. And he has people on the inside who are able to thwart the investigation by the company. So it’s a holistic approach to how you conduct espionage. It’s really extraordinary to watch.

Mr. Jekielek:

You know, something just struck me. We were talking about counterintelligence. I wonder if there are even some people out there—we hear the term often—but I wonder if there are some folks who don’t even know what that entirely means. Why don’t you tell me?

Mr. Eftimiades:

Counterintelligence means that for every intelligence service and for their activities, they’re trying to counter an opposing intelligence service. So we have counterintelligence, which is trying to oppose the general things that a foreign intelligence service does. And we have counterespionage, which is specifically going after an espionage operation, trying to flip it, turn it around, and use it to your benefit. 

In the United States, as in Canada and in free democracies, those intelligence and counterintelligence capabilities are built around the classified worlds. They’re built around our classified military information, our classified intelligence information, and that type of nuclear information—all that classified stuff. China’s strength is that it strikes at the political apparatus where there is not this type of counter capability in place because we have free and open democracies, which is why you see so many accusations and investigations of Canadian parliamentarians and evidence that they’ve been supported by the Chinese embassy. We see that all the time. 

We see the same thing in the United States with Linda Sun in a recent case in New York state. For 12 years, she was supporting the Chinese Communist Party, the United Front Work Department, and thwarting Taiwan in their policy initiatives.

Mr. Jekielek:

While working for the New York governor.

Mr. Eftimiades:

Yes. While she was working for two successive governors, Cuomo and Hochul, over the course of 12 years, basically running China policy for New York state, literally running China policy. 

Mr. Jekielek:

You can’t write this stuff. 

Mr. Eftimiades:

No, you can’t. It’s just amazing, and that New York state apparatus doesn’t have any protection in place. It took the FBI, a federal agency, to come look at that and then to ultimately arrest her and her husband. It’s the same thing in Canada. We have agencies that are on the side that are organized to protect themselves and to protect classified information. They’re not organized to protect General Electric or some food company or something. They’re not organized to protect those. 

Mr. Jekielek:

Something I’ve become aware of is—and this would be great to hear your thoughts on it—is that the FBI has been less focused in past years on developing counterintelligence capability. But from what you’re telling me, it would seem to me like it would be a huge priority for the FBI to develop this kind of broader counterintelligence and counterespionage capability.

Mr. Eftimiades:

That’s the term that you’ve hit on more broadly, right? That counterintelligence capability that the FBI has, up until recently, has been very focused on just the protection of U.S. secrets, right? 18 U.S. 790, you know, that series of laws, of legislation that says protect U.S. classified information. What they haven’t been focused on is covert and political influence. They haven’t been focused on threats and manipulation of the democracy advocates and the dissident community. Up until recently—two, three years ago—they completely ignored that. Maybe because they don’t have resources for it, maybe because it wasn’t seen as a threat. But by and large, it has been pretty much ignored. 

It’s a horrible thing because so many people, so many citizens of the United States were subject to harassment and threats and transnational repression from China, and they were left on their own. If a nation-state serves no other purpose, if it serves nothing else at all, it’s there to protect its citizens. Otherwise, why bother? And we have not done that for decades. 

Mr. Jekielek: 

I read your section in your case studies of transnational repression with great interest, including the Linda Sun example, but because it’s kind of a big area that I’ve been interested in for decades, you’ve looked at—I forget, there’s almost 900 cases for this book, right? And not of transnational repression—that’s just a piece. But can you just explain to me what you found broadly in the transnational and just define it for me too, because again, it may seem to be obvious, but it maybe isn’t obvious to everybody.

Mr. Eftimiades:

Let’s start with our definition. Our definition of this is China, in our case China, reaching out past its borders globally to exercise the CCP’s will to shut down any dissent, to co-opt and to pull people, organizations, governments, etc., to support the CCP through manipulation, through bribes, whatever, and then to firmly destroy any opposition to the CCP globally. That’s their objective. And that’s what transnational repression is. It’s the second part. Actually, it’s both parts. It’s covert manipulation and corruption. And then it’s actually threatening, and in some cases, taking action against individuals globally to shut down any global opposition to the CCP.

Mr. Jekielek:

Something else that is really good in your book, now that I think about it, right, is you explain very clearly what the United Front Work Department is, what its role is. I’m going to get you to tell me about that because, again, it’s something that maybe isn’t entirely obvious to everybody, but also that in doing the work that you just described, it’s not just the United Front Work Department that’s functioning, but multiple other major agencies in the Chinese system and the CCP system.

Mr. Eftimiades:

Right. Let’s start with the United Front Work Department, which has, I believe, 13 bureaus, and it works domestically as well as overseas. And the idea is to join with organizations that do not share the objectives or goals or value systems of the CCP and co-opt them. The CCP might call it, or the United Front Work might call it, educating them to a position where they support the CCP’s objectives. It’s very simple—it’s co-opting other organizations. 

We saw this against the Nationalists, where China sent a million people to join the Nationalist Party, and then eat it out from the inside. They destroy it. They destroy meetings, they argue and fight, and then move up into positions. Then they literally destroy the capability of that organization to oppose the CCP. 

I always say the same thing is happening now. We see it happening through corruption. We see it happening through covert agents recruited. That’s done by the Ministry of State Security. So they actually have a bureau in China’s version of the CIA, the Ministry of State Security, which is responsible for doing work for the United Front Work Department, going out recruiting agents all over the world and getting them to disrupt or turn on their communities, their state or local governments, as well as their federal governments. And we have seen this at every level.

Mr. Jekielek:

You list some of the most shocking examples. One of the prominent ones is Christine Fang, known as Fang Fang.

Mr. Eftimiades:

Right. She was a case around 2015 and was seen often with Congressman Swalwell, who actually ran for the presidency at that time as well. The FBI picked her up on surveillance, meeting regularly with a Ministry of State Security officer out of the consulate. They followed her. It turns out she was very close to Congressman Swalwell.

Mr. Jekielek:

What’s most interesting about that case to me is the duration or the commitment to the development of the relationship. I don’t have a particular interest in singling out Congressman Swalwell, but just in terms of the tradecraft, if you could kind of paint that picture for me.

Mr. Eftimiades:

Sure, absolutely. In fact, the Ministry of State Security has a term for this, which translates literally to bottom sinking fish or fish on the bottom of the ocean. It is a long-term asset. So they put a person in place, in this case, someone who’s very friendly with politicians, representing the Chinese community as she used to sell herself and representing the Chinese diaspora, getting very close to politicians and then leaving that person in place for decades. That’s the objective. And it’s not a very large investment on the part of the Ministry of State Security, but it is a long-term investment that always brings forth results. 

Mr. Jekielek:

Over the years, I’ve managed to talk to a number of people who interacted with her in various capacities. She had this kind of very compelling, incredibly assertive personality by all reports. And it was almost hard to say no to her sort of thing, right? It’s a very, very fascinating and really kind of deeply troubling area. Like how many assets of that nature do you think are out there here? 

Mr. Eftimiades:

I think in the U.S. and in Canada we see a lot of this as well, but I’m going to say, you know, thousands, if not tens of thousands in those countries, because it really isn’t a tremendous cost to the ministry. I mean, you know, they have to invest in the person in time. Maybe there’s training. They have to keep in touch. They dedicate an individual to handling the asset, as it’s called, to meeting her and to communicating with her. 

But it’s not like they’re paying them tons of money. It’s not like they’re paying them for nuclear secrets or anything like that. It’s a slow burn and something that happens over a long period of time. There’s so many cases that have come to light of people being arrested. It’s only because in the past few years, law enforcement agencies have turned their attention towards this. Otherwise, they’ve been unencumbered for decades.

Mr. Jekielek:

Tell me about your background. I mean, how is it that you came to be one of the top people around these issues?

Mr. Eftimiades:

I did part of my undergraduate and graduate work in Taiwan and mainland China. After that, I went into the CIA. For four-and-a-half years after the CIA, I was a special agent for the Diplomatic Security Service in counterintelligence working on China. And I had published during this time, which is not easy while you’re in the intel community, but I had published externally on Chinese espionage. 

In 2018, I started getting calls, you know, ringing off the hook from U.S. government agencies saying, Nick, would you please come in and talk about China? Come in and talk about what they’re doing. And I only thought that God has a sense of humor. You’ve got to be kidding me. For the better part of 34 years, I’ve worked on this issue. And after I left is when they actually started to get concerned about it. 

And so since that time, I have, as you noted, I have 900 cases in the database, which allows you to do extraordinary analysis, comparative analysis, lets you understand motivations for recruitment, lets you understand the type of tradecraft applied against, you know, aerospace technology or information technology, etc. When you have that type of data, it’s really, you know, it really does let you do a lot of extraordinary things.

Mr. Jekielek:

So since that time as a university professor, I’ve, you know, been working a lot on these issues, you know, for the note, and you do mention this in the book as well, is that these 900 cases, they’re cases that we found, not cases that exist, obviously, right? But so there might be some kind of, you know, bias in the sample, so to speak. And I’m just wondering, in your thinking about that, do you have any sense of that? Do you think this is representative?

Mr. Eftimiades:

I do, just because of the individuals, companies in particular. And, you know, people say, is that 10 percent or 100 percent? And the answer is, I don’t know. And because it’s a whole of society approach, Beijing doesn’t know. Right. They don’t know companies that are out there stealing this and that. They don’t know the universities that are gaining one type of technology vs. another. It’s a free-for-all in many ways. 

So at provincial levels, as well as at the central government level. So they don’t have a handle on it at all. I mean, what we know is what we know, which is out of these 900 cases, this is the type of tradecraft that you can see applied towards X type of targets. And the validating part of that is that it proves out, right? You see new cases that come about using exactly that same type of tradecraft, right? 

So in espionage, we’ve seen a new tradecraft applied over the past couple of years, which has been recruiting people online, recruiting low-level people online, handling them online, and putting in certain operations security measures online. And we’ve seen cases like that. Guess what? The last six, seven, eight years, we’ve seen many, many cases like that. So the assertion that that’s the way they’re starting to do their cases is clearly playing out correctly.

Mr. Jekielek:

I remember a few weeks ago when I was starting to read your book, I noticed something in there about how much, like LinkedIn, I think there’s like tens of thousands of just cases of attempted recruitment through LinkedIn. Do people come to you and say, they just tried to recruit me? 

Mr. Eftimiades:

No, actually, in the case of LinkedIn, those statistics were released by the governments that were victims of it. So the Brits released it. The Brits said publicly that we had about 20,000 approaches on LinkedIn. 

Mr. Jekielek:

But how many are there? You can imagine how many there must be globally. I mean, the U.S. has a much greater focus for the CCP than the UK, right?

Mr. Eftimiades:

Absolutely, and it’s cheap. And now with artificial intelligence, I happen to know that it used to be an intern’s job in the Ministry of State Security to identify people on LinkedIn for approaching, for approachment. I’m going to guess that that’s all done with artificial intelligence now. I’m going to guess a lot of the initial approaches and even the responses are all done through AI.

Mr. Jekielek:

Because it’s just, it’s in a sense, it becomes a numbers game because you’re just going to, you know, if you put out 20,000, you’re going to get a few probably of people who are, I know people who have been, you know, approached. I don’t know if it was exactly someone trying to approach me; that wouldn’t have been very smart of them, but I’ve gotten, you know, sort of very beautiful-looking Chinese ladies attempting contact. Yes. I don’t know what the purpose was. 

Mr. Eftimiades:

Yes, they say, I work for a construction company in Shanghai and don’t post anything, but I absolutely have to be your friend.

Mr. Jekielek:

Right, exactly. On multiple social media, in fact, not just LinkedIn.

Mr. Eftimiades:

But when you think about that, Thomas Zhao was a Navy petty officer who is in prison now for, I think, three years for passing along, not classified, but restricted information to his Chinese handler, who was recruited through a stock group, through a group that watches stocks for stock investment portfolios on WeChat. He was identified and approached through that group. The organization, the person doing it maintained a cover that they were doing maritime research, but it can be anything. This guy was recruited through WeChat. We’ve seen others recruited through Facebook. 

What did he transfer through that? He actually transferred photos of his ship in the Navy, classified, you know, weapon systems, systems on shore for radar in Japan, things like that, that he was able to pass along. So he didn’t have access to classified, to real classified, just restricted information. But again, over time, he would have ultimately moved it, would have moved him into a position that he would have been able to pass more and more damaging information. And again, it cost them almost nothing.

Mr. Jekielek:

The other kind of scary part about AI is they can probably assign probabilities now to the likelihood that a particular profile is going to be co-optable, for example, based on certain characteristics, based on, you know, deep analysis of the people that have already succumbed or agreed or whatever. 

Mr. Eftimiades:

Which is why we see things like the CIA’s recent initiative to approach people online. Right. 

Mr. Jekielek:

Let’s talk about that. What do you make of these recruitment videos? 

Mr. Eftimiades:

If you talk to the old-time intelligence officers and they’re extremely against it, you know, intelligence was done one way, but the reality is it’s a great way to approach things for a number of reasons. Not the least of which is that anyone who responds and assesses their potential access to information that the agency is interested in, I think most of these cases will just wind up with the person being debriefed. 

They say, I lived near a place in China that made rockets and stuff. A person’s debrief, we call that a strategic debriefing program, right? And the intelligence community does that. A lot of useful information comes in through those types of programs. But I suspect that’ll be the vast majority of the benefit of using that. 

But it’s cheap. It’s inexpensive. It has a broad outreach. And it really paints a very, very problematic role for China’s counterintelligence service. Now they have to worry about a whole lot of people coming into the CIA. Now they have to worry about thousands of people who might have access to information in China. So it flips the stress points, as you call it. 

Mr. Jekielek:

It’s super interesting this way, because also, you know, the deep, deep corruption that’s inherent to any communist system, of course, it’s leveraging that. It might not be as cheap as a high-value asset. The flip side is, well, actually, you mentioned this in the 2010s, what happened to all the CIA assets in communist China. Maybe you can remind us of that, because I think they tried to send a very clear message. 

Mr. Eftimiades:

Yes, of course, the media reports were that in 2010 or so, about a dozen, I think, or more CIA assets in China were either imprisoned or killed. And, you know, the discussion then centers around what operational security failure that happened, whether it was an individual who had access to these persons, whether it was communications or how China was able to learn about this, and then turn around and eliminate those assets inside China. China bragged about it publicly.

Mr. Jekielek:

Today, there’s a situation on the one hand, there’s certainly a lot less loyalty than the Chinese Communist Party would like there to be. On the other hand, the cost of, you know, becoming an asset is probably very high if you’re discovered. 

Mr. Eftimiades:

Yes, it certainly is. But, you know, in some cases, if you think about it, you’ll have people who immigrate to the United States who come here on EB-5 visas, you know, investment visas or something like that. Now, they may have some insights into governance, into facilities, into programs that China is doing and those are great people to talk to, right? That’s a great person to talk to. 

Are you going to ask that person to go back to China and actively work? No, you’re not, but it’s a tremendous information pool to draw from and that’s what the CIA actually just put out, a tremendous information pool and a headache for China to think, oh my gosh, you know, all these people went and now are in the US. How do we know what’s being said?

Mr. Jekielek:

But is this the U.S. trying to build more of a sand-based collection method?

Mr. Eftimiades:

That’s the beauty of it. They’re casting a wide net. And we’ll see what comes of it. Well, we probably won’t see it publicly. But they’re casting a wide net. And this wide net that they do will likely bring in a lot of useful information. And at the second point, it’ll also tie up China’s intelligence services, their counterintelligence services in particular.

Mr. Jekielek:

But also it’ll play on this paranoia. That is such an important point that I hadn’t really considered until you just mentioned it. I mean, just maybe explain that part for the benefit of our viewers.

Mr. Eftimiades:

Okay. I don’t know if I mentioned the Coast Guard program. So I was reading a little while ago to address the issue of the CCP’s paranoia. For example, they had an advertisement online for the Coast Guard. They were hiring 7,000 officers and wanted people who could speak English or Japanese, but who have not studied abroad. Why? Because they’re fearful that anyone who studied abroad could have been recruited, you know, and they don’t want them in a position where they’re able to report out information. It’s funny because the people in China know this. 

So we’ve had cases where the Ministry of State Security was trying to recruit English speakers. And they went to Hainan Company, an IT company. And they actually did this through the Nanjing University of Aeronautics and Astronautics, right? So they do a cover and they recruit. They want to recruit English speakers. 

Well, a lot of Chinese speakers responded. You know, a Chinese person who spoke English responded to that recruitment effort. And when they figured out it was the Ministry of State Security, they said, no, I don’t want to do it because I want to go to the West one day. I don’t want to be flagged. Right. I don’t want to be flagged. Internally, in China, people understand that. 

They understand the level of paranoia and the risks associated with being part of that apparatus. So it’s just part of who they are, their nature. You know, the CCP has always been like this. And before that, the regimes in China protect the regime. That’s why it’s called state security, not national security. We’re different. We’re national security. Protect the nation, not the state. 

Mr. Jekielek:

You’ve trained over a thousand counterintelligence officers over your lifetime. That’s quite astonishing in itself. What should people be looking for, right?

Mr. Eftimiades:

Here’s the challenge, right? We have a great many Chinese nationals in America. There’s this weird incentive structure that wants to get them. The state wants to co-opt them. Many of them, of course, aren’t interested in doing that too and don’t want to discriminate against them, obviously. And in some cases, they’re actually active resistors, especially in the dissident diaspora communities and so forth, or just passively doing that. 

Mr. Jekielek:

Now, as someone that’s facing this threat that we’ve just been describing in detail, what should people be looking for? 

Mr. Eftimiades:

I think there’s a question of what people should be looking for sort of at an individual or company level. And I think then what is the response? Okay. Which is, you know, more important than what people should be looking for. I mean, what people should be looking for is to get through education and training, right? I mean, I’ve written books on this. I’ve, you know, taught courses on it. That’s the easy part, right? That’s just a matter of education and training. 

The more difficult part is what do you do about it? And in our case, for the United States and for all Western democracies, strategy is important here because China is very, very strategic in its planning. It thinks out decades. It executes over years. If Trump has a problem, they’ll wait Trump out. It’s only another three years and X number of months, right? And they’re very long-term in their thinking. 

The point for us is coming up with a strategy on how we’re going to contend with this. So the next big cyber event, when we see they’ve penetrated our critical infrastructure, that’s got to result in consequences. That’s got to be, you know, okay, we’re kicking your state-owned enterprises off the stock exchange. No more investment from the U.S. for them.

Mr. Jekielek:

If I may jump in for a moment, right, the challenge that we have, and this is whether you’re looking in the Philippines and the, you know, Chinese Coast Guard hosing down people or even putting up flags on reefs or God knows what. It’s always in this gray zone, incremental, and it’s just short of warranting a kinetic, when I say kinetic, I mean, just like action, direct action, right? I’ve always imagined there should be some sort of reciprocity. You do something outrageous, something outrageous gets back to you. So you’re, because that’s the only language they understand as far as I can tell. Right. However, they will always operate in this gray zone. And you’re like, well, is it?

Mr. Eftimiades:

You’re correct, and that’s why it’s called gray zone warfare and China excels at it. They even write about it in their doctrine. You know, they revitalize warring states, period working groups at senior levels in the PLA [People’s Liberation Army] and the CCP exactly to use this incremental approach, operate in the gray zone. And, you know, the response has to be the beauty of this is that we’re a nation. 

They do something and they would say, well, we didn’t do that cyber attack. We say, we don’t care. We think you did. We’re kicking your state-owned enterprises off, period, and it’s our decision. We can do whatever we want. Well, that’s not fair because it wasn’t us who did these massive cyber attacks. We say, we think it was you, and that’s all we need to act. 

So this isn’t going to the U.S. court system. This isn’t talking to your mom and her deciding between the two brothers who’s telling the truth or not. We’re a nation-state. We’re an independent nation-state, as is Canada, as are all the nations in Europe. You can act independently and say, you know what, that’s it.

Mr. Jekielek:

My conclusion, right, is that it’s very reasonable when looking at the Chinese Communist Party to assume bad faith as the basis, right? But we don’t like to do that in the West. We like to always assume good. And actually, I don’t like to do that either. But I think in this case, it’s earned over many decades, right? That you just prove to me it’s not bad faith, and I’ll believe you with extensive evidence. However, otherwise, I should assume it’s bad faith, because that’s what you almost always do, or perhaps always. I have 900 cases that support your contention. Okay. But that itself is a mental construct that’s difficult for us, I think, still, somehow.

Mr. Eftimiades:

I think it was difficult for us. And let’s be honest, there are other factors involved in that as well. In the case of U.S. policymakers, there was not only ignorance of what the CCP, which is what we’re talking about, of what the CCP is really up to. There was a lot of arrogance in our behavior saying, oh, the minute they make money, you know, they’ll want to be Americans. You know, every inside, every Chinese person is a freedom-loving American dying to get out. There was that type of arrogance in our policy apparatus. 

And then there was greed, and there’s still greed. You know, companies being paid to bring their message to the state level or to the federal level, money flowing into universities from the CCP. So ignorance, arrogance, and greed put us in this situation as it is now. It might be bordering on being too late to be able to respond. But I think that the general theme, as we started this conversation with. The general understanding is that, hey, they never had good intentions in the first place. And that’s being proved out arrest after arrest after arrest. 

Mr. Jekielek:

You have a, you posited a kind of a strategic response, which is, I don’t know if it was reciprocity or not. The reciprocity is what’s in my mind. 

Mr. Eftimiades:

Yes. One of many approaches. 

Mr. Jekielek:

Right, so flesh that out for me. 

Mr. Eftimiades:

It is through our alliances like five eyes, and our alliances through NATO. If an individual steals technology from the U.S. or is found doing covert influence in Canada, the response has to be from all of us. A person steals technology, great. We’re going to do a no-fly list. No-fly is for people who do technology theft. 

We’re going to do a list of if you’re an academic and you steal research, you don’t publish anywhere. You don’t get visas to come to academic conferences. You don’t publish in the West at all. So that type of reciprocity, you have to ask, and I do ask policymakers, where do you see the relationship 15 years from now? What do you want it to be like? What do you want China to be like? That’s the first part. 

I get blank stares, but that’s the first part of this. Understand and crystallize for all our Western partners, what do we want out of them? Where is this going to be in 15 years? And what we want is ultimately beneficial for all sides of the trade system. We want to be able to work together on global issues, regional and global issues, free exchange of ideas. Those are straightforward things. 

What we don’t want is threats against our citizenry. We don’t want theft of our technology and our trade secrets. We don’t want military threats. It’s a pretty straightforward thing. You start with the positive aspects of what you want and then start designing a plan and then a strategy to get from A to B to meet those goals. And if we were really smart, we’d put metrics along the way. Ironclad agreements between nation-states that this is how we’re going to respond and then put metrics in a way to ensure that we’re getting there.

Mr. Jekielek:

My contention, and not just mine, is that this whole approach to trade since what President Trump called Liberation Day, has to do with obviously challenging China around high tariffs, but also around bringing other countries into closing various loopholes that allow the Chinese Communist Party to do whatever it wants in the process. Is that your view?

Mr. Eftimiades:

Yes, that is because what we find is just things like when you bar a Chinese company from receiving technology, they open up a subsidiary in Malaysia or something like that immediately, and they route the technology through there. So there’s a lot that’s different.

Mr. Jekielek:

But also security issues, right? Because the U.S. is really unhappy with, for example, the level of Chinese Communist Party, let’s say, penetration in Canada. And the impact on that is on intelligence sharing and so forth. I’m aware that’s the case. So I imagine, in my mind, I don’t know if this is true. No president. Is this something that’s on the table? I’m not 100 percent sure, but I would expect it would be.

Mr. Eftimiades:

I don’t think it is, honestly. I don’t think it’s, I think that it’s a working level discussion area. I don’t know about, you know, and no one knows enough about the Trump administration’s approach towards China and at what levels they see threats. I mean, certainly they see an economic threat. But if we come with a good trade relationship with China, is Trump going to turn his back on everything else? I don’t know. We know our agencies, the FBI and others, are deeply concerned about the covert influence threat now. So are they having those discussions with RCMP? I can tell you the RCMP is concerned about it. 

Mr. Jekielek:

The RCMP is the Canadian National Police.

Mr. Eftimiades:

Yes. So in fact, one of the extraordinary events that I look forward to annually, which I spoke to last week, is the International Conference on Transnational Organized Crime and Terrorism. And it’s hosted by an organization that has an international organization for Asian crime experts. Okay. So you have, the Canadians were there in force talking about the use of criminal organizations to execute those covert influence operations. That’s right. So this concern at a working level, we see it at a working level. 

The problem is sometimes getting a law to support that, right? We’re on untested turf in a lot of ways. I mean, even our own in the United States, the Foreign Agents Registration Act hasn’t been updated since 1938 when we were dealing with German propaganda. It’s all got to be done in the U.S. and it’s got to be physical. You know, it’s a little out of date. So our legal institutions have to update laws so that we’re better able to affect this. And recently laws dealing with Falun Gong are a great start in a good direction to support human rights.

Mr. Jekielek:

You’re thinking about the Falun Gong Protection Act just passing in the House just yesterday, right?

Mr. Eftimiades:

Quite literally, yes.

Mr. Jekielek:

On this point, I wanted to ask you, we were talking offline about just how, in some ways, just people, it might seem odd that the Chinese regime is so obsessed with the Falun Gong, with the Shen Yun dance performance, you know, to the point where there are Chinese agents in jail because they tried to get the nonprofit status of Shen Yun revoked to people that IRS people that turned out to be FBI agents. But yes, it just seems unbelievable in a way that it’s that level.

Mr. Eftimiades:

To us, it appears obsessive. And what we’re talking about is a Chen, I forgot his first name, who is in jail now, who actually said that he was a member of the 610 office in China. And he described it as a spy agency, and told his cellmate that it is responsible for the eradication of Falun Gong globally. 

Mr. Jekielek:

If I may, for a moment, they have an agency committed to the eradication of Falun Gong globally. Yes. Isn’t that in itself, I mean, I’m familiar with this agency for the last, you know, 25 years. However, isn’t that astonishing, just kind of from a bird’s eye view, that there would be an agency for this purpose? 

Mr. Eftimiades:

Unlike our own intelligence agencies, the lion’s share of their effort goes towards protection of the party, okay, as opposed to the nation. So they deem Falun Gong to be a threat to the party because they have an ideological belief. They have a, you know, a spiritual belief that they believe is a threat. They look at people who advocate for democracy, they’re a threat. The people advocate for Taiwan independence, they’re a threat. The Uyghurs, they’re a threat. Tibetans, they’re a threat. 

Anyone who advocates for a position that’s different from China, the five poisons, as we call them, anyone who advocates for a different position from the CCP is immediately considered a threat. But now they have the means and the capability to go globally and destroy that threat. That’s what we’re seeing. Right. And that fits into this rubric of transnational repression.

Mr. Eftimiades:

Right. That’s exactly it.

Mr. Jekielek:

Right. This has been an absolutely fascinating conversation. Any final thoughts as we finish up?

Mr. Eftimiades:

Former Director Wray of the FBI used to say that we have one case every 12 hours that arises dealing with China. Two cases a day times 365 equals 730 cases a year. Some of these take months and months to resolve, so there are thousands of cases in the rear. And what that tells us, tells the FBI, is that we can’t arrest our way out of these situations. Whether it’s the U.S. or any of the Western nations, freedom-loving nations cannot arrest our way out of these situations. 

We can’t. We’re failing. As it is now, we are failing. So someone’s got to do something. Our political apparatus has to step up. Our governments have got to step up. And we’ve got to change the way we’re doing things to turn ourselves toward succeeding. And that, going back to the very first question you asked, is why this becomes so critical, because it’s not something that we’re used to dealing with.

Mr. Jekielek:

Nicholas Eftimiades, it’s such a pleasure to have you on the show.

Mr. Eftimiades:

Thank you. It’s been a pleasure to be here. I appreciate it.