FBI to state: Beware agri-tech spies

An FBI investigator cautioned the Arkansas Agriculture Board on Wednesday that the state's agriculture industry needs to do more to protect proprietary trade secrets from foreign industrial spies.

While Greg McDaniel, an analyst with the FBI's Field Intelligence Group, didn't point to a specific, active threat, he cautioned that other countries are trying to steal research performed in the U.S.

"We have a concern that U.S. technology, U.S. proprietary research, and development and technology -- kind of the brain power -- is being siphoned off by foreign governments," McDaniel said.

He cited a 2013 case in which a research geneticist for the U.S. Department of Agriculture's Dale Bumpers National Rice Research Center in Stuttgart was arrested in Kansas along with another agricultural scientist on charges they tried to steal trade-secret seeds from a Kansas company to hand over to a Chinese delegation that visited Arkansas that year.

McDaniel said the FBI and other federal agencies want to identify Arkansas companies and others involved in proprietary agricultural research, especially with three major crops: rice, soybeans and cotton.

He said the agencies already are doing outreach with larger companies, such as Springdale-based Tyson Foods, and are now trying to gather information about smaller companies and industry groups in Arkansas.

Over the past two to three years, such espionage has become a growing national concern, he said, not just for the FBI but also among other U.S. government agencies worried that U.S. technology may be improperly leaving the country.

McDaniel told the board that information is taken by means of intrusions into company computers; human intelligence gathering done during face-to-face exchanges by researchers or trade delegations; or in efforts by foreign-based companies to form joint ventures with U.S. companies to obtain their technology.

He said the FBI wants to work with companies to help them protect their trade secrets, including providing briefings about trips overseas where there's a higher risk of information being stolen.

"If you're traveling to China on a delegation that may have proprietary research, you can probably expect your room to be entered while you're at dinner or somewhere along the way. That is not unusual," he said. "We can't do that in the U.S., but they can certainly do that overseas."

He said thieves are looking for ways to exploit security weakness in laptop computers, Blackberries and cellphones.

In the 2013 case, Wengui Yan is still awaiting trial in U.S. District Court in Kansas on charges that he and a Kansas man, Weiqiang Zhang, stole and conspired to steal trade secrets. Zhang worked for a research firm called Ventria Bioscience in Junction City, Kan. Yan is a naturalized U.S. citizen who had lived in Stuttgart for 17 years prior to his arrest. Both men have pleaded innocent to the charges.

A federal indictment said the two men traveled to China in 2012 to visit a crop research institute and then invited the institute to send representatives to the U.S. in 2013. On its way back to China, the delegation's luggage was inspected by customs officials who found restricted-access seeds developed by Ventria. The company had invested about $75 million developing the seeds, the indictment said.

Federal prosecutors also are pursuing a case in Iowa involving a man who works for a Chinese seed company accused of attempting to steal seeds from test fields owned by Monsanto Co. and DuPont Co., The Wall Street Journal reported April 24. Investigators told the newspaper that seven people have been charged with stealing trade secrets in the case, with five remaining at large.

A spokesman for the FBI's Little Rock field office, Debra Green, wrote in an email that McDaniel's talk was part of an effort to reach a large variety of businesses around the state, including agricultural businesses.

"Because we are aware their research can be targeted by foreign entities, we encourage management to be diligent and hyper aware as to what is occurring in their businesses and to be thorough in protecting their proprietary interests," Green wrote.

After Wednesday's meeting, Arkansas Agriculture Secretary Wes Ward said that given the willingness of the agriculture industry to publicize and share research as growers work to increase quality and yields, protecting proprietary information will require a balancing act.

"It's a delicate situation to try to protect agriculture," Ward said. "When researchers find something really good, they want to publicize it."

But Ward, who is now in the Marine Corps Reserve after years of active duty, said it was common for servicemen to get briefings on potential threats before being deployed anywhere overseas. He said those briefings seem comparable to what the FBI is now doing.

He said the FBI had contacted the state Agriculture Department late last year about opening discussions on protecting proprietary information before he became agriculture secretary in March.

Business on 05/07/2015