The Research Compliance Landscape Is Evolving Quickly

By Valerie Bonham, Mark Barnes and Daniel Weeks
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Law360 (June 24, 2020, 5:33 PM EDT) --
Valerie Bonham
Valerie Bonham
Mark Barnes
Mark Barnes
Daniel Weeks
Daniel Weeks
Even as global scientific exchange to develop COVID-19 diagnostics and therapies expands, the U.S. Department of Justice, lawmakers and federal funding agencies are pushing forward with efforts to raise attention to researchers with undisclosed research and academic affiliations and funding, largely through the People's Republic of China and academic and hospital entities in China.

A series of recent criminal actions and legislative efforts reinforce the changing landscape for research compliance. For universities, academic medical centers, hospitals and other research institutions, demands to expand oversight and install new or more extensive compliance measures will likely continue.

Among the most significant recent events announced in the past few weeks are a series of indictments and a guilty plea — all involving allegedly undisclosed associations with China's Thousand Talents or other talent programs.

Consistent with several other indictments over the last year, the government has charged wire fraud and false claims against federally funded faculty members — with funds in these cases from the National Institutes of Health and the National Air and Space Administration — who allegedly received research support and failed to disclose ties with Chinese universities, companies and talent programs.[1]

Relatedly, on May 11, the DOJ announced a guilty plea for tax evasion from an NIH-funded investigator who received approximately $500,000 over seven years from China through talent program participation with a Chinese university.[2] The penalty for the felony tax charge included one year of probation and restitution of over $35,000.

As one of these indictments explains, the governments' view is that "all [Chinese] talent programs constitute a contractual funding source from a foreign government."[3] While sometimes talent program funding includes personal payments and sometimes only research funding, U.S. institutions and investigators need to understand the government's view because many faculty who have been involved in talent activities have not always seen their personal participation as contractual.

Instead, they have viewed the relationships more as ad hoc or even consulting arrangements, or seen the paperwork describing them as a formality without real impact or significance.

Some colleagues who have facilitated application for these talent arrangements, generally called nontraditional collectors of valuable information or resources, may contribute to this confusion, obfuscating the real significance of the relationship. Research institutions across the country have been undertaking education and training campaigns, as well as amending reporting tools, to enable and full disclosure by faculty, scientists and medical staff members of their talents program participation.

The DOJ is driving much of this action through its China Initiative, which involves senior DOJ leadership and members from the National Security Division. The increasing trend to use the criminal code to address concerns about undisclosed faculty affiliations and foreign collaborations, which are perceived as threats to national economic and geopolitical security, coincides with pressure mounting from the Congress as well.

On the legislative front, on May 7, the House Republican leadership announced the formation of a China Task Force to lead the party's investigation and response to "current and emerging cross-jurisdictional threats from China".[4] The announcement focused on China's actions in response to the COVID-19 public health emergency, but added that the group will look into a broad range of China-related issues including influence operations targeting the U.S. and other actions to achieve a technological advantage.

Relatedly, and reflecting what most in the university and academic medical center communities see as a significant concern, legislation introduced in May, the SECURE CAMPUS Act, would bar Chinese nationals from entering the U.S. for graduate work in science and biomedical research.[5] It would also prohibit federal research awardees from employing anyone with a Chinese talent program affiliation. The May 29 proclamation from the White House barring visas for certain Chinese students aligns with these goals, though the details of how it will be applied are yet to be confirmed.[6]

Bipartisan activity reflects a push to change the landscape for U.S. research awardees. In March, Sens. Rob Portman, R-Ohio, and Tom Carper, D-Del., the chairman and ranking member of the Senate Permanent Subcommittee on Investigations of the Senate Homeland Security and Governmental Affairs Committee, described plans for comprehensive legislation to address these issues.[7]

Following further remarks in May,[8] they introduced this legislation on June 17. Sen. Maggie Hassan, D-N.H., also a HSGAC member, and Sen. Marco Rubio, R-Fla., from the Intelligence and Foreign Relations Committees, are co-sponsors.

Built upon concerns identified in last fall's Permanent Subcommittee on Investigations report and hearing on Chinese talent program threats, the Safeguarding American Innovation Act, includes a series of significant and potentially controversial actions designed to protect U.S. research and intellectual property from foreign threats.

The legislation offers the prospect of harmonizing grant reporting, a welcome change for many, but it will push federal research awardees and investigators to be more transparent, raise the costs for reporting failures and reduce access for some foreign collaborators who seek to come to the U.S. Key aspects of the bill include:

  • Establishing a new intra-agency council within the Office of Management and Budget, the Federal Research Security Council, to harmonize the grant applications and reporting across federal agencies and identify a process to warn the research community about threats from foreign collaborations;

  • Making failure to fully disclose foreign compensation (e.g., monetary, in-kind, titles and resources) a crime punishable by fines, imprisonment up to five years or both;

  • Directing the State Department to set criteria to determine when individuals may be denied entry owing to concerns about national security (including economic security) and threats to U.S. research integrity;

  • Requiring that sponsors of foreign visitors develop plans to prevent unauthorized release of controlled technology and technical data regulated by export control laws; and

  • Expanding the reporting requirements for colleges and universities receiving foreign gifts by lowering the threshold from $250,000 to $50,000 for U.S. Department of Education reporting and authorizing civil monetary penalties of up to three times the amount of the gifts for failing to disclose.

Regardless of whether this legislation is passed this year — the COVID-19 pandemic has pushed many legislative efforts to the side for now — it is likely that at least some of the ideas included in it will find their way into law or policy within the coming year or so.

The White House's harmonization and innovation effort known as the Joint Committee on the Research Environment, or JCORE, is one vehicle by which increased transparency may be facilitated, especially in the area of reporting conflicts of interest and conflicts of commitment. Consequently, scrutiny will likely intensify and institutions that receive federal funding for research must anticipate that changes will be needed.

Universities and asset management companies have rightly been seeking more guidance and tools from the government to mitigate against the risks of foreign influence. Part of what makes foreign influence cases difficult to detect, manage and prevent is that foreign colleagues and collaborators often share appropriate and legitimate scientific goals with their U.S.-based colleagues. Global engagement is a fundamental element of research success.

The COVID-19 pandemic has underscored why global collaboration is essential to success in science and why collaboration must continue. In research and academic settings, data sharing and intellectual exchange, particularly around basic science, are often the norm and also the means by which valuable breakthroughs are achieved. Restrictions on openness and collaboration in the scientific community, therefore, should be expected to have at least some adverse consequences.

The recent criminal cases and legislative activity reinforce the probability that new rules for global collaboration and foreign engagement are required. So too, the significant stimulus funding provided as part of the government's COVID-19 response, with at least 5 billion new dollars dedicated to research, means that pressure will be applied to funding agencies to ensure that those funds are appropriately managed. Institutions need to be alert and attentive to the larger geopolitical trends and conditions attached to their federal funding.



Valerie Bonham is counsel, Mark Barnes is a partner and Daniel Weeks is an associate at Ropes & Gray LLP.

Christina Ravelo, an associate at the firm, contributed to this article.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice. 


[1] DOJ, Press Release, University of Arkansas Professor Arrested for Wire Fraud (May 11, 2020), available at: https://www.justice.gov/opa/pr/university-arkansas-professor-arrested-wire-fraud; DOJ, Press Release, Former Cleveland Clinic Employee and Chinese "Thousand Talents" Participant Arrested for Wire Fraud (May 14, 2020), available at: https://www.justice.gov/opa/pr/former-cleveland-clinic-employee-and-chinese-thousand-talents-participant-arrested-wire-fraud.

[2] DOJ, Press Release, Former Emory University Professor and Chinese "Thousand Talents" Participant Convicted and Sentenced for Filing a False Tax Return (May 11, 2020), available at: https://www.justice.gov/opa/pr/former-emory-university-professor-and-chinese-thousand-talents-participant-convicted-and.

[3] Criminal Complaint, U.S. v. Simon Saw-Teong Ang (May 8, 2020), Paragraph 13.

[4] Press Release, Leader McCarthy Announces China Task Force (May 7, 2020), available at: https://www.republicanleader.gov/leader-mccarthy-announces-china-task-force/?utm_medium=email&utm_source=FYI&dm_i=1ZJN,6V9JA,WECNXM,RK9WC,1.

[5] Press Release, Cotton, Blackburn, Kustoff Unveil Bill to Restrict Chinese STEM Graduate Student Visas & Thousand Talents Participants (May 27, 2020), available at: https://www.cotton.senate.gov/?p=press_release&id=1371&utm_medium=email&utm_source=FYI&dm_i=1ZJN,6W9VX,1JDFZD,RP8XL,1.

[6] White House, Proclamation, Proclamation on the Suspension of Entry as Nonimmigrants of Certain Students and Researchers from the People's Republic of China (May 29, 2020), available at: https://www.whitehouse.gov/presidential-actions/proclamation-suspension-entry-nonimmigrants-certain-students-researchers-peoples-republic-china/.

[7] Press Release, On Senate Floor, Portman Highlights Upcoming Legislation to Stop Theft of U.S. Research & Intellectual Property by Global Competitors (Mar. 11, 2020), available at: https://www.portman.senate.gov/newsroom/press-releases/senate-floor-portman-highlights-upcoming-legislation-stop-theft-us-research.

[8] Press Release, On Senate Floor, Portman Outlines Upcoming Bipartisan Legislation to Stop China's Theft of U.S. Taxpayer-Funded Intellectual Property (May 13, 2020), available at: https://www.portman.senate.gov/newsroom/press-releases/senate-floor-portman-outlines-upcoming-bipartisan-legislation-stop-chinas; Press Release, On Senate Floor, Portman Discusses Recent Criminal Charges Against China's Thousand Talents Program Members & Upcoming Legislation to Prevent IP Theft by China (May 20, 2020), available at: https://www.portman.senate.gov/newsroom/press-releases/senate-floor-portman-discusses-recent-criminal-charges-against-chinas.

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