(FiveNation.com)- According to a report released last week by Republican staffers on the Senate Homeland Security and Governmental Affairs Committee, the Chinese government attempted to obtain sensitive internal information by building a network of influence and informants within the Federal Reserve.
The report from staffers working for ranking member, Ohio Republican Senator Rob Portman, did not say whether Beijing’s attempts were successful.
According to the report, since at least 2013, Beijing had been targeting the Federal Reserve System seeking to recruit US-based economists willing to share information in exchange for money and other bribes. In total, 13 Fed employees from eight of the 12 Fed locations were identified as the “P-Network” by a Federal Reserve counterintelligence analysis deeming them to be of potential concern.
One of those employees was detained four times during a 2019 trip to Shanghai and his family was threatened. During his trip, the employee’s phones, computer, and contact information were hacked, the report found.
The Homeland Security Committee obtained the Federal Reserve’s counterintelligence analysis in 2020 but said the Fed now disputes some of its findings.
The staffers’ report also found “close ties” between Fed employees and Chinese entities, including the People’s Bank of China, Chinese state-run media outlets, and the CCP’s Thousands Talents Program, which US intel officials say is a front for economic espionage.
According to the report, at least one Federal Reserve employee, after having “continuous contacts” with the Chinese, attempted to transfer large volumes of data through an unapproved transfer to an external site.
Citing a “lack of internal counterintelligence competency,” the committee staffers criticized the Federal Reserve for failing to better police its employees. The report also slams the Fed for a lack of sufficient cooperation with “ federal law enforcement and intelligence agencies.”
According to a source familiar with the Senate investigation, the Fed has resisted implementing security measures that would mitigate such threats, including requiring employees to report any foreign contacts.
The FBI recently made 70 recommendations to bolster security, but so far, the Federal Reserve has only implemented one or two.
