Former Federal Reserve official accused of spying for China to gain economic advantage
A recent arrest shed light on a case where a former senior advisor for the Federal Reserve was suspected of engaging in economic espionage to benefit China. John Harold Rogers was accused of conspiring to steal Federal Reserve trade secrets and sharing them with individuals in China. The Department of Justice revealed that the information provided by Rogers could potentially be used by China to influence the U.S. market similarly to insider trading.
The U.S. Attorney’s Office in Washington, D.C., stated that advanced knowledge of U.S. economic policy, especially regarding changes to the federal funds rate, could provide China with a significant advantage in trading U.S. bonds and securities. Given China’s substantial holdings of U.S. government debt, which currently amount to around $816 billion, the stolen information could have severe implications for the U.S. market.
It was alleged that Rogers’ co-conspirators were part of China’s intelligence and security apparatus, disguising themselves as graduate students while coordinating with Rogers. In exchange for the shared information, they provided Rogers with gifts, paid for his vacations and travel expenses, and also managed his expenses during his trips to China. Despite retiring from the Federal Reserve, Rogers continued to work as a part-time professor at Fudan University in Shanghai, China.
Rogers, a 63-year-old resident of Vienna, Virginia, was indicted on charges of conspiracy to commit economic espionage and making false statements. If convicted, he could face up to 15 years in prison for the espionage charge. The case was announced on the same day that President Donald Trump disclosed plans to impose tariffs on China, as well as Canada and Mexico, signaling the severity of economic espionage as a national security threat.
Throughout Rogers’ employment with the Federal Reserve Board of Governors from 2010 to 2021, he was entrusted with confidential information which he exploited following his retirement. His actions included soliciting trade-secret information on economic data sets, tariffs targeting China, designated governors’ briefing books, and deliberations of the Federal Open Market Committee (FOMC). Established to set the federal funds rate, FOMC decisions have significant impacts on U.S. financial markets.
Rogers, through the indictment, was accused of transmitting sensitive information electronically or by printed documents to his co-conspirators in China. Exploiting his position, Rogers conducted these exchanges under the pretext of teaching classes, further emphasizing the calculated nature of his actions. The indictment highlighted various instances where Rogers deliberately misled authorities regarding his associations with the co-conspirators and his access to sensitive information.
In conclusion, the case underscores the seriousness of economic espionage and its potential consequences on national security, financial stability, and global trade relationships. The indictment presents a stark reminder of the risks posed by malicious actors seeking to undermine U.S. economic policies and trade secrets.
