December 19, 2019 / 9:29 PM / a month ago

Michigan-based research institute to pay $5.5 million over Chinese-funded grants

WASHINGTON (Reuters) - The Van Andel Research Institute, which conducts biomedical research, will pay $5.5 million to resolve civil charges that it failed to disclose to the U.S. government that two of its researchers were funded by Chinese government grants, the Justice Department announced on Thursday.

The Justice Department said that by failing to tell the National Institutes of Health (NIH) about the financial backing by China, the Van Andel Research Institute (VARI) violated the False Claims Act.

VARI settled the case without admitting liability.

The Michigan-based institute, an independent biomedical research and science education organization, said in a statement that the two researchers have resigned. The institute said it has been cooperating with the Justice Department probe over “the past several months,” and called the settlement “in the best interest of the Institute.”

“VARI did not admit any liability, and this civil matter has no connection to the quality of the Institute’s science or the validity of our research findings,” it said.

The Justice Department also alleged that the institute made factual representations “with deliberate ignorance or reckless disregard” for the truth.

The case against the institute marks the latest development in a broader crackdown by the United States amid concerns about widespread spying and intellectual property theft by the Chinese government.

The case comes after the NIH sent letters to research institutions around the country asking them to monitor government-funded projects involving primarily Chinese and Chinese-American researchers.

At the heart of the government’s interest is China’s Thousand Talents Program, which China uses to entice researchers in the United States to share and transmit their knowledge back to China in exchange for perks including salaries, research funding and lab space.

That program, which U.S. officials say has led recruits to engage in major intellectual property thefts such as stealing proprietary defense data related to U.S. military jet engines, was also at issue in the Justice Department’s civil case against VARI.

Between January 2012 and August 2019, the Justice Department said the institute failed to investigate researchers’ foreign funding even though it had received a letter from a Chinese institution at one point which claimed that one of its researchers - Huaqiang Eric Xu - was receiving “generous support” from China’s Thousand Talents Program.

Xu served as a primary investigator for the Center for Drug Discovery, a strategic collaboration between the Van Andel Institute and the Shanghai Institute of Materia Medica. From 2013 through 2017, Xu received more than $10,000, the Justice Department said.

In June 2018, the department said, the institute learned about some of Xu’s Chinese grants while reviewing a proposed press release for a journal article that Xu was writing.

“Rather than inquiring further as to the scope or sources of Dr. Xu’s foreign funding, and rather than determining whether any of the grants listed in the press release required disclosure to NIH, VARI removed the Chinese grants from the proposed funding attributions in its press release,” the department said.

The other researcher at issue, Jiyan Ma, also received a Chinese grant which was not disclosed to the NIH.

Neither Ma nor Xu could be immediately reached for comment.

Reporting by Sarah N. Lynch; Editing by Leslie Adler

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