Unlock the Editor’s Digest for Free
Every week, Roula Khalaf, Editor of the Financial Times, handpicks her top stories and compiles them into an exclusive newsletter.
A former high-ranking official from the Federal Reserve faced arrest on Friday, facing allegations from US prosecutors of leaking economic secrets to China.
John Rogers, a senior adviser in the Fed’s international finance division between 2010 and 2021, is accused of using his access to obtain sensitive information on topics like China-related tariffs, government briefings, policy discussions, and announcements. These allegations were laid out in an indictment that was made public in a Washington federal court on Friday.
Rogers, who resides in Virginia and is 63 years old, reportedly transferred sensitive data to his personal email, printed them, and handed them to individuals posing as graduate students from China. Additionally, the indictment mentions his use of encrypted messaging apps to communicate with these Chinese contacts.
According to the Justice Department, Rogers masqueraded as a professor while meeting with his collaborators in Chinese hotels, where he allegedly shared sensitive trade secret information belonging to the Fed.
Moreover, the economist reportedly received around $450,000 for his role as a part-time professor at Fudan University in China.
Efforts to reach Rogers’s legal representative for comment were unsuccessful.
This indictment adds to a growing list of cases where US government officials, particularly from agencies like the CIA and the military, have been charged with providing China with confidential information.
In recent times, the Justice Department has been increasingly transparent about these cases, aiming to highlight the threat posed by Chinese espionage. US officials have accused Chinese cyber attackers of infiltrating American telecom networks in widespread operations that enabled access to the private conversations of US officials.
The Chinese Embassy in Washington expressed unfamiliarity with Rogers’s case, reiterating that China “upholds the rule of law.”
“We reject any attempts to tarnish or accuse China using so-called ‘spy threats,'” the embassy stated.
China remains one of the world’s largest holders of US government bonds. Decisions and forecasts by the Fed regarding interest rates significantly affect US Treasuries and are closely monitored in global financial markets.
According to US Treasury data, by November, China was holding $768.6 billion of the debt, ranking as the second-largest foreign holder following Japan.
The indictment claims that Rogers began sharing sensitive information as early as 2018 with Chinese co-conspirators, who allegedly were part of China’s intelligence and security apparatus but masqueraded as graduate students at a Chinese university.
The Federal Reserve has chosen not to comment on the matter.
Rogers, whose proficiency in Chinese is limited, discussed potential teaching topics in a way that could presumably seem “legitimate in the eyes of the Fed,” according to encrypted messages exchanged with his alleged collaborator, which have been cited in the indictment.
Chinese contacts reportedly covered Rogers’s travel expenses. “Don’t worry about the cost of the trip… we don’t lavish expenses, but we can cover all necessary costs. You are free to choose a comfortable and convenient travel arrangement,” a message from a purported collaborator included in the indictment stated.
The alleged trade secrets involved in the case purportedly encompass evaluations of an announcement from the European Central Bank, briefing notes for a member of the Fed’s board, and a document titled “Pre-FOMC Briefing” — all dated from 2019.
In 2020, prosecutors stated, Rogers misled the Fed’s inspector general’s office when questioned about his access to and sharing of sensitive information.
