Former Federal Reserve official accused of passing secrets to China

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A former senior Federal Reserve official was arrested on Friday after US prosecutors accused him of passing on economic secrets to China.

John Rogers, a senior adviser in the Fed’s international finance division from 2010-21, used his position to access sensitive data on China-related tariffs, briefings to officials and policy debates and announcements, according to an indictment unsealed on Friday in federal court in Washington.

Rogers, 63, of Virginia, was accused of transferring sensitive information to his personal email account before printing it out and passing it on to Chinese officials disguised as graduate students. He also used encrypted messaging apps to communicate with Chinese officials, the indictment said.

The justice department on Friday said Rogers had “under the guise of teaching ‘classes’,” met his co-conspirators in Chinese hotel rooms where he gave them sensitive trade secret information that belonged to the Fed.

It added the economist had been paid about $450,000 as a part-time professor at Fudan University in China.

Rogers’s attorney could not immediately be reached for comment.

The indictment is the latest in a rising number of cases in which officials from across the US government — and particularly agencies such as the CIA and the military — have been charged with providing sensitive or secret information to the Chinese government.

In recent years, the justice department has also become more public about highlighting cases to underscore the threat from Chinese espionage. Washington has accused Chinese hackers of attacking US telecoms networks in a massive and widespread campaign that has allowed the perpetrators to access the conversations of American officials.

The Chinese embassy in Washington said it was “not familiar” with the specifics of the Rogers’s case, but said China “upholds the rule of law”.

“We oppose any smear and attack on China with so-called ‘spy risks’,” the embassy added.

The Chinese government is one of the biggest global holders of US government bonds. Fed interest rate decisions and signals on future monetary policy movements can also influence US Treasuries and are among the most closely watched reports across global financial markets.

US Treasury figures show that, as of November, China officially held $768.6bn of the debt, making it the second-largest foreign holder after Japan.

The indictment alleges the sensitive information was shared from “at least 2018” with alleged Chinese co-conspirators “who worked for the intelligence and security apparatus of China and who posed as graduate students at a [Chinese] university”.

The Fed declined to comment.

Rogers, who speaks limited Chinese, discussed teaching topics that would make the meetings seem “legitimate in the eyes of the Fed”, according to encrypted messages exchanged with his alleged co-conspirator that were cited in the indictment.

Rogers’s travel was covered by his Chinese counterparts. “[D]on’t worry about the cost of the trip . . . we don’t waste money, but we can bear all the necessary cost, you can choose a comfortable and convenient way for the trip,” an alleged co-conspirator said in a message included in the indictment.

The trade secrets at the heart of the case allegedly include the assessment of an European Central Bank announcement, briefing notes for a member of the Fed’s board and a document titled “Pre-FOMC Briefing” — all dated 2019.

Rogers in 2020 lied to the office of the Fed’s inspector general when asked about his accessing and sharing sensitive material, prosecutors said.