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Chinese agent targeted Canadian scientist in bacteria-smuggling plot: RCMP documents

Espionage revealed as Winnipeg-Wuhan, COVID-origin debate continues
Details of the case of a Canadian researcher targeted by Chinese espionage are raising questions about Canada’s ability to protect scientific research from foreign governments | krisanapong detraphiphat/Moment/Getty Images

A Chinese agent successfully targeted at least one government scientist for his infectious disease research, the results of which went to China for commercial use, RCMP documents show.

It’s a revelation that calls into question Canada’s ability to protect scientific research from foreign agents as Parliament debates the possible Canadian origin of the COVID-19 virus and the involvement of Chinese nationals.

Canadian Food Inspection Agency (CFIA) scientist Dr. Klaus Nielsen was targeted 20 years ago with espionage techniques aimed at obtaining his research on animal brucellosis, a highly contagious disease transmittable to humans, said RCMP documents obtained by Glacier Media under access to information laws.

Nielsen was arrested in October 2012 headed to Ottawa airport en route to China. With him were 17 vials of brucella bacteria packed in a thermos of ice inside a child's lunch bag in carry-on luggage, a 2017 Ontario Court of Justice ruling said.

“The brucella bacteria and the disease it causes, brucellosis, can infect people and animals such as sheep, cattle, goats and pigs,” the decision said.

And, Ontario Superior Court of Justice Heather Perkins-McVey said as she sentenced Nielsen to two years in prison, the case made clear that “Canada cannot protect [its] international property.”

That protection is at issue as Parliament debates COVID’s possible Canadian origins in a Winnipeg lab and the shipping of other deadly diseases from Winnipeg to Wuhan, China, where COVID began its deadly global rampage that would leave 4.3 million dead, including more than 26,500 Canadians.

Both cases were subject to RCMP scrutiny.

Now, Parliament wants to know connections between the Winnipeg lab and Chinese military researchers, although the Public Health Agency of Canada (PHAC) has denied any connections.

Targeting and espionage

The RCMP documents released July 27 said, “In 2001, Weiling Yu sought out and began employment with the CFIA under the supervision of Dr. Nielsen. It was an investigative premise that Nielsen was targeted.

 “Classic tradecraft methodology” – a term denoting espionage techniques – was identified in targeting Nielsen, RCMP said.

Added to that is McVey’s observation that “there was a degree of planning and sophistication to these acts.  The accused used code words and language to continue the deception in his emails. The motive was to promote the use of Chinese test kits which would have had the effect of diverting customers away from using the Canadian product.”

Nor was the placement of an agent in Nielsen’s lab accidental, RCMP said.

 “Dr. Nielsen was a critical and exclusive human asset; he was a person with an international profile, well-travelled and published, making him a valuable target.”

Documents said the RCMP used “a cover posture to undo the conspiracy,” including secret entries to property and undercover operations.

The world-renowned Nielsen, along with the Chinese-born Yu in 2006, set up a company in Harbin, China, called Peace River Biotechnology Company (PRBC) to manufacture and sell low-cost brucellosis diagnostic kits.

Unauthorized shipments

RCMP documents said Nielsen acknowledged unauthorized shipments were made to China, that he was an unpaid PRBC consultant.

He pleaded guilty to one count of breach of trust and 10 charges under the Human Pathogens and Toxins Act, the Export and Import Permits Act and the Transportation of Dangerous Goods Act. He was sentenced to two years imprisonment.

Yu was a co-accused in the case before Park-McVey but her whereabouts were unknown so he faced justice alone. A Canada-wide warrant was issued but police believed she was already in China.

The court said Nielsen met with foreign officials regarding brucellosis.

The kits used CFIA intellectual property and Nielsen had been part of a group developing the process while at CFIA. 

Nielsen and Yu were fired from the CFIA in January 2011 when Diachemix, a U.S. company holding the commercial patent rights, complained. It alleged a $10 million revenue loss.

Nielsen and a Diachemix scientist had developed brucellosis antigen testing kits.

But even 22 months after leaving CFIA, Nielsen had live bacteria when caught on his way to China.

“There is no evidence he received any financial gain either directly or indirectly but that is not a required element. There are, however, acts of dishonesty towards his employer, such as his use of code names and coded language, which suggests a degree of planning to carry out the subterfuge over the five-year period,” Perkins-McVey said.

Further, she said, “Dr. Nielsen was not involved in any attempted bribery of international officials, although there is evidence that Ms. Yu may have been.”

However, the PRBC website shows that as late as 2014, the company was still trying to sell kits internationally.

“One of our goals is to supply the best quality and price brucellosis diagnostic kits to the users,” the site said.

Foreign actor interference 

Part of the released RCMP documentation, in which Nielsen is a case study, discussed national security threats and foreign actor interference (FAI).

Among FAI concerns are access to university and research centres as well as companies leading in innovation, research and development and cutting-edge technology, documents said.

“It is an expectation that FAI investigations will increase in the immediate future,” police documents said.

Indeed, the Canadian Security Intelligence Service (CSIS) has long warned that a number of states, particularly China and Russia, use clandestine means to get Canadian research in aerospace, biotechnology, communications, information technology, nuclear energy, oil and gas and environment sectors.

“The covert exploitation of these sectors by foreign states, in order to advance their own economic and strategic interests, may come at the expense of Canada’s national interests, including lost jobs and revenues, and a diminished competitive global advantage,” CSIS said in its 2013-2014 report.

CSIS has also warned of China’s Thousand Talents program, also under U.S. Department of Justice investigation. Established by Beijing in 2008, the program’s goal to identify and recruit scientific experts around the world to get them to share results of Canadian research work.

“These threats are especially heightened during the COVID-19 pandemic,” CSIS said of the program in 2020.

Parliamentary debate 

Now, however, Parliament wants to know what the government knew about other infectious diseases leaving the Winnipeg lab bound for China.

“The fact remains that, on March 31, 2019, two researchers at the Winnipeg laboratory, Dr. Xiangguo Qiu and Dr. Keding Cheng, took a commercial Air Canada flight carrying two living viruses, Ebola and Henipah, in their luggage to deliver them to the Wuhan Institute of Virology in China, now infamous due to the rumours and allegations that continue to circulate to the effect that the coronavirus may have escaped from the facility,” Bloc Quebecois MP Stéphane Bergeron told Parliament June 1.

Parliamentarians have been attempting to obtain case documentation but the government has not complied with an order to produce them.

However, PHAC has turned documents over to the National Security and Intelligence Committee of Parliamentarians. Members have top security clearances.

The government has gone as far as Federal Court to block disclosure.

That same Wuhan lab is now a focus of a WHO probe into COVID-19’s origins. 

Federal Conservative Party Leader Erin O’Toole said June 21 Prime Minister Justin Trudeau’s government’s refusal to release documents about Winnipeg lab is a “decision to cover up a possible national security breach should concern every Canadian.

Neither O’Toole nor NDP Leader Jagmeet Singh were immediately available for comment.

The U.S. Centers for Disease Control and Prevention considers Ebola a Category A bioterrorism agent or disease because it can be easily disseminated or transmitted from person to person, can result in high mortality rates and have potential major public health impacts, might cause public panic and social disruption and might require special action for public health preparedness. Nipah virus is a zoonotic virus that can spread between animals and people.

PHAC’s 2016 Canadian Biosafety Handbook lists them as high-risk pathogens posing a high risk to the lives of individuals or animals and a high risk to public health.

“Effective treatment and preventive measures are not usually available,” the handbook says.

Public Health Agency of Canada (PHAC) president Iain Stewart told the House of Commons Special Committee on Canada-China Relations May 10 that the transfer of the viruses was not connected to the departure of the Winnipeg lab employees.

“There is also an RCMP investigation,” Stewart said. “I cannot comment on that matter, and questions should be directed to the RCMP.”

The committee heard the individuals’ circumstances could not be revealed to parliamentarians due to privacy laws, national security and investigations. 

Given the option of closed-door proceedings, PHAC refused.

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