Chinese coronavirus tests pushed by US agencies despite security warnings

At least two federal agencies worked to distribute Covid-19 tests from a Chinese genetics company, despite warnings about security risks from U.S. intelligence and security officials, according to interviews and documents obtained by The Wall Street Journal.

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In the early days of the virus, BGI Group or people trying to distribute its products approached at least 11 states in a sometimes aggressive push to get the products into government-run laboratories or set up entire labs, according to people who received the approaches and documents.

BGI, China’s leading genetics company, enlisted a foundation tied to a former U.S. president and used a company linked to the United Arab Emirates’ top spy to promote its efforts. A prominent New York real-estate lawyer threatened to complain to California’s governor if state health officials there didn’t use BGI’s tests.

Some of the company’s testing supplies were used in Nevada, according to the head of the state’s Covid-19 task force. BGI has tried in the past to get into the U.S. market and has sold testing equipment to U.S. private labs that advertise their work for government clients.

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In March, an FBI special agent who monitors biotech threats for the Department of Health and Human Services told an HHS advisory committee that government agencies should be wary of doing business with the company, which, he said, had a history of misusing personal data. The agent, Ed You, echoed warnings from other law enforcement, security and military intelligence officials.

They say gene-sequencing machines that BGI was trying to sell to U.S. labs can be used to catalog patients’ DNA, raising privacy risks. The Covid-19 test kits that federal agencies promoted don’t pose the same risk, but intelligence officials say they are concerned that BGI will parlay the testing kits into a bigger role in the laboratories.

“BGI has undoubtedly taken advantage of the Covid-19 pandemic to expand its reach around the world, including the United States,” Bill Evanina, director of the U.S. government’s National Counterintelligence and Security Center, said.

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A BGI spokesperson said that in the U.S., the company has sold only its Covid-19 tests authorized by the Food and Drug Administration. “BGI has never proposed or established any clinical laboratories for genome sequencing or Covid-19 testing,” the spokesperson said. BGI laboratories were proposed in Nevada and California, but by a representative for a BGI partner. “It is necessary to understand BGI does not have access to either patient samples or test data,” the spokesman said.

A senior U.S. official who has been tracking BGI said the company has grown quickly in part by providing equipment at low or no cost. In some cases, that official says, genomics data collected by the equipment gets stored on systems made by Huawei Technologies Co., a Chinese company that the U.S. government has called a security risk. “It’s not about market share for economic gain. It’s about market share for the sake of data,” the official said. Huawei has repeatedly denied that it is a security risk.

BGI, formerly known as Beijing Genomics Institute, is based in the Chinese city of Shenzhen and specializes in gene-sequencing. The company plays an important role in China’s efforts to be a global leader in genomics. BGI administers the China National Gene Bank, a giant genomic database funded by the Chinese government.

The U.S. Commerce Department sanctioned two of BGI’s subsidiaries earlier this year, saying they provided technology to collect and catalog the DNA profiles of China’s persecuted Uighur population. In a response to the sanctions, BGI said one of the subsidiaries, Beijing Liuhe BGI, did no work that includes “personally identifiable information or violations of privacy or human rights” and that the second, Xinjiang Silk Road BGI, hadn’t conducted any actual business.

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Since the start of the pandemic, China has sent medical equipment and doctors to numerous countries to spread its influence and deflect criticism of its early handling of the coronavirus, according to U.S. officials.

While U.S. intelligence officials tried to keep BGI’s products out of the country, other parts of the government were doing the opposite. The FDA granted emergency-use authorization to BGI Americas, the company’s U.S. subsidiary, for its Covid-19 test. The FDA declined to comment.

Abu Dhabi, the Gulf emirate, sent BGI testing equipment to federal agencies, according to documents obtained by the Journal. The head of the infectious-disease program at HHS offered the company’s Covid-19 test kits to New Mexico, according to emails between HHS and New Mexico authorities. The state declined, the emails show. A senior official of the Federal Emergency Management Agency also offered tests to states.

Spokespeople for both agencies said the equipment wasn’t purchased directly from BGI. An email written by an aide to the HHS official in charge of infectious diseases said the BGI test kits were “received from the UAE.” An HHS spokeswoman said no one at the department knew how it got the test kits.

In Nevada, the head of the state’s Covid-19 task force was trying to address a shortage in testing capacity when he read about “pop-up labs” made by BGI and a company linked to the Abu Dhabi government. Jim Murren, who had been chief executive of casino operator MGM Resorts International before taking over the task force, called Marty Edelman, a New York real-estate lawyer with close ties to the Abu Dhabi government, to see if the emirate could help. He and his colleagues discussed whether it “might be a really intelligent option for the state,” Mr. Murren said in an interview.

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“The Emirate would front much of the capital, and fly everything described at their cost,” Mr. Murren wrote in an email to the head of a local health-care chain that Nevada officials provided to the Journal. Abu Dhabi, Mr. Murren added, “wants to prove the deployment in Las Vegas so they can roll out in other states, and countries -- hence the very low cost and opportunity for us.”

BGI’s Abu Dhabi partner, a data and artificial-intelligence company called Group 42, is linked to Sheikh Tahnoon bin Zayed, a member of the emirate’s ruling family and its intelligence chief. BGI and Group 42 were testing Emiratis for Covid-19. The two companies are also working on a project to collect genetic data of UAE citizens to “generate the highest quality, most comprehensive genome data,” the Abu Dhabi government said in 2019. The Associated Press previously reported details of the talks between Nevada and Group 42. BGI said it was aware that Group 42 had made approaches to Nevada about testing labs, but played no role in the proposals.

Mr. Evanina said counterintelligence officials knew about the growing interaction between BGI and Group 42. “We’re aware of these efforts and concerned about them,” he said. He noted that the two jointly offered free Covid-19 testing to a U.S. Embassy in the Middle East, and were refused.

Nevada ended up getting Covid-19 test equipment including nasal swabs from BGI, but not the testing machines. “There was no capacity for anyone to do anything that would be nefarious,” Mr. Murren said.

The Journal contacted all 50 state health departments about approaches from BGI. At least 11 states, from Alabama to South Dakota, said they got offers for BGI-manufactured tests or testing laboratories that could be constructed rapidly.

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Lobbyists in Ohio, Rhode Island and Massachusetts shared pitches from BGI with each other but failed to interest state governments, according to emails. In Arkansas, BGI contacted Gov. Asa Hutchinson with the help of the George H.W. Bush Foundation for U.S.-China Relations, emails reviewed by the Journal show.

Euhwa Tran, the foundation’s chief operating officer, said that the organization was responding to a request from Mr. Hutchison’s office and was unaware of concerns about foreign testing equipment or BGI.

Mr. Edelman, the same lawyer who pitched Nevada on the Abu Dhabi-BGI offer, pushed to get BGI equipment into California in early April. He contacted Gov. Gavin Newsom’s office, and was connected with Bob Kocher, a physician and venture capitalist on the state’s Covid-19 task force. Other states that were approached to use BGI products, but didn’t purchase them, include Indiana, Kansas, North Carolina, Ohio and Pennsylvania.

Mr. Edelman pitched the BGI machines in a phone call and let drop that he knew the governor’s wife. “We don’t need them,” Dr. Kocher replied. Mr. Edelman told Dr. Kocher that he and his colleagues were “idiots,” Dr. Kocher said. “He yelled at me saying I’m making a terrible mistake for California, that he’ll tell the governor that we’re not taking seriously an offer to help, and we’re jeopardizing California’s public health.”

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Mr. Edelman referred questions to a Group 42 spokesman. The spokesman said that in March, Group 42 tried to help California with Covid-19 testing kits.

“Mr. Edelman did not say or insinuate anything negative about anyone in any circumstance, nor was he a participant in any loud conversations,” the spokesman said. “Mr. Edelman’s sole interaction with Gov. Newsom’s wife was at a New York event many years ago,” he added.

Dr. Kocher forwarded the pitch to the White House, which in response sent a warning from the Air Force Office of Special Investigations. The equipment, it said, could be a security risk. The Washington Post previously reported BGI’s efforts in California.