On July 1, 2009, 72 year old retired University of Tennessee professor John Reece Roth was sentenced to four (4) years in prison for illegal exports of military technical information which resulted from him ignoring the deemed export rule. Prof. Roth was convicted on September 3, 2008 by a jury in the U.S. District Court for the Eastern District of Tennessee of conspiring with Atmospheric Glow Technologies, Inc. (AGT) to unlawfully exporting fifteen different “defense articles” to a citizen of the People’s Republic of China, in violation of the Arms Export Control Act (“AECA”), 22 U.S.C. § 2778. Those illegal exports related to technical information about plasma actuators which were being developed for use in U.S. Air Force (“USAF”) drones. He was also convicted of one count of wire fraud for defrauding the University of Tennessee as he concealed his actions from his then employer despite several opportunities to be forthright.
Roth’s problems arose in conjunction with a contract AGT won with the AF. AGT was a university spin-off that was established in 2000. The AF contract involved developing a plasma actuator which was intended to reduce the drag on the wings of drones. Under the terms of the contract, Roth was prohibited from sharing sensitive data with foreign nationals. Additionally, in 2006 the University’s Export Control Officer warned Roth about his obligations to keep such data guarded. Despite this clear warning, Roth took his laptop containing project plans to China with him. While there, he also asked a colleague to send him an email with data about the project to the email account of a Chinese colleague. Upon receipt, Roth shared the contents with that Chinese colleague. Further deemed export violations arose because Roth had two foreign students work with him on the project – Xin Dia of China and Sirous Nourgostar of Iran - without government knowledge or approval.
Why he took these actions remains a complete mystery. Professor Roth claimed he thought the AECA regulations only applied to the finished product, a defense which was clearly rejected by the jury, undoubtedly relying in large measure on the fact the documentation which accompanied the project repeatedly mentioned AECA, plus Professor Roth signed many documents attesting to his acknowledgment of that control and other conditions of employment. He was also questioned by University authorities at one point and denied deemed exports were taking place.
For international traders, it is important to keep in mind that transfer of controlled defense technical data to foreign nationals, even when taking place in the United States, violates the AECA if done without pre-authorization from the government. A similar ban exists under the International Emergency Economic Powers Act, 50 U.S.C. §§1701–1706, for technical data, goods and services controlled by the Bureau of Industry and Security (BIS).
The Roth case is unique only in the sense that it involved a university professor. The more typical setting is for such data to be transferred within the business community. One presumes the reason this case was pursued so vigorously by the authorities in Tennessee was two fold – one is, as U.S. District Judge Tom Varlan stated, that Prof. Roth could have caused “harm to the security of the United States” by allowing foreign national students access to technology related to USAF drones. Second, the good name of the University of Tennessee was involved and it understandably did not want to lose its lucrative government contracts or its reputation.
Roth pleaded for leniency before being sentenced, but has yet to express remorse. Further, on the day of sentencing, Roth filed a motion for release pending appeal. Judge Varlan has allowed him to remain free at least until the U.S. Bureau of Prisons makes a decision as to where he will be incarcerated.
The goods and technical data subject to control under AECA are articulated at the U.S. Munitions List, which can be found at 22 C.F.R. § 121, also referred to as ITAR, the International Traffic in Arms Regulations. Technical data includes information required for the design, development, production, testing, or modification of defense articles. Defense services are also regulated, examples of which are furnishing of assistance to foreign persons in the design, development, testing or use of defense articles, whether this takes place in the U.S. or elsewhere.
In terms of goods, technical data and services controlled by BIS, they can be found at 15 C.F.R. 730 et seq. The Commerce Control List itself is located at 15 C.F.R. 738.
This case surely serves as a reminder that current and strong internal controls must be established and maintained when dealing with military projects, but also in any other context where foreign nationals are involved, even if the exchange takes place in the U.S. We can also expect more such prosecutions in light of the recent establishment within the Dept. of Justice of a National Security Section.