U.S. diplomats and security officials privately warned the state of Nevada not to use Chinese-made coronavirus test kits donated by the United Arab Emirates over concerns about patient privacy, test accuracy and Chinese government involvement, documents obtained by The Associated Press show.
The documents illustrate how the U.S. government actively—if quietly—tried to keep the state out of a project involving the Chinese firm BGI Group, which is the world’s largest genetic sequencing company and which has expanded its reach during the coronavirus pandemic.
U.S. intelligence agencies have warned that foreign powers like China could exploit samples to discover the medical history, illnesses or genetic traits of test takers, though they have not offered any public evidence. Internal emails and documents obtained by the AP from the Nevada governor’s office through a public records request show U.S. authorities expressing such concerns specifically about BGI.
“I hope the Nevada COVID-19 task force leadership is aware of this so they can make an educated decision and know some of the U.S. Government’s concerns,” William Puff, a Homeland Security regional attaché at the U.S. Embassy in Abu Dhabi, wrote in an email forwarded to Nevada officials.
The warnings from the Department of Homeland Security and the State Department led the office of Nevada Gov. Steve Sisolak in April to direct a Nevada hospital not to use any of the donated 250,000 test kits as officials turned down an offered laboratory deal.
Geopolitics could play a role in the U.S. warning. President Donald Trump and his administration have been locked in a trade war with China and also have actively lobbied its allies not to use telecommunication equipment from Chinese firm Huawei, for instance, citing security concerns.
The donation offer to Nevada also involved a shadowy Emirati company called Group 42, which partnered with Shenzhen-based BGI to create a rapid-testing system in the United Arab Emirates. G42 and government officials in the UAE did not respond to multiple requests for comment.
In response to queries from the AP, BGI said in an email that G42 made the donation to Nevada on its own without BGI’s knowledge and that BGI never had direct contact with the state. BGI’s COVID-19 tests have approval from the U.S. Food and Drug Administration for use on an emergency basis and are used in some labs in the United States—but “BGI has no access to either patient samples or patient data,” it said.
“BGI Group takes all aspects of patient data protection, privacy and ethics extremely seriously, and is committed to full compliance with all applicable regulations in the countries in which it operates,” the company said.
In April, the UAE announced its interest in donating an estimated $20 million worth of coronavirus testing kits to Nevada.
The unusual offer came at a time when Nevada, like other states, were in a mad scramble amid mounting COVID-19 cases and a shortage of test kits. Nevada had shut down the Las Vegas casinos that power the state’s economy as it rushed to set up temporary hospitals, stockpile ventilators and assemble test kits.
The UAE’s oil-fueled sovereign wealth funds and state-owned enterprises long have eyed Las Vegas as an investment opportunity. In its biggest investment, a state-owned Dubai firm partnered with MGM Resorts to build Las Vegas’ $9.2 billion multi-resort CityCenter development.
Former MGM chairman Jim Murren heads Nevada’s COVID-19 Response, Relief and Recovery Task Force, appointed by Sisolak as part of a public-private partnership to seek funding and aid for the state.
In late March, Murren forwarded to the governor’s office an email from Peng Xiao, the CEO of G42, pitching his company’s help. Murren wrote that the Emiratis were making the offer “both as a public service and because they see this as a future investment opportunity for them.”
“They have unlimited capital and would be incredibly flexible on terms- I will handle that part,” he wrote.
Murren told the AP that the initial G42 proposal was to set up a “turnkey” high-capacity lab processing COVID-19 tests.
G42 and BGI partnered to create a similar lab in Abu Dhabi in March, part of a mass testing campaign in the Emirates that has conducted over 11 million tests in a nation of 9 million people.
Along with its sale of tests, BGI has expanded into multiple countries by offering such turnkey labs, which it says can analyze 10,000 to 50,000 tests a day. It has set up such labs in multiple Chinese cities and in countries like Angola, Australia, Brunei, Kazakhstan, Saudi Arabia, Serbia and Togo. Those labs use BGI equipment, which the U.S. government fears could be a means of spying by the Chinese government.
The proposed lab in Nevada would rapidly process samples from polymerase chain reaction, or PCR, tests. Those genetic tests, using long cotton swabs that collect samples from deep inside a person’s nose and throat, detect an active case of the coronavirus.
Days after G42 announced its aid to Nevada, the U.S. government broached its concerns with the state.
In an email sent to Nevada officials on April 20, Puff, the Homeland Security attaché, alleged without offering evidence that G42′s tests were “closer to 60% accurate” rather than the 90% claimed by the firm. BGI long has maintained its PCR tests have high accuracy, though factors like “the sampling process, storage and transportation of samples” can affect results.
Puff also raised concerns about the potential risks of Americans sharing medical samples with BGI.
“The embassy has concerns with G42’s relationship with the Chinese government and BGI, and patient privacy concerns,” Puff wrote. “The guidance we received from the U.S. Department of State is we should decline testing from G42.”
Asked for comment by the AP, Puff said: “I think it’s probably best I don’t.”
The same day, the Nevada governor’s chief of staff, Michelle White, emailed the University Medical Center, which received the G42 supplies.
“Based on the information communicated to me by Homeland Security, we highly recommend that you discontinue these tests and any usage of testing equipment immediately,” she wrote.
Sisolak’s office did not respond to phone and email messages from the AP seeking comment. Murren said state health officials ultimately decided they wanted to build their own high-capacity lab.
The University Medical Center used 20,000 specimen collection kits offered by G42, which are comprised of nasal swabs and tubes to store samples, spokesman Scott Kerbs said. UMC did not use the donated 250,000 analysis kits because they were “not compliant with UMC’s laboratory technology,” he said.
Kerbs said the collection kits “helped us to support local testing at a time when specimen collection materials were scarce in our community.” He did not respond to questions from AP about the warnings. “UMC always appreciates the generosity of donors,” he said.
Since then, the casinos, along with much of Nevada’s shuttered economy, have reopened. Coronavirus testing now is widely available. Nevada has now performed more than 1.1 million tests for COVID-19 and has reported more than 85,000 cases and 1,600 deaths.
Notably, even as U.S. authorities warned Nevada, they did not alert the 75,000 Americans living in the United Arab Emirates about any concerns over the BGI tests used by the Emirati firm, even though the same tests are used widely in the country. The UAE insists all genetic data is kept private and is not shared with BGI.
The State Department told the AP that it shares information to Americans abroad “regarding safety and security threats that might affect them. … In this case, the Department did not deem the use of BGI COVID-19 tests to be a threat to safety.”
The push to convince Nevada not to use the BGI tests comes amid the increasingly antagonistic relationship between the U.S. and China under the Trump administration that has witnessed an ongoing trade war and the expulsions of diplomats and journalists.
U.S. intelligence agencies worry China’s genetic research could provide it a way to spy on or leverage American sources.
In May, the U.S. National Counterintelligence and Security Center issued a warning to state health officials about “potential threats posed by foreign powers in connection with COVID tests.” It did not specify BGI, though it did link to a news report on Israel’s largest health care plan declining to work with BGI.
In June, renewed concerns about its mass surveillance programs.
Officials at G42 have refused to identify who owns the company, though many suspect it links back to Abu Dhabi’s ruling family.
G42’s CEO, Peng Xiao, previously ran Abu Dhabi-based firm DarkMatter’s “big data” application, which could pool hours of surveillance video to track anyone. DarkMatter’s hiring of former CIA and National Security Agency analysts has raised concerns, especially as the UAE has harassed and imprisoned human rights activists.
According to the Nevada emails, among G42’s marketing and communications staff is Giacomo Ziani, who told the AP in January he was the co-creator of a video and voice calling app suspected of being a spying tool of the UAE—though he denied the accusation. Ziani did not answer requests for comment.
BGI formed in 1999 as a state-backed lab to work on the Human Genome Project. It later became a private company and has found itself as a foremost force among companies worldwide in coronavirus testing.
China’s ruling Communist Party hopes companies like BGI and Huawei will boost the country into becoming a global technology leader.
In its email to the AP, BGI said it is not owned or funded by the Chinese government and “has no government capital.” A U.S. Trade Office report in 2018 said the company has “evident links to the government” as its leadership includes individuals who previously held positions in the Chinese government and Communist Party.
Two BGI subsidiaries have been sanctioned by the U.S. Commerce Department for allegedly “conducting genetic analyses used to further the repression of Uighurs and other Muslim minorities” in China. BGI said one subsidiary had done no business while the other was not involved in work that “includes personally identifiable information or violations of privacy or human rights.”
When asked about the perceived danger from China’s influence in the Nevada testing kit offer, the State Department referenced a February speech given by Secretary of State Mike Pompeo.
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