One Year Later, China Still Holding American on Spying Charges

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Sandy Phan-Gillis poses for a picture on a trip to Xian, China in 2013. A year after her arrest in 2015 by Chinese authorities on suspicion of stealing state secrets, she remains a prisoner in the ancient city of Nanning, 365 miles west of Hong Kong, undergoing constant interrogation. Jeff Gillis

Updated | She had been in and out of China dozens of times over the years. She had led powerful business delegations from her hometown of Houston to Shenzhen, China's Silicon Valley. So nothing seemed out of the ordinary on March 19, 2015, when Sandy Phan-Gillis wrapped up another successful business trip to China with a large group that included Houston’s mayor pro tem, Ed Gonzalez.

Over dinner that night, the 55-year-old businesswoman excused herself to meet a friend. The next day, as she stood in line with her group waiting to cross the border into Macau, they suddenly noticed she was gone. They moved on without her. Hours later, she telephoned one of them in Macau. She also called her husband, Jeff Gillis, an oil and gas services manager in Houston. She said she would be staying in China a few more days. Two more days passed before Gillis got another call from his wife. Once again, she said she would be staying in China to wrap up some business. But this time, he later told reporters, her voice sounded strained.

And then another week passed with no word. Frantic, Gillis called the U.S. Consulate in Guangzhou and filled out a missing person's report. Twenty minutes later, an official there called back. Only then, on April 1, did Gillis learn that his wife, a naturalized American originally from Vietnam, was in the custody of Chinese state security. But another six months would pass before Beijing finally explained why: Phan-Gillis was “suspected of engaging in activities that have harmed China's national security,” the Foreign Ministry announced. She was "assured of all her rights…is in a good state of health and is cooperating with the investigation," it added in a statement.

But an investigation of what? The ministry gave no further details. "They told us that she is accused of stealing state secrets,” Phan-Gillis’s daughter, Katherine, said after the Foreign Ministry’s September 22 statement, breaking the family’s six-month silence on the affair. But in the year since she was detained at the border, Chinese officials have not produced evidence of any illegal activity by her. And a year after her arrest, she remains a prisoner in the ancient city of Nanning, 365 miles west of Hong Kong, undergoing constant interrogation. There are no charges, much less a public arraignment and trial, in sight.

“I just thought this had to be a huge mistake,” her husband said following the Foreign Ministry statement. “My wife is not a spy; she is not a thief. She is a hardworking businesswoman who spends huge amounts of time on nonprofit activities that benefit Houston-China relations.”

Since last September, the family has remained silent. Fearing Chinese reprisals, Gillis said he could not discuss his wife’s situation with Newsweek. “Families of loved ones in detention centers in China face a dilemma,” says John Kamm, a San Francisco businessman who runs a foundation that promotes human rights there. “Should they go public or stay silent? Many fear that by going public the loved one will suffer.” But “on balance,” Kamm says, speaking out “has proven to be the right decision, but it remains the most difficult, most agonizing decision to make.”

Phan-Gillis's family has wrestled with that quandary. After China aired its accusations this past September, the family spoke out and opened a website publicizing their plight. But within a few days, they closed it and stopped giving interviews, with the family’s lawyer saying they had “reached a time when it is best to let the State Department and White House negotiate for Sandy, and I am winding down the media campaign.”

The State Department says it’s following her case closely. Senior U.S. officials, including Deputy Secretary Tony Blinken, “have raised Ms. Phan-Gillis’s case with Chinese government officials on multiple occasions,” a department spokeswoman, Anna Richey-Allen, tells Newsweek. Asked whether Secretary of State John Kerry raised Phan-Gillis’s case during his visit to Beijing in January, another department official would say only, on terms of anonymity, “I can assure you that the topic of human rights in China certainly came up.” Meanwhile, according to Richey-Allen, U.S. consular officials in Guangzhou, three and a half hours from Nanning by bullet train, have visited Phan-Gillis regularly over the past year, 11 times in all.

“My sense is that State is handling this discreetly and with diligence,” says Joseph DeTrani, a top former CIA and State Department expert on China. Making a public ruckus over her case could backfire, he adds by email, “given Beijing's preference for discreet discussions/negotiations.”

But Michael Pillsbury, a longtime senior China hand at the Pentagon and on Capitol Hill, argues that “the only way for the American side to succeed” is to get in Beijing’s face, “to specifically deny the allegations and to present proof that the charges are false.” As for the risk that doing so might prompt Beijing officials to think Phan-Gillis is unusually important to Washington, Pillsbury is dismissive. “Sure, it does raise her value in Chinese eyes,” he says, “but what if it were you?”

Theories abound on why China arrested Phan-Gillis. One is that she got wrapped around an axle of Chinese Premier Xi Jinping’s so-called “anti-corruption campaign,” which has rolled up scores of high officials associated with his predecessors on charges of participating in massive bribery schemes. Last year, the Houston Chronicle noted that Phan-Gillis was wired into powerful circles in China: “As president of the Houston Shenzhen Sister City Association and a longtime consultant connecting businesses in southern China with their counterparts in Houston, she knew all kinds of power brokers here and counted many as friends,” the paper said. Thus, it’s possible Beijing’s real interest in Phan-Gillis last year was what she could tell anti-corruption investigators about the business dealings of her Chinese connections, with the spy charges used as a ruse to justify holding her.

Her jailing came as Xi’s campaign to revitalize the Chinese Communist Party was cresting on a wave of “enhanced patriotic education,” as Robert Daly, director of the Kissinger Institute on China and the United States, recently put it. Chinese state television, with its round-the-clock programming of documentaries and dramas recycling Japanese war crimes, its invective against U.S. and Japanese opposition to Beijing’s claims in the South and East China seas and denunciations of the Obama administration’s attacks on Chinese cyberthefts of U.S. government and industrial secrets, made a spy war almost inevitable.

In 2013, the U.S. charged six Chinese nationals with conspiracy to steal specially engineered rice and other seeds allegedly taken from a company in Arkansas. The next year, it indicted five Chinese military officers with the cybertheft of U.S. energy, steel and aluminum companies’ secrets, as well as hacking into trade unions. In May 2015, a Chinese professor was arrested and charged with stealing U.S. cellphone technology when he landed at Los Angeles International Airport.

Beijing has responded with several arrests of foreigners on charges of stealing state secrets, including four Japanese, as well as a Canadian missionary couple, Kevin and Julia Garratt, who had lived in China for decades and operated a coffee shop near the North Korean border. In January, a Swedish human rights activist, Peter Dahlin, was held for three weeks on suspicion of endangering national security until he agreed to a staged TV confession that he had broken the law, “caused harm to the Chinese government and hurt the Chinese public,” according to the BBC.

In China, there is no “due process” as it’s understood in the West. Human rights activists and lawyers are routinely jailed. Recently, anti-regime publishers have been hunted down abroad and rendered to China. Authorities put away suspects and release them when it suits them, and not always on the merits of the case. Kevin Garratt, for example, has been held on charges of spying and stealing state secrets since late January. But his wife’s situation is unknown. She spent six months under “residential surveillance” before being released on bail in February 2015, but there has been no news of her status or whereabouts since.

Last September, a weak and frightened Phan-Gillis dictated a letter to her husband through a visiting U.S. consular official. “You don't know this country and how dangerous it is for you,” she said. “Please try harder for lobbying and negotiation for my release through Congress and the president.” The family’s local congressman, U.S. Representative Al Green, a Democrat, did write to Barack Obama. When Newsweek inquired, his office declined to say what Green asked or how the White House responded.

A swap is not likely, some experts say, until China formally charges Phan-Gillis with espionage—followed by an offer from the U.S. to return one of China’s accused spies held here. But if Phan-Gillis is truly innocent, others say, the U.S. would be loath to make such a deal. Yet another, albeit slim, possibility in the minds of some experts would be a deal to get Phan-Gillis back in exchange for a Chinese fugitive in the U.S., such as Yang Xiuzhu, a former senior official now being held in a New Jersey deportation facility, whom Beijing badly wants extradited to stand trial on corruption charges. Since she has applied for political asylum, however, that’s not likely.

Asked for comment on the Phan-Gillis case, a spokesperson for the Chinese Embassy in Washington, D.C., says there is no “further information to provide.”

Meanwhile, March 19 marks a year since Phan-Gillis was arrested, with no visible movement on her case. And without some sort of deal, she’ll probably stay in jail, says influential China-watcher Bill Bishop, publisher of the Sinocism newsletter.

“If the U.S. isn't offering up something the Chinese want,” he tells Newsweek, “why would they release her just because a U.S. official asked?”

Corrections: An earlier version of this story said Jeff Gillis was “on the verge” of filing a missing person’s report when he contacted the State Department. In fact, he did file a missing person’s report when he called the U.S. consulate in Guangzhou. Based on an erroneous wire service report, Gillis was also quoted describing his wife as someone who “has done a lot of nonprofit work for Houston.” Gillis said she did nonprofit work that benefited Houston-China relations. Also, the family shuttered its website in September 2015, not January 2016. And the city of Nanning is 365 miles west of Hong Kong, not east.