House panel on China says CDC failed to test viruses from Reedley lab. What went wrong?

A congressional committee investigating Chinese communist influence blames gaps in the U.S. regulatory framework for allowing a “wanted fugitive” to set up a clandestine biological laboratory in Reedley last year.

The U.S. Centers for Disease Control was also faulted by the House Select Committee on the Chinese Communist Party for its “baffling” and “unacceptable” response to Reedley city officials who sought the agency’s help identifying thousands of vials of suspected contagions inside the warehouse.

The committee’s conclusions were included in a 41-page report released Wednesday in Washington, D.C. The report specifically criticizes the Centers for Disease Control for refusing to test the biological material found in refrigerators and freezers at the Reedley site, instead relying on labels on containers to determine that the lab contained samples of various infectious viruses, bacteria and parasites that include chlamydia, streptococcus, hepatitis B and C, HIV, rubella, malaria and COVID-19.

The report states that “CDC’s refusal to test left local officials unable to assess the danger to the … Reedley community or inform the community about what steps, if any, it should take to protect public safety.”

The report is based on evidence obtained through a subpoena served on the city of Reedley in September and subsequent interviews by investigators. It amounts to thousands of pages of documents seized from the warehouse where Universal Meditech Inc. set up shop on I Street in downtown Reedley, hundreds of photographs taken inside the warehouse, and hours of video.

“This evidence, alongside interviews of local officials and other investigative steps, revealed troubling gaps in federal pathogen safeguards,” the report states. “Those gaps allowed a wanted fugitive from Canada, who is a (People’s Republic of China) national who had previously stolen millions of dollars of American intellectual property, to operate an illegal facility” in Reedley.

The alleged operator of the lab, Jia Bei Zhu, was arrested in October in Reedley on federal charges of manufacturing and distributing illegal COVID-19 test kits and lying to federal investigators. He remains in custody in the Fresno County Jail. He is expected to have a court hearing Thursday at the U.S. District Courthouse in Fresno, where his attorney Anthony Capozzi said Zhu will plead not guilty when a grand jury indictment is issued.

Rep. Kevin McCarthy, R-Bakersfield, told reporters Wednesday that Zhu was apparently in the U.S. illegally, yet he was able to purchase biological agents. He said the investigation summarized in the report illustrates “how easy it is to get these pathogens online.”

The panel’s investigation determined that Zhu has connections to companies linked to the Chinese government, “and is currently wanted in Canada for contempt of court, where he is the subject of a (Canadian dollar) $330 million judgment for stealing American intellectual property.”

“Zhu appears to have fled the Canadian courts and entered the United States unlawfully given that he had an active arrest warrant in Canada,” the report states. Once in the U.S., Zhu subsequently set up a new network of companies.

Concerns over CDC’s response

Besides not testing labeled vials, the report states that the CDC also did not bother to test materials in vials or containers that had no labels.

Reedley City Manager Nicole Zieba and city code enforcement officer Jesalyn Harper spoke via a video link, and both were critical of how federal agencies responded to their requests for help.

“Each agency handed out business cards and tipped their hats,” Harper said, “and left the warehouse with very little or no enforcement actions taken.”

Said Harper, “The incident shows how unprepared we are as a nation.”

Zieba described the situation as “a true house of horrors.” She said she was terrified that a lab operator could remove tags from vials and the CDC wouldn’t investigate it.

The problems in Reedley underscore the danger of such unlicensed labs because of the “deadliness this could have caused not just in the Central Valley, but spread throughout the country,” McCarthy said.

The report notes that the U.S. “does not conduct oversight of privately funded research, including enhancement of potential pandemic pathogens” if those biological materials are not “select agents,” those deemed most dangerous to people.

Rep. Jim Costa, a Fresno Democrat whose district includes Reedley, said the amount of biological agents inside the warehouse were “enough to scare the bejeezus out of anyone.”

“All it takes to set up a private lab in America is to get a business license,” Costa added.

“These are gaps that we should all be concerned about,” he said.

The CDC inspected the lab site in early May, the report notes, but only after Costa intervened on behalf of the city to press the agency to investigate the warehouse.

But because CDC didn’t test the pathogens discovered in the refrigerators and freezers in the warehouse, “we still don’t have a clear view” of what was there, McCarthy said.

The report states that the CDC insisted “that there was ‘no evidence’ that Select Agents were within (the Reedley lab) or that Zhu and UMI imported infectious agents and ‘insufficient evidence at this time’ of legal violations.”

But, the report adds, the CDC “seems to have made this claim without conducting any investigation beyond reading the labels that were in English on a limited number of the pathogenic samples.”

Costa noted that the lab served to fuel speculation about China’s involvement and the origins of COVID-19 in that country. “What better way to create havoc” than to potentially spread diseases through such labs, Costa said. “I don’t think we clearly know today” the Reedley lab’s ultimate purpose, he added.

“The world has changed,” Costa said. “We know China is an adversary and a competitor, and they are a vast market.”

“At a minimum, the Reedley Biolab shows the profound threat that unlicensed and unknown biolabs post to our country,” the report concluded. “At worst, this investigation revealed profound gaps in our nation’s defenses and pathogen-related regulations that present a grave national security risk that could be exploited in the future.”

Costa said that the “responsibility is vague at best” over what authority different officials have. Unaddressed, he said, “we could have a whole lot of problems on our hands.”

The chairman of the select committee, Rep. Mike Gallagher, R-Wisconsin, said the report “was not a policy report,” but intended to lay out facts for legislators to take constructive steps moving forward.

One idea, he said, is to ensure better responsiveness from federal agencies, including better communication between the CDC and others.