https://www.insidehighered.com/quicktakes/2015/02/26/fbi-and-professor. (The Bloomberg story is at http://www.bloomberg.com/news/articles/2015-02-25/sex-lies-and-espionage-did-a-professor-spy-for-the-fbi-.)
The Institutes have been controversial in the U.S. because of their link to the Chinese government. In the U of South Florida case, however, there appears to be an attempt by the FBI to use an Institute connection for info gathering in China. Up to this point, to the extent there has been international controversy about the U of South Florida, it has been in connection with conflict in the Middle East.
UCLA's Confucius Institute is currently listed as being managed by a board chaired by EVC Scott Waugh. It also has an advisory committee chaired by Vice Provost of Intellectual Property and Industry Relations Kathryn Atchison whose background is in dentistry. The Institute basically seems to be in a reporting relationship to Murphy Hall.