Tiger Trap: America's Secret Spy War With China (22 page)

"This channel is much safer than the others." Dongfan Chung (right) is shown with Gu Weihao, an official of China's Ministry of Aviation, who assured him he could safely pass defense secrets through Chi Mak. Chung, an engineer for Boeing, collected data for China on the space shuttle and the B-1 bomber. He was convicted of economic espionage and in 2010 sentenced to fifteen years and eight months.
FBI

Tai Shen Kuo, a New Orleans businessman, was paid by Lin Hong, a Chinese military intelligence officer, to enlist Pentagon officials in a Chinese spy network. Caught by the FBI, which took this surveillance photo of him, Kuo pleaded guilty under the espionage laws. In 2008 he drew a sentence of almost sixteen years, later reduced to five for cooperating with prosecutors.
FBI

Yu Xin "Katie" Kang, Tai Shen Kuo's young Chinese girlfriend, served as a cutout between Kuo and his handler in China, Lin Hong. Kuo had dominated her life since she was a teenager. Prosecutors recognized that she had been used and controlled for years by Kuo, and she received a much lighter sentence of eighteen months.
FBI

Gregg W. Bergersen, a Defense Department official with a weakness for gambling, turned over Pentagon documents to Tai Shen Kuo, who passed them on to China. Bergersen, shown in this FBI surveillance photo, thought the data was going to Taiwan. He pleaded guilty to conspiracy to disclose national defense information and was sentenced in 2008 to just under five years.
FBI

A second Pentagon official, James W. Fondren Jr., held a
top secret
clearance as deputy chief of the Washington liaison office for the US Pacific Command (pacom). He met in China with Lin Hong, who gave him the code name fang. Fondren, who turned over classifi ed information to Kuo, was convicted and sentenced in 2010 to three years.
FBI

Chapter 14

THE COUNTERSPY

T
HE DIRECTOR WANTS
to see you."

Les Wiser, the FBI's ace counterintelligence agent, the man who caught Aldrich Ames, had no idea why FBI chief Robert S. Mueller III had summoned him to his office. But Wiser's antennae were up; whatever it was could not be good news. The director would not have sent for him unless major trouble was brewing.

Even so, Wiser was not prepared for what he learned. Mueller wasted no time on preliminaries. The FBI, he told Wiser, had been penetrated by Chinese intelligence. Katrina Leung—code name
PARLOR MAID
—the woman the bureau had relied on as its best spy against Beijing, had actually been working for Communist China for more than a decade. It was a nightmare come true. Mueller was grim, still furious over the details, which he had learned only days earlier.

It got worse. Wiser could hardly believe what Mueller revealed next.
PARLOR MAID
's handlers, who had been the FBI's two top counterintelligence agents targeting China, had carried on long-running sexual affairs with Katrina Leung. The FBI agent in Los Angeles, who had recruited her twenty years earlier, was her lover. So, for several years, was the bureau's top China expert in San Francisco.

Not only that, both FBI agents
knew
that
PARLOR MAID
had been recruited by Chinese intelligence. They found that out in 1991, yet headquarters had agreed they could continue to run her. It was an unbelievable mess.

The bureau would have to review everything
PARLOR MAID
had told the FBI for years, including information that had gone straight to the White House. Leung had been considered so reliable that her information was passed up the chain of command to four US presidents—Ronald Reagan, George H.W. Bush, Bill Clinton, and George W. Bush. Now the FBI would have to assume that much of it might be false.

Then Mueller gave Wiser his marching orders.

"Go to LA and take care of this," he said.

The FBI director did not have to spell out what remained unspoken. The disaster in Los Angeles was only the latest calamity to hit the bureau. Still reeling from its failure, along with the CIA, to prevent the 9/11 terrorist attacks in 2001, and the arrest earlier that year of FBI special agent Robert Hanssen as a Russian spy, the FBI now was dealing with an explosive internal scandal that was sure to become public.

Sex! Espionage! A Chinese dragon lady! Wiser's head was spinning when he walked out of the director's office in February 2002. He had just been handed a scorpion and he wasn't wearing gloves.

It was one thing for Mueller to tell him what had been going on in Los Angeles. But how was Wiser going to prove it? He would have to gather solid evidence to break the case open, to prove that
PARLOR MAID
was working for Beijing, that the two FBI men had been having sex with their agent, and that they knew she had been recruited by China but continued to work with her anyhow. The task seemed impossible. It was even further complicated by the fact that both FBI agents, J.J. Smith in Los Angeles, and Bill Cleveland in San Francisco, had retired.

And Wiser knew that he would face stiff resistance within the bureau, which always closed ranks to protect its own. In trying to build a case that involved the two FBI agents, Wiser would be seen as an outsider, a headquarters stooge. He would be violating the core precept of the bureau's culture, the old J. Edgar Hoover command, "Don't embarrass the bureau."

Sure, Hoover was long gone, but the headquarters building in Washington bore his name, and the old edicts had not been entirely forgotten. Wiser was already a target of jealousy and criticism within the bureau's ranks because of his success and the publicity he received in the Ames case. It was Wiser, defying orders from his superior, who had dug out from Ames's trash barrel a yellow Post-it note that proved to be the smoking gun in the case.
The note proved that Ames was an active Russian spy, and it was the evidence the FBI needed to arrest him.

Wiser had made his bones in the Ames case, when he was thirty-eight, but it was nothing compared to the challenge that awaited him in Los Angeles. He felt a little like the lone sheriff in
High Noon.
But this wasn't a Hollywood western. If he screwed up, Mueller would know just whom to blame.

Nor had he exactly volunteered for this job. In the FBI, agents usually hope in time to rise to the level of an assistant special agent in charge (ASAC) of a major field office, and then perhaps to the top job of special agent in charge, or SAC. Wiser, after nineteen years, was up for a SAC post. Now that would have to be put on hold. He would have to do as Mueller asked; he had no choice.

Even before Special Agent Wiser had put Aldrich Ames behind bars for life, he had worked in counterintelligence for most of his years in the FBI. He had earned a reputation as quick, decisive, and discreet.

Tall and thin, with graying brown hair and a wide mustache, Wiser, a former Navy lawyer, did not fit the stereotype of the laconic, square-jawed FBI agent familiar from movies and television. Wiser smiled a lot and could laugh at himself; in a serious and demanding job, he had a saving sense of humor.

To preserve security, Wiser knew he would need a new code name for Katrina Leung, and the investigation of which she was also a target. He could not afford to have any documents generated by his investigation end up in the
PARLOR MAID
file, where other agents might see them. For Leung, the computer came up with a randomly generated new code name:
POETIC FIT
.

J.J. Smith, and the investigation directed at him, were given a separate code name,
RICH FOLIAGE
.

With four handpicked agents from headquarters, Wiser flew to LAX. Along with some two dozen carefully selected agents from Los Angeles, Wiser moved offsite into an office building in Santa Monica, well away from the FBI field office at 11000 Wilshire Boulevard. J.J. had retired, but he sometimes dropped by the office and it would not do for him to run into Wiser's team.

Although Wiser had not wanted the assignment that Mueller gave him, if China had penetrated the FBI, and two agents had been compromised, he was determined to get to the bottom of the mess and let the chips fall where they may.

By April 2002, Wiser was armed with another FISA warrant, and the FBI began wiretapping its own former agent, J.J. Smith. Agents on Wiser's team started tailing him as well.

The FBI, meanwhile, had continued to run
PARLOR MAID
as an asset. A new handler, Special Agent Steve Conley, had been assigned to her when J.J. retired. Not long after Wiser arrived in Los Angeles, he discovered that the FBI office on Wilshire was still approving her payments. He considered whether stopping the money would tip off
PARLOR MAID
that she was under investigation, but decided it was a risk that could be taken. Wiser reasoned that with J.J. retired, Leung would simply assume the bureau had less need for her services. He ordered the payments stopped.

To explain his presence in Los Angeles, Wiser told the field office on Wilshire that he was in town to do an efficiency study. His title of inspector helped his cover.

Sooner or later FBI agents are tapped for a stint in the bureau's inspection division. They visit the field offices, poke around, and write a report on how well or badly the offices are working. Since nobody, as might be imagined, likes a visit from the inspectors, Wiser was not asked a lot of questions.

And it became quickly clear from the wiretaps and surveillance on both J.J. and Leung that their romantic relationship had not ended with Smith's retirement more than a year earlier. In March, the watchers had seen them spending time together in a hotel.

Meanwhile, the agents operating out of the secret office in Santa Monica were delving into
PARLOR MAID
's financial activities. The Leungs owned a Chinese bookstore on East Garvey Avenue in Monterey Park. In July, Katrina Leung filed a petition for Chapter 7 bankruptcy for the bookstore, which meant that the premises had to be closed and all business ceased immediately, unlike a Chapter 11 proceeding, where a company reorganizes and emerges to operate anew.