Tiger Trap: America's Secret Spy War With China (37 page)

As noted, inside the FBI, the agency with the greatest responsibility for uncovering China's spies in America, counterintelligence is not regarded as the most fruitful career path. Pursuing terrorists or white-collar criminals is a better track toward promotion. And for decades, even within the counterintelligence division, the Chinese target was an orphan. Moscow's spies, not Beijing's, were perceived as the main enemy.

Only a minuscule number of FBI agents specialized in Chinese cases. If the bureau lacked an understanding of China, that was not true of the small group of China hands. Some became so fascinated by their subject that they stayed in the Chinese counterintelligence program, knowing that as a result they would never make it to the level of a special agent in charge of a field office or a desirable headquarters post.

Bill Cleveland, until his career was derailed by his singular lack of judgment in the
PARLOR MAID
debacle, was known inside the FBI as a serious student of China, who over the years became immersed in its language, culture, and history. J.J. Smith, who unwisely bet his counterintelligence career on a source with whom he became emotionally entangled, and who ultimately betrayed him, was also well versed in the byways of Chinese culture and society. Perhaps for both men, China, as much as Katrina Leung, became a kind of fatal attraction.

As an institution, the FBI was overly dependent on its informants. In the
PARLOR MAID
case, the FBI's prime source on China, whose reports went all the way to the White House, was secretly working for the MSS.

In the
ETHEREAL THRONE
case, Jeffrey Wang, an innocent man, lost his job and was subject to a lengthy FBI investigation when he was falsely accused as a Chinese spy by a longtime bureau informant who had a personal, family grudge against him. And Denise Woo, the Asian American FBI agent who became convinced of Wang's innocence and rightly tried to help him clear his name, was fired and prosecuted for her efforts.

In the wake of these twin disasters, the FBI ordered an overdue review of the bureau's use of informants. Changes were made, among them a rule that the files of bureau assets be reviewed every sixty to ninety days. An informant review panel was established by the attorney general. None of which was any help to Jeff Wang or Denise Woo.

Rudy Guerin, a former veteran FBI counterintelligence street agent, talked about the risks of running informants too long. "After
PARLOR MAID
, one of the procedures we put in place, you should not run a source for more than a couple of years."

Asked about the informant who fabricated the story about Jeff Wang, Guerin replied: "This source had been run for a long period of time. Agents bond with their sources if they run them for a long time, as happened with
PARLOR MAID
. Agents tend to take things their sources tell them and write it up and say it's gold. Maybe you have to use bad guys in drug cases, but when working espionage and someone sets up a US citizen, you can't do that."

No recent president, Bill Clinton, George W. Bush, or Barack Obama, has wanted to make a high-decibel issue of Chinese espionage. With the United States struggling in 2010 to recover from the worst economic crisis since the Great Depression, Washington could hardly afford to alienate its banker. Indeed, a year earlier, Chinese premier Wen Jiabao lectured the United States about its economic policies. "We have lent a huge amount of money to the U.S.
Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried."

Aside from the US-China economic embrace, the Obama administration was seeking Beijing's help in curbing North Korea's nuclear weapons and preventing Iran from building a bomb. Short of a revelation that China has planted a mole in the White House, or wired Bo, the Obama family dog, Washington is not likely to fuss too loudly about Chinese spies.

How damaging to national security is Chinese espionage?

When the question was put to FBI director Robert S. Mueller III at a 2007 hearing of the House Judiciary Committee, he replied: "I can probably say more in a classified setting. I can say that it is a substantial concern. China is stealing our secrets
in an effort to leap ahead in terms of its military technology, but also the economic capability of China. It is a substantial threat."

In an earlier report to Congress, the FBI said, "Penetrating the US intelligence community is a key objective of the Chinese."
Ironically, at the time of that warning, the MSS had already done exactly that through
PARLOR MAID
.

Aside from classic espionage, China has benefited from the widespread export of military equipment in violation of US laws. The instances are far too numerous to catalog. In the three years from 2006 to 2009, there were literally dozens of prosecutions for illegal shipments to China of defense equipment, including integrated circuits, thermal imaging cameras, night-vision goggles, restricted computer software, smart-bomb components, and parts for radar and missile systems.

Infiltrating the CIA and the FBI, and stealing the secret measurements of the W-88 nuclear warhead and the design details of the neutron bomb are flagrant examples of China's espionage successes.

"If we're talking about violations of U.S. law, the Chinese are surpassing the Russians,"
according to Harry J. Godfrey III, the former head of Chinese counterintelligence at FBI headquarters. "We know they are running operations here. We have seen cases where they have encouraged people to apply to the CIA,
the FBI, Naval Investigative Service and other defense agencies."

Porter J. Goss, former chairman of the House Intelligence Committee and later director of the CIA, said of Chinese espionage against the United States, "It's pervasive, ubiquitous, constant."

Joel Brenner, the former counterintelligence chief for the director of national intelligence, has a gift for talking in sound bites. Referring to the tasking list that the Chinese gave to Chi Mak, Brenner said: "You can get to know the dragon by its claw,
and the list was a clear picture of the dragon's claw."

Harold Agnew, a physicist who worked on the Manhattan Project, flew over Hiroshima on August 6, 1945, in an observation plane behind the
Enola Gay,
and watched the uranium bomb devastate that Japanese city. As head of the weapons division at Los Alamos, and later director of the laboratory, he designed most of the nation's nuclear arsenal. In the 1980s he was the first American scientist allowed to visit Lop Nor, China's secret nuclear test site.

"They had everything," he told an oral history project in 2005. "They're in our knickers and there's maybe one under the couch."

The "dragon's claw" and Harold Agnew's colorful metaphors are eye-catching hyperbole, but they also contain a good deal of truth. Without exaggerating the danger of Chinese espionage, or magnifying the threat, it is a fact that China's spying on America is ongoing, current, and shows no sign of diminishing. The conflict is no less real for being mostly unseen.

Two decades ago, a revealing handbook for spies was published in China by two veteran intelligence researchers, Huo Zhongwen and Wang Zongxiao. The book,
Sources and Techniques of Obtaining National Defense Science and Technology Intelligence,
tells how to gather secret information in the United States. Most intelligence can be collected from open sources, the authors explained, although about 20 percent must be obtained by "special means," including "electronic eavesdropping, and the activities of special agents (purchasing or stealing)." But, by mining "the vast amount of public materials and accumulating information a drop at a time, often it is possible basically to reveal the outlines of some secret intelligence."

They noted that some years ago, the Department of Energy had mistakenly declassified almost twenty thousand documents, including "at least eight highly secret items regarding thermonuclear weapons." They admitted, however, that gathering defense and technology information can be difficult because of security classifications.

Difficult, but not impossible, they wrote. The authors of the espionage guide reminded their readers of a common Chinese saying: "There are no walls which completely block the wind."

Author's Note

When, years ago with Thomas B. Ross, I coauthored
The U-2 Affair,
the story of the CIA spy plane shot down over the Soviet Union, I did not realize at the time that I was embarking on a career of writing books about espionage and intelligence.

For most of the intervening years, I studied and reported on the Cold War battle between the CIA and the FBI and the Soviet, now Russian, intelligence services. I wrote of moles and men, of Edward Lee Howard, Aldrich Ames, and Robert Hanssen. To follow the trail of those stories, I traveled to Moscow four times and to many other locales.

Only in the past decade did I come to the growing realization that there was another narrative waiting to be written, the largely unexplored story of China's espionage against the United States. With the encouragement and support of Sterling Lord, my longtime literary agent, I expanded my initial research on the
PARLOR MAID
case into a broader examination of Chinese espionage spanning the last several decades, up to and including the present.

Like all or most countries, including the United States, China steals secrets. The Chinese have had some notable successes, and some failures as well. The risks posed by their activities in the United States, and the damage done to national security, should not be exaggerated, or ignored.

To write this book, I conducted almost five hundred interviews, with more than 150 people. Given the sensitive nature of counterintelligence, and the ingrained reluctance of CI officers and agents to talk about their work, some declined to speak with me. Many others agreed to be interviewed only on condition that they not be identified. I have respected their wishes.

For their generous assistance on this book I wish to thank Plato Cacheris, and also John F. Hundley, of Trout Cacheris, Lily Lee Chen, Stacy Cohen, John D. Cline, Christopher Cox, James A. Geis, Marc S. Harris, James D. Henderson, Mark C. Holscher, Henry V. Huang, Marianna Liu, Angela Machala, Jonathan E. Medalia, Robert S. Norris, Mary Palevsky, Philip D. Polsky, David Ryan, Federico C. Sayre, Jonathan Shapiro, Perry J. Spanos, Jerry Stockton, Brian A. Sun, Nart Villeneuve, Michael Woo, and Peter Woo.

Katrina Leung declined to be interviewed, but her husband, Kam Leung, spoke to me openly and at length over a period of two days in 2003, and the biographical details about his wife that he provided, as well as his account of their life together and their trips to China, were invaluable and much appreciated.

My especial thanks go to Michael P. Kortan, the FBI's assistant director for public affairs, who did his best to pry loose an occasional morsel from the bureau's famously reticent counterintelligence division. I also appreciate the assistance I received from his predecessor, John J. Miller, and from Bill Carter and Susan T. McKee of the Public Affairs Office. In Los Angeles, Laura Eimiller of the FBI's Public Affairs Office was always helpful.

A number of former FBI agents and bureau officials were willing to share their insights and experience, including Robert M. "Bear" Bryant, Bruce Carlson, Tom Carson, Edward J. Curran, Stephen W. Dillard, Neil J. Gallagher, Harry J. Godfrey, Dan Grove, Rudy Guerin, John L. Hoos, Sheila Horan, Jack Keller, Jay Koerner, John F. Lewis Jr., T. Van Magers, John J. O'Flaherty, Phillip A. Parker, Kenneth J. Schiffer, I. C. Smith, Raymond H. Wickman, and Leslie G. Wiser Jr.

I am greatly indebted as well to the many other former FBI counterintelligence agents who preferred not to be quoted or have any material attributed to them. This book would have been incomplete without their generous time and assistance. I thank them all; they know who they are.

Among the former CIA officials and officers interviewed were Porter J. Goss, who served as Director of Central Intelligence in 2004-5, Milton A. Bearden, Jennifer Millerwise Dyck, Colin R. Thompson, and Robert S. Vrooman.

At the Department of Justice, I appreciate the help I received from Dean Boyd, the public affairs officer for national security, and in Los Angeles, from Thom Mrozek, the media spokesperson for the US Attorney's Office. Michael W. Emmick, the former assistant US attorney in Los Angeles who was the lead prosecutor of Katrina Leung, was especially patient with my questions, as was Rebecca Lonergan, the former assistant US attorney in that office and the lead prosecutor of J.J. Smith. I also appreciate the assistance I received from Erica O'Neil, an assistant U.S. attorney in Milwaukee.

From the Department of Energy, I benefited from conversations a decade ago with then-secretary Bill Richardson, Lawrence H. Sanchez, director of the Office of Intelligence, and Notra Trulock, the acting deputy director of that office. I also thank Stephen Wampler, of the Public Affairs Office at the Lawrence Livermore National Laboratory.

In threading my way through the intricacies of the science and control of nuclear weapons, I am indebted to Thomas B. Cochran, of the Natural Resources Defense Council, Richard L. Garwin, George A. "Jay" Keyworth, the former White House science adviser, and Daryl G. Kimball, executive director of the Arms Control Association.

Several friends and members of the news media were helpful, including Pete Williams of NBC, Matthew Barakat of the Associated Press, and Greg Krikorian, formerly of the
Los Angeles Times.

Chen-yieh Catherine Yu, assistant professor of Chinese at Georgetown University, graciously answered several questions about Chinese language and usage. Jeffrey T. Richelson of the National Security Archive was more than generous with his help and guidance. My thanks as well go to Ian M. Cunningham, who provided me with skillful research assistance at several points along the way. Alexandra and Elizabeth Evans cheerfully kept my newspaper files current.

I especially want to thank Bruce Nichols, senior vice president and publisher of Houghton Mifflin Harcourt, whose steadfast support and enthusiasm for this project made it possible, and is deeply appreciated by me. The manuscript also benefited greatly from the skillful editing of Martin Beiser. Others at the publishing house deserve my thanks as well, including assistant editor Christina Morgan, production editor Rebecca Springer, Laura Brady, who presided over the photo section, and Melissa Dobson, the dedicated copyeditor.