Tiger Trap: America's Secret Spy War With China (6 page)

"We went to China at least once a year, sometimes more," he said. "We went to China at least twenty years, some years two or three times."

The presence of her husband and son, Kam said, "provided the excuse to visit wherever Katrina asked to go. She would say, 'Our family have never been to Xi'an,' so they would say, 'Sure, go to Xi'an.'

"Or she would say, 'My son would love to go to Harbin, to the cold country.'" Three times,
PARLOR MAID
traveled to Harbin, in far northeast China near the Russian border, where the temperature was well below zero, claiming that their son "loved the Ice Lantern Festival." In fact, there was another motive; she was currying favor with the head of the MSS, who came from that city in Heilongjiang Province, as did a large number of other Chinese intelligence officers.

"I was the cameraman," her husband said. "I used a Nikon and an Olympus, eventually a Sony digicam." Kam bought the cameras and the FBI reimbursed Katrina for them. He would make a double set of prints and give one to his wife to pass on to J.J.

Some of
PARLOR MAID
's reports made it to the White House under presidents Ronald Reagan, Bill Clinton, and both George H. W. Bush and George W. Bush, according to intelligence officials. The high-level CIA medal that J.J. received for
PARLOR MAID
is evidence of how valuable her work, and his, was regarded. Until later, when it all unraveled.

As Katrina Leung was ingratiating herself with the top leaders in Beijing, she simultaneously became an increasingly prominent member of the Chinese American community in Southern California. She was active in Republican political circles as well, contributing $10,000 to Los Angeles mayor Richard J. Riordan and $4,200 to Bill Simon Jr.,
who defeated Riordan in the Republican primary for governor of California in 2002 but lost to Gray Davis. According to campaign finance records, the Leungs contributed some $27,000 to the Republican Party during the 1990s.
Katrina Leung also contributed to at least one prominent Democrat, her friend Judy Chu, who represented heavily Chinese American Monterey Park in the state assembly.

Her entrée into the wider world of Los Angeles society was through Caroline Leonetti Ahmanson, a onetime hostess on Art Linkletter's television variety show
House Party
and the widow of Howard Fieldstead Ahmanson, a billionaire savings and loan tycoon. Caroline Ahmanson, who died in 2005, was a well-known patron of the arts in Los Angeles—the Ahmanson Theatre bears the family name—and was also active in promoting improved relations between China and the United States. She was chairwoman of the Los Angeles-Guangzhou Sister City Association, and chose Katrina Leung as president. Caroline Ahmanson was close to Zhu Rongji, the premier of China for five years until 2003, and she visited the mainland several times, accompanied by Katrina.

"Without Caroline, Katrina is just another Chinatown hustler," Kam Leung said of his wife. "Caroline introduced her into the mainstream of society."

Los Angeles businessman Peter Woo, founder and president of the toy manufacturing company Megatoys, saw evidence of Katrina Leung's clout in China firsthand. In 1996, as part of a delegation of some forty community leaders, he accompanied her and Mayor Riordan on a trip to Beijing and other cities in China to promote business for the port of Los Angeles.

"She was the one who put the trip together.
She was in command. There were a couple of dinners with Chinese government officials. She emceed these events. There was a banquet at the Great Hall of the People, she was emcee of that banquet. Katrina and Mayor Riordan saw Jiang Zemin in his office. She bragged about it, she can see so-and-so any time she wants. Our impression was that she was very well connected with the Chinese government." Or as one high city official in Los Angeles put it, "When you need to get something done with China, you go to Katrina Leung."

Katrina, Woo recalled, would often show up at functions with her FBI friends. "She sometimes invited J.J. and his colleagues to dinners. There were rumors she was a spy for China. You see her with FBI agents and she introduced them to us to show there was no problem with the US government. Showing up with the FBI legitimized her status."

And working for the FBI also meant that Katrina Leung enjoyed an affluent lifestyle. Of the more than $1.7 million in expenses and salary she received from the FBI, more than half, $951,000, was paid to her
after
the FBI learned in 1991 that she had passed unauthorized information to Mao Guohua, her Chinese spymaster.

In addition, because of her known connections to the leaders in Beijing, she was approached by Nortel, a major Canadian telecom company, which paid her $1.2 million
as its representative in a deal to allow Nortel and its DMS-100 digital switching systems into China.

As the FBI later discovered, the Chinese government also paid her $100,000,
so that her known income from the FBI, Nortel, and the PRC amounted to more than $3 million.

With the money rolling in, the Leungs' lifestyle improved accordingly. They purchased a house for $1.4 million in San Marino, an upscale section of Los Angeles, with a garage, a swimming pool, a pond, a pool house, and four cream-colored stone lions guarding the driveway. They also owned a Chinese-language bookstore in Monterey Park and two apartment houses, and had funds in sixteen foreign bank accounts.

It was in the house in San Marino that most of the trysts between J.J. and Katrina took place. It was also at the San Marino residence that J.J. would brief
PARLOR MAID
on her assignments, and learn the information she brought back from her trips to China.

Where was Kam Leung during J.J.'s visits? When the FBI man came to the house, he said, "I stayed away. I didn't want a tap on the shoulder in Beijing if I knew intelligence secrets. I could have been interrogated and imprisoned. I didn't want to know what they were discussing.

"For over twenty years, J.J. would come to our house any time he wanted. Three days a week, sometimes five days a week. He would call first and say, 'Can I work?' All our relatives know they cannot come to our house without calling ahead."

J.J. had become so confident of
PARLOR MAID
and their partnership that he began taking classified documents to her home.
TOP SECRET
and other classified materials were stored in the FBI's Los Angeles office under tight security in a secure compartmented information facility, or SCIF (pronounced "skiff"). Usually, agents would read the documents in the SCIF. Sometimes they would check out documents to be reviewed in their offices and then returned.

Not the privileged J.J., who would stuff the documents into his briefcase and take them along to the house in San Marino. He was the only agent who, at least once, kept
TOP SECRET
documents overnight.

Having free run of the house in San Marino was marvelously convenient for the lovers. But it was also convenient for the MSS. J.J. would leave his briefcase open;
the file folder pockets in the briefcase often contained documents with the text facing out. She could see the documents she wanted.

While the FBI man was dozing, or outside smoking, or in the bathroom, perhaps showering after they had sex,
PARLOR MAID
took classified documents from his briefcase and surreptitiously made copies of them on her photocopier or fax machine. Sometimes she took notes on the contents and later threw out the copies of the documents in the trash.

At other times she scribbled notes about what was in the documents without copying them. She also made notes of information that J.J. shared with her. How she could have managed all this without her lover's knowledge is somewhat baffling, but there is no evidence that J.J. realized his primo source was betraying him. Over the years,
PARLOR MAID
passed information to the MSS that she had stolen this way.

Even more remarkably, Katrina Leung continued to pilfer documents from J.J.'s briefcase for many years after 1991, when it had become clear to the FBI from the tape that as Luo she was reporting to the MSS.

What with J.J. dropping by so often, inevitably the Smiths and the Leungs grew close. "J.J.'s family and my family were good friends all these years," Kam said. "In 1992 we went to Hawaii together, island hopping."

And was he aware of his wife's affairs with not one but two FBI agents? He replied: "Gail [Smith] didn't know, William Cleveland's wife didn't know. And I didn't know."

Chapter 5

DESTROY AFTER READING

T
HEY MADE AN
unlikely cast of characters for a spy drama: Chien Ning, a mystery woman and prominent Chinese geophysicist; Hanson Huang, the Hong Kong-born, Harvard-educated lawyer and friend of Katrina Leung; and Jerry Chih-li Chen, who ran a TV repair shop in Oakland, across the bay from San Francisco.

All were key players in the espionage case that the FBI code-named
TIGER TRAP
. At the center of it all was Gwo-bao Min, the aerospace engineer with a Q clearance who worked at the Lawrence Livermore nuclear weapons lab—the man who would give Bill Cleveland such a start when the FBI agent encountered him in a hotel lobby in remote Shenyang.

Cleveland was the case agent, the lead FBI investigator on
TIGER TRAP
. He pursued the case with the help of Al Heiman, another bureau special agent in the Bay Area, and J.J. Smith in Los Angeles.

William V. Cleveland Jr. had become a leading figure in the FBI's Chinese counterintelligence program from a very different background than J.J. Smith's. He grew up in Arlington, in Northern Virginia, the son of an assistant director of the FBI under J. Edgar Hoover.

He graduated from William & Mary College and after two years in the Army joined the FBI in 1969. He was sent to the Defense Language Institute in Monterey, California, to learn Mandarin, then assigned to the China squad in the FBI office in Berkeley, and later in Oakland.

Over time, Cleveland's reputation as an expert on Chinese espionage and respect for him within the FBI grew exponentially. "He was the best I ever knew,"
said Ken Schiffer, a former FBI Chinese counterintelligence veteran. "I thought the world of him. He was my hero." Another former colleague put it this way: "Bill Cleveland was a god."

For all but one of his twenty-four years in the bureau, Cleveland remained in the San Francisco area. The California lifestyle suited him. Always trim, he stayed in shape by jogging every morning, in later years switching to riding a bicycle.

Cleveland was active in his church, seldom missing a Sunday, but some of his colleagues found him sanctimonious and his religious demeanor off-putting. "In Berkeley," said one, "he was holier than thou, you couldn't swear around him.
One day a lot of people were crowded around a window. Somebody was getting a blowjob in a car in plain view and everybody was watching with interest and Cleveland was pounding on the window yelling, 'Stop that!'"

Inevitably, Cleveland's work brought him in contact with J.J. Smith in Los Angeles, and, of course, with
PARLOR MAID
. The two men were close; J.J. considered Cleveland a mentor and a friend. It was Cleveland, a rabid Oakland Athletics fan, who taught J.J.'s son Kelly to play baseball.

In 1978 Cleveland and the San Francisco China squad began investigating several Chinese and Taiwanese nationals. Their leader, the FBI concluded, was the geophysicist Chien Ning, who the bureau believed had been sent to the United States by the MSS.

With a reported bankroll of $250,000,
Chien had been given four tasks by the Chinese intelligence service, the FBI surmised: First, she started a glossy Chinese-language magazine,
Science and Technology Review,
for which Chinese American scientists contributed articles on subjects of interest to China. Half a dozen issues were published in the United States; after that the publication moved to China.

The magazine was no marginal operation. It clearly had the backing of the Chinese government at the highest level.
For the first time, the postal service in China and a network of official bookstores allowed the unrestricted sale of a foreign magazine. Published in Berkeley and printed in Hong Kong, the magazine's first issue, in January 1980, had 104 pages, a print run of two hundred thousand copies, and an interview with two Nobel laureates. It also had a congratulatory message from Dr. Frank Press, the science adviser to President Jimmy Carter and like Chien a geophysicist. In China, a lead article in the
People's Daily
promoted the magazine, and a large number of senior Chinese government officials sent handwritten notes of congratulation to the magazine's Beijing office.

As Chien's second project, through a commercial front set up as Kentex International, libraries at the University of California at Berkeley, Stanford University, and other universities were combed for PhD theses and scientific books on a variety of technical subjects. The papers and books were copied and the copies shipped to Beijing.

In addition, Chien was tasked with opening a bookstore that would sell PRC publications and other books on Asia and Chinese language and culture. The FBI believed she may have helped to found Eastwind Books & Arts, at Stockton and Columbus streets in San Francisco. Finally, she was to open an import-export company.

All of this seemed fairly innocuous. But the FBI's suspicions about Chien's role were fueled when Gwo-bao Min, the Livermore scientist, turned up moonlighting as the advertising and sales manager of her magazine,
Science and Technology Review.

The bureau's antennae went up because Min was an engineer at one of the nation's most sensitive and secret installations, the laboratory founded in large part by Edward Teller, the father of the H-bomb, who became its director. It was at Livermore that the hydrogen bomb, the most destructive weapon in the world, was created.

In the late 1970s, Min worked at Livermore on designing a system to shoot down enemy nuclear missiles. Min's project was a precursor to the Strategic Defense Initiative, the so-called Star Wars program launched in 1983 by President Ronald Reagan.