China's Ministry of State Security (MSS) and other intelligence services aggressively target the US, placing particular emphasis on the high tech sector heavily concentrated in Southern California, and in the Silicon Valley. Cover for Beijing's espionage in the United States includes the 1,500 Chinese diplomats operating out of 70 offices, 15,000 Chinese students who arrive in the US each year, and 10,000 Chinese who travel in some 2,700 visiting delegations each year.
Most of the research personnel in Communist China are locked up in the compound of their research institutes, and very few of them have ever had the chance to see things in foreign countries. The shortcomings of the CPC's intelligence research institutes has affected the judgment of the CPC top leadership when making foreign- related policies. Thus it is not surprising that the CPC's foreign policies have been at times confused or too aggressive.
In 1979, Vietnam invaded Cambodia. Prior to Vietnam's 1979 invasion of Cambodia, the CPC's intelligence community assured the Chinese leadership of the Khmer Rouge's ability to resist the Vietnamese invasion. Based on this assurance, the CPC continued suppling the Khmer Rouge with arms, which were seized by the Vietnamese. CPC intelligence also claimed that Vietnam could not capture Phnom Penh, but only a few days after this assessment, Phnom Penh fell into Vietnamese.
In 1979, Hua Guofeng planned to pay a visit to Iran on his way to Western Europe. The assessment of CPC intelligence was that the Shah of Iran would not step down in the near future, though shortly after Hua Guofeng's visit the Shah was forced to leave the country. The CPC was thoroughly discredited by this event and later fell afoul of the new regime in Iran.
On the eve of the collapse of Romania's Ceausescu, Qiao Shi visited Romania to attend the national congress of the Romanian Communist Party. In their reports Qiao Shi before he left for Romania, Chinese analysts stated that the situation in Romania was fairly good. As it turned out, Ceausescu was executed shortly after Qiao Shi returned home.
As early as 1991, the FBI knew about Chinese government contributions to U.S. campaigns. There is evidence that China sought favorable American treatment on trade policy by contributing millions of dollars to the re-election of Bill Clinton and members of Congress. The US National Security Agency intercepted communications indicating that China was targeting 30 Congressional candidates (mostly Democrats) for influence buying campaign contributions. Republican House Speaker Newt Gingrich was one of those candidates. According to James F. Lilley, U.S. ambassador to China in the Bush administration and a former CIA officer:
"U.S. counterintelligence agents and the FBI discovered Chinese efforts to interfere in American campaigns as early as 1991, when FBI agents warned a number of Democratic members of Congress to watch for Chinese donations passed through intermediaries.... It's the way they operate in Asian countries. They do it by bribing government officials; they bribe them to change policy.... Beijing is trying to influence the U.S. position on a host of issues related to ongoing negotiations about China's and Taiwan's entry into the World Trade Organization, market access for American products in China, intellectual-property piracy, technology transfers and weapons proliferation."
Sen. Fred D. Thompson (R-Tenn.), who chaired the 1997 campaign finance hearings, said the committee believed:
"that high-level Chinese government officials crafted a plan to increase China's influence over the U.S. political process," and took "specific steps" to do so, including the allocation of "substantial sums of money" to influence federal and state elections.
US security agencies and the Justice Department's Criminal Division believe, based on counterintelligence surveillance, that Beijing's diplomatic community and espionage network helped Democratic fundraiser John Huang and other political operatives get millions of dollars in campaign donations and "walking-around" cash for the 1996 election.
The plan was launched in 1995 as a relatively benign congressional lobbying activity, but became an effort whose goal was to illegally funnel money into political campaigns. Approved at the highest levels of the Beijing government, the plan was placed under the control of the Chinese Ministry of State Security. U.S. intelligence has established that about $2 million was allocated by the Chinese government, of which at least $1 million was transferred to U.S. banks or to the Chinese Embassy in Washington.
Chinese Spy Cases:
Larry Wu-Tai Chin: Prolific spy, Larry Wu-Tai Chin spied for the People's Republic of China (PRC) for almost 40 years, and is considered by some as being one of the most damaging spies in US intelligence history, surpassing Aldrich Ames and Robert Hanssen. Chin played damaging roles for the United States in Nixon's "secret" plan for normalizing relations with China, the Korean War, and many speculate, the Vietnam War.
Chin was born in Beijing, and came to the United States in search of work. During World War II, China found a job with the U.S. Army. Because of his English, and Chinese language skills, Chin was placed as a translator and interpreter in the U.S. Army Liaison Office.
Chin began as a spy in 1948, when he was placed as an interpreter at the U.S. Consulate in Shanghai. Chin was recruited by a Chinese Communist Official, from an introduction by a colleague, and roommate, at the U.S. Shanghai Consulate.
In 1951, the U.S. State Department asked Chin to interrogate Chinese prisoners of war captured during the Korean War. Chin interrogated them, and then the next year, sold their identities to the PRC, making sure to note which individuals were anti-communists. During negotiations for the cessation of the Korean conflict, China demanded the return of all Chinese POWs, with the knowledge of every POW that was captured. Many believe that Chin's actions delayed the end of the Korean War by over a year.
Chin was then moved to the CIA's Foreign Broadcast Information Service office in Okinawa in 1952, and then California in 1961. In 1965, Chin would become an American Citizen. Chin was then placed in Arlington, Virginia, as a case officer, where he was responsible for highly sensitive information, including reports from intelligence agents abroad, including translating all of the documents stolen by CIA spies in China. Along with relaying to Beijing the information that the US had acquired through its spies, Chin sold extremely sensitive National Intelligence Estimates and analysis on China and Southeast Asia to the Chinese. With this intelligence, the PRC was able to find the holes in their intelligence network, and thwart US intelligence efforts in the region.
In addition, Chin sent the PRC extremely secret documents detailing President Nixon's plans for normalizing relations with China. Beijing knew of Nixon's intentions a full two years before Nixon made his visit to China, helping China to leverage many key concessions against the United States.
When Chin retired from the CIA in 1981, Chin was awarded with a medal for his distinguished service. Chin was also kept on as a CIA consultant, and was asked repeatedly to return to full-time service. Chin also flew to China after his retirement for a ceremony to receive a similar award from the PRC for his distinguished service to China. Chin had made a fortune through his spying activities, accumulating some $1 million dollars.
Larry Wu-Tai Chin was finally apprehended in 1985 after the FBI received a tip about a spy that had given over an abundance of sensitive information to the Chinese. Allegedly, the information that this spy passed on to his handlers was so great, that it took the Chinese two-months to translate each batch of documents. The informant, Yu Qiangsheng later defected to the United States, and brought Chin's case file with him. Chin initially denied any act of spying for the PRC. However, once presented with intricate knowledge of Chin's spying, he confessed.
Chin was proud of his spying activities, and maintained that he only did it to help improve relations between the United States and China. In early 1986, Larry Wu-Tai Chin was convicted of 17 counts of espionage, conspiracy, and tax evasion. Two weeks after his conviction, while awaiting trial, Chin tied a brown trash bag over his head, lay down, and slowly suffocated himself.
Peter Lee: Peter Lee was a Chinese born, U.S. naturalized citizen convicted of spying on the United States, for The People's Republic of China. In December 1997, Lee entered into a plea bargain, pleading guilty to providing unauthorized information to the Chinese Government, and lying to the FBI. There were much more serious allegations of Lee's spying, however, they were dropped due to the sensitivity of the information that would have to be presented in court
During the 1980's Lee began to develop contacts with Chinese scientists, which would lead to over 600 different correspondences over 16 years. In 1985, while staying in a hotel in Mianyang, China, Lee divulged classified weapons information, and disclosed national defense data, based in part from a classified report that he had authored. In 1997, while Peter Lee was on vacation in China, Lee gave two presentations for China's Institute of Applied Physics and Computational Mathematics (IAPCM). His presentations were on microwave submarine detection technology. This was a highly sensitive project that he was working on at TRW, a government contractor, that he was prohibited to discuss. One of the requirements for Lee's employment, was that Lee had to sign non-disclosure agreement with the Department of Defense, an agreement that he expressly violated in 1997. In addition, Lee did not document that he had interactions with foreign scientists while on his trip to China, a detail that he was required to report.
FBI agents approached Lee about his trips to China, and questioned him about the purpose of his trips to China. Peter Lee admitted that he had lied about the purpose of his trip to China, however, he maintained that he had paid for the trip himself. Immediately after his FBI interview, Lee sent and urgent e-mail and fax to his contacts in China, requesting forged travel receipts. Unfortunately for Lee, one of these communications was quickly intercepted by the FBI. Presented with evidence, along with a failed polygraph test, Lee confessed to espionage. Lee admitted to disclosing unauthorized information on his 1985 and 1997 trips to China, as well as lying on his travel reports.
Lee was an expert in laser energy, and was working on laser projects that helped to simulate nuclear detonations. During the trial, Lee confessed to the court that he knowingly divulged classified information about his projects to Chinese scientists, and for lying to the FBI. These confessions were part of a plea bargain, which omitted Lee's most serious charges. A memo from The Department of the Navy asked that Lee not be charged for divulging information on the submarine project that he was working on, due to the high sensitivity of the project. The project was a joint US-British venture for radar detection of nuclear submarines.
In December 1997, as per his plea bargain, Peter Lee was convicted of his charges: unauthorized communication of national defense information, and for lying to the FBI. Lee was not convicted of espionage, or the dissemination of top-secret submarine data. Lee was sentenced in March 1998 to spend one year in a halfway house, community service, and a $20,000 fine.
The Department of Energy investigated the repercussions of Lee's "unauthorized communication of defense information" and in February 1998, one month before Lee's sentencing, concluded that Lee's classified information "was of significant material assistance to the PRC in their nuclear weapons development program.This analysis indicated that Dr. Lee's activities have directly enhanced the PRC nuclear weapons program to the detriment of U.S. national security."
The information that Lee was charged with disseminating in 1982 however, was declassified by the time of his 1997 confession. Peter Lee maintains that he was not a spy, but was merely convicted on a technicality due to stringent Cold War guidelines that were relaxed since the end of the Soviet threat.
Wen Ho Lee is a Tawainese born nuclear scientist who was accused of providing nuclear weapons data to the Republic of China, Taiwan (ROC). Lee first came under suspicion when it was believed that Taiwan had acquired the weapons design for the W88, a highly sophisticated US nuclear warhead. The investigation "Kindred Spirit," led by the Department of Energy, quickly narrowed its focus on a Chinese-American scientist working in Los Alamos National Laboratory.
The suspicion that US nuclear weapons secrets had been compromised caused a frenzy, and a few days later, Wen Ho Lee's name was leaked to the New York Times, as the prime suspect, and Lee was resultantly fired from Los Alamos. Lee was proved to be linked to the W88 theft, however, he was never directly linked nor has anyone else, to the dissemination of the W88 data to Taiwan.
Suspicions of Lee's spying first arose when Wen Ho Lee contacted Gwo-Bao Min in 1982, when information that Min was a spy was leaked. Lee offered to find the source of the leak for Min, which Min declined. It was later found that Lee thought that Min was working for Taiwan, instead of the PRC. Lee was also found to be sending documents to Taiwan that were stamped with a NOFORN designation, meaning that the document was prohibited from foreign distribution. In addition, he failed to report that he had contact with a Chinese scientist, a detail he was required to report. In March 1999, from a search of Lee's office, investigators found evidence that since 1992, Lee had been moving top secret weapons data from a classified server, to an unclassified server that would be accessible from outside of Los Alamos Laboratory. In 1998, the FBI found that after a failed polygraph examination, Lee tried to delete the weapons files that he had moved to the unsecured server. Lee also had made tapes with classified data on them, and attempted to remove them from the laboratory.
Lee was arrested on December 1999, and was charged with 59 felony counts. These charges alleged that he illegally downloaded classified information, as well as violated the Atomic Energy Act and the Foreign Espionage Act. Considered a flight risk, Lee was denied bail, and kept in solitary confinement for nine months.
However in May 2000, the Department of Justice found several major flaws in the State's case against Wen Ho Lee. The Department of Justice released a report which stated that, the Department of Energy (DOE) too hastily focused on Lee as the prime suspect. Another report, the Bellows Report, criticized the FBI for accepting the DOE's suspicions without scrutiny. In addition, the New York Times, who first publicly published the suspicions of Lee's espionage, admitted that the story was highly flawed.
In September 2000, the United States made a deal with Lee. Lee plead guilty to one felony count for downloading nuclear weapons data onto portable tapes, and was sentenced to time already served. Lee was also to assist the FBI for one year. At Lee's sentencing, the presiding judge, James Parker, apologized to Lee for his gross mistreatment while under investigation, and while incarcerated. He called the way Lee was treated, an embarrassment to the nation.
In 1999, Lee filed a suit against the federal government, stating that the FBI, the Department of Justice, and the Department of Energy was in violation of the Privacy Act for 1974, and was instrumental in the leaks of Lee's alleged espionage, to the New York Times.
Gwo-Bao Min: Gwo-Bao Min was a aeronautical engineer from Taiwan, who came under suspicion of espionage for the PRC, and was forced to resign from his job at the Lawrence Livermore National Laboratory, where he was researching nuclear weapons and missile defense. Among other nuclear weapons secrets, Min was suspected of passing along information to Beijing, on the design of the W-70 project, a neutron bomb. The first neutron bomb was tested in Lawrence Livermore Labs in the 1970's and the Chinese first tested theirs in 1988. However, prosecutors did not believe the there was enough evidence to charge Min with espionage, and Min was never tried.
A tip from China alerted the FBI to Gwo-Bao Min's possible spying activities, and the FBI opened an investigation, "Tiger Trap." Investigators found that Min had been visiting the library at Lawrence Livermore Laboratory, and was researching subjects that ranged beyond his responsibilities in the lab. In addition, Min's library records showed that Min's library activity would spike right before he was to take a trip to China. In 1981, Min was stopped at the airport by the FBI, and investigators found on his person, and index card that answered five questions, one of them relating to the miniaturization of nuclear weapons.
Prosecutors however, felt that there was not strong enough evidence to convict Min. However, Gwo-Bao Min was forced to resign from Lawrence Livermore Labs due to overwhelming pressure and suspicion of espionage. Min then started up an import-export trading company, Grand Monde Trading, and also a consulting firm, Min's Consulting Associates.
However, even after Min's resignation, the FBI kept him under surveillance. In 1982, the FBI intercepted a phone call from Wen Ho Lee, to Gwo-Bao Min, offering to find out who had leaked information that he was a spy. Min declined the offer. When questioned about this call, Lee stated that the call did not have anything to do with espionage. Lee said that he himself was providing Taiwan with declassified information on nuclear reactors, and was afraid that Min might be getting into trouble for the same thing.
How the PRC got a hold of U.S. neutron bomb information is still a secret, and neither Lee or Min have been directly accused of disseminating that data. Many people believe in Min's innocence, and feel that he was simply used because he had a proclivity for kindness. These people also point out that it would be very unlikely for Min to want to help the PRC with their nuclear weapons program, since he is a native to Taiwan, and that his family has been living on the island for generations. James Loh, a friend of Min's said that Min was anti-nationalist, and anti-communist, and that he supports the Taiwanese independence movement. Loh says that there is no reason why Min would want to help communist China, it would go against all of his interests.
Katrina Leung: Katrina Leung was a prominent bookstore owner, business consultant, Republican fundraiser, and a high level spy. In 1982, Leung was recruited by James J. Smith "J.J.," a supervisory special agent on the Chinese Counterespionage squad in Los Angeles, for the FBI, and was trained as a double agent for the United States against the People's Republic of China (PRC). Leung was in an especially valuable asset due to her contacts with very high level officials in the Chinese Government, which placed her in the unique and especially valuable position of feeding the PRC misinformation to the very highest levels of the Chinese Government.
Throughout her service to the FBI of over two decades, she was paid some $1.7 million dollars to act as a double agent. However, throughout her work in the FBI, Katrina engaged in a sexual affair with her handler J.J. Smith for what seems the be almost the entirety of her employment. In addition, Leung also had a sexual affair with Bill Cleveland on and off for about seven years. Cleveland was a supervisory special agent working out if the FBI's San Francisco field office until 1993, when he retired.
Katrina's loyalty to the United States came into question beginning in 1991. In 1990, Bill Cleveland and his colleague, I.C. Smith's mission to asses American Embassy Security in China was compromised. It was found a year later that Katrina Leung was the one who had compromised the trip, informing the Chinese government of the FBI's arrival. The FBI would further investigate Katrina Leung, and found that she was taking photographs of CIA and FBI agents, which would help to identify who was a part of the intelligence community. In addition, in a 2002 search of Katrina's home, investigators found secret FBI documents, a listing of Los Angeles FBI counterintelligence agents, and a classified document about the "Royal Tourist" FBI investigation.
Throughout several interviews conducted from December 2002 to January 2003, Leung admitted to secretly taking classified documents from J.J. Smith without his knowledge, and copying them. Leung said that Smith would leave his briefcase unattended, and Leung would go through it, copying the documents that she wanted. In addition, Leung said that sometimes Smith would let Leung review some of the classified document, though never let her keep them.
On April, 2003, J.J. Smith and Katrina Leung were arrested. Smith was charged with the mishandling of classified documents, and Leung was charged with possessing and copying of classified documents. Neither of them was charged with espionage. Both Smith and Leung pled not guilty to their charges.
As part of a plea bargain Smith agreed to plead guilty to lying about his affair with Leung, and to cooperate with the governments investigation of Leung. This he got in exchange for dropping the most serious charges of mail fraud and the mishandling of classified documents. In addition, he agreed not to talk with Leung and her attorneys. Smith. According to the Justice Department, this last stipulation was made because they viewed Smith as a source of classified information, and did not want him to divulge and more secrets to Leung, who is may be a spy, or to expose these secrets in court, for the sake of national security. If not for the plea bargain, Smith would have been facing five felony charges which could have placed him in prison, and put his pension at risk.
On January 6, 2005, a federal judge dismissed all charges against Katrina Leung due to trial misconduct on the part of the prosecutors. The judge stated that in prohibiting J.J. from communicating with or testifying in defense of Leung, the prosecutors illegally blocked Leung's prime defense witness. As a result, the judge dismissed Leung of all charges. The prosecutors stated that their actions were legal, and stated that they were likely to appeal the case, as the plea bargain was signed off by another federal judge.
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