Parlor Maid
by I.C. Smith
It’s a pleasure to return to Raleigh and the Spy Conference. While it’s always good to see old friends from my former world of government service, I also enjoy meeting you in the audience, making new acquaintances and engaging in conversations with learned and interested folks.
This conference is of particular interest. The main theme is one that has, for the most part, been ignored. For budding authors, there’s a story here that needs to be told. For my part, I’ll try, in the next few minutes, to provide you with some insights into one of the FBI’s greater embarrassments as related to the shadowy world of spies and spying, the Parlor Maid case. This telling of the case will begin, naturally, in China.
I walked out of the U.S. Embassy in Beijing to where, I had been told, there was an open air market. This was a bitterly cold day in December of 1990 and my intent was less to buy something than just to get some fresh air.
But as I strolled through the market, stopping at different stalls of merchandise, I noticed a Chinese male standing near me. As I moved about, I saw the same young man, standing close and not really paying any attention to the merchandise. I had been told, that younger Chinese in particular, would approach westerners and try to converse with them in English. In this case, this individual never said anything. He just continued to shadow me as I moved about the market area and did so until I returned to the Embassy.
I was in Beijing after being detailed from the FBI to the State Department. My title, which was more impressive than the position warranted, was Chief of Investigations, Office of Counterintelligence Programs, Diplomatic Security, United States Department of State. My specific task in Beijing, with side trips to Shenyang and Hong Kong, was to conduct counterintelligence surveys at those diplomatic establishments. I had two young Diplomatic Security officers with me, both eager to learn, but woefully inexperienced in dealing with counterintelligence matters in general, and particularly with the Chinese. I was fully integrated into the State Department after a two year assignment as the FBI’s Legal Attache in Canberra, Australia, but with responsibility for the independent nations in the South Pacific, i.e. Cook Islands, New Zealand, Papau New Guinea, etc. I realized though, to be able to conduct the needed surveys, I needed experienced assistance. So I approached the FBI about sending someone with me to assist with the surveys. The FBI nominated Bill Cleveland of the FBI’s San Francisco office to make the trip. I had known Cleveland for a number of years and while we had never socialized, I had tremendous respect for his professionalism and sheer knowledge of China, its history, culture and most importantly, its intelligence capabilities. Furthermore, he spoke Mandarin Chinese and with his reputation for hard work, I was delighted for him to join us. As for Cleveland, well, it was a dream come true, for after all the years of studying China, learning the language and being assigned Chinese counterintelligence matters, he was finally getting to travel to the place of his primary professional and personal interest.
This trip was not clandestine. I had traveled about the South Pacific with a diplomatic passport, had interaction with Chinese officials and my name and position were listed in diplomatic personnel books. Cleveland too, was issued a diplomatic passport and we all traveled under our true names. After all, we had to obtain visa’s to travel to China from the Chinese Embassy in Washington, D.C. We were, in effect, Diplomatic Security personnel, albeit with something of an unusual make-up, traveling to U.S. installations with a not-so-secret agenda.
A few days after the incident in the open air market, while still working in Beijing, I decided to again take a break and walked to Ritan Park (literally “temple of the sun”), an outdoor park near the vicinity of the area the “diplomatic ghetto” where all diplomatic missions are required to be located. This too was a bitterly cold day and I was virtually alone as I strolled about the park with its winding paths around ponds and shrubbery. After a while though, I decided I had all the fresh air I could enjoy and after rounding a curve, reversed my steps. As I did so, I was met by an obviously surprised Chinese male who suddenly gained intense interest in a mural along the path. I walked a short distance and taking my camera, snapped a quick photograph of the man before walking away. (That photograph is in my book.) But as I continued toward the entrance, I heard a vehicle’s motor running and discovered a large black vehicle with a couple Chinese men sitting in it, obviously running the motor to keep warm. I knew then, for certain, that I was being followed. Though my initial impulse was to photograph the vehicle and occupants, I decided that I’d pushed my luck far enough and quickly returned to the Embassy.
There were other such instances, at the Great Wall, in the Forbidden City and then, a rather bizarre incident in Shenyang, a large and ugly city located near the North Korean border. We have a Consulate there staffed by a small number of Foreign Service Officers on unaccompanied tours (no dependents) as well as a number of Foreign Service Nationals, that is Chinese nationals who had been designated to work for us by the Chinese government. As we were checking into the hotel a Diplomatic Security officer and I were sitting in a lounge near the lobby, while Cleveland had decided to wander about the area. In a few minutes, he returned to where I was sitting, somewhat wide eyed, stating, “You won’t believe whom I just spotted.” He went on to explain that he had seen Min Guo Bao, a former Lawrence Livermore Laboratory scientist suspected of providing the Chinese with some especially damaging and highly classified information dealing with neutron bomb technology. The espionage investigation had been led by Cleveland himself in an investigation code named “Tiger Trap”, then and arguably now, the single most damaging loss of technology we have suffered to the Chinese. Indeed, Cleveland had personally interviewed Min about the loss of this critical technology. Though Min denied he had provided the Chinese with the technology, he was fired from Lawrence Livermore for other security related violations.
So here we were, in Shenyang, China, in the lobby of the Zhongsan Hotel and in a window of no more than ten minutes, Bill Cleveland encountered the subject of the single most important investigation of his career. What are the chances of that occurring? I, at the time, attributed the incident to being of incalculable odds, though not without some trepidation. I couldn’t understand why, as members of Diplomatic Security, a non-operational arm of the State Department, we had been subjected to such scrutiny? Cleveland even had a brief conversation with Min, who was decidedly nervous with the encounter and though he had said he was booked on the same flight as ours for the return trip to Beijing, we never saw him again.
A few weeks later, after we returned to the U.S., I received a phone call from Cleveland, over an unsecure telephone line. He told me, “They knew we were coming, even before we left.” He went on to state, being circumspect as a counterintelligence professional would, that a source of “J.J.’s” had told the Chinese of our travel plans before we departed. I knew “J.J.” to be J.J. Smith (no relation) an agent assigned Chinese matters in the Los Angeles office of the FBI. It was several years later before I had direct contact with Cleveland, but at the time, I assumed the source, who had violated the fundamental tenet of maintaining the confidentiality of a relationship, had been terminated as a source, as was the norm, and subjected to a counterintelligence investigation. That initial assumption was wrong.
On April, 8, 2003, well after I had retired from the FBI, I received a telephone call from an acquaintance in Washington, D.C. I hasten to add, for the record, just in case there are any FBI note takers present, that this source was not in government, but obviously did have good government contacts. I was told to stand by, for the FBI was about to have “…another black eye.” He went on to explain that J.J. Smith would be arrested as would a Chinese-American female, who was passing information to the Chinese, information that was provided to her by Smith. Also, the caller said, Smith was having a sexual relationship with the individual. Furthermore there was a second agent involved, who too, was having a sexual relationship with the same Chinese-American female. While the caller didn’t know the second agent’s name, he did state that the agent, after retirement, worked for the Lawrence Livermore Laboratory. I told him I knew of one retired agent working for the Laboratory, Bill Cleveland, but I was confident Cleveland would never engage in such behavior. I was, of course, wrong again.
On April 9, Smith, who too, had retired, was arrested as was the Chinese-American female, Katrina Leung. Smith was arrested for “Gross Negligence in Handling Documents Relating to the National Defense” and Leung was arrested for “Unauthorized Copying of National Defense Information with Intent to Injure the United States or Benefit a Foreign Nation.” Smith was released on $250,000 bond while Leung was held in jail where she remained for the next three months.
It was a field day for the media and late night comics. And as details emerged, I began to realize that I had, many years previously, more to do with Katrina Leung, whose codename was “Parlor Maid,” than I had initially realized.
A few months later, I received a phone call from David Wise, the prolific and respected author of numerous books about counterintelligence such as Molehunt, The Spy Who Got Away, etc. He asked if I recalled having past dealings with Katrina Leung? I told him that frankly, I didn’t. “Well,” he said, “I talked to someone who recalls your dealing with the case years ago and standing up in the middle of the room, loudly asking, ‘Where’s the (bleeping) beef?’” I told him that while I didn’t recall the incident, I couldn’t deny that I may have used such “colorful” language. I explained to Wise that at the time he was mentioning, 1983-84, I was dealing with the Larry Wu Tai Chin espionage investigation, a large national counterintelligence program, as well as having administrative responsibility for the FBI’s west coast offices, which would have included both San Francisco and Los Angeles. On any given day, I would have received literally dozens of communications from field offices, as well as internal FBI Headquarters demands and simply, I wasn’t in a position to recall names and events from twenty years past. The story that emerged did, in fact, bring back memories.
Katrina Leung’s background is in reality, a mystery. There is an inconsistency between the few documents available and what she allegedly told J. J. Smith. She claims to have been born May 1, 1954 in Guangzho (Canton) and moved to Hong Kong at the age of 3, living with her aunt, Susan Chin. She emigrated to the U.S. in 1960 at the age of 16 using a Taiwanese passport. This too, raises some questions, for in 1950, the British government recognized the People’s Republic of China as the true government of China and Taiwan had no official representation in Hong Kong itself. How she came to obtain a Taiwanese passport is, at least publicly, unknown. I have no idea if this was ever pursued by J.J. Smith, but as we shall see, he had little inclination to ask such hard questions.
She is said to have been given the name of Chan Man Ying (Cantonese dialect) (Chen Wenying in Pinyin Mandarin Chinese) at birth. The Ministry of State Security (MSS), the Guojia Anquanbu, later gave her the contact name of Luo Zhongshan. Intelligence agencies don’t assign aliases to casual acquaintances.
But the bottom line is there is absolutely nothing in Katrina Leung’s past that can be independently verified; there are a few documents and her word, neither of which can be considered to be reliable.
Leung emigrated with her “aunt” Susan Chin and according to one record, arrived in San Francisco in May, 1970. The aunt married eight days later. Leung attended high school in New York, graduating in 1972, the same year she became a permanent resident alien. She was then 18 years old. She graduated from Cornell University in 1976 and later, received an MBA from the University of Chicago, where, for a time, she worked as a bank teller. In1980, she moved to Los Angeles, but not before engaging in some rather unusual behavior. For instance, while at Cornell, she joined the Diaoyutai movement (Tiao Yu Tai to the Taiwanese and Senkaku to the Japanese), a pro-PRC and pro-Communist organization. The Diaoyutai islands (literally meaning “fishing platform”) have long been an object of dispute between the Japanese, the PRC and Taiwan. But recall, at the time she was at Cornell, in the early 1970’s, normalization had not taken place and Taiwan was regarded as this country’s “island aircraft carrier” in the Western Pacific and the PRC was still, “Red China. “ So after normalization, the PRC regarded those who participated in Diaoyutai demonstrations as having shown that their true allegiance was with the PRC. She also organized the showing of pro-PRC movies on campus. And also, likely in New York, and later in Chicago for certain, she met with Lu Ping, a long-time hard-line Communist revolutionary who had been mistreated during the Cultural Revolution and was rewarded by Deng Xiaopeng by being posted in Washington, ostensibly as the head of Xinhua, the New China News Agency. Lu Ping was a long time officer of the Gonganbu, the Ministry of Public Security (MPS). While in Chicago, Leung established a pro-PRC organization and consistently showed her loyalty to her former homeland.
In 1980, Leung moved to Los Angeles where, at the age of 26, she became the general manager of Sida International, an import-export company that was the object of a full investigation, suspected of engaging in the illegal transfer of restricted technology. Leung herself became the object of a full investigation, not only due to her associations with so many pro-PRC individuals, but also, those suspected of engaging in illegal technology transfer. But in one of those completely inexplicable events, the case was closed without any resolution and Leung was never interviewed. What makes this aspect of the case even more disturbing is that it was discovered, in August, 1981, that Leung had a relationship with Min Guo Bao, yes, the same Min Guo Bao of the Tiger Trap case, a fact not disclosed when the investigation of Leung was terminated in November of that same year.
However, in 1982, Leung was contacted by J.J. Smith to aid in the Tiger Trap investigation due to her relationship with Min Guo Bao. After interviewing her, he declared that she was not only forthcoming in their conversations, but she had good information to provide. However, you must remember that in the intelligence world, those with a willingness to provide information far outreaches those with the ability to provide meaningful intelligence information.
In 1983, less than a year after their first meeting, Smith began a sexual relationship with Leung. In effect, he lost control of the professional relationship, if he ever had it, a loss of control that would be disastrous in the future. Leung was then 29 years old. She had been busy since she arrived in the U.S. 13 years previously. She had graduated from high school and two prestigious U.S. universities, had direct contact with a hardened PRC intelligence officer, became a businesswoman, married Kam Leung, a scientist and had slept with an FBI agent. Who says this isn’t a country of great opportunity!
Smith, 39 years old, had been in the FBI for 13 years at the time he began his sexual relationship with Leung. He certainly knew better. It’s fundamental that FBI agents do not enter into personal relationships and certainly not sexual ones, with their sources, a taboo that applies to all areas of FBI investigations, criminal or national security.
Both benefited from this elicit relationship. Leung gained unprecedented access to the FBI and its secrets and Smith gained a position that would make him, in effect, bullet proof. After 13 years he finally had status that had been denied him in his previous years of toiling as a street agent. One must remember that in the FBI hierarchy of Chinese counterintelligence, only three offices had real influence and power, the “establishment” offices of New York, San Francisco and Washington, D.C. Los Angeles was no more than a second tier office with little influence in counterintelligence operations or overall policies relating to such matters.
1984 was a big year for Leung and Smith. With Smith’s considerable assistance, on March 16, Leung became a U.S. citizen. In June, 1984, Leung traveled to the PRC and it was the reporting from that trip that caused me to stand up in the squad room, assuming David Wise’s sources are correct, questioning the value of her information. During that trip, Leung was allowed to go to a prison in Beijing and visit Hanson Huang, a U.S. citizen of Chinese ancestry (he was a New York lawyer) whose incarceration in the PRC was cause for great diplomatic turmoil. When I was interviewed by the Department of Justice after the debacle of the FBI’s own internal investigation into the Parlor Maid saga, I was shown two documents that I had authored in the aftermath of Leung’s trip. The first was, well, rather pithy. (Both documents are still classified for some unfathomable reason.) In it, I essentially pointed out that the report from her trip was nothing more than a Chinese melodrama that had little relevance to insightful intelligence reporting. The second, sent out the next day, has a little history behind it. My boss at FBI Headquarters had formerly been J.J. Smith’s supervisor in Los Angeles and the Los Angeles supervisor had, at that time, been on the same squad and was my boss’s protégé’. The Los Angeles supervisor called my boss, whining about my “pithy” communication. So, to mollify the situation and to allow my superior to “save face,” I sat down and wrote a lengthy communication of several pages, describing in great detail what I thought the Los Angeles office should do if they insisted on operating Leung. Due to the document’s still being classified, I’m not in a position to describe the remedies I suggested, but suffice to say that if my advice had been followed, we wouldn’t be talking about this case today. Further, according to the Department of Justice lawyers who interviewed me, those two documents were the only two documents in Leung’s file that questioned the validity of operating her as a source.
In August of 1984 Leung began to receive monthly payments for both services (information) and expenses, payments that would continue until her arrest in 2003 that totaled over $1.7 million dollars. That was broken down to $1.2 million for expenses, the remaining $500,000 for information, a remarkable imbalance that I still find surprising. Leung was paid at the rate of about $250 each and every day over the nineteen years she was a source.
In 1984 and again in 1986, Leung passed polygraph examinations that centered around three essential questions, i.e. unreported contacts with Chinese intelligence officers, whether she had deliberately mislead the FBI about her contacts with the FBI and whether she had told anyone she had been cooperating with the FBI. I don’t know if the results from those two polygraphs were subjected to re-examination by the Department of Justice investigators, but if those polygraphs are considered valid, once again, we have to question the reliability of polygraphs themselves. For I’m convinced, that it was during that 1984 trip, that Katrina Leung entered into a more formal relationship of cooperation with the Chinese, if indeed, she had not already done so. The end result is that Leung and Smith were home free until my 1990 trip to China.
Oh, don’t get me wrong, it wasn’t always a smooth trip. For instance, in 1987, Leung advised a San Francisco Chinese Consular official to call her from a pay phone, implying that she wanted to ensure that what she was going to discuss wasn’t going to be monitored. The FBI files revealed the incident was never pursued by J.J. Smith, or anyone else who was privy to the incident.
In 1990, the FBI received reporting that Leung had disclosed to PRC officials the existence and location of a still classified technical operation as well as other aspects of a highly classified FBI counterintelligence operation. The FBI failed to follow up on that reporting as well.
We know now, that in the aftermath of the disclosure that Leung had compromised the trip Cleveland and I took to the PRC, there was a meeting at FBI Headquarters in May, 1991 to discuss the matter. Among those attending were Smith and Cleveland. At that meeting, the FBI Headquarters supervisor completely deferred to Smith to resolve the situation, but did not follow-up on the matter. As a result, Smith reported to FBI Headquarters that Leung had again been given a polygraph and had passed the test. He lied. Furthermore, as was the norm for all polygraphs, no one insisted that the results of the polygraph test be sent to FBI Headquarters for evaluation. Again, there was a deviation from normal FBI practices.
Interestingly enough, during this time Smith was the lead investigator in the case against FBI agent Richard Miller and Svetlana Ogorodnikova, a Soviet agent with whom Miller was having an affair. The FBI, correctly, wanted someone not involved in Soviet investigations to handle the investigation. Apparently Smith did not see the parallels between the Miller example and his own ongoing conduct. You will “meet” Svetlana Ogorodnikova later in this conference.
However, both Leung’s and Smith’s, star s were rising. Leung entertained lavishly, undoubtedly at FBI expense and developed a close relationship with PRC President Yang Shangkun. It was later revealed that Yang had authorized a payment of $100,000 to her, because, as Leung stated, he “liked” her. She reported on PRC officials and much of the information she provided was properly vetted and validated by the FBI. Her value as an asset for the FBI, and also, the larger Intelligence Community continued to grow, noting that the vast majority of her information was essentially foreign intelligence information, not counterintelligence in nature. (It should be noted, in all fairness, the FBI, institutionally, has little capability to evaluate foreign intelligence information.) During this same time, Leung also developed a sexual relationship with Bill Cleveland, a relationship Cleveland claimed, had been initiated by Leung herself. Unlike Smith, he denied sharing operational information with Leung and later, passed a polygraph in that regard. Leung, in about five years, had developed a sexual relationship with two FBI agents, both of whom were considered as mainstays of the FBI’s Chinese counterintelligence program. During this decade, warning signals were repeatedly ignored, or deliberately obscured, allowing Leung to continue to be paid by the FBI and to continue to provide information to her Ministry of State Security handlers.
When interviewed by Department of Justice investigators, Smith made two revealing statements. Given the fact that Leung had divulged the existence of the still classified technical matter and a sensitive counterintelligence operation, why was she allowed to continue as a source? His response is indicative of his considerable arrogance. For, he said, he believed that she was far too important to discontinue the operation. In other words, he, not the FBI and even, the Intelligence Community, knew what was best. But, when pressed, he admitted that he feared revealing the fact she had made the disclosures of classified information would result in an inquiry that would have exposed his sexual relationship with Leung and as a result, ruin his career. He, in effect, admitted he had been compromised by their sexual relationship.
Smith told investigators that he had confronted Leung about the incidents of divulging information. He said she had admitted that she had done so, but only after the PRC had discovered her relationship with the FBI in 1990 and had coerced her into working on their behalf. She justified what she had done by stating she had to give information in order to get information back to pass to the FBI in return. That did not, of course, take into consideration the long practice of Smith himself, without authorization, making classified information available to her, including presumably, both the highly classified technical and counterintelligence operations.
This incident did not deter Smith from continuing to operate Leung, declare that she was a reliable and stable source, that she had been polygraphed, and was worthy of continued payments. During this time, Smith kept a series of inexperienced supervisors in Los Angeles in the dark about previous concerns about Leung’s activities. He had become untouchable with his supervisors becoming in essence, his lackeys and FBI Headquarters supervisors continued to defer to him. This continued throughout the 1990’s, but again, not without further examples that something was terribly wrong with this operation.
In 1992, Smith traveled to the United Kingdom on government business and decided to take an additional five days annual leave for sightseeing. His Los Angeles supervisor decided to surprise Smith upon his return. This tells one something about their relationship. But lo and behold, she found him passing through Customs with Leung. She never confronted Smith with this and later lied to investigators when asked about the incident. That wasn’t the only such trip. He took a trip to Hong Kong with Leung and I can assure you that possibly in London and certainly in Hong Kong, their every minute was under the scrutiny of MSS operatives, using cameras, microphones, surveillance teams and any other device available to ensure that Smith could be completely compromised, as if he weren’t already. It’s unfathomable that a counterintelligence professional would not be completely aware of this probability.
Also, in marked contrast to such operations, Smith and Leung had a highly visible relationship, even attending functions at the Chinese Consulate and at banquets arranged by Leung for visiting Chinese dignitaries. This is in direct contradiction to her claims that the PRC had only discovered her FBI relationship only in 1990. Smith accompanied Leung to the FBI Academy to address a counterintelligence class. In that class, he introduced Leung as “Michelle” and talked how she was a born Communist, but that he had converted her and she was a “rock- ribbed Republican.” That whole episode was less about providing training to counterintelligence agents as it was the self-aggrandizement of Smith himself. Leung donated liberally to the Republican Party, though it is now known that some of the funds came directly from the PRC. I suspect some of the donations came in-directly from the FBI itself—if one looked at the schedule of FBI payments and compared them with her donations to the Republican Party.
In 1992, the Los Angeles FBI office received information that indicated that the PRC had a person “working in the FBI,” a woman named “Katrina” who was a double agent. It was later claimed that the name “Katrina” was left out of the subsequent teletype to FBI Headquarters due to the inexperience of the agent writing the teletype. That simply doesn’t meet the red-faced test, for young, inexperienced agents do not sign out their own teletypes. Instead it would have been signed out by the supervisor, the same one who met Smith and Leung at the airport, or by a relief supervisor, including, perhaps, Smith himself. And to add to the absurdity, FBI Headquarters directed Smith and an analyst to debrief the source of that information, not being aware of the mention of “Katrina” in the original information. Of course, Smith, whom I’m confident was well-aware of the original information mentioning “Katrina,” castigated the source and deflected any attention from Leung.
At one point, a Supervisory Special Agent at FBI Headquarters became concerned about Leung and asked that an analyst conduct an independent review of the case. The analyst discovered that Leung had not been polygraphed after all and drafted a strongly worded directive to Los Angeles to polygraph Leung within 6 months. It’s astounding that Smith was not immediately investigated for having lied about Leung having taken a polygraph and subjected to severe and immediate disciplinary action. However, in another example of how this case progressed, the original Supervisor who had expressed the concerns was transferred and his successor altered the teletype written by the analyst to “suggest” that a polygraph be conducted. Of course, that gave Smith the leeway he needed to ignore the recommendation.
In 1996, Smith was finally promoted to Squad Supervisor (GS-14) of the Los Angeles Chinese counterintelligence squad where he, as a manager, continued to personally operate Leung as a source. That, too, was a clear violation of FBI procedures as was Smith’s ability to provide payments to Leung alone. FBI procedures required that all such payments be made in the presence of two agents. And there was more, much more.
In the late 1990’s, the FBI learned that a number of its operations had been compromised and sources had been detained and interrogated in China. A task force was formed to look into those concerns. As part of the process, Leung’s file was scheduled for review. In early 2000, before Smith’s retirement, a source reported that Leung was an agent of the PRC and had an internal source within the FBI. And in another series of mistakes, the FBI Headquarters Section Chief responsible for the task force, who had been Smith’s superior in Los Angeles, picked up the phone and apprised Smith of that source’s reporting. Later, when additional information from a source reported that Leung was “in bed” with the Los Angeles FBI office, the same Section Chief again apprised Smith of the additional information. The task force was dissolved by the same Section Chief, well before it completed its work.
It was later determined that over the course of Leung’s relationship with the FBI, she took 71 trips to the PRC, 15 of which were not “authorized” by the FBI. The MSS provided her with a handler at their San Francisco Consulate, Mao Guohua and she was told to establish an accommodation address in Fullerton, California. Smith routinely provided her with classified information that he wasn’t authorized to pass along. According to Leung, Smith would take along a briefcase with documents, they would engage in sex, often times at her home or in hotel rooms, then he would then leave the room with the briefcase left open and FBI files in plain view. She would go through the documents and copy them, using a copier, or make notes from them.
What sort of documents are we talking about? When the FBI searched her residence, they found the following documents; 1. A verbatim five page TOP SECRET transcript and several summaries of conversations between Leung and her case officer, Mao Guohua. This was the transcript of her reporting Bill Cleveland and my trip to the PRC. 2. A FBI National Security Squad telephone directory. 3. A telephone list relating to an ongoing highly secret counterintelligence investigation, codename “Royal Tourist.” 4. A SECRET FBI memorandum relating to Chinese fugitives. 5. An FBI Legal Attache Directory. None of those are documents that should be shared with any source.
Smith retired in November, 2000, but not before he received a prestigious Intelligence Community award for the Parlor Maid case. But I suspect his retirement was due, in part, if not totally, to the pressures of the Leung case. It was 14 months later before any investigation of Smith began. Predictably, he lied when confronted by investigators, even denying the sexual relationship with Leung until confronted with a film the FBI made of such a dalliance in a hotel room. (I’m surprised it hasn’t shown up on You Tube by now.) A search of his residence, a consensual search by the way in another example of prosecutable timidity if not outright favoritism, Smith was determined to have had numerous classified documents in his possession. This included 47 journals containing extensive notes of his de-briefings of Leung, 14 video tapes (including one at this retirement party where he invited Leung and allowed her to take photographs of those present, including several CIA officers) and other such documents. He continued to provide Leung with information after he retired, information that she dutifully took to her MSS handlers in Beijing.
How much damage did they do? Frankly, no one really knows. It’s practically impossible to do a comprehensive damage assessment of any operation, much less one that lasted almost two decades. But the damage was considerable. Bill Gertz, in his book Enemies, states for instance, that it was Leung who provided the Chinese with the information that led to their discovery of electronic devices in an aircraft being built in the U.S. that was to be used by PRC President Jiang Zemin. Certainly the FBI’s approach was to downplay the damage, but then, the incestuous relationship that was so devastating to the case over the years continued. Dave Szady, the FBI Assistant Director who was in charge of the FBI’s internal review, was a close friend of Cleveland, who stayed in Cleveland’s beach house, was Cleveland’s former superior during the time Cleveland was sleeping with Leung and was too, was a friend of Smith’s.
The National Counterintelligence Executive has been tasked with conducting a damage assessment of the Parlor Maid case, but to my knowledge it hasn’t been completed. I suspect the FBI is dragging its feet to delay its publication. The NCIX can do a reasonably good job in identifying what information Smith had direct access to over the course of the Parlor Maid case. But it’s the indirect access that is almost impossible to identify, information gained from a casual conversation with a colleague or the unauthorized review of a document. It’s readily apparent that the FBI, throughout the course of the Parlor Maid case, constantly violated an elementary rule of the intelligence and counterintelligence worlds, that is, the golden rule of “need to know.”
In September, 2004, when I was going through the final edit of my book, I wrote, “There seems to be an attempt by the Department of Justice for the case to just go away.” And they succeeded. In a low key announcement on May 12th, 2004, Smith had been allowed to plead guilty to a single count of making false statements on a Personnel Security Interview as part of his background investigation, receiving 3 years probation and fined $10,000. He kept his FBI pension. But they still had Leung to deal with and the prospect of a litany of embarrassing revelations if she went to trial.
Leung had originally spent three months in jail, then another eighteen months in home detention. In January, 2005, the judge threw out the original charge of Unauthorized Copying of National Defense Information due to prosecutorial misconduct after the prosecution denied defense lawyers the opportunity to interview Smith, who was to be a witness against Leung. This outrageous act by the prosecution ensured that Leung would never go to trial. Leung’s lawyers negotiated a plea on income tax issues, pleading to one count of lying to FBI investigators and one single count of filing a false income tax return (she hadn’t claimed the money paid her by the FBI, other mortgage related issues, the $100,000 she received from the PRC, etc.) with the stipulation that she must cooperate with FBI debriefings. She was sentenced to three years probation, fined $10,000 and 100 hours of community service.
Many years ago, an old municipal judge in Monroe, Louisiana once defined justice as “Everybody getting exactly what they deserve.” I’ve long thought there is a certain beauty to the sheer simplicity of that definition, one I’ve come to adopt. But if one applies that definition to Katrina Leung, to J.J. Smith and perhaps to Bill Cleveland, was justice really served? Did everybody get exactly what they deserved? Perhaps, that is something we can discuss at a later time.
So who and what was Katrina Leung?
Well, we really can’t say with certainty who she is, but we can state with some confidence what she is.
She’s a seductress. Bill Cleveland was candid in admitting Leung had seduced him, but J.J. Smith would never make such an admission. And who else was on her list? Were there politicians, after all, she was active in political circles? How about the Chinese leadership? Recall, Yang Sheyang “liked” her enough that he authorized a $100,000 payment.
She was a classic Chinese “dragon lady.” This was a term I used on PBS’s Frontline piece, “From China with Love.” Subsequent events have only caused me to be more convinced of that characterization. There was nothing (dare I say, no one) that she wouldn’t do in order to attain her goals. She was completely self centered and was plainly motivated by making money, receiving accolades and recognition. She was relentless in pursuing what she wanted. I’ve also come to believe that she was an extreme risk-taker and was very much addicted to the drug of deceit itself.
And was she a spy? For that, there is no doubt. What may be in doubt is whether was a double agent, a triple agent, or any other number we may want to apply. She came over to the U.S. at age 16 and while I have my doubts that she was dispatched as a spy at that age, it would have never occurred to me that the Chinese would use the priesthood as cover for a spy as they did in the Larry Wu Tai Chin case. Nothing should be ruled out. Perhaps she was “recruited” by Lu Ping while in Cornell or in Chicago. Certainly she was constantly showing an affinity to her motherland. But recruitments of Chinese don’t normally occur outside of China itself, that’s why I’m prone to believe her actual recruitment occurred in 1984 or if not then, a few years later, during one of her several trips back to China. It’s clear though, that she was recruited. She was given a point of contact in the Consulate in San Francisco, she was directed to establish an accommodation address, she was given an alias, she was paid lavishly (we didn’t go into all that, but suffice to say, she made millions in various ventures, including some in the PRC) and she had unusual access to the Chinese leadership. She was a spy alright, but I have an idea that the Chinese mistrusted her much more than the FBI and any information she obtained from them was information they were comfortable with giving up.
Did she work alone? Contrary to what a key government witness testified to in the Chi Mak trial, all Chinese cases are not family affairs. In fact, none of the several publicly known Chinese spy cases, save for Chi Mak, has there been even a remote indication other family members involvement, to include Larry Chin, Wen Ho Lee, Peter Lee, Min Guo Bao and Katrina Leung. Certainly Leung’s husband, a scientist, may have had some financial involvement, but there wasn’t the slightest hint of his involvement in her spy activities.
Are the use of female spies common in Chinese spy operations? Over 2500 years ago, Sun Tzu wrote in his The Art of War that officials of the enemy that should be made use of included, “…favorite concubines who are greedy for gold….”
Certainly Kang Sheng, the sinister architect of the Gonganbu, the MPS, used a spy to keep an eye on Mao Zedong. Qing Jiang, the two-bit actress was his mistress until he gave her to Mao. Kang is reputed to have killed more of his friends than he did his enemies. Qing became well known in later years for being the leader of the Gang of Four during the Cultural Revolution, but many China observers accept that she was, at least initially, a spy for Kang within the Chinese elite.
One final story. A few years ago, and again, for FBI note takers, this occurred well after I retired, I was interviewing a MPS officer who had been on loan to the MSS and dispatched to the U.S. He was originally from Shenyang where he was part of the MPS. I mentioned that I had traveled to Shenyang and recalled how a Foreign Service Officer had been pulled out of the Consultant after it was determined that he was having an affair with a Chinese female. I was in the process of asking him about the incident, through a translator and before she completed the translation, he began to laugh, saying something in Chinese. I asked the translator what he had said and she translated his response as “It was our operation.”
Yes, the Chinese use of female spies has a long and grand tradition and they aren’t going to stop their use now.
Thank you, or as the Chinese would say, xie, xie.