Katrina Leung Was a Temptress, Beguiled by the World of Intrigue, but Was She an Agent of Influence for Beijing, As Prosecutors Now Charge?
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U.S.News & World Report CHINA DOLL Katrina Leung was a temptress, beguiled by the world of intrigue, but was she an agent of influence for Beijing, as prosecutors now charge? By Chitra Ragavan explained: A Chinese-American woman working as an intelligence asset for an fbi agent in Los Angeles had hen I. C. Smith and Bill Cleveland tipped off the mss about their trip. Smith was dumb- stepped off the plane in Beijing on Nov. founded. But he put the matter aside, assuming the fbi 30, 1990, nothing prepared them for would can the woman for the security breach: “I as- the reception they were about to re- sumed she would be closed as a source.” W ceive. The two fbi agents had been dis- She wasn’t. It was not until more than 12 years later, patched to assess security at the American Embassy, in fact—in April of this year—that the source of the leak a low-profile assignment. But from the moment they was finally arrested. According to the fbi, she is Kat- arrived, Smith and Cleveland were placed under heavy rina Leung, a prominent Chinese-American bookstore surveillance by the Ministry of State Security, China’s owner, business consultant, and Republican fundrais- kgb. “They were covering me,” Smith recalls, “like er. The fbi now says that Leung, in addition to her a blanket.” many other accomplishments, was a top-drawer Chi- It was as if the mss knew who the agents were. Smith nese spy. A key source of the secrets Leung allegedly finally understood why five months later, when Cleve- purveyed to her Chinese handlers, prosecutors allege, land called him from San Francisco. “I.C.,” he said, “they was the Los Angeles fbi agent who recruited Leung knew we were coming, even before we left.” Cleveland in 1982 and handled her until he retired in November 38 November 10, 2003 ERIC GRIGORIAN—POLARIS FOR USN&WR 10SPY8(1) DARREN 2588 JENN 2303 38 1ST PROOF After her day in court in Los Angeles last month, Leung exits, calm but beaming. 2000. That would be James Smith, known to friends in April after the fbi notified the lab that Cleveland was and colleagues as “J.J.” The fbi has arrested Smith, 59, under investigation and the lab revoked his clearances. a supervisory special agent on a Chinese counterespi- Lab spokeswoman Susan Houghton says a “cursory” in- onage squad in L.A., saying he had an intimate and vestigation shows “no cause for concern” that Cleveland unauthorized relationship with Leung, 49, for more compromised nuclear secrets. The fbi has made sim- than 18 years. For at least 12 of those years, according ilar assurances to the lab. to court papers, Leung stole classified intelligence in- As intelligence debacles go, they don’t get much formation from Smith and passed it on to her handlers messier than this. But even with its many salacious an- in China. Complicating matters further, the fbi alleges gles, the Leung case captured scant public attention last that Leung also conducted at least a seven-year affair spring as the war with Iraq loomed closer. U.S. News with Cleveland. Now 60, Cleveland was a supervisory has conducted an extensive review of the case since special agent who worked out of the bureau’s San Fran- then, examining hundreds of pages of court records and cisco field office, on another Chinese counterespionage interviewing more than a dozen current and former squad. Cleveland has not been charged and is cooper- counterintelligence experts. The review reveals a sys- ating with the Leung investigation. After he retired in temic failure of security procedures and a stunningly 1993, Cleveland became head of security at Lawrence free-and-easy pattern of access by Leung to some of the Livermore National Laboratory. He resigned that job nation’s most highly secret intelligence operations. The November 10, 2003 39 10SPY8(2) DARREN 2588 JENN 2303 39 1ST PROOF Special Report security breaches were also at least partly Both Smith and Leung have the result, sources say, of the fbi’s failure pleaded not guilty to the to commit anywhere near the same kinds charges lodged against them. of resources to its China counterintelli- Both are free on bail, pending gence program as it did to its Soviet, and trial next year. Prosecutors then Russian, counterpart. fbi managers preparing the case say Leung compounded those problems, govern- has “a long history of lies and ment officials say, by failing to ensure that deception,” noting that the the bureau stopped using Leung as an fbi paid her over $500,000 asset in April 1991, after it learned that she for her information-gathering had tipped Chinese agents to the Beijing services. One of Leung’s at- visit by the two fbi agents. torneys, Janet Levine, coun- “Reliable.” That’s when Cleveland lis- ters that Leung never passed tened to an audiotape provided by an- anything on to the mss “with- other Chinese asset and recognized out the complicity and knowl- Leung’s voice as she told the Chinese edge of this fbi.” She said the about his trip, according to court fbi fed Leung documents to records. He alerted J. J. Smith, who flew give the mss because the bu- to San Francisco to discuss the matter reau had deliberately set her and became “visibly upset.” Both men up as a double agent. “We are flew to Washington to broach the issue confident,” Levine says, “that with officials at fbi headquarters. Nei- the evidence will show that ther man, however, appears to have told Katrina Leung is and has been the fbi that he was having sexual rela- a patriotic, loyal American.” tions with Leung. Indeed, fbi sources After her arrest, Leung’s fam- say, neither knew of the other’s rela- ily issued an angry two-page tionship with her. Smith returned to Los statement accusing the fbi of Angeles and spoke with Leung about a blatant “double standard.” her contacts with the mss. She admit- The statement said: “Their ted it, prosecutors say, adding that the people in Washington are or- Chinese knew she was an fbi asset. chestrating things to protect Smith suggested that Leung take a poly- their own,” adding that “they graph, but she declined. He didn’t press blame the nonagent and the foreign- people he was sworn to protect.” Smith’s the issue. Cleveland, court records say, born, especially the Asian, especially the attorney, Brian Sun, told U.S. News that “relied” on Smith to resolve the prob- woman.” his client “had every reason to believe lem; Smith assured him he had. In fact, Given the nature of the allegations, the that [Leung] was a valuable asset to the he did nothing of the kind. Instead, Leung case is apt to set a new record for United States based upon the informa- Smith made Leung apologize to him and finger-pointing. “It’s a sad day for the tion and the services she provided.” Cleveland, then filed the first of at least fbi,” the bureau’s director, Robert Mueller did not mention the other 19 evaluation reports stating that Leung Mueller, said after the arrests. “Smith fbi agent, Cleveland, who was involved was “reliable” and that she had passed a not only betrayed the trust the fbi with Leung. The fact that he has thus polygraph. placed in him; he betrayed the American far avoided any legal repercussions as DOUG MILLS—CORBIS BETTMANN ment asked Chin to help A SPY WHO CHANGED HISTORY interrogate Chinese pris- oners for the U.S.-allied ll he ever wanted was Richard Nixon’s secret deci- forces in Korea. Chin for U.S. and Chinese sion to re-establish diplomat- promptly sold the Chinese A leaders to get along; ic relations two years before government the names of that’s what Chinese spymas- Nixon’s historic visit to Chinese prisoners who ter Larry Wu-Tai Chin China, and it leveraged key were anti-Communists. claimed was his raison d’être concessions. The North Viet- China responded by de- for almost 40 years of spying namese likely benefited from manding the forced repa- for China. Chin, a cia trans- the secrets that China for- triation of all Chinese lator, analyst, and document warded from Chin during the prisoners as part of nego- control officer, may have Vietnam War. tiations to halt the fight- been the most damaging Chin’s spying career began Wu-Tai Chin ( left), heading to court ing. Experts believe Chin’s anti-U.S. spy ever; he sold in 1948 when he joined the treachery delayed the end bushels of U.S. secrets to U.S. Consulate in Shanghai mission roommate intro- of the Korean War for more China, altering the course of as an interpreter, after a stint duced Chin to a Communist than a year. history. The Chinese govern- at a U.S. military mission in official, who recruited him. Also in 1952, Chin joined ment knew about President southern China. A former In 1952, the State Depart- the cia’s Foreign Broadcast 40 U.S.News & World Report, November 10, 2003 10SPY8(3) DARREN 2588 JENN 2303 40 1ST PROOF/COMP Leung and J. J. Smith watch George W. Bush’s inaugural parade on Washington’s Pennsylvania Avenue from a reviewing stand for VIPs. evidence of deception. When management failures and will, eventu- Cleveland was in charge of se- ally, issue a report. curity at Lawrence Liver- The Leung saga may offer the trap- more, however, he was poly- pings of a dime store spy thriller, but be- graphed and asked, among neath the sordid details is one very other things, whether he had sobering prospect: Katrina Leung and had any contacts with foreign her two G-man lovers might just possi- agents.