Spy Networks in trouble : China

“The C.I.A. considers spying in China one of its top priorities, but the country’s extensive security apparatus makes it exceptionally hard for Western spy services to develop sources there.”

- Mark Mazzetti, Adam Goldman, Michael S. Schmidt and Matt Apuzzo
  The New York Times


World War II lore has it that Winston Churchill, in effect Britain's chosen warlord, knew in advance that the Luftwaffe was planning to bomb the city of Coventry, a hub of manufacturing vital to the wartime effort. But since this information had been obtained via England's newfound ability to decipher the Nazi's secret messages encrypted with the Enigma encoding machine, he chose not to divulge that information and not to act on it in order not to poison the well. The city of Coventry was thus not evacuated, many citizens died and a lot of the infrastructure was destroyed.

Sometimes, intelligence services have to take similar decisions hoping that no loss of life ensues.

In this Chinese intelligence case, the CIA found itself confronted by this sort of quandary and postponed the arrest of a suspected spy, letting him fly home out of reach and risking everything in order to learn more about his activities and build a stronger case against him.

Here's what happened

Up until 2010, the information coming from Chinese spies was the best it had ever been. But then American informants began to disappear, destroying a spy network that took years to build. From 2010 to 2012, 18 to 20 CIA informants were killed or imprisoned by the Chinese. One was reportedly killed in front of his colleagues in a government building courtyard, just as a warning to his coworkers.

American intelligence services had no suspect at first, so a special joint task force of CIA and FBI agents was formed under the leadership of Charles McGonigal, a veteran FBI counterintelligence agent, to make sense of all this. The operation was code-named Honey Badger.

JerryChunShingLee

They started by hurling accusations of sloppy tradecraft, like using the same routes to go to meetings with their sources and meeting them in restaurants that were bugged and where even the waiters were spies. They then suspected that the Chinese had cracked the system used to communicate with American agents (some thought that the software they used was too deficient to resist Chinese software analysts) and finally that maybe a mole was operating in their ranks and was giving their assets away. Their suspicions eventually fell on an ex-CIA agent named Jerry Chun Shing Lee, but political correctness intervened at first. Lee, after all, was of Chinese origin. Also, the CIA's top mole hunter, Mark Kelton, had seen his friend Brian J. Kelley wrongly accused of being a Russian double agent and dragged through the mud in the 1990s. A CIA agent, Robert Hanssen eventually turned out to be the real spy. This experience prompted Kelton to demand nothing but very solid, irrefutable evidence.

Lee was a naturalized U.S. citizen who then served four years in the military, and then studied and graduated in business management. He moved on to get a master's degree in Human Resources management. He then joined the CIA and, posing as a diplomat, worked as a case officer (which looks like a great job for an HR manager) at its Beijing station. He was what the Russians would call a “legal'nye rezidenty”, or legal resident spy.

After thirteen years, he eventually quit the CIA, where he reportedly felt underappreciated and moved with his family to Hong Kong.

The plot thickens

The F.B.I. lured Mr Lee back to the United States in 2012, under the pretext that they possibly had an intelligence contract for him. When Lee visited the US with his family, American agents covertly entered and searched their hotel rooms while they were out. What they found was two notebooks with details about American assets in China, including their names, notes from asset meetings, meeting locations, and locations of covert facilities. They even repeated this on other trips he took to the US and always found those same two notebooks. This was indeed classified information but only made for circumstantial evidence. Also, investigators found suspiciously large cash deposits to his bank account.

But this apparently was not deemed enough to convict Jerry Chun Shing Lee of treason and espionage.

So they let him go.

Why?

In the intelligence trade, an enemy mole can be discovered right under your nose, spying on you. But what do you do with that vermin once you've discovered it?

If at all possible, it's much better not to let the mole know that you found it out, thus allowing you to trace it to its control officer and then explore and exploit the enemy's network, or feed the mole false or misleading information, or any assorted kinds of covert dirty tricks.

As ex-NSA spook John R. Schindler wrote in his list of “Twenty-one things to keep in mind when you're working in intel” :

12 - It's not what you know. It's not who you know. It's what you know about who you know.

And again:

20 - If you think counterintelligence is fundamentally about catching traitors/moles, you really don't understand CI.

Moreover, in this case, a delay before his arrest could give them the leeway needed to strengthen their case against him.

Wrap up

Ex-CIA officer Jerry Chun Shing Lee eventually took one too many trips to the US. On January 2018, he was arrested at JFK airport and charged with spying for China and even drawing floor plans of CIA facilities for them. The official charges were “one count of conspiracy to gather or deliver national defence* information to aid a foreign government, and two counts of unlawful retention of national defence information.” The charges were later upped to “conspiring to commit espionage”.

So, it seems like the ex-CIA recruiter had himself been recruited. Court papers say that representatives of China's Ministry of State Security met with him in Shenzhen in April 2010 and offered him $100,000, only one of many such payments, and promised to see to his needs for the rest of his life in return for his spying activities.

He now resides in the high-security Alexandria jail. He could spend life in prison if convicted.

And Churchill?

It looks like the CIA made the right call when they let him go, for there were no more assets lost going back as far as 2013. But at the beginning of this article, we mentioned Churchill's decision to remain quiet about the Luftwaffe bombing of Coventry. That didn't pan out so good.

It is said that the effect of this decision aged Churchill twenty years.

* This word is spelt defense in America, and defence within the British sphere of influence.

 

Vincent Hardy