Tiger Trap: America's Secret Spy War With China (4 page)

It was J.J. who introduced Katrina Leung to Cleveland. Whether Cleveland or J.J., both of whom were married, knew of each other's simultaneous affairs with the same woman is uncertain, although apparently they did not. What is clear is that
PARLOR MAID
frequently strayed from the parlor into the bedroom.

Whether
PARLOR MAID
acted on her own in having sex with the two FBI agents who worked with her or whether she was encouraged to do so by the MSS is unknown. But the sexual relationships did give her leverage over the two FBI men, who wanted the affairs to remain secret.

Although J.J. would give her instructions, questions to ask Chinese officials, and tidbits of information she was authorized to disclose to Chinese intelligence, Cleveland's trip to China was not among these items. She knew about the trip because Cleveland had told her he was going. The voice on the tape also revealed details of FBI counterintelligence operations.

The tape was a chilling discovery for reasons that were immediately obvious to Cleveland. First, it indicated that
PARLOR MAID
had been doubled back against the FBI and was working for Beijing. Second, it might explain why the target of the
TIGER TRAP
investigation had turned up in Shenyang.

Running into Gwo-bao Min was unsettling enough to Cleveland, but this was a lot worse. Who knew where it might lead? If
PARLOR MAID
had been flipped by the MSS, it was a counterintelligence disaster for the FBI. But it might also drag him down if the truth about his personal relationship with a bureau asset should ever become known. Not to mention what might happen if his wife found out.

Cleveland knew there could be no innocent explanation of why his lover, the FBI's top spy against China, was using a code name and spilling secrets to her MSS handler in Beijing. He was in big trouble, and he knew what had to be done.

He reached for the telephone.

***

Cleveland spoke elliptically, but his message was clear: Katrina Leung, using an alias, had switched sides. She was working for the Chinese intelligence service.

In Los Angeles, J.J. Smith was stunned by the call. He trusted Katrina Leung. They had been lovers for eight years now, and he cared about her. In addition to their emotional and physical bond, she was his golden source.

If
PARLOR MAID
was now a spy for the MSS, it raised all sorts of extremely awkward problems for Special Agent Smith. J.J.'s career and reputation in the bureau had been built on his extraordinary recruitment, Katrina Leung. Because of
PARLOR MAID
, J.J. was a star. The FBI had already paid her well over half a million dollars in expenses and salary.

Leung traveled to China to gather intelligence for the FBI as often as two or three times a year. But Washington regarded her reporting as well worth the money—Katrina Leung was the US intelligence community's secret pipeline into the leadership in Beijing.
^*

The dilemma Smith now faced was excruciating.
PARLOR MAID
's highly classified information had, in some cases, gone all the way up to the president of the United States. Her reporting, through J.J., had undoubtedly influenced America's China policy. Now it was all suspect; who knew how long she had been an asset of the MSS?

Only a year earlier, J.J. had received a prestigious secret CIA medal for his recruitment and handling of
PARLOR MAID
. He had flown to Washington for the ceremony. At a CIA safe house near the White House, in recognition of his intelligence coup, a high CIA official had pinned on him the HUMINT Collector of the Year Award (HUMINT is the CIA's acronym for human intelligence, as opposed to ELINT, electronic espionage).

To shut down the operation now would be a personal and professional catastrophe for J.J. And, not least, it would almost certainly mean the end of his long-running frolic with
PARLOR MAID
. Smith headed to the Los Angeles International Airport and scrambled aboard the next plane to San Francisco. Once there, he huddled with Bill Cleveland. They began to contrive a plan to deal with the disaster.

The fact that
PARLOR MAID
was being run by the bureau as a double agent might contain the seeds of salvation for the two FBI men. As such, she was authorized to tell the MSS that she had contacts in the FBI and to pretend to help the Chinese service while remaining under the FBI's control. So there was the key. After all, J.J. knew, double agents sometimes got a little confused about whom they were working for. The nature of the game was to give away information to see what could be learned in return. Katrina Leung was six thousand miles from home when she visited China. There were times when double agents had to think on their feet, improvise. They might reveal to the opposition a little more than they were supposed to tell. It was a long shot, but perhaps, after all, this thing could be smoothed over.

***

In May 1991, a month after the unwelcome tape surfaced, J.J. and Cleveland flew to Washington to discuss the
PARLOR MAID
problem with their FBI superiors. The meeting took place on May 14 in a conference room at FBI headquarters. Other than the date, the details are enveloped by fog. Bureau officials say they have no record of who was at the meeting, and—with one exception—none of those who might logically be expected to have attended can remember being there. Despite the rampant amnesia, somebody must have met with the pair, because a decision was made.

The one exception was Paul Moore, then the FBI's top China analyst and a thirteen-year bureau veteran. A thoughtful, soft-spoken man, Moore had a PhD in Chinese literature and spoke Mandarin.

J.J. and Cleveland reported to the meeting how
PARLOR MAID
, using a Chinese code name, had told her MSS handler in advance about Cleveland's trip to China. There was no mention made of the ongoing FBI operations she had discussed on the tape, which actually contained a series of conversations between Luo and Mao.

Moore and the other officials in the room were unaware that both J.J. and Cleveland were sexually involved with their asset, a gross violation of bureau rules.

Weighing the risks and benefits of continuing the
PARLOR MAID
operation, Moore reached a conclusion he was later to regret. "I made the recommendation we move forward with the case.
I asked, 'What's the worst-case scenario?' That was a mistake on my part because there was a worst case. But I didn't know that."

There was much more that Moore did not know. In 1988 China had opened a consulate at 443 Shatto Place, in the Wilshire district three miles west of downtown Los Angeles. Officials in China's San Francisco consulate consulted Katrina Leung on the project, and she advised them on the best location for the facility. One of the officials from San Francisco, Wang Do Han, came to Los Angeles and worked with her on preparations for the consulate, which was housed in a new building with Fort Knox-like security.

The FBI was elated that
PARLOR MAID
had become involved in the location and planning of the consulate. She was told to try to persuade the Chinese to purchase cars with sunroofs, to make it easier to identify and track them from the air.

For the FBI, the new consulate offered a target too tempting to ignore. In an operation orchestrated by Lance Woo, a supervisor in the FBI's Los Angeles office, the bureau's electronics experts, using supersophisticated technology that is still highly classified, managed to penetrate the consulate. Every phone call, fax, e-mail, and communication leaving the building was broadcast to the FBI. It was one of the bureau's most successful technical coups.

But in June 1990 the FBI received intelligence that
PARLOR MAID
had learned about the electronic operation directed at the consulate and tipped off the People's Republic of China. The PRC must have discovered that the consulate had been compromised, because the FBI's listening devices suddenly went silent.

There was no real investigation of Leung's suspected role, in large part because of J.J. Smith's exalted stature in the Chinese counterintelligence program.
PARLOR MAID
was considered a supreme source, and Smith's superiors hesitated to challenge him.

But the Chinese did not discover all of the FBI's surveillance techniques. Well after 1990, the FBI was able to obtain copies of checks and documents written inside the consulate. The implication was that the FBI's technicians had even managed to bug the consulate's copying machines. The Chinese finally figured out what was happening, because in the fall of 1999 consulate officials, suspecting that the machines had been compromised, shipped them back to China to be analyzed by their own experts.

The fact that the FBI's technicians had succeeded in bugging the consulate's copying machines
almost leaked out in 1998 when
Newsweek
published a one-paragraph item in its issue of March 2. The brief story, headlined "A Check from China?" reported that a Senate committee headed by Senator Fred Thompson discovered that the Chinese consulate in Los Angeles had written a $3,000 check to a hotel owned by Indonesian-born businessman Ted Sioeng, one of the figures in the investigation of alleged illegal money flowing into President Clinton's 1996 reelection campaign. The Senate committee suspected Sioeng of having acted as an agent of China in funneling money into the campaign. The FBI held its breath, because its secret was teetering right on the edge of disclosure. How could a check written inside the consulate be floating around on the outside? No one realized the obvious answer. The Chinese had meticulously photocopied the check for their records—and they had unwittingly transmitted a copy to the FBI. Despite the
Newsweek
item, the bureau's secret held.

In the meeting at FBI headquarters, Moore was unaware that the FBI had evidence that Leung had blown the consulate eavesdropping operation. His expertise on China was well respected in the bureau and his recommendation that the bureau continue to run
PARLOR MAID
carried considerable weight.

He recalled the position he took at the 1991 meeting. "Here's a woman who's traveling to China, she has established contacts with senior people, including President Yang Shangkun's assistant for intelligence, she's bringing back a lot of information from China to us. They know she gets interviewed by the FBI. The argument I made is, OK, we close this case down—and obviously she has something going with the Chinese she hasn't told us about—if we close it down, does she stop going to China?
The impact is she's going to stop telling us stuff out of the president's office in China. So I said let's go forward, and other people in the room were OK with that."

J.J. Smith and Bill Cleveland were ecstatic as they left FBI headquarters. They had dodged the bullet. From their point of view, the meeting could not have gone any better.

Back in California, however, there was still one detail remaining. J.J. needed to deal with
PARLOR MAID
. She would have to be told that the FBI was now aware that she had been secretly slipping information to the MSS.

On May 31, J.J. confronted Katrina Leung. In an angry, emotional shouting match in the kitchen of her home in San Marino, he told her that he knew about her conversation with Mao. The CIA had identified Mao as an intelligence officer. And
PARLOR MAID
's MSS handler was no ordinary spy. Mao Guohua, as he called himself—that may or may not have been his real name—was regarded as the MSS's leading US expert, roughly equivalent to the chief of a CIA geographic division. How he rose to that position was unclear, since his English was atrocious and he had, as far as is known, never traveled to the United States.

J.J. produced the transcript of the telephone call. If Leung had entertained any doubt, she now realized that her incautious call to Beijing had been intercepted. J.J. and the FBI knew exactly what she had said to Mao. There was no place to hide; she had to come up with an explanation for Smith.

She then confessed that Mao Guohua had learned some years earlier that she was an FBI asset. She claimed it happened when, on a trip to China perhaps around 1986 or 1987—the date is unclear—she took with her notes that she and J.J. had prepared about a Chinese defector to the United States. The notes were in her luggage.

When Leung, en route to Beijing, crossed from a province in southern China to the next, the internal border guards pulled her aside, searched her luggage, and found the notes. On another trip to China a month later, Mao confronted her. He had her notes in hand. They were more detailed than what she had told him about the defector.

By Leung's account, she then admitted to Mao that she was working for the FBI. She also agreed from then on to provide everything she knew about FBI operations to the MSS.
Mao ordered her to tell the MSS in advance of all plans by FBI agents to travel to China.

Since she had been working for the FBI since 1982, it was dubious that Chinese intelligence had tumbled to that fact only after four or five years, particularly since J.J. and Leung were often seen together at dinners and other functions around Los Angeles. Hobnobbing in public with the FBI raised Leung's stature in the Chinese American community. But by fixing the mid- to late 1980s as the probable date that the MSS had discovered her role, Leung avoided the issue of whether she had been passing secrets to Beijing even prior to that time.

She admitted that she had told the MSS about Bill Cleveland's pending trip to China. For this infraction, J.J., bizarrely, made her apologize to Cleveland in a San Francisco hotel room.
And that was it;
PARLOR MAID
, the swinging spy, was back in business.

Chapter 3

THE RECRUITMENT

G
UANGZHOU, FORMERLY CANTON
, known as the Flower City or, less poetically, as the Goat City, is a bustling port on the Pearl River in South China, not far from Hong Kong. It was there that Katrina Leung was born,
probably in 1952, although she was known to shave two or three years off her age. Her name at birth was Chen Wen Ying; like many Chinese who immigrate to America, she later chose an English first name.