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interview: i.c. smith
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I.C. Smith was an FBI special agent from 1973 to 1998. In 1979, he was named supervisor of the Chinese intelligence squad and he worked closely on the Larry Wu-Tai Chin case. In 1990, while working diplomatic security in the State Department's Office of Counterintelligence Programs, Smith traveled with FBI agent Bill Cleveland to China, where the two were surprised to be extensively surveilled by Chinese security agents. Smith now believes that Katrina Leung tipped the Chinese off to this trip. In this interview, Smith recounts his trip to China with Cleveland and the allegations surrounding Cleveland, J.J. Smith, and Katrina Leung. This interview was conducted on June 3, 2003.

Who was Larry Chin? So a file comes on your desk or something and they say, "Here's a guy and we think it might be him," and you look at it? Who is the Larry Chin that you read about or hear about?

What we determined was this: Larry Chin was an individual, ethnic Chinese, born in China, who had been working for the U.S. government since World War II. He was initially hired by the Army doing translation work and stuff like this in southern China and later on he moved to Shanghai. At the time of the communist takeover of China, he was then offered a position with the U.S. consulate in Hong Kong. There, he was used to help -- incredible as it may seem because he didn't have any clearance or anything like that because he was still a Chinese national -- he was actually used to debrief Korean prisoners of war and things of this nature. Turned out, of course, is that he was actually going back into Hong Kong and identifying those Chinese prisoners of war who were cooperating with the U.S. Army, and they were being reinserted back into China to work, that sort of thing.

In the counterintelligence business, sometimes we look on coincidences with a jaundiced eye. We don't always believe in coincidences.

Later on, he went to Okinawa where he began to work with the Foreign Broadcast Information Service. Moved to the West Coast, he obtained a citizenship, obtained clearances, and then he finished his career after 30-something years with the U.S. government here in northern Virginia. And it's interesting because in later years, he became known as such a source of good information and being able to provide analysis and translations and what have you, that he literally had access to information out of the Oval Office that was dealing with things like the conduct of the war in Vietnam, the peace treaty involving Vietnam. In all probability, he delayed the war because he was providing this information to the Chinese.

And then later on, when they were dealing with the normalization of relations with China, there again he was having access to the Nixon policy as to what the conduct of this normalization process, what the U.S. position was going to be and what have you. And then he retained this until he retired, so he had incredible access. ...

Larry Wu-Tai Chin comes across your desk. You discover, "My God, this guy's been polygraphed, he's met all the tests of the CIA, yet he's had this amazing access to everything." Is it hard to make a case against Larry Wu-Tai Chin as an FBI agent?

Well, yes, in this particular case. And there was a two-fold problem with this. Not only do we need to find some sort of tangible evidence, something, a document or something, that we can show that is harmful to national security, a classified document, something that has SECRET stamped all over it or something like this, at the same time, though, we've got to be very, very careful because we still have a source inside China. We can't really do as much as perhaps we would like to do until there is a certainty that that source is out of harm's way. So we had to do this very, very carefully. ...

What was the piece of information that he gave up that let you all know that he should be arrested?

What really broke it is we knew the name of his Chinese handler, the handler from the Ministry of State Security. And when the agents were doing the interviews, [the agent] mentioned the handler by name, he then realized that we knew -- well, he probably thought we knew more than we actually did, but that was the single thing, that one little thing there seemed to break it. He had been denying at that point that he had been a spy. But when we mentioned that handler by name, he admitted that he'd been spying. ...

So is this the first Chinese espionage case the United States has made, Larry Wu-Tai Chin?

You got to remember, normalization had occurred in what, 1979 or something like this, and even today, the database of information that's available that we can draw on as to how the Chinese Ministry of State Security is going to conduct itself in something like this [is] really pretty thin.

But this was the first big one, and what I thought was going to happen was that we had been trying to explain to a lot of people within the FBI and then within even the intelligence community, people like the State Department, that the Chinese posed a very real threat and that their intelligence service was actually quite good. And we thought that this would turn out to be the vehicle that would provide us with the impetus we need[ed] to really get some attention and probably more resources directed towards China.

But it only had a short-term effect, because even with the success there and the fact that we could show that Chin had certainly probably prolonged the Korean War and probably the Vietnam War and impacted on the normalization, all of these things that were occurring there, the peace treaty with Vietnam as an example, and that he almost certainly caused the death of scores of individuals who had worked, had some sort of accommodation with the United States, [it] seemed to be a lesson that was quickly forgotten except for those people within the FBI and a few people within the CIA and maybe a few in the State Department that had a true understanding of the threat that was there. But from the standpoint of the politics of it and stuff like that, it seemed like it was almost forgotten overnight. ...

Can you tell me what two or three lessons [from the Larry Wu Tai Chin case] might have been and we'll see if we can apply them to some of the future cases?

Well, sure. For example, the use of behavioral scientists. Absolutely critical and very, very important to the Chin case because we use behavioral scientists for us to determine -- and this is something you begin to use in criminal cases as well, noting that espionage is actually a criminal case, but it's derived from counterintelligence -- to actually select your individuals and make sure you have the right people to do the right interviews and all the timing, this sort of thing, to actually plan in your interview. You know, there's a great feeling lot of times within the FBI that any FBI agent can accomplish any task. But that's absurd. And so you have to select the right people to do those sort of jobs.

One of the things we did very well in the Larry Chin case is there wasn't this great rush to bring this thing to fruition right away because we couldn't, in part, because we still had the source inside of China. So there you learned that the old business of patience, patience, patience, patience. Because you only have that one opportunity to do it right. So these are the sort of things like this, that you have to think about. Running into right people, use patience, and then go from there.

It's also extraordinarily important that you have people that are professional, not only from the standpoint of dealing with espionage. You got to remember, when you're dealing with these espionage cases, you're making that transition from what is intelligence gathering to make it into a criminal prosecution. And the FBI has done that very, very well in many cases. You make that transition of using intelligence information to apply it to a criminal prosecution. And so this is a very, very tenuous situation and you only got that one chance to do it if you don't have the documents or something like this, you don't actually catch them red-handed. In Chinese counterintelligence, you aren't going to catch them red-handed. And we knew this. So these are the sort of things like this that you do have to apply. ...

Who is Bill Cleveland? Who are these China experts you come across, and what is the legend about that inside the FBI?

One of the things that impressed me before I made the decision to go over to the counterintelligence is that these were individuals who were really, really knowledgeable about their subject. That really impressed me. Once I moved to the China program, I began to meet people like Van Magers, for example, and later on, Bill Cleveland.

These were individuals who had that great curiosity about the culture. As I began to become more familiar with the other counterintelligence programs, I began to realize this was a great curiosity and knowledge of the culture that exceeded the other programs by far. These are people -- not only did they know how to use chopsticks at their local restaurant or something like this -- but they could talk knowledgeably about the history of China. The history was the sort of thing [that] greatly appealed to me from an intellectual standpoint

The China program was a very small and very insular program, because not just anyone wanted to go there. Secondly, the ones that did -- if you didn't want to go there, you just never got involved in it. You tried to do what you could do to get out as quickly as possible.

But these were individuals who were willing to work in that very insular program, even if it meant that they probably would never be promoted to senior ranks in the FBI. Again, that impressed me, because they just seemed to have this kind of a timeless approach to their work that "I'm content to stay right here. We're going to do great things, and we can't even really talk about them to the general agent population." From an intellectual standpoint, I found that very appealing.

It's a little bit Chinese, isn't it?

Oh, yes, there's no doubt about it. One of the things that happens in counterintelligence is that every program that you have -- it could be the Cuban program, or whatever; the program takes on a little bit of the personality and the characteristics of your target. If you can deal with Cuba, for example, and I'm somewhat familiar with that, you have to be willing to roll the dice and be a little bit reckless at times and stuff like this. I used to say that my friends in the Soviet KGB took on the boorishness and the bureaucracy of the Soviet system itself in a lot of ways. So I began to see that sort of thing.

Once upon a time, I guess you had been assigned or taken an assignment at the State Department, and you and Bill Cleveland go to China. Tell me first, how does Cleveland attach himself? He'd never been, I gather. Who is he? How do you get together with him, and how do you end up over there?

After I had served a tour as the legal attachè in the South Pacific based out of Canberra, Australia, I was asked to take a position at the State Department where I was -- to use a word that's been used a lot recently -- I was embedded completely at the State Department. The position I had was chief of investigations, Office of Counterintelligence Programs, Diplomatic Security at the Department of State. One of the jobs that I had to do in that role was, from a counterintelligence standpoint, conduct surveys of at-risk embassies and consulates abroad, of the U.S. embassies and consulates. I went to the Soviet Union when it was still the Soviet Union, both Moscow and Leningrad. We went to Managua in Nicaragua and did the sort of same thing. We also wanted to conduct these same surveys in Beijing and Shenyang, China, [and] in Hong Kong, I might add.

One of the things with the State Department was that they didn't have that strong counterintelligence presence there, in general. But in particular, there wasn't a lot of knowledge about Chinese counterintelligence. So I went over to the FBI. Even though I'm an FBI person, I'm fully integrated into the State Department, so I was really representing the State Department. I said, "Would you recommend someone that could accompany me and a couple of junior State Department personnel to Beijing, Shenyang and Hong Kong?" and they recommended Bill Cleveland.

I knew Cleveland by reputation more than I did personally. I was very pleased, because he had an excellent, excellent reputation; not only from the standpoint of having had some successes in the program, but also that great awareness of the culture and all these things. He had the language skills. He was also the type of individual who I thought would get on well with the State Department personnel that we'd be working with. For all of these reasons, then, I was just very, very pleased that he was allowed to go.

We actually landed in Beijing on Nov. 28, 1990. We conducted this survey in Beijing and Shenyang, and then later Hong Kong.

What was Cleveland like? Was he excited to get to go in the first place? ...

Oh, he was just absolutely tickled to death, because here he was -- he had been working this target for most of his adult life at that point, and he never thought he'd be given the opportunity to actually travel.

An example of his knowledge and expertise -- we were walking down one of the main boulevards there in Beijing one day, he and I and one of the State Department people, and he's actually telling us that "up here on the right is the such-and-such hotel -- that's where Westerners stay." He actually had studied so much about China and so much about Beijing. Of course, a lot of that dealing with the people he had talked to, that it was almost like he had memorized the streets and the main buildings and things of this nature. This is a knowledge of a culture that was very much a rarity. Frankly, it was a rarity for a lot of the FBI guys that you might say in downtown Cleveland and much less Beijing, a country he'd never been in and a city he'd never been in.

You said he spoke the language? He spoke all the languages, or two primary languages?

Yes. I think he was probably stronger in Mandarin, because that would be the primary. I think probably some Cantonese or Toishan or something, but he certainly had some Mandarin.

A good example -- I had decided that I wanted to find me one of those Mao Tse-tung caps, little round caps that you would see Mao in, so we'd go to a market. They had this huge display of caps, but I can't find any of the Mao caps. I can't get [the saleswoman] to understand what I'm saying. Bill comes up and he converses with her. She laughs and she said that nobody asks for them anymore, and she reaches under a counter and pulls one out, and I buy it. But he was able to converse to some degree even with the people in China. There again, he impressed me.

What's he like personally?

He's not boisterous, by any stretch of the imagination. He has a presence about him that makes you realize that water runs pretty deep, if you use that analogy. He's a guy that I enjoyed being with, from a purely intellectual standpoint. Quiet, unassuming, he maintained a very good physical appearance. He jogged and was a runner and what have you, like this as well. He was the kind of guy that I think a lot of FBI agents should emulate, to be like Bill Cleveland, because not only did he have that intellect and a great knowledge about his subject matter, but also had the appearance that was very appealing.

And a good agent?

Oh, yes. If you look at it from the standpoint of those people that were in the China program, he'd have to be in the top two or three.

You had talked about how he had had some successes as an agent. Did he have success in Chinese espionage cases as an agent?

Yes, and I'll have to be a little circumspect about this. But I do know that he had had some success in developing sources and recruitments and that sort of thing.

Of that specialty, or just part of it?

[In] dealing with China, he was considered a very, very knowledgeable source. It's almost like a walking, talking primer on Chinese espionage. When we would periodically get the China people together, people would defer to Bill Cleveland -- and he was never one of those people who were very assertive with his views or anything like that -- they would defer to Bill Cleveland. "Bill, what do you think?" And then what he said had great weight.

"Ambitious" was not a word you'd use about him, though?

No. There again, in many ways he was stereotypical of a lot of the people in the China program. Ambition was low on the list.

[Did it] ever cross your mind that he -- I don't mean by this to imply that he went to the other side -- that he loved and so admired and was so interested in China that he ever lost any kind of perspective about it?

My feeling is this. I've never been in Bill Cleveland's house, but I'd be willing to bet that if one walked in, it would be filled with fine art, porcelain, things like this, from China. He was a fellow that seemed to be more ingrained in the culture than most of us. My feeling is the problems that's associated with him today, the personal relationship with Katrina Leung, what-have-you -- assuming all these allegations are true -- that great affinity that he had developed for China and the culture and such like that influenced him in that regard -- if I had to make a bet.

You guys are there in China, you're in Beijing. Part of the story goes that you were followed by MSS guys, or stern-looking fellows or [you were] made or whatever it was, almost from the very beginning. So you land. Is that where it happens? They pick you up at the airport? Or what happens?

I don't recall. I didn't detect any surveillance at the airport, but I really wasn't looking for any. I can think of, though, three examples of where [I was] sure that I or we were being followed. Two involved me by myself. One of them was at a market near the diplomatic compound.

You've got to remember that, in China, all of the consulates and embassies from abroad are all in a single area, and they're basically walled in, for all practical purposes. Right adjacent to it was kind of an open-air market type thing, and I was there. That's where we begin to notice the first time a young fellow who kept following me from place to place. It wasn't so much that he was trying to listen for my English, because I really wasn't saying anything. I deliberately made some maneuvers and stuff like this to see if he would continue to show up, which he did.

The most telling one was at a park which is located within the diplomatic compound. You've got to remember, this time it's in December, and it's bitterly cold. You got the cold, dry wind blowing across the steppes of China and into Beijing. I was walking in this park one afternoon just to stretch my legs from doing all the things we were doing in the embassy, and I'm by myself. This bitterly cold day, there's no one in there except me, at least I thought. I'm walking through the park and at some point there, I said, "I'm getting cold and I think I'm even getting lost," so I just did an abrupt U-turn. All of a sudden, there's this fellow standing there with a kind of surprised look on his face. He immediately turns and starts looking at some kind of a mural that's on the wall there. I said, "I think that guy was following me." Actually, I even took a couple of pictures of him later on.

But then when I continued on back, maybe half a block later, there was a little pond there, and there are two guys sitting in a black vehicle. You've got to remember, in China at this particular time, there was very little private ownership of vehicles. So there you are. You have a black vehicle on a cold day with two kind of sinister-looking guys sitting with the motor running; in a park inside the diplomatic compound, you know that these aren't private citizens.

I have regretted not trying to take a couple photographs of them. But at this point, I didn't want to push my luck, so I continued on back.

The third time was actually when Cleveland and myself and one of the State Department people took a side trip to the Great Wall. There again, we were followed. In fact, it was kind of amusing in a way, because the guy that was following us -- the people operating the lift that carried you to the top of the Great Wall actually kind of pushed him onto these little gondola-type things. There he was, sitting there with three of us. Of course, he took pictures of us on the Great Wall and all this other stuff. So I can think of those three instances there that occurred very quickly in Beijing.

This was not a clandestine trip. We were over there very much openly as what we were doing, in true name, and the whole business. Normally, diplomatic security personnel do not attract that sort of attention because, after all, diplomatic security personnel are very much what they're described as being; diplomatic security personnel do not make clandestine meets, and they aren't operating spies. They are security people, and so they don't really attract the attention of the opposing intelligence services.

I thought at the time this was a little bit unusual. But then I said, "Well, they recognize me or Cleveland or something from the past," or whatever reason. But I can remember thinking that I thought the surveillance was a little bit more than I had anticipated.

Then this truly weird thing happens to Cleveland, I guess. You're both in a hotel?

Yes. Part of the survey involved Shenyang. Shenyang is a city of a few million up on the North Korean border, almost impossible to get there. We flew up on a China flight, which is a story in itself. We land out on the tarmac. Then I'm walking across the runway and I realize there are patches of ice everywhere. We had landed on this runway with these patches of ice. As we make our way into the terminal building, the regional security officer is waiting for us. We get our luggage and we head straight for the hotel.

The reason I'm mentioning all of this because of the standpoint of coincidence -- how long, when the flight lands -- it wasn't exactly on time -- the time it took us to get our luggage, all these other sort of things. We get to the hotel and we're preparing to check in. I sat at a table with the State Department fellow, Ed McGrath, and Bill is going to stretch his legs.

He walked back in a few minutes and he looked at me and he says, "I.C., you won't believe what I just saw." "Bill, who did you see?" He said, "I just saw Gwo-Bao Min." Gwo-Bao Min was an individual who was a principal subject in a long-time FBI espionage case out of Lawrence Livermore called Tiger Trap. I said, "You've got to be kidding," because I recognized the man's name. So they mill around and Bill actually bumps into him of sorts. At the time, we thought that Min was somewhat uneasy about this meeting. They have a brief conversation, and then we go on our separate ways.

So we were thinking, I said, "What are the odds of this happening in Shenyang, China?" You got this 10- or 15-minute window that's -- you know, the variation, all these things, business about the flights and all these other things, the taxis getting there, everything. Ten or 15 minutes in Shenyang, China, you got Bill Cleveland, who was the case agent for the Tiger Trap case, meeting the principal subject in a hotel in Shenyang, China. What are the odds of that happening? Well, I viewed it mathematically as something that probably couldn't even be calculated, and that's how we kind of viewed that at the time.

What do you make of that?

In light of what we know now, I wonder now if it was a coincidence. Next, that begs the question; if it wasn't a coincidence, what did the Chinese hope to gain by having Gwo-Bao Min [there] -- if in fact he was there at their direction -- and that would be the question, what did they hope to gain? I don't know the answer to that beyond, well, maybe they just wanted to verify that in fact this was Bill Cleveland and something like that -- someone who actually knew him. I don't know the answer to that.

They knew each other?

Oh, sure, because Bill had interviewed Min on several occasions.

Let's take the Mr. Min case. Tell me what the case is, Cleveland's involvement. ...

Basically, the investigation revolved around the loss of nuclear secrets that [were] thought [to] have gone to China when suddenly China appeared to have this technology. To be very candid with you, given the passage of time and stuff like that, I don't remember the intricacies of these technologies, even if I could talk about it, which I don't think I could.

Gwo-Bao Min was the [suspected] employee at Lawrence Livermore lab. Now, how he was developed as a suspect, anything like that, beyond one of the people that had access to this technology, I don't know the answers to that sort of thing as well. I do know based on what, as I recall, Cleveland told me one time -- that he thought that he had a confession. He almost had Min to the point of making a confession, when suddenly he stepped back. …

But eventually, Min left Lawrence Livermore, and I think he resigned. He may have been fired and that sort of thing, and, as I understand, had gone into private business.

But no arrest, no conviction?

No arrest. The case was one of those that was never able to get to the point of being prosecuted.

Still an active case?

I don't know that.

Certainly by then it was an active case?

Probably, and certainly in 1990, yes.

What [was it like] for Cleveland? He's stretching his legs in a Chinese province up on a border after what sounds like a hairy landing and a hairy flight, and he walks out, and there's the bad guy, the one who got away.

Yes, I was saying, we were just absolutely astounded that within this narrow, 10- or 15-minute period of time that we were in the lobby of the hotel, there's Gwo-Bao Min. What are the odds of that happening? At the time, I thought it was just one of these absolutely extraordinary coincidences. How do you explain it? Sometimes these things happen. Though I should add that in the counterintelligence business, sometimes we look on coincidences with a jaundiced eye. We don't always believe in coincidences.

Was Tiger Trap active when you were in your position in Washington?

Oh, sure, sure. It was one of the very early-on espionage cases.

So it was cooking, and [did] it seem like an important one? Like a good one?

Oh, without question. Without question. There was a thought that it could be a technological version of Larry Wu-Tai Chin case, from the standpoint of impacting on the China program, convincing the administration and other people in government that the Chinese were being very successful in the acquisition of technology and these sort of things.

What happened to the case?

They were never able to get those specific documents. Remember, we talked about that. Those documents aren't there. They aren't doing the dead drops. Our surveillance is not going to catch them doing anything, that sort of thing, maybe a meeting or someone from a delegation to travel over. That happened all the time in the Chinese-American community. So you had a confession that didn't work, so the case was never prosecutable.

One of the things that's picked up on a wiretap, I guess, is a phone call from a name that will become famous by the mid-1990s. Tell me about that.

We returned to the U.S., I will say, in mid-December that year. Bill went back to San Francisco. I went back to the State Department. Some time later -- I thought it was a few days, but certainly within the next two or three weeks -- I received a call from Bill one day. It was on an open line, and he told me, "I see they knew we were coming before we even left." My understanding was that this was information he had gained from the wiretap. ... He made some reference to a Los Angeles source that was being operated by J.J. Smith.

You've got to remember that, in counterintelligence wiretaps, they aren't listened to on actual time of the recording, unlike the criminal cases, where you actually have someone sitting there actually listening to these things. So I don't know at what point that someone, a translator or something like that, overheard whatever they heard. But then later on, I guess, Cleveland returned and came back. At some point, it appears to me -- from what I read in the media -- that he recognized the voices, which prompted the phone call to me.

I would think that the phone call had occurred probably well before we left, but had not been listened to until well after we left. ...

So what did he say? Can you reconstruct the conversation to the best of your recollection?

Well, first of all, he said that they knew we were coming before we left. That's the thing that stands out at me. It wasn't a very long conversation, and the inference was that this is information that they had gained from a wiretap, and I think this is probably in the affidavit. That was really about the extent of it. He mentioned a Los Angeles source being J.J. Smith. ...

Who was J.J. Smith?

Well, J.J. Smith was an agent who had long been in Los Angeles and who was assigned to the Chinese squad there, was considered a sound agent, [but] certainly not from an intellectual standpoint. [He] had this deep understanding of the culture. He didn't compare with Bill Cleveland or Van Magers by any stretch of the [imagination], or some of the other ones, but he was considered a solid agent there on the Chinese squad. ...

A little thing, but you've got to remember -- and it's not as prevalent today in the FBI as it should be -- but the coat and tie is very much a part of an FBI agent's uniform, just like wearing the uniform of a street cop. You know, they don't go out there in dress clothes. They wear the uniform. That's very much part of the FBI's uniform.

Well, J.J. was the kind of guy that seemed to have little regard for wearing the coat and tie that was very much part of the uniform. We attributed that to just kind of that Los Angeles attitude, which was not uncommon out there. ...

Based on my dealings with [J.J.] in years past, I always had the impression that he was not quite as good in accomplishing counterintelligence as he thought he was -- I guess is the way I would sum that up.

What made you think so?

Just in my interaction with him, and seeing him at conferences and stuff like this. Within the FBI culture, it's not unusual to have a little bit of disdain for the bureaucrats at FBI headquarters. Even when I was there, I shared that disdain for those who were career bureaucrats. I felt the FBI, though, was strengthened by the fact that you had the field office personnel who moved in and out of headquarters, as opposed to allowing people spend their whole career back there. But he just seemed to have the attitude that there was nothing that he could be taught or he had nothing that he could learn from the people back at headquarters, and didn't really want anything to do with it. Seemed to go far beyond just the brief anti-management biases that sometimes you see.

Guys like J.J. Smith, and even Bill Cleveland -- is it part of their job to run an agent, to find, develop, turn a Katrina Leung, and would Cleveland have had--

Oh, that's an integral part of an FBI agent's performance appraisals.

What is?

The development of sources. Information is a very integral part. All of these other skills you're supposed to have, but the development of sources is certainly one of them. ...

Now, I might add, all FBI agents can't develop sources. I can tell you without any hesitation that probably half of the FBI agents at any given time never develop a really, truly great source. The reason I say that is those individuals who do develop good sources are somewhat of the exception, and they are standouts in that regard. I think this plays later on into this business with J.J. Smith.

So it's considered a cool thing, a good thing?

Oh, it's a very positive thing, an absolutely essential thing. The FBI is like any intelligence organization or law enforcement organization. In the counterintelligence program, that kind of gray area between [the] criminal division and purely intelligence, like the CIA, is that it's absolutely essential that you have sources.

Would Cleveland have had great sources?

I think so. I don't recall any particular one that he had. But certainly I think he would have had certainly good sources, if not great sources.

And there would have been a pressure on him to develop them?

Pressure on all of us, yes. You were judged. Your promotions and things like this your performance appraisal of how you were rated, [the] difference between being exceptional and average -- a great deal depended on how well you were able to develop sources. You may be a great writer and you may be a good investigator, but if you don't have sources, you're actually marked down as part of your overall performance appraisal.

So J.J., who's not seeking promotions or even accepting a move to headquarters, which would be viewed as a career [move] in a big way, [do you think he] may have used the fact that he had a great source, a great source apparently, to act as a shield, in a way?

I think from the standpoint of J.J. Smith, a source did a couple things for him. One of them, it gave him stature that he would not have normally had. You've got to remember that most FBI agents don't develop great sources. Lots of them don't even have sources. ... It's something that you had to work at. It's not always easy, and some people just don't have the personality or the wherewithal to develop new sources. So what he did, this source gave him stature. This source did something else for him, in my view, that allowed him to be almost bulletproof.

What I mean by that is, "I've got this great source, so I don't have to wear a tie to work. I've got this great source, so I'm not going to ever be transferred, like 99 percent of FBI agents are. I've got this great source, so I can meet this source by myself. I've got this great source, so that means I can openly socialize with that individual." All of these things [that] are occurring are the exception. You've got to remember that 99.9 percent of the FBI agents have to adhere to rules differently than what was being applied to J.J.

Do you think he thought of that along the way? Do you think [Katrina Leung] knew that and thought of that along the way?

It's hard for me to say what she thought. Certainly I think he knew that he was taking advantage of the fact that he had this great source. There's no doubt in my mind, knowing J.J., that he would have done it.

Now, if you look at it from her standpoint -- and you get past the salacious aspects of the relationship with this other sort of thing -- here you are assuming the allegations are right that's in the affidavit. Here you are. You have an FBI agent who shows up at your door with a briefcase full of documents. There again, that's the exception. You don't walk around streets of Los Angeles or any other streets with a [briefcase] filled full of documents. There was one occasion that I read about where he kept a top-secret document overnight out of this closed area. Well, for God's sake, a lot of places you aren't even allowed to take that top-secret document from the room, much less walk away with it, keep it overnight. There again, all of these are exceptions.

So here you got this FBI agent showing up at the door, and he's got a briefcase full of documents. What does she think? I suspect what she thought was that this is J.J. Smith; not "J.J. my lover," but this is "J.J. Smith of the FBI." In fact, he's representing the FBI, so probably the FBI knows what he's doing. I think there's a very good possibility at some point there that she probably concluded this is all part of a greater FBI plan. I don't know that, but I think there's a very good chance that she would have, if you looked at what I think her personality is.

It's the reasonable person test. She could conclude this?

Sure. She's being paid extraordinary amounts of money -- $1.2 million just for expenses that she incurred over the years -- and then a half a million for information, which is, in my view, an imbalance, which made me think that probably the FBI was probably supporting some of her private business ventures. The FBI would be reimbursing her for a dinner that she would hold with some Chinese people or something like this. She worked the private business deal with some of those -- and I would suspect that she probably did -- and that means the FBI, in effect, was footing the bill for her own private business adventures. ...

There is a Washington meeting. This is procedural. So what would have had to happen? [What would] Cleveland have had to let Washington know?

... I'm sure that Cleveland probably called Smith. It's a little bit interesting they waited until May to have this meeting. I don't know why they waited as long as they did, but for whatever reason they did. I was still at the State Department, and had no knowledge of this meeting until the media reports that came out. But normally what would have happened is Cleveland would have gone to his supervisor and to his assistant special agent in charge, and said, "I need to go back to Washington, and this is why."

A street agent doesn't get on a plane and fly back to Washington and get reimbursed with his vouchers and all that other kind of stuff. The same thing would have been happening in Los Angeles with J.J. Smith. Going to his supervisor, going to special agent in charge, explain to him why they need to go back there, because the FBI's travel budget is not bottomless. You have to kind of justify these travels -- two or three days of accommodations, this sort of thing. So he would have had to get permission to go back there.

So San Francisco management knows, Los Angeles management knows, at least that the source, the famous J.J.'s source that's making him bulletproof, is talking to -- what do they know? Has given you guys up in China--

The fact that she has had unauthorized contacts with the consulate in San Francisco.

This guy Mao?

Yes, whoever that is. And the fact that, not only were the contacts unauthorized, but the information that she was providing was information that she should not have been [giving]. If she was operating as a source, that's no different than an FBI agent. An FBI agent never, ever gives a source information out of FBI files and stuff like this unless it's specifically authorized. That source [is] the same way. You don't give information about the people that's handling you or anything like that unless it's specifically authorized. In that case, she violated that trust, the confidentiality relationship and stuff like this. ...

At the meeting, what would have happened? Or what did happen that you know about?

I don't know anything beyond what I read in the media, and the fact that they said apparently a decision was made that J.J. would handle it. Now, in my view, at this particular time, I found this a little bit surprising, because first of all, there'd been this four- or five-month period between the time they determined there was a problem and the fact that they finally have the meeting.

Somebody then made the decision to let the field office handle it, which would be consistent with the way that the thing happened. Normally, the headquarters, if it works right, will defer to the operational people in the field to handle these sort of issues. There may have been some follow-up. Someone comes back later on and says, "What happened with this source?" and this sort of thing. I've said that, in my view, there was monumental management breakdown in this issue.

But what I'd also point out, though -- and this is not being defensive of FBI headquarters at all -- the first line of supervision of these sort of issues is at the field office level. J.J. Smith reports directly to the supervisor, who reports then to an assistant special agent in charge, and then special agent in charge or assistant director. The supervision of the conduct of that source normally would have occurred at the field office level. The policy, and these other sort of things, the overall general policy program oversight, that's a headquarters function. A headquarters supervisor does not call a supervisor in the field office and tells them how to work their cases or anything like that. ...

You don't figure either one of these fellows said to the other one, "Well, I'm sleeping with her?"

I can't imagine that they would. To me, I hope that's not the case. Certainly I would think that J.J. would have known that Katrina Leung knew Bill Cleveland and Bill Cleveland knew that obviously Katrina Leung knew J.J. because he was the handler. I can't imagine that either one of them knew the other one had a personal relationship with them. But then, I've been surprised before.

What must that have been like? Put yourself in the head of either one of those guys sitting either in San Francisco or in Washington, both of them having this dark secret.

Well, there again, looking at the personalities, but particularly Cleveland more so than J.J. Smith -- J.J. is the kind of fellow that he will, in my view again, is that he will [would?] think he actually seduced Katrina Leung. But in all probability, she seduced him, if you might draw that distinction. I would think that the personal relationship that Bill Cleveland had developed with her would probably be more of an affinity, I believe, [with] of the Chinese culture and all these other sort of things associated with that.

From what we know and what you know, she might have known from somebody like J.J., or what the L.A. office may have had, or what she may have even inadvertently learned from Cleveland -- is there anything [she could have leaked]? We already know she had one Peter Lee document in her possession.

That's extraordinary. The fact that she would have a document associated with an ongoing investigation, that's extraordinary. That should not have been allowed to happen, and something like that could not have been authorized, in my view.

How important was that document?

I don't know. I don't know how it relates into the overall importance of the investigation. But there is a very structured process in how a person deals with information that is being authorized to pass to the other side.

For example, you may create a document or you have a document and say, "Well, we can afford to give this information up." And [for] every single document that's authorized like that, [there's] the record made of it, for a lot of reasons -- but one of them is to make sure you don't duplicate this for later, that sort of thing as well. You just keep up. Also to make sure, "Well, we gave them this, but can we afford to give them that?" if it's a real document that's associated with it, because there's always a danger in these double agent cases that the other side gets more than we are out of this thing.

So they handle it very, very carefully. I can't imagine that, at any time, anyone would have ever authorized giving a document related to an ongoing investigation. You just don't do that.

You talked about double agent. What does a double agent do? What was she supposedly doing for the Federal Bureau of Investigation?

Well, what she would have been doing is -- and what I can gather from there again the media reports and affidavits -- she was telling Chinese, "You know, I'm working for you, but the FBI, I'm really--" She's really working for them. So what she does is she provides them with any sort of information that might be useful from an intelligence standpoint.

Is she going to be getting technological information? I doubt it, because that's not the realm that she moves. She'd moved more into the political realm, dealing with personalities and this sort of thing. So I would assume that the information that she was providing to the FBI would have been information about personalities and characteristics, and maybe even plans for relationships or treaties, policies. She may have been involved in sort of things.

For example, the time the Chinese shot down one of our aircraft, if she had had some chance to bump into some high-ranking PRC officials, she could have said, "What are you going to do about [that] aircraft?" He would have said, "Well, we're going to do so and so and so and so." She would have gone back and reported that to Smith. So that's the sort of information that I suspect that she was getting, not technological.

There is in this game a give-and-get kind of process. In other words, [would] she have to show her [hand] to the Chinese?

Oh, no doubt about it. ...

I read somewhere I guess that [four] presidents of the United States received on their desks information from her. Do you believe that?

It would have been filtered, of course, several times through, and it probably would have been that sort of information. There again, I have no direct knowledge of this. But I suspect that if the information related to personalities and positions of the PRC government, relating to issues of mutual concern to the U.S. and to the PRC, then yes, it could have very easily ended up there. That's the kind of information that would end up there. as opposed to the neutron bomb [information].

Yes, she's not Larry Wu-Tai Chin. She's not even Peter Lee or Gwo-Bao Min, right? She's what? How do you characterize what she is?

I'll tell you my view of her. I view her as the classic dragon lady in Chinese lore. She's tough, she's cold, she's manipulative. I've been quoted as saying she was willing to take a hit for the team to accomplish -- if you were to ask, in my view again, "Katrina Leung, who are you really working for?" I suspect she would have difficulty answering the question. I suspect that she was using the Chinese to a degree just like she's using the FBI. The only person that she was really working for was Katrina Leung, the classic dragon lady; she'd do anything she needed to accomplish her own goals. She became very wealthy doing it. At least, on the surface it appeared that way.

And Bill Cleveland? What happened?

It's a great disappointment, and not only for those of us who knew and respected Bill Cleveland. The FBI is made up of human beings. We have these great characteristics of courage and passion and strength and all these other sort of things. But we also have individuals who have human failings. It's happened to all of us at some point or another. Part of having to recruit for human beings in this business is that you have human failures.

For example, Bill Cleveland is a guy that I don't remember hardly having a drink with. He's one of those guys who I'd have thought from a religious standpoint -- very devout, family oriented. The disappointment there again -- and I'm not judging the morality of the relationship with her from an extramarital standpoint -- just the fact that this is a fellow who grew up in the FBI. His father was a former assistant director who was well, well respected under the Hoover era. So he grew up in this environment, and he knows that rules are there for a good reason.

Of course, all the rules that's in the FBI are there because somebody created a problem in the past, or something like that, so we got to have a rule that says it's not going to happen again, that sort of thing. So he grew up in this environment. He knew the importance of this. He certainly knew the importance of not having a personal relationship with sources. It's just something that isn't done. So that's the big disappointment, from my standpoint, of Bill Cleveland in this thing -- the fact that he violated that very fundamental precept of not having a personal relationship with a source. You just don't do it.

I know that they say there's been a big review of all of the FBI Chinese intelligence cases now and everything's been compromised because of this. Is it your guess that, when all is said and done and the dust settles and cases have been adjudicated and she's plea bargained and Smith has plea bargained and whatever has happened has happened, that we're going to discover that all those cases, that many, many things have been compromised by Katrina Leung?

First of all, the FBI has had some extraordinary successes in the China program. There again, it goes back to the world of the shadows that I write about; it's something that just the general public doesn't know. Anything that's happening today I have no need to know, even though I was very much involved with that stuff for years.

Unfortunately though, for the FBI, most people are going to, in the recent past, remember the debacle of the Wen Ho Lee investigation, now the Peter Lee investigation. You're going to see greater scrutiny. They're going to start to question it -- and, of course, given the most salacious aspects of the business involving Katrina Leung -- this is what people are going to remember about the China program.

Now, if you ask my opinion, what is the harm of what she has done? If you look at it from the overall context of harm to national security, there again not knowing exactly what was passed and stuff like this, my feeling is probably the harm is greater to the image of the FBI and these individuals than it was as actual harm to national security.

You mentioned Peter Lee and we haven't talked about it. Give me the sort of broad outlines, would you mind, Mr. Smith, of the Peter Lee case, and what happened to it?

I don't know. I have no personal knowledge of the Peter Lee case beyond the fact that it appeared to have been a rush to solve that thing and get it off of the docket as quickly as possible. I'm a little bit perplexed by that.

But then I'm perplexed by the fact that, for example, they went out to J.J. Smith's house and they gave him a pass. If he turned over all these rough notes and stuff like that that he had, for God's sake, if they knew that he had these notes, rough notes, or suspected they had enough probable cause, they should have gone to get a search warrant. I can't imagine keeping 20 years worth of notes so that you kept dealings with a source. As an FBI agent, you're sworn to uphold the law and all these other sort of things, they are in effect government property. They are not the property of that individual agent.

And for whatever reason, we go out there and we negotiate with him; should not have been negotiating with him; should have gone in with a search warrant, assuming probable cause was there.

You figure he's getting kind of kid glove treatment?

In my view, you play hardball first, and then you fall back if you can't make the case. In this case here, they're playing softball early on and with no prospect of ratcheting it up later.

Why?

I have no idea. I just don't know. I don't know. I that this is probably something that is being decided by the local United States attorney and probably someone from the criminal division in the Department of Justice. ...

I'm assuming Robert Mueller, the director of the FBI, will have some input to this thing. But then of course he's just a mouthpiece for the attorney general. You've got to remember this: just like civil rights cases. The FBI investigates them, but the Department of Justice determines which one to be prosecuted. I think this is what's happening here. In fact, I suspect there are a lot of people in the FBI sitting there, just kind of shaking their head at how [there is a] lack of aggressiveness in really pursuing things. ...

So here you are, this unbelievably experienced fellow, know all about it. As the last guy I think who handled a big and successful prosecution in the Chinese espionage world, you look back on this. You know about the Chinese. You know who they are, you know their history, you know their intent, you know what's happened at the Justice Department, you know what's happened in the FBI. What is the lesson you draw from the entire spectrum -- not just J.J. Smith and Bill Cleveland? You look back on these 20-some years. What lesson do you draw from it that's not being applied now?

The lesson that I see that has come out of this, if you look over the past couple of decades at this business, is we haven't applied the lessons learned throughout this process.

For example, you look at the Wen Ho Lee case. I was retired and I received a call from NPR, of all people, and they asked me to comment. I said, "I don't really know about the Wen Ho Lee case beyond the fact that I knew there was an investigation out there, but that's not unusual, at the [lab]." Then they began to say, "For example, they used a false flag approach against Wen Ho Lee." I said, "They used a false flag approach?" The false flag indicates that this is someone working for the FBI, for example, who pretends to be working for another country. Then they will knock on the door of someone that they think is suspected of working for that other country and they say, "Hey, my name is so and so and I'm from Beijing." Then they try to get them to pass documents and this sort of thing. This is something that has been quite successful in the post-Cold War period. ...

But this was a technique that has never, ever proven to be successful against the Chinese. Why? Well, part of the reason is because the Ministry of State Security does not meet its sources in the United States. Then I found out the identity of the agent that was representing himself to be from the Ministry of State Security. This is an agent that doesn't even speak Mandarin Chinese. I know him well; he used to work for me. I said, "Wait a minute. How can you represent yourself as being from Beijing, the Ministry of State Security? You don't even speak Mandarin Chinese." It's a prominent dialect and the official dialect within China, dealing with official circles and stuff like this.

So I knew right then that the people that were doing the Wen Ho Lee case just weren't up to the task. It turned out I found out who the players were, the unit chief used to work for me, and he used to deal with Yugoslavia, for God's sake.

So what I saw happening was that you had a Chinese counterintelligence program that had been virtually decimated in a time that there had been no lessening at all of the intelligence activity by the Chinese intelligence services themselves. The collection effort continued. In fact, it had perhaps even gotten more aggressive. You had the FBI that had no real appreciation for counterintelligence anymore. You've got to remember that this is really the thrust of -- you talk about national security even more so than terrorism. Think about it, right? So this is a thing that no lessons [are] learned as well.

[Is there] another casualty of the war on terror -- that we're not paying attention to some of the other things that we ought to be paying attention to?

I think that's probably true in a lot of things. The FBI today, for God's sake -- now [is] probably the best time in the history of the FBI to be a white-collar crime criminal. There you've got all the agents out there assigned to terrorism without always [having] terrorism cases to work.

Terrorism is cyclical. At some point in the future, Al Qaeda will no longer be a threat. I mean, all these terrorist groups are cyclical. I don't care what they say. Go back and look at the history of them. When is the last time you heard anything from the Japanese Red Army or the Red Brigades? Now you have militia groups on the domestic side and this sort of thing. If it hadn't been for Eric Rudolph, we wouldn't be hearing anything about domestic terrorism. All of this is cyclical.

But the Chinese will always be with us?

The Chinese are constant. Espionage is constant.

 

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posted january 15, 2004

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