Washington Post



Another Spy Fiasco

Thursday, May 1, 2003

THE STORY LINE would make a good spy flick: A modern-day Mata Hari close to the Chinese leadership becomes a paid FBI informant and seduces not one but two high-level FBI counterintelligence officials. One of these, her supposed handler, lets her see and copy reams of classified information over the course of a long-term affair -- and the Los Angeles socialite dutifully passes this material on to the Chinese. She meanwhile becomes a prominent Republican fundraiser and contributor and flaunts her ties to the Chinese leadership while engaging in civic, business and political activity. Yet even after it becomes clear that she is having unauthorized contacts with Chinese intelligence, both agents continue their affairs with her, and the flow of classified information from her handler-lover does not stop until the couple are arrested.

Unfortunately, the story of Katrina M. Leung is not a script -- at least not if you believe federal authorities, who have filed charges against her and former FBI special agent James J. Smith. Both are innocent until proven guilty, but if a tenth of the government's allegations are true, the case is the latest example of incompetence at an agency that has seen too much of it. Like other recent revelations about the battered FBI, it raises the question of whether this is really the agency Americans want to handle counterespionage. The bureau apparently regarded Ms. Leung, to whom it paid more than $1.7 million, as a particularly prized informant, so the Chinese could have used her not merely to garner information but to pass on bad intelligence to American policymakers. Particularly dispiriting is that FBI headquarters appears to have known as far back as 1991 that Ms. Leung was playing both sides and to have done nothing about it.

But the Leung case has yet another disturbing dimension, for Chinese counterintelligence has been an area of notable and high-profile frustration for American authorities in recent years. Major investigations of allegations that China was trying to route money into the American political system and also of allegations of nuclear espionage have fizzled. We still don't know what the Chinese money scandal was all about or how much American nuclear technology was used in Chinese warhead modernizations.

And it turns out that the agents who were involved with Ms. Leung were key players in these probes. Mr. Smith debriefed fundraiser Johnny Chung, for example, and the other former agent, William Cleveland Jr., was a part of the nuclear espionage investigations of Gwo-Bao Min -- against whom charges were never filed -- and Peter Lee, who pleaded guilty to passing secrets to China but served only 12 months in a halfway house. The more famous case of Los Alamos scientist Wen Ho Lee also ended with an inconclusive plea bargain. Is it possible that one reason these investigations ended so frustratingly is that Ms. Leung compromised them?

Neither party in Congress is itching to reopen these cans of worms. The Asian money scandal wasn't helpful to Democrats, and Republicans can't be too eager to visit similar scrutiny on their own party's relationship with a contributor now alleged to be a spy. The Bush administration, having entered office suspicious of China's Communist leaders, now is more intent on cooperating with them on terrorism, North Korea and other issues. But whether American nuclear secrets were compromised and whether China made a significant covert effort to influence American democracy are questions that are no less important today than they were a few years back. The Justice Department's inspector general and the FBI itself are examining the matter; Congress should return to it as well.