Top FBI officials have told members of Congress that every Chinese counterintelligence case investigated by the FBI since at least 1991 may have been compromised by a suspected agent of the Chinese government arrested in Los Angeles last week.
The unfolding spy case, involving alleged Chinese double agent Katrina M. Leung and her FBI contact, former senior China counterintelligence agent James J. Smith, will require major damage assessment of Chinese espionage and technology transfer investigations, according to congressional leaders who have been briefed on the probe.
Among the investigations that require review, they said, are the nuclear secrets case involving former Los Alamos National Laboratory scientist Wen Ho Lee; the alleged transfer of neutron warhead secrets to China from Lawrence Livermore National Laboratory; and the purported efforts by the Chinese government to illegally contribute hundreds of thousands of dollars to political campaigns in this country during the 1996 election.
Rep. Christopher Cox (R-Calif.), recounting a meeting he had Thursday with senior bureau officials, said: "I started going down a list of investigations and they stopped me. They said it's basically every Chinese counterintelligence case during that period of time."
"The question is, really, when did it begin," added Cox, who chaired a select House committee on national security that looked into the transfer of sensitive military and computer technology to the People's Republic of China.
The United States has an extensive program to prevent China and other nations from obtaining such national security secrets. Smith was part of that effort and he recruited Leung in the early 1980s to help obtain information on the Chinese.
Leung, 49, who is being held without bond, is charged with passing classified information she obtained from Smith about FBI personnel and investigations to China. Smith, 59, is accused of allowing her access to the classified materials during a 20-year-long affair. He retired from the FBI in 2000, but continued his relationship with Leung, giving her access to classified material he brought to her home, the government alleges.
According to an FBI agent's affidavit unsealed in court Wednesday, Smith was alerted in 1991 to the possibility that Leung was a double agent by another FBI agent who specialized in Chinese counterintelligence. That agent, who is not named in the court papers but has been identified by numerous sources as William Cleveland Jr., had a long-running sexual relationship of his own with Leung, according to the affidavit.
Cleveland has not been charged in the case, but he resigned Thursday as director of security for Lawrence Livermore National Laboratory and was stripped of his government security clearances. Cleveland left the bureau for Lawrence Livermore, the prominent California nuclear weapons research facility, in 1993.
Lawrence Livermore, the FBI and the National Nuclear Security Administration, a unit of the Energy Department that oversees the laboratory, have launched a separate probe to determine if any classified information was compromised through Cleveland's alleged liaison with Leung.
Rep. Porter J. Goss (R-Fla.), chairman of the House Permanent Select Committee on Intelligence, said he has asked FBI Director Robert S. Mueller III to launch an assessment of the intelligence that may have been lost to China and whether investigations in this country were corrupted with disinformation provided by Leung.
"You really have to start with the assumption that everything that touched or passed through these channels could be compromised," Goss said Friday. "What makes this extraordinary is the length of time this went on and the breadth of contacts this lady had." Leung was prominent in Los Angeles civic and political circles and had contacts with senior Chinese leaders.
Goss and Cox described Smith as one of the FBI's most senior Chinese counterintelligence agents, who would have been involved in or have known about all the bureau's significant counterintelligence investigations involving China.
Lee, a scientist at Los Alamos National Laboratory in New Mexico, was the target of a bungled FBI investigation into whether he gave nuclear secrets to the Chinese; the Justice Department subsequently faulted the bureau for failing to consider other suspects.
In another case that will now be reviewed, Peter Lee, who worked at Los Alamos in the 1980s and later at TRW Inc., confessed to passing nuclear secrets to China in 1997 but received a controversial sentence of 12 months in a halfway house.
In a third spy case, code named "Tiger Trap" by the FBI, a Livermore scientist was suspected of giving details of the United States' W-70 neutron warhead to China in the late 1970s. The scientist was fired, but the FBI was not able to produce enough evidence to take to court. Cleveland was one of the FBI agents who investigated that case.
Goss, a former CIA agent, stressed that charges against Leung and Smith have not yet been proven. FBI officials who supervise double agents such as Leung "are given a lot of latitude," he said, and may have legitimate reasons to provide bits of sensitive information. FBI spokeswoman Susan Dryden said final conclusions from the damage assessment may not be reached until after the prosecutions of Leung and Smith are complete. "As of right now we do not know what damage has been done," she said. "We're going to do an inventory of his cases, evaluate what's been compromised, then take that information and do a formal damage assessment."
Sources said Friday that counterintelligence officials at FBI headquarters did not learn that Leung might be a double agent until the spring of 2001 -- a decade after Cleveland first suspected it -- when an analyst on loan from the CIA discovered irregularities in her file. The analyst was conducting a review of Chinese counterintelligence cases in the wake of the Wen Ho Lee case, sources said.
Leung's romantic relationship with Smith was discovered sometime after that, but officials could not say exactly when. Mueller, who took over his post in September 2001, has said he did not find out about Smith's improper conduct until January 2002. He and other FBI officials have not indicated when Mueller was first told of concerns about Leung.