Veteran U.S. spies were elated to learn of the arrest this week of a suspect in a long-running mole hunt within the CIA’s ranks. But their mood was tempered by skepticism that the man will ever face charges for what some believe is his role in the exposure and deaths of several CIA sources in China, according to current and former officials.
The arrest Monday of Jerry Chun Shing Lee, also known as Zhen Cheng Li, a former CIA case officer, is the latest chapter in a joint FBI and CIA investigation into the devastation of the agency’s spy network in China, the officials said.
The loss of so many sources was a major preoccupation inside the intelligence community and a blow to efforts to gather significant information from inside the country.
The probe began in late 2011 when a worried FBI informant in China told his American handlers that everyone he knew who was helping the U.S. government was being discovered by the Chinese authorities and then being made to work for them, said a former U.S. official with knowledge of the events.
“He was nervous,” said the former official, and feared there must be a mole identifying U.S. assets, some of whom the informant knew. “He was worried about getting caught. That’s how the case got started.”
One by one, assets were being flipped — or in a smaller number of cases, killed, the former official said.
One immediate question was: How had the Chinese learned the names of so many people spying for the United States when their identities were supposed to be among the most carefully guarded secrets in American espionage? There have been several competing theories.
Some now think the Chinese discovered the methods the CIA uses to communicate covertly with its assets in the field, according to the officials.
If the Chinese discovered those methods, they could potentially intercept messages between assets and their CIA handlers and discover the identities of Chinese recruited by the United States.
Compromising the CIA’s covert communications is “a fairly reasonable explanation” for how they discovered the names of so many sources, said the former official, who, like others, spoke on the condition of anonymity to discuss an ongoing case.
A few years ago, the CIA also pushed to develop new forms of secure, covert communications, which suggests that the agency quickly needed to replace equipment that was no longer viable, said a person with knowledge of the effort.
The CIA declined to comment.
It is also possible that a mole provided the Chinese with the information they required to compromise the devices and use them to round up American assets, current and former officials said. Suspicion has focused on Lee, but so far he has been accused only of keeping notebooks filled with detailed information about assets and covert employees after he left his job at the CIA in 2007. Lee, who joined the agency in 1994, lost his security clearances when he left the government and took a job in the private sector.
Lee, 53, does not yet appear to have an attorney. He faces a charge of unlawful retention of national defense information.
Investigators in 2012 took advantage of his return from China to the United States to live in Virginia with his family. During two hotel stays by Lee, in Hawaii and Virginia, the FBI searched Lee’s rooms and photographed a pair of small notebooks containing handwritten notes, including the real names and phone numbers of CIA assets and covert employees, as well as notes from meetings with those assets and the location of covert facilities in China, the Justice Department alleged in court documents.
In 2013, the FBI approached Lee and interviewed him on five separate occasions, according to an affidavit from an FBI agent. But each time, he denied the existence of the notebooks. He was never charged with a crime and eventually left the United States for Hong Kong, where he had been living ever since. Lee was arrested Monday after he landed at a New York airport.
The major investigative work of the case was wrapped up by early 2014, the former official said.
Two former U.S. officials described Lee as an “arrogant” case officer and said he may have determined that having been interviewed multiple times by the FBI without being charged, there was little risk of his being apprehended if he returned to the United States.
For all the suspicion and scrutiny Lee has drawn, officials with knowledge of his case said it is unlikely that he will be charged with more serious offenses, such as divulging classified information to the Chinese. There is no evidence, as yet, that Lee actually gave classified information to a foreign government.
“Absent any proof, there’s not much you can do with it,” one former official said. “There’s lots of smoke around this guy. They couldn’t prove anything.”
The former official said he thought that Lee could point to the case of former CIA director David H. Petraeus, who pleaded guilty to a misdemeanor charge of mishandling information for sharing notes containing classified material with his mistress when he was commander of the NATO mission in Afghanistan.
“ ‘Why does he get a pass and you guys are worried about two notebooks of mine?’ If I were him, that would be my argument,” the former official said.
Rachel Weiner, Devlin Barrett and Matt Zapotosky contributed to this report.