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  Tiger Trap

  America's Secret Spy War with China

  David Wise

  Table of Contents

  Title Page

  Table of Contents

  ...

  Copyright

  Dedication

  Epigraph

  Contents

  Prelude

  Chapter 1

  Chapter 2

  Chapter 3

  Chapter 4

  Chapter 5

  Chapter 6

  Chapter 7

  Chapter 8

  Chapter 9

  Chapter 10

  Chapter 11

  Chapter 12

  Chapter 13

  Chapter 14

  Chapter 15

  Chapter 16

  Chapter 17

  Chapter 18

  Chapter 19

  Chapter 20

  Chapter 21

  Chapter 22

  Author's Note

  Notes

  Footnotes

  Houghton Mifflin Harcourt

  BOSTON NEW YORK

  2011

  Copyright © 2011 by David Wise

  ALL RIGHTS RESERVED

  For information about permission to reproduce selections from this book,

  write to Permissions, Houghton Mifflin Harcourt Publishing Company,

  215 Park Avenue South, New York, New York 10003.

  www.hmhbooks.com

  Library of Congress Cataloging-in-Publication Data

  Wise, David, date.

  Tiger trap : America's secret spy war with China / David Wise.

  p. cm.

  Includes bibliographical references and index.

  ISBN 978-0-547-55310-8

  1. Espionage, Chinese—United States—History. 2. Intelligence service—

  China—History. 3. Intelligence service—United States—History.

  4. United States. Federal Bureau of Investigation. I. Title.

  UB271.C6W56 2011

  327.51073—dc22 2010042025

  Book design by Brian Moore

  Printed in the United States of America

  DOC 10 9 8 7 6 5 4 3 2 1

  To Natalie, Ambrose, and Ben

  There are no walls which completely block the wind.

  —FROM A CHINESE GUIDE ON ESPIONAGE

  Prelude [>]

  1. A Thousand Grains of Sand [>]

  2. Parlor Maid [>]

  3. The Recruitment [>]

  4. Double Game [>]

  5. Destroy After Reading [>]

  6. "Holy Shit, Mr. Grove!" [>]

  7. Riding the Tiger: China and the Neutron Bomb [>]

  8. The Walk-in [>]

  9. Kindred Spirit: Wen Ho Lee [>]

  10. Sego Palm [>]

  11. Trouble in Paradise [>]

  12. Ethereal Throne: The Spy Who Never Was [>]

  13. Storm Clouds [>]

  14. The Counterspy [>]

  15. Royal Tourist [>]

  16. Richard Nixon and the Hong Kong Hostess [>]

  17. Anubis [>]

  18. Endgame [>]

  19. Eagle Claw [>]

  20. Red Flower [>]

  21. The Cyberspies [>]

  22. An Afterword [>]

  Author's Note [>]

  Notes [>]

  Prelude

  Scene 1

  November 1997.

  Katrina Leung made a striking figure, standing there at the microphone in her brightly colored cheongsam Mandarin dress and jacket, her jet-black hair swept up in a tight bun as usual, the high cheekbones accenting her thin, angular face. She was joking with Jiang Zemin, the president of China, joshing and cajoling him to sing for the VIP audience of one thousand at the Biltmore Hotel in Los Angeles.

  "I will sing a song from a Chinese opera," President Jiang finally agreed, to the delight of the assembled dignitaries.

  "One silver moon over the window sill," he warbled in Mandarin, choosing an aria from The Capture and Release of Cao Cao, the classic tale of a conniving, murderous third-century warlord who is caught and sweet-talks his way out of trouble.

  Katrina Leung, at the time a prominent member of the Chinese American community in Los Angeles, had organized the 1997 dinner in honor of Jiang and was acting as his interpreter and emcee of the affair, basking in the spotlight, where she liked to be. Leung's persuading the president of China to burst into song was the high point of the evening, and her coup created a major buzz in the room.

  If there had been any doubt before, the night at the Biltmore solidified her position as the most powerful Chinese American personality in Los Angeles. Leung appeared to move easily at the top of the worlds of politics and business in both the United States and China. How she managed to do so confounded even her many admirers.

  But there was something that the distinguished dinner guests did not know: Katrina Leung was a spy, code-named PARLOR MAID.

  Scene 2

  December 1990.

  Bill Cleveland, chief of the Chinese counterintelligence squad in the FBI's San Francisco field office, was checking into the Zhongshan Hotel in Shenyang, in northeast China, when he saw him.

  Dark-haired, cool, handsome enough to be a Hollywood actor, Cleveland was not someone easily rattled. But now he looked like a man who had seen a ghost.

  He turned, crossed the hotel lobby, and spoke urgently to I. C. Smith, a fellow FBI agent. As Smith recalled the moment, Cleveland approached him looking "sort of wide eyed."

  "You won't believe who I just ran into," Cleveland said. "It was Gwo-bao Min."

  For more than a decade, Cleveland had relentlessly pursued Min, an engineer with a Q clearance who had worked at the Lawrence Livermore National Laboratory in California, one of two national laboratories in the United States that design nuclear weapons. Cleveland—and the FBI—were convinced that Min had betrayed critical US nuclear secrets to China. Yet the proof, enough evidence to make an arrest, seemed always, maddeningly, just out of reach.

  In the closed world of FBI counterintelligence, only a small group of insiders knew about the highly classified case and the lengthy pursuit of the former Livermore scientist. Min had become the great white whale to Cleveland's Captain Ahab. The FBI gave its TOP SECRET investigation a code name: TIGER TRAP.

  Cleveland could not let go of the case; he had delivered dramatic closed lectures on TIGER TRAP at the lab, at the FBI training facility in Quantico, Virginia, even at CIA headquarters, using it as an illustration and a warning of subtle Chinese intelligence methods.

  At the time of the unexpected encounter in Shenyang, Cleveland was the bureau's preeminent Chinese counterintelligence agent. For an FBI counterspy to get into China was tricky enough, but Cleveland, a Mandarin-speaking student of Chinese history, had managed it.

  He had slipped into the Communist-controlled mainland as a member of a State Department team inspecting the security of US diplomatic installations in China. I. C. Smith, the other FBI agent on the team, was on assignment to the State Department and traveled as a diplomat. He recalled that they were closely watched. Well before the inspection team arrived in Shenyang, Smith thought he had detected an unusual amount of surveillance.

  "In Beijing one day," he said, "it was late in the afternoon, a cold dry wind blowing, and I went into a park called the Temple of the Sun to stretch my legs." The park, near the American embassy, was deserted, but as he turned to go back he suddenly came upon a man who quickly looked away and began studying a mural nearby. Smith continued on a short distance, discreetly photographed the man, and kept walking. As he left the park he saw a black limousine, the motor running, with two Chinese men inside. He had no doubt that the car and its occupants were from the Ministry of State Security, the MSS, China's intelligence service.

  "Later in a market, I saw
a guy and the same guy kept showing up. We were even followed on a trip to see the Great Wall." Smith was surprised at all the attention. "Usually diplomatic security people don't get that kind of coverage."

  And now, incredibly, Cleveland had run into Min, the target of the prolonged TIGER TRAP investigation, in remote Shenyang! Cleveland knew Min; he had questioned him more than once. The two spoke briefly in the hotel lobby. It turned out that both were scheduled to leave Shenyang on the same flight two days later, but Min never showed up at the airport.

  Cleveland was shaken by their encounter in the hotel. In a country of more than a billion people, what were the odds of Bill Cleveland running into Gwo-bao Min?

  "Neither one of us believed in coincidences," I. C. Smith recalled in his gumbo-thick Louisiana drawl. Was the MSS trying to rattle the FBI? Was the People's Republic of China sending a message from Shenyang to the J. Edgar Hoover Building in Washington?

  Cleveland could not be sure. But as matters turned out, the encounter was a dark harbinger of what awaited him.

  Chapter 1

  A THOUSAND GRAINS OF SAND

  FOR ALMOST HALF a century during the Cold War, the world focused on the global espionage battle between the United States and the Soviet Union. The duel between the CIA and the KGB, portrayed in countless books, films, and news stories, captured the public imagination.

  Espionage became a kind of entertainment, in no small measure due to the fictional exploits of James Bond, first popularized when President John F. Kennedy let it be known that he enjoyed Ian Fleming's stories. John le Carré's George Smiley provided a more authentic, if less glamorous, rendering of the spy wars.

  Fiction masked the cold reality. In the actual conflict, spies and their agents died. Lives were shattered. The CIA plotted to overthrow governments and assassinate political leaders. The KGB's supermoles, Aldrich Ames in the CIA and Robert Hanssen in the FBI, stole US secrets by the trunkful and betrayed agents working for US intelligence, many of whom were executed.

  As the East-West intelligence battles played out in the cafés of Vienna, in divided Berlin, and in back alleys across the globe, scant attention was paid to the espionage operations of a rising global power—China—and the limited efforts of US counterintelligence, not always successful, to block Beijing's attempts to acquire America's secrets. Inside the FBI, Soviet spies were regarded as the principal quarry; Chinese counterintelligence was relegated to a back seat. After the Soviet Union collapsed in 1991, Russia's spies continued to target the United States, as was demonstrated by the arrest in 2010 of ten "illegals" sent by Moscow to pose as Americans and gather intelligence in the United States. The KGB's espionage arm simply became the SVR (Sluzhba Vneshnei Razvedki), and US counterintelligence efforts against Moscow continued much as before.

  Yet China has in many ways become America's chief rival. And China has spied on America for decades, with some spectacular results, little known outside intelligence circles. At the same time, the end of the Cold War enabled the FBI to rethink its counterintelligence priorities. The bureau shifted its focus to China, to the espionage war with the MSS, the Ministry of State Security—China's foreign spy agency—and the intelligence branch of the PLA, the People's Liberation Army. This book offers a history of China's spying within the United States, focusing chiefly on recent decades, but also looking at some earlier episodes from the post-World War II era. It is a story of interlocking agents and cases, centered around the two particularly dramatic stories of PARLOR MAID and TIGER TRAP. It is a history largely undisclosed, and yet no less significant than the parallel story of Soviet and Russian penetrations. There have been no major films, no best-selling thrillers, and relatively little press coverage about Chinese espionage. Yet the drama, and the stakes, are just as high.

  ***

  America and China are locked in an uneasy embrace. China needs the United States to buy its exports, and American companies long to expand their sales in the huge Chinese market. Washington looks to China for help in dealing with intractable foreign policy issues, such as the nuclear ambitions of North Korea and Iran.

  Despite their interdependence, both countries actively spy on each other, a fact that has not been widely understood. During World War II, Soviet spies penetrated the Manhattan Project and stole US atomic secrets. That history lesson was not lost on China. In the decades after World War II, Chinese espionage was principally aimed at stealing US nuclear weapons data. To the extent that China could acquire those secrets, it could bypass years of research and testing and speed its own development of nuclear weapons, in particular small warheads.

  China, its modernization devastated by the chaos of the Cultural Revolution, coveted those shortcuts. It had ample motive to spy. And the United States, particularly the nuclear weapons labs at Los Alamos and Lawrence Livermore, became its prime target.

  Another priority of Chinese intelligence has been to penetrate US counterintelligence. Spy agencies work constantly to uncover and disrupt one another's operations. Today, Chinese intelligence also targets a broad range of US military technology, from the Navy's most sophisticated weapons systems to the Air Force's stealth bomber.

  Given American preoccupations with Russia, the first thing that must be understood about China is that its spycraft differs in crucial ways from that of the Russians. Some of the techniques—including "honey traps," the use of attractive women to lure targets, and sophisticated electronics—are the same. But the differences are at least as telling as the similarities.

  ***

  The secret headquarters of the Ministry of State Security is located in Xiyuan, the West Garden section of Beijing, near the Summer Palace. Unsuspecting crowds of foreign and Chinese tourists visit the palace daily, not realizing that they are passing China's spy headquarters.

  The MSS—the Guojia Anquan Bu—is China's equivalent of the CIA. Many of its officers live in the headquarters complex in an apartment building called Chien Men, which means "front door." Its location, too, is supposed to be secret, but the neighbors know that the spies live there.

  For thirteen years, starting in 1985, China's top spy, the head of the MSS, was Jia Chunwang, an English-speaking Beijing native with a degree in physics. Jia, who was popular among Communist Party members, was chosen in 1998 as China's procurator-general, a post similar to that of the US attorney general. His successor as MSS director was Xu Yongyue, a party hack from Henan Province. Xu opposed corruption in the MSS but also cracked down on Tiananmen Square demonstrators and other dissidents. In 2007 Xu's deputy, Geng Huichang, fifty-six, a bespectacled native of Hebei Province in northern China, moved up to become MSS chief as part of a government shakeup by President Hu Jintao, who sought to consolidate his power by naming five political allies as ministers.

  The spy agency is organized into a dozen bureaus. The first bureau operates for the most part inside China, but it also recruits people who are heading overseas for study, business, or vacation. The second bureau manages the spies, sending intelligence officers abroad under diplomatic cover in Chinese embassies or under commercial cover, including officers posing as journalists. The third bureau runs operations in Taiwan, Hong Kong, and Macao. In the latter two locations, the MSS spies are assigned to a group code-named Winter Chrysanthemum, which is tasked with gathering intelligence on Taiwanese organizations and foreigners. A second group, code-named Autumn Orchid, has overlapping responsibilities in the two locations but concentrates on collecting intelligence about the media, political and commercial figures, and the universities.

  The fourth bureau, the technology bureau, is in charge of wiretapping and communications, as well as photography. The fifth bureau is internal, responsible for domestic intelligence. The sixth bureau runs counterintelligence. The seventh bureau writes intelligence reports; the eighth is in charge of research; and the ninth runs countersurveillance and works to prevent defections by spies and students. The tenth bureau collects scientific and technical intelligence. The eleventh bureau runs the M
SS computers and is charged with protecting the agency from foreign computer hackers. Finally, a foreign affairs bureau cooperates with friendly foreign intelligence services.

  MSS spies are trained in the agency's own university, the Institute of International Relations in Beijing. The institute is a huge think tank with more than five hundred researchers. It provides the Chinese leadership with major English-language newspapers, summaries of political and economic trends, and documents issued by foreign governments. It is divided into ten offices covering the geographic areas of the world, as well as sections for international relations and the global economy.

  Although the institute teaches foreign languages and geopolitics, it does not teach other courses in espionage tradecraft. For that, students are reportedly sent for specialized training at the Institute of Cadre Management, a school for spies in Suzhou, a city of ancient pagodas and beautiful bridges in the Yangtze River delta, near Shanghai. For up to a year, the recruits learn firearms, martial arts, driving, communications, and surveillance skills.

  The size and budget of the MSS are secret, as is true of most of the world's spy agencies. But in September 1996, at a conference of the MSS and other Chinese intelligence agencies, called Strengthening Intelligence Work, China's vice premier, Zou Jiahua, alluded to the number of MSS agents around the world. In an address delivered to the conference, "Salute to Comrades on the Special Duties Front," Zou spoke of the "tens of thousands of nameless heroes who cherish and loyally serve their motherland [and] are quietly fighting in their special posts abroad." If his figure is at all accurate, it would mean that the MSS literally has tens of thousands of agents around the world.

  The MSS is not the only Chinese intelligence arm that spies on other countries, including the United States. The Military Intelligence Department (MID) of the People's Liberation Army also conducts espionage abroad. It is the MSS, however, that runs most of the intelligence operations against the US target.