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Posted on 04/13/2003 5:22:08 AM PDT by Prince Charles
FBI agents suspected lover as spy
April 13, 2003
BY CURT ANDERSON
WASHINGTON--Two former FBI counterintelligence agents suspected in 1991 that the woman with whom both were having an affair was passing sensitive information to the Chinese, but neither told a superior, according to government documents.
Former agent James J. Smith and former FBI supervisor William Cleveland Jr. kept under wraps their knowledge that Katrina Leung, an FBI intelligence ''asset'' for two decades, had contacts with intelligence services of the Chinese government.
Cleveland, who retired from the FBI in 1993, resigned from his counterintelligence position at the Lawrence Livermore National Laboratory in California, said two law enforcement officials who spoke on condition of anonymity. The lab develops nuclear weapons and possesses some of the nation's most sensitive scientific secrets.
''While the employee in question has not been charged with any wrongdoing, due to the seriousness of the situation, a thorough review of his work is now under way,'' Livermore spokeswoman Susan Houghton said Friday.
Attempts to reach Cleveland for comment Friday were unsuccessful.
The case marks another embarrassing episode for the FBI, which is trying to demonstrate to critics that it can police itself in the aftermath of the highly damaging Robert Hanssen spy case and intelligence failures before the Sept. 11 terrorist attacks.
Cleveland was an FBI counterintelligence supervisor in San Francisco when his affair with Leung began in 1988, according to court documents filed when Smith was charged Wednesday with gross negligence. Cleveland is not referred to by name in the court documents but several law enforcement officials confirmed his identity.
Cleveland recognized Leung's voice on a 1991 tape provided by a source in which she was overheard discussing classified U.S. defense information with a Chinese contact known only as ''Mao.''
Cleveland immediately called Smith, based in the FBI's Los Angeles office, who became ''visibly upset at the news of Leung's unauthorized communication'' with China's Ministry of State Security intelligence services, according to the documents. Smith, who served as the FBI's ''handler'' for Leung, also was having a sexual relationship with her that dated to the early 1980s, the documents said.
It's unclear whether the two men knew about each other's affair. Neither took the issue to a superior or to FBI headquarters as required in such sensitive cases, which probably would have resulted in a polygraph test for Leung. The court documents say Cleveland relied on Smith to address the situation, and Smith later told Cleveland that he had.
Each man continued his relationship with Leung, with Smith inviting her to his retirement party in 2000 and allowing her to videotape it even though FBI and CIA officers were present, court documents show. She also continued to have access to classified material Smith carried with him when he visited her.
FBI Director Robert Mueller took over the agency in September 2001 and five months later was tipped off about Smith, Cleveland and Leung. He ordered an investigation and transferred and demoted Sheila Horan, then acting director of the FBI's national security division, which oversees spy investigations.
The 13-month probe by a 30-member task force resulted this week in federal charges alleging Smith allowed Leung access to classified information that she later passed on to the Chinese.
Leung, a 49-year-old Los Angeles socialite and Republican Party activist, appeared in court Friday and waived her right to a preliminary hearing within 10 days.
''She did nothing to violate her duty, allegiance and oath to this country,'' said Leung's attorney, Janet Levine.
Mueller called the Leung case ''an isolated event'' and said an overhaul of how intelligence assets are handled would prevent such occurrences in the future. This will include far greater headquarters oversight and less independence by FBI field offices, which once operated as individual fiefdoms. He also assigned an inspection team to review the management of the China counterintelligence program.
One unresolved issue in the investigation is whether Leung provided information on China's alleged attempt to influence the 1996 congressional elections through campaign contributions. Smith was the main FBI contact for Johnny Chung, a key figure in the fund-raising scandal who cooperated in the federal probe after pleading guilty to tax evasion and campaign finance violations.
Neither Smith nor Cleveland was given a polygraph test, which did not become routine practice for agents in sensitive jobs until after Hanssen, a top counterespionage official, was charged with passing secrets to the Soviet Union. Hanssen was sentenced to life in prison without parole.
The Leung investigation so far has not disclosed any security breach as damaging as that in the Hanssen case, which resulted in the deaths of at least three U.S. spies. And no evidence has surfaced yet to indicate that Cleveland allowed Leung access to any classified material, either from the FBI or the Livermore lab.
The items that she allegedly obtained from Smith include lists of FBI agents' names, a memo about Chinese fugitives and a telephone list involving an investigation into Peter Lee, an employee at defense contractor TRW Inc. who pleaded guilty in 1997 to passing secret information to China.
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This is the really scary part. Polygraphy is junk science that is more of a tool of self-delusion than it is of finding the truth. I cannot believe that any government agency takes it seriously anymore after the release of the National Academy of Sciences Study "The Polygraph and Lie Detection".
I mean, the FBI might just as well consult an astrologer or palm reader.
A Russian spy sat in FBI headquarters for 15 long years, one of the good ole boys that the "ethics" division would have painted as pure as the driven snow had anyone questioned the man.