Skip to comments.Justice probes deals with China by FBI
Posted on 10/01/2003 4:38:46 AM PDT by kattracks
WASHINGTON (AP) The Justice Department inspector general is investigating whether FBI agents involved in espionage and terrorism cases improperly used informants and subjects of investigation to benefit private businesses they were running on the side, according to officials and documents.
The allegations, according to court documents reviewed by The Associated Press, include that agents' and intelligence assets' private companies were involved in business deals in China and the Middle East about the same time the FBI was investigating Chinese efforts to acquire sensitive technology.
The FBI says it is cooperating with the investigation. "Any time there is a request by an inspector general, the FBI fully cooperates," the FBI said in a statement.
The investigation is focusing on the same Arizona FBI office that produced the now-famous warning that went unheeded before Sept. 11, 2001, that Arab pilots were suspiciously training at U.S. flight schools. The FBI's Phoenix office was a hotbed of investigations into terror and espionage during the 1990s.
The Justice inspector general's office, which investigates wrongdoing by federal law enforcers, has interviewed several times a Phoenix businessman named Harry Ellen, who worked undercover for U.S. intelligence and the FBI for three decades in the Middle East, Mexico and China.
"I was interviewed about events concerning various companies and corporations with whom I came in contact and-or had financial dealings with while I was assisting the FBI," Ellen said in an interview. "One or more of the companies were operated by FBI agents."
FBI agents generally are prohibited from moonlighting in second jobs without special permission, and they undergo regular background checks for irregularities. One of the questions the inspector general is examining is whether private companies originally were fronts used by the FBI in undercover investigations and then were taken over by agents as they neared retirement, officials said.
While working on sensitive Chinese and Palestinian cases, Ellen had a falling out with the FBI in 1999 after he had an affair with a Chinese woman named Joanna Xie. The bureau had asked Ellen to monitor the woman as a possible Chinese intelligence agent.
Ellen alleges FBI agents intentionally divulged his identity as an asset, jeopardizing his life. The FBI denies blowing his cover and says he was severed for violating rules for paid assets. "We decided to break off this relationship," the FBI said in a statement. The FBI has been aware of Ellen's allegations for several years but has concluded there is no wrongdoing, officials said.
The new investigation focuses in part on allegations from Ellen and Xie in a closed immigration case, which were further researched by a freelance reporter who has become a witness in the case.
Xie testified that in 1995 a prominent Chinese-American professor who introduced her to FBI agents visited her in Shanghai with some U.S. businessmen and tried to enlist her help on a project to sell "black box" satellite technology to a Chinese military aerospace company.
An agent introduced by the professor contacted Xie in 1996 from his Phoenix company "requesting that I assist his company with Amway," Xie testified. She said the agent's contact set up an Amway bank account for her for sales. She did not explain further the reference to Amway, the sales distributorship company.
By 1997, Xie alleged, the professor introduced her to some business partners, including another FBI agent who was described as an investor in a Chinese trading company in Chicago. That agent, she alleged, also had business interests in a Phoenix trading company, sought her help on business and introduced her to Chinese business executives.
"So you had learned that some FBI agents were business partners?" her lawyer asked.
"Yes," Xie testified.
Xie said she has turned over to investigators the personal business cards that agents gave her listing at least three of their private companies.
Ellen testified that while working with the FBI on a sensitive Middle East terrorism investigation, he was asked by the bureau to get close to Xie to monitor her activities. Ellen said around that time, one of the agents cited by Xie provided him free T-shirts to be used for his Muslim foundation, which was cooperating with the FBI.
Ellen testified he also had been working on a foundation project to establish a communications system for the Palestinians, but the FBI asked him to stop. A few years later, he said, he learned his plan was put back in motion by a different company he believes was connected with FBI players.
The Justice inspector general also has interviewed an Arizona freelance journalist named Don Devereux, who researched Ellen's case and provided the government and AP copies of corporation records showing FBI counterterrorism agents had created companies with family members and suspected FBI assets.
The company names, in many cases, match those Xie testified about. Officials of one company that involved communications technology, Devereux said, went on a government trade mission to the Middle East.
Devereux wrote the FBI in August 2002 about evidence that "several Phoenix FBI agents became personally involved in the mid-1990s in various international trading companies, some evidently doing business with China."
"As I understand it, those same agents had counterintelligence responsibilities at the same time, duties which specifically included the monitoring of illegal technology transfer to China," he wrote the FBI.
The FBI did not investigate.
Ellen's allegations that the FBI blew his cover as an undercover asset have been reported in the past year by AP, The Washington Post and the East Valley Tribune in Arizona. Several prominent Arizona politicians, including Sen. John McCain, former U.S. attorney Melvin McDonald and former Senate Intelligence Committee chairman Dennis DeConcini have sought investigations.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.