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Killing C.I.A. Informants, China Crippled U.S. Spying Operations - The ...
https://www.nytimes.com/2017/05/20/world/asia/china-cia-spies-espionage.html
May 20, 2017 - WASHINGTON — The Chinese government systematically dismantled C.I.A. spying operations in the country starting in 2010, killing or imprisoning more than a dozen sources over two years and crippling intelligence gathering there for years afterward. Current and former American officials described the ...
WASHINGTON
— The Chinese government systematically dismantled C.I.A. spying
operations in the country starting in 2010, killing or imprisoning more
than a dozen sources over two years and crippling intelligence gathering
there for years afterward.
Current
and former American officials described the intelligence breach as one
of the worst in decades. It set off a scramble in Washington’s
intelligence and law enforcement agencies to contain the fallout, but
investigators were bitterly divided over the cause. Some were convinced
that a mole within the C.I.A. had betrayed the United States. Others
believed that the Chinese had hacked the covert system the C.I.A. used
to communicate with its foreign sources. Years later, that debate
remains unresolved.
But
there was no disagreement about the damage. From the final weeks of
2010 through the end of 2012, according to former American officials,
the Chinese killed at least a dozen of the C.I.A.’s sources. According
to three of the officials, one was shot in front of his colleagues in
the courtyard of a government building — a message to others who might
have been working for the C.I.A.
Still
others were put in jail. All told, the Chinese killed or imprisoned 18
to 20 of the C.I.A.’s sources in China, according to two former senior
American officials, effectively unraveling a network that had taken
years to build.
Assessing
the fallout from an exposed spy operation can be difficult, but the
episode was considered particularly damaging. The number of American
assets lost in China, officials said, rivaled those lost in the Soviet
Union and Russia during the betrayals of both Aldrich Ames and Robert
Hanssen, formerly of the C.I.A. and the F.B.I., who divulged
intelligence operations to Moscow for years.
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The
previously unreported episode shows how successful the Chinese were in
disrupting American spying efforts and stealing secrets years before a well-publicized breach in 2015
gave Beijing access to thousands of government personnel records,
including intelligence contractors. The C.I.A. considers spying in China
one of its top priorities, but the country’s extensive security
apparatus makes it exceptionally hard for Western spy services to
develop sources there.
At a time when the C.I.A. is trying to figure out how some of its most sensitive documents were leaked onto the internet
two months ago by WikiLeaks, and the F.B.I. investigates possible ties
between President Trump’s campaign and Russia, the unsettled nature of
the China investigation demonstrates the difficulty of conducting
counterespionage investigations into sophisticated spy services like
those in Russia and China.
The C.I.A. and the F.B.I. both declined to comment.
Details
about the investigation have been tightly held. Ten current and former
American officials described the investigation on the condition of
anonymity because they did not want to be identified discussing the
information.
The
first signs of trouble emerged in 2010. At the time, the quality of the
C.I.A.’s information about the inner workings of the Chinese government
was the best it had been for years, the result of recruiting sources
deep inside the bureaucracy in Beijing, four former officials said. Some
were Chinese nationals who the C.I.A. believed had become disillusioned
with the Chinese government’s corruption.
But
by the end of the year, the flow of information began to dry up. By
early 2011, senior agency officers realized they had a problem: Assets
in China, one of their most precious resources, were disappearing.
The
F.B.I. and the C.I.A. opened a joint investigation run by top
counterintelligence officials at both agencies. Working out of a secret
office in Northern Virginia, they began analyzing every operation being
run in Beijing. One former senior American official said the
investigation had been code-named Honey Badger.
As
more and more sources vanished, the operation took on increased
urgency. Nearly every employee at the American Embassy was scrutinized,
no matter how high ranking. Some investigators believed the Chinese had
cracked the encrypted method that the C.I.A. used to communicate with
its assets. Others suspected a traitor in the C.I.A., a theory that
agency officials were at first reluctant to embrace — and that some in
both agencies still do not believe.
Their
debates were punctuated with macabre phone calls — “We lost another
one” — and urgent questions from the Obama administration wondering why
intelligence about the Chinese had slowed.
The
mole hunt eventually zeroed in on a former agency operative who had
worked in the C.I.A.’s division overseeing China, believing he was most
likely responsible for the crippling disclosures. But efforts to gather
enough evidence to arrest him failed, and he is now living in another
Asian country, current and former officials said.
There
was good reason to suspect an insider, some former officials say.
Around that time, Chinese spies compromised National Security Agency
surveillance in Taiwan — an island Beijing claims is part of China — by
infiltrating Taiwanese intelligence, an American partner, according to
two former officials. And the C.I.A. had discovered Chinese operatives
in the agency’s hiring pipeline, according to officials and court documents.
But
the C.I.A.’s top spy hunter, Mark Kelton, resisted the mole theory, at
least initially, former officials say. Mr. Kelton had been close friends
with Brian J. Kelley,
a C.I.A. officer who in the 1990s was wrongly suspected by the F.B.I.
of being a Russian spy. The real traitor, it turned out, was Mr.
Hanssen. Mr. Kelton often mentioned Mr. Kelley’s mistreatment in
meetings during the China episode, former colleagues say, and said he
would not accuse someone without ironclad evidence.
Those
who rejected the mole theory attributed the losses to sloppy American
tradecraft at a time when the Chinese were becoming better at monitoring
American espionage activities in the country. Some F.B.I. agents became
convinced that C.I.A. handlers in Beijing too often traveled the same
routes to the same meeting points, which would have helped China’s vast
surveillance network identify the spies in its midst.
Some
officers met their sources at a restaurant where Chinese agents had
planted listening devices, former officials said, and even the waiters
worked for Chinese intelligence.
This
carelessness, coupled with the possibility that the Chinese had hacked
the covert communications channel, would explain many, if not all, of
the disappearances and deaths, some former officials said. Some in the
agency, particularly those who had helped build the spy network,
resisted this theory and believed they had been caught in the middle of a
turf war within the C.I.A.
Still,
the Chinese picked off more and more of the agency’s spies, continuing
through 2011 and into 2012. As investigators narrowed the list of
suspects with access to the information, they started focusing on a
Chinese-American who had left the C.I.A. shortly before the intelligence
losses began. Some investigators believed he had become disgruntled and
had begun spying for China. One official said the man had access to the
identities of C.I.A. informants and fit all the indicators on a matrix
used to identify espionage threats.
After
leaving the C.I.A., the man decided to remain in Asia with his family
and pursue a business opportunity, which some officials suspect that
Chinese intelligence agents had arranged.
Officials
said the F.B.I. and the C.I.A. lured the man back to the United States
around 2012 with a ruse about a possible contract with the agency, an
arrangement common among former officers. Agents questioned the man,
asking why he had decided to stay in Asia, concerned that he possessed a
number of secrets that would be valuable to the Chinese. It’s not clear
whether agents confronted the man about whether he had spied for China.
The man defended his reasons for living in Asia and did not admit any wrongdoing, an official said. He then returned to Asia.
By
2013, the F.B.I. and the C.I.A. concluded that China’s success in
identifying C.I.A. agents had been blunted — it is not clear how — but
the damage had been done.
The
C.I.A. has tried to rebuild its network of spies in China, officials
said, an expensive and time-consuming effort led at one time by the
former chief of the East Asia Division. A former intelligence official
said the former chief was particularly bitter because he had worked with
the suspected mole and recruited some of the spies in China who were
ultimately executed.
China
has been particularly aggressive in its espionage in recent years,
beyond the breach of the Office of Personnel Management records in 2015,
American officials said. Last year, an F.B.I. employee pleaded guilty
to acting as a Chinese agent for years, passing sensitive technology
information to Beijing in exchange for cash, lavish hotel rooms during
foreign travel and prostitutes.
In
March, prosecutors announced the arrest of a longtime State Department
employee, Candace Marie Claiborne, accused of lying to investigators
about her contacts with Chinese officials. According to the criminal
complaint against Ms. Claiborne, who pleaded not guilty,
Chinese agents wired cash into her bank account and showered her with
gifts that included an iPhone, a laptop and tuition at a Chinese fashion
school. In addition, according to the complaint, she received a fully
furnished apartment and a stipend.
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