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• 106 - Gov-Legal: Legal • Court Rulings State-Federal • FCC • Copyright • Patents • Trade Marks • Service Marks • ClickFor KudoAds-106spot / • vMusic-Sponsors106 • 106g Katrina01 MORE-01 FBI Uses Clout • 106g Katrina02 - MORE-02 / Nuclear Lab • 106g Katrina03 MORE-03 / Karina's Background • 106g Katrina04 MORE-04 / Katrina says the FBI paid her $1.7 million for Her Spy activities • 106g Katrina - MORE-05 / Magistrate Denies Bail for Katrina in Spy Case • 106g Katrina - MORE-06 / Katrina China-USA Spy Case • 106g Katrina - MORE-07 / Katrina China-USA Spy Case • 106g Katrina - MORE-08 / Katrina China-USA Spy Case • 106g Katrina - MORE-09 / Katrina China-USA Spy Case • 106g Katrina - MORE-10 / Katrina China-USA Spy Case • 106g Katrina - MORE-11 / Katrina China-USA Spy Case • 106g Katrina - MORE-12 / Katrina China-USA Spy Case   • 106 - Government a b c 19 20 21   Returnˆ To Top' 106vi Katrina Leung and the FBI Feature Stories - (012005-01 010105-01) Katrina Leung U.S. China Spy Case Tossed Out -----January 7, 2005 Yes90-LAtimes Federal judge scolds prosecutors in her dismissal of criminal charges against a woman accused of working as a Chinese double agent. Charging prosecutors with willful and deliberate misconduct, a federal judge on Thursday dismissed all criminal charges against a former FBI informant accused of serving as a Chinese double agent. -----In a sharply worded ruling, U.S. District Judge Florence-Marie Cooper blasted the U.S. attorney's office for "conduct unbecoming a prosecutorial agency." -----Attorneys for Chinese American businesswoman Katrina Leung had accused the government of illegally and unethically exacting a commitment from her former FBI handler that barred him from talking to the defense. -----The pledge was contained in an agreement that retired agent James J. Smith reached with the government last year, allowing him to plead guilty to a reduced charge of failing to report his 20-year-long sexual affair with Leung. -----Under long-established rules, prosecutors are prohibited from obstructing a defendant's access to witnesses. -----At a hearing before Cooper last month, Assistant U.S. Atty. Michael Emmick disavowed any intent to prevent Smith from speaking to Leung's defense team. He blamed "inartful" language in Smith's plea agreement. -----But Cooper cited a Nov. 18 e-mail message to Emmick from Robert Wallace, senior trial counsel in the Justice Department's counterintelligence section in Washington, saying that the wording was aimed at "preventing Smith from being interviewed by Leung's counsel because he is a repository of classified information." -----"In the face of that e-mail," Cooper wrote, "anything short of an admission and apology on the part of the government is hard to imagine. Mr. Emmick did neither. Rather, he chose to ignore the e-mail." -----The plea agreement clause in dispute specified that Smith would engage in "no further sharing of information relating to this case with Leung, counsel for Leung or the employees of counsel for Leung." -----Cooper said the evidence was abundantly clear that the clause was intentionally placed in the agreement to prevent Smith from talking to the defense. And to make matters worse, she said, the prosecution subsequently engaged in a series of explanations and denials that "compounds the problem by undermining the court's confidence in the integrity of the process." -----She accused the prosecution of misrepresenting to the court its true intentions in drafting the "no-further-sharing" clause. -----"While a certain amount of shading of the truth may be tolerated, even in judicial proceedings, prosecutors are subject to constraints and responsibilities beyond those which apply to other lawyers," the judge wrote. -----"In this case, the government decided to make sure that Leung and her lawyers would not have access to Smith. When confronted with what they had done, they engaged in a pattern of stonewalling entirely unbecoming a prosecutorial agency." -----U.S. Atty. Debra W. Yang issued a statement denying any prosecutorial misconduct. "I stand behind the work of the prosecutors of this case and I know that they have conducted themselves ethically," she said. Yang said her staff was analyzing the ruling and would consider an appeal. -----Leung's lawyers, John D. Vandevelde and Janet I. Levine, said in a statement that they were gratified by the dismissal. -----"Katrina Leung's nightmare is over," they said. "The courts have again made sure that truth and justice are not mere platitudes." -----They described their client as a loyal American who dedicated her life to serving her adopted country for 20 years. "She looks forward to moving on with her life as a loyal and patriotic citizen." -----Leung, a naturalized citizen, was recruited by Smith during the early 1980s to gather intelligence for the FBI during her frequent business trips to China, where she ingratiated herself with high-ranking government officials. -----But starting about 1990, prosecutors said, she began working for the Chinese as well, feeding sensitive, unauthorized information about the FBI to her handler at the Chinese Ministry of State Security. -----Smith, who had an extramarital affair with Leung for two decades, learned about her activities but covered it up and continued to vouch for her reliability, he admitted in his plea deal. -----Leung was not charged with espionage but with illegally copying and possessing classified documents that she could have used to harm the interests of the U.S. government. The documents were seized during a search of Leung's San Marino home. -----According to an FBI affidavit, Leung allegedly lifted the papers from Smith's briefcase during his many visits to her house. -----Through her attorneys, Leung denied any wrongdoing and insisted she had acted at all times at the direction of Smith and other members of the FBI's counterintelligence squad. An FBI spokesperson declined to comment on the ruling Thursday. -----Smith, who retired from the FBI in 2000, was initially charged with gross negligence in handling classified documents and faced a possible 10-year prison term. Under terms of his plea agreement, the prosecution could recommend that he receive no time in jail. -----In her ruling Thursday, Cooper said that Smith still has "everything to lose" by talking to the defense. -----"Suspended over his head, like the proverbial Sword of Damocles, is the sure knowledge that if he violates any of the terms of his plea agreement, the deal is canceled and his future returns to its former bleak state." -----Consequently, the judge said, Leung has suffered substantial prejudice as a result of the prosecution's due-process violation. -----Reaction to the dismissal among leaders in the Chinese American community was marked by a mixture of relief and continuing concern. -----Assemblywoman Judy Chu (D-Monterey Park), who knew Leung well and had worked with her, said: "I am glad for Katrina, certainly. But I am terribly disturbed by the prosecutorial misconduct involved in the case. Katrina's life has been turned upside down. And I fear that the outcome was anticlimactic, compared to the charges that were leveled against her." -----"The community asked for a fair trial and restrained its judgment when this case first broke," Chu said. "I am glad that the justice system worked in responding to that request." -----David Ma, chairman of the Chinese American Rights Organization in Monterey Park and a sometime critic of Leung, said the case had damaged the image of Chinese Americans regardless of the dismissal. -----"The legal part is one thing, because you need to prove 100% that she is guilty," he said. "From the point of the view of a loyal Chinese American, I feel very painful about this incident, because people like Katrina are taking advantage of this country." -----Stewart Kwoh, president of the Asian Pacific American Legal Center of Southern California, said: "This is a very unfortunate matter that really required a fair trial to find out the truth." With the dismissal, he said, "we may never know what really happened." -----Lily Lee Chen, former mayor of Monterey Park, said: "It would have been better if we knew exactly what had happened. The damage has been done not only to herself, in terms of her reputation, but for the Asian American community." -----Loyola University law professor Laurie Levenson said Cooper's decision contained a clear message for prosecutors: "Candor to the court is Job 1." -----Levenson, a former federal prosecutor, noted that Cooper dismissed the case on two grounds -- that there was a constitutional violation, and under the court's inherent supervisory powers. Given that, she said, the government will face "an uphill battle" if it appeals. /// Search • 106is - www.yes90.net/ - 106Government • 106ig- Katrina01 - Can you mix Wine, Women, Business and Song with Security - #Katrina01 • 106ig - Today's Puzzle: Can you mix Katrina with Wine, Women, and Gov. Busines - 106iKatrinamixWineWomenBusins • 106is - Ex-FBI Agent Is Arrested in China Espionage Case. Officials say Katrina Leung, 49, was the cause for his "stealing" the secret U.S. documents. MORE STORY • Katrina Leung U.S. / China Spy Case Tossed Out http://www.yes90.net/106government/katrinafbi#katrina http://www.yes90.net/106government/katrinafbi#Katrina01 http://www.yes90.net/106government/katrinafbi#02headline • 106is - Nuclear Lab Official Quits in Katrina FBI Spy Probe / MORE katrinafbi - Disclosure of affair with alleged Chinese double agent Katrina leads the former FBI supervisor - • 106is - Katrina03 Relished Her Local, Chinese Ties / MORE Katrina03 In her spacious San Marino home, decorated with Chinese paintings and art objects, Katrina Leung held numerous fund-raisers for politicians, including former Mayor Richard Riordan and Councilman John Ferraro. Katrina03. • Katrina01 April 2003 - Ex-FBI Agent Is Arrested in China Espionage Case Officials say Katrina Leung, 49, was the cause for his "stealing" the secret U.S. documents. -----It was reported in April 2003 -- by Federal authorities Wednesday arrested a former senior FBI counterintelligence agent in Los Angeles and a prominent local Chinese American businesswoman and charged that his negligence and her work as a double agent compromised secret U.S. documents. -----Authorities alleged that Katrina Leung, 49, carried on romances for almost two decades with former FBI Agent James J. Smith, 59, and another unidentified FBI counterintelligence supervisor in San Francisco, using her access to Smith to obtain secrets for China. At the same time, as a federal informant, she collected $1.7 million from the U.S. government, federal officials said. -----According to an FBI affidavit, Smith, who was Leung's case officer, knew as long ago as 1991 that she "was providing classified information" to Chinese intelligence agencies, but continued to allow her to have access to classified documents. -----"It is a sad day for the FBI," FBI Director Robert S. Mueller said Wednesday. "James Smith was once a special agent, sworn to uphold the rule of law and the high ethical standards of the FBI. According to today's charges, former Agent Smith not only betrayed the trust the FBI placed in him, he betrayed the American people he was sworn to protect." -----Smith was charged with gross negligence in allowing Leung access to classified material. U.S. Magistrate Victor Kenton set bail at $250,000. -----Leung was charged with illegally obtaining secret documents to the advantage of a foreign power. She was also accused of tax violations, including failure to report her income from the FBI. She was held pending a hearing next week. -----Attorneys for both defendants denied the accusations. Convictions could result in federal prison terms of up to 10 years. -----Smith's attorney, Brian Sun, described his client as "a loyal, patriotic and dedicated former agent" who is "very disappointed that the government has chosen to bring this case against him." -----Leung's lawyers, Janet I. Levine and John D. Vandevelde, released a statement calling her a patriotic American who is innocent. -----"For over 20 years she has worked at the direction and behest of the FBI. She repeatedly endangered herself in order to make significant contributions to the security and well-being of the United States and her fellow citizens. We believe that when the full story is known, Ms. Leung will be cleared of all wrongdoing and the extent of her heroic contributions to this country will be revealed," they said. -----Like the 1990 Los Angeles case of Richard W. Miller, the first FBI agent ever charged with espionage, Wednesday's charges rocked the bureau and its third-largest division. -----"This is as shocking as if someone you know had been shot and killed," said one FBI agent. -----A former agent, a colleague of Smith's who had known him for three decades, said the arrest stunned agents. "He was well respected in the office," said the former agent. -----"He got numerous citations and commendations" and several times traveled to Washington to receive commendations at FBI headquarters, the former agent said. "He had access to the highest intelligence information that went right to the White House." Sense of Betrayal -----That level of trust fueled the resentment Smith's former colleagues expressed Wednesday. "Betrayal is the word," said an FBI official in Los Angeles. "It embarrasses everyone because it makes us look so bad." -----In the affidavits, FBI Agent Randall Thomas outlined in great detail an investigation that began 13 months ago and was monitored at the highest levels of the Justice Department. The investigation included covert physical searches; interception of telephone, fax, and e-mail communications; and extensive surveillance of locations that included a hotel room where the two met. -----Smith was assigned for 22 of his 30 years with the FBI to a Foreign Counterintelligence squad in Los Angeles that focused on China. He served intermittently as supervisor of the squad. -----Last April, Thomas said, Smith was the subject of an extensive FBI surveillance authorized by the top-secret Foreign Intelligence Surveillance Court in Washington, D.C. -----Last month, Thomas said, he received a report from another FBI counterintelligence agent in Los Angeles that Smith, on at least one occasion in 1999, checked out a top-secret document from the bureau's vault in Los Angeles and did not return it until a day or two later. -----"No other FBI personnel ever retained top-secret documents overnight that they had checked out," Thomas wrote. -----In a search of Leung's San Marino home, agents recovered a 1997 FBI memorandum on Chinese fugitives that was classified secret, as well as two directories of FBI personnel and a telephone list related to an FBI investigation with the code name "Royal Tourist." -----That case, Thomas said, involved an espionage investigation into a former TRW employee who pleaded guilty in 1997 to passing secret information to China. -----During an interview with agents, Thomas said, Leung said that while Smith would allow her to review classified documents, he never allowed her to keep them. She said she would "surreptitiously" copy documents taken from Smith. Leung told investigators that Smith "would leave his briefcase open, and that the file-folder pockets in the briefcase often contained documents with the text facing out." -----"Leung said this enabled her to see documents that she wanted and that she would remove them and copy them without Smith's knowledge when he left his briefcase unattended," according to the affidavit. -----Secret Search of Luggage -----Smith continued to provide information about the FBI to Leung after he retired in November 2000, according to court documents. -----Last November, FBI agents staged a secret, court-authorized search of Leung's luggage at LAX before her departure to China. -----In the luggage, Thomas said, there was a fax from Smith to Leung and six photographs of a meeting of the Society of Former Special Agents of the FBI. -----When Leung returned to the United States, another search found that the photographs of FBI agents were no longer with her. -----As the charges were being announced Wednesday, the FBI's Mueller gave a closed-door briefing on the case to lawmakers on Capitol Hill. He also announced that internal audits were underway to examine the FBI's China counterintelligence program as well as the bureau's procedures for safeguarding classified information. -----The chairman of the Intelligence Committee of the U.S. House of Representatives, Rep. Porter J. Goss (R-Fla.), said the case was "of serious concern." -----"The director [Mueller] has advised us of the corrective steps he has taken within the Bureau as a result of this matter," Goss said in a statement. "We are satisfied that he has taken the right steps thus far." -----Authorities also said that an investigation was continuing, refusing to rule out additional charges. -----News of Smith's arrest shocked the quiet Westlake Village neighborhood where he, his wife and son have lived for many years. -----"That blows me away," neighbor Pat Lopez said. "I can't imagine." -----The Smiths were regarded as pillars of their Westlake Village community, fixtures at the annual Fourth of July barbecue block party. -----"They are just the nicest people. I find it really hard to believe. They must have something wrong," said Lisa Otis-Kisor, a neighbor and homemaker. "This is a 'Leave it to Beaver' neighborhood. They were like the Cleavers." • Katrina02 April 12, 2003 CALIFORNIA Today's Puzzle: Can you mix Wine, Women, Business and Song with the FBI, CIA and/or any other foreign Spy intelligence? Nuclear Lab Official Quits in Katrina FBI Spy Probe Disclosure of affair with alleged Chinese double agent Katrina leads the former FBI supervisor, William Cleveland, to resign from his post at Lawrence Livermore. -----The onetime head of the FBI's Chinese counterintelligence unit in San Francisco has resigned a sensitive post at the Lawrence Livermore National Laboratory after authorities said he acknowledged a longtime affair with an alleged Chinese double agent. -----The resignation of ex-FBI supervisor William Cleveland Jr. came one day after federal agents in Los Angeles arrested a retired colleague, James J. Smith, and businesswoman Katrina Leung in an espionage-related case Wednesday. -----While Cleveland has not been charged with any wrongdoing, court documents and interviews assert that the former FBI agent, like Smith, carried on a romance with Leung that spanned years. During that time, Cleveland has acknowledged to FBI investigators, he had suspicions that Leung, a prized FBI informant, was passing classified information to China's intelligence service. -----Cleveland raised his concerns with Smith, who he knew had recruited Leung, but took no other action, according to court documents. And both he and Smith continued their romantic involvement with Leung, who FBI investigators allege not only passed on information to China but was found with classified FBI documents at her home in San Marino. -----Those documents included a secret memorandum about Chinese fugitives, a telephone list of the FBI's National Security Division squad in Los Angeles and a directory of the FBI's legal attaches overseas. -----Smith, free on $250,000 bail, has not commented about the case. Cleveland did not return phone calls or e-mails seeking comment Friday. -----Leung, who has been jailed at the federal Metropolitan Detention Center in Los Angeles since her arrest, attended a brief court session Friday in which U.S. Magistrate Victor Kenton discussed procedural matters with prosecutors and defense lawyers in preparation for the defendant's bail hearing Tuesday. -----Afterward, defense lawyer Janet I. Levine told reporters that Leung had been "abused" and "manipulated" by the FBI, not the opposite, as claimed by federal prosecutors. -----"When the facts are revealed, we are confident that Ms. Leung will be shown to be a patriot of this country who did what she was told to do, and she will be exonerated," Levine said. -----Levine said the government's complaint distorts Leung's role as an FBI asset. Referring to Leung's FBI handlers, the defense lawyer said that her client "was used by them to do what they wanted done.... She did what they wanted her to do." Levine declined to be more specific. -----Throughout the FBI, details of the investigation remained closely held, with even veteran agents voicing surprise at the secrecy of the inquiry. One indication of the case's sensitivity was the fact that agents recruited for the investigation were given polygraph tests before, during and after their work on the case. -----At Lawrence Livermore, spokeswoman Susan Houghton said, "It's very important to reiterate that the FBI has not provided us with any information that would make us think that lab security in any way has been compromised. That's why we're really treating this as a personnel matter." -----The case is a further embarrassment for the University of California, which manages Livermore and its sister nuclear weapons facility, Los Alamos, on a long-standing contract for the Energy Department. -----business practices at the labs have come under intense federal scrutiny. The Energy Department has said it will decide by April 30 whether to break the contract. -----On Friday, UC spokesman Michael Reese said the university, in conjunction with lab officials, had acted as quickly as it could to limit possible damage. -----"As soon as we heard about it, his personal and computer access to the lab was immediately suspended and we requested that the [Energy Department] revoke his security clearance," Reese said. "What we've also undertaken, here and at the lab, is a thorough review of his work, to make sure there have been no compromises of security." -----In Cleveland's Monterey neighborhood of single-family homes, residents expressed shock. Cleveland and his wife, a schoolteacher, were described as extremely friendly. "We exchanged cookies at Christmas," said one neighbor. "They're run-of-the-mill people, just like we are." Just as with Smith's arrest on charges of gross negligence in handling U.S. secrets, former colleagues of Cleveland said Friday that they were stunned by disclosures that he was romantically involved with an informant now charged with illegally obtaining classified documents for China. -----"Bill was probably as well respected an agent and supervisor as I worked with in San Francisco," said retired FBI Agent Rick Smith, who served as supervisor of the office's Soviet counterintelligence squad. "He had the utmost respect from field agents as well as the hierarchy ... excellent knowledge of the work and was just a good man." -----While Cleveland's relationship with Leung showed "poor judgment," Rick Smith said, "I don't think there is anything he has done that is related to espionage. And from what I understand, he has not -- and never has been -- the focus of the investigation." -----That statement was echoed by San Francisco FBI Agent LaRae K. Quy. "I do not have any information that he is going to be indicted or anything like that," said Quy, a veteran counterintelligence agent who now serves as the office's spokeswoman. -----In court papers, the FBI has said that Cleveland is cooperating with investigators. -----"I found him to be one of the more competent agents I have ever dealt with in the FBI," said another retired FBI official. "The only reason he did not advance further is that he did not want to leave San Francisco." -----The retired official recalled that Cleveland attended the Army's language school in Monterey. -----Among Chinese intelligence agents, the official said, "he was one of the old hands in the FBI.... -----"I had always known Bill to be very straightforward, very competent," the retired official said. -----Cleveland, who left the FBI in 1993, started at the Livermore lab that same year and headed its counterintelligence program, responsible for identifying potential foreign intelligence threats to the lab and doing security briefings for employees, including those traveling overseas. In that $157,940-a-year post, Cleveland directed a staff of about 10 employees and had a "Q" clearance -- the highest security clearance at the sprawling facility in the Livermore Valley in the East Bay. -----FBI affidavits stated that Cleveland's affair with Leung stopped when the agent retired, but resumed in 1997 and 1999 -- a period when Cleveland was employed at the lab. -----Two years ago, Cleveland went part-time and worked on special counterintelligence projects for the lab. His hours and salary were reduced by 40%. -----Lawrence Livermore has a nuclear weapons and nonproliferation mission. Since the attacks of Sept. 11, 2001, it has taken on new responsibilities in the war on terrorism and has been developing devices to detect and combat biological and chemical weapons. -----Cleveland has been teaching two courses at San Jose State University's Administration of Justice department. One of them focuses on intelligence and counterintelligence. The syllabus shows that the lectures cover some of the most notorious spy cases in recent years -- "The John Walker Spy Ring," "The Aldrich Ames case," and former FBI Agent Robert Hanssen's case as well as "China's intelligence services and methodologies" and nuclear espionage from the 1970s to present. -----Inger Sagatun-Edwards, the department chairwoman, said that she hired Cleveland to teach the spring semester after he was recommended by another former FBI agent. He did so well that she asked him to take on a second course in management of law enforcement agencies when another instructor had to drop it midway through the semester. -----"He received a very positive peer evaluation," said the chairwoman. "We don't have student evaluations until the end of the semester, but it appears he was very popular. He is very engaging and very reliable." Sagatun-Edwards said she had no inkling of Cleveland's involvement in the Leung case until one of the faculty members told her about news reports. -----Records show that Cleveland and his wife purchased a home in Monterey for just over $1 million two years ago. They sold a previous home in Pacific Grove for about $500,000. -----Lynn Posey, their neighbor in Pacific Grove, said Friday that the Clevelands "were very close. They were always together." -----The couple, she said, would "ask about my kids; we exchanged flowers and baked goods -- normal, small-town neighbor stuff. If someone was sick or going to be out of town, we'd tell each other. -----"They were very warm and very friendly and very tight." -----It appears that the Clevelands moved from Dublin, which is not far from the Livermore laboratory, where they sold their home for $335,000 in 1999. -----This article was reported by Times staff writers Greg Krikorian, Tim Reiterman, Lee Romney, David Rosenzweig, Rick Schmitt, Rebecca Trounson and Henry Weinstein. • Katrina03 Today's Puzzle: Can you mix Wine, Women, Business and Song with the FBI, CIA and/or any other foreign Spy intelligence? April 2003 Katrina Relished Her Local, Chinese Ties In her spacious San Marino home, decorated with Chinese paintings and art objects, Katrina Leung held numerous fund-raisers for politicians, including former Mayor Richard Riordan and Councilman John Ferraro. -----Her house, with two stone lions in front and a pool and guest house in the back, has been the setting for entertaining important guests from China on their visits to Los Angeles. -----Leung, who is better known in the Chinese immigrant community by her Chinese name, Chan Man Yin, speaks fluent English, Mandarin and Cantonese. She has relished talking about being well-connected with important people in America and China. -----When Deng Xiao-ping was China's "paramount leader," Leung told a reporter with pride that his daughter had been her house guest. -----She is a woman who seemed to live dangerously, said a prominent Asian American community leader who has known her for many years. Like others, he spoke only on condition that his name not be used. -----"She made it known that she had a special relationship with China, a special relationship with American politicians and a special relationship with the FBI," he said. -----Whenever she organized community functions, she included FBI officials, he said, and introduced them. -----"There would be an FBI table, and I'd wonder, what are these FBI officials doing at a Chinese community event?" the community leader said. -----Another prominent Chinese American businessman who asked not to be identified said Wednesday that he remembers Leung, at several community functions, introducing James Smith, the FBI agent who is now accused of having allowed her access to secret documents, as "my good friend from the FBI." -----As president of the Los Angeles-Guangzhou Sister City Committee, Leung had ample chance to make connections with local leaders and China. -----In 1998, Leung accompanied Riordan on a trip to China. "She seemed to know all the high-level officials," said Peter Woo, who went on the trip. Woo, president of Mega Toys, was president of the Chinese Chamber of Commerce in Los Angeles at the time. -----"Katrina acted as if she were an unofficial ambassador," said another Asian American, who also went on the trip.where delegation was staying, although she was not part of the group, according to one delegation member. -----"She made it known that, when you needed to do business with China, you had to go through her," said a prominent local Chinese American business leader, who frequently travels to China. -----Leung, who came to the United States in 1963 as a high school student, said her grandfather came to Los Angeles at the turn of the 20th century, but that the family later returned to China. -----She is a self-described venture capitalist, with a degree in architectural design from Cornell and an MBA from the University of Chicago. She is married to Kam Leung, a biochemist with a PhD, and they have a son. p04 pril 15, 2003 Katrina Blames the FBI For Her Spy Activities and the arrest of her FBI boyfriend. They paid her $1.7 million. Her defense attorneys say the alleged Chinese double agent was exploited by the bureau. was the cause for his "stealing" the secret U.S. documents. -----Attorneys for longtime FBI informant and alleged Chinese double agent Katrina Leung asserted Monday that she consistently took her orders from bureau agents, one of whom is facing federal charges of allowing her access to government secrets. was the cause for his "stealing" the secret U.S. documents. -----But an FBI agent alleged in an affidavit unsealed Monday that Leung's spying for China has called into question two decades of U.S. counterintelligence investigations that relied on her information. was the cause for his "stealing" the secret U.S. documents. -----Characterized by some media as a modern Mata Hari, the 49-year-old Los Angeles businesswoman faces charges that she illegally obtained secret documents for China. was the cause for his "stealing" the secret U.S. documents. -----Her lawyers described her as a woman exploited by her FBI handlers, including former Los Angeles Agent James J. Smith, who is charged with gross negligence in allowing her access to classified material. "The FBI controlled everything" Leung did since she became an informant more than 20 years ago, her defense attorneys John D. Vandevelde and Janet I. Levine said in court papers.was the cause for his "stealing" the secret U.S. documents. was the cause for his "stealing" the secret U.S. documents. -----But on the eve of today's bail hearing for Leung, federal authorities alleged that she "deceived the FBI about her relationship with [Chinese] intelligence services for years." was the cause for his "stealing" the secret U.S. documents. -----In an affidavit, FBI counterintelligence Agent Randall Thomas alleged that Leung's statements to bureau agents during a lengthy investigation proved to be "false and/or not credible." was the cause for his "stealing" the secret U.S. documents. -----The affidavit suggests FBI officials got very worried because the bureau over the years had "acted on her information and used it in the conduct of various foreign counterintelligence investigations, including detecting efforts by the [Chinese government] to clandestinely obtain technologies that have military applications." was the cause for his "stealing" the secret U.S. documents. -----As a result, Thomas said, "The FBI must now reassess all of its actions and intelligence analyses based on her reporting. A central goal of this reassessment will be to determine which foreign counterintelligence investigations have been thwarted or compromised by her communication of information to her [Chinese] handlers, as well as by disinformation she may have provided her FBI handlers." was the cause for his "stealing" the secret U.S. documents. -----Thomas said Leung admitted receiving $100,000 from the Chinese government, saying it had given her the money because President Yang Shangkun "liked her." was the cause for his "stealing" the secret U.S. documents. -----Among the items found in a search of Leung's San Marino home was a document on Chinese fugitives that was classified secret, two directories of FBI personnel in the United States and overseas, and a document relating to a significant espionage investigation. was the cause for his "stealing" the secret U.S. documents. -----In arguing against bail for Leung, the U.S. attorney's office argued that Leung's release could pose a danger to the United States and that she might flee to China, which has no extradition treaty with the U.S. was the cause for his "stealing" the secret U.S. documents. -----In support of their motion that Leung be held without bail, government attorneys included an excerpt of a cryptic conversation Leung had with FBI Agent Peter Duerst last Dec. 18 during the investigation of her actions. was the cause for his "stealing" the secret U.S. documents. -----"You know," Leung said, "I think the perfect way to end all this, if I just ... disappear, not disappear, oh well, wouldn't that be nice. I mean, if I don't exist, if I do not exist anymore? Would it help?" was the cause for his "stealing" the secret U.S. documents. -----Duerst responded, "Uh, I don't know how we can do that [laughs]." was the cause for his "stealing" the secret U.S. documents. -----Court papers filed late Monday by the government also detailed Leung's alleged connections to top Chinese officials. During the 20 years she was an informant, Leung told the FBI that she had more than 2,100 contacts with various Chinese officials and had the personal telephone number of a high-ranking Chinese official in her phonebook, said federal prosecutors Rebecca S. Lonergan and John B. Owens. was the cause for his "stealing" the secret U.S. documents. -----Though acknowledging that she told the FBI about many of her trips to China, the government attorneys said records show that Leung -- dubbed "Parlor Maid" by her FBI handlers -- took about 15 unreported international trips between 1989 and 2002. was the cause for his "stealing" the secret U.S. documents. -----And although virtually all of Leung's immediate family is believed to live in the United States, immigration records show that she has relatives in Hong Kong and Australia. was the cause for his "stealing" the secret U.S. documents. -----Authorities said Leung and her husband have "immediate access" to $872,000 through several checking and other accounts. was the cause for his "stealing" the secret U.S. documents. -----Records, including those seized from Leung's San Marino home last December, suggest that the couple controlled 16 foreign bank accounts in Hong Kong and China over the past 20 years, said government lawyers. Some accounts had balances as high as $171,300 within the past two years, prosecutors said. was the cause for his "stealing" the secret U.S. documents. -----Authorities had acknowledged that Leung, who was considered a prized informant for the United States, was paid about $1.7 million by the FBI over the past 20 years. But Leung's attorneys said she should be released on $250,000 bail -- the same amount that Smith was released on last week. Defense lawyers Vandevelde and Levine said Leung is not a flight risk and is willing to be monitored with a global positioning device and remain in Los Angeles. She surrendered her passport last December after being interviewed by FBI agents, her lawyers said. was the cause for his "stealing" the secret U.S. documents. -----Government suggestions that Leung, a naturalized citizen, would try to flee to China because she was born there are baseless, her attorneys said. was the cause for his "stealing" the secret U.S. documents. -----"The government's allegations here are such that Ms. Leung would face death or imprisonment if she fled to China," the attorneys wrote in their bail motion. Moreover, they emphasized that Leung "has lived her entire adult life here" and has strong ties to the United States, including her husband, son and other family members, as well as property worth about $2 million. was the cause for his "stealing" the secret U.S. documents. -----Vandevelde and Levine argued that "Leung should be treated no worse than Smith." was the cause for his "stealing" the secret U.S. documents. -----Leung's lawyers provided a glimpse of what is likely to be a multi-pronged defense: Leung is a loyal U.S. citizen who was used by the FBI as a "double agent," putting her in great danger; she generated valuable assistance to the U.S. government and she gave information to the Chinese government as part of her attempt on behalf of the FBI to persuade the Chinese Ministry of State Security that she had access to key information. was the cause for his "stealing" the secret U.S. documents. -----"The FBI fed information to her and encouraged her to give it to the [People's Republic of China] in order to obtain the trust of the PRC and obtain information in return. was the cause for his "stealing" the secret U.S. documents. -----"Leung had no independent access to any government secrets or documents," the defense brief said. "She was not an FBI agent; she did not work in any secret or top-secret facilities. Rather, according to [an affidavit submitted by an FBI agent last week], the only secret items she could access were those provided to her or made available to her by her handler, Special Agent Smith." was the cause for his "stealing" the secret U.S. documents. -----The brief also states that Leung "consistently obtained reliable, valuable information from the PRC, resulting in repeated commendations to Special Agent Smith," a reference to awards that the former agent received because of information he obtained from Leung. was the cause for his "stealing" the secret U.S. documents. -----The Justice Department said last week that Leung had affairs with two FBI agents, Smith and an unnamed agent. Numerous sources have identified that person as retired San Francisco Agent William Cleveland Jr., who last week resigned from Lawrence Livermore Laboratory. was the cause for his "stealing" the secret U.S. documents. -----Defense lawyers said that although Smith and Cleveland had known since 1991 that Leung had a relationship with China's Ministry of State Security, they continued to exploit her knowledge and contacts.   p05 April 16, 2003 / Magistrate Denies Bail for Suspect in Spy Case Katrina Leung, accused of being a Chinese double agent, is called a flight risk. ----- Calling her a flight risk and potential threat to national security, a federal magistrate denied bail Tuesday to Katrina Leung, a longtime FBI informer accused of working as a Chinese double agent. -----U.S. Magistrate Victor Kenton ordered the wealthy San Marino businesswoman jailed at the federal Metropolitan Detention Center pending her trial on a charge of illegally obtaining classified documents from her FBI handler, with whom she carried on a 20-year sexual relationship. -----The agent, James J. Smith, now retired, was charged with gross negligence in the handling of national security documents and freed on $250,000 bond following his arrest April 9 along with Leung. -----During a four-hour hearing before Kenton on Tuesday, Leung's lawyers argued that she was more deserving of bail than Smith. -----At one point, defense attorney Janet Levine wondered aloud whether prosecutors were motivated by prejudice in seeking detention for Leung, a naturalized U.S. citizen who was born in China. -----Assistant U.S. Atty. Rebecca Lonergan denounced the suggestion as outrageous and untrue. Lonergan contended that if allowed to go free on bond, Leung might flee to China, where she has friends in high places and which does not have an extradition treaty with the United States. -----Although Leung, 49, and her family had offered to post as much as $2 million in property to secure her freedom, Lonergan argued that the defendant had possibly millions of dollars stashed away in hidden foreign bank accounts, money she could use if she chose to flee. -----The prosecutor described Leung's foreign assets as "enormous and complex," and charged that the suspect had concealed her overseas earnings in her annual U.S. tax returns. -----Lonergan also asserted that while working as a paid informant, Leung made about 15 overseas trips between 1989 and 2002 without telling her FBI handler. -----And just last month, the prosecutor said, Leung was offered a five-year visa to China during a meeting with the deputy chief of mission at the Chinese Embassy in Washington. -----But defense attorney Levine and co-counsel John Vandevelde accused the government of distorting the facts about Leung's conduct. -----Levine said that Leung has had opportunities to flee since December, when FBI agents searched her home and interviewed her at length over seven days. -----During her interrogation, Vandevelde said, Leung cooperated with the FBI, volunteering information and documents, despite the fact that she had been presented with a search warrant that said she was suspected of committing an act of espionage carrying a possible death sentence. The actual charge against her carries a maximum 10-year prison term. -----Vandevelde also said that Leung gave advance notice to FBI investigators about her meeting with the Chinese diplomat in Washington last month and reported afterward on what transpired. -----"Ms. Leung was exceedingly candid and forthcoming with the FBI," said Vandevelde. "In contrast, agent Smith withheld information when he was questioned in this investigation." -----The defense lawyers suggested that Leung be placed on home detention with electronic monitoring of her movements. Leung's husband, brother and sister attended the hearing and indicated they were willing to post assets for her bail. -----In deciding against releasing her, Kenton cited an FBI statement that the agency has been forced to review a number of national security cases to determine whether they were compromised by unauthorized information that Leung might have passed to China. -----"The court cannot conclude that the defendant does not pose a danger to national security," he said. /// p 06 April 20, 2003 / FBI Protecting Its Own Katrina Spy Case Storyline Other than disputing one claim by Leung's attorneys, agency declines to respond. Attorneys for an alleged Chinese double agent released a statement accusing the FBI of engaging in a cover-up that focuses on the foreign-born woman while minimizing the misdeeds of its own agents. -----Katrina M. Leung, a Chinese American businesswoman from San Marino, and former FBI counterintelligence agent James Smith were arrested earlier this month. Leung has been accused of taking classified documents and passing them to the Chinese, and Smith has been accused of gross negligence for giving Leung access to the documents. -----Matthew McLaughlin, a Los Angeles FBI spokesman, declined to comment on the document but did dispute a passage in the statement that said Leung's home was searched multiple times, but Smith's Westlake home was not. -----"We did search his house after we arrested him," McLaughlin said. -----The seven-paragraph statement by "family and friends" of Leung, 49, portrays her as a patriot who made numerous trips to China at the request of the FBI, only to be used as a scapegoat by an agency that was "embarrassed" after discovering that Smith, 59, and another former agent, William Cleveland Jr., were having affairs with Leung. -----"The FBI is doing what they have done in other cases of FBI bungling," the statement says. "They blame the non-agent and the foreign born, especially the Asian, especially the woman." -----Thom Mrozek, a spokesman for the U.S. attorney's office in Los Angeles, said he would not respond to statements or allegations made by Leung, her lawyers or her supporters outside of court. -----"She will be given an opportunity to defend herself in court," Mrozek said. -----Justice Department sources said that an investigation of Smith has been underway for almost three years, since before his retirement from the FBI's counterintelligence squad in Los Angeles in November of 2000. • 07 WAS KATRINA REALLY a double agent ? -----April 22, 2003. A special team of FBI agents has arrived in Los Angeles to question bureau personnel over management lapses that may have allowed an alleged double agent access to U.S. secrets. -----Eight agents from the FBI's inspections unit will question bureau personnel who worked in the agency's Chinese counterintelligence unit and in other parts of the office. The probe is to "assess responsibility for the management lapses," that allowed the scandal to occur, FBI director Robert S. Mueller said. -----FBI spokeswoman Cheryl Mimura in Los Angeles said the inspectors would be here "as long as it takes to finish up their inquiries. We're putting as much manpower into this as we need to. We will help them in any way we can," she said. -----A former FBI agent, who has been following the probe closely, said his understanding is that the inspectors, known inside the FBI as "the goon squad," will "turn this place upside down." -----"They are going to be asking every agent," who might have any knowledge of the scandal what they know about the case and why they did not come forward earlier, the former agent said. -----The former agent added that he had been informed that one agent in the Los Angeles office already had declined to answer questions from the inspectors. Mimura declined to respond to questions on that subject. -----On April 8, Mueller announced that Katrina M. Leung, a Chinese American businesswoman from San Marino, had been arrested and accused of taking classified documents and passing them to the Chinese. She is being held without bail. -----A former Los Angeles agent, James J. Smith, who was Leung's FBI "handler" for two decades, was arrested the same day and charged with gross negligence for allegedly permitting Leung to gain access to the documents. He has been released on $250,000 bail. -----Attorneys for Leung and Smith have said that their clients have not broken any law and said they will receive a vigorous defense. -----Smith and Leung had a sexual relationship for many years, according to allegations in court documents. FBI sources have said that the investigation began before Smith retired from the bureau's counterintelligence squad in Los Angeles in November 2000. -----During Leung's 20 years as an FBI "asset," she was paid about $1.7 million in fees and expenses. -----FBI regulations specify that whenever an informant is paid, at least two agents have to be present and verify in writing the payment was made. The former agent said he had been told that, among other matters, the FBI inspectors are investigating whether that rule was followed in Smith's dealings with Leung. Former assistant FBI director Bill Baker said he expected the probe would be thorough. "I'm sure this is a specially selected team," including agents with backgrounds in counterintelligence work, Baker said. -----"The post mortem on this will be how well did the L.A. office and the FBI [in Washington] look at the long-term relationship" between Smith and Leung, particularly because the bureau received information as long ago as 1991 that Leung was having unauthorized contacts with Chinese intelligence agencies. -----The probe here is one of three internal investigations being conducted by the FBI in this case. -----Mueller has also ordered a top-to-bottom review of practices and procedures governing how agents handle informants. And he has asked Glenn Fine, the Justice Department's inspector general, "to conduct a thorough review of the performance and management issues relating to this case." /// p08 Is the FBI Trying To Clear Katrina? April 25, 2003 - Times Sources say FBI officials knew of Katrina Leung and Agent James Smith's relationship, but looked the other way despite a potential security threat -----Smith, 59, and Leung, 49, were arrested April 9, 2003. Leung is accused of having taken classified documents and passing them to the Chinese. She is being held without bail in the Metropolitan Detention Center in downtown Los Angeles. She has denied any wrongdoing. Her lawyers have said she was merely doing what Smith and other FBI officials had asked her to do during a more than 20-year career as an FBI spy during which she was paid $1.7 million. -----Smith was charged with gross negligence for allegedly having allowed Leung access to the classified material she is suspected of providing to the Chinese. He is free on $250,000 bond. -----How Smith managed for years to sidestep the regulations governing counterintelligence sources remains a source of embarrassment for the FBI because some of his actions were known to top officials, records and interviews show. -----Although veteran FBI agents acknowledge that meeting alone with sources occurs more frequently than it should, they expressed surprise that Smith did so repeatedly and with the knowledge of superiors. -----"It is one of those things that you don't want to happen," an FBI official said. "But we know it did happen here and people, apparently, just looked the other way." -----Said another source: "People understood he had a very close relationship with her [and] though it was a technical violation of the rules, I don't think anyone saw it as the world's biggest infraction. In hindsight, however, it was." -----Shortly after the 2000 meeting with Smith, three supervisors in the Los Angeles office were summoned to Washington for a meeting with top bureau officials to discuss the developing situation regarding Smith and Leung. -----The details of what was discussed in the meeting, how matters were left when it concluded, and what happened next are unclear. -----Sheila Horan, who attended the meeting and was then an official with the FBI's national-security division, declined to comment. -----Early last year, Mueller, who had come aboard as FBI director the previous summer, removed Horan from her post; she subsequently left the bureau in a disagreement over the pace of certain China investigations, including a matter that didn't involve Leung, according to a federal law enforcement source. -----Angered that more had not been done in the investigation into the activities of Leung, Mueller contacted the Justice Department in early January 2002, said another source close to the investigation. There, Assistant U.S. Atty. Randy Bellows, who had been appointed a special counsel, launched an internal inquiry and recommended the appointment of an inspector-in-charge. The inspector's 13-month criminal investigation led to the charges against Smith and Leung. -----"Bob [Mueller] was incensed and wanted to take care of this [publicly] before it was leaked to the Hill and it appeared he was trying to cover it up," said one source close to the investigation. "He wanted to act decisively and I think he has accomplished that," said the source. Now investigators "are trying to find all the evidence to fit that theory." -----Officials at the FBI, including those at headquarters in Washington, were aware of an especially close relationship between once-prized spy Katrina Leung and her FBI handler, and allowed at least one departure from FBI policy designed to protect the integrity of the bureau's counterespionage system. -----A source close to the investigation said officials were aware for years that Agent James J. Smith would meet with Leung to pay her in person, despite a policy that normally requires the presence of two agents at such meetings, in part to discourage theft -----Top FBI brass were willing to make the accommodation because Leung, whose code name was Parlor Maid, was a particularly valuable "asset" in the FBI's effort to spy on the Chinese, said the source, a former Justice Department official. -----"She was hot," he said, "a very integral part of the Chinese program." -----What officials did not know at the time was that Smith and Leung were involved in a long-term sexual relationship, which federal prosecutors allege served as the backdrop for Leung's secret copying of classified documents and providing them to the Chinese government. -----The fact that Smith had a close friendship with Leung was an open secret in the FBI's Los Angeles field office she attended his retirement party wielding a video camera. But the disclosure that officials in the FBI's Washington headquarters were also aware of aspects of the relationship and appear to have looked the other way may shed new light on the "management lapses" that FBI Director Robert S. Mueller III has said allowed the scandal to occur. -----Recently, Mueller dispatched a team of agents from the bureau's inspections unit in an effort to get to the bottom of the case that resulted in criminal charges being filed against Leung and Smith earlier this month. Some current agents already have been questioned, and none has refused to be interviewed, sources familiar with the investigation said. -----The special treatment given to the meetings between Smith and Leung was one of several apparent opportunities to recognize the potential security threat caused by their relationship. -----The investigation into Leung and her relationship with Smith began in 2000 when "the China program went to hell," said the former Justice Department official, who is familiar with some aspects of the Parlor Maid case as it developed in Washington and Los Angeles. -----At the time, officials were concerned that the Chinese had discovered various electronic surveillance operations by the United States, according to the former Justice Department official. -----As part of the probe into what had gone wrong with the China program, FBI supervisors in Los Angeles questioned Smith about Leung. According to the source, Smith said that Leung was trustworthy and that he was confident she was not responsible for any security breaches. The meeting, which occurred shortly before Smith retired from the FBI in November 2000, was not confrontational because Smith was not suspected of any wrongdoing, the source said. -----"J.J. was a very trusted guy," the source added. "Knowing what we suspect about him now I think even if he knew she was a double agent, he thought he was smart enough to manage that." p09 Did Katrina and Her FBI Lovers Have Influence on U.S. 1996 Elections? April 27, 2003 / Lieberman asks for an inquiry in connection with spying allegations against Katrina Leung. -----Citing concern that an alleged spy case may also have tainted the nation's political system, U.S. Sen. Joseph I. Lieberman (D-Conn.) has asked federal authorities to investigate whether suspected double agent Katrina M. Leung illegally funneled money into campaigns at the direction of China. -----In a letter to U.S. Atty. Gen. John Ashcroft and FBI Director Robert S. Mueller III, Lieberman noted that the lengthy 1997 congressional investigation into the 1996 federal elections and, particularly, the Democratic campaign of then-President Bill Clinton was based largely on information provided by the FBI and other law enforcement agencies. -----"I am asking that you investigate whether firm evidence has now arisen" that Chinese officials influenced U.S. elections through campaign contributions, Lieberman wrote. -----Press accounts and public records, Lieberman said, show that Leung, a San Marino businesswoman, was active in political circles and contributed to the Republican National Committee. He cited a 1997 story in The Times in which Leung dismissed allegations that an Indonesian businessman she knew might be a Beijing political operative. -----"The prospect of a foreign government illegally influencing our political campaigns is a very troubling one, and any evidence that that might have occurred must be vigilantly investigated and pursued," Lieberman wrote. -----FBI officials have said their investigation of Leung and her FBI contact, former Los Angeles counterintelligence agent James Smith, would include every aspect of their work during a 20-year association that included a romance. Officials also have acknowledged that Smith's assignments included the bureau's 1997 campaign finance investigation. p10 Updates: Did Katrina Have Influence on U.S.1996 Elections, ask Congres? Lawmakers To Study FBI Handling of China Counter-Spy -----A letter released today says the arrest of accused Chinese double agent Katrina Leung is among cases that underscore "long-standing concern" about FBI dealings with informants. -----10:29 AM PDT, April 28, 2003 / From Associated Press - WASHINGTON -- The FBI's handling of confidential informants should be a key part of Senate hearings into the arrests on spying charges of a former FBI counterintelligence agent and an alleged Chinese double-agent, three senior senators say. -----"We believe that it is incumbent on the Judiciary Committee to examine whether there are larger security issues that continue to persist," said a letter signed by Sens. Patrick Leahy, D-Vt.; Charles Grassley, R-Iowa; and Arlen Specter, R-Pa. -----The letter to Judiciary Committee Chairman Orrin Hatch requests hearings as soon as possible into the case of former FBI agent James J. Smith and Katrina Leung, a Los Angeles businesswoman and socialite who is accused of being a Chinese double agent --; and also Smith's longtime lover. -----Smith is free on bond; Leung has been jailed without bond since the two were arrested April 9. -----The letter released today said the Leung case, as well as the FBI's handling of informants in the Boston case of fugitive mobster James "Whitey" Bulger, underscore "long-standing concern" about FBI dealings with informants. -----In the Boston case, former FBI agent John Connolly is serving a 10-year prison sentence for protecting Bulger and another crime kingpin. While senior FBI officials have portrayed Connolly and several colleagues as rogue agents, there were also at least 26 memos written between the Boston field office and FBI headquarters indicating top officials knew what was going on. -----It remains unclear exactly how much officials at FBI headquarters knew about Smith and Leung, who is accused of passing classified information she took from Smith to the People's Republic of China. Leung was Smith's intelligence asset for 18 years, during which time the two also had a sexual relationship, prosecutors say. -----"If even a portion of the allegations raised in the public affidavit are true, we cannot afford to wait until yet another breach of national security occurs before we work with the FBI to improve security and the handling of confidential informants," the senators' letter says. -----A spokeswoman for Hatch, a Utah Republican, did not immediately return a telephone call seeking reaction. -----Sen. Joseph Lieberman, D-Conn., also has asked for a Justice Department and FBI investigation. He wants to know whether any of Leung's contributions to Republican campaigns came from the Chinese government. -----Lieberman's Republican-controlled committee conducted an investigation in 1997 into whether Chinese government officials tried to influence the 1996 election with donations to Democratic candidates. The committee's findings were inconclusive. p11 May 1, 2003 / Congress Rejects Katrina Spy Case ----- May 1, 2003 / WASHINGTON The Republican leadership has rejected a request for a prompt hearing into the FBI's handling of accused China double agent Katrina M. Leung, saying any congressional oversight should be delayed until the bureau and the Justice Department complete their own reviews of the spy episode.. ----- "Given the current pending criminal case and the FBI's and Justice Department inspector general's ongoing efforts to investigate this matter, I do not believe that now is the appropriate time to conduct oversight hearings on this matter," Senate Judiciary Committee Chairman Orrin G. Hatch (R-Utah) said in a letter released Wednesday.. ----- A group of senior lawmakers Sens. Patrick J. Leahy (D-Vt.), Charles E. Grassley (R-Iowa) and Arlen Specter (R-Pa.) pressed Hatch last week for an immediate congressional investigation of the case, saying it raised major concerns about national security and the FBI's use of informants in counterintelligence operations.. ----- Leung was arrested April 9 and charged with passing classified information to China that she got from James J. Smith, a top FBI counterintelligence agent in Los Angeles who was also her lover, prosecutors say. Attorneys for Leung, who was paid $1.7 million over 20 years as an informant for the FBI, have said she was merely doing what the bureau and its agents told her to do. Smith, who retired from the FBI in 2000, was charged with negligent handling of classified information. In his response to the three senators, Hatch said he would support a "full review" by the Judiciary Committee of the FBI and Justice probes, once they are complete, "to determine whether there are additional steps the committee should take to prevent future national security breaches.". ----- Leahy said the delay is unjustified. "It's difficult for me to understand why we can't find time to come to grips with issues that are jeopardizing our security," he said. /// p12 Why No Lie Detector Test Given To Katrina? May 2, 2003 / It was suggested that suspect be tested in the mid-1990s, U.S. officials say, but she was not.\By Greg Krikorian and Scott Glover, Times Staff Writers. ----- Years before Katrina Leung's arrest for allegedly obtaining secret documents for China, officials at FBI headquarters in Washington, D.C., suggested that she submit to a polygraph test because of questions about her reliability, according to federal law enforcement officials.. ----- But Leung, who allegedly worked for China for decades while the FBI thought she was spying for the United States, never took the test in the mid-1990s.. ----- One former Justice Department official involved in the Leung case said she refused to take the test. Other sources close to the investigation say that although it is certain she did not take a test, the reason is unclear. The sources said they could find no written record of any refusal by Leung.. ----- "All we know is that she didn't take it," said one official.. ----- Janet I. Levine, one of Leung's lawyers, said her client had never refused an order to take a polygraph test. "Katrina Leung did as she was directed, and was at all times a loyal American," Levine wrote in a prepared statement.. ----- In a telephone interview, Levine said she knew neither whether the topic of a polygraph had been broached on a less formal basis nor whether Leung may have said she preferred not to take the exam.. ----- Leung was arrested April 9 with her longtime handler, former FBI agent James J. Smith. Smith's attorney, Brian Sun, said that his client never received a directive from FBI headquarters in the mid-1990s to have Leung take a polygraph.. ----- It was unclear whether a lie detector test could have helped the FBI uncover Leung's alleged treachery years before May 2000, when the bureau launched an investigation into her and Smith, her longtime FBI contact and alleged lover.. ----- Sources close to the investigation say that Leung, a highly regarded informant for nearly two decades, passed two lie detector tests in the 1980s. The suggestion that she be given another exam in the mid-1990s was prompted by "inconsistencies" in some of her reports to the FBI, but it was never pressed by headquarters, according to one official.. ----- Nearly a month after the arrests of Leung and Smith, current and former FBI officials continue to voice concern that the bureau missed several opportunities to uncover the case years earlier. "If the informant was asked and declined to take a polygraph, it would certainly be another alarm," said one former assistant director.. ----- Rep. Jane Harman (D-Venice), the ranking Democrat on the House Permanent Select Committee on Intelligence, said Thursday that she remains troubled by the potential damage to national security allegedly caused by Leung and Smith.. ----- "I am very concerned about this case and I don't know how far it will go," Harman said in an interview. "No one is claiming yet that we have gotten to the bottom of this case.". ----- Harman, who was briefed Thursday by FBI Director Robert S. Mueller and CIA Director George Tenet, praised the breadth and depth of the FBI's current investigation. She said she was optimistic that "the same vigilance that unearthed this problem is being employed" by the FBI as it investigates the Leung case.. ----- She said she had received assurances that investigators would leave "no stone unturned" in pursuing the case well beyond the Los Angeles field office and FBI headquarters.. ----- "If it goes to San Francisco and other offices, so be it," said Harman.. ----- As far back as 1991, records and interviews show, Leung's actions drew concerns at the FBI. Though a prized "asset," the Chinese businesswoman rankled counterintelligence officials when it was discovered that she had made unauthorized contact with a Chinese official.. ----- A now-retired FBI agent in San Francisco approached then-Agent Smith with worries about Leung after discovering her voice on an "intercepted conversation" with a Chinese official. That same year, the two agents discussed the issue with FBI officials in Washington, where it was decided that Leung's actions would be handled by Smith.. ----- The former Justice Department official involved in the Leung case said that when Leung declined to take the exam, officials at FBI headquarters "did not press" the matter because they were worried about losing her as a counterintelligence source.. ----- Other law enforcement officials versed in counterintelligence, however, said it would not be surprising if Leung or any longtime source would decline a polygraph, especially in the murky world of informants and espionage.. ----- "It was not outside the norm for an informant to refuse a polygraph and we knew that was a possibility," said one federal law enforcement source. "You are not dealing with choir boys here. They are reluctant because of their past or because of things they are currently involved in.". ----- One former FBI official who worked for years in counterintelligence agreed. "This is always a difficult area when you are dealing with long-term assets," said the official, who had no role in this case. "To be successful at what they do, informants or sources have to be liars, so there is almost no way they could ever pass a polygraph.". ----- But one current counter-terrorism agent disagreed, insisting that polygraph examinations with all their potential pitfalls can be helpful in assessing an informant's credibility. And, the agent said, any source worth keeping had to be willing at any time to submit to a polygraph.. ----- "If one of mine tried to [refuse], I would make it clear this is not open to discussion," said the agent. "Either you do this or the relationship is over. It is not an option.". ----- Even with her later arrest as a suspected double agent, the sources agreed, it is impossible to say whether a polygraph could have helped the FBI uncover Leung's alleged betrayal.. ----- "I don't think anybody knows whether the polygraph would have made a difference," one official said. /// END

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