WASHINGTON (NYTIMES) - A former CIA officer suspected by investigators of helping China dismantle United States spying operations and identify informants has been arrested, the Justice Department said Tuesday (Jan 16).
The collapse of the spy network was one of the US government’s worst intelligence failures in recent years.
The arrest of the former officer, Jerry Chun Shing Lee, 53, capped an intense FBI inquiry that began around 2012, two years after the CIA began losing its informants in China.
Investigators confronted an enduring mystery: How did the names of so many CIA sources, among the agency’s most dearly held secrets, end up in Chinese hands?
Some intelligence officials believed that a mole inside the CIA was exposing its roster of informants.
Others thought that the Chinese government had hacked the CIA’s covert communications used to talk to foreign sources of information.
Still other former intelligence officials have also argued that the spy network might have been crippled by a combination of both, as well as sloppy tradecraft by agency officers in China.
The counterintelligence investigation into how the Chinese managed to hunt down US agents was a source of friction between the CIA and FBI.
Lee, who left the CIA in 2007, has been living in Hong Kong and working for a well-known auction house.
He was apprehended at Kennedy Airport in New York on Monday and charged in federal court in Northern Virginia with the unlawful retention of national defense information.
He appeared in Brooklyn federal court on Tuesday and is being held there while awaiting transfer to Virginia.
He does not have a lawyer, a Justice Department official said.
The FBI apparently learned that Lee was travelling to the United States and scrambled to charge him on Saturday.
Lee had previously travelled to the United States in 2012 to live with his family in Virginia.
It was during that trip that FBI agents searched his luggage during hotel stays in Hawaii and Virginia and found two small books with handwritten notes that contained classified information.
He later made his way back to Hong Kong after being questioned by FBI agents in 2013. It is unclear why Lee decided to risk arrest by coming to the United States this month.
In the books the agents found, Lee had written down details about meetings between CIA informants and undercover agents, as well as their real names and phone numbers, according to court papers.
Prosecutors said that material in the books reflected the same information contained in classified cables that Lee had written while at the agency.
More than a dozen CIA informants were killed or imprisoned by the Chinese government.
The extent to which the informant network was unravelled, reported last year by The New York Times, was a devastating setback for the CIA.
Officials said the number of informants lost in China rivalled losses in the Soviet Union and Russia during the betrayals of both Aldrich Ames and Robert Hanssen, formerly of the CIA and the FBI. They divulged intelligence operations to Moscow for years.
The CIA declined to comment on Lee’s arrest.
According to court documents, Lee served in the US Army from 1982 to 1986 and joined the CIA in 1994 as a case officer.
Former agency officials said he also served in China during his career. Those who knew him said he left the agency disgruntled after his career plateaued.
Prosecutors said that both before and after he and his family moved back to the United States in 2012, Lee met with former CIA colleagues and other government employees.
As the agency began losing assets in China, it was not clear at first that the losses were systematic, but as the disappearances mounted, the US intelligence community eventually realised it had a major problem.
The case had frustrated counterintelligence officials in the FBI and CIA as they sought to determine how the Chinese had disrupted agency operations in the country.
The FBI suspected an insider had revealed sensitive information to the Chinese government, a theory not initially embraced by the CIA.
Lee eventually became a prime suspect in the hunt for a traitor.
Former intelligence officials said that the FBI lured Lee back to the United States as part of a ruse and he was interviewed five times in May and June 2013.
The authorities said he never disclosed the two books, described as an address book and a datebook, to investigators.
Former officials said they were surprised that Lee came back to the United States in 2012, knowing he might be under FBI suspicion.
Details about the FBI operation to lure him back were tightly held, but former intelligence officials said he returned with the promise of a possible contract with the CIA.
Many former agency officers leave the agency and then return on contract.
At some point after the FBI interviewed him, Lee returned to Hong Kong.
Why the FBI did not arrest Lee after originally finding the classified material in his notebooks remains unclear.
The FBI declined to comment.
Officials are concerned that Lee’s case and at least one other represent a troubling pattern of Chinese intelligence targeting former agency officials, an easier task than trying to recruit current CIA operatives.
In June, a former CIA officer was charged with providing classified information to China and making false statements.
Prosecutors said that the former officer, Kevin Patrick Mallory, 60, of Leesburg, Virginia, had top-secret documents and incriminating messages on a communications device he brought back from Shanghai.
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 Claiborne, who pleaded not guilty, Chinese agents wired cash into her bank account and lavished her with thousands of dollars in gifts.