U.S. SPY NET­WORK

New Straits Times - - World -

episode shows how suc­cess­ful the Chi­nese were in dis­rupt­ing US spy­ing ef­forts and steal­ing se­crets years be­fore a well-pub­li­cised breach in 2015 gave Bei­jing ac­cess to thou­sands of gov­ern­ment per­son­nel records, in­clud­ing in­tel­li­gence con­trac­tors.

The CIA con­sid­ers spy­ing in China one of its top pri­or­i­ties, but the coun­try’s se­cu­rity ap­pa­ra­tus makes it hard for Western spy ser­vices to de­velop sources there.

At a time when the CIA is try­ing to fig­ure out how some of its most sen­si­tive doc­u­ments were leaked onto the In­ter­net two months ago by Wik­iLeaks, and the FBI in­ves­ti­gates pos­si­ble ties be­tween Pres­i­dent Don­ald 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.

De­tails about the in­ves­ti­ga­tion have been tightly held. Ten cur­rent and for­mer US 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 CIA’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 cit­i­zens who the CIA 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 re­alised they had a prob­lem: As­sets in China, one of their most pre­cious re­sources, were dis­ap­pear­ing.

The FBI and CIA opened a joint in­ves­ti­ga­tion run by top coun­ter­in­tel­li­gence of­fi­cials at both agen­cies. Work­ing out of a se­cret of­fice in North­ern Vir­ginia, they be­gan analysing ev­ery op­er­a­tion be­ing run in Bei­jing.

One for­mer se­nior US 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 US Em­bassy was scru­ti­nised, no mat­ter how high rank­ing. Some in­ves­ti­ga­tors be­lieved the Chi­nese had cracked the en­crypted method that the CIA used to com­mu­ni­cate with its as­sets. Others sus­pected a traitor in the CIA, 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 CIA’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 was 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 by in­fil­trat­ing Tai­wanese in­tel­li­gence, a US part­ner, ac­cord­ing to two for­mer of­fi­cials. And the CIA had dis­cov­ered Chi­nese op­er­a­tives in the agency’s hir­ing pipe­line, ac­cord­ing to of­fi­cials and court doc­u­ments.

But the CIA’s top spy hunter, Mark Kel­ton, re­sisted the mole the­ory, at least ini­tially, for­mer of­fi­cials say.

Kel­ton had been close friends with Brian J. Kel­ley, a CIA of­fi­cer who in the 1990s was wrongly sus­pected by the FBI of be­ing a Rus­sian spy. The real traitor, it turned out, was Hanssen.

Kel­ton of­ten men­tioned Kel­ley’s mis­treat­ment in meet­ings dur­ing the China episode, for­mer col­leagues said, adding that he would not ac­cuse some­one with­out iron­clad ev­i­dence.

Those who re­jected the the­ory at­trib­uted the losses to sloppy US trade­craft at a time when the Chi­nese were be­com­ing bet­ter at mon­i­tor­ing US es­pi­onage ac­tiv­i­ties in the coun­try. Some FBI agents be­came con­vinced that CIA han­dlers in Bei­jing too of­ten trav­elled the same routes to the same meet­ing points, which would have helped China’s 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 CIA.

By 2013, the FBI and the CIA con­cluded that China’s suc­cess in iden­ti­fy­ing CIA agents had been blunted — it is not clear how — but the dam­age had been done.

The CIA had tried to re­build its net­work of spies in China, of­fi­cials said, an ex­pen­sive and time­con­sum­ing ef­fort led at one time by the for­mer chief of the East Asia Di­vi­sion.

A for­mer in­tel­li­gence of­fi­cial said the for­mer chief was bit­ter be­cause he had worked with the sus­pected mole and re­cruited some of the spies in China who were ul­ti­mately ex­e­cuted. NYT

AFP PIC

The num­ber of United States as­sets lost in China ri­valled those lost in the Soviet Union and Rus­sia dur­ing the be­tray­als of Aldrich Ames and Robert Hanssen.

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