Senators Seek Probe Into FBI’s Managing of Informant

Times Staff Writer

A group of lawmakers is calling for a congressional probe of the FBI’s handling of suspected China double agent Katrina M. Leung, saying that the bureau’s system for handling confidential informants may be flawed.

In a letter to Judiciary Committee Chairman Orrin G. Hatch (R-Utah) released Monday, three senators requested hearings on the “larger national security issues” of the arrests earlier this month of Leung and retired Los Angeles FBI counterintelligence agent James J. Smith. Leung has been accused of passing to China classified information that she took from Smith during a 20-year relationship in which the two were also sexually involved, prosecutors say.

“If even a portion of the allegations ... are true,” the letter said, “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 letter was signed by Sens. Patrick J. Leahy (D-Vt.), Charles E. Grassley (R-Iowa) and Arlen Specter (R-Pa.). All three have been vocal critics of the FBI.

A spokeswoman for Hatch didn’t return a telephone call seeking comment.


The missive follows a request Friday by Sen. Joseph I. Lieberman (D-Conn.) seeking a Justice Department probe into whether Leung, a politically wired San Marino businesswoman, may have illegally funneled money from the Chinese government into Republican campaigns.

Several years ago, Senate Republicans investigated the possibility that China tried to influence the 1996 presidential election by funneling money to Democrats; the results were inconclusive.

In the wake of the China incident, the FBI has launched an internal investigation into how it uses and manages counterintelligence “assets.”

One line of inquiry is whether intelligence officers should continue handling their own informants when they become supervisors. Critics say that can present potential conflicts of interest when questions arise about the informants, and in deciding how much and whether the informants should be paid.


Another top FBI counterintelligence specialist, William Cleveland Jr., has told investigators that he alerted Smith as long ago as 1991 that he feared Leung was passing secrets to China, according to an FBI affidavit filed as part of the criminal case against Leung and Smith.

Cleveland, who was not named in the affidavit but was identified through sources, is cooperating with investigators, according to government officials who allege that Cleveland too had a sexual relationship with Leung. Cleveland has not been available for comment.

The Times reported last week that FBI officials in Washington and Los Angeles were aware for years that Smith would meet with Leung alone to pay her in person, despite a policy requiring two agents at such meetings. That policy is aimed, in part, at discouraging theft.

Officials were willing to make the concession because they considered Leung to be such a valuable asset, a former Justice Department official said. Over the years, the government paid a total of about $1.7 million to Leung, whose FBI code name was Parlor Maid.

Smith, who has been charged with negligent handling of classified material, is free on bond. Leung has been jailed without bond since the two were arrested April 9.Leung’s attorneys say she merely did what Smith and other FBI officials asked her to do. Smith’s lawyers have asserted that FBI headquarters knew of the possibility that Leung engaged in unauthorized discussions with Chinese officials.