FBI Removes Counterintelligence Chief

The FBI has abruptly reassigned the longtime head of its counterintelligence program in Los Angeles, the first local fallout from the espionage scandal involving a former agent and his Chinese American informant.

In a shakeup that took effect Monday, Daniel Sayner, a high-ranking and highly regarded FBI veteran, was replaced by another senior counterintelligence official from the Los Angeles office, Lance Woo.

Sayner, who spent years as assistant special agent in charge of counterintelligence in Los Angeles, turned down a lateral transfer to another supervisory post, deciding to return to street duty as an agent if he could not run the counterintelligence program, sources said.

Although FBI officials in Washington and Los Angeles declined to comment on the reassignments, Ron Iden, assistant director in charge of the Los Angeles office, praised Sayner’s service.

“Dan Sayner has had an outstanding career in the FBI in which he has distinguished himself in each assignment,” Iden said in a statement.

Neither Sayner nor Woo returned calls seeking comment.

The reassignments came two months after the FBI announced the arrests of former Los Angeles Chinese counterintelligence supervisor James “J.J.” Smith and his 20-year informant and lover, Katrina Leung. Federal indictments have charged Smith with gross negligence in allowing Leung access to classified information and Leung with obtaining, copying and keeping national security documents. Both have pleaded not guilty.

Attorneys for Smith and Leung have minimized the alleged damage to national security caused by their clients’ actions. The lawyers have noted that, as far back as 1991, top FBI officials knew and seemed unconcerned about Leung’s allegedly improper contacts with Chinese agents.

But Justice Department officials have portrayed the actions by Smith and Leung as a significant blow to years of U.S. espionage efforts involving China.

“It caused serious damage to our China program,” one top counterintelligence official said recently in an interview, adding: “I don’t think the worst is over.”

Long before arresting Smith and Leung in April, FBI officials in Los Angeles fired one local agent for potentially exposing a Chinese counterintelligence investigation.

The agent, who was not part of Smith’s squad, was accused of improperly discussing information about an ongoing FBI investigation with someone who had no reason to know about it -- an action that was seen as grounds for firing, though not worthy of criminal prosecution.

When he learned about that case and the concerns about former Agent Smith in December 2001, FBI Director Robert S. Mueller III removed a top national security division official at headquarters.

Until now, however, no high-ranking officials in the local FBI office had been reassigned since the FBI investigation of Smith and Leung began.

One person in the Los Angeles FBI office said he thought many agents consider Sayner a scapegoat. “It is all being directed by headquarters.”

A former Los Angeles FBI agent, who said Sayner had refused a job as assistant special agent in charge of administrative matters for the Los Angeles office, said: “He’s the fall guy.”

Though his assignment in the stealthy world of counterintelligence kept much of Sayner’s work secret, he did gain public attention over the years.

In 1986, Sayner’s affidavit outlined an FBI investigation into a Soviet employee of the United Nations who was arrested in New York as a spy.

Three years ago, Sayner surfaced in a much more visible fashion during congressional hearings into another alleged espionage case in Los Angeles, this one supervised by former Agent Smith.

The hearings focused on the federal prosecution of Peter Lee, a Manhattan Beach scientist who pleaded guilty in 1997 to charges of passing on classified secrets that may have aided China’s nuclear weapons program.

The FBI investigation, code named Royal Tourist, spanned years, and led to Lee’s being sentenced to 12 months in a halfway house and three years’ probation.

The sentence angered some in Congress who believed Lee would have faced a much stiffer penalty had the FBI conducted a more thorough investigation. Lawmakers were specifically angered that the FBI had allowed a warrant under the top-secret Foreign Intelligence Surveillance Act to lapse when they were investigating Lee.

But during a congressional hearing, Sayner told a subcommittee that, under federal regulations, a warrant can be renewed only if agents have evidence of new information justifying continued surveillance. In Lee’s case, Sayner said, the information was stale at the time a new warrant would have been requested.

In the current case against Smith and Leung, authorities have alleged, one of the national defense documents illegally obtained by Leung dealt with the Lee investigation.