Details Are Disclosed in Case of Alleged Agent

Times Staff Writer

The U.S. government’s case against accused Chinese double agent Katrina Leung revolves around three national security documents that she allegedly lifted from the briefcase of the FBI counterintelligence officer who was her longtime handler and lover.

Though the general nature of those documents is described in Leung’s indictment and in an accompanying FBI affidavit, new details about their contents have surfaced in recent legal filings by federal prosecutors.

They include the first disclosure of what Leung is alleged to have talked about with a Chinese spy agency official in telephone conversations intercepted by U.S. authorities. Among the topics was an FBI agent’s counterintelligence assignment in China.

The other two documents are identified in court papers as a copy of a secret cable from an FBI agent in Hong Kong and a list of FBI agents assigned to the investigation of Peter Lee, a TRW scientist who pleaded guilty in 1997 to passing classified secrets to Chinese scientists.


The three documents were allegedly recovered during searches of Leung’s San Marino home a few months before she and retired FBI agent James J. Smith were arrested.

Those documents are among more than 100,000 pages of records that prosecutors say they have provided to the defense so far. Both sides continue to battle over how much more should be disclosed.

Leung, a naturalized citizen active in Los Angeles’ Chinese American community, was recruited by Smith in the early 1980s to gather intelligence on China. She became a highly prized FBI asset, bringing back valuable information during frequent trips to the mainland, where she hobnobbed with high-ranking Chinese officials, feeding them supposedly harmless information provided by the FBI.

Starting about 1990, however, Leung began working for the Chinese as well, supplying their spy agency, the Ministry of State Security, with information about her FBI employers, according to federal prosecutors.


Leung, 49, has not been charged with espionage; she has been charged with illegally copying and possessing national security documents that the prosecution says she intended to use, or could have used, to harm the interests of the United States. She says she is innocent.

During a search of her home in December 2002, investigators reportedly retrieved a five-page, single-spaced FBI document detailing eight telephone conversations Leung had with her handler at the Ministry of State Security in 1990 and 1991. Leung had kept it in a locked safe.

According to the prosecution’s recent legal briefs, the document contains two verbatim transcripts and six summaries of conversations between Leung -- code-named Luo Zhungshan by the Chinese -- and her Chinese handler, identified as Mao Guohua.

The document shows that the two talked about an FBI agent’s upcoming trip to China on a counterintelligence assignment, the flight to the United States by relatives of a Chinese defector and travel to China by a subject of an FBI counterintelligence investigation. Those people were not identified in the prosecution briefs.


According to federal authorities, Smith learned of Leung’s alleged double-dealing in 1991 from a fellow FBI counterintelligence agent in San Francisco. Smith is accused of having covered up the revelations, including his sexual affair with Leung, while continuing to vouch for her credibility as an FBI asset.

The second document allegedly found in Leung’s home was a seven-page electronic communication from the FBI’s legal attache in Hong Kong, dated June 12, 1977, and labeled secret.

The prosecution said in its recent legal filings that the letter contained information from a code-numbered intelligence source about China’s intelligence-gathering capabilities and counter-surveillance methods -- including its use of satellite technology -- and details about the workings of the Ministry of State Security and the Ministry of Public Security. The latter is China’s domestic spy agency. The attache’s letter reportedly included a discussion of a possible FBI response to China’s spying activities, including the “tasking” of certain FBI offices.

Leung has not been accused of relaying the information in that document to the Chinese.


The third document reportedly seized by the FBI dealt with Operation Royal Tourist, the FBI’s six-year investigation of TRW scientist Lee. The classified secrets he gave China might have aided that country’s nuclear weapons program. Lee was sentenced by a federal judge in Los Angeles to 12 months in a halfway house and three years’ probation.

The document reportedly found in Leung’s home was alleged to have been prepared while Lee was under investigation. It is said to contain a list of agents assigned to the case, the off-site location where they worked, their specific assignments and their office, cellular, beeper and home telephone numbers,

“I remember Peter Lee is somebody they care a lot about,” Leung is quoted as telling FBI interrogators, referring to the Ministry of State Security, in a tape-recorded interview after the search of her home.

Leung said she was “very sure” that her Chinese handler had asked her about the case after Lee’s arrest, but a partial transcript of the interview that was declassified doesn’t indicate whether she had turned over any information from the FBI document to her Chinese superiors.


The government’s recent legal papers indicate that the defense is asking for many more records, including the actual tapes of Leung’s phone conversations with the Chinese spymaster and any other records about him.

In a legal brief opposing further disclosures, Assistant U.S. Atty. Michael Emmick wrote that the defense appeared to be hoping to force the government to drop the charges, rather than reveal highly secret and sensitive information.

U.S. District Judge Florence-Marie Cooper, who is presiding over the case, has scheduled closed hearings next month to hear arguments.

A spokesman for the U.S. attorney’s office said prosecution would have no comment on the recent legal filings and pretrial discovery dispute. Defense lawyers John D. Vandevelde and Janet I. Levine issued a statement expressing frustration over what they said was their inability to comment freely.


“Because of restrictions on our use of information classified by the government,” they said, “we cannot publicly file papers or publicly comment on them.” Leung, who is free on bail, is expected to go on trial next year.

She is to be tried separately from Smith, 60, who is charged with criminal gross negligence in his handling of national defense documents, making false statements to FBI agents and depriving the agency of his “honest services.”