http://www.bloomberg.com/apps/news?pid=20601087&sid=ab2PiDl1qW9Q&refer=home
China's Spying Overwhelms U.S. Counterintelligence (Update2)
By Jeff Bliss
April 2 (Bloomberg) -- In a Santa Ana, California, courtroom,
66-year-old engineer Chi Mak listens to federal prosecutors describe
how he and his family stole secrets from his employer, L-3
Communications Holdings Inc. The alleged target: data about Navy
submarine engines that run silently to avoid detection.
U.S. intelligence officials say the Mak case is unusual -- not in the
nature of the charges brought against him, but that charges were
brought at all.
For every person caught and accused of passing U.S. military and
trade secrets to China, they say, scores of others go undetected.
Taking advantage of an outmanned counterintelligence effort drained
and distracted by the wars in Iraq and against al-Qaeda, current and
former officials say, China has systematically managed to gain
sensitive information on U.S. nuclear bombs and ship and missile designs.
``Iraq and the struggle with terrorism are sucking resources across
the board,'' says Joel Brenner, the top counterintelligence official
in the office of Director of National Intelligence Michael McConnell.
Meanwhile, ``the Chinese are really making a run at us.''
Adds Keith Riggin, a former senior official at the Central
Intelligence Agency who focused on China issues: ``If the American
people knew the number of officers going against the Chinese, they
would be appalled.'' He says his frustration with the lack of
resources was one reason he ended a 24-year career in 2006.
`Troublesome'
While 140 foreign intelligence services are trying to penetrate U.S.
agencies, China's is the most aggressive, Brenner says. He describes
China's activities as ``an intensifying and troublesome pattern.''
Chinese officials say the U.S. allegations are meritless.
``I wonder why people always feel threatened by others and treat
others as thieves,'' Qin Gang, a spokesman for the Foreign Ministry,
said at a March 15 press briefing in Beijing. ``It indicates these
people have a chip on their shoulders and have fragile psychologies.''
While the Federal Bureau of Investigation tripled the size of its
China unit in 2001, plans for further expansion were scotched when
the Iraq war began, says Rudy Guerin, a China expert who retired from
the bureau last year. David Szady, the FBI's former assistant
director for counterintelligence, says the FBI should hire another
1,500 agents, and most should be used against China's espionage
within the U.S.
More Agents
Stephen Kodak, an FBI spokesman, declines to say how many more might
be necessary. At the same time, he adds that ``the bureau would
always welcome additional assets.''
Central Intelligence Agency spokesman Paul Gimigliano says his agency
has enough resources, and that ``it would be wrong to suggest that
other priorities have diluted the attention we pay to China. Over the
past five years, the opposite has been true.''
The FBI spent $2.2 billion on counterterrorism and
counterintelligence programs last year; the CIA budget is classified.
The U.S. won't disclose how many counterintelligence agents are
working on China-related issues.
U.S. officials say there's overwhelming evidence that China has a
well-thought-out plan to employ thousands of professional spies and
amateurs to get sensitive U.S. military and business data, sometimes
directly from sympathetic employees, sometimes through a joint
venture or third party.
Submarine Data
Mak, his wife, brother, sister-in-law and nephew were indicted on
charges of conspiring to export U.S. defense articles to China's
government. In court papers, prosecutors say he copied submarine data
from L-3's Anaheim, California-based Power Paragon unit onto compact
discs and enlisted the other family members to encrypt the
information and help smuggle it to China. Brenner says the disks also
contained information on the U.S. Navy's next-generation DD(X) warship.
Under questioning, Mak admitted sending information to Chinese
operatives since 1983 on technology that included radar systems of
Aegis cruisers, which are used to defend against multiple missile
attacks, Brenner says.
Mak and his relatives pleaded innocent to the charges. His lawyer,
Ronald Kaye, says he was taking the disks for a conference with
fellow engineers, and that the information about the Navy engine was
obsolete. The engineer also got approval from his supervisor to make
presentations at the conference, Kay says.
`Asset to His Country'
Mak ``was not only an asset to the company but a profound asset to
his country,'' he says. Mak's relatives will go on trial in May.
U.S. officials say China's effort encompasses industrial secrets as
well as national-security ones. Brenner cites the case of Gary Min, a
DuPont Co. chemist who admitted obtaining information on company
products, including materials used in airplane construction, that
prosecutors valued at $400 million.
Authorities say that between August and December 2005, Min, 43,
downloaded 22,000 confidential abstracts from the Wilmington,
Delaware-based company's electronic library. The documents included
information on all DuPont's major product lines as well as emerging
technologies.
Some of the searches focused on Vespel, a synthetic resin used to
coat car, airplane and oil pump parts, and Declar, a plastic material
used in the automotive and energy industries and in airplane
interiors, according to court papers.
Shredded Documents
U.S. law-enforcement authorities said that when they searched Min's
Grove City, Ohio, home, they found computers containing confidential
files, garbage bags filled with shredded company documents and the
remains of DuPont papers that had been burned in the fireplace. In
court documents, DuPont said the information would be ``highly
valuable'' on the open market in ``foreign countries, specifically China.''
A call to Min's lawyers wasn't returned. Min hasn't been charged with
being a Chinese spy.
Brenner says his office is still assessing the damage from another
case involving Katrina Leung, who the FBI had used for 20 years as a
double agent to obtain information from the Chinese, and who
prosecutors in turn accused of being a Chinese agent herself.
Authorities accused Leung, 52, of taking documents from James Smith,
head of the FBI's Chinese counterintelligence operation in Los
Angeles, over the course of a nearly 20-year affair with him.
Peter Lee
Some of those documents related to ``Royal Tourist,'' the FBI code
name for the investigation of Peter Lee, an employee of defense
contractor TRW Inc. Lee, who was accused of giving radar technology
being developed to track submarines to Chinese scientists, pleaded
guilty in 1997 to willful transmission of national defense
information to a person not entitled to receive it.
While the case against Leung was dismissed in 2005, Smith pleaded
guilty to making a false statement to the FBI about his relationship
with her. Smith was one of the FBI's most seasoned China experts, a
resource the agency has struggled to replace, intelligence officials say.
The CIA also hasn't been able to replace its veteran China experts
when they retire, Riggin says. ``We're losing huge experience in this area.''
With the CIA occupied with preventing U.S. government secrets from
falling into the wrong hands, Riggin and others say, companies doing
business in China are especially vulnerable to losing non-defense
information. U.S. businesses are paying particular attention to the
first intellectual-property suit brought in a Chinese court by Santa
Clara, California-based Intel Corp., the world's biggest semiconductor maker.
Intel Suit
In the suit, Intel said Shenzhen Dongjin Communication Tech Co. Ltd.
illegally used its software, which Dongjin had obtained through a
third party, for network communication cards in its own products.
Shenzhen Dongjin has countersued, accusing Intel of being an illegal monopoly.
Spokesmen for Shenzhen Dongjin haven't responded to e-mails and phone
calls for comment. A ruling may come as early as next month, says
Intel spokesman Chuck Mulloy.
Whatever the ruling, U.S. companies face an uphill battle to keep
secrets secret, says Thomas Donohue, president of the U.S. Chamber of
Commerce, the nation's largest business group.
``If you're going to make a huge move toward innovation, well, get
ready in this system to lose it,'' he told reporters March 26 in
Beijing. ``Because somebody's going to steal it.''
To contact the reporters on this story: Jeff Bliss in Washington
jbl..._at_bloomberg.net .
Last Updated: April 2, 2007 11:07 EDT
----------------------------------------------------------------------------------------------------
World Class, Professional, Ethical, and Competent Bug Sweeps, and
Wiretap Detection using Sophisticated Laboratory Grade Test Equipment.
----------------------------------------------------------------------------------------------------
James M. Atkinson Phone: (978) 546-3803
Granite Island Group Fax: (978) 546-9467
127 Eastern Avenue #291 Web:
http://www.tscm.com/
Gloucester, MA 01931-8008 E-mail: mailto:jm..._at_tscm.com
----------------------------------------------------------------------------------------------------
We perform bug sweeps like it's a full contact sport, we take no prisoners,
and we give no quarter. Our goal is to simply, and completely stop the spy.
----------------------------------------------------------------------------------------------------
Received on Sat Mar 02 2024 - 00:57:27 CST