US FBI/Comments on China Spying

This is the standard refrain among U.S. counterintelligence specialists, some of whom believe America has never fully understood how the Chinese wage the espionage war. Chinese spies have not been caught making "dead drops" or using other clandestine techniques that Americans saw during the Cold War era. Here, author Dan Stober, former U.S. Ambassador to China James Lilley, former FBI Special Agents Edward Appel and T. Van Magers, and former Energy Department Director of Intelligence Notra Trulock describe and evaluate China's espionage tactics.
	Author, A Convenient Spy: Wen Ho Lee and the Politics of Nuclear Espionage The Soviets used blackmail. The Soviets used people who had an ideological bent towards communism, and the Soviets and the United States would find weaknesses in people and exploit that. … The Chinese, on the other hand, had a much different approach. They would send their scientists to America, and of course lots and lots of students come to the United States. Many of them stay here, and the approach is often described as a thousand grains of sand, which some people have objected to, but it's a pretty good description actually. Everybody gathers a little bit of information -- I don't mean every Chinese person in America, but everybody that's working for them -- and they assemble it. When Chinese scientists come to the United States, they make contacts. It's alarming to FBI agents and members of Congress who have no idea that there are Chinese scientists at Los Alamos National Laboratory, at Lawrence Livermore, and the first time they hear this, that "My God, in Los Alamos, you're telling me there's Chinese nuclear weapon scientists? This can't be true." And of course the reverse is true, that American scientists have been going to China since around 1980 and once they get there, the techniques of gathering information used by the Chinese, first of all, is just to talk to these people a lot. If you spend a couple of weeks with somebody and get tours of the Great Wall and banquets and trips to their ancestral homeland, if they're Chinese American, then people talk and there's useful information. They also use techniques such as after a long day at the Wall and a long banquet with lots of alcohol, you find yourself in a hotel room, perhaps surrounded by Chinese who are asking you lots and lots of questions and implying that there's an obligation for you to answer because "We've been so nice to you," or perhaps if you're Chinese American, "To help the motherland." And by the way, "Your grandmother who lives on the third floor of her apartment in Beijing, we just put her on the first floor for you so she doesn't have to walk up the stairs anymore." And if that sort of technique gleans one piece of information, fine. Tomorrow there'll be another piece of information. … You mean they're not any more sophisticated than this? I thought there would be dead drops at phone booths outside restaurants. Well, a good question. The Chinese don't do dead drops, the Chinese don't do phone booths. The Chinese would much rather have you come to China and "let's sit around and talk." Or "talk to us in the United States and don't go steal documents for us. We don't want you to steal documents, it just gets you caught. And you're doing this for the betterment of the world,"or if they're playing it here, "you're Chinese American, Taiwanese or mainland American, help the motherland. You're all overseas Chinese. We're a poor country, America's a rich country. It's not going to hurt America to help us." It's that sort of pitch. And yes they use the United States mail. It's not been published before, but it's true.
	U.S. Ambassador to China, 1989-1991; CIA in China 1975-1978 How do they do it? How is [China's] espionage different than, let's say, the Russians or the East Germans were? It's different. It has the same objectives because they all go back to Sun Tzu, in one form or another, [in] the 5th century B.C., who had the five kinds of spies. He wrote the booking on spying. The Chinese have done espionage, and spying, and intelligence work very well since the beginning. It's all through the romance of the three kingdoms. It's been a central part of their work. They use different techniques. You don't find the case officer in a trench coat on the corner making a pass with an agent or laying down a dead drop, necessarily. What you find is the massive collection technique, the vacuum cleaner. Somebody once said -- I think this is in Nick [Eftimiades]'s book -- "If the Russians want to get certain sand from a beach that's special, they'll have a submarine come in at night. They'll put a crew infiltration. They'll get a bucket full of sand, and they'll take it back to the submarine and leave." The Chinese will have 500 people having picnics on the beach, each picking up the sand in a small can, and bringing it back. It's a different technique. They rely much more on contacts, persuasion. Only a small percentage is for actually clandestine work. They do that, but a very small percentage. And it's very frustrating for people like the FBI who are looking for the classical intelligence man. They found one in Larry Wu-Tai Chin in 1985. We got that through a penetration in the Ministry of State Security, Yu Qiangsheng. And, that broke the case. But that case showed us their techniques. And their techniques were quite different. This man was never handled in the country, never saw the embassy. He always went to third countries, Canada or Hong Kong, and did his work there. ... But through the years, we've picked up on their training techniques. We've got a number of defectors from embassy intelligence people who have told us the way they train, the way they recruit, the way they motivate, the way they dispatch under cover, either unofficial or official cover, for a third country, targeting certain areas, with a very heavy emphasis in the United States on technology.
	FBI Special Agent, 1973-1997; specialized in counterintelligence. The word about the Chinese is that they do things differently. They've been doing this for 4,000 years, that they operate on the basis of relationships, interpersonal relationships. They call it "guanxi." They call it developing a superior subordinate relationship with someone, to trade information back and forth with someone. At the end of the day, though, intelligence collection methodology relies on someone who knows telling someone who is trying to collect information. So, whether the person is paid or not, whether the person owes a debt of gratitude or owes some kind of guanxi to the other person, at the end of the day, the intelligence service succeeds by establishing sources. And that's the way the Chinese work, just like everybody else. … They do run agents. They do collect intelligence through classic operations. But by and large, they rely on a large number of what they call "overseas Chinese" and a few non-Chinese to provide them with information, basically, because of the relationships they build over time. Basically, it's a game played on the use of assets. Right. And an asset is somebody you know that can give you what you want. And obviously, you develop a relationship where that person wants to give you things, where that person actively goes out and collects things for you. In our thinking here in the West, we tend to think about an employer/employee relationship or a contractor relationship so that, in a secret way, the contractor goes out and collects information, and then brings it, for money, to the intelligence officer who is running the operation. But oftentimes the Chinese don't feel it's necessary to pay that person, or at least not to pay the person for intelligence. They might get paid because they have a strong business relationship with the Chinese government. But they might not get paid specifically for the intelligence that they bring. And the idea is that the person is so obliged to the person who has the guanxi with them, that, out of a sense of duty, a sense of obligation, a sense of togetherness, on behalf of the motherland, this person will take risks and bring information as a part of the overall relationship. … So we found that frequently the Chinese intelligence services were practically invisible to their sources, because the relationship between the intelligence officer and the source was a personal relationship, and was one of mutual obligation. The source didn't think of himself as an employee or contractor. The source thought of himself a person who should go out and do for a friend, for a colleague. … The way you define it, a lot of times it does turn into a game of spy versus spy, in a way. A lot of times it isn't the hot dog dealer, it is people that have relationships with friends in China with MSS or other organizations. Is it really a large proportion of this game being played between the two intelligence services? Sure. It's the way the game is played. Obviously, it is spy versus spy. That's what counterintelligence is. And at the end of the day, the better your operation as a counterintelligence service, the more you know about that foreign intelligence service. And hopefully they don't know that you know it. Hopefully, you can to some extent contain their operations, and understand more about their operations than they want you to, so that you know what they're looking for and you know who they're using. You know their order of battle. You know what their targets are. You know what information they need. I can remember a time many years ago when Chinese intelligence service sent a high-ranking intelligence officer to discover what this "Supreme Court thing" is that the U.S. has. Well, that's the kind of intelligence operation we want to see. Frankly, we'll help that guy find out all about the Supreme Court. But when the intelligence officer comes after weapons systems, that's a whole different thing, and we want to know what weapons systems they're coming after. And we want to know where they're seeking market intelligence about particular companies or about particular opportunities they might have to compete in the economic sphere. … I think you need to look at the demographics. We've gotten very focused in recent years on this racial profiling thing. But let's look at it from the point of view of the Chinese intelligence officer. One of the things you find out if you're a Chinese intelligence officer is that the Asia-Pacific population in America has gone from less than 1 percent to more than 3 percent of the population, and considerably more than that in West Coast cities like San Francisco and Los Angeles, where there's a huge amount of U.S. government classified contracting. Then you find out that in the physical sciences and engineering at the head of the most complex and most valuable research and development that the U.S. is doing, you will find a very high percentage of Chinese. Five to 10 percent in some cases. Why is this? Well, it's their chosen profession. Coincidence? Who knows? Who cares? Now the point of the matter is, if I'm a Chinese intelligence officer and I'm looking at this group of people who know about, let's just say nuclear engineering, who am I going to look at? Am I going to look at the Italian American? Am I going to look at the Irish-American? Or am I going to look at the Chinese-American, who still speaks my language, who still has an aunt over in Shanghai. So if I'm a Chinese intelligence officer, I'm not thinking about infiltrating somebody into that nuclear engineering facility. I'm thinking about how do I go about getting access to that Chinese person who's already there? How do I recruit that person? How do I develop guanxi with that person? How do I assume a relationship in which I have the upper hand and I can convince that person to share information with me? At the end of the day, it's pretty elementary from the standpoint of the Chinese intelligence service. They do practice racial profiling, and it's very successful for them. And your answer to the claims out there that what that does is it leads to a stereotype, a double standard, where it's not only a few people, but anyone who's of Chinese ancestry is viewed with a different lens? How does one get around that, that there might be a double standard? It really isn't a double standard when you stop and think about it. It's basic methodology. It's basic counterintelligence methodology and security methodology. The first question you ask yourself is, does that foreign intelligence service have power over that person? If they have control over the relatives of that person, the place where those relatives live, the welfare of those relatives -- that's a tremendous leverage or potential leverage over that person. Obviously a source of potential influence. And the other aspect of it is, how can I best find out what I need to find out? Maybe English is my second language. If I have somebody I can talk to in my own native tongue, that's a huge advantage to me. From the standpoint of the security guy, if you were looking at three candidates for a position at HP, and one of the candidates was coming from Dell Computer, would you automatically put him at the head of the line, or would you put him last in line, because that's a competitor of yours. You don't want to hire a competitor. So it's the same kind of thing in the intelligence game. You want to hire somebody to do nuclear engineering, do you really want to hire somebody with a whole bunch of relatives in a hostile foreign nation? Or not? It's a call that you have to make. …
	FBI Special Agent, 1969-2002 Who is a Chinese spy? Who are you looking for when you're in Chinese counterintelligence? Are they different than, for example, Russian spies? Absolutely. And that's one of the difficulties in dealing with Chinese counterintelligence. Against most countries, you identify intelligence officers, you determine the agency for whom they work, you know what sort of information they will seek based on their employment, and you go from there, developing a technique to counter them. With Chinese you have known intelligence officers who don't engage in intelligence activities. You have known intelligence officers who do. You have persons who have no connection with Chinese intelligence -- I mean, not even a peripheral one -- who engage in intelligence collection. You have intelligence officers in the country who are here to make money. The Chinese are bureaucratic, as I guess most governments can be, and there is a level of approval for expenditures that's really relatively low. You have to go quite high to approve spending in even the most unimportant area. However, if you have someone overseas who's making money, then the level of approval of that operation overseas making money, can approve spending the money that you make. So you immediately increase your budget substantially if you have money-making operations abroad. So we see intelligence personnel abroad, and all we see them doing is making money, and at first we couldn't understand that, and later we realized they were making money and that was the goal, so that other personnel would have money to spend on operations. Our standard statement is Chinese is different, and it is. And because it is different, it's made it a challenge for us to be successful. Ultimately we weren't successful in identifying a lot of their activities and a lot of their targets, but still, because of the difference, it's often difficult to explain and justify budgets for continuing operations against the Chinese. And in the 1970s, 1980s and 1990s, did what they were looking for in the United States of America change? Sure. Initially when the first group got to the United Nations -- and this is one person's perspective -- seeing that they were interested in leading the non-aligned nations group in cultivating ethnic Chinese to win the hearts and minds of the Chinese people vis-à-vis Taiwan, and to get general information. I mean, I remember when the Chinese first came to the mission to the U.N., even before the liaison office in Washington, they obtained the entire printed output, every document that NASA put out each year -- how much it was to upgrade their system, or to know what our system was, I don't know. But we knew what they got in just public source material. And an awful lot of what they did then was public source material, where they would meet with U.S. politicians or U.S. reporters, wine them, dine them, and talk to them about what was happening. And this was major information. They considered it the most sensitive information again, and classified it very highly and sent back. And it's the stuff that you read in the Op Ed page of The Washington Post or The New York Times each day. You could read political columnists. If it were today's environment, you would watch Fox News, or CNN, or PBS, and you would listen to the talking heads, and that's what the Chinese got, and that was important to them. For us, we wouldn't have turned around for it, but they reported it, and were given high marks by their senior officials in Beijing for getting that information. And then the arc of information gathering, take me to the 1990s. What are they after by the 1990s? When I left the field in the early '90s, there were so many different groups of people in the United States from China. There were still political people who were interested in that. There were persons in the embassy and the consulates who were responsible for keeping track of ethnic Chinese in the United States. There were those responsible for students, and they wanted to make sure that they toed the party line, particularly in the aftermath of Tiananmen. There were commercial officials in the U.S. running companies, some legitimate, some engaging in business activities but with other purposes, such as to make money for intelligence. Some it seems as loss leaders just for raising the Chinese profile. … One of the things about countering Chinese intelligence activities that is such a challenge is that again, the persons who collect intelligence, including classified information, often are not traditionally-trained spies. If you have someone from an institute in Shenyang that makes cruise missiles, and that person comes to the United States and develops information that his factory might use, an institute might sponsor a student to come to the United States, and the purpose is to get more information to come back and to enhance that facility's capacity. … In dealing with the Chinese, we've had any number of persons the Chinese have dealt with who we've later talked to, many of whom have been in positions with great access. And the Chinese tend not to give specific instructions in most cases, about what information should be gleaned. … The Chinese response would probably be, "You give us what you think we need." Well, try proving that in court as a case of Chinese espionage. They tend to be non-specific, and I guess if you accept their position as being willing to send a lot of sources out to get small bits of information, and then to reassemble it back in China, it works well. If you have a relatively large number of sources, and you're interested in running them for a long time, and you're not willing to compromise them for short-term gain, then you do it the way the Chinese do it. If, on the other hand, you want immediate gratification, you want the hard facts, you want them now, you want specific information, you want it sooner rather than later, then you develop the sort of facts that the FBI can prosecute, or the FBI can develop information about so the Department of Justice can prosecute them -- and the Chinese don't work that way. And as a result, countering them is so much more difficult because you don't have those difficult, those hard-edged intelligence officers who look guilty on the stand. I mean, I remember one case in which a person engaging in intelligence activities had his kids in the room with him when he was meeting with someone. And you've never, you can't imagine how unattractive it would be to present in court espionage in the background and two kids watching TV in the foreground. I mean it just, you're not going to make a case that's going to be binding. This is the bad guy you want to send away for life? You know, it's a hard target because of the way they do what they do, and the fact that it's so different from the others, and the fact that there isn't, for the most part, the central direction and control that leads to the specificity you need to get the elements of the client.
	Director of Intelligence, U.S. Energy Department, 1994-1999 [China] relied on a much wider range of potential agents: students, businessmen, visiting scientists, academic exchanges, and so forth, many of whom come to this country with specific taskings from both their institutes and also the Chinese intelligence services, the Ministry of State Security, and so forth. So that the threat, in the information that we were presented from the FBI, what I came away with was the threat was much broader and consequently probably much more difficult to deal with. And my experience later showed that to be true. … The motivation of the Chinese? Well, I can't speak to the entire program. What I can speak to is what I was told. And what I was told was that in a number of the cases that we encountered, visiting laboratory scientists would be told by the Chinese that, one, that the United States was a very strong country, that China was a very weak country, and that, you know, these individual scientists had a responsibility to help their motherland, the People's Republic. And it was clear to us in the nuclear program that what the Chinese were worried about was that they were falling further and further behind the United States. … So the Chinese were looking at all this and they're looking at their own strategic force posture, and they're realizing just how incredibly vulnerable that posture is. If you're working a scenario that involves, you know, Taiwan, and across the Taiwan Straits, and you want to keep the United States, you need a credible deterrent. Rebuilding, re-establishing the credibility of that deterrent, to us, it was what was driving Chinese espionage, at least as it was targeted against our laboratories and nuclear complexes. So Chinese espionage, who's attracted to them, who did they look for to sort of become their asset? There are differing views on that, and I heard differing views. From [former FBI China analyst] Paul Moore, particularly, but others, we heard that the Chinese focused just on ethnic Chinese: that that was their target, that's who they went after. Paul Moore specifically told us that the Chinese methodology worked very well against institutions that had relatively large numbers of ethnic Chinese. And he would site specifically the laboratories and Silicon Valley. It did not work very well against institutions like the U.S. army, which did not have high numbers.Now my experience and my approach to this was different. Based on what I saw on the counterintelligence interviews that were done, on the case histories that were done, my impression was that that was far too narrow an approach; that the Chinese had seemed to us would come to anyone who would talk to them. They like to focus on fairly senior managers at the laboratories who would be allowed to travel by themselves, unescorted, and might be willing to talk. And that included, you know, some very senior people at Los Alamos, Livermore, and so forth -- regardless of ethnicity. On the other hand, it's also clear that ethnic Chinese scientists, naturalized Chinese citizens, were also part of the target set, but not the only part…