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LOS ANGELES, California (Reuters) -- For years she was a society hostess, a prominent Chinese-American who hobnobbed with politicians, presidents and millionaires
But on Thursday Katrina Leung was behind bars and Los Angeles was buzzing with news that she had been charged with being a double agent who passed classified national security information to China obtained during a secret 20-year love affair with her FBI handler.
Leung, 49, was jailed pending a hearing next week and her FBI handler, James Smith, now retired, was released on bail on charges of gross negligence for allegedly allowing Leung to obtain documents from a briefcase he left open at her posh San Marino home during "debriefing" sessions.
"There is not a lot of spy intrigue in Los Angeles politics, so people are absolutely shocked at this," a city hall insider told Reuters. "I think the ripple effects of her arrest have not yet been fully understood."
Both Leung and Smith were arrested on Wednesday after a year-long investigation. The information Leung is alleged to have passed to China included details on FBI personnel, phone lists and intelligence on the whereabouts of Chinese fugitives.
Leung, who runs a business consultancy and a bookstore, had a vast network of contacts, serving as a director of the influential Los Angeles World Affairs Council, as secretary of the National Association of Chinese Americans. She also helped organize banquets and functions for Chinese dignitaries including one for then-Premier Zhu Rongji during a visit in 1999.
"We were as surprised and shocked as anyone when the news broke regarding Ms Leung. Ms Leung has been a community activist for many years but has served as a volunteer board member of the Council for only three months," said J. Curtis Mack, president of the Los Angeles World Affairs Council.
She was an activist for former Republican Mayor Richard Riordan, accompanying him on a 1998 trip to China, and a fund-raiser for California's Republican 2002 gubernatorial candidate Bill Simon.
Simon, in a campaign speech last year, called Leung an "old and dear friend," according to a published transcript. Simon could not be reached for comment on Thursday.
Leung was also the president emeritus of the Los Angeles- Guangzhou Sister City Organization and took part in an international trade forum in Hong Kong in December last year.
Leung's lawyers said in a statement she was a "loyal American citizen" who had worked for 20 years under the direction of the FBI.
"She repeatedly endangered herself in order to make significant contributions to the security and well-being of the United States.
"We believe that when the full story is known. Ms Leung will be cleared of all wrongdoing and the extent of her heroic contributions to this country will be revealed," the statement said.
According to an FBI affidavit, Leung worked as a paid "asset" of the United States providing her handlers with information about China for almost 20 years. But during much of that time Leung, who is married, had a clandestine relationship with Smith who was supposed to be monitoring her activity.
The affidavit said Leung had admitted to FBI investigators that Smith would come to her house for debriefing sessions and leave his briefcase open, which allowed her to take and copy documents without Smith's knowledge.
Leung also admitted providing the information she obtained to her handlers at the Ministry of State Security -- a Chinese intelligence service, the affidavit said. - CNN 11 Apr 2003
FBI Woman 'spied for China'
A Chinese-American woman who worked for the Federal Bureau of Investigation (FBI) has been accused of spying for Beijing
A Chinese-American woman who worked for the Federal Bureau of Investigation (FBI) has been accused of spying for Beijing
Katrina Leung has been charged with passing on classified nations security information to China, allegedly obtained from her lover and FBI "handler", James Smith.
Mr Smith has also been charged with gross negligence after allegedly allowing her access to secret documents during "debriefing" sessions at her home.
Correspondents say that the scandal could prove a great embarrassment to the FBI and the Republican party, with whom Ms Leung - a Los Angeles socialite - had close links.
Ms Leung was arrested on 9 April and charged with "obtaining a classified national security document for the purposes of aiding a foreign nation".
She has claimed that she is innocent, but has been denied bail.
At the same time, Mr Smith, a former FBI special agent, was charged with gross negligence but given bail.
Authorities said that Ms Leung was recruited to work for the FBI in the 1980s and began an affair with Mr Smith.
According to the prosecution's affidavit, she was paid $1.7m over 20 years by the FBI, and operated under a number of aliases, including "parlormaid".
But during this time, the prosecution alleged, she was also working as a double agent for the Chinese government.
Prosecutors said that they found classified documents at Ms Leung's home, including a secret 1997 memorandum about Chinese fugitives.
Network of contacts
Katrina Leung has been charged with passing on classified nations security information to China, allegedly obtained from her lover and FBI "handler", James Smith.
Mr Smith has also been charged with gross negligence after allegedly allowing her access to secret documents during "debriefing" sessions at her home.
Correspondents say that the scandal could prove a great embarrassment to the FBI and the Republican party, with whom Ms Leung - a Los Angeles socialite - had close links.
Ms Leung was arrested on 9 April and charged with "obtaining a classified national security document for the purposes of aiding a foreign nation".
The affidavit also said that the FBI secretly searched her luggage when she left for a trip to China in November 2002 and found six photographs of former and current FBI agents.
When she returned from the trip, her luggage was covertly searched again, and the photos were no longer there.
It was alleged that Mr Smith came to Ms Leung's San Marino home, which she shares with her husband and son, for "debriefing sessions".
During the times of his visit, she was able to copy documents from his briefcase which she then passed on to Chinese agents.
Mr Smith was alerted to her duplicity by another FBI agent with whom she allegedly also had an affair, but he continued to see her.
A statement by the FBI Director, Robert S Mueller, said the day of the arrests was "a sad day for the FBI".
"Former Agent Smith not only betrayed the trust the FBI placed in him, he betrayed the American people he was sworn to protect.
"Allegations that he caused the loss of classified information, as well as his personal indiscretions with Ms Leung, are very serious and warrant a strong response," the statement said.
Ms Leung's lawyers, however, said that she is a "loyal American citizen".
"She repeatedly endangered herself in order to make significant contributions to the security and well-being of the United States.
"We believe that when the full story is known, Ms Leung will be cleared of all wrongdoing," the lawyers said.
Ms Leung was well-known in the Chinese-American community and also had a network of contacts in China.
In 1999 she organised a banquet for then Chinese premier Zhu Rongji when he visited the USA.
She also organised fundraising activities for the Republican party and accompanied a former Republican mayor on a trip to China in 1998. - BBC News 9 Apr 2003
FBI Spy Shakes up Nortel
Business leaders in the United States and Canada were scrambling yesterday to cope with news that a prominent Los Angeles businesswoman and former consultant for Nortel Networks Corp. is alleged to have been a spy for China.
Katrina Leung, 49, was arrested Wednesday after the FBI unveiled a series of allegations involving a love triangle between her and two FBI agents.
According to the allegations, Ms. Leung had affairs with both agents over a 20-year period while she was being paid $1.7-million (U.S.) by the FBI to spy on China. However, court documents allege that she was also spying for China and stole documents from the agents.
During that period, Ms. Leung, whose code name was Parlor Maid, also ran a consulting business and her clients included Nortel, which paid her $1.2-million to help open markets in China.
She was also active in the Republican Party and attended U.S. President George W. Bush's inauguration.
Ms. Leung, who is married to a biochemist, denied any wrongdoing but the fallout from the arrests reverberated across North America.
Yesterday, Brampton, Ont.-based Nortel confirmed the company hired Ms. Leung in 1990 as a consultant.
"Mrs. Leung has never been an employee of Nortel Networks. Mrs. Leung was the president of a firm engaged by Nortel Networks in the early 1990s as a representative to assist us in the creation of a Chinese joint venture," said Tina Warren, a Nortel spokeswoman. "The firm was paid for its services and our business relationship with it terminated in 1996."
Documents filed in court show that Nortel hired Ms. Leung's company, Merry Glory Ltd., in October, 1990, to help establish a joint venture in China. Nortel was subpoenaed last January and handed over all documents relating to Ms. Leung.
"We have fully co-operated with the authorities and believe that Nortel Networks' involvement in this matter is closed," Ms. Warren said.
Lawrence Surtees, a telecom analyst with IDC Canada Ltd. in Toronto, said the case would not have much fallout on Nortel. "Could she get U.S. state secrets out of Nortel? I don't think so. I think it's an embarrassing coincidence," he said.
In Los Angeles, the business and political community was shaken by the arrest.
"We were as surprised and shocked as anyone when the news broke," said Curtis Mack, president of the Los Angeles World Affairs Council, which boasts a roster of business leaders as directors, including Ms. Leung.
Katrina Leung, 49, was arrested Wednesday after the FBI unveiled a series of allegations involving a love triangle between her and two FBI agents.
According to the allegations, Ms. Leung had affairs with both agents over a 20-year period while she was being paid $1.7-million (U.S.) by the FBI to spy on China. However, court documents allege that she was also spying for China and stole documents from the agents.
During that period, Ms. Leung, whose code name was Parlor Maid, also ran a consulting business and her clients included Nortel, which paid her $1.2-million to help open markets in China.
She was also active in the Republican Party and attended U.S. President George W. Bush's inauguration.
Ms. Leung, who is married to a biochemist, denied any wrongdoing but the fallout from the arrests reverberated across North America.
Yesterday, Brampton, Ont.-based Nortel confirmed the company hired Ms. Leung in 1990 as a consultant.
"Mrs. Leung has never been an employee of Nortel Networks. Mrs. Leung was the president of a firm engaged by Nortel Networks in the early 1990s as a representative to assist us in the creation of a Chinese joint venture," said Tina Warren, a Nortel spokeswoman. "The firm was paid for its services and our business relationship with it terminated in 1996."
Documents filed in court show that Nortel hired Ms. Leung's company, Merry Glory Ltd., in October, 1990, to help establish a joint venture in China. Nortel was subpoenaed last January and handed over all documents relating to Ms. Leung.
"We have fully co-operated with the authorities and believe that Nortel Networks' involvement in this matter is closed," Ms. Warren said.
Lawrence Surtees, a telecom analyst with IDC Canada Ltd. in Toronto, said the case would not have much fallout on Nortel. "Could she get U.S. state secrets out of Nortel? I don't think so. I think it's an embarrassing coincidence," he said.
In Los Angeles, the business and political community was shaken by the arrest.
"We were as surprised and shocked as anyone when the news broke," said Curtis Mack, president of the Los Angeles World Affairs Council, which boasts a roster of business leaders as directors, including Ms. Leung.
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