In a very serious tone, the FBI issues a warning on its website. “It warns that the Chinese government’s “counterintelligence and economic espionage activities” pose a significant danger to American prosperity and democracy. The FBI places great importance on eliminating this danger as a high counterintelligence priority.” The risk to the lives of the hundreds of brave Chinese operatives who have agreed to spy for the United States inside their own nation is significantly greater. Over the course of the last decade, the CIA has lost more than a dozen operatives to either death or imprisonment.
And it seems that a suspected Chinese spy working inside the FBI’s own counterintelligence section was mostly responsible. A spy who was able to operate covertly for over two decades until being quietly apprehended in the year 2020. Currently awaiting trial in a Hawaiian prison, his situation is shrouded in mystery. Now, author James Bamford’s new book, “SPYFAIL: Foreign Spies, Moles, Saboteurs, and the Collapse of America’s Counterintelligence,” reveals many of these previously concealed details.
It was the spring of 2001, and Chinese intelligence was riding high. Hainan Island in China was the site of an emergency landing for a Navy EP-3 electronic espionage aircraft operated by the National Security Agency on April 1. After the crew was safely evacuated, Chinese intelligence officers began removing the agency’s top-secret espionage and cryptologic equipment as well as stacks of top-secret papers. The gear, software, and papers were a huge bonanza for Chinese intelligence, providing them with valuable information into the targets and tactics employed by the NSA in China. Two former CIA covert agents, one from Shanghai and the other from Hong Kong, volunteered to switch sides less than a week ago, providing Chinese intelligence with yet another information goldmine.
It had been four years since Britain had handed Hong Kong back to China, but the city was still very much a neon and noise paradise. But nowadays, you may hear a lot of Mandarin among the crowds of foreigners bargaining over Rolex watches, checking into the Peninsula, and partying in Lan Kwai Fong and other popular nightlife areas. A Beijing businessman now based in Hong Kong observed, “Five years ago, everyone looked down on you if you spoke Mandarin.” “They see that we’re the bigwigs here, the ones with the cash,”
Travelers from mainland China have surpassed those coming from overseas Chinese communities as the city’s most frequent tourist group. They outspent both the Americans and the Japanese in terms of individual consumption. In addition, March of 2001 was a very hectic month. As the Hong Kong Arts Festival came to a close, the Hong Kong International Film Festival opened its doors.
In the shadows, the city had become a significant hub for spies from both the East and the West. Li Gang, the deputy head of Beijing’s Liaison Office in Hong Kong, said, “Hong Kong is a site where foreign intelligence services do a lot of operations.” Before the art crowd left and the movie buffs arrived, two former American agents sneaked into another hotel for a covert meeting with their Chinese counterparts. As brothers, they had both served as undercover CIA agents in China and were now planning to swap allegiances.
His elder brother David Yuk Ching Ma and Alexander Yuk Ching Ma also served in the CIA’s clandestine services. In the year 1935, when David entered the world, Shanghai was a city full with jazz clubs, casinos, and opium dens. In the early 20th century, the Pudong District on the eastern bank of the Huangpu River became the country’s primary financial centre; in the following decades, it would also become the country’s high-tech spying core.
At the age of twenty-six, David relocated to Los Angeles, where he eventually became a naturalised citizen of the United States. Six years later, in 1966, he joined the CIA as an entry-level employee, likely as a translator. In contrast, during the late 1960s, the United States was in the midst of its deadly war with North Vietnam, which was supported by China. A constant stream of potential spies was thus making their way to Camp Perry, often known as “The Farm,” in the vicinity of Williamsburg, Virginia.
Almost all of them looked like they belonged at a Notre Dame football game and that was the issue. Very few people could successfully blend into an Asian street mob. Moreover, there were hardly any fluent Chinese or Vietnamese speakers. That worked out well for David, and in 1971 he was elevated to the CIA’s officer ranks. He spent a considerable amount of time in Asia and was entrusted with the names of several human sources for the agency in China and abroad, as well as the agency’s system of covert communications (“covcom”).
David stepped down from his government post in 1983 when it was discovered that he had been helping Chinese people gain illegal admission to the United States. However, his older brother Alex, who was also a covert officer, had signed up months earlier and had taken his position. He, like David, is a Hong Kong native who has spent time in Shanghai. They both attended and received degrees from the University of Hawaii at Manoa. After completing his training at The Farm, he was given the names of the agency’s spy networks as well as numerous covcom data before being sent to the Far East. After seven years, he decided to leave the CIA and go to China around 1995. Surprisingly, there are no laws prohibiting former spies from relocating to the countries they had spied for. as a result, hardly much is known about his actions while he was there.
However, David soon found himself in deep financial and legal difficulty. While he was a Los Angeles resident in 1998, he pleaded guilty to two charges of bank fraud. He was sentenced in December to serve five months in Taft Correctional Institution, a minimum-security federal prison outside Bakersfield, California, followed by five years of probation and $145,623 in restitution, all of which he could not pay. But in 2000, Alex returned from China, declaring to Customs and Border Protection officials that he was a “importer and exporter” and carrying $9,000 in U.S. money. The two brothers showed up in Shanghai not too long after that.
Alex and David were suspected of meeting with at least five officials from China’s Ministry of State Security (MSS) in a hotel room on March 24, 2001, and passing on highly sensitive material over the course of three days. Information pertaining to CIA officer identities and those of CIA human assets in China; the CIA’s use of operational tradecraft; and CIA secure communications practises (covcom details) were among the allegations made by the government. After that, each brother was given fifty thousand dollars.
After thereafter, as detailed in the indictment, Alex and David went back to California but remained in contact with their handlers. Soon after Christmas of 2002, Alex applied to become a special agent at the FBI in order to act as a mole for China’s intelligence organisation. However, at that time he was already about 49 years old, therefore he was told he couldn’t participate.
Since he was fluent in numerous different varieties of Chinese, he was recruited in 2004 to serve as a translator. As a spy, he would be in an even more advantageous position here, with the ability to listen in on Chinese discussions and learn a great deal more about the country. He contacted an alleged collaborator, probably David, the day before he began his new job to share the exciting news that he would be working full-time for the “other side.”
By that point, the FBI had just suffered another devastating and embarrassing counterintelligence failure involving China. It was revealed in 2003 that the bureau’s most valuable asset in China, a U.S. citizen named Katrina Leung, was really a double agent for China, much like Alex. Even worse, she was cheating on both of the FBI’s top China agents at the same time. They included her longstanding handler, to whom she had been feeding false information for over a decade, information that was often sent to the White House in a hurry.
After being transferred to the FBI’s Honolulu office, Alex and his wife purchased a condo on Hawaii Kai Drive for $600,000, putting them within walking distance of the water on the island’s southeast coast. Alex was a big guy with a wide grin and square spectacles that hid his plump cheeks that appeared to light up whenever he grinned. He spied for the FBI for at least six years, and probably much more, replacing Robert Hanssen, who had previously spied for Russia for nearly two decades. It seems like the government agency never learnt anything.
The procedure was really easy to understand. Like Hanssen decades before, Ma would quietly scoop up stacks of top-secret documents and leave the building. Others he duplicated onto CD-ROMs, some he downloaded from his computer onto a flash drive, and some he snapped with a digital camera. Certain ones exposed the identities of sensitive sources while others dealt with guided missiles and armed systems.
In addition, Ma was well-versed in the CIA’s top-secret covcom methods, which are used by CIA officials to keep in touch with their informants. Once every several months, after he had amassed a substantial body of information, he would contact his handlers. They would fly him to Shanghai, pick him up at the airport, and take him into the city to meet with operatives from the Shanghai State Security Bureau and give up his secrets after a thorough debriefing (SSSB).
The Ministry of State Security (MSSB) was the regional branch of China’s CIA and FBI. Its headquarters are located in Beijing’s Xiyuan (Western Garden), next to the Summer Palace’s expansive collection of lakes, gardens, and palaces. Its emblem continues to include the hammer and sickle, the symbol of the Communist Party. A stern-faced senior party official from Zhenping County, the jade capital of China, in the province of Henan, Minister of State Security Xu Yongyue oversaw the organisation back then. And leading the SSSB was Cai Xumin, who in 2004 was promoted greatly to vice minister of the MSS, perhaps owing to his recruitment of Ma.
At the conclusion of the Shanghai meeting and paperwork handoff, Ma would simply fly back to Honolulu. An inquisitive customs agent from the United States took him away for a secondary search and found $20,000 in cash in addition to a brand new set of golf equipment. However, no concerns were voiced and no action was taken, and later that day Ma emailed his SSSB handler with an attachment containing even more sensitive data. The MSS also provided him with other income, which was periodically transferred into a Hong Kong bank account.
Even David Ma was kept in the loop, but only covertly. He settled in the affluent Los Angeles suburb of Arcadia, where he became known as an immigration rights adviser for the city’s various Asian immigrant communities, including Alhambra and Monterey Park. He built multiple shops since he understood the locals and could communicate with them well in Mandarin, Cantonese, Shanghainese, and Chaozhou. AsiAmerica Immigration & Consultancy, Inc. and the Chinese American Civil Rights Organization were among these groups.
He was cited in a 2005 Los Angeles Times piece concerning Chinese espionage, which is ironic given the topic. With China’s economy booming, he said he could see how some Chinese Americans may feel compelled to assist the government in any way they could. I’m not implying that all of them are agents,” he said. “Some of them are motivated by pure avarice, while others are required to conduct business with the [Chinese government] for survival. Essentially, it’s the same as bartering or exchanging.”
As a result of his enterprise, David rose to prominence within Los Angeles’s Chinese communities, making him an excellent recruit for the SSSB and MSS. Finding locals who had turned become CIA and FBI secret informants in China was crucial. As early as February 2006, China’s mole in the FBI, Alex Ma, emailed David photographs of five people he suspected of being sources. Along with the images, there was a picture of five dogs lounging on a park bench, which was a coded request for him to reveal the identities of the photographers. After that, David sent Alex the names of two of the snitches. The five names and corresponding photos of the sources were stored on a memory card that Alex owned.
A few months later, Alex had his Hong Kong-born wife, Amy Ma, meet with his handlers in Shanghai and pass them an encrypted laptop. As expected, his wife thanked him for shipping and delivering “the gift” through email. Alex, however, was able to travel to Shanghai every few months with his secret caches and return home without raising suspicions. Moreover, in June of 2008, his manager called him and informed him that his “business” would be receiving a large number of orders in the next year.
Alex got a phone call from an MSS officer in May 2010 apologising for not seeing him on a recent visit to China and inviting him to meet in Shanghai in the future, just a few months after another covert encounter to give over papers to his handler. He also requested that Alex contact David to see whether he was interested in talking about their “business partnership.” A seasoned CIA covert operative who had just reapplied to the agency, maybe to become a mole, was also being brought on board by the MSS around the same time. Zhen Cheng Li in China was Jerry Chun Shing Lee at Langley.
Lee was born in Hong Kong, much like Alex, but he spent most of his childhood in Hawaii and eventually became a naturalised American citizen. When he was seventeen, in 1982, he enlisted in the United States Army and stayed in the reserves when active duty ended. A short time later, he enrolled in Hawaii Pacific University and emerged from there with a degree in international business management, having completed his studies in 1992. One year later, he completed his master’s degree in human resource management and began working for the CIA as a case officer. Over the next 14 years, he was sent on a variety of international postings, including many to China, where he had access to the CIA’s human and covcom covert networks, much like Alex and David Ma.
In July of that year, Lee expressed his dissatisfaction with his lack of promotion at the CIA. One of his colleagues said, “He was extremely negative of the organisation and his time there; the fact that he didn’t receive recognition, he didn’t get promoted, and he didn’t get the assignments he deserved.” Therefore, Lee left, and he now works for Japan Tobacco International out of Hong Kong ( JTI). The corporation offers 120 different brands of cigarettes outside the United States, including Camel and Winston, and employs roughly 40,000 people.
Tobacco smugglers and counterfeiters were a significant challenge, though. With the cooperation of corrupt Chinese authorities, Asian criminal syndicates were shipping out huge shipments of fake cigarettes. The corporation had hired David Reynolds, who had worked for the CIA from 1988 to 2002, to head up a Brand Integrity Unit to battle the syndicates. After that, he spent two years in Guangzhou as a U.S. consulate official. After working for the CIA for several years, Lee said he was recruited by Reynolds to serve as the CIA’s official contact in Beijing with the MSS, China’s intelligence service.
Now that he worked in an office on the 42nd story of Tower 1 in Times Square, Causeway Bay’s glitzy, high-end retail and dining complex, Lee could see out over all of Hong Kong. Adjusting to life in the private sector was challenging, and he ran into issues almost immediately. Employees at the company started to worry that he was communicating with corrupt Chinese authorities about their investigations and the impending arrests of company executives. One of our contract investigators was detained and imprisoned in China, and many shipments of counterfeits bought as part of the investigations were confiscated by the Chinese authorities or just vanished, according to a manager.
The executives at JTI had notified the FBI, and all signs led to Lee, but the agency seemed to have done nothing. When Lee was ultimately let go in the middle of 2009, the firm was forewarned by a Chinese official that he was still actively sharing information with MSS personnel. The information was again sent to the FBI by JTI authorities. A manager at the firm responded, “I definitely reported it to the right authorities.” The data was useful, but once again it seemed to be ignored by the agency. Around the same time, Lee met Barry Cheung Kam-lun, a former Hong Kong police officer with, as Lee understood, strong links to the MSS and who may be a prospective business partner. They had a private meal with MSS personnel on April 26 in Shenzhen, a city next to Hong Kong.
The moment has come for the formal presentation. Following Barry’s pardon, the intelligence officials and Lee came to an arrangement for Lee to start delivering information to them and acting as their spy. In return, they gave him a hundred grand in a briefcase and promised to look after him “for life.” In a few of weeks, he started getting his assignments, the most important of which was allegedly becoming a mole in the CIA, much as Alex Ma had done in the FBI. During the same month, he submitted his resume and application for a job with the CIA again. However, it was fruitless because of his unremarkable career and subsequent resignation from the agency.
Instead, Lee and Barry Cheung Kam-lun created FTM International to join the “Big Tobacco” conflicts and conduct their own brand integrity investigations, likely as a cover. Nearly $400,000 later, they rented quarters at Dannies House in the seedy Wan Chai neighbourhood. Lee’s new workplace was in a decrepit orange high-rise, thirteen stories up, with broken air-conditioning units sticking out the windows like enormous steel bird feeders. This was in stark contrast to the soaring skyscraper that JTI occupied in Times Square.
Two years later, however, Lee had become tired of Hong Kong and had run out of secrets to sell, so he packed up his family and headed back to Virginia, where the CIA had given him a possible position. In August 2012, during a three-day layover in Hawaii, agents carried out a black bag job on his hotel room; it had been surreptitiously crafted to lure him back to the United States. The results of their investigation were quite damaging. Two tiny, transparent plastic notebooks had his top secret, handwritten CIA operation notes: a datebook with 49 pages and an address book with 21 pages. Specifically, they included the actual identities of human sources who were being kept in the dark, as well as the times, places, and locations where meetings were held. As soon as he landed in Fairfax, Virginia, his hotel room was subjected to another covert search, and the data was still in his hands.
But for whatever reason, they decided to just keep questioning Lee over the course of the next year instead of actually arresting him. After the sixth interview in June 2013, during which the bureau asked more revealing questions, Lee and his family decided to return to China-controlled Hong Kong. For the second time, the FBI had failed to locate him.
Lee worked in security for Estée Lauder and Christie’s over the course of many years.
Then, in January of 2018, he took a Cathay Pacific aircraft to New York’s John F. Kennedy International Airport, where he landed presumably under the impression that the threat had passed.
It was a major blunder
His name was circled on the airline’s manifest, and he was taken into custody as soon as he stepped off the plane.
In spite of his initial denials and promises to fight the espionage allegations, he eventually pleaded guilty in May 2019 and was given a nineteen year jail term.
Simultaneously, the FBI uncovered the Chinese mole who had infiltrated the agency sixteen years before. A sting operation in which an agent poses as an MSS officer and approaches Alex Ma in Honolulu in August of 2020 is successful. Ma was convinced of his authenticity by a film showing him, David, and the SSSB agents signing up as spies in 2001. After that, the fictitious MSS officer presented Ma with a $2,000 cash “token of gratitude” for Ma’s work in aiding China. Ma added that he wished for the success of “the motherland” and volunteered to continue working for the MSS. He was captured for spying shortly afterwards and is undergoing trial. Since David’s Alzheimer’s was so severe at the time, it was decided not to arrest him, even though he was then 85 years old.