Book Excerpt: Enemies:How America's Foes Steal Our Vital Secrets--and
How We Let It Happen

http://www.amazon.com/gp/product/product-description/0307338053/ref=dp_proddesc_0/002...

About the Author

Bill Gertz is the defense and national security reporter for the
Washington Times and the author of the New York Times bestsellers
Treachery, Breakdown, and Betrayal. He is also an analyst for Fox News
and has been interviewed on many television and radio programs,
including This Week, John McLaughlin’s One on One, Hannity & Colmes, The
O’Reilly Factor, and The Rush Limbaugh Show. He has lectured at the FBI
Academy and the National Defense University. Gertz lives with his family
near Washington, D.C.

Excerpt. (c) Reprinted by permission. All rights reserved.
Chapter 1

PARLOR MAID

She's been a Communist since the day she was born. Her bona fides are
impeccable. I gradually converted her--she's now a rock-ribbed Republican.

--FBI agent James J. Smith, introducing Chinese triple agent Katrina
Leung to FBI China hands in 1993

On July 5, 2000, a brand-new, $120 million Boeing 767 jetliner flew from
the Boeing corporation's airfield in Everett, Washington, to San Antonio
International Airport. The Chinese military had purchased the jetliner
for the leader of Communist China, Jiang Zemin. China Aviation Supplies
Import and Export Corporation, which is run by the Chinese Communist
state, purchased the aircraft for China United Airlines, which has been
identified in declassified U.S. intelligence reports as a commercial
entity operated by the People's Liberation Army. Once in San Antonio,
the aircraft underwent a $15 million customization to outfit the plane
with all the luxuries of a Middle Eastern sheik, including a special
vibrating bed to help Jiang sleep.

On August 10, 2000, the modification work complete, the Boeing took off
for Beijing's military airfield. Within weeks, Chinese security
officials had found some twenty-seven sophisticated electronic
eavesdropping devices in the aircraft.

How had the bugs gotten there, when the entire customization had been
under the strictest, twenty-four-hour supervision by some twenty-five
Chinese military intelligence officials? It turned out that clandestine
operatives from the CIA and the National Security Agency (NSA) had
covertly placed the devices in the plane in hopes of gathering
intelligence from Jiang prior to a future summit meeting. (To this day,
the details of the bugging remain secret.)

For the United States, there was a more pressing question: How had the
Chinese uncovered the bugs so quickly? U.S. counterintelligence launched
an investigation to find out. That probe led ultimately to the Los
Angeles-based FBI counterspy James J. "J. J." Smith and his prized
agent, Los Angeles businesswoman Katrina Leung--code name "Parlor Maid."
A former FBI official, William Cleveland, would come under scrutiny as well.

The investigation turned up a revelation that would prove highly
embarrassing to the FBI: Both of these officials, two of the Bureau's
most senior counterintelligence officers, had had illicit, long-term
sexual relationships with Leung. Contrary to the bed-hopping image of
spies popularized in James Bond films, having intimate relations with a
paid FBI informant violates one of the cardinal principles of the spy
business, not to mention Bureau rules.

But to focus only on the soap opera element of the Katrina Leung story
is to characterize the episode as something only vaguely resembling a
spy case. And a spy case it is, without a doubt--a terribly damaging one
at that.

The real story of Parlor Maid has never been told. The main reason the
full account has not emerged is that the FBI and federal prosecutors
mishandled the investigation from the beginning.

A small group of FBI officials did their best to keep the inside story
from coming out. Rather than rage against the flagrant
counterintelligence failures demonstrated in the Leung case, these
officials focused on protecting the FBI's already-battered reputation
from further damage. Later, prosecutors made poor tactical decisions
that undermined the court case against Leung almost before it could begin.

Ultimately, prosecutors had to settle for a plea deal with Leung. The
deal, reached on December 16, 2005, spared Leung from serving jail time
or having to admit anything about passing illegally copied classified
information to Communist China.

After the plea deal was finalized, Leung's lawyers--having safely
escaped a trial that would have aired the overwhelming evidence of
Leung's espionage--issued a statement professing that their client
wasn't a spy and suggesting that she would have been glad to tell her
story in court. A spokesman for the U.S. Attorney's Office in Los
Angeles, Thom Mrozek, responded, "It's fair to say the government, by
virtue of how this case moved along, was never able to tell its side of
the story either."

Mrozek's statement was accurate, but it only obliquely hinted at the
reasons the case "moved along" as it did and at the powerful evidence
that Katrina Leung was indeed a spy for Communist China.

The real story of Parlor Maid will be told here for the first time. The
Leung affair, like many cases from the dark world of intelligence and
counterintelligence, is rife with lies and betrayals, half-truths and
truths, myth and reality converging and diverging. But this account,
based on court papers and on interviews with numerous intelligence and
law-enforcement officials who knew the case firsthand, reveals the
inside story of what really happened with Katrina Leung, Communist
China, and the FBI.

Parlor Maid is the story of a Chinese spy who got away. And not just any
spy. U.S intelligence officials close to the case insist that regardless
of the outcome of the prosecution, the Katrina Leung case represents one
of the worst spy cases in American history--and one of the worst U.S
intelligence failures, as well. The evidence buried as a result of the
FBI's mismanagement and the prosecution's failures bears this conclusion
out.

Further confirmation came in May 2006, when Department of Justice
Inspector General Glenn A. Fine issued his report on the Leung case.
Fine's highly critical report identified scores of FBI failures. The
first among them was the fact that the FBI ignored intelligence from an
informant who said a senior FBI agent was being "run" by Chinese
intelligence in Los Angeles. The spy running the agent was Katrina
Leung, and the agent was J. J. Smith. "The FBI's failure to fully
investigate Leung early on," the report stated, "was a lost opportunity
to obtain information concerning the PRC's attempts to acquire
technology and her contacts with persons of investigative interest to
the FBI." The inspector general also made it clear that Leung was in
fact a spy for China, not the FBI. The report stated clearly that Leung
"provided classified U.S. government information to the PRC without FBI
authorization." It revealed that at every step of the way in Leung's
career as an FBI informant, for which she was paid $1.7 million, there
were glaring signs that she was not who she claimed to be.

The extensive record makes it clear that the People's Republic of
China--an emerging world power that poses a direct threat to the United
States--penetrated the FBI. For more than two decades Communist China
ran a spy, Katrina Leung, who stole valuable secrets from the U.S.
government and intelligence community. More than that, this penetration
agent, who had more than 2,100 contacts with Chinese officials over the
course of twenty years, helped the Beijing regime exert enormous
influence in the United States.

As revealed by the inspector general's report, by many declassified
intelligence reports, by FBI documents, and by other documents submitted
in court, Leung compromised all the FBI's foreign counterintelligence
investigations on China. The FBI already struggled at aggressive
counterintelligence, the vital technique that represents the best way to
discover our adversaries' true intentions and, if necessary, to thwart
dangerous plans before they are executed. The Chinese agent did
incalculable harm by ruining the few successful counterintelligence
operations that the United States had in place.

Adding to the damage, Leung's frequent reports on China apparently
contained strategic disinformation about Beijing's plans and intentions.
For many years these reports, intelligence officials told me, reached
the highest levels of the U.S. government--including the Oval Office.
The Chinese government could tailor its deceptive information to conform
with U.S. beliefs and expectations because it had access to the deepest
secrets from within the U.S. government and intelligence community. One
legal document in the court case quotes U.S. government officials as
stating that given the magnitude of the compromises, the FBI "must now
re-assess all of its actions and intelligence analyses based on
[Leung's] reporting."

Parlor Maid is a textbook case of how Communist China uses its
intelligence services and agents not simply to gather intelligence but
also to run aggressive counterintelligence operations, to manage its
adversaries' perceptions of the emerging Chinese superpower, and to
conduct disinformation operations against the United States. The Katrina
Leung case provides a harrowing reminder that Communist China has made
the United States its number-one target. But largely because of the
effectiveness of China's penetration and disinformation campaigns, we
have reached the point where top U.S. government officials dismiss a
nuclear-armed Communist dictatorship in Beijing as "not a threat" to the
United States.

And at the end of the day, Parlor Maid is a story of criminal negligence
and cover-up on the part of the FBI. The truth must be revealed.

The Intercept

On November 26, 1990, a decade before China discovered the electronic
bugs on Jiang Zemin's Boeing 767, the telephone rang at the Chinese
Ministry of State Security (MSS) in Beijing. MSS is the Chinese
Communist equivalent of the FBI and CIA combined, with the political
police aspects of Moscow's KGB added. The caller, a woman, spoke
Mandarin and identified herself as Luo Zhongshan. She asked to speak to
Mao Guohua, the head of the MSS Foreign Affairs Bureau, one of the units
that runs China's intelligence-gathering operations in the United
States. The conversation was intercepted and recorded by the NSA, the
supersecret electronic spying and code-breaking agency.

mao:Who's this?

luo:Uh, greetings. Hey.

mao:I recognize you now.

luo:-There are two situations right now. I don't want to disclose it
over the telephone.

mao:Uh.

luo:The matte...

http://www.amazon.com/gp/product/product-description/0307338053/ref=dp_proddesc_0/002...

Editorial Reviews

Review
Praise for Bill Gertz and his explosive New York Times bestsellers

“A blockbuster book . . . Just astounding.” ―Rush Limbaugh

“Gertz is legendary among national security reporters for the quality of
his sources. . . . He is the envy of his competitors.” ―Washington Monthly

“The hottest reporter in town . . . [Gertz] breaks dozens of stories
every year, and he’s read carefully by people who follow national
security issues, not to mention the military attachés around town.”
―Washington Post

“If you’re a fan of horror stories, read this. It will scare the hell
out of you.” ―G. Gordon Liddy

“Bill Gertz remains a national asset.” ―Weekly Standard

“Explosive . . . A methodical, well-thought-out, easy-to-read book . . .
that will shock the average American.” ―Sean Hannity

Book Description
It’s the great untold story of the war on terror.

Taking advantage of gaping holes in America’s defenses, terrorist
organizations and enemy nations like Communist China, North Korea,
Russia, and Cuba―not to mention some so-called friends―are infiltrating
the U.S. government to steal our most vital secrets and use them against
us. And most astonishing of all, our leaders are letting it happen.

In the explosive new book Enemies, acclaimed investigative reporter Bill
Gertz uncovers the truth about this grave threat to our national
security and America’s harrowing failures to address the danger. Gertz’s
unrivaled access to the U.S. intelligence and defense communities allows
him to tell the whole shocking story, based on previously unpublished
classified documents and dozens of exclusive interviews with senior
government and intelligence officials. He takes us deep inside the dark
world of intelligence and counterintelligence―a world filled with lies
and betrayal, spies sleeping with enemy spies, and moles burrowing
within the FBI, the CIA, the Pentagon, and even the White House.

Enemies stunningly reveals:

. The untold story of one of the most damaging enemy spy penetrations in
U.S. history―and how the FBI bungled the investigation

. How Communist China’s intelligence and influence operations may have
reached the highest levels of the U.S. government

. Why Russia has as many spies in America today as it did at the height
of the Cold War

. How al-Qaeda and other terrorist groups use official identification,
uniforms, and vehicles to infiltrate secure areas and carry out attacks

. How some thirty-five terrorist groups are targeting the United States
through espionage

. A startling account of the many enemy spies the U.S. has let get away

. How a Cuban mole operated high up in the Pentagon for sixteen years

. The gross ineptness that led U.S. officials to hound an innocent man
while the real mole operated right under their noses

. Why aggressive counterintelligence represents the only real defense
against terrorists and enemy spies―and why the U.S. intelligence
bureaucracy resists it

Delivering the kind of shocking new information that led Washington
Monthly magazine to declare him “legendary among national security
reporters,” Bill Gertz opens our eyes as never before to deadly threats
and counterintelligence failures that place every American at risk.

America’s enemies, including terrorist organizations, are stealing our
most vital secrets to use against us―and the U.S. government makes it
shockingly easy for them to do so. Filled with headline-making
revelations from acclaimed reporter Bill Gertz, Enemies reveals the
frightening untold story of the War on Terror.

Also available as an eBook