Unlike espionage cases involving at-the-office traitors like the CIA's Aldrich Ames and the FBI's Robert Hanssen, the Leung case raises some unusually delicate issues. It doesn't involve just classified documents that may have been stuffed in a briefcase and smuggled home but secrets that may have been spilled during the nearly 20 years of pillow talk Leung allegedly conducted with Smith and the seven years' worth with Cleveland. The possible ramifications have sent intelligence veterans into fits of apoplexy. "This is just perfectly ghastly," says James Lilley, former ambassador to China. "These two FBI case officers were fools. And she made a monkey out of them and fed them a lot of tainted information, which they fed straight into the White House." Lilley, once the CIA'S station chief in Beijing, doesn't believe that Cleveland and Smith, despite their lapses, did all that much damage. "My own sense," he says, "is these guys couldn't operate against a bull fiddle."
Others in the U.S. intelligence community aren't quite so sure. These are among the principal findings of the U.S. News examination of the case:
J. J. Smith frequently briefed an ad hoc China operations group consisting of the CIA, the Defense Intelligence Agency (DIA), the State Department, the National Security Agency (NSA), and other agencies. Any disinformation Leung provided to her FBI handlers would have permeated the entire intelligence community, numerous officials say. Smith may also have been present at CIA station liaison meetings with many of these same agencies, officials say. That's because, by law, the CIA and the military intelligence services must coordinate all domestic intelligence-gathering operations, such as recruiting assets to send abroad, with the FBI, in the event the target of such operations involves a U.S. citizen. Because of his supervisory status and China expertise, Smith would have been present at many such liaison meetings and could have knowingly or inadvertently provided Leung with information about CIA and military operations, sources, and methods. Wortzel says the damage from the Leung case could match the compromising of U.S. agents and operations during the Cold War. "If we are ever able to get access to Chinese records," says Wortzel, now vice president of the Heritage Foundation, "this will compare to East Germany, where we found we never had a viable operation."
The implications of such a conclusion are still sinking in. Current and former government officials say the entire roster of U.S. intelligence efforts for all of Asia outside the Soviet Union over the past 20 years may have been compromised, as well as operations of allies like Britain, Canada, Australia, New Zealand, and Taiwan.
Leung may have jeopardized the identities of U.S. intelligence and counterintelligence agents because she guest-lectured at the FBI's academy in Quantico, Va. She also had occasion to meet case officers from the CIA, DIA, NSA, and other intelligence agencies who attended FBI training programs. "There's concern," a senior FBI official says, as to what Leung may have told MSS from these meetings. "How we do things, how we report things, and what we're interested in," this official said, "allows them to build countermeasures to protect that information."
U.S. News has learned that one Quantico talk took place on May 20, 1993--two years after Cleveland and Smith found out about Leung's MSS contacts. Leung and Smith, sources say, were both invited to speak to Chinese counterintelligence agents from the FBI, the Pentagon, and other agencies. The topic: how to conduct double-agent operations. The classified meeting was videotaped. "There they are talking about it in a room full of people," a source exclaimed, "asking about how it's done."
Leung's task for the FBI, according to FBI agent Thomas, was to pretend to be a Chinese asset, known as a "controlled agent," providing her MSS handler only with information Smith had authorized. U.S. News has learned that the FBI is not discounting the possibility that Leung was already a real MSS asset when the FBI recruited her, not a pretend one, which would make her not a double agent but a triple agent or "triple cross."