Tiger Trap

by David Wise

  Her family background had elements of a soap opera. In the 1930s Katrina's grandfather had immigrated to New York. He opened a laundry on Long Island and eventually owned two restaurants in lower Manhattan. His son, Jimmy Gai Chin, Katrina Leung's uncle and surrogate father, joined him in New York. With his wife back in Hong Kong, the uncle took up with a barmaid and sired two boys. The barmaid moved to England with the children, became ill, and died; the boys, ages six and four, were returned to New York. The uncle, suddenly finding himself a single parent, called on his wife for help, and Katrina, her aunt, and grandmother joined him in Manhattan in 1970. Katrina traveled on a Taiwanese passport that said she was born on May 1, 1954, in Canton, China.

  They moved into an apartment at 137 Chrystie Street. "She enrolled in Washington Irving High School, and from three to midnight worked in a sewing factory," Kam Leung said. "She got mugged twice walking home at night."

  In 1972, the same year Katrina graduated from high school and became a permanent resident, she was accepted at Cornell University on a scholarship. There she met Kam Leung, a graduate student in biochemistry. He recalled the moment.

  "The first weekend I went there I saw a flyer, 'Upper Buttermilk Falls, Chinese Student Association Picnic.' I went, and there was a little girl wearing almond-shaped tinted eyeglasses and pigtails. She said, 'I'm very cold.' So even I could figure that out so I took off my pea coat and gave it to her.

  "A week later I found her crying in the lobby of the International Student House. She was lonely and homesick, so that is how we went on our first date. We went to see the movie Butterflies Are Free."

  They lived together for three years before marrying in 1975. "I was too poor for a wedding ring so neither of us wear wedding rings."

  Kam Leung was born in Hong Kong in 1951; his father, a graduate of a military school in China, had been posted to a train station near Canton. "When the Japanese invaded, he was in charge of the last train out of China. He rescued the safe of Ho Tim, who founded the Hang Seng Bank in Hong Kong, and probably saved his fortune."

  In 1969, when Kam Leung was eighteen, he came to the United States to study chemistry at Sam Houston State University, in Huntsville, Texas. He went on to Cornell in 1972 to earn a PhD in biochemistry.

  In lengthy interviews over two days, Kam Leung came across as both astute and sophisticated as he described in great detail his life with Katrina. He was also, to all outward appearances, and despite his wife's infidelities, still hopelessly in love with her.

  "She is brilliant," he said. "She was always the head of the class. She is generous to a fault." What had attracted him to her? "She's helpless," he replied. "She is extremely insecure inside. I recognized the little girl inside of her, crying out."

  There is, of course, a startling disconnect between Kam Leung's gauzy view of the helpless little girl in pigtails who captured his heart at Cornell and the tough-minded, deceptive, and ambitious woman who ended up earning millions as a double agent and a spy for both the FBI and Beijing.

  Katrina Leung graduated from Cornell in 1976, and her husband won a research fellowship at the University of Chicago. "She just followed me and hung around the Chinese student center." But 1976, Kam said, "was the beginning of her troubles. Katrina helped to found the Chicago chapter of the National Association of Chinese Americans. It was considered a pro-Beijing group."

  And it was in Chicago that Katrina met and became a close friend of Hanson Huang, a smooth graduate of Harvard College and Harvard Law School who had landed a job in that city with Baker & McKenzie, a prestigious international law firm. Huang, who was born in Hong Kong in 1951, and Katrina Leung were both active in support of China in the Diaoyutai Islands student movement.

  The islands—in Chinese, diaoyutai means "to catch fish"—are a string of eight barren and uninhabited isles in the East China Sea about one hundred miles northeast of Taiwan. They are claimed by China, Japan, which calls them the Senkaku, and Taiwan. During the 1970s, Chinese students around the world joined in a movement to protest Japan's claims to the islands.*

  In 1976 Kam Leung completed his PhD and moved to Cincinnati to take a job at Procter & Gamble. Katrina remained behind and earned a master's in business administration at the University of Chicago. Kam visited her on weekends.

  In 1980 the couple moved to Los Angeles and took a studio apartment in Azusa, in the foothills of the San Gabriel Mountains east of downtown. Kam went to work as a research scientist for a medical equipment company. "I was killing mice, fifteen hundred mice a week for the lab, injecting them." Katrina got a marketing job with an HMO.

  Before that, however, she briefly worked as general manager of an import-export company. The FBI investigated the firm because it was suspected of illegally transferring technology to China. Early in 1981 the FBI began a full field investigation of Katrina herself, who was "believed to be engaged in clandestine intelligence gathering on behalf of the PRC." That investigation languished in the FBI bureaucracy and the case was closed, with no action taken, in November of that year.

  At the same time, the bureau learned that Katrina Leung had a close relationship with the target of another case of suspected technology transfer to China, this one in San Francisco. William Cleveland was the case agent; in Los Angeles, J.J. Smith was assigned to the investigation.

  A year later, in August 1982, J.J. knocked on the door of the apartment in Azusa. He identified himself as a special agent of the FBI.

  It was the beginning of the dance, an intelligence tango that sometimes ends with the recruitment of a useful source. It might seem astonishing, even reckless, that the FBI would try to recruit someone who it believed might be spying for China. But in "the wilderness of mirrors," as counterintelligence is often called, it was not entirely strange. The recruiter looks for a person who already has contacts with the target. And calculates the risk.

  Over the next four months, J.J. interviewed Katrina several times. By December, she had accepted J.J.'s offer.

  Soon afterward, according to Kam, "We were sitting by a lake. She said, 'I'm going to quit my job to work for the FBI.'"

  Chapter 4

  DOUBLE GAME

  THERE ARE TIMES when a single act can be a turning point in a life. Everything else that happens flows from that moment. J.J. Smith's recruitment of PARLOR MAID was just such a pivotal juncture. He had been a special agent of the FBI for a dozen years. He was thirty-eight; Katrina Leung had just turned thirty-one a month earlier.

  J.J. was a big man, almost six feet, stocky and muscular, proud of his blue-collar background. His father was a bricklayer for forty-five years. His grandparents on his father's side were German farmers; his maternal grandmother, who was Mexican, had married a Scotch-Irish fireman.

  He and his wife, Gail, a former Daffodil Queen in Washington State, were married in 1966. In the summer of 1967, after graduating from the University of Puget Sound, he was about to be drafted when he encountered a buddy, Doug Walker, who had an idea.

  "Let's sign up for Army Intelligence," Walker suggested, "and we'll both end up drinking beer in Germany." Instead, they were trained as intelligence officers and sent to Vietnam. J.J. was assigned to the 515 Military Intelligence Group in Quang Ngai, a Viet Cong stronghold, running double agents in a program code-named 97 CHARLIE.

  Back at Fort Bragg, North Carolina, a local FBI agent in Fayetteville recruited him for the bureau, which he joined in 1970. He wound up in Los Angeles, and by 1975 he was handling Chinese counterintelligence cases.

  Foreign counterintelligence, or FCI, in bureau terminology, was not a popular career path inside the FBI. "Young agents out of Quantico, all full of piss and vinegar, they wanted bank robberies, criminal cases," said John L. Hoos, a former FBI agent who worked with J.J. "But J.J. was a rare duck, he went into FCI and stayed in FCI."

  J.J., he added, "was very likable, with a good sense of humor, he was very dedicated to his work, respected by the other agents. He was well versed in Chinese counterintelligence�
�a walking encyclopedia on cases, procedures. If you had a question, ask J.J."

  By the time J.J. recruited PARLOR MAID in 1982, he had achieved an unusual degree of independence within the FBI field office. His supervisors indulged him and deferred to his expertise on matters Chinese. Although FBI agents are often moved around, because of J.J.'s stature he was able to remain in Los Angeles. With his wife, Gail, and their young son, Kelly, J.J. settled down in Westlake Village, a comfortable suburb.

  Although at first Katrina Leung was only an IA, the FBI's designation for an informational asset, J.J. quickly realized her potential as a bureau source. It did not take long for their professional relationship to turn personal. By August 1983 they had hopped into bed.

  One of the reasons that J.J. had recruited Katrina was her friendship from Chicago days with Hanson Huang, who had gone to China to work for Armand Hammer and the Occidental oil company. Although Huang was a loyal pro-PRC activist, the Chinese authorities had, ironically, begun to suspect him, perhaps because of his curiosity about the location and size of the country's oil reserves, matters considered state secrets in China. He was arrested, and in June 1983 convicted of espionage in a Beijing court and sentenced to fifteen years.

  J.J.'s interest in Huang, and the FBI's, was based on more than Huang's activism in the Diaoyutai Islands student movement. For Hanson Huang had emerged as a key figure in TIGER TRAP, involving nuclear weapons, which Bill Cleveland was actively pursuing in San Francisco with the help of J.J. in Los Angeles. Now that Huang had run afoul of Chinese intelligence, perhaps he might be willing to help the FBI.

  As J.J.'s first major assignment for Katrina, he instructed her to go to China and try to wangle her way into the prison where Huang was being held. It was a tall order. In a tightly controlled Communist state, how could a foreigner manage to visit a prisoner serving time for espionage? That she accomplished that feat might have been expected to raise an eyebrow both with J.J. and the bureau. It did not; J.J.'s first reporting to headquarters from PARLOR MAID was a summary of what she had learned on her prison visit.

  I. C. Smith, who was not related to J.J., was then working in the China unit at FBI headquarters in Washington. "J.J. had sent me an airtel and she, Katrina Leung, had all this reporting on her first trip to China in 1983 about Hanson Huang, who was in jail. I said this was a bunch of crap because it's got sex and intrigue and everything but intel. I said, 'Dammit, J.J., where's the fucking beef?'"

  "Don't worry, it's coming," J.J. assured him.

  I.C.'s annoyance may have been partly rooted in the fact that J.J. seemed to walk on water in the bureau. "J.J. had an LA attitude," I.C. said. "He flaunted the rules. He could get by without wearing a coat and tie. He had this great source, and it made him bulletproof."

  By this time, PARLOR MAID had graduated to the status of an OA, or operational asset in FBI jargon. As an IA, she provided information to the bureau; as an OA she was given specific tasks. At the same time, Leung was solidifying her contacts in the Chinese American community in Los Angeles.

  In March 1984, with J.J.'s help to speed up the paperwork, she became a US citizen. That year, or soon after, Katrina moved into the big leagues as a full-fledged DA, or double agent. The bureau's plan was to let the MSS think she was working for China, while in fact she was directed and controlled by the FBI.*

  Toward that end, she was encouraged by J.J. to advertise to China her contacts with the FBI and in particular her friendship with him. She was authorized to approach the MSS in Beijing, pretending to be loyal to China. No sensitive information was supposed to be given to her by the FBI, since she was not an employee and would have had a difficult time explaining her access to bureau secrets. But the Chinese, who have been spying for at least twenty-five hundred years, since Sun Tzu wrote the book on espionage, would have quickly understood that she had been recruited by the FBI and dangled to the MSS. And anyone who had a relationship with the FBI was of great interest to the MSS.

  On her visits to China, PARLOR MAID was also encouraged by J.J. to boast to the MSS and other officials about her growing status in the Chinese American community, since that, too, made her an attractive source for the Chinese intelligence service.

  PARLOR MAID was usually accompanied on her trips to China by her husband and their young son. On her very first trip to Beijing, according to Kam Leung, "she knocked on the door of the MSS. She was tasked to do this."

  "We went to China at least once a year, sometimes more," he said. "We went to China at least twenty years, some years two or three times."

  The presence of her husband and son, Kam said, "provided the excuse to visit wherever Katrina asked to go. She would say, 'Our family have never been to Xi'an,' so they would say, 'Sure, go to Xi'an.'

  "Or she would say, 'My son would love to go to Harbin, to the cold country.'" Three times, PARLOR MAID traveled to Harbin, in far northeast China near the Russian border, where the temperature was well below zero, claiming that their son "loved the Ice Lantern Festival." In fact, there was another motive; she was currying favor with the head of the MSS, who came from that city in Heilongjiang Province, as did a large number of other Chinese intelligence officers.

  "I was the cameraman," her husband said. "I used a Nikon and an Olympus, eventually a Sony digicam." Kam bought the cameras and the FBI reimbursed Katrina for them. He would make a double set of prints and give one to his wife to pass on to J.J.

  Some of PARLOR MAID's reports made it to the White House under presidents Ronald Reagan, Bill Clinton, and both George H. W. Bush and George W. Bush, according to intelligence officials. The high-level CIA medal that J.J. received for PARLOR MAID is evidence of how valuable her work, and his, was regarded. Until later, when it all unraveled.

  As Katrina Leung was ingratiating herself with the top leaders in Beijing, she simultaneously became an increasingly prominent member of the Chinese American community in Southern California. She was active in Republican political circles as well, contributing $10,000 to Los Angeles mayor Richard J. Riordan and $4,200 to Bill Simon Jr., who defeated Riordan in the Republican primary for governor of California in 2002 but lost to Gray Davis. According to campaign finance records, the Leungs contributed some $27,000 to the Republican Party during the 1990s. Katrina Leung also contributed to at least one prominent Democrat, her friend Judy Chu, who represented heavily Chinese American Monterey Park in the state assembly.

  Her entrée into the wider world of Los Angeles society was through Caroline Leonetti Ahmanson, a onetime hostess on Art Linkletter's television variety show House Party and the widow of Howard Fieldstead Ahmanson, a billionaire savings and loan tycoon. Caroline Ahmanson, who died in 2005, was a well-known patron of the arts in Los Angeles—the Ahmanson Theatre bears the family name—and was also active in promoting improved relations between China and the United States. She was chairwoman of the Los Angeles-Guangzhou Sister City Association, and chose Katrina Leung as president. Caroline Ahmanson was close to Zhu Rongji, the premier of China for five years until 2003, and she visited the mainland several times, accompanied by Katrina.

  "Without Caroline, Katrina is just another Chinatown hustler," Kam Leung said of his wife. "Caroline introduced her into the mainstream of society."

  Los Angeles businessman Peter Woo, founder and president of the toy manufacturing company Megatoys, saw evidence of Katrina Leung's clout in China firsthand. In 1996, as part of a delegation of some forty community leaders, he accompanied her and Mayor Riordan on a trip to Beijing and other cities in China to promote business for the port of Los Angeles.

  "She was the one who put the trip together. She was in command. There were a couple of dinners with Chinese government officials. She emceed these events. There was a banquet at the Great Hall of the People, she was emcee of that banquet. Katrina and Mayor Riordan saw Jiang Zemin in his office. She bragged about it, she can see so-and-so any time she wants. Our impression was that she was very well connected with the Chinese government." Or as one high ci
ty official in Los Angeles put it, "When you need to get something done with China, you go to Katrina Leung."

  Katrina, Woo recalled, would often show up at functions with her FBI friends. "She sometimes invited J.J. and his colleagues to dinners. There were rumors she was a spy for China. You see her with FBI agents and she introduced them to us to show there was no problem with the US government. Showing up with the FBI legitimized her status."

  And working for the FBI also meant that Katrina Leung enjoyed an affluent lifestyle. Of the more than $1.7 million in expenses and salary she received from the FBI, more than half, $951,000, was paid to her after the FBI learned in 1991 that she had passed unauthorized information to Mao Guohua, her Chinese spymaster.

  In addition, because of her known connections to the leaders in Beijing, she was approached by Nortel, a major Canadian telecom company, which paid her $1.2 million as its representative in a deal to allow Nortel and its DMS-100 digital switching systems into China.

  As the FBI later discovered, the Chinese government also paid her $100,000, so that her known income from the FBI, Nortel, and the PRC amounted to more than $3 million.

  With the money rolling in, the Leungs' lifestyle improved accordingly. They purchased a house for $1.4 million in San Marino, an upscale section of Los Angeles, with a garage, a swimming pool, a pond, a pool house, and four cream-colored stone lions guarding the driveway. They also owned a Chinese-language bookstore in Monterey Park and two apartment houses, and had funds in sixteen foreign bank accounts.

  It was in the house in San Marino that most of the trysts between J.J. and Katrina took place. It was also at the San Marino residence that J.J. would brief PARLOR MAID on her assignments, and learn the information she brought back from her trips to China.