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5:19, 19 January 2018

Arrested Former C.I.A. Officer Had Ties to Chinese Spies, Ex-Colleague Says

Arrested Former C.I.A. Officer Had Ties to Chinese Spies, Ex-Colleague Says

Arrested Former C.I.A. Officer Had Ties to Chinese Spies, Ex-Colleague Says


WASHINGTON — Jerry Chun Shing Lee, the former C.I.A. officer arrested this week in New York, had repeated contacts with Chinese intelligence, each on an official basis whilst working for the agency in Beijing and afterward beneath situations his business associates discovered deeply suspicious, according to a former colleague who worked closely with him.

The new information suggests why American investigators suspect Mr. Lee, who has been charged with mishandling classified data, might have played a role in the dismantling of the C.I.A.’s networks of agents in China starting in 2010. The former colleague, who worked with Mr. Lee at Japan Tobacco International, mentioned he was viewed at the firm with mistrust and was fired as a outcome, just before he came below intense F.B.I. scrutiny as a achievable turncoat.

Executives at Japan Tobacco informed the F.B.I. of some of Mr. Lee’s suspicious contacts in 2010, the former colleague said in an interview. But it is unclear when and no matter whether F.B.I. counterintelligence agents learned all the information of his a number of contacts with Chinese spies.

The destruction by Chinese security agencies of the C.I.A.’s operations inside the country, like the imprisonment or execution of a dozen Chinese nationals secretly working for the United States, is considered 1 of the most devastating intelligence setbacks for the agency in current decades. With Mr. Lee’s arrest and the continuing investigation, inquiries at the C.I.A. and the F.B.I. into how it unfolded and what blunders were produced are likely to go on for years.

Mr. Lee, 53, a naturalized American citizen who was born in Hong Kong, joined the C.I.A. in 1994 following serving in the Army and earning two business degrees at a Hawaii university. He worked beneath diplomatic cover in Asia and at C.I.A. headquarters in Virginia.

By 2007, he was increasing frustrated by his lack of advancement and decided to leave the agency. He was hired by Japan Tobacco International and joined that company’s team of investigators who tracked cigarette smuggling and counterfeiting.

Mr. Lee told his new employer that his final government assignment had been as the agency’s official liaison in Beijing to Chinese intelligence, according to the former colleague, who did not want to be swept into the media storm more than the case and spoke on the situation of anonymity. Although some of Mr. Lee’s meetings with Chinese officials would have been authorized and very carefully documented, former officials say there have been some issues at the time that he may not have been completely forthcoming with superiors about his unofficial contacts.

Soon after a year or so in the new job, he came beneath suspicion from superiors at Japan Tobacco who thought he may possibly be tipping off corrupt Chinese officials about the company’s investigations of cigarette smuggling and counterfeiting. Situations that he was informed about typically fell apart, so his bosses stopped updating him about their inquiries, said the former colleague, who was directly involved in the operations.

Right after such suspicions prompted his dismissal by the Japanese business in mid-2009, a Chinese official warned the organization that Mr. Lee was again speaking with Chinese intelligence officers, falsely telling them that the company’s investigations unit in Hong Kong, exactly where he had worked, was a C.I.A. front, the colleague stated. Japan Tobacco officials passed the info to the F.B.I.

By October 2010, looking for organization for a new organization he had produced, Mr. Lee was accompanied to a business meeting by Chinese intelligence officers, who vouched for him, Japan Tobacco was later told by folks at the meeting.

Mr. Lee was taken into custody on Monday right after arriving at Kennedy International Airport and charged with a single count of retaining classified info. The charge, which carries a maximum sentence of ten years, connected to Mr. Lee’s possession in 2012 of two notebooks that contained the identities of Chinese nationals functioning for the C.I.A. and other highly classified information. Mr. Lee’s repeated contacts with Chinese intelligence would be of wonderful relevance to the query of whether he might have been recruited by China and played a role in the betrayal of C.I.A. secrets.

During the early years of the investigation into the loss of sources in China, there were disagreements amongst the C.I.A. and F.B.I. more than no matter whether Mr. Lee was the likely source of the breach. Some investigators believed China may have penetrated the C.I.A.’s covert communications or sloppy tradecraft.

Mr. Lee does not yet appear to have a lawyer, although he was represented by a federal public defender during a court appearance this week. He has not been charged with espionage, and no proof has publicly emerged linking him directly to the deaths of the C.I.A. sources in China.

The colleague, who was formerly a senior manager with Japan Tobacco and worked closely with Mr. Lee there, mentioned the company had very good explanation to believe Mr. Lee’s claim that he had been the C.I.A. liaison to the Ministry of State Security, even though he declined to give particulars. He said the firm also believed the later report that Mr. Lee was meeting in 2010 with Chinese intelligence, which came as a tip from a Chinese official to a veteran investigator with Japan Tobacco, a former Hong Kong police investigator who had handled several tobacco situations.

Mr. Lee’s reported false claim that Japan Tobacco investigators had been in fact functioning for the C.I.A. alarmed business officials, who thought it would put at danger each firm investigator who traveled in China. He said the claim had no basis in reality, and that any perception of an association with any foreign intelligence service was carefully avoided due to the fact it would have been unsafe for Japan Tobacco workers in China.

Firm officials thought the false C.I.A. claim was an act of revenge for Mr. Lee’s firing. For months, the company banned all travel to the rest of China by Hong Kong-based investigators, mentioned the former colleague.

“We took it as payback from Jerry,” the colleague mentioned.

In addition, at the time of his firing, Mr. Lee told senior Japan Tobacco officials that other business safety workers had been carrying out kidnappings and torture in their hunt for smugglers, the former colleague stated. These claims have been in no way substantiated, but they roiled the company and led to the breakup of the Hong Kong investigative unit, which was later reformed with largely various personnel.

But Mr. Lee’s reported contacts with the Chinese Ministry of State Security did not end there, the former colleague said. Following Mr. Lee was fired, he joined with a former Hong Kong police officer to type a modest investigations firm and sought tobacco companies’ enterprise.

In October 2010, Mr. Lee appeared at a meeting of the Guangdong Province branch of the Chinese state tobacco organization accompanied by Ministry of State Security officers, men and women at the meeting told Japan Tobacco officials. Mr. Lee was in search of enterprise for his new investigations firm, and the intelligence officials were there to support his appeal, Japan Tobacco was told.

Mr. Lee co-owned the investigations firm, FTM International, with Barry Cheung Kam Lun, according to corporate records. Mr. Cheung was a former Hong Kong police officer, according to Mr. Lee’s former colleague. Mr. Lee’s wife, Caroline Lee, served as the sole director of FTM, the records show.

Even though the investigations firm, called FTM International, evidently did not thrive and sooner or later went out of organization in 2014, Mr. Lee was later hired by Estée Lauder, the cosmetics company, and Christie’s, the international auction home, which suspended him soon after his arrest. But the former colleague stated Japan Tobacco never ever heard from Mr. Lee or his prospective employers. He stated he did not know about the F.B.I. investigation until Mr. Lee was arrested.

An internal announcement of his hiring by Christie’s as director of security for Asia described him as getting “considerable domestic and international knowledge of managing complex safety issues” and stated he spoke Cantonese and Mandarin as properly as English. In a statement, Lavina Chan, head of corporate communications for Christie’s Asia, confirmed that Mr. Lee had worked in the job for the past 20 months and had been suspended after his arrest pending the outcome of the investigation.

The colleague recalled other details of Mr. Lee’s two years with Japan Tobacco. While reticent with superiors, he was a lot more loquacious with regional Chinese workers, who described him as often talking about the money he was producing or wanted to make. When the firm discovered a $15,000 shortfall in a money fund utilised to pay informants on cigarette smuggling circumstances, Mr. Lee came beneath suspicion. His bosses feared he may also be taking cash to pay informants who did not exist, the colleague said.

He was married with two daughters, appeared to be devoted to his young children and did not reside a flashy life-style, the colleague mentioned. But he was unpopular at work, broadly noticed as untrustworthy, and when he left, “none of us ever wanted to see him again.”

Reporting was contributed by Adam Goldman and Matt Apuzzo in Washington, Michael Forsythe in New York and Amy Qin in Hong Kong.

A version of this article appears in print on , on Page A11 of the New York edition with the headline: Arrested Former C.I.A. Officer Had Ties to Chinese Spies, Ex-Colleague Says. Order Reprints | Today’s Paper | Subscribe


Published at Fri, 19 Jan 2018 00:23:32 +0000

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