To: MSI who wrote (20820 ) 4/13/2003 1:34:53 PM From: Tadsamillionaire Respond to of 93284 Espionage: Sex, Spies and the ‘Parlor Maid’ Justice Department task force was never able to prove the Chinese government was behind millions of dollars in suspect campaign contributions April 21 issue — An accused Chinese double agent who was having long-term sexual affairs with two veteran FBI counterintelligence agents was a key source for a special Justice Department campaign-finance task force, NEWSWEEK has learned. SET UP SIX YEARS ago in part to investigate an alleged Chinese plot to influence U.S. lawmakers, the task force has since disbanded: it was never able to prove the Chinese government was behind millions of dollars in suspect campaign contributions to former president Bill Clinton and members of Congress during the 1990s. But last week’s arrest of Los Angeles businesswoman Katrina Leung—an accused spy whose code name was Parlor Maid—has prompted an intense FBI review to determine if she compromised highly sensitive counterintelligence investigations, including the campaign-finance probe. Leung, sources say, was the task force’s chief source on prime target Ted Sioeng, a suspected Chinese “agent of influence” whose family and businesses contributed $250,000 to the Democratic Party in 1996 and an additional $100,000 to a California GOP Senate candidate. Leung and Sioeng (who sat next to Al Gore at his Buddhist-temple fund-raiser that year in Los Angeles) were “close friends,” one source says. Task-force prosecutors hoped to use Leung to lure Sioeng back into the United States in the spring of 1997. But the ruse failed—apparently because Sioeng got suspicious—and the case collapsed. Now FBI officials want to know if Leung sabotaged the probe and was actually protecting Sioeng. If so, it was only one of many embarrassments flowing from the Leung affair. She is already being touted as the “Mata Hari” of Chinese espionage. A highly compensated FBI “asset” (she was paid $1.7 million for services and expenses since 1983), Leung stands accused of purloining classified documents from the briefcase of her bureau “handler,” ex-L.A. agent J. J. Smith, with whom she was having a long-term affair, and turning them over to the Chinese. Leung was simultaneously having sexual relations with another FBI agent, William Cleveland, who resigned last week as a top security official at Lawrence Livermore Lab-oratories. Sources tell news-week that the FBI first suspected Leung in 1991, when she tipped off her Chinese handler (code-named Mao) to a sensitive FBI “security survey” of U.S. diplomatic missions in China. But Smith vouched for her, and the FBI kept Leung on the payroll. “I’m absolutely astounded they kept her as a source,” says ex-agent I. C. Smith, who headed the 1991 survey. “This strikes me as a monumental management failure.” Lawyers for Smith and Leung say they will contest the charges and argue that her real loyalties were to the United States, not China, making her in effect a triple agent. msnbc.com