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CIA rebuilding spy networks in China a decade after losing agents, director reveals

The Central Intelligence Agency is working to rebuild spy networks in China after a devastating counterintelligence loss of its recruited-agent networks there more than a decade ago, CIA Director William Burns disclosed Thursday.

Mr. Burns, speaking at a security conference in Colorado, was asked about the loss of the recruited Chinese and other agents that U.S. officials say began in 2010 and was caused by a combination of betrayal by a CIA officer and a breakdown in a clandestine communication system.

“We’ve made progress and we’re working very hard to make sure we have a very strong human intelligence capability to complement what we can acquire through other methods,” Mr. Burns said.

It was the first time the CIA, the lead U.S. intelligence service for conducting human spying, has acknowledged publicly what officials have called an intelligence disaster at a time when there was renewed U.S. government focus on China.

The director made the comments during an appearance at the Aspen Security Forum about what steps have been taken after most of the CIA’s recruited agents in China were arrested or executed.

On Taiwan, Mr. Burns also repeated the Biden administration position that a war with China over Taiwan is neither imminent nor inevitable.

But he said Chinese President Xi Jinping is determined to take control of the island at some point in the future, while adding that the Chinese leader likely has not decided whether to try to seize Taiwan by force.

Russian military shortcomings in Ukraine also have affected Chinese leaders’ thinking on an invasion of Taiwan, he said.

“I think what it means is that today, President Xi and the PLA, the People’s Liberation Army leadership, have doubts about whether they could pull off a successful, full-scale invasion of Taiwan at an acceptable cost to them,” he said.

On the recent hacking of U.S. government email accounts announced by Microsoft, Mr. Burns said the U.S. government first detected the Chinese hacking and alerted the software company.

Regarding the agent losses a decade ago, U.S. intelligence and counterintelligence officials said the arrests of the spy network were carried out by the Ministry of State Security, the primary intelligence and counterespionage service in China.

Between 2010 and 2012, as many as 30 CIA recruits in China were detained by MSS inside China and at other locations.

The intelligence loss hampered the U.S. government’s ability to monitor what has recently been described as the largest buildup of conventional and nuclear military forces in history by China’s People’s Liberation Army.

Most of the compromised agents were imprisoned, but U.S. intelligence knows of at least one case of the CIA agent being executed in front of a gathering of security personnel in the courtyard of a government building in Beijing.

Intelligence sources said in 2019 that while the MSS counterspy operation used traditional recruitment of persons with knowledge of agent networks, a secure communications system used to communicate with recruited agents also may have been penetrated by the Chinese.

Mark Kelton, a former deputy CIA director for counterintelligence, declined to comment on the agent losses in China.

However, Mr. Kelton, who was involved in investigating the agent losses, said Chinese intelligence operations represent “a secret assault on America that is without parallel since that mounted by Moscow in the 1930s and ’40s.”

“The PRC has launched a covert assault on the United States across the full spectrum of intelligence activities,” he said. “That campaign, which has inflicted considerable damage on us, to include theft of sensitive government, trade, and industrial secrets.”

Chinese intelligence operations against the United States have been successful for decades, beginning with the recruitment of nuclear scientists that resulted in the loss of secrets on every deployed warhead in the nuclear arsenal.

The Chinese military is currently engaged in what the commander of the Strategic Command called a “breathtaking” nuclear breakout – a three-fold expansion of its nuclear warhead and missile arsenal.

Other intelligence sources said the agent losses began in mid-2010 when a drop off of the quality of intelligence from the agent network was noticed by CIA.

Many of the agents were disillusioned officials who had agreed to spy for the CIA and reveal some of the inner workings of the communist system.

Initial fears about the agents in China were confirmed by the end of 2010 when the flow of intelligence dried up and agents began providing information that was suspect in reliability. The damage continued through 2013.

A special intelligence task force worked on two theories behind the losses: One was the result of a mole inside the CIA who was working for the Chinese. The other was a technology compromise.

Eventually, the FBI and CIA identified a former CIA operative who is a likely source in the loss: Jerry Chun Shing Lee, a naturalized U.S. citizen also known as Zen Cheng Li.

Lee was a former CIA operations officer in Hong Kong who was recruited by several MSS officers. He had access to the identities of numerous CIA officers and the identities of their human sources, along with details of sensitive intelligence collection operations and methods.

Lee pleaded guilty to conspiracy to commit espionage in April 2019. He was sentenced to 19 years in prison.

Other counterintelligence officials who believed the agent losses were the result of a communications breakdown said Lee’s treachery could not account for the speed with which the agents were arrested.

They theorized that an internet-based communications system used in handling new agents was improperly connected to an ultra-secure system for contacting agents.

The agent network had been built up over many years by CIA officers working undercover.

The CIA’s record for protecting agents has been spotty. The agency’s network of Soviet and Russian agents was compromised by spies in the 1980s and 1990s.

Critics blame the restructuring of CIA counterintelligence after the firing of CIA master counterspy James Angleton in 1975 for the security breaches.

After Angleton, counterintelligence at CIA was downgraded by removing the function from an independent section and making it a component of several agency departments.

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