Incident: Arrested CIA case officer Jerry Chun Shing Lee is believed linked to the death and disappearance of at least 20 CIA sources in China between 2010 and 2012, NBC News reported Jan. 17, citing sources familiar with the case. Lee was arrested Jan. 15 and charged Jan. 16 with unlawfully retaining information pertaining to national defense, the Department of Justice announced Jan. 16.
Tactics: While Lee's involvement in the loss of CIA sources has not been officially confirmed, the timeline and details of Lee's case and the CIA's loss of sources do appear to line up. The FBI lured Lee to the United States from his residence in Hong Kong in August 2012 under the pretense of interviewing him for a job. During that trip, FBI agents searched Lee's hotel room on two occasions, finding material that was later confirmed to contain the names and phone numbers of classified CIA sources, along with handwritten meeting notes and dates with those individuals. Additionally, FBI agents and Lee's former colleagues interviewed and met with him multiple times to allow him the opportunity to admit to his retention of classified materials, but Lee concealed his possession of the information. Lee had served with the CIA from 1994 to 2007, which would have put him in a position to know and work with classified CIA sources. But retaining that information beyond the end of his service broke the terms of several lifelong non-disclosure agreements Lee had signed upon entering service for the CIA. Approximately three years after Lee ended his service with the CIA, the agency began noting a concerted effort on the part of Chinese authorities to neutralize sensitive U.S. sources in the country — a campaign that went on for about two years.
Trends: Lee is just the latest current or former U.S. government employee to be implicated in Chinese espionage efforts. In the past nine months, we have seen two State Department employees arrested. One, Candace Claiborne, was arrested for failing to disclose thousands of dollars in gifts she received from Chinese officials. The second, Kevin Mallory, was arrested for selling classified documents to China. If NBC's sources are right, Lee's case appears to have primarily damaged U.S. national security interests in China, but it nevertheless reinforces the analysis that China maintains a strong appetite for intelligence of strategic and commercial value.
Implications: While Lee's case appears to fall into the traditional espionage category rather than industrial espionage, he nevertheless highlights a highly active, capable and hostile Chinese intelligence capability. If the U.S. government — which has one of the most capable counterintelligence programs in the world — is struggling to keep up with the Chinese espionage threat, nongovernmental entities such as corporations with far fewer resources are much more vulnerable. Lee is the second former government employee (after Mallory) to face espionage indictments in the past seven months. Given the tendency of former government employees involved in national security to go on to work for the private sector or higher education, it is important for companies and other institutions to consider the potential intelligence risk to such employees before posting them to sensitive areas like China.