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Not Guilty Plea Entered in Spy Case

Ex-FBI officer James J. Smith is charged with hiding an affair with an alleged Chinese agent.

March 01, 2004|David Rosenzweig | Times Staff Writer

Former FBI counterintelligence officer James J. Smith pleaded not guilty last week to a new indictment charging him with concealing his long-standing sexual liaison with an alleged Chinese double agent.

Smith, who retired from the agency in 2000, appeared before U.S. District Judge Florence-Marie Cooper.

At the same time, prosecution and defense attorneys told the judge they would be ready to go to trial in February. The trial of the alleged double agent, Katrina Leung, is tentatively scheduled to begin in September.

The new indictment was returned by a federal grand jury earlier last week, superseding one brought against Smith after his arrest last April.

It increased the emphasis on Smith's affair with Leung, which began in 1983, soon after he recruited her to spy on China, and continued for 20 years. Leung, a wealthy Chinese American businesswoman, remained a prized FBI asset in that time.

Conspicuously omitted from the new indictment were any details of her alleged double dealings with an officer at the Chinese Ministry of State Security, code-named "Mao." As a paid FBI informant, Leung was supposed to gather information about the Chinese intelligence service while pretending to be spying on the FBI.

Smith learned in 1991 that Leung had been feeding sensitive U.S. intelligence to "Mao," according to the original indictment. When confronted, Leung allegedly admitted having passed the information to the Chinese intelligence agent, but Smith allegedly hid that from his superiors. Nor did he tell them that Leung had refused to take a polygraph test, it is alleged.

One possible explanation for the absence of those details from the new indictment is contained in a written stipulation submitted by prosecutors and defense lawyers last month. In it, Assistant U.S. Atty. Rebecca Lonergan said the government was planning to seek the replacement indictment, and stated that the new document would affect the defense team's pending motions for access to classified information. As of Jan. 30, the prosecution had declassified and turned over 176 of 348 documents requested by the defense.

Smith's defense lawyers, Brian Sun and John Cline, declined to speculate on whether the new indictment had been crafted to restrict their access to classified information.

Citing the affair with Leung, the latest indictment charges Smith with falsely telling interrogators that there had been nothing in his past or present life that could be used to compromise him as a counterintelligence officer. The questioning occurred during a routine internal security interview in August 2000, three months before he retired.

Smith's and Leung's extramarital relationship is also mentioned prominently in a second count, which accuses him of depriving the government of his honest services. "This sexual relationship violated FBI rules and regulations and created a significant risk that defendant Smith would not act with impartiality and care in his handling of Leung," the indictment states.

Smith is also charged with two counts of criminal gross negligence in removing classified documents from FBI headquarters in Los Angeles and taking them to Leung's San Marino home where, according to prosecutors, she surreptitiously lifted them from his briefcase.

Leung, 49, is charged with illegally copying and possessing national security documents that were recovered during a search of her home. She has denied any wrongdoing, contending that she is a loyal American who acted under instructions from her FBI handlers.

Both defendants are free on bond.

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