Counterintelligent: how the GOP keeps the FBI stupid.

• Author: Marshall, Joshua Micah
• Position: Need for reform at the Federal Bureau of Investigation, cases of espionage, implications for the Republican Party

IN MARCH, 2003, THE FBI ARRESTED A Chinese-American businesswoman and Republican fundraiser, alleging that she had passed a frighteningly broad range of American secrets to the People's Republic of China (PRC). For two decades, Katrina Leung had been a paid bureau informant, supplying information on Chinese intelligence operations in America. She'd also been sleeping with two senior FBI agents--one of whom was her so-called "handler"--for the better part of those two decades. It was alleged that she had transmitted what she learned about American counterintelligence from her lovers to Beijing and sent Beijing's disinformation back through the FBI. The story was sordid, embarrassing, and, worse than that, quite grave: Intelligence sources told The Washington Post that Leung had single-handedly compromised 20 years of American counter-intelligence work against the PRC.

Democrats, who in 1997 weathered endless--and ultimately unproven--accusations of selling political favors or national security secrets for PRC money, can take a measure of satisfaction from this unlikely coda: The only bonafide Chinese spy so far turns out to have been not only a Republican, but a well-connected GOP fundraiser. And not just any Republican fundraiser, but one who happened to be sleeping with one of the lead FBI agents investigating Democratic fundraising.

It's bad enough that Leung was able to seduce two FBI agents. But her longtime handler and lover, James Smith, was in possession of information covering a wide range of investigations and operations aimed at the PRC. Since Smith had access to so much, and Leung had access to what Smith had (copying and returning documents from his briefcase before he noticed their absence), her treachery touched everything: the 1997 campaign finance scandal, the investigation of Wen Ho Lee (the Chinese scientist at Los Alamos who was once suspected of selling nuclear secrets to Beijing), investigations of spies at the Lawrence Livermore National Laboratory, and much more. "They lost everything," one hawkish D.C.-based China watcher told me. "It's not how big a fish she is; it's how much damage did she do to the system over 20 years. She totally wrecked it." The real lesson that the Katrina Leung case teaches is one that the FBI and the Republicans, who became its most aggressive patrons during the 1990s, have spent almost two decades ignoring: The repeated failure of the FBI to adopt basic counterintelligence tactics has left it wide open to moles and spies.

From time to time, every spy agency falls victim to a mole, a traitor, or a double agent. It's in the nature of the enterprise, since each such institution constantly attempts to penetrate the secrets of almost every other intelligence service. But because intelligence professionals know that it is extremely difficult to guard against every compromise of an agency's secrets, they are supposed to structure their outfits in such a way as to minimize the damage when the inevitable breach occurs. The best way to do that is through what intelligence professionals call "compartmentation"--designing the organization like a honeycomb, with individual parts sealed off from the rest as much as possible, and distributing information within the organization only on a "need to know" basis. There's always a tension between the needs for compartmentation and information sharing. But without effective compartmentation, a single: well-placed mole can trigger an intelligence leak of catastrophic proportions. Poor compartmentation also makes finding the culprit almost impossible.

If the Leung scandal were a one-time goof, it might not be so outrageous. But it's not. The problems it exposed bear striking similarities to those revealed in the investigations into the Soviet-controlled American spies Aldrich Ames and Robert Hanssen--problems of information security about which the bureau had been repeatedly warned, but had just as often failed to address. This is no insignificant bureaucratic rigidity. Some of the country's most important national security secrets over the last 20 years have been exposed to our two biggest adversaries, and finding the culprits has been long delayed because of the bureau's failure to effectively implement this most basic principle of intelligence work. Despite no fewer than five very public warnings, Washington has been chronically unwilling to fix it.

These repeated, dangerous failures at the FBI have both administrative and political sources. Bureaucratically, the agency is being asked to undertake two incompatible responsibilities: law enforcement and intelligence work. Though the two activities are related and...