Editor’s Note: Foreign Policy magazine (Foreign Police) published a lengthy investigative report in late December 2020 on the nearly decade-long global data war between the intelligence services of China and the United States. The report is based on extensive interviews with more than thirty current and former U.S. intelligence and national security officials.
The report is divided into three parts: Part I: The Chinese Communist Party’s use of stolen data to identify U.S. intelligence officers (agents); Part II: How U.S. intelligence struggled in the Obama era as Xi Jinping consolidated power. Part III: Intelligence operations in the Trump era and the growing cooperation between the CCP’s intelligence services and tech giants.
This presentation covers Part I: The CCP’s use of stolen data to identify U.S. intelligence officers.
Around 2013, U.S. intelligence noticed an alarming problem where undercover CIA agents sent to African and European countries were identified by Chinese Communist Party intelligence in a very short period of time. What was the problem? The development of the incident may go back 20 years. A former senior national security official said, “The United States and China collided with each other on a global scale. It opened a global Pandora’s box.”
CIA Recruits Agents in China Using Communist Corruption
From 2000 to 2010, the U.S. CIA exploited corruption in the Communist Party bureaucracy to develop intelligence agents in China. In China in 2000, CCP officials earned a modest official salary, probably less than 2,000 RMB per month, but officials earned informal salaries that greatly exceeded their official salaries, when an official not involved in corruption would be considered a fool by his colleagues, and money could buy anything, which the CIA happened to have in abundance.
The CIA pays its agents and informants quite handsomely, and in the 2000s could earn up to a million a year for being the most senior agent in the diplomatic facilities of certain countries (such as China, Russia, Iran, and North Korea). This compensation can come in many forms, such as sometimes paying tuition and living expenses for an official’s children attending college in a foreign country.
The CIA’s successful recruitment caused alarm in Beijing, as one former top CIA official recalled, “They [the CCP] were forced to see their own problems, and our mistakes helped them see theirs.” The CCP leadership realized that unchecked corruption was not just an existential threat to the party at home; it was also a major counterintelligence threat that provided a window to enemy intelligence services like the CIA. As Hu Jintao, then secretary of the Communist Party, said at the 2012 party congress, “If we don’t deal with this [corruption] issue well, it could …… even lead to the collapse of the party and the fall of the country.”
In late 2012, Xi announced a new anti-corruption campaign, which was designed to consolidate power but was also linked to the actions of the U.S. CIA. Before Xi’s purge, former U.S. intelligence officials say, petty corruption at the Ministry of State Security was ubiquitous, with Communist Party spies sometimes diverting money from their operations to their own “nests”; official Communist Party hackers sometimes moonlighted as cybercriminals and then passed on their cut to intelligence agency bosses. But these activities have become increasingly unsustainable under Xi Jinping’s crackdown.
Beijing uproots CIA spy network
In 2010, the Chinese Communist Party discovered that the U.S. CIA had a network of contacts throughout the military, intelligence agencies, and other locations. Communist intelligence officials began exploiting a loophole in the secret communication system between CIA agents (a loophole first discovered by Iran, which Tehran likely told Beijing about), and from 2010 to 2012, the CIA’s network of contacts in China was ruthlessly uprooted, with the Communist Party imprisoning and killing dozens of people.
By about 2010, two former CIA officials recalled, the Chinese Communist security services had developed a sophisticated travel intelligence program, developing databases that tracked flights and passenger lists, and “we looked at it very carefully, and [Chinese Communist spies] were actively using it for counterintelligence and offensive intelligence activities.” To be sure, the Chinese Communist Party had already stolen a significant amount of data prior to discovering the actions of U.S. intelligence agencies.
Yet the turmoil between 2010 and 2012 gave Beijing the incentive to go after larger, riskier targets and also to put together the infrastructure to handle the massive amount of stolen information. It was at this time that the CCP intelligence agencies transitioned from merely being able to steal data in large quantities to quickly sifting through the data for useful information. U.S. officials have also observed that most of the CCP’s intelligence facilities are located near language and data processing centers. It was these new capabilities that allowed the CCP to successfully hack into the U.S. Office of Personnel Management (OPM), with very frightening implications.
CIA personnel sent to Africa and Europe were quickly identified
Around 2013, U.S. intelligence noted an alarming problem in which undercover CIA agents sent to African and European countries were identified by Chinese Communist intelligence in very short order, sometimes even as soon as CIA personnel passed passport control and began to be monitored by Chinese Communist agents. There were even times when the CCP was open and unabashed about their surveillance, as if they wanted the U.S. to know that they had identified the CIA agents.
This anomaly soon alarmed senior U.S. officials, with one former intelligence official saying, “The Chinese [the CCP] were not supposed to know the identity and location of the undercover agents at all.” But how the Chinese Communist Party got word of these intelligence agents is beyond their understanding.
In previous eras, the CIA would likely have started looking for the mole, but now they think it’s likely related to the CCP’s cyber espionage, specifically, to the CCP’s successful intrusion into the U.S. Office of Personnel Management (OPM). The intrusion saw Chinese Communist hackers steal detailed personal information, including health, residency, employment, fingerprinting and financial data, on 21.5 million current and former U.S. officials and their spouses, as well as job applicants. Some also had their security background check details stolen, which provide insight into an individual’s mental health records, sexual history and proclivities, and whether a person’s relatives overseas may be subject to government blackmail. Although the U.S. did not disclose the breach until 2015, U.S. intelligence officials became aware of the initial OPM hack in 2012.
When compared to travel details and other stolen data, intelligence officials say the information in OPM likely provided strong clues to Communist Party intelligence about unusual behavior patterns, biographies or workplace experiences that flagged individuals as possible U.S. agents. Gail Helt, a former CIA China analyst, recalled her reaction to the OPM intrusion as, “Oh, my God, what does this mean for anyone who’s ever been to China? What does it mean for the people we’re formally recruiting, the people we’re talking to, and their families? And what does this mean for future institutional recruiting efforts? It’s just horrible. Absolutely horrific.”
Douglas Wise, who served as deputy director of the Defense Intelligence Agency, said the depth of concern has prompted damage assessments across the intelligence community around OPM and other hacks. There is concern that because the CCP has mastered the requirements and processes used by the U.S. government in hiring for sensitive positions, the CCP may be sifting through OPM data to tailor the ideal profile of individuals to place CCP spies in the U.S. government.
The study of OPM data has given the CCP unprecedented insight into the workings of the U.S. system, yet at the same time, the U.S. is flying with one eye closed when dealing with the CCP due to the complete destruction of the CIA’s carefully built network of Chinese agents, making the U.S. government increasingly controversial on how to deal with China (the CCP).
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