ENEMIES

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Bill Gertz, defense and national security reporter for The Washington Times, describes a growing threat posed by foreign agents and terrorists who exploit U.S. weaknesses in this first of three excerpts from his new book, "Enemies: How America's Foes Steal Our Vital Secrets -- And How We Let It Happen" (Crown Forum), out this week.

Tai Wang Mak dialed a phone number in Guangzhou, China.

The man who answered, Pu Pei-liang, was a researcher at the Chinese Center for Asia Pacific Studies at Zhongshan University, known to U.S. intelligence officials as CAPS.

"I'm with Red Flower of North America," said Mak, a Chinese national working as an engineer in Los Angeles for Hong Kong-based Phoenix Television.

Mak said he would arrive in China in nine days. Pu instructed him to use a calling card to phone from the airport in Guangzhou so that he could be picked up.

The call from California to China, placed Oct. 19, 2005, was intercepted by the long electronic ears of the U.S. National Security Agency.

Mak's reference to Red Flower of North America brought a breakthrough in a yearlong investigation into one of the most damaging losses of defense technology in American history.

Chinese spies used those code words to authenticate themselves when making contact with communist China's intelligence bureaus. Other often-used code words include Winter Chrysanthemum and Autumn Orchid.

U.S. intelligence knew that CAPS received funding from the People's Liberation Army and conducted operational research for the Chinese military. The phone call revealed that CAPS had one of its most valuable spies inside the U.S. defense industrial system.