- The Washington Times - Tuesday, September 19, 2006

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 second 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. Read Part 1 here

FBI agents found the typewritten letter in a search of the office of the suspected spy for North Korea.

“It would be preferable,” it said, “that you find a student inside the church.”

The letter, from one of the spy’s North Korean handlers, used “church” as code for “Washington, D.C.”

It was December 1997. The following March, the FBI intercepted a fax in which their suspect, Korean-American businessman John Joungwoong Yai, gave a progress report on his main goal — recruiting a subagent who could join the U.S. government and obtain top-secret information for the communist regime in Pyongyang.

Possible employment stops for the “disciple” that Yai discussed with an associate: the Library of Congress, the FBI, even a news reporting job in Washington.

Yai, of Santa Monica, Calif., had planned to recruit someone “for a long time and anguished over it,” he wrote to his North Korean contacts.

“There are two or three persons whom I have been working on for a while. In [my] opinion, the person has to possess a high quality presence; at least or higher than a U.S. university education, absolutely fluent in English and Korean, young with clear ideology, and has potential to work in the church.”

Yai concluded his fax with good news. “I have successfully found an excellent, young high quality person who lacks nothing for becoming a student who has potential for a long range plan.”

FBI documents in the case of John Joungwoong Yai provide a rare glimpse into the secret world of North Korean spying within the United States.

North Korea today epitomizes the term “rogue state.”

Under absolute leader Kim Jong-il, who has ruled as an iron-fisted demigod since his father’s death in 1994, the communist regime has demonstrated that it can starve and brutalize its own people as well as fire long-range ballistic missiles to threaten other nations.

Kim fulfilled the goal of his father, Kim Il-sung, by covertly developing a nuclear weapons arsenal in part to ensure that the regime stays in power.

Kim exploits the organs of the Workers’ Party of Korea as a combination of intelligence and security services. This vast, secret network of political police, modeled on the Soviet Union’s KGB, conducts operations abroad as well as squelches the slightest internal dissent.

A U.S. government counterintelligence report produced in 2004, “Intelligence Threat Handbook,” highlights North Korea’s efforts to infiltrate the United States. The report notes that operations here remain limited, but some are among the most threatening because they focus on “acquiring nuclear weapons technology.”

A classified government report in 1999 said Kim’s “aggressive intelligence programs … place a priority on science and technology collection.”

Keeping tabs

The FBI compiled exhaustive evidence that Yai conducted what U.S. officials called “low-level intelligence services” for Pyongyang over at least seven years, until his arrest Feb. 4, 2003.

Yai faced up to 20 years in prison if convicted on charges of failing to register as an agent of Kim’s government.

“During the period of the … surveillance, the FBI found no evidence that Yai was employed by any entity other than the North Korean government,” FBI counterintelligence agent James G. Chang said in an affidavit.

The FBI investigation concluded that Yai was a spy who traveled to North Korea, China, Austria, the Czech Republic and other countries to meet North Korean security officials.

But Yai ended up being sentenced to two years after pleading guilty to lesser felony charges related to not declaring $18,179 in cash to customs officials at Los Angeles International Airport as he and his wife returned from a trip to Prague in April 2000.

Yai, a shopkeeper and restaurateur born in South Korea in 1943, became a U.S. citizen in 1981.

Agents intercepted Yai’s telephone and fax communications; hid microphones in his office, house and car to monitor conversations; and secretly searched his residence with authorization from a court in Washington under the Foreign Intelligence Surveillance Act.

The FBI found that Yai was sending reports to North Korea through China that were based on information from public sources, including newspapers, magazines, TV and radio. He embellished information to make it sound more valuable to his handlers, the affidavit said.

The bureau traced Yai’s calls to the North Korean Embassy in Beijing and to Shenyang, China, close to the border with North Korea.

In May 2000, Yai began corresponding with the North Koreans in Beijing via e-mail. Chang said in the affidavit that the North Koreans turned to China in communicating with agents because of extremely limited e-mail access in North Korea at the time. Only a few high-ranking government officials, Kim among them, were permitted to use the Internet.

Yai’s lawyer, William Genego, argued in court that Yai sent newspaper clippings to North Korea simply to compensate for the lack of free media and Internet access.

‘Mr. Kang’ regrets

An FBI search of Yai’s Santa Monica house April 8, 1998, found “code charts” for secret communications.

Base words and phrases included “the White House,” “the State Department,” “the Pentagon,” “secret operation,” “military,” “human target,” “covert surveillance,” “top secret,” “recruitment,” “CIA,” “FBI,” “nuclear facility” and “invasion.”

Code words included Yai’s cover names — “Won,” “Doe,” “Adams” and “Paul” — as well as multiple substitutions for the word “headquarters” such as “Kang,” “Peter” and “James.”

Intercepted communications and physical searches revealed Yai was meeting with North Korean contacts overseas and receiving thousands of dollars at a time. On March 15, 1998, for example, the FBI intercepted a fax to Yai from “Peter Kang.”

The fax stated: “I received your itinerary fine. It would be preferable that Mr. Kang greet you, but in due concern for the health [code for ‘safety’], we have decided not to.”

The fax specified local telephone numbers at which to “ask for Kim Chol-yong” and “inform him of your location,” numbers that were for the North Korean Embassy in Vienna, Austria.

A search of Yai’s office April 8 produced an envelope with the address of a Vienna hotel, containing $8,500 in cash. According to the FBI affidavit, a stamp in Yai’s passport showed he was in Austria on April 4.

Pastoral visit

Over several days in March 1998, Yai had sent two more faxes to his North Korean handlers to provide details on his young recruit in America, identified only as Person C in the FBI affidavit. Yai wanted the recruit to visit headquarters, which he referred to as “pastor Peter.”

“It is better to have the pastor give him the blessing himself, and then give him directions,” Yai wrote.

In another fax, he told the North Koreans that his “new student” was born in Seoul in 1969, spoke English well, was skilled in use of computers and had an ideology that “is beneficial and reliable to our causes.”

In May 1998, hidden FBI microphones picked up a conversation between Yai and a female associate, whom the affidavit identifies as Person L.

Yai explained that “the long-term plan is to hook [Person C] up with his friends in Washington, D.C., who are going to school there.”

Person L asked whether the recruit could get a job as a reporter in Washington, to which Yai replied, “Historically for spies, if the head leaders fall, everyone falls also.”

He did not explain this cryptic remark, but it indicates Yai saw himself as a spymaster.

His young recruit eventually did visit North Korea. On July 20, 1998, Yai faxed headquarters to report Person C’s reaction.

“He indicated it was a valuable experience, although a nervous one,” Yai wrote. “Disciple will do well.”

Eye on Washington

The FBI said Yai helped his unidentified coworker, Person L, get a job with the Los Angeles district attorney’s office as a steppingstone toward other employment — at the FBI.

“They need Chinese speakers and people like me who can speak Korean,” Person L told Yai, in a conversation overheard by the FBI. “I heard people wait up to five years to be hired by the federal government. So I think I should apply to places in Washington, D.C., as soon as possible.”

Person L said she was trying to get a job at the Library of Congress as a researcher in Korean-American crime.

“The office I am working for right now is a law-enforcement office,” she said. “So I heard it is very easy for me to get hired by another law-enforcement agency later on.”

The North Koreans clearly indicated a focus on obtaining top-secret information from inside the U.S. government.

On May 5, 1997, a handler sent a fax to Yai saying that the “company president” thought Yai “has made too many proposals about medicine that is already well known, and the types of goods are not varied enough.” (“Medicine” was code for “source,” in the sense of “basis of information.”)

His contacts wanted newer and better “medicines,” specifically ones that were “a little more interesting and inexpensive” — codes for “undisclosed [not sold to the public]” and “top secret,” respectively.

Other 1997 faxes to Yai from North Korean headquarters made similar suggestions about what sort of “medical proposals” and “items” would be “accepted.” Yai apparently took the message to heart.

In his office, the FBI found these notes, handwritten in Korean: “Do not send anything that has been revealed in the newspaper or radio. (Engage in a lot of conversation with people above [in rank], and things that we do not see in homeland.)”

The FBI said it overheard Yai telling Person L that the North Koreans “are looking for things that are not public.”

“They want about 100 or 150 reports a year,” he told her. “I finished about 160 last year.”

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