- The Washington Times - Friday, August 10, 2007

China espionage

Chinese military intelligence collectors scored a recent coup in stealing valuable U.S. simulation technology that will boost Beijing’s combat training.

Xiaodong Sheldon Meng, 42, a former Beijing resident, pleaded guilty Aug. 1 in California to illegally providing China's military with embargoed software used in air force and navy training.

Meng also pleaded guilty to stealing proprietary corporate technology known as “Mantis” while working for the San Jose-based Quantum3D Inc., and attempting to sell it to China’s Navy Research Center.

Prosecutors said Meng violated arms export control laws by selling China's military what is called “viXsen” source code, a Quantum3D product controlled for export as a defense article. The software is used in “visual simulation software program used for training military fighter pilots.”

Meng also illegally installed a copy of Quantum3D’s “Mantis” simulation software on a Chinese navy site and altered the code to make it appear as though it belonged to a competitor. The software was part of a sales demonstration project for the Chinese produced by Meng.

“This conviction, the first in the nation for illegal exports of military-related source code, demonstrates the importance of safeguarding our nation’s military secrets and should serve notice to others who would compromise our national security for profit,” said Kenneth L. Wainstein, assistant attorney general for national security. “This case is the latest evidence of the department’s enhanced investigative and prosecutorial efforts to keep America’s critical technology from falling into the wrong hands.”

Investigators said Meng stole software that is “designed for precision training of military fighter pilots in night vision scenarios, among other applications.”

U.S. officials said the compromise could be more extensive than outlined by prosecutors because Quantum3D produces mainly military products, including day and night combat training simulators, and advanced infrared, electro-optical and night vision goggle devices.

“The software stolen by Meng will improve the PLA’s ability to achieve more sophisticated military simulation for training and mission planning purposes, that is, to help them to better kill us,” said Richard Fisher, a specialist at the International Assessment and Strategy Center, referring to the acronym for China’s People’s Liberation Army.

The software acquisition is part of a large-scale Chinese military technology collection program targeting the United States. China is in the process of building up its military forces with the goal of challenging the United States in any conflict over Taiwan. The buildup includes acquisition of advanced Russian fighter bombers as well as new indigenous J-10 fighters.

The Pentagon’s annual report on China's military power said such illegal software acquisitions are part of China’s “aggressive and wide-ranging espionage” that poses “the leading threat to U.S. technology.” The technology is “vital for the [Chinese military‘s] transformation into an information-based, network-centric force,” the report stated, noting more than 400 U.S. investigations related to China since 2000.

NRO director candidate

Defense sources say a leading candidate to be the next director of the National Reconnaissance Office (NRO), the secret intelligence agency that builds and operates the nation’s constellation of spy satellites, is former CIA official Carol Staubach.

The likely appointment is raising questions among some in Congress and the intelligence community about the close associations of several current and former intelligence officials with Booz Allen Hamilton, a leading intelligence agency consultant.

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