Why Settle the Wen Ho Lee Case?

by emptywheel

Apparently, Wen Ho Lee's civil suit charging the government abused his privacy rights is close to being settled.

Intensive settlement negotiations between former nuclear scientist Wen Ho Lee and the U.S. government are delaying -- and may ultimately avert -- action by the Supreme Court on appeals by reporters fighting to protect their confidential sources in the case.

The Lee case is viewed by the media as one of the most significant press-freedom battles of recent years. But yesterday, for the second time in two weeks, the court declined to act on the reporters' petitions.

It now appears that the court's lack of a decision may be linked to a May 16 letter to the court from Lee's attorneys, which said that "there have been recent settlement discussions" and that "resolution of the entire case may be imminent." USA Today first reported the letter.

This is actually remarkable news, with many possible implications for the Imperial Presidency. Apparently, the Bush Administration prefers to spend (presumably) a chunk of money to avoid any court rulings on this case. What kind of rulings were they fearing?

The most immediate ruling a settlement avoids is a SCOTUS ruling on journalistic privilege. As it stands, the DC Court of Appeals has held that the five journalists must reveal the sources who leaked damaging information about Lee. By pre-empting a SCOTUS decision, the Bush Administration avoids the possibility that SCOTUS will enshrine some kind of privilege with a decision. But Steve Aftergood, master of all things secrecy, sounds like he was more worried that SCOTUS would rule against the journalists.

For the media, "you could foresee a much worse outcome," said Steven Aftergood, director of the Project on Government Secrecy of the Federation of American Scientists. Since there is always the risk that the high court could affirm the appeals court's ruling, he said, "to get it off the table would count as a victory."

So while BushCo avoided a SCOTUS ruling that might favor journalists, they also avoided a ruling that might validate Abu Gonzales' witch hunt against (some) leakers.

Then there's the possibility the Bush Administration was trying to avoid a decision on the larger issue--whether or not leaking damaging information about a government employee constitutes a violation of that person's privacy. Let's just say the issue may arise again soon if the Wilsons ever decide to sue Rove and Libby for leaking false, damaging information about Joe and Valerie.

Then, finally, there's the wacky outside possibility that the Republican Administration would have something to hide regarding leaks floated under a Democratic Administration. How's that possible, you say? I don't know. Bill Richardson, then head of DOE and now the Democratic governor of New Mexico, has always been the odds on favorite target in this case, so it's hard to see how the exposure of the actual leaker could hurt the Republicans.

It may--and this is a big may--relate to the exploits of GOP fundraiser and Chinese Double Agent, Katrina Leung. Leung had been a spy for the FBI for many years, even though as early as 1991, the FBI had indications she was a double agent. One of the secrets she admitted sharing with the Chinese was the identity of two FBI agents investigating nuclear sales to China (which may or may not be the sales related to Iran-Contra).

Mr. Cleveland was the lead F.B.I. agent on a 1980's investigation, code-named Tiger Trap, into accusations that the Chinese used a spy in the United States to steal neutron bomb secrets. Officials said he was one of the two agents whose identities Ms. Leung admitted having revealed to the Chinese in connection with the investigation. Although he was not identified in court documents, officials said that he was the one to whom Ms. Leung said she apologized.

The top-secret Tiger Trap investigation was considered critical to national security, because the nuclear information that American intelligence officials believe the Chinese stole would have allowed Beijing to modernize its nuclear arsenal.

No one was ever arrested in that investigation, but the case led authorities to investigate Wen Ho Lee, a former scientist at Los Alamos National Laboratory. Mr. Lee was arrested in 1999 on 59 counts related to accusations that he revealed classified nuclear data, but all but one of the charges were dropped after a judge found significant problems with the government's case.

It has also been alleged that Leung may have been an ongoing source in the investigation that led to the accusations against Lee.

Intelligence sources say the case also raises questions about why the FBI began its ultimately fruitless investigation of Taiwanese-born American scientist Wen Ho Lee and whether he was a victim of disinformation passed to the FBI.

"They're going to have to look at that completely if they have the stomach for it," Triplett said.

But this is a known double agent. Why would the Bush Administration care if her involvement in the Wen Ho Lee case were exposed?

I don't know. But suffice it to say this known double agent and Republican donor was never charged as a spy and subsequently all charges against her were dismissed on a technicality. This is a Chinese spy the Ashcroft DOJ let walk free.

Don't get me wrong. I can imagine the Administration would like to avoid enshrining journalistic privilege. As it would like to avoid setting any precedents equating smear campaigns and violations of privacy.

But the Wen Ho Lee case partly derived from the disinformation of a Republican donor and double agent, who purposely scuttled an investigation into a Reagan-era transfer of nuclear technology to the Chinese. That same Republican donor and double agent may have provided the information that purportedly incriminated Lee. And that same Republican donor and double agent went free last year, through the either willful or typical incompetence of the Ashcroft DOJ.

I think it's a fair question: Why has BushCo made such a concerted effort to settle this case?

Comments

[Sebastian Dangerfield]

Fascinating stuff. I'm very glad that you're highlighting this, as the whole sorry Wen Ho Lee debacle is one ugly story, and way underreported.
I think that the government's desire to settle here may have more to do with where this case may go ultimately if tried on the merits than with the question of whether journalists have a privilege entitling them to refuse to give up confidential sources in response to an otherwise valid civil discovery request. The discovery issue here (i.e., whether journalists are exempt from civil discovery) is a pretrial skirmish -- albeit the most significant one, as without this discovery, it will be impossible to prove the case. The ultimate issue will be, as you note, whether (and how much) a plaintiff can collect against a government that violated the Privacy Act in a smear campaign.
This administration has much to fear from a large demonstrative judgment under the Privacy Act arising from a government smear. It has not much of anything to fear if the courts grant journalists a civil dicovery privilege -- as that is distinct from a privilege against testifying in a criminal matter (which was fairly well settled in Branzburg). In other words, there is no likelihood that the Supreme Court -- after refusing to hear Miller's case, which suarely raised the question in the criminal context -- would use a civil discovery case as a vehicle for announcing a priviplege that applied in criminal proceedings as well (therby overruling or limiting its Branzburg precedent).
(BTW, on a DC gossip note, I was in court on the day that this case was argued in the DC Circuit and watched the argument. Wen Ho Lee's lawyer -- an engaging, youngish attorney who also was the trial attorney -- absolutely mopped the floor with overrated 1st amendment maven Floyd Abrams {erstwhile Judy Miller/Times attorney in Plamegate}. He did an absolutely smashing job.)

[JohnLopresti]

Walter Pincus's counsel was separate from the aggregated journalist defendants WH Lee pursued in the case cited above, now still in (arbitration), and Pincus' case was a separate case too, though I saw naught in the news about whether he, too, was bartering with WH Lee. The Branzburg case was interesting for grand jury evidence rules interface. I got my information here. I often read White Sands news with a Byzantine expectation: there is a government contract renewal process there, and the challenge this year was especially strong for displacing the academic institution which has operated some of that facility longterm, with a different, more natively defense-oriented contractor. Cursory reading of the news when WH Lee was taken off that job led me to interpret the processing of the malfeasance accusations as part of the larger shuffle for prime contracts among the oligopoly of defense contractors. The essence in that contract, seemingly, always arrives at a decision about where to source world class R+D; the university has garnered that accolate perennially above all rivals to supplant it.

On Bill Richardson I know little, save he is a rare governor native speaker of Spanish; he even worked at the UN. I liked his cordial welcome which he afforded to the TX-11, the state legislators who spent 6 weeks in a Santa Fe hotel to deprive the newly re-gerrymandered TX legislature of the quorum it required to re-re-gerrymander mid decenium, a DeLay tactic, the fruits of a yearslong strategic process. The TX re-re-gerrymander mid decenium verbal argument was held in the US Supreme Court March 2006; it will be one of the most interesting challenges for the new SCOTUS to decide in its inevitably multifaceted fashion; a decision we expect Soon.

OT: EW probably has seen this about some of W.Jeffress's current concerns.

[JohnLopresti]

Footnote: I wish TypePad let the author edit. Appropos of which: "accolate" could be a hybrid accolyte or accolade. I choose the latter.
J

[maxie]

I don't know if the facts of the case ever really came to light. I have family members who work at the lab. The process of working with classified info on the computers is tedious and time consuming. If you need to use the restroom, you first must lock certain disks, etc. in a several-safe system. Same thing if you go to get a soda, etc. You can't just lock your computer. The protocol is extensive.

Thus, it is common for scientists there to take work home in an effort to actually get it done. Lee's daughter, apparently, played some video games on his system. That's it. Really. Word from people up there is that, far as nuclear physicists go, Lee isn't all that bright.

It's almost never I have anything to add to the comments on this blog, but I learn so much from the commenters. Thank you!

[emptywheel]

Sebastian

Thanks for the anecdote. I've not been impressed with Abrams' work on the Plame case. Curious to hear he's still dialing it in.

maxie

Thanks for commenting! I think you're right--this boils down to one really violation, which most people would be found guilty of if they had been made to be a scapegoat.

[tryggth]

Wow. Again.

[Jon]

Thanks, EW, for a very interesting post! The one question I could never get past was why a Taiwanese-born scientist would spy for the mainland Chinese government?

My friends from Taiwan have nothing but contempt for the "mainland Chinese government apparatchiks."

[John Casper]

Seriously OFF TOPIC
ENRON jury reaches verdict.
I think it's scheduled for noon ET, about two minutes.

[nostril recon]

FBI Officials Are Faulted In Chinese Spying Case

http://www.washingtonpost.com/wp-dyn/content/article/2006/05/24/AR2006052402386.html?sub=AR

A Los Angeles FBI informant was able to spy for China undetected for more than 10 years, passing on information she garnered from an affair with her handler, because her supervisors ignored a series of clues and were too deferential to the FBI official responsible for working with her, a report released Wednesday said.

The FBI paid Katrina M. Leung $1.7 million to spy on Chinese officials during the time she was secretly passing sensitive information to the Chinese, court documents showed in 2003. Leung's FBI handler, James J. Smith, helped her evade polygraph tests and covered up their affair, according to a 23-page summary of a Department of Justice report. The full 235-page report is classified.

Officials did not suspect the two's 20-year affair, even after a source told agents that Leung was "in bed with" the Los Angeles FBI, and Smith's supervisor saw them get off an airplane from London together, the report said.

"The FBI's inattention to oversight of Smith and Leung, its willingness to waive and exempt Smith from complying with the rules, and supervisory mismanagement allowed Smith to continue his affair with Leung unimpeded until his retirement" in November 2000, said the report released by Glenn A. Fine, the Justice Department's inspector general. "Unfortunately, through Smith, Leung's access to sensitive FBI investigations and information also continued until that time."

FBI officials on Wednesday acknowledged "weaknesses in the FBI's asset program." The agency has implemented, in whole or part, seven of 11 recommendations in the report, they said. Managers have standardized procedures, and now review agents' files every 90 days and closely monitor their payments.

"The FBI expanded its polygraph program in 2001, making all on-board employees, contractors and detailees subject to a polygraph examination," FBI Assistant Director Charles S. Phalen Jr. wrote in response to Fine's report. "The FBI has built, and continues to improve, a comprehensive, centralized and forward-looking security program."

The Leung case was particularly embarrassing to the FBI since it came on the heels of revelations that another agent, Robert P. Hanssen, had sold information to the Russian government for 20 years.

At the same time Leung conducted her affair with Smith, she was romantically involved with an FBI handler in San Francisco. He cooperated with government investigators and was not charged in the case.

Attorneys for Leung and Smith did not return calls to comment.

During the years Leung worked for the FBI, "the FBI's China Program was understaffed, overworked, and experienced regular turnover in management," Fine's report said. Agency officials ignored a number of red flags.

In 1990, the FBI received reports indicating Leung had disclosed the existence and location of a still-classified operation. But a headquarters unit chief accepted Smith's denials on Leung's behalf. Reports on the matter were placed in different files and were not discovered for another 10 years.

Less than a year later, the FBI learned that Leung was using an alias to communicate with Chinese officials, but this, too, did not cause alarm. "We found that Smith's reputation at the time was such that he was treated as being above reproof," the report said.

Smith later admitted that he was the source of information Leung gave to the Chinese. He brought classified documents to her house, where she secretly copied them. Smith told investigators he discovered Leung's deception and tried to regain her loyalty to the United States.

"Smith said that for the next three or four months, he was more circumspect with Leung than usual," the report said, "but eventually things went back to the way they had been before the issues arose and the entire matter appeared to be forgotten."

In 1992, Los Angeles FBI managers received reports that a double agent named "Katrina" was working for the Chinese. But Leung's name was dropped from a transmission to Washington, and the matter was handed back to Smith, who discredited the source.

Leung and Smith were arrested in 2003. Smith struck a plea deal with federal prosecutors that spared him prison time and prevented him from speaking with Leung's defense lawyers because of concerns over classified information coming out in open court.

That provision doomed prosecutors' case against Leung. A U.S. district judge threw out the case in January 2005, ruling that Leung could not get a fair trial without access to Smith. The government has appealed to the U.S. Court of Appeals for the 9th Circuit.

Leung ultimately pleaded guilty to two minor charges: lying to the FBI and failing to report income on her tax returns. She spent three months in jail and 18 months in home detention, and was sentenced to three years' probation, 100 hours of community service and a $10,000 fine.

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