Popular Mechanics Show
On a hot Florida day late in 2005, Ko-Suen "Bill" Moo was preparing
for the endgame of a covert operation he'd been orchestrating for
nearly two years. He had arrived in Fort Lauderdale at 5 am on Nov.
7, as the city was recovering from the onslaught of Hurricane Wilma
two weeks earlier. Moo checked into a $350-a-night room at the
plush Harbor Beach Marriott Resort & Spa, and now, a day after
arriving in town, the Korean-born businessman was ready to sign
what promised to be a lucrative contract. In a few days, he'd head
back to Hollywood International Airport to see off a plane,
chartered for $140,000 to carry a special package. Moo would catch
a commercial flight and meet up with his cargo in Shenyang, a city
in northeastern China. The cargo was costing him nearly $4 million,
but it was worth it. He would clear $1 million in profit once he
made the delivery to his clients, senior officials in the Chinese
People's Liberation Army.
Moo's package was an F110-GE-129 afterburning turbofan engine,
built by General Electric to power America's latest F-16 fighter
jet to speeds greater than Mach 2 (1500 mph). Over lunch in the
Marriott's restaurant, 58-year-old Moo told the arms dealers who
had arranged the purchase that he would soon be looking for
additional engines--or even an entire F-16. But what the Chinese
army wanted most of all was an AGM-129A, the U.S. Air Force's
air-launched strategic nuclear-capable cruise missile. The stealth
weapon, which flies at 800 miles per hour, can deliver a
150-kiloton W80 warhead to a target 1800 miles away.
Like everything else Moo was shopping for, the missile is guarded
by at least three laws forbidding its sale or the transfer of its
design details to foreign countries without government permission.
Moo knew this quite well. In addition to working as a covert agent
for China, he had a day job in the U.S. aerospace industry. For
more than 10 years Moo had been an international sales consultant
for Lockheed Martin and other U.S. defense companies in Taiwan. He
was arguably the Taiwanese air force's most critical arms
broker.
Scouring the Globe
According to U.S. counterintelligence agents, Bill Moo was one
player in a sprawling, decentralized network. "They are scouring
the globe on behalf of the Chinese government, vacuuming up every
shred of technology information or hardware they can get their
hands on," says former FBI officer Ed Appel.
A press officer at the Chinese embassy in Washington, D.C., calls
that accusation "groundless," saying that "the Chinese government
does not have activities in espionage in the United States."
However, Appel and others say that extensive Chinese spying is
indicated by a sampling of cases that have recently come to light
in the United States.
South Korean arms dealer Kwonhwan Park was sentenced in August 2005
for exporting Black Hawk helicopter engines and night vision
equipment to China. Ting-Ih Hsu, a naturalized U.S. citizen, and
Hai Lin Nee, a Chinese citizen, illegally exported 25 low-noise
amplifier chips that have applications in the Hellfire
air-to-ground missiles carried by Apache and Cobra helicopters. New
Jersey firms Manten Electronics and Universal Technologies sold
China millions of dollars' worth of restricted computer chips.
Eugene You-Tsai Hsu, a retiree living in Blue Springs, Mo., tried
to buy a critical encryption device tightly controlled by the
National Security Agency. Additional accused Chinese operatives
have been sent to prison in cases involving Generation III night
vision equipment and computer chips used in advanced radar and
navigation systems.
None of the spies acted in concert, according to U.S.
counterintelligence sources. Like Moo, they were freelancers,
operating at what Appel calls a "deniable distance" from their
Beijing bosses. However, they did share much of their quarry--items
on shopping lists that included some of America's most
sophisticated weaponry.
Sights on Taiwan
On Feb. 28, 1991, the United States and its allies called a halt to
combat operations in the Persian Gulf War, just four days after
U.S. tanks started to roll across the desert, and a few weeks after
launching an air campaign. "The Chinese watched with dismay the
ease of the U.S. victory over Iraq," says Toshi Yoshihara, visiting
professor at the Air War College in Montgomery, Ala. In response,
he says, modernizing the country's vast but primitive arsenal
became a top priority for Chinese officials.
According to U.S. deputy undersecretary of defense Richard Lawless,
China's sense of urgency stems partly from concern over the future
of Taiwan. In testimony before the Senate Foreign Relations
Committee, Lawless said that China wants "a variety of credible
military options to deter moves by Taiwan toward permanent
separation or, if required, to compel by force the integration of
Taiwan" with the mainland.
Since the United States has pledged to defend Taiwan, that means
China is seeking the ability to go toe-to-toe against America's
best weaponry. Some U.S. officials argue that China's ambitions go
beyond Taiwan to encompass the global stage.
Rather than trying to address all its military shortcomings at
once, Yoshihara says, the Chinese government focused on obtaining
"leap ahead" technologies already in use by the United States.
Former Chinese leader Jiang Zemin called these technologies
"shashoujian," translated variously as "assassin's mace" or "silver
bullet." They ranged from advanced communications equipment to
long-range missile systems.
A Credible Threat
The result of China's 15-year effort has been "the largest military
buildup the world has witnessed since the end of the Cold War,"
says Richard Fisher, a China specialist for the International
Assessment and Strategy Center (IASC), a Virginia-based think tank.
China is now termed a "credible threat to other modern militaries
operating in the region" by the Department of Defense, despite
languishing perhaps 25 years behind the States in a number of
areas. By next year, Chinese nuclear missiles could have the
capability to hit any target in the United States from launch sites
on mainland China. By 2008, the country is expected to possess
submarine-launched nuclear missiles, giving it global strike
capabilities.
The nuclear arsenal is backed by an increasingly sophisticated navy
and air force. Currently on Chinese military drawing boards are
plans for combat aircraft, the Chengdu J-10 and Xian JH-7A fighter
jets; a combat helicopter, the Z-10; advanced warships; and even
space-based weapons designed to knock out communications
satellites. U.S. observers fear that much of this will be made
possible by espionage.
In June 2005, China began sea trials of its new Luyang II
guided-missile destroyers. When the armaments were unveiled, jaws
clenched in the Pentagon. The ships were equipped with a knockoff
of the latest version of the U.S. Navy's Aegis battle management
system, a critical command-and-control technology. The technology
enables U.S.--and now Chinese--forces to simultaneously attack land
targets, submarines and surface ships. It also runs fleet defense
tactics to protect against hostile planes and missiles. Federal
sources insist that the only way the relatively backward Chinese
military could have developed such a system was by copying
it.
Into the Arms Bazaar
Anthony Mangione is a quiet-spoken man in his mid-40s whose office
in Fort Lauderdale's federal courthouse is decorated with old
newspaper cuttings celebrating the D-Day landings, two fish tanks
(one full, one empty) and a door covered with dozens of curling
Post-it notes.
As the assistant special agent in charge of the Fort Lauderdale
department of Immigration and Customs Enforcement (ICE), Mangione
heads a team of undercover agents who have spent years infiltrating
what he terms a global "arms bazaar." The agents are assigned to
ICE's Arms and Strategic Technology Investigations (ASTI) unit,
which has operations in 43 countries as well as in the United
States. Last year, ASTI agents conducted more than 2500
investigations worldwide, many of them involving China.
The Moo case got under way after two arms dealers, who also work as
paid informants, introduced some of Mangione's undercover agents to
a French middleman, Maurice Serge Voros. During a phone call on
Feb. 26, 2004, Voros asked the agents, who were posing as arms
dealers, for help obtaining engines used in the U.S. Black Hawk
combat helicopter. The engines, manufactured by General Electric,
are on the U.S. Munitions List, a catalog of restricted arms and
technology administered by the State Department's Bureau of
Political-Military Affairs. It is illegal to export Munitions List
items without a special government license.
Over the following year, ASTI learned that Voros represented Moo,
and that Moo in turn was working for the People's Liberation Army.
In a Dec. 4, 2004, e-mail, Moo wrote that China did not want its
name on any of the contracts.
"These cases take a long time," says Mangione. "It can be
frustrating. But you have to let the game play." In March 2005,
Voros told the undercover agents that Moo had now shifted
priorities. His new top goal was to buy an F-16 engine--and, said
Voros, Moo had been given "the green light" to make a deal.
Lethal Shopping Lists
Moo's destination last November was Shenyang Aircraft Corp., which
lies a few miles from Taoxian International Airport. It's the site
where, in cooperation with Russia, China developed its first
homegrown fighter engine, the Lyulka AL-31 turbofan engine. But the
Lyulka provides a Pontiac Firebird level of performance compared to
the Formula One-worthy engine that Moo was set to deliver. U.S.
officials believe that China planned to copy the F-16 engine for
its own prototype fighter.
China has managed to "reverse-engineer some of [America's] most
modern rifles, cannons and guns and produce them domestically,"
says Larry Wortzel, chairman of the U.S.-China Economic and
Security Review Commission, which reports to Congress. However,
Chinese expertise in engine manufacturing has lagged, according to
Wortzel, who spent 25 years working in military intelligence. "This
is one of their biggest espionage targets," he says.
"There are characters out there with laundry lists of stuff like
this," says Mangione. Moo's list included nuclear missiles and jet
engines, and also called for the "urgent procurement" of "2 to 4
sets" of a "Nuclear Submarine (nuclear reactor should be one unit,
no noise) including ALL nuclear weapon systems." Acquiring an
entire submarine might be a long shot, Mangione says, but "any
specs, any photos, any anything they can get is more than they had
before."
China's efforts amount to a worldwide "market intelligence
program," says former FBI analyst Paul D. Moore. "The reality is
that China does not practice intelligence the way God intended," he
jokes. America's intelligence structure arose during the Cold War
to contain the Soviet Union. "In our model, professional
intelligence officers go out and do the job," Moore says. "In
China's model, anyone and everyone is a potential intelligence
asset."
The system is chaotic and inefficient but also highly effective.
According to Moore and others, it relies on "guanxi," a system of
social networking with deep cultural significance. "The process for
finding the best restaurant in Seattle is exactly the same as
finding out what nuclear technology America has," Moore says. "You
ask your friends. Eventually, you're introduced to someone who can
help."
Guanxi could explain why Chi Mak, a naturalized American citizen
who spent years as a naval engineer for U.S. defense contractors,
finds himself in jail, accused of secretly working for the Chinese
government. "When someone reaches out to you," Moore says, "it can
be very hard to say no."
According to a 42-page FBI affidavit, Mak was the lead engineer on
a highly sensitive U.S. naval project: the Quiet Electric Drive.
The FBI says it recorded Mak copying Navy secrets, and later found
Chinese-language wish lists in his home that included propulsion
and command-and-control technology.
According to his lawyer, Ronald Kaye, Mak acknowledges "engaging in
a technology exchange" with China. But, Kaye says, none of the
material was classified. "It's unfortunate that so quickly people
came to perceive something criminal." A trial is set for this
November.
The Endgame
After a series of meetings in London and Orlando, Fla., Bill Moo,
Voros and the ASTI agents agreed on a price of $3.9 million for one
F-16 engine. On Oct. 5, 2005, Moo transferred the money into a
Swiss bank account he controlled. One month later, he flew from
Taipei to San Francisco and then to Miami. By now, he was being
shadowed by ASTI investigators.
On Nov. 8, Moo was driven to a quiet hangar in Homestead and shown
his prize, an F-16 engine. He had already wired $140,000 from a
bank account in Singapore to an account run by an ASTI front
company to cover shipping costs to China. Moo asked to photograph
the engine but was rebuffed. Nevertheless, he now authorized
payment of the $3.9 million. According to an ICE official, Moo told
the undercover agents that after he returned to China he would want
to buy an entire aircraft. "Then [the] customer [will] have a
confidence on you, okay? So they will be planning [to buy] the
two-seat F-16." Moo also said he would want to purchase cruise
missiles.
Government documents, including a federal indictment, arrest
warrant and criminal complaint (below), allege that Taiwan-based
arms broker Bill Moo secretly attempted to buy an F-16 engine for
Chinese officials, and planned to follow up with further purchases
of airplane and missile technology. Moo pleaded guilty to multiple
offenses in May of this year.
On China's Shopping List: Armaments recently sought by Chinese
intelligence, according to U.S. investigators, include (from left):
parts for the F-14, Generation III night vision gear that can
intensify light by a factor of 30,000, and AIM-120 air-to-air
missiles. PHOTOGRAPHS BY CORBIS (F-14), MOROVISION NIGHTVISION,
INC. (NIGHT VISION GEAR), GETTY IMAGES (AIM-120).
Mangione decided it was time to bring the operation to an end.
"People like Moo don't have their lists out to one person," he
says. "If he's dealing with us he's dealing with 10 other people.
We couldn't take the risk that one of these other sellers might
give him what he was after."
Agents moved in and arrested Moo in his hotel room on Nov. 9. After
six months in jail--during which he tried to bribe both an
assistant U.S. attorney and a federal judge to let him go--he
pleaded guilty to multiple offenses; a sentencing hearing was set
for this summer. Voros is still at large, the subject of an
international arrest warrant.
Modern Smuggling
Technology espionage can be difficult to prevent. As Lockheed
Martin's representative in Taiwan, Moo had successfully passed a
"rigorous" vetting procedure dictated by U.S. government rules,
according to company spokesman Jeff Adams. Yet, U.S. officials say
he may have transferred restricted technology to China before the
investigation began.
More typical cases are even harder to detect. ASTI agents often
navigate the murky area of dual-use technologies, where pressure
sensors could be used either for bombs or for washing machines,
where computer chips with missile applications might actually be
destined for in-car navigation systems. Furthermore, thousands of
items prohibited for export can be bought over the Internet,
shipped to a U.S. address, then simply mailed to China in a padded
envelope. Such materials supply the building blocks needed for
complex armaments.
In other cases, technology is smuggled out to an approved country
using fake end-user certificates. For instance, Kwonhwan Park
shipped his Black Hawk engines to Malaysia before sending them on
to China. And, advanced technology such as the F-16 fighter has
been sold to countries from Bahrain to Venezuela where controls may
be less stringent than in the United States.
The situation outrages U.S. Rep. Frank Wolf (R-Va.), who
successfully fought recent plans by the State Department to use
Chinese-built computers for classified material. He says too little
attention is paid to China's "aggressive spying program against the
U.S." The legal deterrents to espionage are weak, says Wolf, who
chairs a subcommittee overseeing security and technology. "In the
Cold War people went to jail for a long time" for spying, he says,
but today's "negligible penalties" are more appropriate to
low-level embezzlement than military spying. Park was unusual in
receiving a 32-month prison term and a deportation order; in
contrast, Ting-Ih Hsu and Hai Lin Nee were each sentenced to three
years of probation.
Meanwhile, says the IASC's Richard Fisher, a "battle is being
waged. The Chinese have established a vast collection system that
by the end of the decade will have helped them to become a global
military power." While concern grows among policy-makers and wonks,
Mangione and his team still labor in the shadows of the worldwide
arms bazaar. They hope to prevent the day when U.S. troops could
find themselves staring down the barrel of a high-tech weapon
marked "Made in America."
