Former CIA officer accused of spying for China could have gotten people killed

By Rachel Weiner

Former CIA officer Kevin Mallory is accused of selling secrets to the Chinese.

A former CIA officer accused of spying for China had notes in his home that could have gotten clandestine sources killed, according to prosecutors in Alexandria federal court.
While Kevin Mallory is not accused of handing those documents over to Chinese intelligence agents, prosecutors noted his access to the material to underscore the seriousness of potential breaches and to argue that he should remain jailed pending trial on espionage charges. 

A federal judge agreed.
Mallory, a 60-year-old from Leesburg, Va., is accused of handing over classified documents revealing details of CIA intelligence.
On a phone that Mallory admitted was given to him by someone he thought worked for Chinese intelligence, eight documents were found, authorities said. 

Six were classified CIA documents and one was a classified Defense Intelligence Agency document, FBI agent Stephen Green testified Friday. 

The last is a mix of typed and handwritten pages that are still being reviewed.
At least two of the documents were transmitted to the Chinese earlier this year, according to prosecutors.
A magistrate judge last week ordered Mallory’s release on a $10,000 bond. 

But U.S. District Judge T.S. Ellis overturned that decision Friday, in part based on the new details revealed regarding Mallory’s CIA career and the documents found in his possession.
Prosecutors confirmed in court Friday that Mallory worked for both the CIA and the Defense Intelligence Agency, the CIA’s counterpart in the Defense Department.
According to court documents, Mallory was a covert CIA case officer from 1990 to 1996 and a CIA contractor from 2010 to 2012. 

It was not clear when he worked for the DIA.
Antoinette Shiner, an information review officer for the CIA, confirmed in a declaration filed in court Friday that Mallory’s documents contained sensitive CIA intelligence, analysis of that intelligence and, in some instances, the actual human or technical sources of the intelligence.
One of the documents he has passed on to the Chinese “reveals the breadth and depth” of the CIA’s understanding of “a specific hostile foreign intelligence service,” according to Shiner, including details on that foreign service’s approach to counterintelligence.
Handwritten notes found in Mallory’s house, she said, concern sensitive human sources and “could reasonably be expected to cause the loss of critical intelligence and possibly result in the lengthy incarceration or death of clandestine human sources.”
According to the criminal complaint against Mallory, he told the Chinese operatives that he had notes to offer as well as documents.
Mallory is not accused of selling intelligence that led to the death of any U.S. officer. If he were, he would be facing the death penalty. 

Instead he could be sentenced with up to life in prison, if convicted.
Prosecutors also played in court a phone call from jail in which Mallory asked his wife and son whether a particular memory card had been seized by FBI agents. 

The card had been seized, and the eight documents were on it. 

It was found wrapped in foil inside a shoe in Mallory’s closet, according to Assistant U.S. Attorney John Gibbs.
At the end of the call, Mallory says it’s “good” that agents found the card and that he had merely hoped to give it to his lawyer first so he would know it hadn’t been tampered with in some way.
Prosecutors have repeatedly emphasized that wigs, fake scar liquid and other disguise makeup were found in Mallory’s bedroom closet. 

Defense attorney Geremy Kamens said the items are given to every CIA officer who trains for clandestine service and that they were over a decade old. 

In recent years, he said, Mallory had used them only on Halloween.
Kamens pointed out that Mallory repeatedly reached out to his former CIA colleagues about his contact with the Chinese agents, even before the first of his two trips to China this spring. 

It was after his second trip that Mallory was caught lying to Customs agents about how much money he was carrying home.
Kamens suggested Chinese intelligence runs “a very sophisticated organization” and could have put the classified documents on the phone themselves in hopes of “blackmailing him so they could obtain information in the future.” 

He also implied, in Ellis’s words, that Mallory was working as a freelance “double agent,” aiming to expose Chinese attempts at espionage.
The judge was not persuaded by either suggestion, noting that according to the criminal complaint Mallory was paid $25,000 by the Chinese.
While the Chinese operatives represented themselves as working for a Shanghai think tank, according to the complaint, Mallory told FBI agents he believed they were intelligence agents. 

The think tank, the Shanghai Academy of Social Sciences, functions as both a legitimate academic institution and a cover for Chinese intelligence officers, according to the FBI.
“He’s cleverer than most,” Ellis said. 

By going to the CIA at the same time, “he’s trying to make sure he has a way out.”
He ruled that Mallory was both a flight risk and a danger to the community, because he might trade the rest of his intelligence for help getting out of the country.
The Chinese, Ellis said, “would love to have him so they could drain him of information and make sure he doesn’t talk very much.”

Bumbling Ex-CIA Officer Charged With Selling Secrets to China

A prestigious Chinese think tank provided cover for the intelligence operation that ensnared Kevin Mallory.
BY BETHANY ALLEN-EBRAHIMIAN, ELIAS GROLL

Caught with a bag of cash and an electronic device used to communicate with his handlers, a former government official with years of military and intelligence experience is accused of spying for China.
Kevin Mallory of Leesburg, Virginia is charged with providing defense-related information to a foreign government and lying to federal agents.
Mallory provided several classified government documents to a Chinese contact, who initially claimed affiliation with a prestigious Shanghai think tank, in exchange for cash. 

Documents filed by federal prosecutors depict Mallory, an experienced Chinese-speaking former operative, as a bumbling spy who executed his treason clumsily.
Mallory’s career spanned decades and multiple government agencies. 

After graduating from Brigham Young University in 1981, he served as active duty military and then an Army reservist for several years. 

From 1987 to 2013, he worked for different government agencies and U.S. defense contractors — as well as the CIA, according to a report in the Washington Post. 

He held a top secret security clearance for much of that time and was posted to regions including Iraq, China, and Taiwan.
It was only this year that Mallory began to stray from the straight and narrow, according to court documents. 

A Chinese handler posing as an employee of the Shanghai Academy of Social Sciences (SASS) made contact with Mallory during trips to China in March and April.
The SASS is a reputable and internationally known think tank. 

But it also maintains a close working relationship with the Shanghai State Security Bureau, a regional office of the Ministry of State Security, China’s intelligence arm.
In the following weeks, Mallory provided classified documents to Chinese intelligence officials in exchange for $25,000.
The FBI’s affidavit describing Mallory’s espionage activity appears to indicate that the former CIA officer tried to cover up his crimes. 

After he was stopped at Chicago’s O’Hare airport returning from Shanghai with $16,500 in undeclared cash in one of his bags, Mallory approached American intelligence agencies to describe his meetings in Shanghai with individuals he described as Chinese intelligence officers.
Having been caught with a payment that investigators believe was in exchange for classified government information, Mallory disclosed his contacts with the Chinese intelligence officers and may have offered his services as a double agent in order to conceal his espionage on behalf of Beijing. 

The FBI affidavit never claims he offered to serve as a double agent, but in approaching an unspecified government agency with a communications device provided to him by the Chinese, Mallory appears to have made an overture to an American intelligence agency.
“He had a security clearance, he had apparently also worked at CIA, so he knew what he was doing,” said Peter Mattis, a former government analyst and now a fellow at the Jamestown Foundation’s China Program.
But then Mallory made what Mattis called a “stupid mistake.”

Kevin Mallory

The FBI affidavit filed in a Virginia federal court this week paints a picture of extraordinary technical incompetence by Mallory and his Chinese handlers. 

Mallory’s Chinese contacts supplied him with a communications device — likely a smart phone — to exchange messages and transfer classified documents.
In a May 24 meeting with FBI agents, Mallory showed off the device and demonstrated how to move from a “normal” to “secure” messaging mode. 

When he toggled over to the secure mode, he was surprised to find that it displayed a history of his secure messages. 

Mallory seems to have assumed they would be deleted.
Mallory voluntarily turned the device over to the bureau for a forensic analysis. 

When the bureau’s technical experts dug into it, they were able to recover additional secure messages exchanged between Mallory and his Chinese contacts.
In an exchange of messages on May 3, 2017, Mallory’s handler asked why the documents had been blacked out at the top and bottom. 

“The black was to cross out the security classification (TOP SECRET//ORCON//),” Mallory replied. “I had to get it out without the chance of discovery. Unless read in detail, it appeared like a simple note.”
Two days later, Mallory discussed his motives with his handler: “Your object is to gain information, and my object is to be paid.” 

His handler replied: “My current object is to make sure your security and try to reimburse you.”
The FBI analysis also discovered four documents on the phone, three of which are described in court documents as government materials. 

One is top secret; the other two are classified as secret. 

The affidavit provides no hint as to what the documents contain.
Mattis told Foreign Policy that the “scope, scale and potential impact of Chinese intelligence operations” has been of primary concern to U.S. national security agencies for years.
Chinese think tanks, including SASS, work closely with the Ministry of State Security. 

China’s spy arm prefers to meet sources inside China, and social science academies provide a useful front for intelligence and influence operations.
“Chinese think tanks are used to invite someone over who is either a person of interest or a source,” said Mattis. 

“That person comes over and gives a talk, and they’ll be met and have meetings with the local state security element or the People’s Liberation Army.”
But these intelligence-linked Chinese think tanks also maintain a known presence in Washington. 

One of those is the China Institutes of Contemporary International Relations, which bills itself as a “comprehensive research institution” but which is also an official numbered bureau of the Ministry of State Security, functioning rather like the CIA’s Open Source Center.
The institute actively engages in the Washington think tank ecosystem and also invites U.S. officials and academics for events in Beijing. 

The Center for Strategic and International Studies, a nonpartisan Washington think tank, has co-hosted numerous cybersecurity dialogues with the Chinese institute in recent years.
For more than two decades, the institute has sent a fellow to Washington, who stays for a year or two, according to Mattis. 

“I guess some people find value in talking with them,” he said. 

“I have mixed feelings on that score.”