04/23/07

DEFENSE NEWS

Spies and Sighs: How China Watches Taiwan

By WENDELL MINNICK, TAIPEI

The news that China used a computer virus to steal files from a Taiwanese colonel’s home computer has stirred a debate over the island nation’s ability to protect its secrets and its independence from Beijing, its geographic neighbor, economic partner and diplomatic rival.

Lin Chong-Pin, former vice minister of defense, argues that the recent hacker incident is part of a larger effort to subdue Taiwan.

“China has established a massive ‘net army’ by recruiting young talent,” said Lin, now president of the Foundation on International and Cross-Strait Studies, based here. “This is a proactive implementation of Beijing’s concept on information warfare. It materializes the spirit of ‘the three wars,’ which the People’s Liberation Army enunciated in December 2003 in its ‘decree on the political work.’ They are psychological war, the legal war and the media war.”

Chinese progress in this three-front advance has dampened fears of a military invasion, but cast doubts on Taiwan’s economic and political ability to stay separate.

Taiwanese students attend Chinese universities and Taiwanese businessmen and even legislators invest in and own Chinese businesses. Hundreds of thousands of Taiwanese have moved to the mainland, where communities have created Taiwanese schools, banks and restaurants.

And as contacts between mainlanders and islanders grow, so do the opportunities for Chinese intelligence officials to exploit them.

“The thing is already in train, from the other side, where the half a million or million Taiwanese living in the greater Shanghai area, the greater Guangzhou area and a few other places are having, I think, an inexorable impact on the thinking and calculation of interests by their relatives, business partners and friends back in Taiwan,” said a former U.S. State Department official assigned to Taiwan. “China seeks to rapidly ‘colonize’ Taiwan covertly through implanting of agents, cultivation of agents of influence, ensnaring key leaders through flattery and commercially advantageous deals, and buying of others. All this will be immeasurably facilitated by a quantum expansion in cross-strait travel and commerce.”

Taiwan and China now have no direct links, direct air-to-air flights or maritime transport, but many believe it is only a matter of time. Only about a thousand Chinese tourists and businessmen a year are allowed to travel to Taiwan. Once direct links are established, China is expected to overrun Taiwan with tourists, businessmen and, of course, more spies.

One former U.S. intelligence officer assigned to the de facto U.S. embassy here, the American Institute in Taiwan (AIT), said the process has been a long one and virtually unstoppable.

“With economic integration already in full progress, more and more people [in Taiwan] are going to make compromises, so the potential for more sell-outs increases,” the former intel officer said. “It is not a pretty picture. Most people recognize that the picture is not good, but no one knows how bad the picture might be. Time is on China’s side.”

Chinese officials in Beijing and Washington did not respond to questions by press time.

The Second Oldest Profession

Lin believes more than 5,000 mainland Chinese spies are operating in Taiwan. Lin himself stumbled upon one who was driving a taxi here in 1995.

“The driver spoke with perfect Pekingese and admitted that he was from Beijing, briefed by the Taiwan Research Institute [affiliated with the People’s Republic of China’s National Security Ministry], with a master’s degree from Tsinghua University in hydraulic dynamics, and was here in Taiwan to ‘serve the broad masses by comparing the strengths and weaknesses between the capitalist and socialist systems,’” he said.

Lin reported the matter and discovered that the Ministry of Justice Investigative Bureau (MJIB) was already aware of the man.

Critics say that both the MJIB and the National Security Bureau are fully aware of spies, but refuse to arrest them for fear of damaging business ties with China. When spies are caught, they are normally repatriated to China. Many times, they are simply put under surveillance without taking action, MJIB sources said.

Examples abound of Chinese prostitutes working in karaoke hostess bars (KTVs) near military facilities in Taiwan. Sources say some of the worst examples include areas near the Tsoying Naval Base in Kaohsiung and Army headquarters in Taoyuan.

However, some doubt the effectiveness of using mainland taxi drivers and prostitutes as spies.

“Is it worth planting a honey trap in a KTV to gather info from an E-4 [a junior rank level for American enlisted personnel], when perhaps the same info could be obtained from open sources?” said a former U.S. intelligence officer who has worked in both Beijing and here. “Taiwan is a fairly transparent society, but in the military and intelligence fields, they’ve learned from the same sources in terms of masking the truth, distortion, com-partmentalization, etc.”

Though there are arguments that Taiwan does the best it can to safeguard secrets, there have been recent examples that illustrate flagrant disregard for security and the protection of not just Taiwanese but U.S. secrets as well.

The Mysterious Mr. Moo

Ko-suen “Bill” Moo, a Taiwan-based sales agent with contracts with a variety of U.S. and French defense firms in Taiwan, was charged in a U.S. federal court in February 2006 with attempting to acquire U.S. military equipment for China. Moo was sentenced to six and a half years in a federal prison.

A court press release issued at the time of his sentencing described in detail Moo’s attempts to undermine U.S. national security “by illegally negotiating the purchase of F-16 and Black Hawk [helicopter] engines, air-to-air missiles and air-to-ground missiles for delivery to ... China.

“When caught, he tried to undermine our system of justice by attempting to buy his way out of jail,” the release added.

Unanswered questions about Moo’s activities in Taiwan during the past 10 years have left many concerned that some of Taiwan’s most sensitive defense programs have been compromised.

“Bill Moo was said to have at least 14 and as many as 17 contracts on very sensitive programs,” one senior Taiwan defense official said. “It seems we’re only beginning to scratch the surface in understanding the damage Bill Moo has done.”

The official lamented that Taiwan did not act more quickly in the Moo affair, and called for an investigation “to see how much information Bill Moo and others have given to Beijing. An assessment should be done on what aspects can be saved and what should be thrown out.”

There are unaddressed concerns that Moo compromised Taiwan’s current Posheng C4ISR upgrade program. Moo was the principal sales agent on the $1.3 billion U.S. Foreign Military Sales program, and there are questions on why Taiwan’s government has not conducted a damage assessment of Moo’s activities there during the past 10 years.

Unanswered questions also have been raised over Moo’s involvement in a highly questionable contract for an Israeli company to handle the software for the $225 million Anyu-4 air defense command and control program.

“I’m curious if a damage assessment has ever been done on what he passed on to Beijing about Posheng, as well as Anyu-4,” a local U.S. defense contractor said.

One thing working to China’s advantage is rampant corruption in Taiwan’s arms procurement system. The lack of transparency and oversight has allowed Beijing to co-opt agents with cash. Many are “double-dipping,” say sources here — profiting from U.S. arms sales to Taiwan and then selling the information to Beijing.