Defense News
10/05/09
By Wendell Minnick
Ex-PACOM Official Convicted of Spying for China; Ties with Taiwan Raise Eyebrows
Taipei - James Fondren, a former official with U.S. Pacific Command (PACOM), was found guilty of espionage Sept. 25 for his involvement in a Chinese spy ring. He faces a 15-year sentence.
Fondren retired from the U.S. Air Force as a lieutenant colonel in 1996, then joined PACOM as a civilian employee from 2001 to 2008. He served as deputy director of the command's Washington liaison office.
Fondren is the second U.S. government official found guilty of involvement in a Chinese spy ring run by Tai Shen Kuo, a Taiwan-born naturalized U.S. citizen who worked on defense sales to Taiwan for U.S. companies.
Kuo also recruited Gregg Bergersen, an official with the U.S. Defense Security Cooperation Agency (DSCA) who was arrested in February 2008. Bergersen was the director of C4ISR programs in DSCA's Weapons Division.
At the time of his arrest, Bergersen was in charge of Taiwan's Po Sheng C4I modernization program, which upgraded the self-governing island's C4ISR (command, control, communications, computers, intelligence, surveillance and reconnaissance) network to Joint Tactical Information Distribution System standards.
Kuo testified against Fondren during the trial. Fondren was convicted on one count of supplying classified information to Kuo. He also was found guilty of two counts of making false statements to the FBI.
Court documents indicate that Fondren provided Kuo with classified information in the form of "opinion papers" under the guise of a consulting service run solely by Kuo. Fondren was found guilty of providing an opinion paper, titled "DoD-PLA Bilateral Military Meetings," that contained classified information.
He was acquitted of two counts of unlawful communication of classified information, one count of conspiracy to communicate classified information to a foreign agent, and one count of aiding and abetting a foreign agent.
"We are pleased that the judge dismissed two counts of the charges," said Fondren's attorney, Asa Hutchinson.
The judge "found there was not sufficient evidence to allow those charges to go to the jury. We are also grateful for the jury finding not guilty on three counts" - two counts of espionage and one false statement, Hutchinson said. "Clearly, the jury had problems with the government's case and the testimony of Tai Shen Kuo."
Kuo's testimony confirms "the duplicitous nature of spying," Hutchinson said.
"Here you have a businessman and U.S. citizen who misrepresents his intentions to those in government and to many in the private sector," he said. "Clearly, the trial shows that China is very active in the United States in an effort to gain any advantage, and it is sometimes difficult to distinguish between legitimate business interests and illegal activity."
According to court papers, Fondren worked in a Sensitive Compartmentalized Information Facility. According to evidence at the trial, Fondren provided classified information to Kuo from 2004 to 2008.
Fondren and Kuo have a long history. In March 1999, on a trip to China, Kuo introduced Fondren to a Chinese government official.
"As Kuo well knew, this individual was an official of the PRC [People's Republic of China] government. Fondren and the PRC official exchanged more than 40 e-mail messages between March 1999 and November 2000," court papers said.
THE BERGERSEN CONNECTION
Kuo also recruited DSCA official Gregg Bergersen in what officials are calling a "false flag" operation. Kuo had told Bergersen that information being provided was going to Taiwan officials, and he would eventually end up with business opportunities upon his retirement from DSCA. Instead, the information went to China.
A Defense News reporter first met Bergersen here in August 2005, while he was working on Taiwan's Po Sheng C4ISR program. At the time, Kuo was attempting to secure subcontracts for Phase II of the program.
Bergersen also managed negotiations with Taiwan on the Communications and Information Security Memorandum of Agreement (CISMOA), which allows the United States to release Type 1 cryptography techniques that would be used for U.S.-Taiwan communications during a war.
Both were arrested in February 2008 by U.S. federal authorities. In plea agreements, Bergersen received 57 months in prison in July 2008 and Kuo received 15 years in May 2008.
Kuo was last seen here in 2007, leading a tour of the military-run Chungshan Institute of Science and Technology (CSIST) for representatives of an unidentified U.S. defense company.
Bergersen also was in attendance on an "unauthorized" visit to Taiwan without Pentagon approval, a former Taiwan defense official said. CSIST produces weapon systems for Taiwan's military, including missiles and communications equipment.
THE MOO CONNECTION
Taiwan authorities have repeatedly denied that Bergersen or Kuo compromised the Po Sheng system. However, U.S. authorities made an arrest in 2005 of another Taiwan sales agent, Ko-suen "Bill" Moo, on charges of attempting to ship U.S. weapons to China.
Moo was the principal sales agent for Po Sheng and also was involved in the Anyu-4 air defense command-and-control program. Sources in Taipei and Washington said Kuo and Moo worked together on the program.
After Moo's arrest, an FBI affidavit said, Kuo continued to work on securing subcontracts for Po Sheng's Phase II until his arrest in 2008.
However, neither Kuo nor Moo was charged with compromising Po Sheng in either Taiwan or the United States.
A former U.S. defense official downplayed the Po Sheng connection.
"Moo, Kuo, Bergersen and Fondren most likely would have had only limited access to details on the Po Sheng program, beyond what's already available in the public realm," he said.
In 2006, Moo was sentenced to six years for attempting to ship an F-16 engine to China's Shenyang Aircraft Corp., which develops and manufactures military aircraft and components.
Court documents indicate Moo also attempted to acquire an AIM-120 Advanced Medium-Range Air-to-Air Missile, an AGM-129 Advanced Cruise Missile and a Black Hawk helicopter engine. During his arrest, Moo reportedly attempted to bribe U.S. law enforcement officers to release him.
TAIWAN SECURITY ISSUES
Taiwan authorities made no arrests in connection to the arrests of Kuo or Moo, despite the fact both had more than a decade of business dealings with the Taiwan military.
Critics complain that there is no vetting of Taiwan businessmen being hired by U.S. defense companies. U.S. companies need to begin implementing a serious due diligence program in Taiwan and elsewhere in Asia, the former U.S. defense official said.
"These companies do cursory checks on sales representative company financials, and that's about it," he said. "They need to shell out the money for professionals for real background checks."
The issue is expected to become even more complicated as direct flights and closer relations with China make the flow of information to Beijing more difficult to control.
Taiwan has long been a conduit for Chinese espionage efforts against the United States. Sources in Taipei and Washington have complained that China has thoroughly penetrated Taiwan's military and political system.
