The Sixth Bureau, Episode 2: The Spy’s Diary

0:07A few quick notes before we get started. It's customary in Chinese for family names to come before given names. So with Xu Yanjun, Xu is his family name, and Yanjun is his given name. But almost everyone we spoke to and almost every document we reviewed for this story referred to him as Xu. So for simplicity, you'll hear us do the same for him and for a few others. Also, this series includes material originally written and spoken in Chinese. At various points, you'll hear actors voicing the translated versions in English. This episode also contains strong language. Finally, this is the second episode.

0:41If you missed the first, we recommend going back and listening from the beginning. Thanks. When Jordan and I first started going through the documents of this case, we saw a bunch of the usual things we'd expect. Trial testimony, emails, that kind of stuff. But one thing really stood out. Remember, Xu Yanjun is a spy, working for one of the most secretive agencies in the world, China's Ministry of State Security. So it was surprising to come across something much more intimate. Something that made us feel like we were inside his head. June 11th, morning. Eyeglasses prescription, March 6th. The whole family worshiped the Buddha at Jimin Temple.

1:25October 29th, evening. The fat man and his wife held banquet. April 5th, morning. Went with the second uncle's family to sweep great-grandfather's tomb. Xu Yanjun had an online calendar where he put his appointments in. This is Bradley Hall, the lead FBI agent on the Xu Yanjun case. At the end of the day, he would take little notes to himself about what happened that day. Sometimes it was related to source meetings. Sometimes it was related to work conflicts. Sometimes it was about his wife or his child or the apartment that he wanted to buy. July 15th afternoon, purchase of the house, signed a contract, May 25th, morning.

2:08Shuu goes to a music festival. Shuu eats lobster. Shuu takes his grandfather car shopping. Shuu wins money at cards. Shuu loses money at cards. Shuu loses more money at cards.

2:29Shuu seems to have been pretty bad at cards. So it was every little piece of his life that he very diligently put down in textual form for us. It was a diary. It was a diary. November 16th, afternoon. Watch Interstellar with Zhong Ling. October 31st, evening. Karaoke, November 28th. After dinner, food massage. February 17th, evening. Dined with Zhang Hao. Three rounds of drinks. Puked. There were highs and lows, and we saw all of them. March the 3rd, grandfather passed away at 10.40 p.m. He's a complicated fella, would be the simplest way to put it. He has some issues. He likes to gamble. He likes to womanize.

3:15Shu was married, but wasn't the most faithful husband. I don't remember how many girlfriends we identified, but there were quite a few. One of them starts to dominate his diary around this time. He refers to her with an emoji, a peach. December 30th, evening, Peach. The beginning, Wanda Hilton. June 29th, evening, Peach. July 2nd, afternoon, picked up Peach near the Sheraton and gave the gift. August 7th, went to karaoke afterwards. Peach was drunk and took her home. September 20th, noon, Peach, Nanjing Hotel. The details of Xu's personal life are pretty juicy. But what's even more incredible is that this spy meticulously documents his work life, too.

4:00March 14, six bureau meetings. January 24, held banquet with comrades of aerospace team. November 25, worked overtime on Tier 230 AM. May 13, party committee meeting. June 11, met G. Chowchee. March 31, aviation briefing. August 24, my official promotion came. Waited for too long. It finally came. took a load off my mind.

4:29It's normal enough to keep a diary, but Shue's recording things that are supposed to be secret, deniable, things about his job and how he does it. It's an actual spy's diary, and we got our hands on it.

4:49From Bloomberg News and iHeart Podcast, This is The Sixth Bureau. I'm Jordan Robertson. And I'm Drake Bennett.

5:04As spy agencies go, China's Ministry of State Security is unique. First of all, it's massive. Estimates we've heard put it at hundreds of thousands of employees. It's way bigger than the FBI and the CIA combined. And it has an additional job that those agencies don't. Industrial espionage. Stealing stuff from companies instead of governments. It wasn't just military information. It wasn't just U.S. political information. They wanted trade secrets. They wanted everything. This is Matthew McKenzie, a federal prosecutor on the shoe case. Everyone does espionage, but not every country uses their intelligence apparatus to steal commercial trade secrets.

5:45That is beyond the norms. Technically, this is correct. The CIA and FBI don't steal trade secrets. But the U.S. government does have a history of it. In the late 1700s, right after independence, the U.S. offered bounties for anyone who could smuggle out loom designs from British cotton mills. Those mills had been built thanks to plans stolen from Italian silk spinners, an industry that Italians essentially stole from China centuries before. Fast forward to the 1990s. China's economy is still recovering from the devastation of the Cultural Revolution, and the ruling Communist Party decides, reasonably enough, that they need to do whatever they can to catch up.

6:28Within a decade, China becomes the world's factory, churning out toys and textiles and kitchen appliances. They soon move on to more advanced technologies, like smartphones and electric vehicles. Then, in 2015, the CCP codifies this ambition in a strategic plan called Made in China 2025. Which is exactly what it sounds like. China making its own critical technologies and no longer relying on Western products. That policy and commitment largely worked. Today, it's safe to say they've caught up in many of these technologies. But one key area where they haven't is aerospace. Building planes and helicopters and jet engines that other countries want to buy.

7:09That's where the MSS comes in. In particular, one of its divisions, the 6th Bureau. Xu Yanjun worked there on a team tasked with stealing the secrets of the world's top aviation companies. Everything in China is a top-down approach, right? It is an edict from the government that we are going to make our own regional airliners so we can stop buying from Boeing and stop buying from GE. We're going to make our own domestic product. And Xu Yanjun's job is to work with engineers from China's state-owned aerospace companies and get them exactly what they need. Because they're the ones who are actually trying to build the plane.

7:49Which brings us to a recording that Xu secretly made in 2017. My favorite part of the entire case. He's recording a talk by a man named Arthur Gao. This is the engine power. Therefore, you have to do the power interrupt test and EMI lightning. Arthur Gao was an engineer at the American company Honeywell. He worked on advanced technologies for both civilian and military aircraft. For control systems of helicopters, there are two very important issues. One is the rotor dynamics. You have to take it into account. Arthur is originally from Taiwan, and he came to the U.S. in the late 70s to get his Ph.D.

8:34He eventually wound up at Honeywell in Phoenix. He's been invited to China to give this talk in what was described as an academic exchange with the Nanjing University of Aeronautics and Astronautics. But when he got there, he wasn't brought to a university to give his talk. He was brought to a hotel room. Inside, only a few people were there. Arthur thinks he's talking to all of these academics and students, and it turns out that there are no academics. There are no students. There are MSS officers, posing as people who work in the industry. There are also Chinese engineers, employees of China's state-owned aerospace conglomerate, AVIC.

9:14They're to learn what they can from Arthur about his work at Honeywell. In particular, the combat aircraft systems that Honeywell builds for the United States military. These are all military standards. They have very detailed regulation. Arthur talks to the group for about three hours. And at the conclusion of his presentation... FBI agent Bradley Hall. Shu Engineer thanks him, they go through all the niceties, and then they ask Arthur to step out of the room. Teacher Gao, maybe you can head back first. Thank you so much. Arthur walks out of the room, leaving Shu and the engineers alone. But the tape keeps rolling.

9:58And there's this amazing kind of Easter egg. You know that narrative convention in movies and TV where near the beginning of a story, some new character shows up and someone else has to explain to them, and by extension you, the audience, how everything works and who everyone is? Think Peggy Olsen's first day on the job in Mad Men. Now this is the executive floor. It should be organized, but it's not. So you'll find account executives and creative executives

10:32What we hear next on the recording is exactly that for Shu's world. You hear someone take a sip of a drink and put their mug down on the table. You hear the door close behind Arthur, and then Shu turns back to the group of Chinese engineers. Xu Yanjun starts describing how the MSS recruits Western experts, how they operate them, and how they found Arthur so that he could teach them about what the Americans were doing with their helicopters. Xu wants to know how the engineers think Arthur will be most useful to them, what kind of source he may be. So he lays out the different types of sources he brings in, like a taxonomy of spies, let's say.

11:18He walks them through it. There are a few aspects to our collaboration. He actually has what he calls four levels of expert participation. The first level are high-ranking experts. This expert is ranked highly and is reliable. The expert can directly participate in the design of the project. These are folks who have direct involvement in design, both in the West and in Chinese systems. They have access to classified information in China and their long-term sources. as in these are the people that they keep on the books for 15, 20 years and they call them in when they need them. This is our highest level of collaboration.

12:01A lot of the stories you hear about China stealing trade secrets involve hacking, breaking into computer systems. But spying's ultimately about something way more ordinary, cultivating relationships or using people. They invite people over under some kind of innocent-sounding pretext. This is James Olson. We'd like to invite you to China to give a guest lecture or to meet with our experts just for a get acquainted session. And we will compensate you for that. There will be a stipend and we will cover all your expenses. And most people fall for it. James knows this because he was a spy. And the Central Intelligence Agency for 31 years.

12:44Eventually, the agency's chief of counterintelligence. So James has a pretty good idea of what a spy like Shu Yanjun does. And he says there's kind of a universal playbook on how to do it. It sounds cynical, but in the intelligence profession, we know that every human being has needs. And our job in intelligence is to identify what your need is. And our hope is that need is so compelling, so urgent, so important for you, that if we satisfy that need, you will assist us. You will violate your own country's laws. You will give us technology. It sounds terrible, but we are in the business of exploiting your weakness, your needs, your vulnerabilities.

13:36And we're good at it.

13:41Sometimes exploding vulnerabilities is a matter of carrots, but sometimes it sticks. People fear the MSS. Generally, they will put that in the frame of your family back in China is dependent on the government. And we would not want to do anything to make their life more difficult. I've seen cases where family members are arrested. I have seen cases where family members are sent by the MSS to deliver messages to people in the United States to either get in line or come back to China to face whatever consequences there are for them there. We don't know exactly why Arthur Gao did what he did. We tried multiple times to contact him for this series, but we never heard back.

14:27We also reached out to his former employer, Honeywell. They never responded. But we do know that when the MSS came calling, it was hard for Arthur to say no. And they came calling more than once. That talk in the hotel room wasn't a one-off. The MSS first targeted Arthur two decades before. The first invitation came to Arthur in 1997 from someone at the Nanjing University of Aeronautics and Astronautics, or NUAA. You're going to hear NUAA a lot in this series, because its staff worked really closely with the MSS. They allow themselves to be used as cover to invite and to host foreign visitors so that they can assess them, wind them, and dine them, develop them when they're making their trips to China.

15:17It's a very, very valuable relationship in the MSS eyes. So the invitations from NUA kept coming, and Arthur Gao kept accepting them. He'd come give a talk. There'd be fancy meals, luxury cruises down the Youngst River. All expenses paid trips to visit tourist attractions. Then, after he got home from a trip in 2003, his contact followed up, asking for very sensitive information. Arthur seemed to get suspicious, and he cut things off. That worked for a while. The MSS, though, can be patient. Like, unbelievably patient. Eleven years later, his contact, who was actually an MSS officer named Zhao Rong, reaches back out, like an old friend checking in.

16:03Time flies. It has been 11 years. He mentions things about Arthur's personal life that only a friend should know. I heard that you had a son recently. Congratulations. He wishes Arthur's family a happy new year. Stay healthy. and invites him to return to China. If I were Arthur, I'd be creeped out. So he replies, but he doesn't commit to another trip. Two years later, in 2016, Jia nudges him again. This time, Arthur caves. He tells Jia that he does have a trip to China coming up, a personal trip to see some friends. Jia offers to pick him up at the Beijing airport. In the car, he introduces a supposed university colleague.

16:46It's actually Shu Yanjou. During that visit, Ja and Shu come up to Arthur's hotel room late at night and hand him$3 ,000. Arthur's confused. This has been a strictly personal trip. No presentation, no meetings. He didn't even bring his work computer. They basically tell him, keep it. Use it for the next trip. On the next trip, though, in 2017, when he gives that talk in the hotel, he's handed another envelope of money. This time, it's five grand.

17:21At the time he gave that talk, Arthur Gao was thinking about retirement. In a way, this only made him more useful. It meant he could come over for even longer periods of time. And they could possibly even hire him. He said he may retire in two years or so. He also wants to, right? He has the ability. He is competent. He has a desire to achieve something. We can also design it that way. Arthur Gowdy, he was the longest-running asset that's in the case. I mean, he, what, 20 years? What does he represent to you in terms of, you know, this organization's ability to run people for a long time? Both the long-term nature of the operation and then the significant amount of damage that can happen over that time frame.

18:07Bradley Hall. With Arthur's example, when he did choose to disclose, he disclosed things that could hurt us. The helicopter that the Marine Corps is going to fly, the next level helicopter, there's no reason that the Chinese government needs to know the specifications of that. There's no reason an employee of any American company should be prepared to pass that sort of information over.

18:31In 2021, Arthur Gao was indicted and pled guilty to exporting controlled information without a license. He was sentenced to three years probation and ordered to pay a fine. Okay, back to Xu's taxonomy of the types of sources he recruits. Level one, it's kind of like having someone who works for you directly over a period of time. Level two, that's more like having a consultant who's on call for specific one-off jobs. These are folks who examine specific models. They solve problems. They usually come to China for a one-month period, but fairly infrequently because they are working in companies in the West.

19:08If we have specific questions, we can ask them, for instance. If we come across any problems in the project, we can present them with the questions directly in a very specific fashion. Level three, that's even less of a commitment. The third level, he called topical experts. These are individuals who answer questions in person only, or they provide reports that they only come into China for very, very short durations of time because they're experts in their field back in the West, and it would be unusual or raise concerns if these people stayed there for more than a week or a weekend or something like that.

19:46Xu indicated that this was the most common type of source that he as an individual ran. This is something we've done quite a lot in the past. Arthur Gao was probably a level three. So was a man named Li Jiang. Xu wrote about meeting with Li in his diary. April 20th, afternoon. Pick up Li from train station. Check in to Jingling Hotel. We don't know that much about Li Jiang, but we do know that he was an expert on fighter aircraft and how to make them. Like the Lockheed Martin F-35, which is one of the world's most advanced fighter jets. We also know that when Xu invited Li to come give a talk in Nanjing, the MSS officer used an alias.

20:32When Lee arrives in April 2014, Xu and Jia Rong host a banquet in his honor. There's a level of rapport building. There's a level of wining and dining that's often involved with this. But it's not just about rapport building. During the banquet, Xu's colleagues sneak into Lee's hotel room and try to hack into his computer. But they run into problems, and they can't get everything they want. So they invite Lee back a few months later for another visit. They want him to give a talk about electric takeoff and landing systems. And they want to take another crack at hacking into his laptop. December 7th, Li Zhang's coming to Nanjing, entertaining.

21:12Shu brings Li to the hotel. Li drops his stuff in his room and then heads off to dinner with Shu's boss, Zhao Rong, who's waiting for him in a private dining room. I'm in the private room and the dishes have been ordered. Then, Xu and another colleague go to Li's room to try and hack into his computer again. At 6.49 p.m., Xu texts his boss.

21:36The hack is taking longer than expected, and his boss gets impatient. 15 minutes later.

21:48Now, it's 8.39 p.m. The operation's been going for almost two hours. Shu updates his boss. The copying will more or less be done in 15 minutes. Restoring the scene and documents will take roughly 20 minutes. Hurry up, hurry up. Because remember, Shu's boss, Jia Rong, is having dinner with Li. And even a fake honorary banquet can only go on for so long. Finally. The copying is completed. Restoring is in progress. After two hours and 22 minutes, Shu's done. Restored. Exiting. You can let him toddle back up to his room at this point. The next day, Lee gives his talk. Totally clueless he's been hacked.

22:32We were never able to reach Lee Ji-young. As far as we know, he was never charged with any crimes. The fourth and final level of Shu's experts are called spotters. So these are people that we have living in the West whose job it is to identify engineers who might be susceptible for working with the MSS. These people are crucial for Xu because they live in places like the U.S., places that are too risky for Xu to go.

23:03Ji Chaochen, the guy who was secretly recorded by the FBI in Chicago, Ji was a spotter. Ji was first approached by the MSS back in Beijing. It was 2012. He was about to graduate from college, and he was checking out a job fair on campus. He'd also applied to some grad schools in the U.S. to get a master's degree in engineering. He wasn't sure exactly what he wanted to do next. At the job fair, he meets Jia Rong, who's on a spotting mission of his own. The MSS officer introduces himself to Ji as a college professor and tells him about some vague opportunity in a, quote, confidential unit. This is G texting his girlfriend about that first conversation.

23:47He indicated that they wanted to train me to do things on their behalf because they are not able to leave the country. G was a perfect candidate for the 6th Bureau. He was already planning to go to the U.S. for legitimate reasons, an engineering program, and so didn't need a cover. And he was psyched to be a spy. Once the MSS came clean about who they really were, he was all in. He got into a university in Chicago, signed official paperwork with the MSS, moved to the U.S., and got to work. His job was to provide background information and hopefully some assessment information on Chinese Americans who were working in high-tech companies in the United States.

24:32Former CIA chief of counterintelligence, James Olson. He was fired up. He really wanted to do this. It's kind of fun being a spy. And Ji had fun, a little too much fun. In 2014, he reaches out to a friend he knows from China. The friend is studying aeronautical engineering in Washington, D.C. Ji wants his help finding potential sources, and he starts off by texting a photo of a bunch of$100 bills. It's operating funds from Shu Yanjun, who's now his handler. Hucker, you even dare to photograph this? Photograph this sneakily. Delete after you see it. Then G eventually gets down to business, in his own way.