The Sixth Bureau, Episode 1: Your Friend From Nanjing

0:01Bloomberg Audio Studios Podcast Radio News

0:12Today's date is Wednesday, April 25th, 2018. The time is 3.12pm. The following is a consensual body recording with the subject G. Chow Choon. The recording starts now.

0:41There's a guy sitting in a red Chevy Malibu in front of an apartment complex near downtown Chicago. He's waiting for someone to walk out of the apartment building. After a few minutes, the person does. He's young, and he's wearing a warm-up jacket and glasses. He has a buzz cut. His name is G. Chowchun.

1:02The guy in the red car gets out, walks toward G., and yells to him in Mandarin. Chiaojin? Are you Ji Chiaojin? Yes. Hi. Hi. How may I help you? Is it a good time to talk? I beg your pardon? There's something I'd like to talk to you about. We were all holding our breath because this is that interaction that we've prepared for. The two men are being watched. Ji's a little confused, a little flustered. And you can see that in his body language. He keeps this distance. You are a friend from Nanjing, send me to you. This reference to Nanjing, it's code. It's a way of saying, hey, we know the same people.

1:47And Ji, he understands it. Oh, I get it now. I think at that point, Ji's demeanor relaxed and their body language got closer. Is it a good time to talk? Roughly how long will it take? My car is parked over there in red. No problem, no problem. The two men walk towards the red car and get in.

2:18I'm not sure if you are aware. Something went down with the friends in Nanjin. I am not aware. Do you know whom I am referring to? Ji hesitates. The man pulls out his phone. Let me show you this. Xu Yanjoon. It's Xu Yanjoon. Xu Yanjoon.

2:44I have heard of him. Have you heard that something happened to him recently? I am not aware. The stranger says his name is Chen and suggests that the two of them go somewhere more private than his car. He says he has a room at the Hyatt, which is nearby. At first, Ji tries to get out of it. I really don't have time right now. I apologize. But Chen pushes back. This is important. When people have issues, such as this talk with you, they come to me, but I do not want to talk too much about it because... Okay, I understand. Ji gives in. They drive to the hotel. And it was immediate. Let's start moving.

3:25Let's start getting into place. So at that point, I left for the hotel and got to the lobby. Chen parks the car, and the two men walk into the hotel. I am simply a spectator sitting near the hotel bar and enjoying my afternoon. But my true goal is to keep my eyes on the two individuals that are briskly walking into the hotel lobby and making their way to the elevator. The two men take the elevator up to a room. G sits down at a small table at the foot of the unmade bed. He'd already gone into the hotel room and pleased a camera. Chen takes off his coat and drapes it over a chair. He's dressed like an accountant, a blue button-down, khakis, and a cell phone holster.

4:12He closes the curtains, but that plunges the room into complete darkness, so he reopens them. They both laugh awkwardly. Chen sits down. He pulls a sheet of paper out of his pocket, unfolds it, and hands it across the table. It's a recent article from a Belgian newspaper. Chinese spy arrested in Brussels at the request of the United States. The spy is Xu Yanjoon, the same person Chen name-dropped to Xi back in his car. Xi knows Xu Yanjoon well. Xu works for China's Ministry of State Security, or MSS, and so does Xi. Both of them are spies. We were aware of Ji Chao Choon's relationship with his MSS handler, Zhu Yanjun.

5:04Our goal was to use the information that his handler was arrested. Chen tells Ji that the friends in Nanjing don't know how Zhu Yanjun's cover was blown. We don't know if the problem was with your communications with them. We don't know why is the U.S. on to him, so I was sent to let you know to stop contacting them for now. Okay. Chen warns Ji, you could now be in danger. He hands Ji a cell phone. He says Ji should only contact him from now on, and only on this device. Your handler was arrested. Don't talk to anybody else at this time. Any information that you need to relay back should go through me.

5:47Chen's making it clear. I am now the only person you can trust. So they send me here to talk to you, but at this time, please stay low-key. Don't send them any text messages, don't send them WeChat messages, don't email them, because we don't know where things went wrong. So at light, nothing had happened. At normal.

6:12The two men leave the hotel room, and Chen drives Ji back to his apartment. Before Ji gets out of the car, Chen makes sure he has the cell phone. Did you grab the cell phone? Yes, it's in my pocket Thank you for your help Give me a bit of time Don't tell anyone about this Okay The whole interaction lasts about two hours Chen drives off, parks, and speaks into a hidden microphone Today day is April 25th, 2018 The time is 5.03pm ending the consensual monitoring.

7:00What G didn't know that afternoon was that this stranger off the street who knew his name and his biggest secret was actually an undercover FBI agent. And the person watching them was an agent too. A lot of what the undercover agent had said to G was a lie. But one key detail was true. Xu Yanjun, Xi's MSS handler, had been arrested. To announce federal criminal charges for conspiracy to commit economic espionage and theft of trade secrets. Xu wasn't just Xi's handler. He was running MSS operations all over the world. And he was at the center of one of the most significant spy rings the FBI has ever taken down.

7:46The MSS is believed to be the world's largest intelligence agency. But the people who work there are basically ghosts. We rarely learn their names. And even when we do, it's usually an alias. Xu Yanjun was the first intelligence officer ever to be lured out of China, arrested, and tried in the U.S. We had never been able to convict in the United States and put in prison a staff MSS officer. So it was very clear to me that we were making history. What this case cracked open for the first time was a view from inside the MSS, revealing thousands of pages of emails, chats, audio recordings, classified Chinese government documents, even Xu's personal diary.

8:30It was just strange the way he kept records of everything, not only what happened, but his own feelings about them. I now have several terabytes of an MSS officer, no doubt, no question, of his life. And that's a unicorn. At the heart of Xu's mission was an advanced technology that China has been after for years. One that has proven uniquely difficult to copy, much less surpassed. Ready for takeoff. Ready for takeoff, sir. Stand by for takeoff. The jet engine. The jet engine. One of the marvels of this century of marvels. It was a marvel when it was invented over 80 years ago, and it still is today.

9:12Only a few countries in the world know how to make them really well. China has said this is a national priority that we get this information. The MSS was tasked to do it. It fell down to Zhu Yanjun at that time.

9:29He's right out of central casting. Zhu is basically out there trying to steal corporate secrets. is doing that with the full support and cooperation of his government. He did it multiple times, over multiple years, right through an extensive network around the world. These are things that could be catastrophic. The idea that we could get Xu, it opens up so many doors to understanding what the Chinese government is up to and what information they have about us, how they work. It's like a once-in-a-lifetime kind of opportunity. The American people truly understood the scope of Chinese espionage inside the United States right now, they'd be shocked.

10:08They'd be outraged. It's the people of the United States who are the victims of what amounts to Chinese theft on a scale so massive that it represents one of the largest transfers of wealth in human history. Stealing American technology, giving it to Chinese companies who can then undercut American companies and Americans go out of business. That is their stated goal. They want to replace the United States as the world's only superpower. And they're on track to do what they're claiming they're going to do.

10:43There's a lot of change and straight-up chaos happening right now. Some of it may end up being noise, but we are witnessing the formation of a new world order. And one thing's clear. China is the new economic and military superpower alongside the U.S. The two countries have been going head-to-head for the last few decades. Not that long ago, the U.S. was still ahead of China in almost every advanced technology. That time has passed. China's caught up in so many ways, thanks to a ton of investment, talent, innovation, and one more thing, spying.

11:24From Bloomberg News and iHeart Podcast This is the Sixth Bureau I'm Jordan Robertson And I'm Drake Bennett This is a story of the inner workings of one of the world's most mysterious and powerful spy agencies and how one man's ambition and mistakes opened its vault of secrets

11:59On the next episode... We are in the business of exploiting your weakness, your needs, your vulnerabilities. And we're good at it. That recording was almost dumb luck. I cannot believe they didn't turn that recording off. 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.

12:43Hello, I'm Stephen Carroll. I'm in Brussels, where many of Europe's biggest decisions get made. And I'm Caroline Hepker in London. We're the hosts of the Bloomberg Daybreak Europe podcast. We're up early every weekday, keeping an eye on what's happening across Europe and around the world. We do it early so the news is fresh, not recycled, and so you know what actually matters as the day gets going. From Brussels, I'm following the politics, policy and the people shaping the European Union right now. And from London, I'm looking at what all that means for markets, money and the wider economy. We've got reporters across Europe and around the globe feeding in as stories break.

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