105. The Chinese Spy Scandal: Mastering LinkedIn (Ep 2)

17:05David:And Yang, or whoever this real contact is, says, my object is to make sure of your security, try and reimburse you. So you can see what's going on here. Mallory's also going to place more classified material he'd obtained on another SD card, wraps it in tinfoil, stashes it in his bedroom closet. But I think this is where it's interesting because this is where it starts to go. Because he does seem to suddenly panic about what he's doing. He seems to kind of freak out. And possibly because of that custom stop, I kind of wonder where... I mean, A, it may have been just a genuine custom stop. You wonder if it was a kind of tip-off custom stop.

17:43David:You also wonder if he over-interprets the custom stop and thinks, they're onto me. I'm in trouble now. I'm doomed. What am I doing? Because at that point, he behaves in a pretty odd way, doesn't he?

17:54Gordon:It's kind of bizarre because he does midstream in this relationship with Yang and the MSS. He reaches out to an acquaintance who had worked with him at the CIA to get Mallory in touch with the CIA, to tell the agency that he'd been approached by Chinese intelligence on this business trip. And he kind of wants, it seems like Mallory wants to get this on the record, which is maybe the exact opposite of what you should do in this situation. Because he seems like he's almost going to try to spin it like he's being useful to the agency in some way.

18:38David:Yeah, I kind of wonder if either he's scared and he thinks, I'm going to get caught I better go to them first. Or if he's thinking he can play a kind of clever double game, because I wonder if what he's thinking is, if I tell them I've been pitched by Chinese intelligence, but not tell them I've actually started passing stuff, maybe I'll either get away with it, or they might use me as a double agent back against the Chinese, but I'll probably get away with it. But he's thinking, I can just pretend all that's happened is I've been pitched by the Chinese, and I've had some contact with them, but kind of claim that there's nothing more to the relationship than that.

19:14David:But I agree, it's odd. It feels like a person who's panicking. There's a good piece by Tara McKelvey, who is an old colleague at the BBC and a really good reporter. And she suggests in the piece she wrote about this that Mallory was hoping to become a double agent. But his messages, he's sending text messages to old acquaintances linked to the CIA, and they're getting increasingly frantic. And so on May 12th, 2017, he meets with a CIA investigator. And he now kind of goes, oh, I think these people I met in Shanghai were linked to Chinese intelligence. And I received a covert communications device and instructions how to use it.

19:50David:And he says he'll come to another meeting. And then comes the kind of crucial meeting. And this is a kind of wild meeting. May 24th, 2017. Thinks he's going to meet the CIA investigator again. But this time it's the Pheebs, David. The Pheebs are there.

20:03Gordon:This is a bad sign. This is a bad sign when

20:06David:there's phoebes there yeah they're there waiting for him and mallory says he's been contacted on social media by chinese recruiter he's traveled out twice he says that and he says he's been paid 25 000 in total which he says was in line with his billable rate as a consultant including expenses i mean wow that's 25 000 for that's pretty good money for i don't know whatever consultants he was doing on anti-bullying or whatever it was.

20:35Gordon:Yes, family development and anti-bullying. This is the going rate for this kind of - We're in the wrong game, David. We're in the wrong game. We are. We would need to respond to those messages from Shirley Shen. Yeah, let me just hold the recording a minute.

20:49David:Let me go back. So, Mallory says he was encouraged to pursue employment with the US government in a position with access, which he said he was in the process of doing. He tells the Thebes, He received taskings to write papers about US policy and he responded, he says, by writing and delivering too short, what he says are unclassified, what he calls white papers, using information in his head as well as open source information. And he says, I didn't retain copies of this, I just sent it over.

21:21Gordon:Well, why would you retain any copies of work that you produced?

21:24David:Of the work you've done when it's open source, you know? Yeah, it's totally dumb. But then, of course, crucially, he tells the Thebes multiple times he didn't provide the Chinese with any other documents in any format, paper or electronic, beyond these two papers. Now, this is the funny bit. He's going to show the covert communications device that Samsung phoned the FBI agents and describe how it works. And this is where things really do go wrong for Kevin Mallory.

21:53Gordon:I think, Gordon, maybe that's a good place to take a break right when this guy, Kevin Mallory, is thinking that the solution to all of his problems is to show the Phebes the Covcom device that he has been using to communicate with the Chinese. Let's take a break. When we come back, we will see how in the world that wonderful idea goes terribly wrong.

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26:05Gordon:Well, welcome back. Kevin Mallory. Gordon is sitting with the Pheebs looking at his Samsung Galaxy smartphone communication device. And I guess it's about to all go sideways for him, isn't it?

26:19David:Yeah. So poor Kevin Mallory. I'm almost feeling sorry for him for this moment. He sat with the Pheebs and he's saying, here's this covert communications device that my Chinese handlers gave to me. I've never used it, he says. I've never used it to send classified documents to Yang, my handler. I'd only ever sent a test message. And I'm pretty sure that the device is designed to delete all the previous history. So he voluntarily agrees to show the agents how to shift on the phone from the normal message mode to a kind of clandestine secure messaging mode on the phone. and then he appears very visibly surprised according to people who were there when the whole chat history with yang turns up including what he thought with the secure messages that he'd exchanged and which he claimed he's just claimed he never had because he only sent a test message and he's showing them how to use it and then suddenly the whole messaging history you know pops up including references to foreign intelligence services and to documents and he just he just goes silent for a few moments i mean how bad is that and it looks like the software had a glitch possibly and just revealed the messages by mistake i mean how bad is that it's comedically bad almost i mean i really think that he almost had it was like his conscience was was overactive

27:53Gordon:in a way. And he felt like he needed to come clean in some way, shape or form. But now he's attempted to kind of come clean. And then the phone wrecks him, Gordon. I mean, it's remarkable.

28:07David:He's come cleaner than he wanted to. He wanted to come semi-clean. Now he's been cleaned out by the phone. He's been cleaned out. That's right. Because the messages say things like, I can also come in the middle of June. I can bring the remainder of the documents I have at that time. Fairly incriminating. Yeah. Yeah. And he's kind of saying, well, this is just the two white papers I'd already told you about, you know, open source stuff. The remainder of the documents, that's just me stringing the Chinese along. And according to one of the FBI agents who was present, it was a fairly significant moment, like the understatement, as we realised there was something very different going on here than we first thought.

28:45David:I mean, it does sound like the Thebes maybe didn't realise until he did that, that he had actually been passing the documents. They really thought he was just owning up. And suddenly they're like, oh, this is a very different case. So it's bad. And then he's going to kind of give them the phone and allow them to make a copy of the phone, which is going to allow them to find even more messaging history in it, in which he's talking about the documents he's sent, which is, you know, even more incriminating because there's more details about messages about money going into accounts funds being broken into four equal payments over four consecutive days when you get the okay to place the payment and i'll send more docs in the future i will destroy all the electronic records after you confirm receipt i've already destroyed the paper records i cannot keep these around too dangerous yeah that's bad that's that's really bad that's

29:34Gordon:really incriminating yeah yeah and i guess when the phoebs actually look at the phone they see that there's a handwritten index which has sort of a description of a number of different documents. I mean, this is kind of the jigs up here for Kevin Malloy.

29:51David:Yeah, the game's over. It's pretty clear that he's been using the device to send these documents. So then June 22nd, 2017, the FBI arrest him at the house. Interesting enough, there's a red banner covered in Chinese calligraphy that hung outside the front door. His poor teenage son is at home. and the fbi i mean when they do this they go in i mean hard don't they because there are guns helicopters black vans it's the the full fbi works basically that it's used i think they just enjoy doing it that's my theory do you think they particularly enjoy doing it to a cia officer or a former cia officer i bet you know 100 100 yeah this is this is fun this is this is like

30:31Gordon:an fbi carnival right here you know this is everyone's going like let me do the raid let Yeah. It also, I mean, one of the pieces of this story that is also just, I mean, it's like, what was Mallory thinking? Is he's doing a lot of the document scanning and destruction in full view of cameras inside the FedEx store in Leesburg, right? It's just, he's on camera doing this stuff, which enables the FBI to then use that as evidence at the trial.

31:04David:Yeah, that's right. because they've got him scanning classified material onto the SD card and, as we said, kind of getting the stuff shredded at the store all on camera. Then they're going to find the concealed SD card, the one he'd said to hide during a search of his home. In the trial, they're going to be able to show all this evidence, including a recording from after he's arrested, a couple of days after, where he can be heard on a call from the jail asking his family to search for the hidden SD card. I mean, amateur out. I mean, you know, it's pretty bad, isn't it? Anyway, it's no comment on the quality of people employed by the CIA in the 1990s, but it's kind of -

31:47Gordon:It sounds, well, the way you just said that, Gordon, it makes it sound like it's a comment on the quality of the people employed by the CIA.

31:53David:Before all our CIA listeners come after me, I don't mean that, but I think he was the rotten apple. And as befitting a rotten apple in May 2019, he's sentenced to 20 years under the Espionage Act. So he gets the full whack of the law for doing that. And it all started with a LinkedIn message. And I guess he's not the only one, is he? I mean, we shouldn't pretend that he's the only case. There's plenty of others.

32:17Gordon:No. And I think we will, down the line, want to do a few more series on industrial and commercial espionage too. I mean, in this case, This is more of a straight up, just you're recruiting a former CIA officer who's got political national security information that you might want. But in so many other cases, the targets are very different.

32:38David:You're right. I mean, it is interesting because the way in both the Parliament Alert and the Mallory case, it starts off with this offer of kind of consultancy and writing reports. And it is, that's what LinkedIn is there for, is for connecting people to kind of be able to ping in a pitch work to each other. So, you know, the platform, which, you know, we should say LinkedIn is, you know, says it's working with governments to try and deal with this, has offered a new way of doing something that intelligence services have been using for some time. So it's not a uniquely Chinese thing, I think, to try and build relationships that way through that kind of cover.

33:16David:And I mean, China's Ministry of State Security, not often we're going to quote them, but they say that West does this to them. So January 2024, the MSS posted on WeChat, which is the Chinese messaging kind of service, alleging that MI6 had established contact in 2015 with a foreigner in charge of an unnamed overseas consultancy. And they recruited this guy from a third country without being clear and then use this person in China to gather intelligence and to recruit more people and train them. And so the MSS was basically making the point, hey, everyone does this. So there is a sense in which using this process is something that intelligence agencies do, the kind of consultancy as cover to try and lure people into a relationship which then builds.

34:05David:So I guess the question is, is what China does different?

34:08Gordon:absolutely it's different i've never liked this we spy they spy everybody spies anytime a chinese intelligence case is sort of unearthed kevin mallory or whatever right you sort of get this reaction that okay well this is part of the game right everybody spies i think that statement is it's true and at its heart though it's completely misleading because Because of, I guess a couple of things. The scale is totally different. It's totally different. We talked about this, I mean, throughout both of these episodes, that the Chinese can throw so many resources at this that it's not fair, quote unquote.

34:58Gordon:It's not the same. It's happening at a very different level. They're bigger than us. I think that the targets, I mean, but the second thing is, is like, we talked in this series about more typical intelligence targets, you know, political types try to get into, allegedly, into parliament in the UK. The reality, though, is that the Chinese look at sort of security competition, I think, across every possible domain, right? Scientific, commercial, economic, political, cultural. This is not how, I think, the CIA and SIS would sort of view the spy game with China, right? It's a much more narrow set of targets.

35:42Gordon:And then the last point is just like, again, the strategies that the Chinese employ to steal IP, to capture networks of elites in the West, like these are not strategies, I think, that are widely deployed at scale by Western intelligence services. So I think it's like this everybody spies thing is just it's ignoring the reality that the Chinese are spying differently and at a greater scale than everyone else.

36:12David:Let me come back to you a little bit because I agree that actually China is different in the way it spies. You know, I think they go after different targets. They do economic espionage in a way we don't. They do, I think, political interference in a way that we don't. There's a bit, though, of me which goes, why do we get to decide what's acceptable spying and what's not? You know, who gets to set the boundaries of why some things are? Because basically, recruiting a Kevin Mallory, that is exactly what I think the Brits or the CIA would do to an MSS officer, an ex-MSS officer, if they could get it.

36:51David:Kind of political intelligence, counterintelligence, military intelligence, using consulting cover to try and get them. That case, I think, is actually very hard to go, hey, you know, you can't do that. It's a bit like saying China's going to use an embassy to spy. Well, shock horror, we might do similar things, you know, who'd have thought? So there's certain types of intelligence, which I think we do the same. There's definitely another category, which China does, which we don't do. I think that is true, and I agree with you there. And they do it at a scale and with impact that we don't do. I think there's an interesting question is, who sets the rules in espionage?

37:24David:Who gets to decide what's allowed and what's not allowed? And I think it's right that we complain about it. I think particularly for me, the kind of political interference, I think that feels a big deal. The economic espionage, I agree. I think we should be complaining about it. Don't get me wrong. I don't think it's right that it happens. It's quite interesting from a moral perspective to decide where the boundaries are. But I definitely think we should be calling it out at the very least.

37:50Gordon:Well, sure. I guess I'm not saying that I think it's even unfair. I don't think fair has anything to do with it. I just mean that when these Chinese spy cases come out and you hear the inevitable refrain that, well, everybody's spies, it's just sort of - It's too simple. It's too simple. And it's analytically misleading about the nature of the problem. That's my concern. So it's missing the scale point. It's missing the differences. And it makes it harder for us to then deal with the problem because we just say, oh, you know, it's just everybody spies. And it's assuming the game is the same. And in fact, there are vectors, threat vectors that the Chinese intelligence services use to gain access to the information, the resources, and the people in our societies.

38:48Gordon:And we're not defending ourselves properly against them if we don't analytically look at it in sort of a clear-headed way. That's my opinion.

38:55David:No, and I agree with you very much that we need to be clear-headed about it. And we need to be able, and this goes back to some of the discussion we had earlier, to call it out and to be open about it and to say, this is what they do, this to our, whether it's parliament or businesses, this is what you need to look out for, because this is what they're trying to do to us. I think we absolutely need to be kind of clear headed about that. I think the scale point is really interesting because I think the reality is they don't have to choose, are we just going to do political intelligence or are we going to do economic intelligence?

39:28David:They could do everything at vast scale enabled by digital technology and having 600 ,000 people, maybe even more in their security and intelligence services compared if you're in MI5 or the FBI and you're looking at that scale that you see incoming, that has a strategic effect on whatever you think of the morality of it, on your economy and your political life, if they can do it at that scale, and you don't necessarily have the resources and the ability to defend against it. That is a kind of strategic risk for Western countries, I think, if they're not alert to it. And it's a pretty hard one to defend against.

40:05David:I agree.

40:06Gordon:I'm glad you said that, Gordon, because I was nervous that you were drifting into your classic sort of your chummy approach of sort of anti-Western actors, like you did in our Snowden series where you sort of, you know, the swan song of this, you know, this sort of anti-Western axis. It's appealing to Gordon and Carrera.

40:27David:It's possible to care about civil liberties, David, and human rights, and be critical of Chinese espionage and Russian espionage. It's not either or, that's what I would say. In fact, it should be and. Anyway, you've opened up a big one there.

40:45Gordon:That's right. That's right. At the very end. I also think, I mean, there is a great, and Becky, our producer, has typed into the chat here, do you think we would ever spy like this? And I think the answer, and this is something we haven't really talked much about in the series, but is really actually an important piece of the way that enabler of the way China spies is in part because it has a very closed political system and it is not an open society. And so what do you think about the ways that Chinese intelligence agencies, state-owned enterprises, et cetera, can get access to our IP, can become investors in US or Western companies, can target for acquisition companies that are in bankruptcy, and can get access to sort of politicians and elite networks all over the West.

41:45Gordon:The way you do that is because we have a very open system. And it's not reciprocal. So like if we tried to do the same things back, we would have no purchase. It's out of the question, I think.

42:02David:That's a challenge for us.

42:03Gordon:It is. It's a structural challenge that you just can't, I think, do much about at scale.

42:09David:Yeah. So if we have one message though from this two-part series, I think it's, think before you link. When you get that request, think carefully. However tempting it may seem for that consultancy deal, I think, just think twice, isn't it, David?

42:25Gordon:If you're being paid$25 ,000 for anti-bullying consulting, you might be working. Something else might be going on.

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43:39Gordon:Please, for the love of everything good in this world, stop. With Mint, you can get premium wireless for just$15 a month. Of course, if you enjoy overpaying, no judgments, but that's weird. Okay, one judgment. Anyway, give it a try at mintmobile.com slash switch. Upfront payment of$45 for three-month plan, equivalent to$15 per month required. Intro rate first three months only, then full price plan options available. Taxes and fees extra. See full terms at mintmobile.com. Yeah, for the Chinese Ministry of State Security. Well, this has been a fun little journey into the world of Chinese espionage.

44:11Gordon:We hope you have enjoyed it. Do go ahead and go to therestousclassified.com and join the Declassified Club. We should also say, Gordon, we'd be remiss if we didn't yet again mention that we are doing a live show. Isn't that right?

44:25David:We are doing a live show. So if you want to hear more about Edward Snowden, hero or villain, and our differing perspectives on that and some other issues, we may find cause to disagree. Disagree agreeably or agree disagreeably. Anyway, disagree agreeably. We're going to agree disagreeably.

44:43Gordon:Yeah, exactly. Alive on stage. We are going to disagree disagreeably on stage. Are we? Yeah, it's going to be an extended struggle session between me and Gordon Carrera.

44:56David:So this could be the first and last live show that we ever do. So you better come. That's right. That's the 31st of January at the South Bank. So do get tickets. Only a few left. So do sign up if you want to come. But otherwise, we'll see you next time. We'll see you next time.

45:15Thank you.