China controls
Defense officials say new Commerce Department export controls on goods to China will assist Beijing's intelligence services in identifying U.S. technology for purchase or theft for its military buildup.

The Commerce Department announced on June 15 that it is loosening export licensing requirements for some goods with military applications sold to China and imposing new licensing rules on a list of items that could help build China's military.

"The list is a road map for the Ministry of State Security weapons collection efforts, in essence a target list," said one defense official of China's civilian intelligence service.

The U.S. products that require stricter licensing include such things as carbon fiber (used in composites for radar-evading stealth systems), bearings, machine tools, X-ray machines, high-performance computers, rugged telecommunications equipment, phased array antennas, avionics, aircraft, turbine engines and some underwater equipment.

The rules were coordinated with the Pentagon but appear biased in favor of the Bush administration's pro-business policies toward China.

Former National Counterintelligence Executive Michelle Van Cleave stated in a recent report for the National Defense University that in the past decade China remained among "the top intelligence threats."

"China maintains some of the world's most effective intelligence services -- including the Ministry of State Security and the People's Liberation Army Military Intelligence and Technical Intelligence Departments -- with global reach," she stated. "Collection of scientific and technological information has been one of the Chinese intelligence services' top priorities. In recent years, China has successfully used espionage to acquire a range of sensitive U.S. technologies, including design information on all of the most-advanced U.S. nuclear weapons, missile design and guidance technology, electromagnetic weapons R&D, and space launch capabilities."

The relaxing of export controls followed release of the Pentagon's latest annual report to Congress on the Chinese military that warns China is buying and stealing large amounts of U.S. military technology for its arms buildup.

"China continues a systematic effort to obtain from abroad through legal and illegal commercial transactions dual-use and military technologies," the report said. "Many dual-use technologies, such as software, integrated circuits, computers, electronics, semiconductors, telecommunications, and information security systems, are vital for the PLA's transformation into an information-based, networkcentric force."

The report noted several illegal activities by China in seeking missile, imaging, semiconductor, and submarine "by targeting well-placed scientists and businessmen." The report said there were more than 400 illicit exports by China since 2000 and stated that "China's aggressive and wide-ranging espionage [is] the leading threat to U.S. technology."

Defector wars
The decades-long debate at the CIA over whether Soviet KGB defector Yuri Nosenko was a true defector or a plant dispatched by Moscow to fool the agency resurfaced this week.

The agency abruptly canceled a planned talk by former CIA Soviet operations officer Tennent H. "Pete" Bagley on his new book, "Spy Wars: Moles, Mysteries, and Deadly Games," a hike through the so-called wilderness of mirrors that is central to the spy business.

Intelligence sources said a network of current and former CIA officers opposed to Mr. Bagley's views was behind the cancellation.

Mr. Bagley also had his scheduled talk at the International Spy Museum canceled this week. It was expected to have been a contentious debate on Mr. Nosenko, who defected in 1964, was imprisoned by the CIA as a suspected false defector, and was eventually freed and declared legitimate in 1969. He now lives under an assumed name in Northern Virginia.

Mr. Bagley said in an interview that he believes his talk at the CIA was canceled because agency officials objected to his views on Mr. Nosenko. "It's the Nosenko case," he said. "I give very powerful, convincing reasons to believe that Nosenko was a plant."

The suspicions were confirmed by post-Cold War discussions with former KGB officers, he said.

"My book does not question whether or not Nosenko was a genuine defector," he said. "The point is that there were penetrations [of U.S. intelligence and CIA], including the breaking of American ciphers."

A CIA spokesman said Mr. Bagley's talk was not canceled due to his message but because of questions regarding prepublication review of the book.

"Intelligence officers are routinely exposed to a range of views on complex topics -- that's a key part of the job," the spokesman said.

One source of opposition to Mr. Bagley and his book is former FBI counterspy David Major, who recently called the book "dangerous and disruptive" because it presents the "myth" that the KGB would dispatch an agent as a false defector to spread disinformation.

Retired Maj. Gen. Oleg Kalugin, who works with Mr. Major at the Counterintelligence Centre also dismissed Mr. Bagley's book as "absurd" and "misleading."

Meanwhile, a senior counterintelligence official said Mr. Bagley's book is an excellent primer on the topic of spies.

Mr. Nosenko's bona fides were doubted after an earlier KGB defector, Anatoly Golitsyn, convinced the late CIA master counterspy James Jesus Angleton that the KGB had formed an ultra-secret strategic disinformation program to deceive the United States, which included dispatching false defectors.

Mr. Bagley said he believes Mr. Nosenko was sent to cover up Russian intelligence penetrations of U.S. electronic spying and codes, and to dissuade the CIA that Moscow had no role in the assassination of President Kennedy. Lee Harvey Oswald, a former Marine, had defected to the Soviet Union before returning and killing Kennedy.

North Korea pact
A senior Bush administration official said the shutdown of North Korea's nuclear facility at Yongbyon could take "a few weeks" to carry out, once the North Koreans readmit International Atomic Energy Agency inspectors to oversee the process.

Inspectors are due on the ground "any day," said the official involved in North Korea issues, and an official team of technicians "will visit in a few weeks to lock down the process of shutting and sealing Yongbyon."

Once the shutdown commences, the first shipment of 50,000 metric tons of fuel will go to North Korea as part of the February agreement reached in Beijing to denuclearize North Korea, which in October set off its first underground nuclear test, a small-yield blast.

The official said the next meeting of the six-party talks, including the United States, North Korea, China, South Korea, Japan and Russia, will be held after North Korea "shuts and seals" the Yongbyon facility.

Chinese in Hawaii
A Defense Department official is upset that the U.S. Pacific Command recently hosted a meeting in Hawaii of representatives of U.S. and foreign special operations forces that included commands from China's special operations forces.

"We shouldn't be inviting the Chinese to these meetings," said a special forces operator opposed to the meeting.

A former special operations officer was also upset that the Pentagon's Special Operations and Low-Intensity Conflict office is promoting Chinese participation in such meetings since the Chinese military continues to view the United States as its main enemy and is using such forums to gain information that could be used against the United States in a future conflict.