Department of Justice Seal

Prepared Remarks of Kenneth L. Wainstein, Assistant Attorney General for National Security, at a Press Conference Announcing Espionage Charges

Washington, D.C.
Monday, February 11, 2008

Good afternoon. I’m Ken Wainstein, the Assistant Attorney General for National Security. Thank you all for joining us today.

With me today are Chuck Rosenberg, the U.S. Attorney from the Eastern District of Virginia; Tom O’Brien, the U.S. Attorney from the Central District of California, and Art Cummings, the Executive Assistant Director for the National Security Branch at the FBI.

We’re here today to announce two espionage prosecutions that were initiated with two sets of arrests that took place earlier today -- one on either side of the country.

At about 7 o’clock this morning in Alexandria, Virginia and New Orleans, Louisiana, FBI agents arrested three individuals -- including a weapons policy analyst at the Defense Department -- and charged them with conspiring to communicate national defense information, the ultimate recipient of which was the Peoples Republic of China.

At about 7 o’clock this morning -- California time -- FBI agents in Orange County arrested one individual, an aerospace engineer who had worked for Rockwell International and the Boeing Company, and charged him stealing trade secrets from those companies -- once again on behalf of the Peoples Republic of China.

The two U.S. Attorneys overseeing these prosecutions are going to step up in a moment and explain what these two cases are.

But, before they tell you what the cases are, I’d like to take a moment to explain what they represent -- what they represent about the threat of foreign espionage, and what they represent about our response to that threat. The threat here is very simple. It’s a threat to our national security and to our economic position in the world -- the threat that is posed by the relentless efforts of foreign intelligence services to penetrate our security systems and steal our most sensitive military technology and information.

This threat is not new. Espionage has been a fact of life since the founding of the first nation-state, and it was particularly prominent during the Cold War of the last century. While the collapse of the Soviet Union ended the Cold War, it did not end the threat from foreign intelligence services.

If anything, that threat has only increased with the rise of non-aligned nations that are all seeking advantage in the process of military development. In fact, one Defense Department report from 2006 noted a 43% increase in the number of suspicious foreign contacts reported by American defense firms -- many of which were presumably foreign operatives probing for protected military information.

It is no surprise that we’re seeing this espionage activity.

-We have interests and alliances around the globe.

-We have a vibrant and diffused economy, with high-tech development taking place in companies ranging from garage operations to Fortune 500 corporations.

-And, we have an open society and open economy.

While these factors are the ingredients of our economic and military success, they are also what make us vulnerable to foreign intelligence services that want to steal our secrets and piggy-back on our technological innovation.

While there are entities from over a hundred different countries trying to get access to our secrets or our controlled technology, there are a number of countries that have proven themselves particularly determined and methodical in their espionage efforts. The Peoples Republic of China is one of those countries.

As the Director of National Intelligence testified last September, China’s foreign intelligence service is “among the most aggressive in collecting against sensitive and protected U.S. systems, facilities, and development projects, and their efforts are approaching Cold War levels.” (September 18, 2007 Testimony before the House Judiciary Committee at page 8).

We see that in the prosecutions we have been bringing into court lately. In the past six months, we have filed charges in a half dozen cases involving efforts to acquire different types of technology, ranging from battlefield night-vision equipment to accelerometers used in the development of smart bombs and missiles.

And, we see that in the cases we’re announcing today -- two espionage conspiracies that reflect two very different schemes and approaches.

One is the classic espionage network, complete with traditional elements of spy tradecraft -- including foreign handlers, pay-offs, cut-out couriers and a compromised government employee -- all of which resulted in the penetration of our government’s information security system and the passage of national defense information.

The other is an effort to give intelligence taskings to an aerospace engineer who had a position in American industry that afforded him access to sensitive trade secrets on our military and aerospace programs.

Two different approaches, but both with the same objective in mind -- which is to get a hold of our nation’s military secrets.

These two cases plainly represent the magnitude of the threat we face.

But also, they represent the magnitude of our efforts to meet that threat.

They represent our willingness to bring the full range of investigative resources and the full weight of the law against anyone who conducts foreign espionage against our national interests.

And, they represent what really are exceptional efforts by a fine group of dedicated investigators and prosecutors across the country -- efforts that we should all be proud of.

And, to learn more about those efforts, I’ll now turn it over to the U.S. Attorneys. First we’ll hear from Chuck Rosenberg, and we’ll next hear from Tom O’Brien. After that, we’ll take a few questions.