A prestigious Chinese think tank provided cover for the intelligence operation that ensnared Kevin Mallory.
- By Bethany Allen-EbrahimianBethany Allen-Ebrahimian is an assistant editor at Foreign Policy. She spent four years in China before joining Foreign Policy and holds a master's degree in East Asian studies from Yale University., Elias GrollElias Groll is a staff writer at Foreign Policy, covering cyberspace and its conflicts and controversies. He has written for the magazine since 2012 and is a graduate of Harvard University.
Caught with a bag of cash and an electronic device used to communicate with his handlers, a former government official with years of military and intelligence experience is accused of spying for China.
Kevin Mallory of Leesburg, Virginia is charged with providing defense-related information to a foreign government and lying to federal agents.
Mallory allegedly provided several classified government documents to a Chinese contact, who initially claimed affiliation with a prestigious Shanghai think tank, in exchange for cash. Documents filed by federal prosecutors depict Mallory, an experienced Chinese-speaking former operative, as a bumbling spy who executed his treason clumsily.
Mallory’s career spanned decades and multiple government agencies. After graduating from Brigham Young University in 1981, he served as active duty military and then an Army reservist for several years. From 1987 to 2013, he worked for different government agencies and U.S. defense contractors — as well as the CIA, according to a report in the Washington Post. He held a top secret security clearance for much of that time and was posted to regions including Iraq, China, and Taiwan.
It was only this year that Mallory allegedly began to stray from the straight and narrow, according to court documents. A Chinese handler posing as an employee of the Shanghai Academy of Social Sciences (SASS) made contact with Mallory during trips to China in March and April.
The SASS is a reputable and internationally known think tank. But it also maintains a close working relationship with the Shanghai State Security Bureau, a regional office of the Ministry of State Security, China’s intelligence arm.
In the following weeks, Mallory allegedly provided classified documents to Chinese intelligence officials in exchange for $25,000.
The FBI’s affidavit describing Mallory’s espionage activity appears to indicate that the former CIA officer tried to cover up his crimes. After he was stopped at Chicago’s O’Hare airport returning from Shanghai with $16,500 in undeclared cash in one of his bags, Mallory approached American intelligence agencies to describe his meetings in Shanghai with individuals he described as Chinese intelligence officers.
Having been caught with a payment that investigators believe was in exchange for classified government information, Mallory disclosed his contacts with the Chinese intelligence officers and may have offered his services as a double agent in order to conceal his alleged espionage on behalf of Beijing. The FBI affidavit never claims he offered to serve as a double agent, but in approaching an unspecified government agency with a communications device provided to him by the Chinese, Mallory appears to have made an overture to an American intelligence agency.
“He had a security clearance, he had apparently also worked at CIA, so he knew what he was doing,” said Peter Mattis, a former government analyst and now a fellow at the Jamestown Foundation’s China Program.
But then Mallory made what Mattis called a “stupid mistake.”
The FBI affidavit filed in a Virginia federal court this week paints a picture of extraordinary technical incompetence by Mallory and his alleged Chinese handlers. Mallory’s Chinese contacts supplied him with a communications device — likely a smart phone — to exchange messages and allegedly transfer classified documents.
In a May 24 meeting with FBI agents, Mallory showed off the device and demonstrated how to move from a “normal” to “secure” messaging mode. When he toggled over to the secure mode, he was surprised to find that it displayed a history of his secure messages. Mallory seems to have assumed they would be deleted.
Mallory voluntarily turned the device over to the bureau for a forensic analysis. When the bureau’s technical experts dug into it, they were able to recover additional secure messages exchanged between Mallory and his Chinese contacts.
In an exchange of messages on May 3, 2017, Mallory’s handler asked why the documents had been blacked out at the top and bottom. “The black was to cross out the security classification (TOP SECRET//ORCON//,” Mallory replied. “I had to get it out without the chance of discovery. Unless read in detail, it appeared like a simple note.”
Two days later, Mallory discussed his motives with his handler: “Your object is to gain information, and my object is to be paid.” His handler replied: “My current object is to make sure your security and try to reimburse you.”
The FBI analysis also discovered four documents on the phone, three of which are described in court documents as government materials. One is top secret; the other two are classified as secret. The affidavit provides no hint as to what the documents contain.
Mattis told Foreign Policy that the “scope, scale and potential impact of Chinese intelligence operations” has been of primary concern to U.S. national security agencies for years.
Chinese think tanks, including SASS, often work closely with the Ministry of State Security. China’s spy arm prefers to meet sources inside China, and social science academies provide a useful front for intelligence and influence operations.
“Chinese think tanks can be used to invite someone over who is either a person of interest or a source,” said Mattis. “That person comes over and gives a talk, and they’ll be met and have meetings with the local state security element or the People’s Liberation Army.”
But some intelligence-linked Chinese think tanks also maintain a known presence in Washington. One of those is the China Institutes of Contemporary International Relations, which bills itself as a “comprehensive research institution” but which is also an official numbered bureau of the Ministry of State Security, functioning rather like the CIA’s Open Source Center.
The institute actively engages in the Washington think tank ecosystem and also invites U.S. officials and academics for events in Beijing. The Center for Strategic and International Studies, a nonpartisan Washington think tank, has co-hosted numerous cybersecurity dialogues with the Chinese institute in recent years.
For more than two decades, the institute has sent a fellow to Washington, who stays for a year or two, according to Mattis. “I guess some people find value in talking with them,” he said. “I have mixed feelings on that score.”
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