FBI: SUSPECT SWAPPED SEX FOR U.S. DOCUMENTS, SECRETS.

Byline: Mariel Garza Staff Writer

Katrina Leung - accused of swapping sex for government secrets - had the perfect cover: Republican Party member, philanthropic businesswoman, active in the Chinese-American community, trusted player in Los Angeles politics.

As a portrait of the suspected Chinese double agent emerged Thursday, people who knew her and had worked beside her for two decades expressed shock and awe.

How could the bubbly 49-year-old, politically connected wife and mother from posh San Marino have a secret life - one complete with aliases such as ``Parlor Maid,'' clandestine meetings with FBI agents, secret copying of classified documents and scandalous sexual liaisons?

``It's really freaky,'' said city commissioner Leland Wong. ``Katrina has been a fixture in this city for a long, long time. I can't tell you how shocked I was.''

Wong, currently a member of the Water and Power Commission who has served in many other city posts, recalled Leung from years of her involvement in a sister city organization. He also ran into her in Beijing during Mayor James Hahn's trade and tourism mission last November.

Leung was arrested Wednesday, along with former FBI Special Agent James J. Smith of Westlake Village, and charged with copying national security documents with the intention of harming the United States. She is being held without bond in a federal jail.

Smith, charged with letting her get away with it, was released on $250,000 bond.

Court documents allege that Smith recruited Leung as an informant about two decades ago, and soon began an affair with her.

When Smith visited the posh San Marino home that Leung shared with her husband, Kam, she would allegedly sneak documents out of his briefcase and turn over copies to a Chinese agent.

Smith supposedly learned of her duplicity a decade ago, tipped off by another special agent with whom Leung had an affair.

Prosecutors said they found FBI documents at Leung's home, including phone directories and a secret 1997 memorandum about Chinese fugitives that contained ``national defense information.''

Authorities suspect that the latest spy trip occurred in November, when she was hooked up with Mayor James Hahn's 10-day Asia junket.

A covert search of her luggage at Los Angeles International Airport on Nov. 11 revealed six photographs of current and former FBI agents. When she returned Nov. 25, the documents weren't in her luggage, court documents say.

Leung was reportedly paid about $1.7 million for expenses and for her work as an FBI ``asset'' over the years. It's not clear how she used the money, and whether it is connected with the thousands of dollars that Katrina and Kam Leung have contributed over the years to local, state and federal politicians.

The Leungs are listed as major donors with the Secretary of State's Office. Last year, they gave about $25,000 to state candidates, including $10,000 to former Mayor Richard Riordan's gubernatorial bid.

She also gave at least $5,000 to Republican committees and candidates at the federal level in the past four years. The couple also gave $9,000 to various city of Los Angeles candidates in the past four years, including Hahn and City Attorney Rocky Delgadillo.

The description of Leung as a modern-day Mata Hari seems incongruous with the upstanding, civic-minded woman who worked publicly to improve Chinese-U.S. relations through her work as president of the Guangzhou Sister City Association.

Leung's lawyers, Janet Levine and John Vandevelde, say she is an innocent woman who endangered her own life to help the United States.

``We believe when the full story is known, Ms. Leung will be cleared of all wrongdoing and the extent of her heroic contributions to this country will be revealed,'' they said in a statement.

By many accounts, Leung sought out elected officials, insinuating herself through donations, throwing fund-raisers, attending dinners and other events.

``She seemed sort of like a hanger-on,'' said Ted Stein, a local developer and chairman of the city's airport commission, who met Leung twice, both times when she was with Riordan. ``She did get involved with the Chinese community and wanted to be in the middle of anything involving them.''

Though Leung was a state GOP member, she wasn't well-known outside of a small Southern California circle.

``She was seen as a supporter, not a major source people would go to or who was relied upon,'' said Shawn Steel, immediate past chairman of the California Republican Party.

According to Hahn's staff, Leung asked to be included in the November trade delegation, which included local business leaders. They refused, but Leung still showed up at events on the Beijing leg of the trip, either uninvited or as a guest of the Chinese officials who feted Hahn's group.

Her appointment to the state GOP and to the board of the Los Angeles World Affairs Council both came at the beginning of 2003, about a month after Leung was interrogated by FBI officials, admitting to some charges, according to court documents.

Curtis Mack II, president of the council, said he had no hint his new board member was in trouble.

Mack said he recommended Leung to join the council because the group was looking for greater representation from the local Chinese community, and he was aware of her prominence and activism.

``If Chinese leaders were coming to Los Angeles, we would be talking to the people in the consulate and she would usually be involved in setting up arrangements for them and things of that sort,'' Mack said.

Leung was well-known to Chinese officials, and often hosted visiting dignitaries. City Hall insiders recall Leung attending council meetings along with a number of Chinese officials visiting the city.

When Chinese Premier Zhu Rongji visited Los Angeles in 1999 during an eight-day tour of the United States, it was Leung who organized the meetings between Chinese and local officials.

Bee Canterbury Lavery, a board member of the sister city association and former Mayor Tom Bradley's chief of protocol, said it was clear Leung had many connections in China.

``We're all in a state of shock about the whole thing,'' Lavery said. ``No one would've suspected at all. ... We just knew her as a very talented woman who was very involved in the Chinese community.''

It was likely those ties to the People's Republic of China that made her good recruit material to Smith, who worked out of the FBI's Los Angeles office, where he focused on Chinese counterintelligence.

On Thursday, there was no sign of the FBI veteran or his family at their two-story home in the 4400 block of Guildhall Court in the well-to-do suburb of Westlake Village.

Smith, reached by phone, referred all inquiries to his attorney.

``Mr. Smith is a true-blue American who has not, nor has he ever, participated in any kind of espionage, and he is not even alleged to be (a spy) by the government,'' said Paul Murphy, Smith's co-counsel.

``He is the typical go-to-the-Fourth-of-July-parade type of guy, and that's why these allegations are so upsetting.''

Murphy described his client as a patriotic American and a Vietnam War vet, who was duped by Leung.

``He trusted her and he turned his back. Under the circumstances, that does not make him negligent.''

Smith's neighbors declined to talk publicly about him.

``They're wonderful people,'' said a woman next door, who would not give her name. ``And I want to respect their privacy.''

``He's a nice guy,'' said a neighbor named Jim, who declined to give his last name. ``I don't judge. People do what they do, because they do it.''

Staff Writers Dana Bartholomew, Rick Orlov and Harrison Sheppard contributed to this report.

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