FBI Responds to OIG Report on the Handling of Former Asset Leung

Washington, D.C. - The FBI responded today to the release of an Office of the Inspector General’s (OIG) Report entitled “A Review of the FBI's Handling and Oversight of FBI Asset Katrina Leung."

The FBI appreciates the Inspector General’s continued interest and review of the human source program, including the case of former FBI Asset Katrina Leung. The FBI acknowledges that the conduct involved -- during the years 1982-2000 -- was in violation of FBI policy and exposed weaknesses in the FBI’s asset program. In its review, the IG offered 11 recommendations to improve FBI oversight and management of assets, seven of which the FBI has already instituted either in whole or in part. With these steps the FBI has already moved to address the systemic issues identified by the OIG that enabled Smith and Leung to escape detection and avoid accountability.

The FBI has made significant progress in reforming and strengthening its management and oversight of human sources. These steps were spurred by the discovery that Special Agent James J. Smith had been engaged in an inappropriate relationship with Leung. Shortly after that discovery, Director Mueller ordered a thorough investigation and review not only of the allegations regarding Leung and Smith but also of the counterintelligence asset program. This comprehensive internal review of the FBI's human source program led to a change in the way the program is managed and the way assets and the information is validated. As a result of its own review, which began in May 2002 , the FBI committed to several initiatives to identify and correct deficiencies in the China Program. Many of these reforms put in place as a result of the Leung matter and related to asset validation and handling in the China Program are now being adopted throughout the FBI. We believe these reforms continue to enhance the FBI’s Counterintelligence program and will help the FBI avoid serious asset problems in the future.

Although there is inherent risk in the use of human sources, the FBI has taken significant steps to improve oversight and to minimize these risks. These steps include standardizing source operating procedures and the asset validation and review process. For instance, standard operation procedure mandates that once an individual is designated as an asset, his or her files must be reviewed by Supervisory Special Agents every 90 days. In some case this review takes place every 60 days. As part of this review process, payments to human sources for services or expenses are closely monitored by supervisors and executive managers in the field and at FBI headquarters. Asset validation and review is an active and ongoing process. In addition, FBI Headquarters conducts inspections and on-site assessments of all field office human source programs.

To provide additional oversight, the Attorney General established the Confidential Informant Review Committee (CIRC) comprised of Justice Department (including a Deputy Attorney General for the Criminal Division and an Assistant U.S. Attorney) and FBI officials. The CIRC provides oversight in the use of human sources, including criminal informants being operated for more than six years.

We appreciate the Inspector General’s review of this program, and we will continue to incorporate suggested reforms that will help better ensure the success and continued improvement of the FBI’s human source program.