Taiwan, US count cost of spy saga

By Jens Kastner

http://www.atimes.com/atimes/China/MB12Ad01.html 

TAIPEI - The notion that Taiwan functions as a conduit for Chinese espionage efforts against the United States has once again become overwhelming. Right before the Lunar New Year, which fell on February 3 this year, Taiwanese authorities detained Lo Hsien-che, a one-star major-general of the Taiwanese army, on charges of spying for mainland China.

Information that had been leaked to the other side of the Taiwan Strait covered a wide range of military communication installations, including the underground optical cable network layout throughout the island and Po Sheng, the integrated Taiwan-US Pacific Command joint military strike information-sharing platform.

As Lo is believed to be Taiwan's highest-ranking military officer to have ever spied for mainland China, the islanders are shocked, with the media talking of the worst espionage case in 50 years. Since it is feared that Beijing has received advanced military technology, it is speculated that there will also be repercussions for the US.

A report in China's Global Times, produced under the auspices of the official Chinese Communist Party newspaper, the People's Daily, said that Lo was recruited by a female Chinese agent who offered him sex and money in return for information.

Lo met the woman, who held an Australian passport and pretended to be working in the export and import business, when he served in Thailand from 2002 to 2005, it is reported. "Lo started to collect secret information for the woman in 2004 and received between US$100,000 and $200,000 each time for his services in Thailand," according to a report.

Taiwanese Prime Minister Wu Den-yih has ordered the Department of Defense to conduct a thorough investigation and review the possible consequences of Lo's espionage.

While Taiwanese and US officials have quickly said the case will not affect Taiwan-US military ties and US arms sales to Taiwan, analysts believe the US might become more prudent over the sale of more advanced weapons to Taiwan as its concerns grow that China may obtain US military technology via espionage in Taiwan.

While the extent of the actual damage to the US military is not yet clear, it is clear that besides the Taiwanese military, Taiwan's Kuomintang (KMT) government has suffered a big blow. With the Taiwanese public once again harshly realizing that the Chinese communists - despite myriad recent goodwill overtures - can't be trusted, Taiwanese President Ma Ying-jeou's quest for cross-strait mutual military trust is all but certain to be called into question.

At the time of his arrest, Lo, who was promoted to the rank of major-general four years after he was allegedly recruited by China, was head of the Taiwanese military command's communications and information office. Local media reported that the authorities raided his home and recovered documents relating to the US$1 billion Po Sheng C4I modernization program that Taiwan is purchasing from US defense contractor Lockheed Martin. Po Sheng or Broad Victory is a digital multi-service command, control and intelligence system - a joint Taiwan-US military communications effort.

The alleged major target of Lo's spy activities was the technology sold to Taiwan in 1999 by then-US president Bill Clinton shortly before he left office. The program is meant to upgrade Taiwan's own C4ISR (command, control, communications, computers, intelligence, surveillance and reconnaissance) network so as to directly link it to the US Pacific Command's network radio system - the Joint Tactical Information Distribution System (JTIDS).

The US armed forces and their allies use JTIDS to support data communications needs for every type of military platform from the air force's fighter aircraft to the navy's submarines.

The ability to connect in such a way is seen as crucial to Taiwan's warfare capabilities because it provides the island's forces with something with which China's People's Liberation Army (PLA) still has significant problems - the capability to enable efficient communication and information-sharing among its services. Otherwise, the PLA is superior on almost all fronts.

The formula is simple: If there's no connection between a nation's army, navy and air force, its military can't conduct joint operations properly and is consequently incapable of engaging in modern warfare. Therefore, in the event of an outbreak of war across the Taiwan Strait, Po Sheng would provide Taiwanese and US forces with an edge over the PLA that can hardly be overestimated.

The "language" Po Sheng uses is categorized as a Type 1 cryptography technique. If Beijing could get its hands on the code, it could attempt to penetrate Taiwan and the US's networks, theoretically rendering the expensive system useless.

Lo isn't the first spy whose apparent mission it has been to get hold of the keys to the US cipher systems. In 2008, a Pentagon analyst who managed negotiations on the release of Type 1 to Taiwan was accused of providing classified information to a Chinese agent, and another US government official was found guilty in the same context in 2009.

Besides data related to Po Sheng, there's other important information Lo could have possibly sold to the Chinese as he also had access to other communications systems of the Taiwanese army, as well as to the sale of US-made Apache helicopters and Taiwan's underground optical fiber communication network.

According to Taiwanese experts Asia Times Online has approached, the damage Lo's espionage activities could have possibly done to the US is likely limited. This is not simply because that in the years that have passed since 1999, Taiwan - due to budget constrains - has not managed to establish more than the very first stage of the system.

"Most importantly, the US has from the beginning carefully censored what was released to Taiwan," says Wang Jhy-perng, a research fellow at the Association for Managing Defense and Strategies who formerly served in the Taiwan navy's units for intelligence and electronic communications. "It can be seen from each and every past US weapons sale to Taiwan that full capabilities aren't provided."

Wang further points out that Washington only equipped roughly a third of Taiwan's weapons systems with Po Sheng, namely US-made fighter aircraft and ships. The other two thirds, like the French-made Mirage 2000 and Lafayette Frigates, as well as the domestically built IDF fighter aircraft, were left out because that would have cost "big money", said Wang.

The other reason Wang believes that by far the most significant damage lies on the Taiwanese side is that although important, while Po Sheng data is directly transmitted by the Taiwanese to the US Pacific command, the feedback sent to Taiwan is very limited, making it unlikely that the Chinese could have gathered much useful intelligence.

"Because the US's own safety mechanisms come into effect very early in the chain, it's implausible that the US suffered a great deal," Wang assesses.

In terms of Taiwan's political landscape, in Wang's eyes, the case has the potential to bring about weighty repercussions. "If the Department of Defense this time fails to make a clean sweep, President Ma Ying-jeou could face problems on his way to re-election in 2012," said Wang.

He adds that in light of the revelation that China - despite much-praised warming cross-strait ties - still engages in major espionage against Taiwan, the Ma government's recent decision to refrain from stationing the domestically built Thunder 2000 multi-barrel rocket system on Taiwan's outlying islands clearly demonstrates the Ma government's naivete.

For Arthur Ding, a research fellow at the China Politics Division at Taipei's National Chengchi University, the Lo case raises big questions that probably won't be answered for a long time to come.

"Tensions we can't yet grasp [between Washington, Beijing and Taipei] might have developed which could go off like a time bomb," said Ding.

Apart for the spy case, Ding cites tension over the US's refusal to grant China's request to call the joint statement by US President Barack Obama and Chinese President Hu Jintao on the latter's recent visit to the US by the weighty term "communique".

Ding agrees that the uncovering of Lo's espionage activities will likely bring more domestic pressure on Ma and his pet project of pursuing better ties with China.

"More and more people find that there is no truce from China at all," he says.

Jens Kastner is a Taipei-based journalist.

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