Caught on Tape: Selling America's Secrets

Rare Video Obtained by "60 Minutes" Shows Pentagon Employee Selling Secrets to Chinese Spy

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We're used to spy novels about the Russians, but today's reality in espionage is different. China has just as good a spy network in the United States. And you are going to see a Chinese spy caught red-handed taking American military secrets from an employee of the Defense Department.

If China is the Asian dragon, then it has awakened to compete with the United States all around the world for resources, markets and strategic advantage. The Chinese are shopping for information ranging from U.S. nuclear weapons designs to the inside deliberations of the Obama White House.

Because of the nature of espionage, you never get a look at this clandestine underworld but recently the FBI recorded a Chinese agent stealing America's secrets. The video we obtained is being made public for the first time on "60 Minutes."

Full Segment: Stealing America's Secrets
Web Extra: Cyber Spies
Web Extra: Sloppy Spying
Web Extra: Stolen Secrets
Web Extra: Stopping Chinese Spying

In the video, the man driving the car is Gregg Bergersen. He's a civilian analyst at the Pentagon with one of the nation's highest security clearances. His companion is Tai Shen Kuo, a spy for the People's Republic of China.

Kuo was born in Taiwan, but he's a naturalized American citizen who owns a number of businesses in Louisiana; Bergersen worked at the Pentagon's Defense Security Cooperation Agency which manages weapons sales to U.S. allies.

Bergersen knew a secret the Chinese desperately wanted to know: what kind of weapons America was planning to sell to Taiwan, the rebellious Chinese island that mainland China wants to reclaim. It was July 2007 when they were driving outside Washington, D.C. Neither man knew that what they are about to do was being recorded by two cameras the FBI has concealed in their car.

As the FBI cameras were rolling, Kuo reached over and put a roll of bills in Bergersen's shirt pocket. A hundred dollar bill was clearly visible on the outside of the bundle of money.

"I'll give you, let you have the money," Kuo told Bergersen.

"Whoa, oh, are you sure that's okay?" Bergersen asked.

"Yeah, yeah, fine," Kuo replied.

Bergersen asked, "You're sure?"

"60 Minutes" correspondent Scott Pelley watched the tape with John Slattery, the FBI agent at headquarters who oversaw the case. He recently retired as a deputy assistant director and is now a vice president at BAE Systems, a major defense and security contractor.

Asked what's going on in the tape, Slattery explained, "Information has been passed prior and this is reward for that, or there is expectation that passage of information is forthcoming so that's what's happening here."

Slattery estimated that Kuo gave Bergersen about $2,000.

Tai Shen Kuo's money and contacts came to the FBI's attention while the bureau was investigating a different Chinese espionage case. They followed him, tapped his phone, monitored his e-mail and all of that led them to Bergersen.

In the car, the Pentagon employee and Chinese spy were plotting the handover of secret documents that listed future weapons sales to Taiwan and details of a Taiwanese military communications system called Po Sheng.

"I'm very, very, very, very reticent to let you have it because it's all classified," Bergersen told Kuo, as the cameras continued to record their conversation. "But I will let you see it."

"And you can take all the notes you want," Bergersen told Kuo. "Which I think you can do today. But I if it ever fell into the wrong hands, and I know it's not going to, but if it ever."

"Okay, that's fair, that's fair, yeah, yeah," Kuo replied.

"Then I would be fired for sure. I'd go to jail," Bergersen warned. ""Because I violated all the rules."

"He just described them as classified documents," Pelley remarked. "He knows precisely what he's doing."

"Exactly," Slattery agreed.

"He's almost going down your list of requirements for an indictment by a grand jury, Pelley pointed out.

"And we thank him for that," Slattery joked.

"When it comes to espionage against the United States, is China now the number one threat that we face?" Pelley asked Michelle Van Cleave, who was America's top counter intelligence officer.

"I would be hard pressed to say whether it's the Chinese or it's the Russians, but they're one, two, or two, one," she replied.

Working for the director of national intelligence, she was in charge of coordinating the hunt for foreign spies from 2003 to 2006. Van Cleave's position as National Counter-Intelligence Executive was created by Congress after a series of spy cases, including those of CIA agent Aldrich Ames and FBI agent Robert Hanssen, embarrassed the intelligence community. Both those men spied for the Russians, but the threat has changed, says Van Cleave.

"The Chinese are the biggest problem we have with respect to the level of effort that they're devoting against us versus the level of attention we are giving to them," Van Cleave explained.

Asked what the Chinese want from America, Van Cleave told Pelley, "Virtually every technology that is on the U.S. control technology list has been targeted at one time or another by the Chinese. Sensors, and optics, and biological and chemical processes. These are the things, information technologies across all the things that we have identified as having inherent military application."