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The Globe and Mail, Monday, April 21, 2008 G A11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

News

Haiyan Zhang was a risingstar in the federal bu-reaucracy, until a secur-

ity guard escorted her fromher Ottawa office. She was or-dered to leave everything be-hind.

Six months into her job asan analyst for the Privy Coun-cil Office, a sensitive depart-ment thats like Ottawasnerve centre, a series of redflags had gone up. Now, nearlyfive years later, documents ob-tained by The Globe and Mailreveal the specifics of why theChinese-born Ms. Zhang wasdeclared a threat to nationalsecurity and summarilyfired.

The declassified documents,

once marked top secret butnow filed in Federal Court,

yield a rare insight into how,in an era of escalating concernabout Beijings spies, severalOttawa agencies worked to ridthe bureaucracy of one per-ceived threat, Ms. Zhang. Evenso, she remains on the govern-ments payroll, having suc-cessfully grieved her 2003ouster. But she has not yetpersuaded the government tolet her show up to a less sensi-tive job on a continuing basis;she is being paid to stay homemost days, pending the out-come of a new security-clear-ance investigation, expectedshortly.

Confident, attractive and tri-lingual, Ms. Zhang, now 45,had raised eyebrows with herattendance at some Chineseembassy functions in Ottawaand her friendship with a Chi-nese diplomat. She had alsoattended gatherings sponsoredby her former employer, Xin-hua, the state-controlled Chi-nese news service. The factthat she had visited Chinaeight times in eight years aftergetting her Canadian citizen-ship was deemed noteworthyas well.

Security-intelligence agentsalso fixated on a financialtransaction what they allege

was a strange $700 gift Ms.Zhang received years earlierfrom U.S. officials in Egypt

who included the money

along with a picture frameand mailed it to her.

FOREIGN CORRESPONDENT

I pose no past, current or fu-ture threat to Canada, Ms.Zhang wrote in court-fileddocuments, which lay out herlife story and legal defence.

Never charged with anycrime, she launched a wrong-ful-dismissal case that landedin Federal Court. Her lawyerhas said she will make nopublic comments until thecase is completely resolved.

Born in China in 1963, Ms.Zhang says she loved learningEnglish as a student, especial-ly after Canadian migrs in-troduced her to Shakespeare.Top marks in school, she says,led Xinhua to hire her as oneof the agencys first femaleforeign correspondents.

Western counterintelligenceagencies often liken Xinhua toan intelligence agency, but Ms.Zhang says she was merely a

journalist. Most days werefilled with drudgery, she says,rewriting foreign news reportsfor consumption in China.

During the early 1990s,while still in her 20s, she wasposted to Cairo. She found lifein the Xinhua compoundthere difficult. It reminded herof a miniature repressive Chi-nese society, she says in doc-uments filed in her defence.She stresses: I was NOT aCommunist party member.

While in Cairo, she says shebefriended a man named Bobwho worked at the U.S. em-bassy. She asked for his helpgetting into U.S. universities.In turn, he requested she givehim a writing sample.

Ms. Zhang says she came upwith a handwritten piece de-scribing a routine, politicalstudy session at the Xinhuabureau including how herbosses were asking for morestories from the Middle Eastas they rejected pieces on thecollapse of Communism in Eu-rope.

Bob and his wife apparentlyappreciated Ms. Zhangsfriendship. After I returned toChina, to my surprise, I foundUS $700.00 in the packagecontaining the picture framethey had given me as a going-away gift, she writes.

Before she left the Egyptiancompound, she says, her boss-es had kept close tabs on her,fearing she might be drawn toWestern ideals or, worse, West-ern men.

During a rare out-of-countryassignment to Kuwait, how-ever, Ms. Zhang met a Cana-dian at a hotel bar frequentedby foreign correspondents.

In 1995, they married andmoved to Ottawa. After arriv-ing, Ms. Zhang started China-bridge Communications, aconsultancy whose clients in-cluded corporations and feder-al agencies.

The idea was to help themmake inroads into China. Giv-en the job, Ms. Zhang says, itonly made sense to attendsome embassy functions andsome parties held by Xinhua.Her attendance was sporadic,she says.

In 2002, Industry Canada aformer client hired Ms.Zhang, now a citizen. I wasprecisely the kind of talent theGovernment of Canadaneeded, she writes in her fil-ings, especially as a memberof the visible minority com-munity.

The PCO soon poached her.Filings show that one official

who enticed her to join prom-ised she would learn more intwo years at the PCO than inan entire career anywhere elsein the government.

Officials recall the analystbeing a forceful presence ingovernment meetings. But inAugust, 2003, the PCO tookthe extremely rare step of fir-ing Ms. Zhang.

CREDIBILITY PROBLEMS

Ms. Zhang writes she had justgotten back from a trip to Chi-na, her eighth taken between1995 and 2003. This time, shesays, she had gone over to at-tend her brothers funeral andalso donated 200 schoolbagsto poor children.

Regardless, a security guardtold her to leave her desk andleave behind everything on it.Five years later, Ms. Zhang isstill fighting that decision. Ihave never, nor will I ever, di-

vulge any information about Canada to anyone thatcould compromise the interestof the country, she says incourt documents.

The PCO acted on the adviceof Canadian intelligence,

which spent six months study-ing Ms. Zhangs background

a standard check to seewhether a civil servant meritssecret clearance. The Secur-ity Intelligence Review Com-mittee, a watchdog body,ended up backing the intelli-gence investigation complete-ly.

After seven days of secrethearings in 2005, the SIRCchairwoman of the time, PauleGauthier, upheld all the con-cerns. As a former employeeof Xinhua, the complainantmay have engaged in intelli-gence activities on behalf of aforeign state, reads the once-secret report.

It mentions certain socialcontacts Ms. Zhang made withXinhua and with a specificChinese embassy official aMr. Shi, described as theprincipal trade representa-tive before concluding thatshe appears to maintain reg-ular contact with foreign rep-resentatives who may beinvolved in intelligence collec-tion activities.

The SIRC report then goes

on to highlight credibilityproblems. The story of the$700 gift from Bob at theU.S. embassy in Cairo washighly unusual and unbeliev-able, according to SIRC,

which found it odd that Ms.Zhang couldnt remember herfriends last name.

SIRC says the gift raisedquestions of trustworthiness,as it gave rise to the appear-ance the complainant wascompensated surreptitiouslyfor the information by theU.S. government.

Why would she choose asubject that had been discuss-ed at an internal study sessionby Xinhua? asks the SIRC re-port. The Chinese govern-ment did not want the subjectmatter of the handwrittenpiece to be published.

A CD-ROM Ms. Zhang want-ed to take from her Ottawadesk contained informationthat belonged to the Canadiangovernment, according toSIRC, but it did not divulgeprecisely what it was.

THE CASE OF HAIYAN ZHANG

I POSE NO PAST, CURRENT OR FUTURE THREAT TO CANADA

Loyal civil servant or threat to national security?Recently declassified documents reveal how several Ottawa agencies worked to rid the bureaucracy of one of its rising stars

BY COLIN FREEZE

Haiyan Zhang, in Ottawa in December of 2005, was fired as an analyst for the Privy Council Office in 2003. BILL GRIMSHAW FOR THE GLOBE AND MAIL

Haiyan Zhangs career has includ-ing working as a foreign corre-spondent in Egypt, an analystsrole inside a sensitive Canadiangovernment department and,most recently, a five-year legalbattle to go back to work for Ot-tawa after she was branded a se-curity threat.

1963: Born in Lanzhou, China

1998: Earns a masters degree atthe China School of Journalism

1989: Becomes the first femaleforeign correspondent for Xin-hua, Chinas state-run newsagency

1989-91: Reports for the Xinhuabureau in Cairo

1995-1999: Emigrates to Canada,starts Chinabridge Communica-tions, a consultancy. Earns a mas-ters of business administrationfrom the University of Ottawa

1999: Receives Canadian citizen-ship

2002: Joins the Canadian civilservice, starting at Industry Cana-da

FEBRUARY, 2003: Hired by thePrivy Council Office as a senioranalyst

AUGUST, 2003: Escorted from heroffice and fired, following a se-curity-screening investigation bythe Canadian Security Intelli-gence Service

NOVEMBER, 2003: An adjudicatorhears her grievance and givesMs. Zhang another job, with alesser security clearance

2005: After secret hearings, theSecurity Intelligence ReviewCommittee upholds the CSIS in-vestigation to fire Ms. Zhangfrom the PCO

2006: The federal governmentassigns Ms. Zhang to a less sensi-tive job. She works for only a fewdays at Service Canada beforeshe is told to go home and awaitthe outcome of a new security in-

vestigation

2008: A Service Canada spokes-woman says the investigation iscontinuing66 Colin Freeze

Zhang at a glance

The Canadian governments five-year legal battle with an em-ployee deemed to be an espion-age threat is taking place at atime when counterintelligenceagents complain that the Chineseagents are keeping them verybusy. Jim Judd, director of theCanadian Security IntelligenceService, had the following ex-change with the Senate Commit-tee on National Security andDefence one year ago.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SENATOR ROD ZIMMER: Do othercountries send individuals intoour country? I presume they do. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MR. JUDD:Yes, they do comehere. ... It is sometimes surpris-ing the number of hyperactivetourists we get here and wherethey come from. I do not want tobe politically incorrect, so I willnot name specific countries, butat any given time there aremaybe 15 countries that would beof interest to us in that regard. Itebbs and flows, depending on is-sues.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SENATOR ZIMMER: Is it equal, oris there a fair number of individu-als who come from certain coun-tries?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MR. JUDD: There does tend to bea concentration of sorts, yes.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

THE CHAIRMAN(SENATOR COLIN KENNY): Surelyit is not politically incorrect tocomment on the public reportswe have seen about the Chineseand what is reputed to be an ag-gressive program that they havein this country. The governmenthas commented on this publicly.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MR. JUDD: They would be one ofthe 15 countries.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

THE CHAIRMAN: Are they at thetop of the list?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MR. JUDD: Pretty much.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

THE CHAIRMAN: Do they take up50 per cent of your time?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MR. JUDD: Close to it.66 Colin Freeze

CSIS and Chinese agents

The Canadian government mayconsider Haiyan Zhang a threatto national security, but a promi-nent movie producer in Montrealthinks better of her.

She was the best student I ev-er had, said Kevin Tierney in aninterview. In a strange wrinkle tothe national-security case, theman behind 2006s record-set-ting Canadian film, Bon Cop, BadCop, said he taught Ms. Zhangadvanced English in China whileworking abroad in the early1980s.

Mr. Tierney distinctly recalledmeeting Ms. Zhang. He and hiswife were teaching English inLanzhou, 36 hours from Beijingby train. At the time, China

wasnt anywhere as open to theWest as it is today.

But the drive of one teenager,Ms. Zhang, always stood out. Ithought of her as by far the mostambitious, Mr. Tierney said.

He recalled teaching Shakes-peares Macbeth to the class.Subversively, he drew parallelsbetween Mao Zedong and hiswife and the bloody ambition ofthe tragedys namesake couple.In his narrative, premier Zhou En-lai assumed the role of Banquo,the friend betrayed by the cou-ple.

The theme was pretty radicalfor the time, especially for youngChinese students cowed by theCultural Revolution and its fallout.

Yet Ms. Zhang was receptive tothe literature and the debates itprompted.

For a young woman, she hadloads of confidence, when youwerent supposed to stand out,Mr. Tierney said. She was some-one who was never going to dis-appear into the crowd.

Mr. Tierney returned to Canadaand produced movies. His Eng-lish student became a foreigncorrespondent. Eventually, shemarried a Canadian and movedto Ottawa.

Once established, she lookedup her old English teachers. ToMr. Tierney, it was gratifying tosee his former student living outher dreams. But in 2003, federal

officials fired Ms. Zhang afterbranding her a possible espion-age threat.

I went from complete shock and then it became sort of outra-geous, said Mr. Tierney, whostill occasionally dines at theZhang house in Ottawa. Henoted his friend still doesntknow the full case against her.

At the very least, to be held inabeyance this long seems to meto be cruel and unusual punish-ment, Mr. Tierney said. He saidthat, when it comes to Ms.Zhang, he is now less inclined tothink of Shakespeare than of an-other writer.

Its Kafkaesque, he said.66 Colin Freeze

SHE WAS SOMEONE WHO WAS NEVER GOING TO DISAPPEAR INTO THE CROWD