Secrets to Remain Under Wraps in Espionage Case

CHICAGO (CN) - A federal judge approved the government's motion for in camera inspection of classified information under the state-secrets privilege in an economic-espionage case involving the Chinese military and a pair of international telecommunications corporations.

Neither of the companies involved in the litigation have been named at this point, but the order tells a story straight out of a Hollywood thriller.

According to the order, defendant Hanjuan Jin "was a software engineer for Company A, a Chicago-area company that sells telecommunications products and services around the world."

The government alleges that "while Jin was on medical leave... she negotiated and accepted employment with Company B, a telecommunications company based in China." Her work included projects in which Company B was working with the Chinese military."

The indictment claims that when her leave from Company A ended, Jin returned, but "did not advise anyone at Company A that she had accepted employment with Company B," and then "downloaded over 200 technical documents belonging to Company A on the secure internal network."

Jin resigned the next day, and within 24 hours was stopped at O'Hare International Airport attempting to depart for China on a one-way ticket and with "over 1,000 technical electronic and paper documents belonging to Company A" in her possession.

Shortly thereafter, the government charged Jin with violating the Economic Espionage Act of 1996, on the grounds of possessing trade secrets with the intent to benefit someone other than the original possessor, "knowing the trade secrets were stolen, appropriated, obtained, and converted without authorization."

When discovery began, the government discovered portions of certain classified documents that it argued should be examined by the court in camera.

The order by United States District Judge Ruben Castillo holds that "the government has adequately asserted the state secrets privilege here," based largely on a sword affidavit by C. Frank Figliuzzi, Assistant Director of the Counterintelligence Division of the FBI.

To construct a standard under which to analyze the government's motion, the court consulted the law on disclosure of informants. According to the court, the government "may generally withhold from disclosure the identity of its informers or the contents of a communication which would endanger secrecy of that information."

The government primarily seeks to withhold records of communication among its own agents. Some records were merely found to be "redundant of evidence already disclosed," but others may include information that could help Jin's defense.

One such record is a set of "electronic communications in which [FBI agents] referenced information obtained during interviews of Jin." The court found that so long as the agents' testimony does not "var[y] from the subject matter anticipated by the government," it can remain under seal.

Judge Castillo indicated he would also issue an ex parte order under seal containing the classified information that was not included in the public opinion.

The court acknowledged that it was "concerned by the lack of an adversarial presentation before the issuance of the order," and intended the public ruling to justify the proceedings' secretive nature. A priority trial date will be set this week.

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