by David Wise
But Hatter, much to the open disappointment of Shapiro and the FBI agents in the courtroom, did not send Lee to prison. He sentenced Lee, instead, to one year in a halfway house, three thousand hours of community service, and a $20,000 fine. As a convicted felon, however, and without a security clearance, Lee's career as a scientist working for the nuclear weapons labs or defense contractors was effectively over.
Six months after Lee was sentenced, there was an odd postscript in the case. The Pentagon asked the Naval Criminal Investigative Service to conduct a "Project Slammer" interview with Lee. The little-known project, run by the government's intelligence agencies, conducts interviews of convicted spies to find out what makes them tick. The FBI, possibly not looking kindly on the Navy's interference in the Lee case, told NCIS to go away. There was no Project Slammer interview of Peter Lee.
Looking back on the case, James Henderson, Lee's attorney, said that his client was convicted for disclosing information that "should never have been classified." According to Henderson, "the director of one of the programs Lee worked on said to me the only reason it was classified was to get funding from Congress."
The defense attorney had his own view of ROYAL TOURIST. "He was no real spy," Henderson insisted, "just a guy who did something stupid because he wanted to be a big shot."
Chapter 16
RICHARD NIXON AND THE HONG KONG HOSTESS
IN 1967 DAN GROVE was the FBI's man in Hong Kong, a key listening post for intelligence on China and Southeast Asia. Somewhat like Vienna after World War II, Hong Kong was a magnet for spies and intrigue.
Grove, like all FBI agents stationed overseas, had the title of legal attaché, or legat. He was later to play an important role in the TIGER TRAP case when the student he recruited was entrusted with the letter from Hanson Huang to Gwo-bao Min, the Livermore scientist.
In October 1967 Richard Nixon was in Hong Kong, a city he visited often as the senior partner in the New York law firm of Nixon, Mudge, Rose, Guthrie, Alexander & Mitchell, where he worked during the 1960s and plotted his way back to power. When Nixon traveled abroad, as a former vice president he could, if he wished, receive political and military briefings at US embassies in the countries he visited. He was briefed on China by officials at the US consulate when he traveled to Hong Kong in 1967.
As the FBI legat in the British colony, Grove sometimes worked with Pericles "Perry" Spanos, the senior Treasury special agent in Hong Kong. Spanos was primarily concerned with smuggling, counterfeiting, and narcotics. One of the watering holes he kept a close eye on was the Den, the bar in the old Hilton hotel.
The US consulate in Hong Kong is on Garden Road. The Hilton, a landmark until it was demolished in 1995, was four blocks down the hill, below the consulate, at the corner of Queens Central Road. There were two bars in the Hilton: the Dragon Boat, shaped like a boat, was the regular bar; the Den, in the basement, was the cocktail lounge. Marianna Liu, a beautiful young Chinese woman, was the head hostess at the Den.
The Den was a place where patrons could enjoy a Filipino band, dancing, and drinks. "When the fleet was in," said one American diplomat, "US officers and aviators would book suites at the Hilton and there would be a lot of partying at the Dragon Bar and the Den."
Chinese intelligence did not overlook the fleet's fondness for the Hilton, according to Milton Bearden, who spent five years in Hong Kong during two tours for the CIA. "Hong Kong, the Hilton, the Dragon Bar, and the Den were hugely rich targets for the PRC. Intelligence was a cottage industry in Hong Kong. Everybody was involved. The Brits, the Americans, the Chinese, the fat cats. Everybody."
That included the FBI. "One day," Grove recalled, "Spanos comes across the hall to me about Liu. He says she's a source of mine on smuggling jewelry and different things out of China. He said there's all kinds of reports about her working for the other side. He said you got to look at this."
Nixon was in town, and Spanos told Grove that Liu had visited the former vice president in his suite at the Mandarin Hotel. "Spanos said she spent last night with Nixon. He said, 'I'm really concerned about this situation. Nixon spent the night with her at the Mandarin Hotel.' He said, 'He's shacking up with this girl and I know he got a security briefing.' That's what had Perry so distressed."
Grove resisted. "I said it's overseas, it's agency [CIA] jurisdiction. He said, 'Yeah, but Nixon is a US politician and just had a TOP SECRET briefing here.'" Grove finally agreed to accompany Spanos to the Den.
"I'll never forget," Grove said. "It was a very hot day—you could fry an egg on the sidewalk—we walked down to the Den." They were greeted by Marianna Liu. "She gives us a nice seat and Spanos says, 'I understand you spent the night with the big man last night.' She giggles. She laughed and giggled and said yes and pointed to the other girl and said she and the other hostess, Teresa, were with him and his friend. And the friend I found out was Bebe Rebozo."
Rebozo, a millionaire real estate developer who owned a bank on Key Biscayne, Florida, was Nixon's closest friend, his golfing, boating, and drinking partner, as well as his frequent travel companion. They both liked charcoal-broiled steaks and watching movies, which Rebozo would select.
Perry Spanos independently recalled the conversation about Nixon in the Den much as Grove had. "The main hostess was Marianna, a beautiful Chinese lady in her early thirties," Spanos said. "She was very coy, and said she and her friend Teresa met him, and she implied it was more than just a casual meeting. Teresa was nearby, Marianna pointed to her. She said, 'Myself and Teresa entertained Nixon.' I don't think Nixon was a ladies' man. So it surprised me."
Grove did not doubt that Liu and the other hostess had visited Nixon and Rebozo at the Mandarin. But he was skeptical of her giggling implication that they had spent the night. "Marianna Liu was Nixon's friend," Grove said. "I'm convinced she was working for the other side. I think she was also a communication channel, he was using her as a back channel to the Chinese. Before the opening to China. She swears they never even touched, and I believe her."
Nevertheless, Grove felt he had to tell FBI headquarters about his encounter with Liu at the Den. Before reporting the conversation to Washington, Grove decided it would be prudent to check with the British, on whose turf he was operating. He paid an official call on the Special Branch of the Royal Hong Kong Police.
"I went over to the Brits and asked if they had coverage of Liu, and they said she had been reported several times, always asking questions of Navy people down at the Den. When do you sail? and this kind of stuff. The Brits said it's been reported to us several times she was a possible CHIS [Chinese intelligence service] agent. We did not investigate because all her activities were directed at the US."
On October 12, Grove dutifully reported the British concerns about Liu and the conversation at the Den to FBI headquarters. He was well aware that the part about the hotel visit was the sort of salacious gossip that J. Edgar Hoover reportedly loved to collect to give him leverage over presidents and other public officials. Grove saw it another way. An old-fashioned FBI agent, reflexively loyal to the bureau, he argued that Hoover had a responsibility to inform high-level officials if the bureau learned of reports being spread about them.
Two years after Nixon resigned the presidency in 1974, his contacts with Liu in Hong Kong leaked out, but received little attention from the mainstream press. However, an FBI memo in July 1976 cited and restated Grove's 1967 report to headquarters. Referring to Liu, it said:
Information concerning subject was originally brought to the attention of this Bureau by Legal Attache, Hong Kong, letter dated 10/12/67 wherein suspicions of possible Chicom intelligence involvement of subject were inferred but not substantiated by Special Branch, Hong Kong Police and a U.S. Customs representative in Hong Kong indicated he had heard from a former Customs representative in Hong Kong, that subject was a regular bedmate of Vice-President Nixon when he visited Hong Kong. The Customs representative indicated he had no firsthand knowledge, was furnishing the informa
tion in confidence and requested no further dissemination of the information. No active investigation of the subject was conducted by the FBI.
Grove's report, with its explosive line about Liu as "a regular bedmate of Vice-President Nixon," triggered an unexpected reaction from headquarters in 1967. "I got a screaming meemie cable from Bill Sullivan, saying, 'Mr. Nixon's private life is of no concern to this bureau.' Sullivan was hoping to get Hoover's job and he could see this ruining his chances." If Nixon became president, Grove reasoned, "Sullivan thought with this information Nixon would never get rid of Hoover."
Indeed, on December 16, 1968, a little more than a month after Nixon was elected president, he let it be known through his press secretary that he had asked Hoover to remain as FBI chief.
Hoover had guaranteed similar job security for himself during the Kennedy administration. Attorney General Robert Kennedy, the president's brother, intensely disliked the aging FBI director, and the Kennedys would have been pleased if Hoover had retired, which he had no intention of doing. On March 22, 1962, Hoover dropped by the White House for a private lunch with President Kennedy to inform him that the FBI knew of his sexual liaison with Judith Campbell (she later remarried and became Judith Campbell Exner), who was also bestowing her favors on Sam Giancana, a Mafia don. Giancana and Johnny Rosselli, another mobster, had been hired by the CIA to assassinate Fidel Castro and both later met untimely ends. Giancana was murdered in 1975 before he could testify to a Senate committee investigating the CIA's activities; a year later Rosselli's body was found stuffed into an oil drum floating in the ocean near Miami.
As documented by the Senate Select Committee on Intelligence, "the last telephone contact between the White House and the President's friend [Judith Campbell] occurred a few hours after the luncheon." Hoover remained director of the Federal Bureau of Investigation for a decade more, until he died in office on May 2, 1972, at the age of seventy-seven.
***
William C. Sullivan was an assistant director of the FBI, a Hoover sycophant who later broke with the FBI chief and became his bitter opponent. In his book, The Bureau: My Thirty Years in Hoover's FBI, Sullivan said that Nixon and Rebozo had taken two trips to Hong Kong "brightened for Nixon by his friendship with a Chinese girl named Marianna Liu." Sullivan described what he said happened when he gave Grove's letter to the FBI director:
"'I'll handle this one,' Hoover said gleefully when I passed the letter on to him. He took the letter to the future president immediately. 'I know there's no truth to this,' he told Nixon. 'Someone must be misleading our legal attaché. I'll never speak of it to anyone,' Hoover concluded with great solemnity. It was one of his favorite speeches, one he gave often to politicians."
In an interview with Jack Nelson of the Los Angeles Times in 1973, Sullivan called Hoover "a master blackmailer." The minute Hoover would "get something on a senator he'd send one of the errand boys up and advise the senator that we're in the course of an investigation and we by chance happened to come up with this data on your daughter. But we wanted you to know this—we realize you'd want to know it. But don't have any concern, no one will ever learn about it. Well, Jesus, what does that tell the senator? From that time on the senator's right in his pocket."
In 2009 Marianna Liu was a peppy seventy-seven-year-old grandmother living modestly in Monterey Park, the heavily Chinese community east of downtown Los Angeles. In a lengthy interview with the author at her home, she confirmed that she and the other hostess had spent time with Nixon and Rebozo at the Mandarin Hotel, but disputed many of the stories that have swirled around her since her friendship with Nixon became known.
Thin, short, dark-haired, and brown-eyed, Liu said she exercised at the gym every day to stay trim. She spoke English in a rapid-fire, choppy style. "We were at Mandarin, yes," she said, "no love affair. We were friends."
"He was with Bebe Rebozo," she continued. "They were in the Den to have a drink. They said after work let's have a drink. I didn't want to go alone." So she asked her friend Teresa to come with her to Nixon's hotel.
"Around 9 P.M. after dinner we went to the Mandarin. We went there and just had a drink. Not very long, maybe an hour or less. Soft drink, I had, I don't drink." She did not recall what Nixon drank.
At the Mandarin, she said, Nixon introduced Bebe as his secretary. At some point in the hotel suite, Nixon "gave me a bottle of perfume." She added, "I did not spend the night with Nixon."
Although Liu insisted that she had only seen Nixon one evening, at the Den and then at the hotel, she apparently had a different recollection previously. According to a 1976 story in the New York Times, Liu said she had first met Nixon when he was vice president and she was working as a part-time tour guide for a travel agency. If so, this would date their first meeting to the 1950s, when Nixon was vice president.
The story reported that Liu said she had met Nixon several times thereafter, and that she thought they had seen each other on his trips to Hong Kong in 1964, 1965, and 1966. The story said Liu recounted that when she was hospitalized in April 1967, Nixon sent flowers to her room.
Although the visit to the Mandarin took place in October 1967, a photograph of Liu and Nixon smiling warmly at each other was taken at the Den in 1966, according to the files of the Hong Kong Standard, which published the photo. If the date is accurate, they had met at least in those two years.
Liu was asked in the interview with the author if she had ever provided information to China. "No, I would never do that," she replied. "I did not give information to PRC."
Told that the police in Hong Kong suspected she might have collected information for China, she laughed. "They say I'm a Red spy."
Her own background, Liu contended, did not support those suspicions. She was raised in Beijing, she said, and her father was a Nationalist general who had been killed by the Communists. She remembered that her father "limped one leg short from fighting the Japanese." According to Liu, in 1949, when Mao's forces prevailed, they told her father that if he surrendered and switched sides he could "stay a general. He refused. He ran away twice and third time they got him. He was shot somewhere in Shantung."
By 1951, Liu had moved to Hong Kong. After attending a Catholic school, she worked for a Swiss watch company, a travel agency, and an insurance company, then landed the job at the Hilton in 1963. She worked as a hostess at the Den for eight years.
According to the Times story, Liu said that Nixon had told her if she ever decided to emigrate to the United States and needed help, she could contact him. Liu did move to the United States and received permanent residence status on December 1, 1969, ten months after Nixon became president, but she told the newspaper that she had not asked Nixon for help. Her husband, Gorkey Faan, joined her a few years later.
Coincidence or not, Liu moved to Whittier, California, Nixon's hometown. She came to the United States as a domestic for Raymond F. Warren, an official of the Immigration and Naturalization Service in Los Angeles, who also lived in Whittier. Liu said she worked as a companion for Warren's wife, Helen, an invalid who was partially paralyzed.
Liu said in her interview with the author that she had contacted Warren through a Chinese bartender she knew in Los Angeles who "was good friend of Ray Warren many years." She said she originally arrived in the United States on a visitor's visa, "and Warren got me papers to take care of his wife." She applied for naturalization in 1975 and became a citizen.
In the 1970s Liu and her husband bought a restaurant in Maywood, California, called Anderson's Cuisine, which served American food. They ran the place for three or four years.
But Liu's quiet life in Southern California took an unexpected and unhappy turn in 1976. The National Enquirer assigned a team of half a dozen reporters to dig into Liu's relationship with the by-then former president.
The supermarket tabloid trumpeted the first of two stories on August 10, with a sensational headline in large type: "Nixon Romanced Suspected Red Spy." Below the headline the paper ran the photo
of Liu and Nixon and another banner: "Chinese Beauty: 'Yes, There Was Love.'"
The story, and a second article two weeks later, raised questions about how Liu's immigration to the United States had been handled, why she had been allowed into the country after the FBI reported suspicions that she was working for Chinese intelligence, and why she had been sponsored by an INS official from Whittier.
The tabloid quoted Liu as saying she and Nixon had gone dancing by moonlight on a yacht in Hong Kong harbor that was raided by police at 5 A.M. Liu and Nixon had been together "several times" at four different hotels in Hong Kong, the story claimed. It quoted Liu as saying, "Yes, there was love.... It could easily have developed into a very strong love affair, but I wouldn't let it. He had an important career and a wife and family to think of, and I cared too much for him to let him spoil that.... We had many opportunities to make love—we were alone in his hotel room at least six or seven times—but I wouldn't let it happen." The story also claimed that Liu had visited Nixon twice in the White House in 1970.
In her interview with the author, Liu denied many of the assertions in the tabloid's account. There was, she said, no dancing on a yacht in the harbor, by moonlight or otherwise, and no police raid. "Never happened," she said. She denied she had been at four hotels with Nixon. "No, only the Mandarin," on the one occasion she talked about.
And the "Yes, there was love" quote? "No, they made it all up. Don't believe a word of the Enquirer."
Liu also insisted she had never visited Nixon at the White House, never saw him after she came to the United States, and did not travel to Washington for his inauguration, as one FBI report suggested.
By 1976, Dan Grove was in the FBI's office in Berkeley. The National Enquirer had contacted him when it was researching its stories on Liu, and in July, the month before the stories were published, Grove sent two airtels alerting FBI headquarters to the tabloid's investigation and detailing his conversations with one of its reporters.