FBI agent and lover 'worked for Chinese'

A Chinese American businesswoman and an FBI counterintelligence agent with whom she had an affair for two decades have been arrested in Los Angeles and accused of passing on secrets to the Chinese government.

FBI documents say that Katrina Leung used her relationship with James Smith to obtain access to classified information even though she worked for the US as a federal informant, earning $1.7m (£1m) for her espionage work. She is being held without bail pending a hearing next week.

Mr Smith is accused of "gross negligence" for granting her access to official secrets when he allegedly knew she was passing them on. He was granted bail set at $250,000. The FBI has not given details of what the Chinese may have learnt. But Robert Mueller, the agency's director, said: "It is a sad day for the FBI."

In 1999, a Taiwanese-born nuclear scientist, Wen Ho Lee, was arrested and held without bail for more than a year before it transpired that the accusations were baseless. His lawyer, Brian Sun, is now representing Mr Smith. He described his client as "a loyal, patriotic and dedicated former agent" who is "very disappointed that the government has chosen to bring this case against him".

Mr Smith is accused of taking home classified documents. A search of Ms Leung's home allegedly uncovered a secret FBI memorandum on Chinese fugitives and phone directories relating to the bureau.