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RCMP officer nabs Chinese Spy

JIM BRONSKILL Sat Apr 30, 9:30 AM ET

From CP.org

Confidential German sub plans offered to covert Mountie in coffee shop

An RCMP officer assuming the role of a Chinese spy nabbed a Toronto-area woman when she agreed to sell him pages from a German submarine manual, The Canadian Press has learned.

The remarkable meeting in the neighbourhood cafe was part of an elaborate sting operation that turned Michaela Gile's life upside down and led to her eventual conviction in Germany for attempted treason.

It also shattered any faith Gile and her husband had in the Canadian justice system.

The eye-opening case also sheds some rare light on the undercover activities of the RCMP's secretive national security division.

The international espionage saga began in 2003 when Gile, a German-born translator, had a payment dispute about her work on a confidential manual for the weapons system of the U-212A submarine, equipped with six torpedo tubes.

Designed in Germany, the advanced vessel is renowned for a quiet propulsion system powered by hydrogen fuel cells that helps it elude enemy subs.

Gile, experienced at translating technical literature, had landed the job through the firm Kern AG. But completing work on the 144-page manual was proving too much, so she subcontracted portions to five other translators.

There was a disagreement over the fee - Gile felt she was owed 12,000 euros - and Kern balked at paying.

"I had the subcontractors breathing down my neck. I was getting pretty frantic," Gile recalled during an interview in her comfortable southern Ontario home.

"And one of the subcontractors said, 'Well, why don't you just sell it to the Chinese?"'

"We even cracked jokes out on the patio about it. And for some reason I did call the next day."

Gile, a landed immigrant, came to Canada in 1999 to be with her current husband. Raised in Germany, she had lived in the United States, where she was previously married, for more than two decades.

Tall with blonde hair, blue eyes and a still-distinct accent, the 44-year-old Gile evokes the cinematic archetype of the exotic femme fatale. But she says her detour into the world of spies happened quite by chance.

Gile agreed to tell her story on condition she be identified by her birth name. Though Gile is her legal name, she usually goes by her husband's surname in Canada. (In keeping with practice in Germany, her last name was not made public there upon conviction.)

Gile also insisted her town and the identities of family members not be revealed.

The RCMP, Canadian Security Intelligence Service and Justic Department all declined to discuss the case, while Chinese officials did not respond to repeated inquiries.

The Canadian Press pieced together the story primarily from Gile's account and Canadian and German court documents.

Why would a translator - even one anxious for money - take the momentous step of phoning the Chinese Embassy in Ottawa to offer up the manual for the submarine's FL 1800U weapons system?

Gile says she was definitely not herself during this period.

She has been diagnosed with bipolar affective disorder, also known as manic-depression, a condition that can severely affect a person's mood, thoughts and behaviour.

She takes medication to control the effects. But in early October 2003 Gile was off her usual drugs to avoid a conflict with antiviral treatment and chemotherapy she was receiving for hepatitis C.

She claims she has no actual recollection of phoning the Chinese mission that autumn day.

But she knows she got a call on a Saturday afternoon three weeks later.

Gile remembers the voice on the other end of the line:

"I want to meet you right now about your project," the man said. "We're really interested in this."

Gile says she told him no, she had changed her mind.

Her son, who was in the room, urged his mother to hang up.

But the caller was persistent, saying he was just around the corner. He told her to look for an Asian man in a suit at a nearby coffee shop.

Gile agreed.

Incredibly, the agent who met her was sporting the red, yellow and blue of the RCMP on both his tie clip and wristwatch, Gile recalls. She would recognize them as the Mountie colours only much later, after she had been arrested, when she spotted them on a sign.

At one point, the undercover officer, apparently noticing the gaffe, tugged his sleeve over his watch.

Gile admits becoming caught up in the intrigue. It felt like she was in a movie: "This is really action-packed, this is really cool."

But Gile says she also tried to warn her new acquaintance she wasn't well.

When asked early on in the drama how much she wanted for the manual, Gile had suggested $100,000 - "a ridiculous amount," she now says, but all she could come up with at the time.

The man said he would pay $5,000 for a portion of the sub manual, she remembers. Gile scurried home and came back with about 30 pages.

The contact handed her a Chinese newspaper with a lump inside. When Gile returned to her house, she unwrapped the paper to find a thick stack of $50 bills inside.

"I couldn't believe it. I did not know what to do."

She would not have much time to ponder events.

Another call came, leading to a meeting in the parking lot of the same coffee house the next morning, Sunday, Oct. 26.

Gile brought more pages. The Asian man led the translator to his yellow Nissan where he said her money was waiting.

Four men appeared from nowhere, surrounded Gile, handcuffed her and put her in a car. She was taken to the RCMP detachment in Milton for hours of questioning.

"They kept asking me if I was CIA or FBI you know, if I worked for any of the American agencies."

Back at Gile's house, police brandishing a court-approved warrant were sifting through the family's belongings. They carted away computer equipment, several disks and CDs at the end of the six-hour search. They also reclaimed the $5,000.

"Ever since then, I've become very paranoid and I've become very suspicious," says Gile's husband. "They went through a lot of private stuff that I don't think they needed to go through."

The search warrant and supporting documents remain sealed.

The investigation was conducted by an Integrated National Security Enforcement Team, one of several RCMP-led units that include members of federal agencies such as CSIS, Citizenship and Immigration and the Canada Border Services Agency, as well as provincial and municipal police.

One officer involved in the case, Const. Tom Ragell of the Toronto Police Service, declined to discuss the probe, while another, Joseph Harris of the York Regional Police, did not return calls.

Gile spent a difficult Sunday night behind bars. At a bail hearing the next day Crown lawyer Ruthanne Bowker confirmed that an undercover Mountie had met her at the coffee house.

How the RCMP learned of the case remains a mystery. Did the Chinese tip off the Canadians as a friendly gesture? Was there a mole inside the embassy? Or was Gile's apparent telephone call to the mission intercepted by Canadian spies? No one is saying.

Most likely the Communications Security Establishment, the federal eavesdropping agency, picked up Gile's phone conversation with the Chinese, surmises Wesley Wark, an intelligence expert at the University of Toronto.

CSE, the clandestine outfit responsible for monitoring foreign communications, is known to spy on phone and message traffic in and out of embassies in Canada.

If CSE did intercept Gile's call, it makes sense that CSIS and the RCMP would have been alerted to the submarine case.

Wark suspects China, keen to modernize its obsolescent sub fleet, is eager to learn more about the German vessel.

"I have no trouble at all in believing that Chinese officials would take an interest in anything to do with the U-212 boat."

In court, Bowker said Gile had advised the undercover RCMP officer she intended to flee the country with the money accepted for the manual and abandon her family - a claim Gile denies.

She also remains upset about her treatment in jail, saying she was denied medical attention despite her obvious mental difficulties and the resulting stress.

Her husband has a photo of his wife's arms, covered in long red streaks, taken upon her release the day following the arrest.

Gile says she made the slash marks using her fingernails and wristwatch.

"I tried hurting myself pretty bad.

"They did not get me a doctor. I asked four times for a doctor."

Gile also says the hepatitis therapy she was undergoing required her to drink plenty of fluids but she didn't receive enough water, making her violently ill.

As an American citizen, she has since written the U.S. consulate in Toronto about her desire to initiate a formal complaint against the RCMP.

Gile was charged with violating the Export and Import Permits Act - charges that eventually would be formally stayed, or suspended, at the request of the Crown.

She was alleged to have "exported or attempted to export" materials included in the federal Export Control List, regulations intended to prevent the transfer of sensitive items to foreign states.

Over the next several months nothing much happened aside from occasional court appearances.

Jeff Manishen, her lawyer at the time, says he sought details of the case from the Crown without success.

"I was never provided anything and, ultimately, when we were in a position where that material certainly should have been provided, the Crown decided to stay the proceedings," he said. "So I never learned of the full particulars of what the investigation was."

In March 2004, Gile received a letter from David Littlefield, an agent of the federal solicitor general, advising that her "private communications" - likely both phone calls and e-mail messages - had been intercepted by police between Oct. 25 and Dec. 23, 2003.

Under the law, authorities must inform people after the fact that they've been subject to a police wiretap.

Last summer Gile learned that her father, who lives in a small German village near Mannheim, had fallen ill.

She asked Canadian authorities for her U.S. passport, which had been confiscated, and set out in September for her homeland.

Four days after arriving in Germany, Gile was arrested. She later learned German authorities had tapped her parents' phone for about a year.

Though the Justice Department in Ottawa stayed the charges against Gile in August 2004, the Canadians clearly continued to co-operate with their German counterparts on the case.

A public statement from the German court says that upon careful examination of the documents Gile handed to the Canadian agent, they constituted a state secret and, in the wrong hands, would pose "a threat of severe disadvantage for the security of the state of Germany."

Gile spent weeks in a small cell with three other women at a prison in the western city of Koblenz.

She told her story to the German authorities.

There was talk of her son testifying at trial, since he had overheard her phone conversation - and alleged protestations - when the shadowy Asian man first called.

But Gile didn't want to involve her boy further.

"I just wanted to get it over with."

Gile received a suspended sentence of one year, meaning she would not have to serve any more jail time.

The judges who heard the case believed that even if the Chinese had received the manuals, the damage would have been relatively minor.

Still, prosecutor Wolf-Dieter Dietrich was quoted in the German media as saying he would look into why a company working on an electronic weapons system had farmed out such manuals for translation.

"We don't want a blunder like this in the future."

A weary but relieved Gile returned to Canada just before Christmas.

She points to her relatively light sentence as evidence the submarine documents did not contain genuine secrets.

"But they had to give me something after all that big fuss was made about it. It was all over the news in Germany," she said.

"They could not just say, 'Oops, we made a mistake."'

Her husband acknowledges his wife did "a stupid thing."

But he feels she paid too high a price.

"I don't believe in the law anymore, because I don't think the law is about justice.

"My respect for the police is at an all-time low."

The episode made Gile anxious and depressed. Her daughter, unable to cope, left home over the turmoil.

"The whole thing, it ruined us pretty good," Gile said.

With hindsight she feels "really, really bad" about her actions. Torn by guilt, Gile asks, "How could I have done that to us?"

But she believes the Canadian authorities overreacted.

"I think they were a bunch of idiots. I mean, they were more wacko than I was," she said with a laugh.

"I at least have a doctor that tells me, 'Yes, you're a little bit off, you need to take your medication.' I at least have an excuse.

"They were just too eager."

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