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Espionage fears cost woman second civil-service job

Documents reveal government agency's 13-step plan to dismiss Canadian who once worked for China's state-run news agency

From Monday's Globe and Mail

A Canadian civil servant has been removed from her job inside the federal bureaucracy amid concerns about Chinese espionage.

In 2003, Haiyan Zhang was denied “Top Secret” status and escorted from her job as an analyst in the Privy Council Office, the nerve centre of the Canadian government.

Then, a few months ago, after having grieved her way into a less sensitive job, she was stripped of her “reliability status” – the bare minimum – and sent packing from Service Canada, a relatively obscure marketing agency on the periphery of the public service.

Internal memos obtained by The Globe and Mail include references to a secret investigation by a retired head of the RCMP, as well as a 13-step federal action plan to remove her from the civil service once and for all.

Five years ago, a federal civil servant wooed Ms. Zhang, saying the PCO was perfect for her. But after a closer look during a security screening, intelligence officials fixated on the fact that she had once worked as a reporter for Xinhua, Beijing's state-run news service.

Ms. Zhang, a Chinese-Canadian who espouses love of her new homeland and deep-seated contempt for communists, had run smack into growing federal fears about Chinese spies operating in Canada. Never openly accused of any act of wrongdoing, she was not so much fired as left in perpetual limbo. Civil servants can't go to work without a security clearance. She has none.

After spending years on paid leave awaiting the outcome of security screening investigations, Ms. Zhang continues her struggle today. “Matters related to the termination are still before the [labour] board,” said her Ottawa lawyer, Andrew Raven. (He said his client was out of the country last week and not commenting on her case.)

Memos released under freedom of information laws (and now posted on The Globe's website) show just how officials worked to rid themselves of Ms. Zhang.

In 2006, long after she had been ousted from the PCO, she was found to still be entitled to a federal job, according to a labour board adjudicator. Having been branded untrustworthy in terms of handling secrets, Ms. Zhang could be parked in an agency that had none to speak of.

Enter Service Canada, a federal marketing agency whose own internal polling shows it remains rather obscure. Despite its successful 1-800-OCANADA phone line for advice on getting disability cheques and the like, the agency has little public profile.

Service Canada hired Ms. Zhang, seemingly unaware of her background. When security concerns did re-emerge, officials went into panic mode. “We were outclassed by the threat,” reads one briefing note.

In late 2006, after a few weeks of work, she was told to go home and once more await a review of her reliability status.

Draft findings of the inquiry were completed within months, but, after talks with senior managers, officials went back to the drawing board to “refocus, examine threats, identify risks, seek external advice,” according to a memo.

That process took all of 2007. Service Canada even hired Phil Murray, an RCMP commissioner turned consultant, for a “Threat and Risk Assessment.” The document remains secret but passages show he was to look at “vulnerabilities,” including whether unspecified “risks could be reasonably mitigated.”

In February, 2008, Service Canada was charting a clearer course: A memo laid out a 13-step “process for decision-making” in revoking Ms. Zhang's reliability status.

First, officials had to persuade a departmental security officer and assistant deputy minister that she should be denied status. Then she had to be given notice and an opportunity to respond. After that, it would be a matter for judges – at the labour relations board, the Federal Court, the Federal Court of Appeal, even, possibly, the Supreme Court of Canada.

If all else failed, one recourse remained. “Seek directions from cabinet,” reads the 13th point on the memo.

Ms. Zhang was posted to the Middle East as a Xinhua reporter. She has written about how she walked through the Egyptian desert at moonlight, rode Arabian horses, and then met and married a Canadian in Kuwait. After immigrating, she got an MBA and went to work representing Canadian businesses in China. She was headhunted by the PCO in 2003; the promise at the time was that she'd learn more in a couple of years there than in an entire career in any other agency in government.

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