The FBI Spent a Generation Re-Learning How to Catch Spies. Then Came Kash Patel.

Editor’s note: We talk all the time about the obvious dangers the Trump administration is creating. But some of the dangers are more subtle. This is a piece about what’s happening inside the FBI as Trump shifts the bureau’s mission away from counterintelligence to focusing on immigration and street crime.

It’s a remarkable piece of reporting by genuine experts that explicates how the FBI’s counterintelligence mission is vital for dealing with China, which the administration claims to be so focused on.

This is longform journalism at its best and we’re only able to bring you pieces like this because of Bulwark+ members. More than a hundred thousand people banded together to build the kind of media outlet they wanted to exist in the world.

To our Bulwark+ family: Thank you.

And to everyone else: I hope you’ll hunker down and suck the marrow from this piece. When you’re ready to join us in the Bulwark+ community, we’ll be ready for you.

—JVL

AMERICA HAD BEEN AT WAR FOR TWO WEEKS but didn’t know it. The onslaught began with a fleet of store-bought drones swarming a power substation in Pennsylvania, delivering explosives made from common chemicals. They shredded switchgear and control systems, cutting power to airports, hospitals, and nearly half a million homes.

Hours later, a far-right extremist group calling itself “Dark Reich” took credit for the attack in an anonymous video replete with Nazi and occult symbols. The group hailed the blackout as the opening salvo of a campaign to bring down the U.S. government. They urged others to replicate their efforts and ignite a race war.

Over the next few days, copycat attacks cut the power for hundreds of thousands of Americans as summer temperatures soared into the 90s. Nobody could figure out who was piloting the drones. Each incident looked amateurish, yet the pattern worried FBI officials. Bureau investigators began to suspect a foreign adversary might be quietly orchestrating “gray-zone” attacks—covert strikes that offered plausible deniability.

Soon anonymous cyberattacks compounded the damage, crippling municipal governments, water systems, and first-responder networks from Atlanta to Denver. Rail corridors and ports—critical for stocking grocery stores and mobilizing the military—snarled in the digital gridlock. In an already toxic political climate, the White House was unable to craft a coherent response. Two weeks into the crisis, the source of the chaos became clear when China launched a swift and decisive invasion of Taiwan, and the United States was too paralyzed by domestic strife to stop it.

This scenario—hypothetical, but based on very real fears—is laid out in a 2024 RAND Corporation study modeling how America’s enemies could mask state-directed attacks as the work of extremists or criminal groups. Carrying out an operation of this magnitude on American soil would require a sophisticated network of spies. Which is exactly what China’s security services have been building since the late 1970s, stealing vital military, nuclear, and technological secrets en masse.

Recently, Beijing’s intelligence services have gotten more aggressive. They’ve activated clandestine networks to organize violent crackdowns inside the United States, kidnapped American citizens, and carried out sweeping cyberattacks that hit everything from telecom giants to military IT networks. Some security researchers have speculated that, in a crisis, China’s espionage networks could quickly be repurposed for sabotage.

American security experts fear that growing networks of foreign spies, combined with new technology, represent an unprecedented threat—one the FBI, the primary agency tasked with thwarting hostile foreign intelligence services, may struggle to address.

“Look at what the Ukrainians are doing with drones and AI against Russia,” says national-security analyst Paul Joyal. “I know our adversaries are watching.”

Yet as these dangers have mounted, the White House has proposed slashing the FBI’s budget by more than $500 million and has shifted the bureau’s priorities away from combating spies and other forms of foreign influence. Under Director Kash Patel, the FBI has moved people and power out of the bureau’s headquarters in the J. Edgar Hoover Building in Washington and into the heartland. He reassigned nearly a quarter of all agents to a job that’s never been part of the FBI’s purview, immigration enforcement, according to data obtained from the bureau by Virginia Sen. Mark Warner, a Democrat. Counterintelligence specialists with deep expertise in countries like China, Russia, and Iran are now regularly working immigration cases on a rotating basis, according to former agents who recently left the bureau. The FBI has also limited investigations of crimes like violations of the Foreign Agents Registration Act (FARA), allowing foreign spies greater room to maneuver.

The end result of these changes, former senior FBI officials maintain, is that America is extremely vulnerable—not just to an attack, but to an unprecedented level of foreign espionage.

“It’s a disaster,” says Robert Anderson, the head of FBI counterintelligence from 2012 to 2014. “I’m rooting for everybody because we’re all Americans, [but] Patel needs to wake up.”

In a statement, the FBI said it was working with agencies across the government, publicly highlighting the tactics of America’s adversaries, and actively trying to change government policies to allow it to better protect the United States. “Looking towards the future,” a bureau spokesperson said, “we are preparing for the impact new technologies such as Quantum and AI will have on counterintelligence threats.”

But some lawmakers already seem to have lost faith in the bureau’s approach. In Washington, the House Intelligence Committee, led by Arkansas Republican Rep. Rick Crawford, recently approved a bill that would overhaul counterintelligence, stripping the FBI of its leading role. “The counterintelligence threat is very real,” said a spokesperson for the committee. “This is not politics; this is about national security and the safety of Americans in the homeland. The light is flashing red.”

The FBI is the country’s chief counterintelligence agency and premier law enforcement organization. If the bill were to become law, Director of National Intelligence Tulsi Gabbard would be put in charge of all U.S. counterintelligence efforts, including the FBI’s spy hunters. Her office is currently responsible for making sure the eighteen agencies in the U.S. intelligence community—including the FBI—work together and share information. Critics warn that expanding Gabbard’s role could harm civil liberties by shifting some of the bureau’s counterintelligence decision-making outside of the Department of Justice, a law-enforcement institution bound by constitutional safeguards. “That’s really dangerous,” says Frank Montoya Jr., a retired FBI agent who was once the head of counterintelligence for the agency Gabbard now runs. “You could be creating a domestic spy agency with even less transparency to the American public.”

A House Intelligence Committee spokesperson disagreed, adding that the bureau would not lose the power to carry out its own investigations. “This effort,” the spokesperson said, “is about bringing all of the tools to the table—not degrading any, FBI or otherwise.”

It’s not the first time the bureau’s counterintelligence agents have faced such a flashpoint. More than two decades ago, as then-FBI Director Robert Mueller began diverting resources to combat terrorism in the wake of the attacks on September 11th, the bureau’s counterspies were reeling from a series of espionage disasters, post–Cold War budget cuts, and pressure from Congress to strip the FBI of its counterintelligence mission. Meanwhile, the threat from Chinese espionage was exploding. Beijing not only employed intelligence officers to steal secrets; it began coercing tens of thousands of Chinese students, tourists, and businesspeople to help them in an “all of society” approach to spying.

The bureau was incapable of combating this onslaught until a small group of veteran FBI spy hunters, led by Assistant Director David Szady, shifted its strategy in 2002. Instead of simply hunting spies who had infiltrated the government and the private sector, the bureau used preemptive tactics—blocking or trapping foreign agents before they could do damage. To succeed, they had to confront scandals involving sex, spying, stolen nuclear secrets, and an FBI culture in which, as Szady puts it, only “cigar-smoking, beer-drinking, door-kicking agents” in the criminal divisions won respect—and got the funding that went with it.

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Today, however, Patel and President Donald Trump are moving toward an earlier strategy—one that failed spectacularly in the early 1990s, according to former senior spy hunters. Back then, Director Louis Freeh, believing a decentralized approach would be more effective at fighting crime, “took a sledgehammer instead of a scalpel to headquarters staffing,” says Thomas McWeeney, a contractor the FBI hired at the time. But instead of welcoming a new era of effectiveness, Freeh oversaw a decade marked by crises—from intelligence failures leading up to the September 11th terror attacks to the bungled espionage investigation of Dr. Wen Ho Lee.

In a series of exclusive interviews, Szady, McWeeney, and other former FBI officials recounted their successes and failures as they tried to rebuild the bureau’s Cold War–era spy-hunting capabilities—a process laid out in a 2005 internal FBI document obtained by The Bulwark. Many of these former bureau officials, including lifelong Republicans and Trump supporters, say they share Patel’s stated goal of “depoliticizing” the FBI. But some worry the administration is ignoring—or worse, actively crippling—counterintelligence at a critical time, as adversaries experiment with grave new threats, from AI-driven weapons to advanced cyber intrusions. Their experiences offer a glimpse into the type of challenges Patel faces—not only from foreign adversaries like China, but from rivals like Gabbard. “It’s tragic,” says Montoya. “All our work is being destroyed.”

‘They’re going to eat you alive’

IN LATE SEPTEMBER 2001, BARELY TWO WEEKS after al Qaeda operatives murdered 2,977 Americans, Robert Mueller sat in the bureau’s massive “war room” overseeing hundreds of agents trying to hunt down those responsible for the attacks. Despite the counterterrorism whirlwind, Mueller—less than a month into his service as FBI director—still had to figure out how to juggle the bureau’s other responsibilities, including fighting crime, rooting out corruption, and thwarting foreign spies.

That afternoon, Mueller tore himself away to meet two veteran spy hunters—Szady and his chief of staff, Kevin Favreau—in a vestibule adjacent to the war room. Spying had changed a lot since the fall of the Berlin Wall. Computer and internet technologies were booming and ascendant powers like China were aggressively targeting the United States. Earlier that year, President George W. Bush had put Szady in charge of a new interagency organization called the National Counterintelligence Executive (NCIX). It was formed to help the FBI, CIA, and Department of Defense coordinate their responses to emerging threats from foreign spies. Mueller wanted to better understand how it worked, Szady recalls. He closed the door, sealing the three men off from the cacophony of the command center, and asked: “What is your definition of counterintelligence?”

For Szady and Favreau, the subtext was hard to miss. During their frequent trips to Capitol Hill, they’d heard that legislators and staffers had come to see the FBI’s approach to both counterterrorism and counterintelligence as antiquated and inept. Szady, a charismatic showman with a staccato New England accent, had a reputation for being brash, even coarse at times. But he chose his words carefully, framing counterintelligence as a wide range of strategic and tactical moves to disrupt foreign spies.

“Wrong,” Mueller said, interrupting Szady. “It’s about espionage, espionage, espionage.”

The FBI director’s meaning was clear—he wanted stats he could show to Congress: criminal prosecutions and spies behind bars.

“Director, that may be your opinion,” Szady replied, “but if you go up on Capitol Hill and tell them that, they’re going to eat you alive.&#