Newshub can reveal the Inspector-General of Intelligence and Security (IGIS) is inquiring into a complaint received from a Government staffer about the NZSIS.
Yuan Zhao, also known as Jason, has been suspended from his role as a senior analyst at the Public Service Commission (PSC) after he says allegations were last year made by the New Zealand Security Intelligence Service (NZSIS) that he passed privileged information to the Chinese Government.
He said the NZSIS accused him of having close personal relationships with members of the foreign Government and disclosing privileged insights and information. Zhao also said the NZSIS claimed his alleged history of providing information "poses an on-going risk to NZ's national security and insider threat risk to PSC".
But Zhao told Newshub he has no details of what he has been accused of and has "done nothing against New Zealand".
He's called it a "racist attack" and said New Zealand's spies warned him not to speak with anyone who works for the Chinese Government.
"I can't have freedom of socialising with any person who works for the Chinese Government," he told Newshub.
The IGIS Brendan Horsley has confirmed he is inquiring into a complaint received from Zhao about the NZSIS.
"I am unable to provide any further information on the complaint or its progress due to the requirement in the Intelligence and Security Act to conduct my inquiries in private."
The NZSIS wouldn't comment specifically on Zhao, neither confirming nor denying it had made the accusations.
"The mission of the NZSIS is the protection of New Zealand's national security," a spokesperson said. "The NZSIS has a long standing approach of not discussing what may or may not be specific areas of operational focus or individuals."
Andrew Little, the Minister Responsible for the NZSIS, also wouldn't comment on an individual case, but did say he has wider concerns about individuals in New Zealand providing information to foreign governments.
"New Zealand is not immune to a range of national security risks. As the NZSIS have said previously, there are a small number of states that engage in interference activities against New Zealand's national interests. Insider threats pose risks to our national security and is an issue we take very seriously."
Zhao was born in China in 1970 and moved to New Zealand in 2000, becoming a citizen in 2006. He's worked for a number of government agencies, including the Ministry of Business, Innovation and Employment (MBIE) and Education New Zealand.
On October 20, 2022, Zhao, his wife, and his three children returned back to the Wellington International Airport after a holiday in Australia.
It's here that Zhao said he and his family were "detained" by the NZSIS for an interview.
"My family cooperated with NZSIS's demands and allowed NZSIS to search our luggage and provided phones and electronics (including the access codes) to NZSIS," Zhao said.
"Then NZSIS officials took away our NZ passports, luggage, phones (mine, my wife's and two sons' phones) and my son's laptop to an inside room check."
He claimed he was later separated from the rest of his family and felt "forced" to sign a paper saying he voluntarily agreed to the interview.
"The NZSIS officers threated (sic) me and said 'Do not tell anyone about this interview' and 'Don't worry, we can find you anywhere' several times," Zhao said.
NZSIS officials asked him to "stop connection" with Chinese Embassy staff who he spoke with on the WeChat Chinese social media application, he said.
His phone was also held for weeks meaning his family missed vital information sent to it, Zhao said.
"I deleted those connections from my Wechat. I can't have freedom of socialising with any person who works for the Chinese government."
Zhao told Newshub he knew a now-former staff member at the embassy as they both took their sons to table tennis training. He met another worker at the embassy as that individual took a Chinese Government delegation to visit Education NZ's Wellington office when he worked there.
"After I came out the interview room around 5:30pm at the Wellington Airport, my children asked me, 'daddy, why did they search us, we are just kids? Why did they detain us for such long time?'."
"Daddy… are you a spy," he said his children asked.
The NZSIS spokesperson told Newshub it doesn't have "enforcement powers and cannot detain or arrest anyone, or require them to speak to us".
They said anyone can complain to the IGIS "if they consider that they have been, or may be, adversely affected by something done by the NZSIS".
Later that evening, when the family were back home, Zhao said he was told by the PSC he had been suspended as the NZSIS "informed them of a national security matter regarding me and the potential security risk to PSC".
'Racist attack'
Zhao claimed the accusations being made against him were "nonsense and framed me". He said he has "done nothing against New Zealand" and has complained to the IGIS.
"I did not know it because the things NZSIS allegated (sic) I never did. I guess someone wants to clean the office as I was the only China-born Chinese person at PSC.
"I believe if I was a White or Māori person, NZSIS wouldn't search and detain my family and interview me at Wellington International Airport.
"They could find another time to interview me at Wellington. I live and work in Wellington. Why did NZSIS take action on my family holiday back to home at Wellington International Airport? Because I am a China-born Chinese. It's a racist attack."
Zhao said a lawyer working for him has submitted a personal grievance to the PSC and employment processes are now underway.
Zhao started a Givealittle page to raise money for legal fees, but it's since gone offline. He said it will eventually go back up.
He claims the ordeal led to him being diagnosed with acute stress disorder and high blood pressure.
"NZSIS's and PSC's actions have had a flow-on effect: I feel my career, health, financial status and family life are all at risk."
A PSC spokesperson said: "In accordance with standard security intelligence practice, we do no comment on individual security matters."
Horsley, the Inspector-General of Intelligence and Security, told Newshub that the general process he follows is that after determining whether an inquiry is necessary into a complaint, he would seek relevant records, could conduct interviews and get evidence from the relevant people.
That would lead to a written report which may include recommendations for redress.
"A draft classified report will usually be provided to the relevant agency for comment. A report that does not include classified information (such as information that will not prejudice the security, defence or international relations of New Zealand) will also be provided to the complainant for their comment.
"After the report has been finalised, I will publicly release a version of the inquiry report with sensitive information removed, such as information that may prejudice the security or defence of New Zealand, or that might endanger the safety of any person. The report may be published individually or included within my annual report."
There are no set timeframes for IGIS complaint inquiries as they are dependent on the circumstances.
According to the NZSIS, an inside threat or insider "is any person who exploits, or intends to exploit their legitimate access to an agency's assets to harm the security of their agency or New Zealand".
This can be done "wittingly or unwittingly, through espionage, terrorism, unauthorised disclosure or information, or loss or degradation of a resource or capability".
Little said confirming what may or may not be areas of operational focus for the intelligence and security agencies "could be helpful to those who would seek to do harm to New Zealand."
"I receive regular updates from our intelligence and security agencies about all of the national security risks they work to protect New Zealand from."
