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Senior FBI National Security Division chief demoted over spy probe

WASHINGTON (CNN) -- One of the FBI's senior national security officials has been demoted over the handling of an investigation into possible Chinese espionage.

According to bureau officials, Sheila Horan has been removed from her job as deputy assistant director for counterintelligence in the National Security Division, and has been moved to the Administrative Services Division.

The action was ordered by FBI Director Robert Mueller.

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Bureau officials say the espionage investigation deals with the possible attempt by China to recruit a spy against the United States. No details were provided about the status of that investigation.

Bureau officials told CNN Horan did not pursue the probe aggressively enough to satisfy Mueller, and he felt she was slow to inform him of details of the investigation.

The counterintelligence unit has been embarrassed within the last few years by various scandals, including the discovery that one of the bureau's own --now-convicted veteran FBI agent Robert Hanssen -- had been spying for Russia for years.

The FBI was also red-faced after its intensive investigation of nuclear scientist Wen Ho-Lee, suspected of spying for China, largely fell apart. He pleaded guilty to one count of mishandling classified material and has now published a book accusing the FBI of treating him unfairly because of his Chinese heritage.

The case Horan was looking into is said to be unrelated to the discovery of listening devices -- bugs -- found aboard a Boeing 767 delivered to China recently for use by the Chinese government.

Horan, 54, joined the FBI in 1973. She is one of the bureau's highest ranking women. She has worked counterintelligence since 1975. In August 1997, she was named special agent in charge of the FBI's National Security Division in the bureau's Washington field office.

In December 1998 she was promoted to deputy assistant director for counterintelligence at headquarters.