60 Minutes - Sunday, February 3, 2019

Episode Date: February 4, 2019

The officials who convicted Kevin Mallory -- who was being investigated for conspiracy to commit espionage -- tell Anderson Cooper how their case came together. Malta -- the The smallest nation in the European Union -- is earning an unsavory reputation. Jon Wertheim reports. The reintroduction of the predator has led to more visitors and a shift in the ecological makeup of Yellowstone Park. Bill Whitaker has the story. Those stories on tonight's "60 Minutes." Learn more about your ad choices. Visit megaphone.fm/adchoices To learn more about listener data and our privacy practices visit: https://www.audacyinc.com/privacy-policy Learn more about your ad choices. Visit https://podcastchoices.com/adchoices

There are very few things that you can be certain of in life. But you can always be sure the sun will rise each morning. You can bet your bottom dollar that you'll always need air to breathe and water to drink. And, of course, you can rest assured that with Public Mobile's 5G subscription phone plans, you'll pay the same thing every month. With all of the mysteries that life has to offer, a few certainties can really go a long way. Subscribe today for the peace of mind you've been searching for. Public Mobile, different is calling. The new BMO VI Porter MasterCard is your ticket

to more. More perks, more points, more flights, more of all the things you want in a travel rewards card, and then some. Get your ticket to more with the new BMO VI Porter MasterCard and get up to $2,400 in value in your first 13 months. Terms and conditions apply. Visit bmo.com slash VIPorter to learn more. Does the Mallory case fit a pattern that you're seeing coming from Chinese intelligence? Yes. We currently have three pending cases against former intelligence officers, and they're alleged to have been spying on behalf of the Chinese. It's hard to overstate how unusual it is to have three cases like this ongoing.

It's not unusual. It's unprecedented. Kevin Mallory was a former clandestine case officer for the CIA, who the Justice Department believes was recruited by a Chinese spy. Did you send them anything on that phone? I sent some tests. Tonight, 60 Minutes gets an insider's view at what espionage looks like. Malta sits as a sun-dappled speck in the Mediterranean, a short ferry ride to Sicily and not much farther to Libya.

Over the last three millennia, Malta has been conquered or colonized by just about every world power. Most of the 500,000 people here are Catholic, a tradition that started early. The Apostle Paul is said to have been shipwrecked here in 60 AD. But as you'll see, today the proud Maltese are dealing with accusations that are far from holy. You fly up alongside that wolf and you shoot a tranquilizing dart into it. Five minutes it goes down.

We process the wolves, we take blood and we attach a radio collar. And then we follow them for their life, hopefully. Yellowstone wolves are fierce and territorial. The leading cause of death is attacks from other wolves. And their look is uncontrollable. That look says, I ain't going to conform to your rules, and I'll die before I do. I'm Steve Proft. I'm Leslie Stahl.

I'm Scott Pelley. I'm Anderson Cooper. I'm John Wertheim. I'm Bill Whitaker. Those'm Scott Pelley. I'm Anderson Cooper. I'm John Wertheim. I'm Bill Whitaker. Those stories tonight on 60 Minutes. What's your next adventure? Everyone deserves a chance to do what they love. Pacific Life helps you reach financial goals while you go after your personal ones.

Plans change over time and your financial solutions can too. Pacific Life has a variety of financial solutions that can help you complement your life goals and passions while managing the uncertainties. Backed by more than 150 years of experience, you can count on Pacific Life to be there so you can go out and keep living your best life. Pacific Life is one of the most dependable and experienced insurers in the industry and has been named one of the 2019 World's Most Ethical Companies by the Ethisphere Institute. The freedom to go after whatever is next for you, that's the power of Pacific. Ask a financial professional about how Pacific Life can help give you the freedom to do what you love or visit www.pacificlife.com. We'll be right back. spy. Officials say Mallory was a prime target for recruitment. He was out of work, three months

behind on his mortgage, and thousands of dollars in debt. But as the Chinese would discover, Kevin Mallory wasn't exactly James Bond. The Department of Justice agreed to show us how they caught Mr. Mallory and why they believe his recruitment by China is part of a massive clandestine campaign to steal not just national security secrets from the U.S. government, but industrial and technological secrets from American companies. This is what espionage looks like. The man standing on the right in the yellow shirt is Kevin Mallory, who once held a top-secret security clearance while working for the CIA and the Defense Intelligence Agency. Footage from a surveillance camera at a Virginia FedEx store in April last year

caught him as he prepared to hand a clerk stacks of classified documents to be scanned onto an SD card, the kind that can be inserted into a mobile phone. So this is the rare moment, right, in an investigation and in an espionage case where we actually have video footage of the individual preparing the classified material for transmission to the Foreign Intelligence Service. We watched the tape with Ryan Gaynor, the FBI's supervisory special agent who investigated Mallory, and Jennifer Jelly, who prosecuted the case against him for the National Security Division of the Department of Justice.

They say Kevin Mallory sent national security secrets to a Chinese spy on a covert communication device. So here you see him talking with the store clerk about the scanning job. And throughout this video, you see little pops of yellow, little yellow pieces of paper that flash by when he's showing the documents. That was important for us because the document that he successfully passed consisted of a typed up white piece of paper, that was the classified information, followed by two yellow sheets of paper with his handwriting on them. And here you can see. So that's, those are the yellow sheets of paper. You can see the yellow sheets going through that scanning process.

Prosecutors say some of the information Mallory sent could have revealed the identity of a couple who had secretly spied on China for the U.S. It was a very personal betrayal. Mallory had supervised the couple years before. He was betraying people. This is people's lives at stake. Correct. These were documents that specifically talked about human beings whose lives could be in danger.

If they had traveled to China, they could have been arrested. At the time he gave the information to the Chinese intelligence officer, he knew they were planning on traveling to China. John Demers is the top official in charge of the Department of Justice's National Security Division, which helps guard the U.S. against terrorism, cyber attacks, and espionage. He's responsible for coordinating activities across law enforcement and U.S. intelligence agencies. He says Kevin Mallory's recruitment is just one of many efforts by the Chinese Ministry of State Security, or MSS, to spy on the United States. What is MSS?

So MSS is the principal intelligence agency of the Chinese government. And in rough terms, it is like the CIA and FBI put together. Their capabilities are world class. They have cyber capabilities. They have expertise in turning people into cooperators. And they have all of the tools and expertise of a very capable intelligence organization. John Demers says Kevin Mallory hadn't worked for any U.S. intelligence agency in five years, but he was still of interest to China. He spoke Mandarin, was desperate for money, and had classified information he might be willing to sell. You're looking for people who will be willing to work with you for one reason or another. You start very slowly. You're looking for people who will be willing to work with you

for one reason or another. You start very slowly. You start to see what information they're willing to share with you, originally innocuous information, then something maybe slightly more sensitive, and so forth. And that relationship develops over time. It's a patient process. It's a grooming of an intelligence asset.

It's a grooming, and it's a It's a grooming and it's a constant testing to see what the person is willing to do. The Chinese didn't reach out to Kevin Mallory in a dark alley like in a movie. They made contact with him like any job recruiter would. They sent him a message on the career networking site LinkedIn. What could the Chinese tell from reading his LinkedIn page? When you look at this LinkedIn page, it's very clear immediately that he worked in national security, that he had the type of background that the Chinese intelligence services are most interested in. He's good at national security, military, international relations, counterterrorism, security clearance, dispute resolution. This is a signpost to, I was a former intelligence official.

And it led to what you would expect. Mallory ended up in contact with this man, who called himself Michael Yang, and claimed to be an employee at a Chinese think tank. So he's a Chinese intelligence officer? We believe him to be a Chinese intelligence officer. And more importantly, Mr. Mallory, when meeting with him, believed him to be an intelligence officer. Over the next several weeks, Michael Yang paid Mallory $25,000 to come to Shanghai twice, and Mallory reached out to former colleagues at the CIA,

asking to be put in touch with people who had current intelligence on China. Prosecutors say his former colleagues grew suspicious and reported him to CIA security, putting him on the radar of law enforcement. When Mallory returned from his second trip to China, he was stopped by customs at Chicago's O'Hare Airport. He had lied on this form about how much money he was carrying, more than $16,000 in cash, and agents discovered this box with a phone in it. Mallory claimed it was a gift for his wife,

but it was actually a covert communication device that had been given to him by Chinese intelligence. This looks just like a regular phone. What makes it a covert communication device? So it's not so much the hardware. The phone itself had a unique piece of software installed on it designed to allow secure communication both in text and also the secure transmission of documents later. You might think a former CIA officer would be cautious about the text he sends to a Chinese spy, but Kevin Mallory was remarkably direct, complaining about the money he was paid and the risk he was taking. Your object is to gain information, he told Michael Yang, and my object is to be paid for.

I'll destroy all electronic records after you confirm receipt, Mallory wrote to Yang. I already destroyed the paper records. I cannot keep these around. Too dangerous. At this point, all the risk is on me. So he says, I'm taking all the risk, but then he goes on a few bubbles later to actually try to transmit additional information to the Chinese. But technology wasn't Mallory's strong suit. He complained to Michael Yang that the phone wasn't working properly. This system sucks. It's too cumbersome, he wrote. I put all these messages and then and you can't read them because you're not logged in the same time. That's a poor system. At this point, prosecutors say Mallory was scared. He'd been

stopped at customs and he feared the CIA and FBI were on to him. Prosecutors say he decided to come up with a cover story and reached out to the CIA, telling them he thought he was being recruited by Chinese spies. The CIA called him in for an interview. My judgment is, and we haven't got through this conversation, that these guys work for Chinese intelligence, so my sense is that they're looking for government secrets, U.S. government secrets at some level. In this meeting, Mallory admitted the phone was a covert communication device given to him by the Chinese,

but prosecutors say he lied about the classified documents he'd already sent. Did you send them anything on that phone? I sent some tests of some sort just to see if I could do it right, and I couldn't figure it out, and I messed that up. He's trying to control the narrative. So what you have here, likely,

is an attempt to steer the story, to explain away some of the more alerting pieces, while not admitting to the criminal activity of providing the classified information to the Foreign Intelligence Service. We now know that at this point in time, Kevin Mallory has successfully sent the classified table of contents, the classified white paper, and tried to send several other documents unsuccessfully. Mallory offered to bring in the phone to be examined by the CIA, confident that all his messages to Michael Yang had automatically been deleted. So he believes everything he sent has disappeared from the device.

So that's why he's willing to bring the device in. We have every reason to believe that he believed at the time that those communications would be gone. Two weeks later, Mallory arrived at a hotel room in Ashburn, Virginia for a second meeting with the CIA. When he got there, the FBI was waiting for him, along with a computer forensic examiner. He agreed to show them how the phone worked. When he goes to demonstrate it, up on the screen where he expects to have his whole chat history basically deleted, up on the screen comes some of the chat history. The FBI recorded the meeting.

I'm surprised it kept this much. So you may have commented you're surprised that there was this much there. Right, because in the past, maybe it's the screen size, because some of it just disappeared. One of the most incriminating messages that appeared on the phone was Mallory planning another trip to China. I can also come in the middle of June, he wrote. I can bring the remainder of the documents I have at that time. From the FBI perspective, this is a pivotal moment in the investigation. Four weeks later, the FBI arrested Kevin Mallory and searched his home.

Hidden in the back of this closet in a junk drawer, agents discovered an SD card wrapped in tin foil on which he'd placed eight secret and top-secret documents, the same ones he scanned at that FedEx store last April. It is our belief that it was intention to take this SD card to China to provide to them. Does the Mallory case fit a pattern that you're seeing coming from Chinese intelligence? Yes. We currently have three pending cases against former intelligence officers, and they're alleged to have been spying on behalf of the Chinese.

It's hard to overstate how unusual it is to have three cases like this ongoing. It's not unusual. It's unprecedented. To me, it's disappointing and it's really hurtful, I think, to everyone to know that we still have people who are willing to betray the U.S. for a few dollars. Bill Evanina is director of the National Counterintelligence and Security Center, a division of the Office of the Director of National Intelligence. He serves as the U.S. government's top counterintelligence official. When it comes to espionage against the United States, does China pose the greatest threat or Russia?

When it comes to espionage, China poses the greatest threat, and it's not even close compared to Russia or Iran or any other country. And if you include economic espionage, industrial espionage, it's not even in the same ballgame. When most people think of espionage, they think of somebody in a trench coat trying to steal a state's secret. What's happening now with China, it's not just about state secrets, it's about technological secrets. That's the prize that China wants. That's correct. It's trade secrets, proprietary data, intelligence, emerging technology, nanotechnology, hybrid,

anything that they can see that is the future, supercomputing, intelligence, emerging technology, nanotechnology, hybrid, anything that they can see that is the future, supercomputing, encryption, those are the issues that they look at. And they have a prioritized schedule that they look at, and they send people forward to go collect that data. John Demers of the Justice Department's National Security Division says since 2011, more than 90 percent of the economic espionage cases they've charged have involved China, which has stolen secrets about everything from genetically modified rice seeds to wind turbine technology. This is a persistent campaign you're seeing.

Yes, very persistent, very sophisticated, very well resourced, very patient, and very broad in scope. Demers says Chinese operatives have intensified their efforts on industries critical to Chinese President Xi Jinping's Made in China 2025 program, a 10-year plan to jump ahead of the United States in aerospace, automation, artificial intelligence, quantum computing, and other cutting-edge industries. I think some people who see this are going to think, well, this is something the U.S. must do as well. The U.S. intelligence community doesn't take trade secrets from foreign companies for the benefit of American companies.

This is not something that we do. As for former CIA officer Kevin Mallory, he continues to deny sending any classified information to the Chinese. This past June, a jury in Virginia found him guilty of conspiracy under the Espionage Act and lying to the FBI. Mallory is currently awaiting sentencing and faces up to life in prison. Malta, you might say, is punching above its weight. The smallest nation in the European Union is home to one of its fastest growing economies. NEMA's voguish growth sector, internet gambling, cryptocurrency, blockchain, artificial intelligence, in Malta is trying to establish itself as a hub.

A mere blip in the Mediterranean, Malta prides itself on this surge and its plucky personality. But as we discovered on a recent visit, there's a fine line between the cutting edge and the margins, the sun and the shadows. Along with old charms and new construction, Malta is earning a reputation for rampant corruption and dubious dealings. And then there's the matter of the assassination of a journalist, Daphne Caruana Galizia, whose revelations cut a little too close to the heart of power. Malta sits as a sun-dappled speck in the Mediterranean. Three small islands, a short ferry ride from Sicily, and not much farther to Libya, the southern gateway to Europe.

It can be hard to get your bearings here. Over the last three millennia, Malta has been conquered or colonized by just about every world power, and each has left its mark. Most of the 500,000 people here are Catholic, a tradition that started early. The Apostle Paul is said to have shipwrecked here in 60 AD. I find this to be a good metaphor of Maltese culture. Mark Anthony Falzone is an anthropology professor and local newspaper columnist. The story is that St. Paul converted the Maltese to Christianity. So that would mean that Malta was one of the first places

to be converted to Christianity, even before Rome. So we would be the original and the best Christians. A small band of crusaders, later known as the Knights of Malta, fended off the mighty Ottomans in the 16th century. Under British rule, the Maltese survived more than 3,000 German and Italian bombing raids in World War II. Malta gained its independence in 1964, and since then, this country, with little heavy industry and not much arable land, has had to figure out a way to get by on its own.

Remnants of its fabled past have made it irresistible to Hollywood producers. Parts of Gladiator were filmed here, And Game of Thrones. Europeans flock here for a budget tan. Oligarchs to dock their super yachts. Malta is already an established hub of online gambling. No more bets, come on. But since taking over in 2013, the current government has sought to refashion the country as a mecca for emerging and complex technologies like cryptocurrency and blockchain.

The 44-year-old prime minister, Joseph Muscat, is the high priest of this new gospel. Welcome to Malta. Welcome to the blockchain island. Thank you. These industries may be thriving in this sunny place, yet they're known to attract more than their fair share of shadowy people. But that's nothing new. For centuries, Malta played host to pirates and smugglers, operating in what Marc-Anthony Falzon calls the center of the fringes. It strikes me there's a certain ingenuity, a certain scrappiness here.

Yes, and scrappiness also means flexibility. Does that also pertain to a willingness to bend rules, a flexibility in that sense? No doubt. Yes, the person who never bends the rules, they are thought of as a bit of a good boy. Which is not a term of endearment. No, a good boy is not a very good thing to be. It's naive. While we have increased... Perhaps in that same entrepreneurial spirit, the government has launched a program, some call it a scheme, to sell passports to the world's super-rich. Have a spare million? You, too, could buy Maltese citizenship. And, as this promotional video shows, the European Union passport that comes with it. As citizens of Malta, successful applicants can enjoy visa-free access to approximately 170 countries.

Who's buying these passports? Russian tycoons, Chinese tycoons, Saudi tycoons, Nigerian tycoons. For Manuel D'Elia, an online journalist and longtime critic of the current government, the program, estimated to have brought in almost a billion dollars, is essentially a Trojan horse, allowing those with dubious aims to breach Europe's borders. Why would they want a Maltese passport? Because they want to go in the rest of the world, hiding where they're really from. Maltese passports give them not only free movement for themselves through European airports, but it gives their money, their capital, free movement throughout Europe.

And free movement to the United States. American airport, you've got that Maltese passport validated by the EU, you go write your passport. Visa free, absolutely. So that's a big reason to have it. Applicants to the Golden Passport Program, as it's come to be known, are supposed to show that they've established residence in Malta for at least a year. But when we checked the listed address for a Russian tycoon, it led us here. Down there in the basement.

To a modest suburb and run-down basement apartment that had been divided in two. Let's just call this what it is. This is a fraud. It is a fraud. It's a fraud. What's worse, it's perpetrated by the state. It's not just sanctioned by the state.

There are other countries in Europe where money can get you a passport, but in tiny Malta, it has helped contribute to the economic boom. And yet if Malta is suddenly flush with cash, in other ways it's bankrupt. At least according to journalist Daphne Caruana Galizia, who spent years chronicling organized crime as well as high-level corruption for Malta's major newspapers and then on her blog Running Commentary. When she launched the site in

2008, her son Matthew says it quickly turned into a must-read. How would you describe her blog, Running Commentary, to someone that hasn't read it before? It was completely revolutionary. She became known simply as Daphne, and just as quickly became a reviled figure in some corners of Malta, vilified by government officials, subjected to libel suits and to death threats. Do you ever think to say, mom, you got to stop the blog, you've got to stop poking and provoking, this is getting dangerous? Of course she felt fear and you could see it. She knew that the

powerful people that she was writing about were closing in on her. They were using every possible means to shut her down. She knew that, and that frightened her deeply. Then, on the afternoon of October 16th, 2017, Matthew was sitting across from his mother at the dining room table in the family home as she finished a blog post. There are crooks everywhere you look now, she wrote. The situation is desperate. Just before 3 p.m., she left the house to go to the bank. And then what seemed like 30 seconds later, I hear the explosion. And it was just so loud. Daphne's car made it less than a mile down the road through the valley when a powerful bomb placed under her seat was detonated,

sending thick black smoke into the air. Matthew ran toward the wreckage. So you think this is where? I think this is where the bomb went off. It's been marked by the forensic team. This is where a lot of the flesh and metal and plastic was. The car ended up in a field 100 yards away, consumed by a fireball. Matthew's first instinct was to try and get his mother out. I remember walking up to the driver's side and just seeing fire. I didn't see anything else inside the car. There are a lot of ways to kill someone. What do you think the significance of a car bomb this powerful was? Obviously, it was a way of killing my mother, a way of sending a message to us, to our family, and a way of sending a message to anyone else who was thinking of doing anything

about the really grand corruption in this country. This was a symbolic gesture. It was. For the mourners who attended Daphne's funeral, her assassination was symbolic of just how corroded Malta had become under a government that she claimed doesn't just tolerate corruption, but encourages it. The list of scandals she exposed and relentlessly pursued is too numerous to catalog here and includes allegations of cronyism, bribery, and money laundering. But there's one revelation that stands out, involving a murky Maltese bank recently shuttered by European authorities. It allegedly held accounts for some of Malta's most well-connected,

including the Prime Minister's Chief of Staff, Keith Schembrey. As Daphne chronicled, Schkembrey is alleged to have taken kickbacks for brokering Malta's billion-dollar national energy deal and for taking payoffs to help Russian millionaires snag those coveted Maltese passports. Keith Shkembrey is still in business. He's the Chief of Staff of the Prime Minister. He's the most powerful man in this government. He went to work today. He went to work today. He went to work today. With this cloud hovering over him.

Well, this is what impunity is about. This is why I'm angry. Schembri denies any wrongdoing, but leaked findings into the passport kickback allegations by Malta's own financial watchdog determined that there was, quote, reasonable suspicion of money laundering and or the existence of proceeds of crime.

Malta's justice officials are looking into both sets of allegations. What's more, there have been multiple inquiries by European authorities, all raising serious questions about corruption in Malta. We put all this to Glenn Bedingfield, a local member of parliament and former advisor to the prime minister. What's your level of concern? I don't have any concerns. You have no concerns about corruption? No, because I think that there is a smear campaign trying to hit the government. All of this is a politically charged smear campaign? It is a politically charged smear campaign. The EU, the European authorities. Can you quote from an EU report? I can quote from an EU report right now.

This is Ana Maria Gomez, an MEP. Oh, oh, oh, Ana Maria Gomez. We are taking up Malta in the European Parliament. Ana Maria Gomez is a Portuguese member of the European Parliament, leading an EU inquiry into the rule of law in Malta. She is part of a growing chorus of officials who see the country as a problem child on the continent. The system is basically flawed because the prime minister

ultimately controls the attorney general, who also controls the police. Nobody is being tried. And of course, the sense of impunity is being fueled by this fact. And it affects us all. Something's rotten in the state of Malta, I hear you say. Yes, and such a beautiful island and such a great people, such a proud history. But I must say that at the moment, indeed, the political atmosphere is rotten. We repeatedly asked to speak with Prime Minister Muscat, but were told he didn't have time. Instead, the government put forward the finance minister, Edward Cicluna. The sheer volume, the circumstances, the fact patterns,

can you not see how people looking at Malta from the outside really wonder about integrity and corruption here? Well, if they want to know more about Malta, they'll find out that it's not that picture you're depicting. It looks bad, but it's not. Not the way it's been depicted? Definitely not. I want to be clear. This is a depiction based on multiple different authorities inside in Europe. They're all allegations. They're allegations that have come out of investigations. These aren't ad hominem attacks.

I'm not trying to downplay allegations. Allegations are serious, but they're still allegations. You know, it's up to the courts and their procedures and their experts to decide. The supporters of Daphne Caruana Galizia have no faith in these experts and procedures, especially when it comes to solving her murder. After a high-profile government raid,

three men were detained, figures she didn't know and never wrote about. But few doubt the assassination was ordered by one of her many powerful enemies. How will you know when you have justice? When all the corrupt people that she was reporting on, treating our country as a gigantic trough which they're feeding from for years. When they've paid the price for that, then there will be justice for my mother's stories. But there also has to be justice for her murder, too. The old ramparts designed to protect Malta from conquest and colonization still stand tall. But outside forces that once might have invaded the country now look on with concern, waiting to see whether

Malta can confront itself and move in from the center of the fringes. it's safe to say that wolves have an image problem since ancient times they've been portrayed in fables and legends and the bible as fearsome voracious predators the story of the big bad wolf may be the most memorable and frightening of all the fairy tales told by the brothers grim that grim reputation actually produced a very real result in America in the early 20th century. Wolves were wiped off the landscape, trapped, poisoned, and hunted until there was not a single one left in the American West. When the National Park Service decided to bring wolves back to Yellowstone Park in the 1990s, it followed a bitter debate between wildlife groups who wanted them restored and ranchers who most definitely didn't.

Two decades later, the wolves of Yellowstone still stir strong emotions, but they've also had an impact that almost no one saw coming. In the dead of winter, Yellowstone Park is a beautiful but forbidding place. Howling wind, sub-zero temperatures, six feet of snow. Just finding enough food to survive is a profound struggle for every animal. Waterfowl, bison, elk, foxes, they all have to work for every morsel. Yellowstone was the world's first national park, founded in 1872, and it remains one of the most visited. Millions of people come here every summer, but they used to pretty much leave it to the wildlife in the winter, until the wolves came back.

Oh, they're behind the tree. Now, reports of a wolf sighting can produce a traffic jam along the 150-mile stretch of road the Park Service keeps open in the winter. Oh, we got a wolf. Oh, neat. Visitors, with spotting sc scopes gather in absolutely frigid weather for a momentary, long-distance view. Bill, these folks came from Germany to see wolves. Doug Smith runs the Yellowstone Wolf Research Program for the Park Service.

And no one predicted this would happen. Actually, you know, we... The appeal of coming in to see the wolves? Yes, and it truly has been amazing, and hundreds of thousands of people a year, we estimate, come here just to see wolves. Wolf tourism pumps $35 million a year into the local economy, much of it spent in the winter, which is prime wolf-watching time. We've seen wolves all three days that we've been out. Glenn Mai is a retired FBI agent from

Arlington, Virginia. Kathy Lombard is a retired cop from New Hampshire. They both paid an outfitter thousands of dollars to take them wolf-watching. So what is it about wolves that bring you all the way out here from New Hampshire to sit out here and just hope for the chance to see them? They've been able to bring wolves back into Yellowstone and they've thrived so that's just an awesome thing to see. It was January 12, 1995 when the first gray wolves captured in Canada were carried into Yellowstone Park. It drew both national attention and fierce opposition. So much that armed guards were posted to protect those wolves.

So the first wolves released into Yellowstone Park were released right back here in this thicket. Yes, so a total of 41 over three years. How many are in the park now? We've got 96 in 10 packs, and it's been roughly 100 wolves the last 10 years. Very stable. Those 10 packs of about 10 wolves each are without a doubt the most closely observed and studied wolves on earth. Our goal is to keep touch with each pack. That's our goal. They do that by trying to attach radio collars to at least two wolves in each of the park's packs. So you fly out in the airplane,

find wolves in the open. That airplane radios a waiting helicopter on the ground. That helicopter flies out with a gunner in the back seat. That gunner is almost always Smith himself. And you fly up alongside that wolf and you shoot a tranquilizing dart into it. Five minutes it goes down, we process the wolves, we take blood, we measure them, we look at their health and we attach a radio collar and then we follow them for their life hopefully. That life, by the way, typically lasts about five years. Yellowstone wolves are fierce and territorial. The leading cause of death is attacks from other wolves. And their look is uncontrollable. That look says,

I ain't going to conform to your rules and I'll die before I do. And that's powerful. That is a location of a wolf. Data from the radio callers has helped Smith's team to learn volumes about wolf behavior. Let me see where the boulder is by itself. It also helps all those wolf watchers find them. Park Service employee Rick McIntyre is out every day listening for signals. So that is from a black male wolf, 1107.

And then spreading the word. Would you like to see a gray wolf? I would love to. Okay, there you go. So it's a little bit right of center. Oh, yeah. Oh, look, here comes the whole pack. Wow.

So see if you can count them all. There would be two grays and six blacks. Four, five, six black ones and the white one that went by. And there should be a second gray. How about that? We had spotted the Junction Butte pack along a ridgeline about two miles away. Like most packs, it's led by an alpha male and an alpha female, the only two wolves in a pack who mate

with each other. The gray alpha female is still leading to the right. Oh, yeah. And you see how the ones behind her are playing. Uh-huh. She's determined to lead them to the west. They're running along the top, right along the ridge. Yeah. That's magnificent. We can see these wolves from the ground and it's been a sensation. So we've learned a lot about pack dynamics and personalities and how social they are. What do you mean? Describe that for me. They want to be together. They're a pack animal. So the power of the wolf is the pack. Nowhere is that power more evident than when a wolf pack is on the hunt for elk, its favorite prey. They work together because they have to. Your average wolf weighs 100 pounds or so, but your average prey animal is much bigger.

A bull elk is 750 pounds. A cowlick is 500. A cow elk's 500. So how's a roughly 100 to 120-pound animal going to take that down? They do it, Doug Smith says, both by coordinating their attack and by zeroing in on vulnerable prey. They're going to take the weak. So they're making their living off of calf elk, old elk, injured elk. Without wolves, there was an overpopulation of elk in Yellowstone.

As wolves have cut the size of those herds, there's been an unexpected side effect. Plants that elk feed on have made a comeback, which has in turn produced benefits for other species. All the little trees have come back since wolf recovery. This gully filled with shrubs has all come back since wolf recovery. And the wolves are a factor in all of that. Very simply put, wolves eat elk. Elk eat this. When the elk get reduced, they eat less.

So beavers and songbirds can respond to the growth in that vegetation. Doug Smith is quick to say that it's not as simple as he just made it sound. But that hasn't stopped some environmentalists from declaring wolves the saviors of Yellowstone's ecology. There's some people who will try to convince you that wolves could probably solve Mideast peace and world hunger. Randy Newberg is a Montana hunter who hosts a TV show and podcast for hunters. He remembers how emotional the debate over reintroduction was between wolf haters and wolf lovers. Wolves are wolves. They aren't the big bad wolf and they don't have a rainbow shooting out their ass like everyone would think they do. There's something romantic

about a wolf, right? Unless you've seen it chewing on a live cow. Eric Costa's family has been raising cattle and sheep on this Montana ranch for 100 years. He says he was worried from the moment the first wolves were brought back to Yellowstone, which is about 100 miles to the south. You know, they weren't going to stay in the park. They're a wild animal. They'd go where they want to go. I'm sure you knew it was only a matter of time before they were going to get here. Oh, yes. There was no doubt.

And there was a set of tracks. Eric Colston knew that wolves would follow migrating elk out of Yellowstone and onto his ranch, and that they'd attack his livestock if given the chance. He started hiring range riders to watch over his cattle, and he bought guard dogs to help keep wolves away from his sheep. Live sheep pay for things. Live cattle pay for things. Dead ones don't. His defensive measures have kept wolves away from his livestock, but neighboring ranchers have lost both cattle and sheep to wolves.

The thing that's never monitored when I talk to these people is the lost nights of sleep, the nervousness. I saw a wolf track on my place today, or I actually saw a wolf. Wolves are around. You can't measure or compensate for that. Are wolf attacks on livestock a serious problem? No. It's rare that it happens, but if it's happening to you, it's a serious problem. It was that fear of wolf attacks that drove ranchers and settlers to eradicate them in the early 20th century. After the

Endangered Species Act was passed in 1973, wolves were among the first to be listed and a campaign began to restore them to Yellowstone Park. After that happened in the 90s, wolves quickly spread out of Yellowstone and into neighboring states, so many that there are now nearly 2,000 in Montana, Wyoming, and Idaho. After a long and bitter legal battle, those states finally won the authority to manage and sometimes kill wolves outside the national park. Has this management of the wolves helped to lessen some of those passions, to calm some of those emotions? I think so. So to have wolves, you have to kill the wolves? In some situations, yes.

The first situation is cut and dried. Any wolves that attack livestock are immediately killed themselves. I think that's helped a lot, at least with the ranching community. People feel better if they're not powerless to deal with something. And then wolves are hunted. There's a hunting season on wolves. All three states have them. So having wolves be hunted has probably increased people's willingness to share the landscape with them. Looks like there's at least two of them.

Randy Newberg is living proof of that. He filmed a wolf hunt a few years ago for his TV show. It took him 11 days and 100 miles of trudging and tracking through the snow. You went out looking for a wolf and saw how smart they are, how cunning they are, how athletic they are. Yeah. If you want to increase your respect for wolves, go and chase them out on their landscape. Hunters and ranchers and avid wolf watchers rarely see eye to eye. But they now agree on at least one thing.

We've got a gray. Wolves are back in Yellowstone for good. Oh, my God, yes. People love this. You know, we live in an artificial world. It's stores and cars and roads and buildings. Wolves are real. And people crave it.

They love it. We almost have this thirst for something real now. I'm Sharon Alfonsi. Thanks for joining us.