“You failed, Wen Ho!” agent Carol Covert shouted at him. “You failed everything!” When that didn’t work, Covert tried to threaten him, telling him he’d lose his job, face public humiliation–or possibly worse. “Do you know who the Rosenbergs are?” she asked, taunting him with the fate of the husband-and- wife spy team executed in 1953.

But Lee never buckled. A transcript of the hourlong grilling, which was secretly recorded, shows Lee seemingly confused by the agents’ barrage of questions. Despite his denials of wrongdoing, Lee was indicted on 59 counts of violating the Atomic Energy Act and thrown into solitary confinement. He remained imprisoned until September 2000, when federal Judge James Parker ordered him released as part of a plea deal. Parker scolded Justice and Energy Department officials, saying they had overstated the evidence against Lee and “embarrassed our nation.”

Now Wen Ho Lee, retired and living in New Mexico, is telling his side of the story. In a new book, “My Country Versus Me,” Lee recounts his run-in with the Feds, and puts his spin on lingering questions about his own handling of classified material. Lee says throughout his ordeal he was determined not to be intimidated. “I wasn’t going to let… the government break my spirit. I kept telling myself, I will never give up, I will never surrender to their dirty tricks and lies.” Today, as Justice rounds up thousands of people of Middle Eastern descent in its hunt for terrorists, Lee’s story stands as a cautionary tale about the pitfalls of unbridled police power. Three years ago, U.S. officials were in a frenzy over fears that the Chinese government had stolen our nuclear secrets. No Chinese theft was ever proved; no spy was ever found.

Lee is pursuing a lawsuit against the U.S. government for violating his privacy rights. New documents, recently obtained by his lawyers and reviewed by NEWSWEEK, show that top Justice Department officials had concerns from the outset. In an internal memo, John J. Dion, chief of the department’s internal-security section, wrote that the aggressive tactics against Lee “suggest that the government intentionally revealed facts about the investigation to the news media in order to pressure Lee to confess, or out of vindictiveness toward Lee for not confessing.” Lee, Dion warned, “will certainly… paint himself as a victim of Washington politics and government overreaching.”

But Lee wants more than his day in court. “I think I should get a pardon from the president,” he told NEWSWEEK. “I think the government owes me an apology.” He’s not likely to get either. For all the government’s excesses, Lee wasn’t blameless. As part of his deal with prosecutors, Lee pleaded guilty to one felony–downloading classified nuclear data onto portable tapes and then storing them on a vulnerable, unclassified computer. Lee knew he could be punished for what he’d done. When investigators were closing in on him in December 1998, Lee erased the data from the unclassified computer. The classified tapes were never found. Lee says he tossed them into a Dumpster.

In his NEWSWEEK interview, Lee insisted that he made the tapes because he feared a computer crash at Los Alamos would wipe out his work. “The purpose [was] to protect my file, to make sure my file don’t get lost,” he said in halting English. Yet new evidence suggests that he may have had other reasons. In a recently published book, “A Convenient Spy: Wen Ho Lee and the Politics of Nuclear Espionage,” reporters Dan Stober and Ian Hoffman write that Lee made repeated trips to his native Taiwan. The last was in December 1998, when he was invited to give a speech to Asiatek, a high-tech firm that, according to FBI documents, had close ties to the Taiwanese Ministry of Defense. When Lee asked for permission to go on the trip, he was turned down. But he went anyway, accepting free air fare from the company.

For the first time, Lee acknowledged to NEWSWEEK that he was exploring a job with Asiatek: “After I retire, I hope I can do some consultant work.” Stober and Hoffman conclude that Lee kept his library of secret nuclear tapes as an “insurance policy” for a future job. (Lee denies it.)

That would be a far cry from the government’s belief that Lee was a communist spy. But it would hardly make him a hero, either. What irritates the Feds is that Lee is making money from his story–up to $650,000 for the book and a TV-movie deal. But the Feds may have only themselves to blame. It was their over-the-top tactics, after all, that turned Lee’s story into a box-office tale.