Israel, Neo-Con Ties At Core Of New Spy Probe

by Jim Lobe

(IPS) -- The burgeoning probe over claims that a Pentagon official passed highly classified secrets to a Zionist lobby group is part of a much broader network of FBI and Pentagon investigations of prominent U.S. neo-conservatives and their ties to Israel dating back some 30 years, according to knowledgeable sources.

The sources, who asked to not be identified, said the FBI has been intensively reviewing a series of past counter-intelligence probes that were started against several high-profile neo-cons but never followed up with prosecutions, due to political pressure, to the great frustration of counter-intelligence officers.

Some of these past investigations involve top current officials, including Deputy Secretary of Defense Paul Wolfowitz; Undersecretary of Defense for Policy Douglas Feith, whose office appears to be the focus of the most recently disclosed inquiry; and Richard Perle, who resigned as Defense Policy Board (DPB) chairman last year.

All three were the subject of a lengthy investigative story by Stephen Green published by the progressive newsletter 'Counterpunch' in February. Green is the author of two books on U.S.-Israeli relations, including 'Taking Sides: America's Secret Relations with a Militant Israel', which relies heavily on interviews with former Pentagon and counter-intelligence officials.

At the same time, another Pentagon office concerned with the transfer of sensitive military and dual-use technologies has been examining the acquisition, modification and sales of key hi-tech military equipment to third parties by Israel obtained from the United States, in some cases with the help of prominent neo-conservatives who were then serving in the government.

Some of that equipment has been sold by Israel -- which in the last 20 years has become a top exporter of the world's most sophisticated hi-tech information and weapons technology -- or by Israeli middlemen, to Russia, China and other U.S. strategic rivals. Some of it has also found its way onto the black market, where terrorist groups -- possibly including al-Qaeda -- obtained bootlegged copies, according to these sources.

Of particular interest in that connection are derivatives of a powerful case-management software called PROMIS that was produced by INSLAW, Inc in the early 1980s and acquired by Israel's Mossad intelligence agency, which then sold its own versions to other foreign intelligence agencies in the Middle East, Asia and Eastern Europe.

But these versions were modified with a "trap door" that permitted the seller to spy on the buyers' own intelligence files and possibly the U.S., according to a number of published reports.

A modified version of the software, which is used to monitor and track files on a multitude of databases, is believed to have been acquired by al-Qaeda on the black market in the late 1990s, possibly facilitating the group's global banking and money-laundering schemes, according to a 'Washington Times' story of June 2001.

According to one source, Pentagon investigators believe it possible that al-Qaeda used the software to spy on various U.S. agencies that could have detected or foiled the Sept. 11, 2001 attack.

The FBI is reportedly also involved in the Pentagon's investigation, which is overseen by Deputy Undersecretary of Defense for International Technology Security John A "Jack" Shaw with the explicit support of Defense Secretary Donald Rumsfeld.

The latest incident is based on allegations that a Defense Intelligence Agency (DIA) career officer, Larry Franklin -- who was assigned in 2001 to work in a special office dealing with Iraq and Iran under Feith -- provided highly classified information, including a draft on U.S. policy towards Iran, to two staff members of the American Israel Public Affairs Committee (AIPAC), one of Washington's most powerful lobby groups. One or both of the recipients allegedly passed the material to the Israeli embassy.

It would be a mistake to see Franklin as the chief target of the current investigation, according to sources, but rather he should be viewed as one piece of a much older and broader network.

Franklin has not commented on the allegation, and Israel and AIPAC have strongly denied any involvement and say they are co-operating fully with FBI investigators.

The office in which Franklin has worked since 2001 is dominated by staunch neo-conservatives, including Feith himself. Close to Israel's right-wing Likud party and headed by William Luti, a retired Navy officer who worked for DPB member Newt Gingrich when he was speaker of the House of Representatives, it played a central role in building the case for war in Iraq.

Part of the office's strategy included working closely with the Iraqi National Congress (INC) led by now-disgraced exile Ahmad Chalabi, and the DPB members in developing and selectively leaking intelligence analyses that supported the now-discredited thesis that former Iraqi President Saddam Hussein had close ties to al-Qaeda.

Feith's office enjoyed especially close links with Vice President Dick Cheney's chief of staff, I Lewis Libby, to whom it "stovepiped" its analyses without having them vetted by professional intelligence analysts in the Central Intelligence Agency (CIA), the DIA, or the State Department Bureau for Intelligence of Research (INR).

Since the Iraq war, Feith's office has also lobbied hard within the U.S. government for a confrontational posture vis-ˆ-vis Iran and Syria, including actions aimed at destabilising both governments -- policies which, in addition to the ousting of Hussein, have been strongly and publicly urged by prominent, hard-line neo-conservatives, such as Perle, Feith and Perle's associate at the American Enterprise Institute (AEI), Michael Ledeen, among others.

Despite his status as a career officer, Franklin, who is an Iran specialist, is considered both personally and ideologically close to several other prominent neo-conservatives, who have also acted in various consultancy roles at the Pentagon, including Ledeen and Harold Rhode, who once described himself as Deputy Secretary of State Paul Wolfowitz's chief adviser on Islam.

In December 2001, Rhode and Franklin met in Europe with a shadowy Iranian arms dealer, Manichur Ghorbanifar, who, along with Ledeen, played a central role in the arms-for-hostages scandal involving the Reagan administration, Israel and Iran in the mid-1980s that became known as the "Iran-Contra Affair."

Ledeen set up the more recent meetings that apparently triggered the FBI to launch its investigation, which has intensified in recent months amid reports that Chalabi's INC, which has long been championed by the neo-conservatives, has been passing sensitive intelligence to Iran.

Feith has long been an outspoken supporter of Israel's Likud Party, and his former law partner Marc Zell has served as a spokesman in Israel for the Jewish settler movement on the occupied West Bank. Most of the neo-cons are Jewish.

He, Perle and several other like-minded hardliners participated in a task force that called for then-Israeli Prime Minister Binyamin Netanyahu to work for the installation of a friendly government in Baghdad as a means of permanently altering the balance of power in the Middle East in Israel's favor, permitting it to abandon the Oslo peace process, which Feith had publicly opposed.

Previously, Feith served as a Middle East analyst in the National Security Council in the administration of former President Ronald Reagan (1981-89), but was summarily removed from that position in March 1982 because he had been the object of a FBI inquiry into whether he had provided classified material to an official of the Israeli embassy in Washington, according to Green's account.

But Perle, who was then serving as assistant secretary of defense for international security policy (ISP), which, among other responsibilities, had an important say in approving or denying licenses to export sensitive military or dual-use technology abroad, hired him as his "special counsel" and later as his deputy, where he served until 1986, when he left for his law practice with Zell, who had by then moved to Israel.

Also serving under Perle during these years was Stephen Bryen, a former staff member of the Senate Foreign Relations Committee and the subject of a major FBI investigation in the late 1970s for offering classified documents to an Israeli intelligence officer in the presence of AIPAC's director, according to Green's account, which is backed up by some 500 pages of investigation documents released under a Freedom of Information request some 15 years ago.

Although political appointees decided against prosecution, Bryen was reportedly asked to leave the committee and, until his appointment by Perle in 1981, served as head of the Jewish Institute for National Security Affairs (JINSA), a group dedicated to promoting strategic ties between the United States and Israel and one in which Perle, Feith and Ledeen have long been active.

In his position as Perle's deputy, Bryen created the Defense Technology Security Administration (DTSA) which enforced regulations regarding technology transfer to foreign countries.

During his tenure, according to one source with personal knowledge of Bryen's work, "the U.S. shut down transfers to western Europe and Japan (which were depicted as too ready to sell them to Moscow) and opened up a back door to Israel" -- a pattern that became embarrassingly evident after Perle left office and the current deputy secretary of state, Richard Armitage, took over in 1987.

Soon, Armitage was raising serious questions about Bryen's approval of sensitive exports to Israel without appropriate vetting by other agencies.

"It is in the interest of U.S. and Israel to remove needless impediments to technological cooperation between them," Feith wrote in 'Commentary' in 1992. "Technologies in the hands of responsible, friendly countries facing military threats, countries like Israel, serve to deter aggression, enhance regional stability and promote peace thereby."

Perle, Ledeen, and Wolfowitz have also been the subject of FBI inquiries, according to Green's account. In 1970, one year after he was hired by Senator Henry "Scoop" Jackson, an FBI wiretap authorized for the Israeli Embassy picked up Perle discussing classified information with an embassy official, while Wolfowitz was investigated in 1978 for providing a classified document on the proposed sale of a U.S. weapons system to an Arab government to an Israeli official via an AIPAC staffer.

In 1992, when he was serving as undersecretary of defense for policy, Pentagon officials looking into the unauthorized export of classified technology to China, found that Wolfowitz's office was promoting Israel's export of advanced air-to-air missiles to Beijing in violation of a written agreement with Washington on arms re-sales.

The FBI and the Pentagon are reportedly taking a new look at all of these incidents and others to, in the words of a 'New York Times' story Sunday, "get a better understanding of the relationships among conservative officials with strong ties to Israel."