Cloak and Swagger

To Washington's small and sometimes fractious community of Iran experts, it was becoming obvious: What to do about Iran and its fast-developing nuclear program was set to rival Iraq as the most pressing foreign-policy challenge for the person elected president in 2004. By the spring and early summer of this year, the city was awash in rival Iran task forces and conferences. Some recommended that Washington engage in negotiations with Tehran's mullahs on the nuclear issue; they drew scorn from the other side, which preached regime change or military strikes.

In late July, as this debate raged, a Pentagon analyst named Larry Franklin telephoned an acquaintance who worked at a pro-Israel lobbying group, the American Israel Public Affairs Committee (AIPAC). The two men knew each other professionally from their long involvement in the Washington Iran and Iraq policy debates. A Brooklyn-born Catholic father of five who put himself through school, earning a doctorate, as an Air Force reservist, Franklin had served as a Soviet intelligence analyst at the Defense Intelligence Agency until about a decade ago, when he learned Farsi and became an Iran specialist. At their July meeting, Franklin told the AIPAC employee about his frustration that the U.S. government wasn't responding aggressively enough to intelligence about hostile Iranian activities in Iraq. As Franklin explained it, Iran had sent all of its Arabic-speaking Iranian agents to southern Iraq, was orchestrating attacks on Iraqi state oil facilities, and had sent other agents to northern Iraq to kill Israelis believed to be operating there. Iran had also transferred its top operative for Afghanistan to the Iranian Embassy in Baghdad. The move, Franklin implied, signified Tehran's intention to cause more trouble in Iraq.

A couple of weeks after this meeting, in mid-August, the AIPAC official was visited by two FBI agents, who asked him about Franklin. From the line of questioning, it wasn't clear to the AIPAC official whether Franklin was being investigated by the FBI for possible wrongdoing or if he was simply the subject of a routine background investigation for renewal of his security clearance.

But on August 27, when CBS broke the story that the FBI was close to arresting an alleged “Israeli mole” in the office of the Pentagon's No. 3 official, Douglas Feith, it became clear that Franklin was in trouble. News reports said that the FBI had evidence that Franklin had passed a classified draft national-security presidential directive (NSPD) on Iran to AIPAC. What's more, reports said, the FBI wasn't just interested in Franklin. For the past two years, it had been conducting a counterintelligence probe into whether AIPAC had served as a conduit for U.S. intelligence to Israel, an investigation about which National Security Adviser Condoleezza Rice was briefed shortly after the Bush administration came into office.

In the flurry of news reports that followed, the scope of the FBI investigation seemed potentially enormous. Citing senior U.S. officials, The Washington Post reported that “the FBI is examining whether highly classified material from the National Security Agency … was also forwarded to Israel,” and that the investigation of Franklin was “coincidental” to that broader FBI probe. Time magazine reported that Franklin had been enlisted by the FBI to place a series of monitored telephone calls (scripted by the FBI) to get possible evidence on others, including allies of Ahmad Chalabi, a favorite of Pentagon neoconservatives. Chalabi was alleged to have told his Iranian intelligence contacts that the United States had broken their communications codes -- a breach that prompted a break in U.S. support for Chalabi last spring -- and the FBI wanted to know who had shared that highly classified information with Chalabi. What's more, an independent expert on Israeli espionage said he had been interviewed by the FBI in June and in several follow-up calls, and that the scope of the senior FBI investigators' questioning was broad and extremely detailed.

In the wake of the first news reports, AIPAC strongly denied that any of its employees had ever knowingly received classified U.S. information. Israel also categorically denied that it had conducted intelligence operations against the United States since the case of Jonathan Pollard, a U.S. Navy intelligence analyst who was convicted of spying for Israel in 1987.

At the time the CBS report aired in late August -- incidentally, on the Friday evening before the opening of the Republican national convention -- custody of the Franklin investigation was being transferred from the head of the FBI counterintelligence unit, David Szady, to U.S. Attorney Paul McNulty, a Bush appointee, in Alexandria, Virginia, as the case moved to the grand-jury phase.

And then, in mid-September, news of the Franklin investigation went dark.

* * *

The classified document that Franklin allegedly passed to AIPAC concerned a controversial proposal by Pentagon hard-liners to destabilize Iran. The latest iteration of the national-security presidential directive was drafted by a Pentagon civilian and avid neocon, Michael Rubin, who hoped it would be adopted as official policy by the Bush administration. But in mid-June, Bush's national-security advisers canceled consideration of the draft, partly in response to resistance from some at the State Department and the National Security Council, according to a recent memo written by Rubin and obtained by The American Prospect. No doubt also contributing to the administration's decision was the swelling insurgency and chaos of postwar Iraq.

Rubin, in his early 30s, is a relative newcomer to the neoconservative circles in which he is playing an increasingly prominent role. Once the Iraq and Iran desk officer in the Pentagon's Office of Special Plans and later a Coalition Provisional Authority adviser in Iraq, these days the Yale-educated Ph.D. hangs his hat at the American Enterprise Institute (AEI) and serves as editor for controversial Middle East scholar Daniel Pipes' magazine, The Middle East Quarterly.

In an article published in the Republican-oriented quarterly Ripon Forum in June, Rubin suggests that the administration resolve its Iran waffling by turning against the current regime. “In 1953 and 1979,” he wrote, “Washington supported an unpopular Iranian government against the will of the people. The United States should not make the same mistake three times.” In other words, President Bush should step up his public condemnation of the Iranian regime and break off all contact with it in hopes of spurring a swelling of the Iranian pro-democracy movement. In short, Rubin, like his fellow Iran hawks, urges the administration to make regime change in Iran its official policy.

This invocation of “moral clarity” has a long intellectual pedigree among neoconservatives. It's the same argument they made to Ronald Reagan about the Soviet Union more than 20 years ago. “If we could bring down the Soviet empire by inspiring and supporting a small percentage of the people,” Michael Ledeen, a chief neoconservative advocate of regime change in Iran and freedom scholar at AEI, recently wrote in the National Review, “surely the chances of successful revolution in Iran are more likely.”

Was it to this end that Franklin was allegedly observed by the FBI passing the draft NSPD on Iran to AIPAC? Was he trying to inform AIPAC, or Israel, about the contents of the draft NSPD? Or rather, and perhaps more plausibly, was he trying to enlist the powerful Washington lobbying organization in advocating for a Iran-destabilization policy? In other words, is the Franklin case really about espionage, or is it a glimpse into the ugly sausage-making process by which Middle East policy gets decided in Washington and, in particular, in the Bush administration?

* * *

Arguably past the apogee of its power, AIPAC nonetheless remains one of Washington's most influential organizations. Successor to the Eisenhower-era American Zionist Council of Public Affairs, AIPAC came into its own during the Reagan years, thanks largely to the efforts of former Executive Director Thomas Dine. When Dine assumed his post in 1981, the organization had an annual budget of a little more than $1 million, about two dozen employees, and 8,000 members; when he left in 1993, a budget of $15 million was being administered by a staff of 158, and the committee had 50,000 members.

An assiduous networker and fund-raiser, Dine also quickly became indispensable to the Reagan White House as a promoter of various neoconservative foreign-policy initiatives. He also forged alliances between AIPAC and other interests, including the Christian right. (Another former AIPAC executive director, Morris Amitay, has long been active in neoconservative ventures, as both a business partner to Feith and Richard Perle and co-founder, with Michael Ledeen, of the Coalition for Democracy in Iran.) By the mid-'80s, AIPAC had been a prime mover in the defeat or crippling of initiatives and legislators not to its liking, and the passage of billions in grants to Israel. It had also taken on an increasingly pro-Republican (and pro-Likud) tilt.

While many regarded AIPAC's power as lessened during the Clinton administration, since 2001 AIPAC has been powerful enough that even the Bush administration couldn't get the committee and its congressional allies to tone down language in a 2002 resolution in support of Israeli military actions against the Palestinians. AIPAC's 2002 annual conference included 50 senators, 90 representatives, and more than a dozen senior administration officials; this year's conclave boasted President Bush himself, plus House Majority Leader Tom DeLay and an array of State and Defense department officials.

But while AIPAC is a powerhouse, it is not clear that it would have been the perfect vehicle for the kind of Iran-destabilization lobbying that some in Washington have been pushing. There are a wide variety of Israeli positions on how to deal with Iran. Many of Washington's Middle East hands who are pro-Israel believe destabilization will not likely succeed, and they fear it will not deal with what they consider the real threat from Iran: nuclear weapons.

“If you mean trying to promote the peaceful overthrow of the regime in Iran, I think the prospects for success are highly uncertain,” says Patrick Clawson, deputy director of the Washington Institute for Near East Policy, a pro-Israel think tank. Pro-Israel activists in Washington want to make sure that the United States considers Iran's nuclear program first and foremost an American problem, the response to which could include, if necessary, air strikes against Iran's nuclear facilities. Iran's nuclear program, one such activist recently told the Prospect, “has to be seen as Washington's problem.”

There are other competing positions within the Israel-policy community. One Israeli official in Washington this summer for diplomatic meetings discussed regime change in Iran with a reporter from The American Prospect on the condition that his identity not be disclosed. He believes that Iran is ripe for democratic revolution, that it has one of the most pro-Western populations in the region, and that Iranian opposition forces would be electrified by a vigorous show of U.S. presidential support. But he believes that any sort of military intervention in Iran would set back considerably these promising regime-change forces. Still another group of Israeli policy-makers seem more inclined toward a military option, as evidenced by Israel's well-publicized purchase of 500 “bunker-buster” bombs from the United States in September and its failed efforts to launch a spy satellite to monitor Iran's nuclear-program developments.

Yet another policy position became evident in Seymour Hersh's article in The New Yorker in June, in which Hersh reported that Israeli Prime Minister Ariel Sharon, sensing that the U.S.–created chaos in Iraq could leave an opening for anti-Israel efforts in Iran, was pursuing a “Plan B” that had Israeli operatives covertly training and equipping Kurds in Iraq, Iran, and Syria for possible future covert action to counter any such measures. As Hersh reported: “Israeli intelligence and military operatives are now quietly at work in Kurdistan, providing training for Kurdish commando units and, most important in Israel's view, running covert operations inside Kurdish areas of Iran and Syria. … Some Israeli operatives have crossed the border into Iran, accompanied by Kurdish commandos, to install sensors and other sensitive devices that primarily target suspected Iranian nuclear facilities.”

The Israeli government insisted the story wasn't credible, and that it was sourced by Turkey, which is panicked, as ever, about foreign designs on Kurdistan. But a source told the Prospect that Franklin expressed the conviction that the United States has intelligence that affirms Hersh's report to be largely accurate. A second former U.S. diplomatic official who recently visited the area told the Prospect that there are Israeli intelligence officials operating in Kurdish Iraq as political advisers, and others under the guise of businessmen.

All of which raises questions, like what exactly was in the draft NSPD that Rubin wrote and Franklin allegedly shared with AIPAC? And does the destabilization plan pushed by neoconservatives in the draft NSPD in fact advocate that the United States or its proxies arm the Iranian opposition, including the Kurds, as part of its efforts to pursue regime change?

The public statements by the neoconservatives emphasize that regime change in Iran would not require U.S. military force. Then again, the neoconservatives' inspiration for the Iran plan has its roots in Reagan-era NSPDs that, while providing nonmilitary support to Poland's Solidary Movement, also had the CIA aggressively arming and training the Afghan mujahideen, the Nicaraguan Contras, and other anti-communist rebels. There's also no denying that some of the chief advocates of the Iran regime plot come out of the Pentagon, America's military command center. And some of those same Iran hawks have discussed the Iran regime-change issue, for instance, with Parisian-based Iran Contra arms dealer Manucher Ghorbanifar -- not exactly the kind of go-to guy for a nonviolent regime change plan, one might think.

* * *

Whatever the nuances, the neocons are facing one of their biggest challenges in Washington today: persuading the administration to adopt their regime-change policy toward Iran even while their regime-change policy in Iraq appears to be crumbling. Since the Iraq invasion, Feith's office has come under the intense scrutiny of congressional investigators, investigative journalists, and Democratic critics for its two controversial prewar intelligence units, the Office of Special Plans and the Policy Counter Terrorism Evaluation Group. It was those units that had helped convince the Bush White House of an operational connection between Saddam Hussein and al-Qaeda -- a claim since disproved by the independent September 11 commission, among others. Those secretive intelligence units had also been among the administration's strongest champions of Chalabi, who allegedly told Iranian intelligence agents that the United States had penetrated Iranian communications channels.

An FBI counterintelligence investigation of who had leaked this information to Chalabi was reportedly under way by spring 2004, and many of Chalabi's neocon allies were incredibly anxious: Misjudgment about Chalabi's virtues or postwar Iraq planning was one thing; passing secrets to another nation would be an accusation of an altogether graver magnitude.

All of these investigations put Franklin and other neoconservatives associated with Feith at the white-hot center of a raging controversy: What would any second-term Bush foreign policy look like? Would controversial neocon figures like Feith remain in power? Or would it mark the rise of pragmatists and realists? For the neoconservatives, the fight to clear Franklin and themselves has become a fight against their internal administration rivals. And they're fighting it in classic neocon fashion: dirty and disingenuously.

Among intelligence professionals, it's hardly a state secret that even nations whose relationships go beyond mere alliance and constitute friendship spy on one another. That's one reason nations have counterintelligence capabilities as well. As such, investigations of espionage and mishandling of classified documents are not uncommon in Washington; the Bush administration's Justice Department, for example, has opened investigations to probe allegations of Chinese, Taiwanese, and Saudi espionage, including ones that involve ranking officials at the FBI and State Department. With the investigations into AIPAC and Franklin, the Justice Department has renewed its interest in snooping by our ally, Israel.

Since the Pollard case, U.S. intelligence and law-enforcement sources have revealed to the Prospect that at least six sealed indictments have been issued against individuals for espionage on Israel's behalf. It's a testament to the unique relationship between the United States and Israel that those cases were never prosecuted; according to the same sources, both governments ultimately addressed them through diplomatic and intelligence channels rather than air the dirty laundry. A number of career Justice Department and intelligence officials who have worked on Israeli counterespionage told the Prospect of long-standing frustration among investigators and prosecutors who feel that cases that could have been made successfully against Israeli spies were never brought to trial, or that the investigations were shut down prematurely. This history had led to informed speculation that the FBI -- fearing the Franklin probe was heading toward the same silent end -- leaked the story to CBS to keep it in the public eye and give it a fighting chance.

But the pro-Israel lobby and some neoconservatives, fighting for their political lives, have turned the leak on its head. They claim that the AIPAC and Franklin investigations have nothing to do with the substance of the Iran-related leaks. Rather, they say, investigators are going after Jews. In the current probes of Franklin and AIPAC, Michael Rubin has led the strident charge. On September 4, during the media flap over the investigations, Rubin sent an e-mail memo -- obtained by the Prospect -- to a list of friendly parties targeting two of Washington's more respected mainstream journalists, calling them key players in an “increasing anti-Semitic witch hunt.” The memo fingered Deputy Secretary of State Richard Armitage as one likely source of the leaks about the investigation, and also urged that, if the accusations had any merit, the White House demand the evidence be made public. “I'm increasingly concerned about the leaks spinning off from the Franklin affair,” Rubin wrote. “It was bad enough when the White House rewarded the June 15, 2003, leak by canceling consideration of the NSPD. It showed the State Department that leaks could supplant real debate. … Bureaucratic rivalries are out of control.” Rubin's memo showed up in a similar form almost a month later in the op-ed pages of The Washington Times under the byline of National Review staffer Joel Mowbray, and echoes of it can be seen in the pages of the neocon-friendly Jerusalem Post.

Meanwhile, Franklin was involved in some pushback of his own. In late August, the Franklin case was referred from Szady to U.S. Attorney Paul J. McNulty, a Bush-Ashcroft appointee who heads the U.S. District Court for the Eastern District of Virginia. A grand jury was seated on the case in September and had subpoenaed at least some witnesses to testify about Franklin. Then, on October 1, The New York Sun reported that Franklin had fired his court-appointed attorney (whom he had presumably retained for financial reasons), halting grand-jury proceedings while he found new counsel. On October 6, the Los Angeles Times reported that Franklin had stopped cooperating with the FBI entirely. He had hired a high-profile lawyer, Plato Cacheris (of Aldrich Ames and Robert Hanssen fame), and had rejected a proposed plea agreement whose terms Franklin considers “too onerous,” according to the Los Angeles Times.

Who pushed Franklin -- who for months seemed vulnerable -- to stop cooperating? And who is paying for his expensive new lawyer? At this writing, we do not know. Also unknown is the status of the larger FBI counterintelligence probe of alleged Israeli espionage into which Franklin stumbled. But we do know that his recent decisions would seem to immensely help any of the people against whom he could have testified. At least for now, that's a round won by a clique intent on pushing freelance crypto-diplomacy to its limits.

Laura Rozen reports on foreign-policy and national-security issues from Washington, D.C. Jason Vest is a Prospect senior correspondent.

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