[BretLudwig]

The Spy Who Loves Us


by Philip Giraldi

"After Israeli spy Jonathan Pollard was sentenced to life in prison in
1986, the U.S. negotiated an understanding with Israel€”a
€œgentlemens agreement€� €”stipulating that neither nation would
thenceforth conduct espionage operations in the others territory
without consent. But the agreement was a sham from the beginning. The
Israeli government didnt even honor its commitments in the aftermath of
the Pollard case, failing to return the estimated 360 cubic feet of stolen
information to enable the U.S. to conduct a damage assessment. The United
States, for its part, continued to recruit and run agents inside Israel
throughout the 1980s and 1990s. And it was known within the intelligence
and counterintelligence communities that Israel did the same in the United
States. David Szady, the FBIs assistant director for
counterintelligence, was so dismayed by the level of Israeli spying in the
late 90s that he called in the head of the Israeli Embassys Central
Institute for Intelligence and Special Activities (Mossad) office and told
him, €œKnock it off.€�

Pollards name was in the news again on April 22, when former U.S. Army
weapons engineer Ben-Ami Kadish was arrested for passing secrets to
Israel. Kadish had been an agent run by Yosef Yagur, who directed Pollard.
Yagur, under cover as a science attaché at the Israeli Consulate General
in New York, fled the U.S. in 1985 after Pollard was arrested, but
remained in touch with Kadish.

The arrest revived suspicions that Israeli agents might still be operating
inside the U.S., most particularly €œMega,€� whose cover name was
revealed in an NSA-intercepted conversation between two Israeli
intelligence officers. €œMega€� was clearly at the policymaker level, as
Kadish and Pollard frequently sought files by name or number. Someone more
senior in Washington appeared to be directing the Israeli handlers toward
sensitive information. Whoever €œMega€� was, he is still at large.

Israeli Foreign Ministry spokesman Arieh Mekel sought to play down the
allegations, noting, €œSince 1985 there have been clear orders from prime
ministers not to conduct these kinds of activities.€� The media obediently
reported the disclaimer under headlines such as Agence France Presses:
€œIsrael says no spying on US since 1985.€� But the spokesman had not
said that. He referred to €œthese kinds of activities,€� possibly
meaning the recruitment of American Jews to work as Israeli intelligence
agents. Mekels half-hearted denial was a step removed from the Israeli
governments reaction to the 2004 investigation of the American Israel
Public Affairs Committee, when then Prime Minister Ariel Sharon and
Foreign Ministry spokesman Mark Regev insisted that Israel €œdoes not spy
on the United States of America.€�

Its possible that Israel has largely demurred from recruiting American
Jews as spies, but Tel Avivs intelligence operations in the U.S. have
undeniably continued. The magnitude of Israeli espionage is certainly
known to some senior government officials and is hidden in classified
files. But even evidence available in public records attests to widespread
infiltration.

Spy operations run by a case officer directly involving a controlled agent
are only one of many tasks delegated to an intelligence service. Other
responsibilities might include tapping into communications networks,
directing agents of influence in the foreign government who can enable
favorable policy decisions, running covert actions that feed misleading
information to the media, and arranging technology transfers that
frequently rely on companies that are either fronts or co-operating with
the intelligence service to obtain secret military or commercial
information. Even if Israel has stopped recruiting American Jews€”and
that is by no means certain€”it nevertheless continues to carry out many
core intelligence operations in the United States.

Israel has little need to run agents of influence here as its intelligence
officers, diplomats, and politicians already have unfettered access to
policymakers. It has been reported that the Pentagon under Paul Wolfowitz
and Doug Feith€”both of whom have been investigated for passing
classified information to Israel€”took few steps to monitor Israeli
visitors. Likewise, the Israeli Embassy has excellent access to the media.
When it wants to plant propaganda or place stories intended to shape
opinion in a direction favorable to Israel, the Mossad generally looks to
the British press. Rupert Murdochs Times group of newspapers and the
Daily Telegraph, formerly owned by Conrad Black, have featured many
articles that clearly originated with Israeli government sources. Such
pieces are often picked up and replayed in the United States.

Virtually every U.S. government body concerned with security has confirmed
that Israeli espionage takes place, though it is frequently not exposed
because FBI officers know that investigating these crimes is frustrating
and does no favors for their careers. But Israel always features
prominently in the annual FBI report called €œForeign Economic Collection
and Industrial Espionage.€� The 2005 report states, €œIsrael has an
active program to gather proprietary information within the United States.
These collection activities are primarily directed at obtaining information
on military systems and advanced computing applications that can be used in
Israels sizable armaments industry.€� It adds that Israel recruits
spies, uses electronic methods, and carries out computer intrusion to gain
the information.

The focus on U.S. military secrets is not limited to information needed
for the defense of Israel, as was argued when Pollard was arrested. Some
of the information he stole was of such value that many high-ranking
intelligence officers believe the Soviet Union agreed to the release of
tens of thousands of Russian Jews for resettlement in Israel in exchange.
In early 1996, the Office of Naval Investigations concluded that Israel
had transferred sensitive military technology to China. In 2000, the
Israeli government attempted to sell China the sophisticated Phalcon early
warning aircraft, which was based on U.S.-licensed technology. A 2005 FBI
report noted that the thefts eroded U.S. military advantage, enabling
foreign powers to obtain hugely expensive technologies that had taken
years to develop.

In 1996, ten years after the agreement that concluded the Pollard affair,
the Pentagons Defense Investigative Service warned defense contractors
that Israel had €œespionage intentions and capabilities€� here and was
aggressively trying to steal military and intelligence secrets. It also
cited a security threat posed by individuals who have €œstrong ethnic
ties€� to Israel, stating that €œPlacing Israeli nationals in key
industries €¦ is a technique utilized with great success.€� The memo
cited illegal transfer of proprietary information from an Illinois optics
firm in 1986, after the Pollard arrest, as well as the theft of test
equipment for a radar system in the mid-1980s. A storm of outrage from the
Anti-Defamation League led to the Pentagons withdrawal of the memo, an
apology that predictably blamed the language on €œa low-ranking
individual,€� and a promise that no similar warning would be written
again.

But the issue of Israeli spying would not go away. Soon after, the General
Accounting Office, the investigative arm of Congress, completed an
examination of espionage directed against American defense and security
industries. The report described how Israeli citizens residing in the U.S.
had stolen sensitive technology to manufacture artillery gun tubes,
obtained classified plans for a reconnaissance system, and passed
sensitive aerospace designs to unauthorized users. An Israeli company was
caught monitoring a Department of Defense telecommunications system to
obtain classified information, while other Israeli entities targeted
avionics, missile telemetry, aircraft communications, software systems,
and advanced materials and coatings used in missile re-entry.
Independently, a Defense Department source confirmed the GAO report,
citing €œdozens of other spy cases within the U.S. Defense industry.€�
The GAO concluded that Israel €œconducts the most aggressive espionage
operation against the United States of any U.S. ally.€�

In early 2001, several federal government agencies noticed a series of
intrusive approaches by Israelis who were ostensibly selling paintings. In
June, the Drug Enforcement Administration made a compilation of the
activities of the so-called €œart students€� in a classified report,
which was later leaked. The report documents 125 specific attempts by
Israelis to gain entry to government offices, residences of government
employees, and even Defense Department facilities between January and June
2001. The Israelis €œtargeted and penetrated military bases€� and were
observed trying to enter federal buildings from back doors and parking
garages. One detained Israeli was caught wandering around the federal
building in Dallas with a detailed floor plan in hand. Many of those
arrested were found to have backgrounds in €œmilitary intelligence,
electronic surveillance intercept, or explosive ordnance units.€�

Now, there may have been an Israeli student subculture in the U.S. selling
cheap reproductions. But it is also clear that the art-student mechanism
was used by intelligence officers to provide cover for espionage. The
students were organized in cells of eight to ten members that traveled in
vans, which provide concealment for electronic equipment. Several of the
students were able to afford expensive airline tickets to hop from plane
to plane, two of them flying in one day from Hamburg to Miami, then to
Chicago, and finally winding up in Toronto on tickets that cost $15,000
each. In Miami and Chicago, they visited two government officials to try
to sell their art. Another student had in his possession deposit slips for
$180,000. Six students used cellphones provided by a former Israeli vice
consul. Many claimed to be registered at either the University of
Jerusalem or the Bezalel Academy of Arts in Jerusalem, but not a single
name could be connected to the student body list of Bezalel, and there is
no University of Jerusalem.

It is plausible that the art students who were actually intelligence
officers might have been seeking entry to DEA facilities to gain access to
confidential databases. If the broader Israeli espionage effort was focused
on Arabs in the United States, such information would be invaluable. The
DEA report concluded cautiously that the Israelis €œmight well be engaged
in organized intelligence gathering.€� Of the 140 art students arrested,
most were deported for immigration violations. Some were just let go.

And then there are the movers. Urban Moving Systems of Weehawken, New
Jersey was largely staffed by Israelis, many of whom had recently been
discharged from the Israeli Defense Forces. As has been widely reported,
three movers were photographed celebrating in Liberty State Park against
the backdrop of the first collapsing World Trade Center tower. The
celebration came 16 minutes after the first plane struck, when no one knew
that there had been a terrorist attack and the episode was assumed to be a
horrible accident. The owner of the moving company, Dominik Suter, was
questioned once by the FBI before fleeing to Israel. He has since refused
to answer questions.

Whether the movers and the art students had jointly pieced together enough
information to provide a preview of 9/11 remains hidden in intelligence
files in Tel Aviv, but the proximity of both groups to 15 of the hijackers
in Hollywood, Florida and to five others in northern New Jersey is
suggestive.

Speculation about 9/11 aside, it is certain that Urban Moving was involved
in an intelligence-collection operation against Arabs living in the United
States, possibly involving electronic surveillance of phone calls and
other communications. When they were arrested, the five Israelis working
for Urban Moving had multiple passports and nearly $5,000 in cash. They
were held for 71 days, failed a number of polygraph exams, and were
finally allowed to return to Israel after Tel Aviv admitted that they were
Mossad and apologized.

Between 55 and 95 other Israelis were also arrested in the weeks following
9/11, and a number were reported to be active-duty military personnel. The
FBI came under intense pressure from several congressmen and various
pro-Israel groups to release the detainees. The order to free them came
from Judge Michael Mukasey, now the U.S. attorney general. An FBI
investigator noted, €œLeads were not fully investigated€� due to
pressure from €œhigher echelons.€� According to one source, the White
House may have made the final decision to terminate the inquiry. Though
the investigation could have gone much farther, the FBI identified two of
the Weehawken movers as Israeli intelligence officers and confirmed that
Urban Moving was a front for Mossad to €œspy on local Arabs.€� One CIA
officer involved in the investigation concluded, €œThe Israelis likely
had a huge spy operation.€�

In May 2004, there were two incidents involving Israelis in moving vans in
proximity to U.S. nuclear facilities. One occurred in Tennessee near the
Nuclear Fuel Services plant, which reprocesses nuclear waste from
hospitals. The van was pursued by the local sheriff for three miles after
refusing to pull over. The two fleeing Israelis, who threw a bottle
containing an accelerant, had in their possession Israeli military IDs
and false U.S. documents. In the second incident, two movers in a van
tried to enter the Kings Bay Naval Submarine Base in Georgia, which is
home to eight Trident nuclear submarines, but were arrested when dogs
detected drugs inside their vehicle. The men had military IDs and false
documents. There was no follow-up by the FBI even though both incidents
were reported to federal authorities.

There have also been reports of intensive targeting of U.S. government
facilities overseas. In late 2001, State Department security noted a
series of incidents at diplomatic missions and military bases, all
involving Israelis. It described many of the incidents as €œbizarre.€�
In one instance, French police arrested several Israelis at 2 a.m. after
they were observed taking numerous photos of the U.S. embassy in Paris. As
it was dark, their behavior was unusual to say the least€”or perhaps not
since it was revealed that the Israelis were using infrared film to detect
communications equipment in the embassy.

In August 2004, the media discovered an FBI investigation, begun in 1999,
involving Pentagon intelligence analyst Larry Franklin. He had openly met
Israeli Embassy intelligence officer Naor Gilon as well as two AIPAC
officials, director Steve Rosen and chief analyst Keith Weissman. He
pleaded guilty in October 2005 to revealing classified information and is
now serving a 12-year prison sentence. Rosen and Weissman are currently on
trial. If the prosecution is correct, Franklin passed classified
information relating to Iran to both AIPAC employees, who in turn provided
the information to the Israeli Embassy. The defense has argued that such
exchanges are routine in Washington, particularly between close allies
such as Israel and the U.S., but that is a dubious reading of events.
Passing classified information and documents is not the same as casual
political conversation over a cup of coffee. If Israel had stopped spying
on the United States, Gilon should have refused to receive the information
provided by Franklin. He might even have gone through official channels to
report Franklins activity. He did neither. Nor did Rosen and Weissman
object when they received information that they knew to be classified.
Instead, they passed it on to the Israelis.

In June 2006, it was revealed that the Pentagon had begun to deny security
clearances to American Jews who had family in Israel. Israelis seeking
security approval to work for American defense contractors were also
finding it increasingly difficult to obtain clearances. A Pentagon
administrative judge overruled an appeal by one of the Israelis, stating,
€œThe Israeli government is actively engaged in military and industrial
espionage in the United States. An Israeli citizen working in the US who
has access to proprietary information is likely to be a target of such
espionage.€�

Israel conducts much of its high-tech spying through its corporate
presence in the United States. It is heavily embedded in the
telecommunications industry, which permits access to the exchange of
information. The Whitewater investigation revealed that President Bill
Clinton warned Monica Lewinsky that their phone-sex conversations might
have been recorded by a foreign government. That foreign government would
have been Israel, where government and business work hand-in-hand in the
high-tech sector, and many former government officials and military
officers hold senior management positions. The corporations, in return,
receive large contracts with the Israeli government and the Israel Defense
Forces.

Two Israeli companies in particular€”Amdocs and Comverse Infosys, both of
which are headquartered in Israel€”do significant business in the United
States. Amdocs, which has contracts with the 25 largest telephone
companies in the U.S. that together handle 90 percent of all calls made,
logs all calls that go out and come in on the system. It does not record
the conversations themselves, but the records provide patterns, referred
to as €œtraffic analysis,€� that can provide intelligence leads. In
1999, the National Security Agency warned that records of calls made in
the United States were winding up in Israel. Amdocs also has an apparent
relationship with some of the art students who were arrested in 2001.
Several were provided with bond money by an Amdocs executive.

Comverse Infosys provides wiretapping equipment to law enforcement
throughout the United States and also has large contracts with the Israeli
government, which reimburses up to 50 percent of the companys research
and development costs. Because equipment used to tap phones for law
enforcement is integrated into the networks that phone companies operate,
it cannot be detected. Phone calls are intercepted, recorded, stored, and
transmitted to investigators by Comverse, which claims that it has to be
€œhands on€� with its equipment to maintain the system. Many experts
believe that it is relatively easy to create a so-called €œback door€�
that permits the recording to be sent to a second party, unknown to the
authorized law-enforcement recipient. And Comverse equipment has never
been inspected by FBI or NSA experts to determine whether the information
it collects can be leaked, reportedly because senior government managers
block such inquiries.

According to a Fox News investigative report, which was later deleted from
Foxs website under pressure from various pro-Israel groups, DEA and FBI
sources say that even to suggest that Israel might be spying using
Comverse €œis considered career suicide.€�

A number of criminal investigations using Comverse equipment have
apparently come to dead ends when the targets abruptly change their
telecommunications methods, suggesting at a minimum that Comverse
employees might be leaking sensitive information to Israeli organized
crime.

The chickens occasionally come home to roost. In 2002, Israeli espionage
might have been directed against the U.S. Congress, which has so
assidiously ignored Tel Avivs spying. Congressman Bob Ney, currently in
prison for corruption, arranged a noncompetitive bid for the Israeli
telecommunications company Foxcom Wireless to install equipment to improve
cellphone reception in the Capitol and House office buildings. Foxcom,
based in Jerusalem, has been linked to imprisoned lobbyist Jack Abramoff.
Telecommunications security experts note that equipment that can be used
to enhance or improve a signal can also be used to redirect the phone
conversation to another location for recording and analysis. The
possibility that someone in the Israeli Embassy might be listening to
congressmens private phone conversations is intriguing to say the
least.

Some might argue that collecting intelligence is a function of government
and that espionage, even between friends, will always take place. But the
intensity and persistence of Israeli spying against the United States is
particularly disturbing since Israel relies so heavily on American
political and military support. Other allies like Britain, France, and
Germany undoubtedly have spies in Washington, but there is a line that
they do not cross.

Given the stakes involved, it would be reasonable for the United States to
quietly offer Israels leaders a choice. They can continue to receive
billions of dollars in aid, or they can persist in spying against their
greatest benefactor. They should not be permitted to do both. "


http://www.amconmag.com/2008/2008_06_02/cover.html

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