Israel at Center of Spying Probe

The Justice Department has launched an espionage investigation into whether a top policy analyst working for the Pentagon’s third-ranking official may have passed classified information to Israel through a powerful pro-Israeli lobbying group, sources familiar with the probe said Friday.

The investigation, being handled by the counterespionage division of the FBI, is said to focus on an incident last year in which the analyst allegedly turned over a presidential directive on U.S. policy toward Iran to two people affiliated with the Washington-based American Israel Public Affairs Committee, the sources said. Those two in turn may have given the information to Israel.

Officials are concerned because the directive that was transmitted was in draft form and still being debated by U.S. policymakers, possibly putting the Israeli government in a position to influence the final document, officials said. U.S. policy toward Iran is important for Israel, which is concerned about Iran’s potential nuclear capabilities.

Moreover, investigators fear that the suspect -- who works for Douglas J. Feith, chief policy advisor to Defense Secretary Donald H. Rumsfeld -- also may have been in a position to compromise government information about that country and the U.S. war effort.

The notion of a trusted ally such as Israel betraying the U.S. by taking secrets would be a major embarrassment for the Bush administration, especially coming just before the start of the Republican National Convention next week.

The sources said the Pentagon aide being scrutinized also has ties to Deputy Defense Secretary Paul D. Wolfowitz, who, with Feith, was a key architect of U.S. Iraq strategy. But the sources said there was no immediate evidence of information having been compromised.

The Pentagon late Friday played down the prominence of the official under investigation and the importance of the information that might have been conveyed to Israel.

“DOD has been cooperating fully with the Department of Justice on this matter for an extended period of time,” a Pentagon statement said. “The investigation involves a single individual at DOD at the desk officer level, who was not in a position to have significant influence over U.S. policy. Nor could a foreign power be in a position to influence U.S. policy through this individual. To the best of DOD’s knowledge, the investigation does not target any other DOD individuals.”

The probe, which has entailed FBI wiretaps and undercover surveillance and photography, was first reported Friday by CBS News. Justice Department officials declined to comment about the investigation, or on reports that an arrest or arrests were imminent.

The official under suspicion was described by senior Defense officials as a civilian employee and Iran specialist working at the Pentagon’s office of Near East and South Asian Affairs. NESA is the office charged with setting the Pentagon’s policy for the entire Middle East. Before going to work for Feith, the analyst worked for the Defense Intelligence Agency.

Since the Sept. 11 attacks, NESA has had the lead on war-planning for Afghanistan and Iraq, and for determining the Defense Department’s positions on Iraq, Syria and other volatile spots throughout the region. The office is run by William J. Luti but falls ultimately under the purview of Feith.

Luti ran the Pentagon’s secret Iraq war-planning shop known as the “Office of Special Plans” in late 2002 and 2003.

According to one senior Defense official: “This investigation has been going on for some time. We were notified of it a long time ago and have been working closely with the Justice Department.”

Iran, which has generated international worry over its potential nuclear capability, has expressed concern in recent days that Israel or the United States may use warplanes to destroy its facilities. In response to perceived threats, Iran has boasted that its new generation of missiles could strike Israel.

The issue is further complicated by links between top civilians in the Pentagon and Iraqi politician Ahmad Chalabi. Chalabi, a longtime ally of Wolfowitz and Feith, has been investigated by American officials in connection with the transmittal of U.S. secrets to Iran.

The contents of the U.S. documents allegedly provided to Israel were not disclosed Friday.

The Israeli government strenuously denied any impropriety.

“We deny these allegations,” said David Siegel, spokesman for the Israeli Embassy in Washington. “The United States is Israel’s most cherished friend and ally. We have a strong ongoing relationship at all levels, and in no way would Israel do anything to impair this relationship.”

AIPAC also firmly denied wrongdoing.

“Any allegation of criminal conduct by AIPAC or our employees is false and baseless,” the organization said in a statement. “Neither AIPAC nor any of its employees has violated any laws or rules, nor has AIPAC or its employees ever received information they believed was secret or classified.”

AIPAC, a large advocacy group, has been known to spend an average of $1 million a year lobbying in Washington, although it makes no campaign contributions in its own name.

“AIPAC is cooperating fully with the governmental authorities,” the organization said in a statement. “It has provided documents and information to the government and has made staff available for interviews. We will continue to offer our full cooperation and are confident that the government will find absolutely no wrongdoing by our organization and its employees.”

AIPAC is considered one of the capital’s most astute and influential lobbying organizations, long maintaining ties with top figures in the U.S. government.

AIPAC “has and will continue to have discussions with policymakers at all levels of government,” the group said in its statement, responding to reports about the investigation.

Allegations of improper sharing of classified material with Israel have cropped up over the years. But the only case of espionage was that of Jonathan Jay Pollard, a former U.S. Navy intelligence officer who pleaded guilty in 1986 to spying for Israel and was sentenced to life in prison.

The Pollard affair was a considerable source of political tension between the U.S. and Israel. Pollard, who was awarded Israeli citizenship in 1998, remains in a U.S. prison.

Few espionage cases have reached into the upper echelons of the Defense Department. The highest-profile cases in recent years involved former FBI agent Robert Hanssen -- who was sentenced to life in prison in 2002 for accepting watches, diamonds and cash for spying for Russia -- and Aldrich H. Ames, a former CIA counterintelligence official who pleaded guilty in 1994 to spying for the Soviet Union and was blamed for the deaths of several U.S. agents.

Within the military, retired Army Reserve Col. George Trofimoff was sentenced to life in prison in 2001 after he was convicted of spying for the Soviet Union and Russia, passing photos of U.S. documents to foreign agents.

And in 1985, retired Navy Warrant Officer John A. Walker Jr. pleaded guilty to passing secrets to the Soviet Union. His son, Navy Seaman Michael L. Walker, 22, also pleaded guilty to charges of spying for the Soviets. Two others were convicted in connection with the spying.