Secret files held by Yemeni security forces that contain details of American intelligence operations in the country have been looted by Iran-backed militia leaders, exposing names of confidential informants and plans for U.S.-backed counter-terrorism strikes, U.S. officials say.
U.S. intelligence officials believe additional files were handed directly to Iranian advisors by Yemeni officials who have sided with the Houthi militias that seized control of Sana, the capital, in September, which led the U.S.-backed president to flee to Aden.
For American intelligence networks in Yemen, the damage has been severe. Until recently, U.S. forces deployed in Yemen had worked closely with President Abdu Rabu Mansour Hadi's government to track and kill Al Qaeda operatives, and President Obama had hailed Yemen last fall as a model for counter-terrorism operations elsewhere.
But the identities of local agents were considered compromised after Houthi leaders in Sana took over the offices of Yemen's National Security Bureau, which had worked closely with the CIA and other intelligence agencies, according to two U.S. officials who spoke on the condition of anonymity to discuss sensitive operations.
Yemeni intelligence officers still loyal to Hadi's besieged government burned some secret files, one official said. But they couldn't destroy all of them before the Houthi fighters, whose leaders have received some weapons and training from Iran, moved in.
The loss of the intelligence networks, in addition to the escalating conflict, contributed to the Obama administration's decision to halt drone strikes in Yemen for two months, to vacate the U.S. Embassy in Sana last month and to evacuate U.S. special operations and intelligence teams from a Yemeni air base over the weekend.
The Houthis claimed Wednesday that they had captured that air base, Al Anad, as new fighting broke out in and around the southern seaport of Aden, the country's financial hub, where Hadi had taken refuge. Over the weekend, the Houthis seized the central city of Taizz.
A Houthi-controlled TV channel announced a $20-million bounty for Hadi's capture, and his Aden compound was hit by airstrikes.
Foreign Minister Riad Yassin said Hadi was overseeing the city's defense from an undisclosed safe location. The Associated Press reported that he had fled the country on a boat.
Jen Psaki, the State Department spokeswoman, said that U.S. diplomats "were in touch" with Hadi early Wednesday and that he later "voluntarily" left his residence. She said she could not confirm whether he was still in the country, calling conditions there "incredibly volatile."
As the turmoil deepened, Yemen appeared to be descending into a civil war that could ignite a wider regional struggle.
Saudi Arabia launched airstrikes against Iran-backed militias in Yemen to bolster the positions of the Yemeni government against the rapid advance of the Shiite militias, the Saudi ambassador to the U.S. said Wednesday.
The objective of the airstrikes is to "defend the legitimate government" of Yemen and prevent the takeover of Yemen by Houthi militias, Ambassador Adel al Jubeir told reporters at the Saudi Embassy in Washington.
Saudi Arabia reportedly moved troops, armored vehicles and artillery to secure its border with Yemen, which sits alongside key shipping routes.
After suicide bombers killed 137 worshipers at two Shiite mosques in Sana on Friday, a previously unknown group that said it was allied with Islamic State claimed responsibility. That stirred fear that the extremist group had expanded to Yemen, adding a new threat to the quickly fragmenting country.
The Houthis and their allies, backed by tanks and artillery, advanced Wednesday to within a few miles of Aden after battles north of the city, officials and witnesses said. Much of the rebels' heavy weaponry was provided by Yemeni military units that remained loyal to former President Ali Abdullah Saleh, who was toppled in 2012 and is a bitter opponent of Hadi.
The struggle for Aden comes as the Arab League summit prepares to meet this weekend in the Egyptian resort of Sharm el Sheik.
In the town of Houta, the capital of Lahej province, fighting left bodies strewn in the streets, residents reported, and people remained indoors as gunfire was heard. The Houthis appeared to be consolidating control of the town's southern outskirts, closest to Aden.
But U.S. officials also worried Wednesday about the loss of the Yemeni intelligence files, including the names and locations of agents and informants with information on Al Qaeda in the Arabian Peninsula, considered the terrorist network's most dangerous and resourceful branch.
There was no indication that the Houthis gained direct control of U.S. intelligence files, so the loss doesn't compare to more infamous cases, like the takeover by Islamic militants of the U.S. Embassy in Tehran in 1979 or the U.S. retreat from Saigon at the end of the Vietnam War in 1975.
But AQAP, as the group is known, has repeatedly sought to attack Americans at home and abroad. It designed a bomb that a Nigerian man sought to explode in his underwear on a Detroit-bound flight in 2009, and concealed explosives aboard four cargo planes headed to the U.S. in 2010. Both times, the bombs were discovered before they exploded.
The U.S. still plans to fly armed drones over Yemen from bases in Saudi Arabia and Djibouti, but officials acknowledged that their ability to identify and find terrorism suspects has been severely hampered by the loss of the intelligence files and the power struggles within Yemen's security services.
Four U.S. drone strikes have been reported in Yemen this year, according to the Long War Journal, a website that tracks the attacks. That compares with 23 in the first 10 months of 2014. The Houthi takeover of Sana forced a pause in the program.
Under Hadi, U.S.-trained Yemeni forces launched regular raids to capture or kill Al Qaeda militants, and assisted in attempted rescues of foreign hostages. CIA and U.S. military drone strikes targeted senior terrorists, most famously killing Anwar Awlaki, an American-born Muslim cleric and militant leader who was linked to several major plots, in 2011.
Experts warn that AQAP could use the growing chaos to reassert itself, and to link up with anxious Sunni Muslims to fend off the minority Houthis, who are Shiites, and who were previously concentrated in the country's north.
"From a counter-terrorism perspective, AQAP has less pressure on them," said a U.S. defense official who spoke on condition of anonymity to discuss sensitive assessments. For now, he said, the Houthis appear more intent on destroying Hadi than going after their rivals in AQAP.
U.S. tracking of Al Qaeda operatives is "not impossible; it is just a lot more difficult," he said.
Josh Earnest, the White House press secretary, appeared to agree at a news briefing Wednesday. "The ability of the U.S. to put pressure on these extremists is not helped by the fact that U.S. personnel had to leave," he said.
"There's no doubt that we'd like to see a functioning central government in Yemen. We don't see that right now," Earnest added. He said Washington still has "the capability to take out extremists if they pose a threat to the United States."
Rep. Adam B. Schiff (D-Burbank), the top Democrat on the House Intelligence Committee, said in an interview that the Houthis may have captured a "significant portion" of the $500 million in military equipment that the U.S. has given Hadi's government.
The equipment approved included Huey II helicopters, Humvees, M-4 rifles, night-vision goggles, body armor and hand-launched Raven drones.
"The news from Yemen is all bad," Schiff said. "I have to think that given the magnitude of the support we have given and the rapidity with which large portions of Yemen fell to Houthis, that a significant portion of military support is now in the hands of people who are not our friends."
The abrupt changes in Yemen, including the loss of the intelligence files, has prompted criticism that the White House failed to adequately prepare for the collapse of a fragile ally, and that it relied too heavily on poorly trained local security forces.
"It was a train wreck that anyone who knows anything about Yemen could see happening. It seems we put our head in the sand, and the train wreck has happened and now we are saying, 'How did this happen?'" said Ali Soufan, a former senior FBI agent who worked on terrorism cases and now heads the Soufan Group, a security firm in New York.
"We pulled out from any meaningful control of the situation in the country and now I think it is too late, because every decision is a bad decision," he said.