New Probes Target Israelis and U.S. Technology

Federal investigators in San Diego and Chicago are conducting separate probes into whether Israel illegally schemed to obtain U.S. technology for cluster bomb components and a sophisticated aerial reconnaissance system, officials said.

American officials insist that Israel is not the target of a coordinated federal inquiry. But the latest incidents follow disclosures of investigations under way in New York, Iowa, Pennsylvania, New Jersey, Connecticut and Massachusetts--plus the John Jay Pollard espionage affair--that have implicated Israeli officials in clandestine arms and technology transfers and strained U.S.-Israeli relations.

Tuesday, Israeli Ambassador Meir Rosenne complained to reporters in Washington that because of publicity about the spate of cases, “we were indicted and sentenced before the first witness came in.”

Probe in Chicago Area

In the Chicago area, investigators are trying to determine whether Israeli air force officers attempted to steal restricted optical technology from Recon Optical Inc., of suburban Barrington.

A financial dispute between the government of Israel and the Chicago-based firm had led to abrupt termination of a $40-million contract for a sophisticated jet-borne camera system that could photograph a man lighting a cigarette up to 100 miles away.

Recon Optical, in a federal suit subsequently filed in New York, cited an attempt by three Israeli military officers to remove 50,000 pages of technical documents from the company’s plant. The officers had been assigned to monitor the reconnaissance system’s development at the plant.

Ten boxes of notes, thousands of pages of which were written in Hebrew, were confiscated by security guards and subsequently translated by the company.

“In the first two or three documents, we found information indicating the government of Israel was conspiring with a commercial firm to routinely transfer secrets from this country to Israel,” Larry Larson, president of Recon Optical, said in a telephone interview Tuesday.

“We were horrified. They were trying desperately to get ahold of our technology,” he said.

Technology Not Included

The contract called for development and delivery of the table-sized system hardware but did not call for Israel to receive the technology used to manufacture it, Larson said.

Among the Hebrew-language documents, Larson said, the company found references to “undercover agents” placed in the Illinois research and development facility.

Larson identified the Israeli commercial firm as Electro-Optics Industries, one of Israel’s leading developers of high-tech military systems.

Ambassador Rosenne, who said he was unaware that a federal investigation has grown from the contract dispute, dismissed the controversy Tuesday as “a conflict and litigation between Israel and an American company. . . . It is nothing criminal.”

Charges Denied

And in a written statement issued Tuesday by its Washington embassy, the Israeli government said: “We flatly deny all of the baseless accusations regarding the behavior of Israeli officials in this matter. Any information involved (was) obtained properly and covered by U.S. government export license.”

Federal officials who asked not to be identified confirmed Tuesday that an investigation is “at a preliminary stage” and has not been taken to a grand jury.

However, in San Diego, a grand jury has been examining the business records of RISI Industries, a manufacturer of assembly line machinery that was approached several months ago by Israeli arms makers seeking assistance in setting up machinery to manufacture grenades similar to those used in cluster bombs.

Grenade Left Behind

The investigation was launched after representatives of RISI Industries and Israel Military Industries, a government-owned munitions manufacturer and the leading supplier of arms to the Israeli army, met at a Los Angeles restaurant and inadvertently left behind a sample grenade. The restaurant notified authorities.

U.S. Customs agents subsequently raided the RISI Industries plant in San Diego. Company officials say they violated no U.S. export laws and, in fact, have not signed any agreement with Israel. No charges have been filed.

Export of cluster bombs and any related technology to Israel was banned by President Reagan in 1982 after the U.S.-made weapons reportedly were used in Israel’s invasion of Lebanon.

3 Companies Raided

Last month it was learned that federal authorities had raided three U.S. companies in Pennsylvania and Iowa and had subpoenaed the records a several others in connection with a probe into possible smuggling of cluster bomb technology to Israel.

Eight employees of Israel Military Industries and Israel’s defense procurement office in New York also were subpoenaed to appear before a federal grand jury, but those subpoenas were recently withdrawn “in return for pledges of cooperation by the government of Israel,” according to Asst. Atty. Gen. Stephen S. Trott.

Besides the cluster bomb inquiries, federal officials also are investigating Israel’s acquisition of electroplating technology used to improve the accuracy and durability of tank cannon barrels. Last December, agents of the U.S. Customs Service seized business records of American companies in Massachusetts, Connecticut, New Jersey and Pennsylvania.

Customs officials said in court affidavits that the tank barrel technology belongs to the U.S. Army and that the companies had not obtained required export permits to transfer the technology to Israel. The Israeli government and the companies denied wrongdoing and no indictments have been returned.

10 Arrests in April

And last April federal agents arrested 10 men suspected of attempting to illegally export American weapons to Iran. That case, expected to go to trial in November, has implicated three Israeli businessmen, a retired Israeli general and unnamed Israeli government officials in an alleged illegal scheme to sell $2 billion in Israeli-owned, U.S.-made jets, missiles and spare parts to Iran. Israeli officials deny there was any official involvement in the transaction.

A U.S. Customs official who asked not to be identified said the spate of export violation investigations focusing on Israel do not reflect any campaign to focus on U.S.-Israeli trade.

“We have not targeted the Israelis,” the official said, noting Israeli involvement in “less than 3% of all” export violation cases.

William C. Rempel reported from Los Angeles and Gaylord Shaw from Washington.