CIA Operation in Iran Failed When Spies Were Exposed

Dozens of CIA informants in Iran were executed or imprisoned in the late 1980s or early 1990s after their secret communications with the agency were uncovered by the government, according to former CIA officials who discussed the episode after aspects of it were disclosed during a recent congressional hearing.

As many as 50 Iranian citizens on the CIA’s payroll were “rolled up” in the failed operation, said the former officials, who described the events as a major setback in spying on a regime that remains one of the most difficult targets for U.S. intelligence.

The disclosures underscore the stakes confronting the CIA and its informants as the United States is under pressure to produce better intelligence on Iran and especially its nuclear activities. The Bush administration has indicated that preventing Iran from obtaining an atomic weapon will be a priority of the president’s second term.

Like Iraq before the U.S. invasion in 2003, Iran is regarded as a “denied” territory by U.S. intelligence, meaning that the CIA has no official station inside the country and is largely dependent on recruiting sources outside the Islamic Republic’s borders.

Details of the setback were first outlined Feb. 2 by former Pentagon advisor Richard N. Perle in testimony before the House Intelligence Committee. During a hearing on security threats, Perle was critical of U.S. intelligence capabilities and cited the crackdown on American sources in Iran as an example of the failures that have beset U.S. espionage in the Mideast.

Perle referred to the “terrible setback that we suffered in Iran a few years ago when in a display of unbelievable, careless management we put pressure on agents operating in Iran to report with greater frequency and didn’t provide improved communications.”

When the CIA’s sources stepped up their reporting, “the Iranian intelligence authorities quickly saw the surge in traffic and, as I understand it, virtually our entire network in Iran was wiped out.”

Former CIA officials familiar with the matter confirmed portions of Perle’s account and provided additional details. But they said the incident occurred in the late 1980s or early 1990s, not “a few years ago,” as Perle suggested, and that it was not clear that the informants were exposed because of any pressure from the agency to file reports more frequently.

The CIA declined to comment, but a U.S. intelligence official rejected Perle’s criticism of the agency’s record in the Mideast as ill-informed and outdated.

“Intelligence methods evolve constantly,” said the official, who spoke on condition of anonymity. “Trying to use these things from the past to make assertions about the present is in this case ill-advised.”

In a phone interview, Perle acknowledged that he had “a poor sense of time” concerning the events he described and was uncertain about details.

“I don’t recall the details, or the mechanism by which the [Iranian agents] were communicating,” Perle said. “What I was told was that our entire network was destroyed” and that as many as 40 of the informants were executed.

According to a former CIA official who served in the Mideast at the time, the Iranian informants were part of a network of spies that was run by CIA officers based at the agency’s station in Frankfurt, Germany.

The Iranian spies communicated with the agency “via secret writing,” the former official said, referring to messages printed in invisible ink on the backs of letters that were mailed out of the country. The spies received messages in the same fashion from a CIA officer in Frankfurt.

It is not clear what aroused the Iranian government’s suspicion, “but all of the letters went to a handful of addresses in Germany,” the former CIA official said, speaking on condition of anonymity.

“Once they had one agent and they recovered the letters that had come in to him and found out where he was sending his letters out, they quickly identified others who fit that profile,” the former official said.

As many as 50 spies were exposed. They included members of Iran’s military and were providing information on an array of activities, the former official said.

Iran was a major intelligence priority for the United States at the time. During the 1980s, the U.S. was supporting Iraq in its war against Iran. The regime in Tehran, the capital, had also launched its clandestine nuclear program by then, according to the International Atomic Energy Agency, the United Nations’ nuclear watchdog group.

The CIA’s Iran operation in Frankfurt was disbanded in the mid-1990s, and portions of it were relocated to Los Angeles, where the CIA still seeks to capitalize on Southern California’s large Iranian population by cultivating sources who travel to the country or have relatives there.

Although the spies in Iran were using an old form of secret communication, even high-technology systems have proved vulnerable. During the 2003 war in Iraq, the CIA received regular reports from 87 informants whom it had equipped with satellite telephones, according to an account of the operation in journalist Bob Woodward’s recent book, “Plan of Attack.”

Calls from sources close to Iraqi leader Saddam Hussein provided the intelligence that led to the first strike of the war, when the United States launched missiles at the Dora Farm compound in Baghdad because of reports that Hussein and his sons were staying the night there. Weeks later, it became clear that Hussein and his sons had survived the strike, and the still-standing Iraqi government banned the use of satellite phones.

Perle, who was an assistant Defense secretary in the Reagan administration and was a Pentagon advisor who advocated the invasion of Iraq, is a longtime critic of the CIA. He said he mentioned the Iranian operation to highlight how the agency had struggled in the region.

“I think we’re in very bad shape in Iran,” Perle said during his testimony.

He also complained that CIA leaders had not been held accountable and noted that the official who had been in charge of the exposed Iran operation was later promoted.

Perle declined to name the individual, but other sources said it was Stephen Richter, who was appointed head of the agency’s Near East division in 1994. He has since retired and could not be reached for comment.

Several senior CIA officials who served under George J. Tenet, who stepped down as the agency’s director last year, said they were unaware of the matter. One reason could be the length of time that has elapsed since the intelligence breakdown in Iran.

In a recent unclassified report, the CIA says it believes Iran is “vigorously” pursuing chemical, biological and nuclear weapons and that its civilian nuclear development program is a cover for efforts to build a bomb. Iran has repeatedly denied the accusation.

Such assessments also are being greeted with some skepticism abroad and in the United States, largely because the CIA’s prewar estimates of Iraqi stockpiles of banned weapons have been proved wrong.

Iran’s discovery of CIA informants was reminiscent of the exposure of U.S. agents in Iraq a decade ago. In Iraq, hundreds of U.S. informants and sympathizers are believed to have been executed by Hussein, many of them after a CIA-backed coup plan unraveled in the mid-’90s.

The Senate Intelligence Committee recently disclosed that it was launching a “preemptive” review of assessments on Iran to avoid any repetition of the intelligence failures in Iraq.

Inspections by the International Atomic Energy Agency have exposed a long-hidden Iranian program to produce fissile material that could be used for nuclear weapons. But IAEA officials believe that Tehran has frozen the program. Iran maintains that its nuclear activities are designed to produce energy, not an arsenal.