FBI Stings Seen as Part of Policy ‘War’


Last June, leading neoconservative Richard Perle received an unexpected phone call at his home. It was Larry Franklin calling. Franklin is the veteran Iran specialist in the Pentagon’s Near East South Asia office and the key Iraq War planner who had been pressured by the FBI into launching a series of counterintelligence stings. Perle, a former chairman of the Pentagon’s Defense Policy Board, was an architect of the 2003 Iraq War.

Franklin, who never had phoned before, asked Perle to “convey a message to Chalabi” in Iraq, according to sources aware of the call. Ahmad Chalabi is the embattled president of the Iraqi National Congress. He is currently at the vortex of a Pentagon-intelligence community conflict over pre- and post-war policy, but is still endorsed by neoconservatives, such as Perle.

Something about Franklin’s unexpected call struck Perle as “weird,” according to the sources. Why was Franklin calling?

In the recent past, Perle had only encountered Franklin a few times in passing, the sources said. Perle became “impatient” to end his brief conversation with Franklin, and finally just declined to pass a message to Chalabi or to cooperate in any way, according to the sources.

Perle refused to comment.

While the purpose of the mysterious call to Perle is still unclear, a source with knowledge of Franklin’s calls suggested that Franklin might have been trying to warn Perle and Chalabi that conflict between the counterintelligence community and the neoconservatives and the Chalabi camp was spinning out of control.

Unbeknownst to Franklin, the FBI was listening.

By the time Franklin phoned Perle, Franklin had been under surveillance for at least a year by the FBI’s counterintelligence division, which is led by controversial counterintelligence chief David Szady. Franklin had been monitored since a meeting June 26, 2003, at the Tivoli Restaurant in Virginia, where he discussed a classified Iran policy document with officials of the American Israel Public Affairs Committee (AIPAC).

He also was monitored late last May while responding to a routine media inquiry by CBS reporters about Iran’s intelligence activities in Iraq, according to multiple sources. The CBS call was pivotal.

Among the reporters who spoke to Franklin in late May, according to multiple sources with direct knowledge of the call, was former CIA attorney Adam Ciralsky, who had joined CBS as a reporter. During that call, Franklin purportedly revealed classified information, according to the sources.

In late June, Szady’s FBI counterintelligence division finally confronted a shocked Franklin with evidence of his monitored calls. The bureau arranged for Franklin to be placed on administrative leave without pay, and then threatened him with years of imprisonment unless Franklin engaged in a series of stings against a list of prominent Washington targets, according to multiple sources with direct knowledge of the FBI’s actions in the case.

Terrified, needing to provide for a wheelchair-bound wife and five children and without the benefit of legal representation, Franklin agreed to ensnare the individuals on the FBI sting list, the sources said. The list might include as many as six names, according to sources.

In a special Jewish Telegraphic Agency investigation, this reporter first revealed Franklin’s stings and the circumstances surrounding them.

AIPAC was stung July 21. That day, Franklin met an AIPAC official in a Virginia mall and urged that information be passed to Israel that Israelis operating in northern Kurdistan were in danger of being kidnapped and killed by Iranian intelligence, according to multiple sources. That information — the validity of which has been questioned — was reportedly passed to the Israeli Embassy, thereby providing the FBI with a basis for search warrants and threats of an espionage prosecution against AIPAC Policy Director Steve Rosen and AIPAC Iran specialist Keith Weissman, according to the sources.

AIPAC officials contacted declined to comment.

Attorneys familiar with FBI security prosecutions identified Section 794 and 798 of the Espionage Act as ideally suited to the FBI’s sting strategy. Section 798, titled, “Disclosure of Classified Information,” applies to “whoever knowingly and willfully communicates, furnishes [or] transmits — for the benefit of any foreign government to the detriment of the United States any classified information — concerning the communication of intelligence activities of the United States or any foreign government.” The sweeping statute would cover classified information not only about America but also about Iran and Iraq.

Reporter Janine Zacharia first revealed initial news of the July AIPAC sting in The Jerusalem Post.

After the AIPAC sting on or about Aug. 20, Franklin — still without legal representation — was directed by his FBI handlers to launch a sting against Chalabi’s Washington-based political adviser, Francis Brooke, according to multiple sources with direct knowledge of Franklin’s stings.

At the time, Washington intelligence circles were accusing Chalabi of passing sensitive American intelligence code-breaking information to Iranian intelligence. The charges against Chalabi have since fallen from view.

Brooke, a southerner who lives in a Washington-area home owned by Chalabi, took the August call from Franklin on the kitchen phone.

“Franklin called,” Brooke related, “and said, ‘You have a real problem on your hands with Iran and Chalabi.’ I told him, ‘It is all horse—-.’ Larry got very angry at me. He said it was ‘deadly serious.’ I said, ‘What the hell, if you say it is serious, OK. But we have no information about American code-breaking of Iranian intelligence.'”

“So Larry says, ‘I am talking to a bunch of media people, and I can spin this — but you need to level with me to get this straight,'” Brooke recalled. “This was not very much like Larry, and I just said, ‘There is nothing to spin.'”

Brooke dismissed the entire effort as part of a “vendetta against Chalabi organized by [then-CIA Director George] Tenet and others at the CIA.”

Franklin refused to comment.

In August, Franklin, still without legal counsel, was also directed by the FBI to call Ciralsky, who by this time had moved from CBS to NBC, where he was working on security developments in Iran, according to multiple sources with direct knowledge of Franklin’s calls. Franklin tried to set up a meeting with Ciralsky, but no such meeting ever occurred, according to sources familiar with the call, because shortly thereafter, on Aug. 27, the FBI’s AIPAC raids were leaked to CBS. Franklin actions were now public.

Before joining CBS, reporter Ciralsky was working as an attorney for the CIA but was allegedly forced out in 1999 during the course of an inquiry into his family background and his Jewish affiliations. Ciralsky later filed a harassment lawsuit against the CIA that is still pending.

The man who supervised much of the CIA investigation of Ciralsky and then the FBI’s investigation of Franklin following the May conversation with Ciralsky was Szady. In a JTA investigation, this reporter revealed exclusively his involvement with Ciralsky.

Critics of the current investigation point to Szady’s involvement in the probe of Ciralsky a decade ago to raise questions about a possibly larger agenda. One question involves the media.

Because Ciralsky is a reporter with NBC, some critics raised the specter of Szady’s FBI counterintelligence division consciously trying to entrap a member of the media engaged in routinely contacting sources. One source with direct knowledge of Franklin’s stings said it amounted to an “enemies list.”

Ciralsky refused to comment.

FBI officials repeatedly refused to discuss the Franklin stings. The bureau also refused to respond to questions about whether members of the media — including those at CBS, NBC and even this reporter — are under surveillance as part of their investigation. But at one point, a senior FBI official with knowledge of the case finally stated, “I cannot confirm or deny that information [due to] the pending investigation.”

Some Washington insiders believe that the FBI’s multiple stings are far from routine counterintelligence but represent a “war” between the counterintelligence community and policymakers, especially neocons.

One key insider explained the war this way: “It is two diametrically opposed ways of thinking. The neocons have an interventionist mindset willing to ally with anyone to defeat world terrorism, and they see the intelligence community as too passive. The intelligence community sees the neocons as wild men willing to champion any foreign source — no matter how specious — if it suits their ideology.”

Leading neoconservative figure Michael Rubin of the American Enterprise Institute added his own thought.

“This is a war of the intelligence community vs. the neoconservatives,” Rubin observed. “It involves both the right and the left of the intelligence community. It is a war about policy, the point being, the CIA must not be involved in policy. The CIA’s role is to provide intelligence and let the policymakers decide what to do with it, and it appears they are not sticking to that role — and that is a dangerous situation.”

“This is the politicizing of intelligence,” he continued. “But the CIA, by its establishing principles, is not to be involved in politics.”

Rubin added that the sting effort “against AIPAC is the culmination of a 20-year witch-hunt from a small corps within the counterintelligence community” that Rubin labeled “conspiracy theorists.” He added, “What is the common denominator between the Ciralsky case and the AIPAC case? David Szady.”

Szady, who has been decorated twice by the CIA for distinguished service, answered one critic, writing, “I am not at liberty to comment on pending investigations.” Szady had issued a statement to this reporter earlier that he “has no anti-Semitic views, has never handled a case or investigation based upon an individual’s ethnicity or religious views and would never do so.”

One neoconservative at the center of the counterintelligence war said: “This is just the beginning. Nobody knows where this war is going.”

Edwin Black is the author of “IBM and the Holocaust” (Crown, 2001). Black’s current best seller is “Banking on Baghdad” (Wiley), which chronicles 7,000 years of Iraqi history. This article first appeared in the Forward.


Does AIPAC Prober Target Jews?

David Szady, the senior FBI counterintelligence official currently heading the controversial investigation of the American Israel Public Affairs Committee (AIPAC), is well-known to senior Jewish communal officials, who assert he has targeted Jews in the past.

Now, an investigation reveals that Szady was involved in a well-publicized case involving a Jewish former CIA staff attorney who sued the FBI, the CIA and its top officials for religious discrimination. Although not named in the suit, Szady headed the elite department that former CIA Director George Tenet admitted in 1999 was involved with "insensitive, unprofessional and highly inappropriate" language regarding the case of attorney Adam Ciralsky.

The AIPAC investigation, which CBS broke last month on the eve of the Republican convention, is believed to focus on a Pentagon official suspected of passing a classified draft policy statement on Iran to AIPAC, the pro-Israel lobby, which allegedly then passed it on to Israel.

AIPAC denies any wrongdoing and has called the alleged charges "baseless." But the case cast a spotlight on the venerable lobbying organization and has sent shock waves through the Jewish community.

Jewish communal officials and members of Congress have protested the investigation and the media frenzy around it, calling for an investigation into who leaked the investigation and for what purpose.

Many questions remain unresolved, including who initiated the investigation, believed to have begun two years ago, and why.

Szady was appointed by President Bush in 2001 to head a little-known intelligence interagency unit known as the National Counter Intelligence Policy Board. He returned to the FBI about two years ago, becoming assistant director for counterintelligence.

Jewish communal officials familiar with Szady assert that he has targeted Jews, blocked or slowed their clearances and squeezed minor security violators.

"He’s bad, very bad," declared one senior Jewish organizational executive, who like all those familiar with Szady declined to speak for the record.

According to exclusively obtained documents, Szady was directly involved in the Ciralsky case. He is identified in the documents as the chief of the CIA’s Counterespionage Group, known as CEG, which was later accused of targeting Ciralsky for being Jewish and a supporter of Israel.

Szady would not respond directly to a request for an interview, but FBI spokeswoman Cassandra Chandler said, "David Szady has informed me that he has no anti-Semitic views, has never handled a case or investigation based upon an individual’s ethnicity or religious views and would never do so."

Of the AIPAC investigation in particular, Chandler said: "Investigations are predicated upon information of possible illegal or intelligence activity. The suggestion that the FBI or any FBI official has influenced this investigation based on moral, ethnic or religious bias is simply unfounded, untrue and contrary to the very values the FBI holds highest."

Ciralsky’s problems began as soon as he joined the CIA’s legal staff as a junior member in early December 1996. Within days, CIA security personnel began creating a special file on Ciralsky and his Jewish background, according to the documents.

One Dec. 19, 1996, internal CIA memo on Ciralsky indicated that a CIA supervisor "would like to keep current on developments for damage control purposes."

By Jan. 15, 1997, the agency had created a four-page annotated "Jewish resume" of Ciralsky, which was classified "secret." The resume listed Ciralsky’s teenage trips to Israel in 1987 with the Milwaukee federation and for Passover in 1988, his camp counselor stint at the Milwaukee JCC’s day camp and his minor in Judaic studies at George Washington University. His major in international affairs was not mentioned.

Shortly thereafter, CIA security personnel were asking whether Ciralsky’s nephew might be working with the Israeli government, according to documents. The nephew was only about 5 months old at the time.

By May 1997, Szady, a 32-year veteran of the FBI, had joined the CIA as chief of the CEG within the CIA’s Counterintelligence Center. A presidential directive mandates that an independent FBI official serve as chief of the CIA’s CEG.

Although Szady was not in his post when Ciralsky was hired, shortly after Szady assumed his new position, the CEG appeared determined to terminate Ciralsky.

On June 12, 1997, a memo titled, "Spot Report-Next Steps in the Adam Ciralsky Case," was circulated by Szady’s department, outlining what would be done to force Ciralsky from the agency.

The report and the routing slips were tagged with classifications such as "sensitive," "restricted handling" and "eyes only, no registries," thus ensuring that the documents would not end up in any formal and traceable file.

Although Szady’s name is blocked out, his bureaucratic initials, C/CEG/CIC, on two routing pages, plus the hand-written acknowledgment next to his initials, show he received the "Spot Report" the day it was written, according to sources with personal knowledge of the case.

By September 1997, unable to find any incriminating information on Ciralsky, Szady’s CEG assigned teams of investigators to ramp up the pressure with multiple interrogations, according to documents.

One CEG investigator’s memo on Sept. 12, 1997, suggests questions for interrogators to ask Ciralsky, such as, "What is your family’s relation with Israeli President Ezer Wizman [sic]?" This question was based on the fact that Ciralsky is a distant relative of Ezer Weizman, who was Israel’s president at the time. The Sept. 12, 1997, memo added, "Maybe his family has donated money to Israeli government causes."

The memo also quotes one of Szady’s investigators, saying, "From my experience with rich Jewish friends from college, I would fully expect Adam’s wealthy daddy to support Israeli political/social causes in some form [such as] Israeli Bonds purchased through the United Jewish Appeal."

A week later, Sept. 19, 1997, before a security polygraph had even been administered, Szady’s CEG circulated a secret memo, saying that former CIA Director "Tenet says this guy is outta here, because of lack of candor. Once that’s over, it looks like we’ll be waving goodbye to our friend."

Szady was third on the distribution list to receive that Sept. 19 memo, according to the routing slip and sources.

A handwritten note on the routing slips comments, "Great job — we should have Ciralsky’s report in the security file. This will definitely result in termination by cancellation of contract! Thx."

Ciralsky complained to the CIA’s inspector general, the Office of Equal Employment Opportunity, to senior administration officials and to Malcolm Hoenlein, executive vice chairman of the Conference of Presidents of Major American Jewish Organizations.

After the outlines of the Ciralsky story broke in 1998, the CIA launched an internal and external review of Szady’s department, the CEG, to determine whether it had engaged in anti-Semitism.

As a result of that review, Tenet conceded in a letter to Abraham Foxman, the Anti-Defamation League’s (ADL) national director, that "some of the language used by some of the investigators in this case was insensitive, unprofessional and highly inappropriate."

After the review, the CIA hired the ADL to conduct "sensitivity training" within the ranks of Szady’s CEG.

Foxman said, "The sensitivity training in the CIA was not directed at one individual. It was directed at a situation. There was a concern in the agency at that time, that the world was changing and the agency itself needed its staff to be sensitive to diversity."

After he left the CIA in 1998, when his contract was not renewed, Ciralsky filed a lawsuit against the CIA, the FBI and others, alleging that he was "unjustly singled out for investigation and subsequently interrogated, harassed, surveilled and terminated from employment with the CIA solely because he is a Jew and he practices the Jewish religion," according to the complaint.

Ciralsky’s case was not isolated within the intelligence community, according to senior officials at Jewish organizations who declined to speak for the record. One Jewish official stated that he knew of as many as 10 other CIA employees who had been harassed or pressured because of their Jewish background, but they were afraid to come forward.

Postings on the CIA’s internal Jewish-only bulletin board — the agency allows various ethnic groups within its ranks to share company tidbits — reflect that numerous employees feel anti-Semitism is rampant. One such posting in 2000, obtained from sources, asks, "Does anyone know how one would go about informing the D/CI [director of central intelligence] directly that some incidents of anti-Semitism are tolerated?"

Despite Szady’s direct involvement in the Ciralsky case, Szady was decorated twice by the CIA for distinguished service, once with its Seal Medallion and once with the Donovan Award.

One Jewish communal official said of Szady, "He has never stopped looking for Mr. X," the elusive individual some FBI officials hypothesized worked with Jonathan Pollard, who was sentenced in 1987 for spying for Israel.

At least one senior Jewish official cautioned against concluding too much. "Szady might just be overzealous. I know Jews who have been to his house, and they assure they saw no evidence of prejudice."

On Szady’s link to the Ciralsky case, American Jewish Congress Chairman Jack Rosen said, "The FBI, in recent years, has been criticized for many things, and if the story is true, I would urge that an outside and independent individual or group come in to investigate."

Ciralsky, now a TV network newsman, declined to comment on his case. His lawsuit has been caught up in pretrial legal limbo, hampered by a series of preliminary motions, according to attorneys familiar with the case.

Spy vs. Spy

Over the past few weeks, as the anniversary of Sept. 11 approached, the FBI and the Department of Justice, along with investigative reporters at CBS, The Washington Post and the Los Angeles Times, have focused their resources on what they must figure is a real threat to American security: the folks at AIPAC.

"Israel Has Long Spied on U.S., Say Officials" screamed a front page Sept. 3 headline by Times’ writers Bob Drogin and Greg Miller.

The article played catch-up to a report on CBS that the American Israel Public Affairs Committee (AIPAC), the pro-Israel lobbying group, is the focus of an ongoing federal investigation. According to the news reports, an indictment was imminent against lower-level Pentagon analyst official Larry Franklin for passing confidential documents regarding America’s Iran policy to two AIPAC officials, who then funneled them to the Israelis.

In June the Pentagon revoked Franklin’s security clearances, and the FBI has been tracking two AIPAC Iran analysts, Steve Rosen and Keith Weissman. I suppose that’s just in case they try to enroll in flight school.

What is going on here?

No one I’ve spoken with believes this purported investigation will uncover serious wrongdoing. That’s not to say no one may have crossed lines, lines that are often blurry to begin with. The office of Doug Feith, the undersecretary of Defense for Policy, is under at least two separate investigations that don’t concern Israel, as is the Pentagon’s Office of Special Plans, which was responsible for some of the dubious intelligence regarding pre-invasion Iraq. But as for the Franklin investigation, a Washington investigator told me, "We’re not even close to Jonathan Pollard territory here."

All along, the seriousness of the charges and the way they unfolded doesn’t square. If AIPAC were really the target of a two-year government investigation approved by national security adviser Condoleezza Rice, wouldn’t it have been radioactive by now? Would Rice herself have spoken to the group several times last year, and maintain her commitments to speak to it again in the coming months? Would she have allowed her boss, President Bush, to speak to AIPAC’s annual meeting on May 10? And would members of both parties have swamped AIPAC events in New York and Washington?

Is this affair about some nefarious pro-Israel spy ring that reaches from the Century Plaza AIPAC banquets to the halls of Congress to the neocons at the Pentagon to the White House? Or are the accusations volleys in a turf war over administration policy in the Middle East, from Israel to Iraq to Iran? The administration’s weak and incoherent Iran policy has pitted the State Department and CIA against the Department of Defense, and leaking a spy story is one way to discredit the latter. There is plenty of fault to be found with administration neocons, but smearing them with insinuations of dual-loyalty hurts Israel and American Jewry as a whole.

In all this, the press has been a willing accomplice. The Sept. 3 Los Angeles Times article lacked only a photo of Ethel and Julius Rosenberg to make it more sensational. The damning headline rested — if you read through the piece — on a few unnamed officials. Other than printing some pro-forma Israeli denials, the writers don’t bother to investigate the details of the accusations themselves. It’s Swift Boat Veterans for Truth-style journalism: print the accusations, let others sort out the truth. Meanwhile, the looney left and Buchanan right go off on an Internet posting binge of anti-Israel conspiracy theories.

The Los Angeles Times piece offers no context — zero — as to what kind of spying other allies engage in, or to what extent the United States does the same. It doesn’t detail the harm — if any — to America’s security that such a vast network may have caused. And, like any good spy information, it self-destructs toward the end: The unnamed former officials say, "The relationship with Israeli intelligence is as intimate as it gets," and "They probably get 98 percent of everything they want handed to them on a weekly basis." So Israel and AIPAC have an intensive, politically suicidal, ongoing spy network against Israel’s life-sustaining ally in order to snag that extra 2 percent?

Franklin has not been charged yet, but there are reports indictments are forthcoming. They are expected to be minor. But they will cast a major pall on the operations of an organization that has been critical to Israel’s well-being. I’ve often disagreed with AIPAC when it has appeared to act as a hand puppet in the lap of Israeli governments whose policies sometimes defied logic or decency. Even then I know it has sometimes served as a truth-telling intermediary to Israeli prime ministers who needed to face difficult facts.

In Los Angeles, home to a financially and politically active network of AIPAC supporters, no one is even thinking of jumping ship. That would change in a heartbeat if what looks like reporters getting spun turns out to be bona fide espionage.

"It would be a dealbreaker," said one AIPAC supporter, who preferred to go unnamed.

In the meantime, we can only hope the folks at State, the FBI and the press are working as hard to uncover our enemies as they are to discomfit our friends.

Red Tape Ties Up Shoah Payments

Living in the Radom ghetto in central Poland, Saul Friedman applied for work in 1942, and for the next two years cleaned a building and labored in a peat bog for the German army.

He earned no money, but received something much more valuable extra food rations. When the ghetto was finally liquidated in 1944, he was sent to an Auschwitz satellite camp, then to Mauthausen, and after liberation came to the United States.

Friedman, 85, is one of thousands of other survivors in the United States, Israel and elsewhere, who are now entangled in a bureaucratic hassle over a recent German law meant to benefit a little known class of survivors.

The so-called ZRBG law, the German acronym for Payment of Pensions from Employment in a Ghetto, was established two years ago to give German Social Security benefits to those who worked voluntarily, or "at will," in the ghettos of Eastern Europe.

Although the law is well meant and the benefits are significant, in practice eligible applicants are facing long delays, a high rejection rate and a bureaucratic process defined as "highly erratic."

For instance, Mark Rothman, the Holocaust services advocate for the free Bet Tzedek Legal Services, reports that among 135 applicants in the Los Angeles area, 13 have waited for more than a year for an initial response, 47 have been waiting between six months to a year and all but five of the remainder have received rejections.

Similarly, an 80 percent rejection rate has been reported from New York and Florida.

Following protests by the Claims Conference (Conference on Jewish Material Claims against Germany), Bet Tzedek and a group of five U.S. Congressional representatives from Los Angeles, German authorities have launched an investigation to determine whether the ghetto pensions law is being interpreted too narrowly and restrictively.

"This law was meant to be generous, but if the investigation shows that there has been a hiccup in the implementation, we will take corrective measures," said Michael Wolff, the German consul for legal affairs in Los Angeles.

Wolff noted that there appeared to be some confusion by a number of applicants between compensation for forced or slave labor, which is handled under a different law and by a different ministry, and for voluntary "at will" ghetto labor, which is administered by the Social Security departments of the individual German states.

Gideon Taylor, executive vice president of the Claims Conference, said he had encountered two basic difficulties with the ZRBG law: one in the way it is administered and the other in the way it was written.

An example of perplexing administrative decisions is the case of Westwood resident Saul Friedman. While his application was turned down, that of his wife Bella, who worked as a seamstress for the Germans in the same ghetto and at the same time as her husband, was approved.

She has received an $18,000 back payment and now gets a monthly $250 check from the German Social Security system.

An example of some of the law’s provisions criticized by Taylor, Rothman and U.S. Rep. Henry Waxman (D-Los Angeles) is that only workers who were over 14 years old at the time are eligible for ghetto pensions.

Under that restriction, the application of Helen Korb was turned down. As an 8-year-old in the ghetto of Mir (now in Belarus), Korb worked alongside her mother doing cleaning and laundry at a German garrison.

"When I was in the ghetto, they wouldn’t let me be a child, and now they say I can’t get a pension because I was a child," Korb, a North Hollywood resident, said bitterly.

The ghetto pension law is the latest chapter in the history of Nazi era reparations, but it’s not the end of the book.

"We are always looking for more liberal interpretations of existing laws," Taylor said, "and we are now receiving the first allocations from Germany for home care for elderly survivors."

In another Holocaust-related development, three Los Angeles-area survivors suffered a legal setback in their suit against an international commission dealing with wartime insurance claims.

In their suit, the survivors accused the International Commission on Holocaust Era Insurance Claims (ICHEIC) of, in effect, serving as a front for Italian insurance company Assicurazoni Generali to lower or deny claims by survivors or their heirs.

The suit was first filed almost a year ago in Los Angeles Superior Court under California’s unfair business practices statue. At ICHEIC’s request, the case was transferred to a federal court, because of claimed foreign policy aspects.

A federal judge sent the suit back to Superior Court, where Judge William Highberger ruled last week that the state had no jurisdiction in the case.

Attorney William Shernoff, representing survivors Dr. Jack Brauns, Manny Steinberg and Roman Rakover, complained that he was caught in a Catch-22 dilemma between federal and state courts and said he would take the case to the California Court of Appeals or state Supreme Court.

New York attorney Constantinos Panagopoulos, representing ICHEIC, applauded Highberger’s decision, saying that it validated his argument that because of international political implications, the case was a matter for the executive, rather than judicial, branch of the government.

Is Israel Spy Claim a Neocon Backlash?

Hours after CBS News first reported that federal officials were investigating a possible Israeli "mole" at the Pentagon, the first analysis hit the wires claiming that the emerging scandal wouldn’t damage U.S.-Israel relations.

It was quick journalistic work, but it wasn’t worth the bytes it was written on. The plain fact is, the scandal will affect Jewish and pro-Israel interests in myriad ways — even if the federal investigation fizzles and no charges are brought. And any proof that Israel was spying on the Pentagon, with the cooperation of the pro-Israel lobby, would be devastating both for Israel and for the Jewish community here.

At the very least, the fast-moving controversy highlights the many gray areas created when two close allies share military and strategic information through a web of formal and informal contacts.

Jewish leaders believe the leaks that produced the CBS story and the exaggerated talk of a mole may have been triggered by the bitter struggle between administration neoconservatives — many of them Jewish, many in the top ranks of the Pentagon organization chart — and the traditional conservatives and military and intelligence professionals who fear the neocons have led America into a military debacle in Iraq and want to do the same in Iran.

In particular, these forces have been critical of Douglas Feith, undersecretary of defense for policy, a hawk’s hawk and the boss of the man at the epicenter of the controversy, Pentagon analyst Larry Franklin.

This week, unnamed officials told reporters that the premature revelations had compromised their investigations, and that Franklin’s status remained "murky." But, on Tuesday, there were reports federal prosecutors in Alexandria, Va., the site of a number of recent high-profile spy and terror prosecutions, were nearing a decision on legal action.

But even if the investigation produces no arrests and no evidence American Israel Public Affairs Committee (AIPAC) went beyond the bounds of legal lobbying, it has the potential to cause damage to Israel, to Jewish interests here and to U.S.-Israel relations.

The accusation of a "mole" — that term made sensational headlines, but it wasn’t borne out by later reporting — plays into the ongoing belief by many on both ends of the political spectrum that a cabal of Jewish neoconservatives led America into a destructive war in Iraq, not because of America’s interests — but Israel’s.

The charge lacks credibility for several reasons, including President Bush’s obvious determination to topple Saddam Hussein from the earliest days of his administration and the fact that Israel never considered Iraq its most dangerous enemy.

But it has been persistent and damaging, and it is bound to gain new currency with this week’s barrage of news stories, some of which implied that pro-Israel neocons improperly gave Israel input into U.S. decision making on Iraq, as well as Iran. As the story spun out in the press, the Iraq references faded, but they are unlikely to be forgotten by those eager to blame the Jewish state and its American friends.

The scandal will refocus attention on a group of Jewish neoconservatives who have been polarizing figures both inside and outside government circles, including Feith and Deputy Defense Secretary Paul Wolfowitz.

The charges, even if unsubstantiated, could impede the widespread military cooperation between Washington and Jerusalem — ties that are even more important as the allies fight the terrorist forces that have targeted both nations. At the political level, there may be little impact, but the taint of even discredited spy charges could sow suspicions and fears that will make day-to-day cooperation at the working level more difficult.

The charges will also have a chilling effect on countless Jews serving in important government positions.

The new spy scandal is also bad news for the one American jailed for spying for Israel: Pollard, now in his 19th year of incarceration. This week’s stories will re-energize the military and intelligence officials who have worked so hard to prevent his release and make this president and the next one even warier about the political fallout from a Pollard pardon.

There is also the potential human tragedy of a non-Jew who cares about Israel whose reputation and career could be destroyed by a trial in the press, not the courts. It may turn out that Larry Franklin simply "mishandled" government documents in the course of routine, perfectly acceptable contacts with Israeli representatives — a far cry from espionage.

If there is evidence of improper actions by pro-Israel lobbyists and by Israeli officials, the results could badly undercut the good work done by years’ worth of pro-Israel activism and fan the fires of anti-Semitism based on the fallacious charge that Israel distorts U.S. policy to serve its own interests.

But even if the charges are quickly revealed as overblown, the fact that they have exploded in the middle of an emotionally charged presidential campaign and as protests proliferate over the Iraq war could adversely affect the Jewish community and Israel. Jewish leaders are worried — and they are right to be.