Iran: The Next War

V. Iran's Double Agent

Larry Franklin, it turns out, wasn't the only person involved in the Pentagon's covert operation who was exchanging state secrets with other governments. As the FBI monitored Franklin and his clandestine dealings with AIPAC, it was also investigating another explosive case of espionage linked to Feith's office and Iran. This one focused on Ahmed Chalabi, the head of the Iraqi National Congress, the militant anti-Saddam opposition group that had worked for more than a decade to pressure the U.S. into invading Iraq.

For years, the National Security Agency had possessed the codes used by Iran to encrypt its diplomatic messages, enabling the U.S. government to eavesdrop on virtually every communication between Tehran and its embassies. After the U.S. invaded Baghdad, the NSA used the codes to listen in on details of Iran's covert operations inside Iraq. But in 2004, the agency intercepted a series of urgent messages from the Iranian embassy in Baghdad. Intelligence officials at the embassy had discovered the massive security breach—tipped off by someone familiar with the U.S. code-breaking operation.

The blow to intelligence-gathering could not have come at a worse time. The Bush administration suspected that the Shiite government in Iran was aiding Shiite insurgents in Iraq, who were killing U.S. soldiers. The administration was also worried that Tehran was secretly developing nuclear weapons. Now, crucial intelligence that might have shed light on those operations had been cut off, potentially endangering American lives.

On May 20th, shortly after the discovery of the leak, Iraqi police backed by American soldiers raided Chalabi's home and offices in Baghdad. The FBI suspected that Chalabi, a Shiite who had a luxurious villa in Tehran and was close to senior Iranian officials, was actually working as a spy for the Shiite government of Iran. Getting the U.S. to invade Iraq was apparently part of a plan to install a pro-Iranian Shiite government in Baghdad, with Chalabi in charge. The bureau also suspected that Chalabi's intelligence chief had furnished Iran with highly classified information on U.S. troop movements, top-secret communications, plans of the provisional government and other closely guarded material on U.S. operations in Iraq. On the night of the raid, The CBS Evening News carried an exclusive report by correspondent Lesley Stahl that the U.S. government had "rock-solid" evidence that Chalabi had been passing extremely sensitive intelligence to Iran—evidence so sensitive that it could "get Americans killed."

The revelation shocked Franklin and other members of Feith's office. If true, the allegations meant that they had just launched a war to put into power an agent of their mortal enemy, Iran. Their man—the dissident leader who sat behind the first lady in the president's box during the State of the Union address in which Bush prepared the country for war—appeared to have been working for Iran all along.

Franklin needed to control the damage, and fast. He was one of the very few in the government who knew that it was the NSA code-breaking information that Chalabi was suspected of passing to Iran, and that there was absolute proof that Chalabi had met with a covert Iranian agent involved in operations against the U.S. To protect those in the Pentagon working for regime change in Tehran, Franklin needed to get out a simple message: We didn't know about Chalabi's secret dealings with Iran.

Franklin decided to leak the information to a friendly contact in the media: Adam Ciralsky, a CBS producer who had been fired from the CIA, allegedly for his close ties to Israel. On May 21st, the day after CBS broadcast its exclusive report on Chalabi, Franklin phoned Ciralsky and fed him the information. As the two men talked, eavesdroppers at the FBI's Washington field office recorded the conversation.

That night, Stahl followed up her original report with "new details"—the information leaked earlier that day by Franklin. She began, however, by making clear that she would not divulge the most explosive detail of all: the fact that Chalabi had wrecked the NSA's ability to eavesdrop on Iran. "Senior intelligence officials were stressing today that the information Ahmed Chalabi is alleged to have passed on to Iran is so seriously sensitive that the result of full disclosure would be highly damaging to U.S. security," Stahl said. "Because of that, we are not reporting the details of what exactly Chalabi is said to have compromised, at the request of U.S. officials at the highest levels. The information involves secrets that were held by only a handful of very senior intelligence officials." Thanks to the pressure from the administration, the public was prevented from learning the most damaging aspect of Chalabi's treachery.

Then Stahl moved on to Franklin's central message. "Meanwhile," she said, "we have been told that grave concerns about the true nature of Chalabi's relationship with Iran started after the U.S. obtained, quote, ?undeniable intelligence' that Chalabi met with a senior Iranian intelligence officer, a, quote, ?nefarious figure from the dark side of the regime, an individual with a direct hand in covert operations against the United States.' Chalabi never reported this meeting to anyone in the U.S. government, including his friends and sponsors." In short, the Pentagon—and Feith's office in particular—was blameless.

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