Report: Alleged Pentagon spy for Israel is Larry Franklin

By Nathan Guttman

Haaretz

August 28, 2004

WASHINGTON - The Web site of the Washington Post on Saturday quoted two sources who identified the Pentagon employee who allegedly spied for Israel as Larry Franklin, a desk officer in the Defense Department's Near East and South Asia Bureau.

According to the Post, the sources said Franklin worked at the Defense Intelligence Agency before moving to the Pentagon's policy branch three years ago and is nearing retirement.

The newspaper also quotes a law enforcement official as saying that the information allegedly passed by Franklin went to Israel through the pro-Israel lobby group the American Israel Public Affairs Committee (AIPAC).

Meanwhile, a federal law enforcement agent said Saturday that arrests in the Federal Bureau of Intelligence investigation into the alleged spying could come as soon as next week.

The American TV network CBS reported Friday that the FBI has been conducting an ongoing investigation into the matter and is convinced the spy has conveyed highly sensitive information to the Israeli government via two representatives of AIPAC.

The CBS report only identified the suspected mole as a senior analyst who works in the bureau of Defense Secretary Donald Rumsfeld. He was also said to be closely associated with two senior Pentagon officials, Paul Wolfowitz and Undersecretary of Defense for Policy Douglas J. Feith.

"The FBI has a full-fledged espionage investigation under way and is about to... roll up someone [who] agents believe has been spying, not for an enemy, but for Israel, from within the office of the secretary of defense," CBS reported.

The network said that the mole, whom it described as a "trusted analyst of the Pentagon," had last year passed on "secret White House deliberation on Iran."

The New York Times reported the analyst worked for Feith, who created a special intelligence unit before the Iraq war that had sought to build a case that Baghdad had ties to Al-Qaida - a position that has been criticized by intelligence professionals.

Asked whether the suspect worked under Feith, the number three Pentagon official, and William Luti, a senior official in the Pentagon's policy section, Pentagon spokesman Lawrence Di Rita declined comment.

"It's a criminal matter and we don't comment on criminal matters," he said.

CBS also reported that FBI investigators are concerned that Israel may have used him in an effort to influence U.S. policy on the war in Iraq, but the Defense Department said Saturday that the mole would not have had any influence on decision-making at that level.

Shortly after the September 11, 2001 attacks, Feith and Luti set up the intelligence unit, which ended up finding a close relationship between Al-Qaida and Iraq that later became an important element for invading Iraq.

The FBI has notified Rumsfeld about the investigation and has asked AIPAC to provide it with information about the two representatives in the organization who are suspected of involvement in the affair.

In a statement released Friday, the Pentagon said that it was cooperating with the Justice Department in the investigation, and downplayed the possibility that the suspect had sought to sway U.S. policy in the Gulf or Middle East.

"The investigation involves a single individual at the Department of Defense at the desk officer level who was not in a position to have significant influence over U.S. policy," it said.

"Nor could a foreign power be in a position to influence U.S. policy through this individual. To the best of the Department of Defense's knowledge, the investigation does not target any other Department of Defense individuals."

The Israeli embassy in Washington issued a statement categorically denying the allegations as "completely false and outrageous."

AIPAC issued a statement saying "we would not condone or tolerate, for a second, any violation of U.S. law or interests. We are fully cooperating with the governmental authorities and will continue to do so."

In late 2001, Franklin and another Defense Department official, Harold Rhode, met with an exiled Iranian businessman, Manucher Ghorbanifar, who had been involved in the Iran-Contra scandal of the 1980s.

Questioned about the meeting in August 2003, Defense Secretary Donald Rumsfeld said it was "absolutely not" the case that the meeting with Ghorbanifar was intended to be part of any other ongoing, unofficial talks with Iranians.

A senior U.S. official, however, said on condition of anonymity that two other Iranians were present at the meeting who the Bush administration had been told had information useful to the U.S. in its then-fledgling global war on terrorism.

In November of 1985, U.S. naval intelligence analyst Jonathan Pollard was arrested at the gates of the Israeli embassy in Washington, on espionage charges. He was tried, convicted and handed a life sentence for spying for Israel.

Israel apologized for the incident and disbanded the intelligence cell of which Pollard was a part.