Two Decades After Pollard Case, Israel Still Has Spies in the U.S.
By Jeff Stein, CQ National Security Editor

The indictment last week of a top American military scientist on charges of passing secrets to Israel underscores an unhappy fact of life for U.S. counterintelligence agents: Our closest ally in the Middle East, a recipient of more than $2 billion a year in direct U.S. aid, is aggressively spying on us.

Not only that, Israeli spymasters are largely exempt from U.S. prosecution on espionage charges, say past and present counterintelligence agents, unless their activities cannot be ignored.

“It doesn’t surprise me at all,” said a senior FBI official, who talked only on the basis of anonymity due to the sensitivity of the subject. “Only when their activities become really egregious do they get prosecuted.”

Little is known about Noshir Gowadia, a U.S. citizen of Indian origin, who was already on trial in Hawaii for passing secrets about U.S. stealth technology to China.

Gowadia, 62, worked 18 years for Northrop Corp, where he was an engineer and designed the B-2 stealth bomber’s propulsion system, according to news reports. His Nov. 15 indictment by a federal grand jury in Honolulu does not detail the kinds of secrets Gowadia might have given to Israel, or how.

One of the few to be prosecuted was Jonathan Pollard, who for three years in the 1980s gave thousand s of highly classified military documents to Israeli spies working under diplomatic cover here.

But Pollard, now in the 22nd year of a 30-to-life sentence in a federal penitentiary in North Carolina, was also offering secrets to South Africa, Pakistan and others, according to a new book by the lead investigator in the case.

“Capturing Jonathan Pollard: How One of the Most Notorious Spies in American History was Brought to Justice,” by retired Navy counterintelligence agent Ron Olive, destroys the portrait of Pollard as an Israeli Nathan Hale.

Some documents ended up in the hands of Soviet leaders, intelligence sources maintain.

More recently, Pentagon intelligence analyst Larry Franklin pled guilty to passing secrets to two officials of the American Israel Public Affairs Committee, or AIPAC, the face of the so-called Israeli lobby here.

But those are anomalies, according to veteran FBI and CIA operatives.

Despite the highly publicized Pollard case, Israeli agents never stopped trying to recruit “moles” in the U.S. government, multiple and reliable intelligence sources say.

That’s in addition to stealing American industrial, technical and scientific secrets here.

Over the Line

A spokesman for Israel’s embassy in Washington dismisses such allegations.

“The U.S. and Israel share the closest relations on national security issues,” the spokesman, David Siegel, said by telephone. “Any assertions to the contrary are ridiculous.”

Siegel “categorically” denied that Israel has spies in the U.S. government.

Former and present U.S. intelligence officials tell a different story.

John M. Cole, an FBI spy catcher who retired in 2004, says that from 1993 to 1995 alone, he had “125 open cases” of Israeli espionage, representing nearly half of all the investigations carried on in his Global Unit, part of the now-defunct National Security division. (The pre-9/11 Global Unit was responsible for all espionage threats except Russia and China.)

The 125 figure “makes sense,” another former top FBI counterintelligence official said, speaking only on condition that he not be identified because of the issue’s sensitivity.

This official called the Israeli embassy’s denials “horse [manure].”

In fact, he said, U.S. officials repeatedly warned the Israelis to back off. But the finger-wagging only seemed to energize them.

“We would call them in, call them on the carpet, and next week there would be 10 more cases,” he said.

The Justice Department never seemed much interested in prosecuting them, he and other counterintelligence veterans said.

“Agents would get pissed off,” said the former top official. “We knew they were going to walk, that they were going to get a pass. . . . It was frustrating.”

Inside the FBI itself, Cole said, tracking suspected Israeli spies was hush-hush.

In a sharp break with FBI procedures, he was prohibited from notifying field offices when an investigation crept into their jurisdictions.

“No one was supposed to know we were investigating the Israelis,” Cole said.

For FBI agents new to counterintelligence, the aggressive Israeli espionage operations came as a surprise.

“They were trying to get inside [the U.S government], to understand our real intentions and intelligence” on them and their adversaries from Moscow to Riyadh, the former counterintelligence official added.

“Many of us didn’t understand at first that they weren’t our friends, they were Israelis,” the senior former official said. There was “a bit of a mind set in the FBI” that since the Israelis were allies — and much admired ones at that — their espionage “hijinks” didn’t merit much concern.

One of the more notorious hijinks surfaced in 2000, when Israeli agents were discovered eavesdropping on the White House and other sensitive telephone systems, according to media leaks at the time.

“The FBI had identified no one to arrest during its investigation,” the Associated Press quoted senior FBI officials as saying.

Last week, a knowledgeable FBI source told me it was yet another case of “looking the other way.”

But Dave Szady, who recently retired as head of FBI counterintelligence programs, says, “It depends on the circumstances.”

“In the counterintelligence world, neutralization is sometimes as effective as prosecuting them,” he said.

“The Israelis are our great friends,” he added, “but sometimes they step over the line.”
‘PNG-ed’

Cole said he had developed a case involving a civilian employee at a military base who was giving secrets to an Israeli military liaison officer.

“Other people within the government were involved also,” he said, declining to offer more details. He said he referred the cases to the Justice Department, “but nobody wanted to pursue it.”

Over the years, he said, a few Israeli spies were quietly “PNG-ed,” declared persona non grata and sent home.

But for the most part, “It was kept pretty quiet, because of the politics involved.”

Officials at the White House National Security Council and the Justice Department did not return calls asking about Israeli espionage in the United States.

Some FBI officials made a stab at getting White House backing for prosecutions, but “no one was going to fall on their sword” over it, the former top counterintelligence official said. There were too many more important things going on, particularly in the Middle East, where Washington, short on assets and language skills, needed Israel’s help.

They ‘Go Too Far’

For 13 years, a succession of Israeli prime ministers and defense officials insisted to U.S. presidents that Pollard was part of a “rogue operation” not sanctioned by Tel Aviv.

Finally, on May 11, 1998, under growing pressure from Israeli politicians and public opinion, they admitted he was theirs all along, awarded him Israeli citizenship, and began petitioning for his release.

The latest was Ehud Olmert, who brought up Pollard during his low-key summit meeting with President Bush last week, Israeli sources said.

Since several Bush administration national security officials have close ties to Israel, some intelligence sources speculated that the White House might give in to Olmert’s importuning.

But Bush would likely face an uproar from U.S. intelligence officials if he did, if President Clinton’s experience in 1998 is any guide.

When word leaked that Clinton might release Pollard during a summit with Prime Minister Benjamin Netanyahu, then-CIA Director George Tenet threatened to resign.

The Israelis “go too far,” says Cole. “They have crossed the line by tasking and paying people to steal our secrets.”

Jeff Stein can be reached at jstein@cq.com.