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Brit Hume, host   "It has been more than 16 years since a civilian working for the Navy was charged with passing secrets to Israel. Jonathan Pollard pled guilty to conspiracy to commit espionage and is serving a life sentence. At first, Israeli leaders claimed Pollard was part of a rogue operation, but later took responsibility for his work. Fox News has learned some U.S. investigators believe Israelis again are very much engaged in spying in & on the U.S., who may have known things they didn't tell us before 9.11.01. Fox News correspondent Carl Cameron has details in the first of a four-part series. (begin videotape)

A Budget truck was pulled over in Oak Harbor WA last Tuesday near the Whidbey Island Naval Air Station and found to have traces of TNT on the gearshift and traces of RDX plastic explosive on the steering wheel, Fox News has learned. Traces of explosives were also found on one of the truck's 2 occupants. The FBI, INS, BATF, and local police are all investigating.
Govt officials said the roadside stop was so close to the naval air station that military personnel took part in the initial arrest and naval intelligence has also been involved in the subsequent investigation. Shortly after midnight 5.7.02 federal officials say local police pulled the vehicle over for speeding. Documents read to Fox News indicate that the driver & passenger told local police they were delivering furniture from California but that authorities doubted the story because of the early morning hour. A bomb-sniffing dog first detected explosives on one of the men and inside the truck. High-tech equipt was used later to confirm the presence of TNT & RDX plastic explosive.

Documents read to Fox News indicate that both driver & passenger were Israeli nationals. Investigators say a roadside check of the national database of immigration records indicated that one of the men had not entered the country legally, and the other was in violation of his visa. Both men were taken into custody for immigration violations. At 7:30 that morning local police were notified that the BATF & FBI had tested the truck and found traces of explosives on the steering wheel & gear shift.
Officials say no other charges of been filed against the driver & passenger and an investigation is ongoing. Authorities say records for the Budget truck do not indicate any recent rental for the purposes of transporting explosives, which would require special permits.

Amdocs profit rises, guides down for year
4.23.02   Reuters

Los Angeles   Telecomm software & services company Amdocs Ltd. Tue. reported fiscal Q2 results in line with analysts' expectations but gave guidance for year below expectations because of weak telecom marketplace. The Israeli-U.S. co. reported $26.4 million net profit, 12¢ per share, compared with a year-earlier profit of $15.4 million, or 7¢ per share. Excluding acquisition-related costs, co. posted pro-forma $82.9 million profit at 37¢ per share. Av. broker est. surveyed by Thomson Financial/First Call was pro-forma 37¢ profit per share.
[ Nearly doubled earnings after 9.11.01 & Jenin but still managed to fleece investors 3 to 1 while domestic majors had record milestone losses. ]

$455.2 million Q2 revenue compared with $372.3 million same period last year. Co. expects FY2002 $1.73 billion revenue and pro-forma earnings $1.40 per share. First Call est. for year was earnings of $1.50 per share on revenue of $1.85 billion.
"This reflects more prolonged & deeper market deterioration than originally anticipated," Amdocs CEO Avi Naor said in statement. Co. also said it was expanding share repurchase plan by addtl 20 million shares. Amdocs shares closed down 2.9% at $22.30 on NYSE. 52-week high $66.55, 52-week low is $20.56.

Launch of Israel's TecSAR satellite
2.13.08   Yiftah Shapir INSS

Israeli TecSAR satellite was launched 1.21.08 by an Indian Polar Space Launch Vehicle (PSLV)-C10 from the Satish Dhawan Space Centre at the Sriharikota range in south-east India. It entered orbit about 80 minutes after launch. Less than two weeks later, on January 31st, it sent its first images. The photographs, which were taken at night in stormy weather, were said by Israel Aerospace Industry personnel to be of exceptional quality.
TecSAR was built by IAI's Mabat space facility and it carries components from Elta and other Israeli companies (Rafael, Tadiran, Spectralink and Rokar). It joins other IAI surveillance satellites already in space: the Ofeq-7 launched June 2007 and Eros-B launched April 2006.

However, TecSAR is unique in several respects. First of all, it uses Synthetic Aperture Radar technology (SAR) to provide images of the earth's surface. Since the images are generated by radar rather than by visible light, it can perform at night as well as during daytime and it can see through clouds.
The satellite's operational specifications are classified but it can reportedly provide high-resolution images sufficient for military intelligence needs. The satellite can operate in a number of modes, including wide area scans, and provide both strip and point coverage. Each mode naturally provides a different degree of resolution. Aiming can be done by electronic steering of the radar beam or by physical steering of the satellite itself.
These capabilities have been packed into a relatively small package. TecSAR weighs about 300 kilograms, of which only 100 are payload. The low mass allows for operational agility which means that operators can redirect its antenna from one target to another very quickly.

Another unusual feature was the choice of launch vehicle. Until now, Israel has preferred to launch its Ofeq-series surveillance satellites by itself, using the Shavit satellite launcher. That entailed a number of benefits. First of all, there was the advantage of independence from any foreign participation. Independent launch capability, especially in time of crisis when Israel might be subjected to an embargo, could turn out to be vital.
Secondly, a satellite launch capability is an important element of Israel's deterrent power, since it can always be translated into a surface-to-surface missile capability. Indeed, foreign analysts have long assessed that the Shavit can also carry a one-ton warhead over a range of 4000 kilometers. Thirdly, satellite launch capability is a major component of Israel's image as a leading technological power in the world, because very few states have such a capability.

However, the use of the Shavit also involved some drawbacks. The most important was the constraint on possible satellite orbits. Any launch from Israeli territory must be directed westwards, towards the sea, in order to prevent the launcher's first stages (or the satellite itself, in case of a malfunction) from falling on populated areas or on foreign territory. A westward launch, i.e., against the direction of the earth's rotation, seriously restricts the weight of the satellite that the launch vehicle can carry.
In the past, Israel also experienced several failures, most recent example being the attempted Ofeq-6 launch in March 2004, though it should be noted that such failures are not rare in the launch industry and a failure rate of several percent is considered almost standard.
In such cases, security links and the operational experience of another partner can allow alternative launches when needed. Israel has used foreign commercial rockets in the past for a variety of reasons. Its Amos communications satellites were all launched by commercial boosters because Israel has neither the capability nor the geographic location needed to put communications satellites into space. (Communications satellites are placed in geosynchronous orbit at a fixed point over the equator and are much heavier than the Ofeq surveillance satellites.)
Moreover, the Eros-series commercial imagery satellites, similar to the Ofeq series, were also sent into orbit by commercial launchers. (The two EROS satellites used Russian commercial launchers to reach near-polar orbits that permit almost global coverage.)

The TecSAR represents the first Israeli use of the Indian PSLV launcher, which makes possible an orbit that could not be reached from Israel: altitude 450-580 kilometers, with an inclination of 41 degrees. As a result, TecSAR cruises from west to east, unlike all the surveillance satellites launched from Israel itself.
For the Indians, this launch was an important step in introducing the PSLV into the commercial launcher market. The PSLV was inaugurated in 1994 and has now had 11 successful launches, although the first commercially significant launch took place only in April 2007. It is noteworthy that because of strong domestic opposition in India to excessively close security cooperation with Israel, the Indians stressed the purely commercial character of the launch.

TecSAR undoubtedly constitutes a technological breakthrough for Israel's defense industry. It is an advanced satellite with few competitors in the world. It is unique in its capabilities and in its size (similar American surveillance satellites are much heavier). For the defense establishment in Israel, it provides coverage of the whole of the Middle East.
Together with the Ofeq-7, the TecSAR will make possible a larger number of "visits" to points of interest at any given time and will permit night-time and all-weather coverage.

IPO of wiretapping firm Verint Systems set
4.22.02   Reuters ¹

Wash.D.C.   Verint Systems Inc., whose wiretapping software enables law enforcement agencies to scan the Internet, telephone calls and other forms of communication, said on Monday it plans an initial public offering of 4.5 million common shares. The unit of U.S.-Israeli communication system developer Comverse Technology Inc. said in SEC filing it expects shares to sell for $16 to $18 each. It was not immediately known when Verint will debut, but it has applied for NASDAQ listing under the symbol "VRNT"

Comverse, which will own 79.5% when the IPO is completed, was down 69¢, or more than 5%, at $12.55 morning Nasdaq trade. Woodbury NY based Verint is selling 4.4 million shares in the IPO while AKR Enterprises LLC of Glen Burnie, MD, is selling 136,985 shares. Verint predicted it will net about $67.5 million in proceeds, which it plans to use to finance growth, for working capital and general corporate purposes. The money may also be used to repay bank debt and for acquisitions or other investments.
The company will have about 23.4 million shares outstanding, giving it a potential market value of $374 million to $421 million. Managing the IPO are Lehman Brothers, Salomon Smith Barney, Robertson Stephens, UBS Warburg and U.S. Bancorp Piper Jaffray, which have option to buy 675,000 extra shares to cover any overallotments.

Comverse posts Q4 loss
3.12.02   Jim Christie Reuters

Average analyst expectation per Thomson Financial/First Call research firm survey for the Israeli-U.S. company was 6¢ a share posted earnings, individual est. ranging 5¢ to 6¢ a share. Q4 sales fell 24% to $265 million from $346.6 million year ago; co. expects Q1 sales to fall to around $220 million, resulting in Q1 6¢ a share loss.   [cf. prev. article for truth],  
Comverse chair & CEO Kobi Alexander stressed same basic notion to analysts during conf.call, citing continuing "recession" in global capital spending in the telecom industry. Comverse limited its guidance to current Q1 because "visibility has deteriorated," but added it expects return to profitability by end of current FY. Alexander said Comverse is well positioned to seize opportunities as economy rebounds and had about $1.4 billion in cash & cash equivalents as of 1.23.02. Co. may make small acquisitions for cash, he added.

Co. short-term guidance sent shares tumbling. Comverse shares closed $15.85, down 21¢, or 1.3%, and fell to $13.96 in after-market trade on Instinet. Analysts expected Comverse's sales would stay flat in the short term and expected co. to not provide outlook beyond next 2 quarters, reflecting the difficulty in determining when telecom markets will rebound. "We're bouncing along the bottom," said Raymond James & Assoc. Inc. analyst Mike Latimore "Q1 & Q2 will not be inflection points."

That was driven home Tue. after cell-phone maker Nokia warned of weak sales and telecom equipt maker Lucent Technologies Inc. lowered sales forecast, said WR Hambrecht & Co. analyst Peter Friedland. Comverse's guidance of likely lower sales and loss for current quarter is result of uneven ordering by customers, Friedland noted. "Hope had been $265 million (in Q4 sales) would be a bottom because co. said it had seen a stabilizing backlog," he said. "Backlog looked good at the beginning of the year so some carriers were spending some money, but more recently building that pipeline tailed off, so carriers stopped making commitments," Friedland added.

How Americans are blackmailed by Israel ¹
2.24.02   Alexander James Arab News   abridged

… The Israeli spy news story first broke regarding the existence of a system to tap into any phone in America built into the surveillance system used by law enforcement authorities. However after reporting it, Fox News spiked the story from its website. Several cases were cited where investigations ranging from drug running & money laundering to 9.11.01 had been compromised by leaks from the company that operated the phone taps as well as phone data from an associated co. that handles billing services for almost every phone in America.
… The focus of the article was a single question: Could Israel be blackmailing the entire US govt & media?

Amdocs, Inc. which subcontracts billing & directory services for phone companies around the world, incl 90% of American phone companies, is owned by Israeli interests. Yet another company, Comverse Infosys, is suspected of having built a "back door" into equipt permanently installed into the phone system that allows instant eavesdropping by law enforcement agencies on any phone in America.
As reported by Fox News, Israeli co. Amdocs was implicated in the leaking of police phone data that resulted in the collapse of an investigation into a massive drug & credit card fraud operation with Israeli connections. In a telling repeat of the Los Angeles drug case, investigators looking into the attacks on the World Trade Center are again reporting that confidential telephone information is again being leaked in a manner that is interfering with the investigations. Again, Amdocs was implicated.

The Ken Starr report on Whitewater describes how Bill Clinton warned Monica Lewinsky that a foreign govt was tapping their phone calls, phone taps or bugs built right into the phone system. …
2 Mossad agents were arrested with dynamite inside the Mexican Congress. A Mexican newspaper carried the story of the arrested Mossad agents on front page. The Mexican govt was persuaded to release the 2 men without trial.

Israel receives a hugely disproportionate share of U.S. foreign aid, about $5 billion a year.
  [ A needlessly conservative figure that fails to include military "loans" to a highly debt laden nation as well as gifts of large quantities of sophisticated munitions. In the past decade. the total U.S. charity to Israel is between $10 & $14 billion annually. ]
A large segment of the US population questions the sending of so much money to such a small population while so many people remain homeless on our own streets. But somehow, Congress is "persuaded" to keep sending more cash each & every year.
… Sharon faces war crimes trial. Israel is in violation of the Geneva Accords. The UN accuses Israel of using torture on children.

… in a corrupt society only the corrupt can reach the heights of power, and they all have secrets to hide. They are all vulnerable to blackmail. Amdocs & Comverse Infosys are the most powerful tools a blackmailer could ever hope for. If we elect a govt of criminals, we elect govt subject to blackmail.

update: Just announced that Israeli "spy-phone" co. Comverse Infosys is now buying into the Instant Messaging business through Odigo, largest Instant Messaging co.
  [ Misnomer. Odigo perhaps may be largest co. primarily or exclusively engaged in IM, but it is far from largest co. to do so. ]
Odigo is Israeli-owned co. whose employees received 2 hour advance warning 9.11.01 to leave their offices near WTC.

from Odigo web site
. Gabriel Matsliach, Ph. D, chief technology officer at Odigo, has overall responsibility for Odigo's R&D activities. One of the founding members of Odigo, Dr. Matsliach holds Ph.D in computer science from the Technion, Israel Institute of Technology, and has over 12 years of experience in leading & managing software development projects.
Previous to his position with Odigo, Dr. Matsliach worked at Amdocs, leading telecommunication software co., where he led the development of cutting edge technologies and their deployment to mobile operators in Europe & N.America. In 1998 he was awarded the "Prime Minister's Award for Software Development".

The spies who came in from the art sale
3.13.02   John Sugg Creative Loafing

Atlanta   … major international espionage saga roots in Atlanta. … haven't read about it in Atlanta Journal-Constitution even though that paper's Washington bureau last week reported the seething scandal. … CNN CEO Walter Issacson says it would be "perverse" to televise Afghan babies killed by U.S. bombs, … ignoring sacred cows. … In 1999, word began spreading among intelligence agencies about bands of Israeli "students" doing strange things, such as popping up around federal buildings & military establishments marketing artwork. According to intelligence sources, low-level alerts began being flashed around to offices of the FBI, DEA, federal prosecutors and others. By March 2001, counterintelligence officials had issued a bulletin to be on the watch for Israelis masquerading as "art students."
At same time, American intelligence services were increasingly worried by the dominance of many highly sensitive areas of telecommunications by Israeli companies. Comverse Infosys (now called Verint) provides U.S. lawmen with computer equipment for wiretapping. Speculation is that "catch gates" in the system allowed listeners to be listened to. Other software called Amdocs provided extensive records of virtually all calls placed by the 25 largest U.S. telephone companies.

Often the Israeli "students" sold their artwork on street locations near federal buildings. In one incident in Atlanta, they showed up outside an unlisted FBI office and began taking photos, according to sources. Agents collared them and sent them on their way. Also in our town, a DEA agent recalled seeing the "students" selling art around his offices. Later, when he spied the same artwork (Chinese made, as it turned out) at the Mall of Georgia, he became suspicious. DEA is the lead U.S. agency in monitoring money laundering which explains spy's interest. Similarly, a former federal prosecutor was visited at his home by the Israeli "art salesmen" and, according to sources, concluded that, wow, this was exactly what the alerts had been about.

Then came 9.11.01 … media went out to a four-martini lunch … commendable exceptions. One is Carl Cameron, Fox News. 12.12.02, Cameron broke spy story. He said at the time: " … more than 60 Israelis have been arrested or detained, either under the new PATRIOT anti-terrorism law, or for immigration violations. A handful of active Israeli military were among those detained, according to investigators, who say some of the detainees also failed polygraph questions when asked about alleged surveillance activities against & in U.S." … Fox also reported Israeli "students" "targeted & penetrated" U.S. military bases. … Others at Fox confirm there was intense pressure on the network by pro-Israeli lobbying groups, such as the Anti-Defamation League and the misnamed Committee for Accuracy in Middle East Reporting (CAMERA). …

French Web-based service, Intelligence Online, obtained same 61-pg June 2001 federal report Cameron had. The website reported that 120 Israelis had by now been detained or deported by U.S. authorities. … The Oklahoman reported last week that 10 months ago 4 Israelis peddling artwork (but carrying military IDs) were detained near Tinker AFB OK. Le Monde in Paris recounted 6 intercepted "students" had cell phones purchased by an Israeli vice consul in U.S. Sources told CL that many of the phones had a walkie-talkie feature that was virtually impossible to intercept.
Intelligence Online connected many dots, naming which Israelis were employed by the tech companies, and what military specialties they had ("special forces," "intelligence officer," "explosive ordnance/combat engineer," "electronic intercept operator", even "son of Israeli army general"). Many of the apparent operatives had set up shop at addresses only stones' throws from Arabs in San Diego, Little Rock, Irving, Texas, and in South Florida, esp. in FL, where 10 of 19 9.11.01 terrorists lived. French report bolsters speculation Israelis might have gained advanced knowledge of the attack and not passed on that critical intelligence to U.S.

Bush administration shills were quick to try to spin the story. Justice Dept spokeswoman Susan Dryden, called Intelligence Online report "urban myth," and other federal flaks trumpeted that no Israeli had been charged with or deported for spying. … Israeli Embassy spokesman Mark Reguev derided Intelligence Online report as "nonsense." Israel in the past has stridently denied wrongdoing until long after the truth was obvious. Israel claimed Jonathan Pollard … wasn't an agent. Israel stubbornly contended its 1967 attack on the USS Liberty, in which 35 American sailors were killed, was an accident, lie exposed in recent reports incl one that aired last fall on History Channel. Recent authoritative book, Body of Secrets , by James Bamford, concludes that National Security Agency officials "were virtually unanimous in their belief that the attack was deliberate."

Following U.S. denials of recent spy story, Intelligence Online editor Guillaume Dasquie threatened to post the sensitive report online. He commented: "The document we have in our possession details not only the identities of the members of this network, but also their activities in the Israeli army, and even their serial numbers in the intelligence services, their passport numbers and their validity, and their visas and their validity." There's more to this story but you might have to move to Paris to read it.

Fox News has learned that one group of Israelis, spotted in N.Carolina recently, is suspected of keeping an apartment in California to spy on a group of Arabs who the U.S. is also investigating for links to terrorism.

Numerous classified documents obtained by Fox News indicate that even prior to 9.11.01, as many as 140 other Israelis had been detained or arrested in a secretive & sprawling investigation into suspected espionage by Israelis in the U.S.

Investigators from numerous govt agencies are part of a working group that's been compiling evidence since the mid '90s. These documents detail hundreds of incidents in cities & towns across the country that investigators say, "may well be an organized intelligence gathering activity." The first part of the investigation focuses on Israelis who say they are art students from the Univ. of Jerusalem & Bazala Academy. They repeatedly made contact with U.S. govt personnel, the report says, by saying they wanted to sell cheap art or handiwork.
Documents say they, "targeted & penetrated military bases." The DEA, FBI and dozens of govt facilities, and even secret offices & unlisted private homes of law enforcement & intelligence personnel. The majority of those questioned, "stated they served in military intelligence, electronic surveillance intercept and or explosive ordinance units."

Another part of the investigation has resulted in the detention & arrests of dozens of Israelis at American mall kiosks, where they've been selling toys called Puzzle Car & Zoom Copter. Investigators suspect a front. Shortly after NYTimes & Wash.Post reported the Israeli detentions last months, the carts began vanishing. Zoom Copter's Web page says, "We are aware of the situation caused by thousands of mall carts being closed at the last minute. This in no way reflects the quality of the toy or its salability. The problem lies in the operators' business policies."

Why would Israelis spy in & on the U.S.? GAO investigation referred to Israel as country A and said, "According to a U.S. intelligence agency, the govt of country A conducts the most aggressive espionage operations against the U.S. of any U.S. ally." A defense intelligence report said Israel has a voracious appetite for information and said, "the Israelis are motivated by strong survival instincts which dictate every possible facet of their political & economical policies. It aggressively collects military & industrial technology and the U.S. is a high priority target." The document concludes: "Israel possesses the resources & technical capability to achieve its collection objectives." (end video clip)

A spokesman for the Israeli embassy here in Washington issued a denial saying that any suggestion that Israelis are spying in or on the U.S. is "simply not true." There are other things to consider. And in the days ahead, we'll take a look at the U.S. phone system and law enforcement's methods for wiretaps. And an investigation that both have been compromised by our friends overseas.

Hume   Carl, what about this question of advanced knowledge of what was going to happen on 9/11? How clear are investigators that some Israeli agents may have known something?
Cameron   It's very explosive information, obviously, and there's a great deal of evidence that they say they have collected, none of it necessarily conclusive. It's more when they put it all together. A bigger question, they say, is how could they not have know? Almost a direct quote.

Hume   Going into the fact that they were spying on some Arabs, right?
Cameron   Correct.
Hume   All right, Carl, thanks very much.

Part 2

Cameron (voice-over)   Fox News has learned that some American terrorist investigators fear certain suspects in the 9.11.01 attacks may have managed to stay ahead of them, by knowing who & when investigators are calling on the telephone. How? By obtaining & analyzing data that's generated every time someone in the U.S. makes a call.

Unidentified female   What city and state, please?
Cameron   Here's how the system works. Most directory assistance calls, and virtually all call records & billing in the U.S. are done for the phone companies by Amdocs Ltd., an Israeli-based private telecommunications company. Amdocs has contracts with the 25 biggest phone companies in America, and more worldwide. The White House & other secure govt phone lines are protected, but it is virtually impossible to make a call on normal phones without generating an Amdocs record of it.
In recent years, the FBI & other govt agencies have investigated Amdocs more than once. The firm has repeatedly & adamantly denied any security breaches or wrongdoing. But sources tell Fox News that in 1999, the super secret National Security Agency, headquartered in northern Maryland, issued what's called a Top Secret sensitive compartmentalized information report, TS/SCI, warning that records of calls in the U.S. were getting into foreign hands, in Israel, in particular.

Investigators don't believe calls are being listened to, but the data about who is calling whom & when is plenty valuable in itself. An internal Amdocs memo to senior co. executives suggests just how Amdocs generated call records could be used. "Widespread data mining techniques & algorithms … combining both the properties of the customer (e.g., credit rating) and properties of the specific 'behavior.'" Specific behavior, such as who the customers are calling.

The Amdocs memo says the system should be used to prevent phone fraud. But U.S. counterintelligence analysts say it could also be used to spy through the phone system. Fox News has learned that the NSA has held numerous classified conferences to warn the FBI & CIA how Amdocs records could be used.
At one NSA briefing, a diagram by the Argon national lab was used to show that if the phone records are not secure, major security breaches are possible. Another briefing document said, "It has become increasingly apparent that systems & networks are vulnerable. Such crimes always involve unauthorized persons, or persons who exceed their authorization … citing on exploitable vulnerabilities."

Those vulnerabilities are growing, because according to another briefing, the U.S. relies too much on foreign companies like Amdocs for high-tech equipt & software. "Many factors have led to increased dependence on code developed overseas. … We buy rather than train or develop solutions." U.S. intelligence does not believe the Israeli govt is involved in a misuse of information, and Amdocs insists that its data is secure. What U.S. govt officials are worried about, however, is the possibility that Amdocs data could get into the wrong hands, particularly organized crime. And that would not be the first time such a thing has happened.

Fox News has documents of a 1997 drug trafficking case in Los Angeles, in which telephone information, the type that Amdocs collects, was used to "completely compromise the communications of the FBI, the Secret Service, the DEA and the LAPD." We'll have that and a lot more in the days ahead, Brit.

Hume   Carl, I want to take you back to your report last night on those 60 Israelis who were detained in the anti-terror investigation, and the suspicion that some investigators have that they may have picked up information on the 9.11.01attacks ahead of time and not passed it on. There was a report, you'll recall, that the Mossad, the Israeli intelligence agency, did indeed send representatives to the U.S. to warn, just before 9.11.01, that a major terrorist attack was imminent. How does that leave room for the lack of a warning?

Cameron   I remember the report, Brit. We did it first internationally right here on your show on the 14th. What investigators are saying is that that warning from the Mossad was nonspecific & general, and they believe that it may have had something to do with the desire to protect what are called sources & methods in the intelligence community. The suspicion being, perhaps those sources & methods were taking place right here in the U.S.
The question came up in select intelligence committee on Capitol Hill today. They intend to look into what we reported last night, and specifically that possibility, Brit.

Hume   So in other words, the problem wasn't lack of a warning, the problem was lack of useful details?
Cameron   Quantity of information.
Hume   All right, Carl, thank you very much.

Part 3

Cameron (voice-over)   The company is Comverse Infosys, a subsidiary of an Israeli-run private telecommunications firm, with offices throughout the U.S. It provides wiretapping equipt for law enforcement. Here's how wiretapping works in the U.S.
[ Comverse is Israeli firm with U.S. identity while Infosys is the 2nd largest software firm in India to whom Israelis farm out drugde work software development and who typically puts app hackers on site at customer location, hence identity duality of wiretap maker.
Who hates Arabs & Muslims almost as much as jews but Indians? Brilliant, or merely standard industry practice. ]

Every time you make a call, it passes through the nation's elaborate network of switchers & routers run by the phone companies. Custom computers & software, made by companies like Comverse, are tied into that network to intercept, record and store the wiretapped calls, and at the same time transmit them to investigators. The manufacturers have continuing access to the computers so they can service them and keep them free of glitches. This process was authorized by the 1994 Communications Assistance for Law Enforcement Act, or CALEA. Sr govt officials have now told Fox News that while CALEA made wiretapping easier, it has led to a system that is seriously vulnerable to compromise, and may have undermined the whole wiretapping system.

Indeed, Fox News has learned that Atty Gen. Ashcroft & FBI Dir. Robert Mueller were both warned 10.18.01 in a hand-delivered letter from 15 local, state and federal law enforcement officials, who complained that "law enforcement's current electronic surveillance capabilities are less effective today than they were at the time CALEA was enacted." Congress insists the equipt it installs is secure. But the complaint about this system is that the wiretap computer programs made by Comverse have, in effect, a back door through which wiretaps themselves can be intercepted by unauthorized parties.

Adding to the suspicions is the fact that in Israel, Comverse works closely with the Israeli govt, and under special programs, gets reimbursed for up to 50% of its research & development costs by the Israeli Ministry of Industry & Trade. But investigators within the DEA, INS and FBI have all told Fox News that to pursue or even suggest Israeli spying through Comverse is considered career suicide. And sources say that while various FBI inquiries into Comverse have been conducted over the years, they've been halted before the actual equipt has ever been thoroughly tested for leaks. A 1999 FCC document indicates several govt agencies expressed deep concerns that too many unauthorized non-law enforcement personnel can access the wiretap system. And the FBI's own nondescript office in Chantilly, VA that actually oversees the CALEA wiretapping program, is among the most agitated about the threat.

But there is a bitter turf war internally at FBI. The FBI's office in Quantico, VA has jurisdiction over awarding contracts & buying intercept equipt. For years, they've thrown much of the business to Comverse. A handful of former U.S. law enforcement officials involved in awarding Comverse govt contracts over the years now work for the company. Numerous sources say some of those individuals were asked to leave govt service under what knowledgeable sources call "troublesome circumstances" that remain under administrative review within the Justice Dept. (end videotape)
And what troubles investigators most, particularly in NY, in the counter terrorism investigation of the World Trade Ctr attack, is that on a number of cases, suspects that they had sought to wiretap & survey immediately changed their telecommunications processes. They started acting much differently as soon as those supposedly secret wiretaps went into place, Brit.

Hume   Carl, is there any reason to suspect in this instance that the Israeli govt is involved?
Cameron   No, there's not. But there are growing instincts in an awful lot of law enforcement officials in a variety of agencies who suspect that it had begun compiling evidence, and a highly classified investigation into that possibility, Brit.
Hume   All right, Carl. Thanks very much.

Part 4

Cameron (voice-over)   Los Angeles, 1997, a major local, state and federal drug investigating sours. The suspects: Israeli organized crime with operations in New York, Miami, Las Vegas, Canada, Israel and Egypt. The allegations: cocaine & ecstasy trafficking, and sophisticated white-collar credit card & computer fraud.
The problem: according to classified law enforcement documents obtained by Fox News, the bad guys had the cops' beepers, cell phones, even home phones under surveillance. Some who did get caught admitted to having hundreds of numbers and using them to avoid arrest. "This compromised law enforcement communications between LAPD detectives & other assigned law enforcement officers working various aspects of the case. The organization discovered communications between organized crime intelligence division detectives, the FBI and the Secret Service."

Shock spread from the DEA to the FBI in Washington, and then the CIA. An investigation of the problem, according to law enforcement documents, concluded, "The organization has apparent extensive access to database systems to identify pertinent personal & biographical information." When investigators tried to find out where the information might have come from, they looked at Amdocs, a publicly traded firm based in Israel. Amdocs generates billing data for virtually every call in America, and they do credit checks. The company denies any leaks, but investigators still fear that the firm's data is getting into the wrong hands.

When investigators checked their own wiretapping system for leaks, they grew concerned about potential vulnerabilities in the computers that intercept, record and store the wiretapped calls. A main contractor is Comverse Infosys, which works closely with the Israeli govt, and under a special grant program, is reimbursed for up to 50% of its research & development costs by Israel's Ministry of Industry & Trade. Asked this week about another sprawling investigation and the detention of 60 Israeli since 9.11.01, the Bush administration treated the questions like hot potatoes.

Ari Fleischer, White House press secretary   "I would just refer you to Justice Dept with that. I'm not familiar with the report."
Colin Powell, Sec.State   "I'm aware that some Israeli citizens have been detained. With respect to why they're being detained and the other aspects of your question, whether it's because they're in intelligence services, or what they were doing, I will defer to the Dept of Justice and the FBI to answer that."   (end videotape)

Snow   Carl, we've heard the comments from Ari Fleischer & Colin Powell. What are officials saying behind the scenes?
Cameron   Well, there's real pandemonium described at the FBI, the DEA and the INS. A lot of these problems have been well known to some investigators, many of who have contributed to the reporting on this story. And what they say is happening is supervisors & management are now going back to collect much of the information, because there's tremendous pressure from the top levels of all of those agencies to find out exactly what's going on.

At the DEA & the FBI, already a variety of administration reviews are under way, in addition to the investigation of the phenomenon. They want to find out how it is all this has come out, as well as be very careful because of the explosive nature and very political ramifications of the story itself, Tony.

Israel denies spying on American allies
8.28.04   Jeffrey Heller Reuters, Joanne Morrison Reuters

Jerusalem   Israel denied Saturday spying on its main ally, the U.S., responding to suspicions a Pentagon analyst passed secret papers to the Jewish state about one of its most bitter enemies, Iran. U.S. govt sources said Friday the FBI was investigating an analyst connected to DefSec Rumsfeld's office on suspicion he gave classified documents to Israel via AIPAC, the powerful pro-Israel lobby in Washington. The sources declined to identify the suspect and said no one had been arrested and no charges brought.
In brief statement, U.S. Defense Dept said it had been cooperating on the matter with Justice Dept for some time and understood the investigation was limited in scope. Wash.Post & NY Times quoted the Pentagon as ..."The investigation involves a single individual at Defense Dept at the desk officer level who was not in a position to have significant influence over U.S. policy," the papers quoted the statement as saying.

Israeli officials insisted Israel had not spied on U.S. since being caught red-handed 2 decades ago in an espionage scandal involving U.S. Navy analyst Jonathan Pollard, arrested in 1985 outside the Israeli embassy. "We deny carrying out any intelligence activity. It is a strange story," said a sr Israeli govt official, who declined to be identified. "Israel, for many years, has not carried out intelligence activity in U.S. "
Israeli parliament's Foreign Affairs & Defense Committee chair Yuval Steinitz said Israel made a "firm decision" 20 years ago, after Pollard's arrest, not to spy on Washington again. "I have a lot of confidence in U.S. investigation authorities and therefore I am completely confident that at the end of the day it will be confirmed that there is no Israeli involvement in such a case," he said.
An Israeli Embassy spokesman in the U.S. capital called the allegations "completely false & outrageous." AIPAC described the suspicions as "baseless and false." "We take our responsibilities as American citizens seriously. We would not condone or tolerate for a second any violation of U.S. law or interests," AIPAC said in a statement.

PM Ariel Sharon has frequently highlighted his warm relations with President Bush and has visited the White House 9 times since taking office. A senior Sharon aide meets often with U.S. National Security Adviser Condoleezza Rice.
But the case of Pollard, an American Jew granted Israeli citizenship in 1995, 8 years after he began serving a life sentence in a U.S. prison for spying for Israel, is still an irritant in relations between the 2 countries. According to CBS, which first reported the FBI investigation, one of the documents passed to Israel was a draft presidential directive on U.S. policy toward Iran, placed by Bush in an "axis of evil" along with pre-war Iraq & N.Korea.

U.S. & Israeli officials accuse Iran of developing nuclear weapons, a charge it denies. Since its 1979 Islamic revolution Iran has refused to recognize Israel's right to exist. Iranian officials have made a point of highlighting the Islamic state's military capabilities in recent weeks in response to some media reports that Israeli or U.S. war planes could try to destroy Iranian nuclear facilities in air strikes. Iran said last week it had carried out a successful test firing of an upgraded version of its Shahab-3 medium-range ballistic missile. Military experts said the unmodified Shahab-3 was already capable of striking Israel or U.S. bases in the Gulf.

Inquiry into classified papers runs deeper
8.29.04   Warren P. Strobel Knight Ridder

Wash.D.C.   An FBI probe into the handling of highly classified material by Pentagon civilians is broader than previously reported, and goes well beyond allegations that a single midlevel analyst gave a top-secret Iran policy document to Israel, three sources familiar with the investigation said yesterday. The probe, which has been going on for more than 2 years, also has focused on other civilians in the secretary of defense's office, said the sources, who spoke on condition they not be identified but who have firsthand knowledge of the subject.

In addition, one said, FBI investigators in recent weeks have conducted interviews to determine whether Pentagon officials gave highly classified U.S. intelligence to a leading Iraqi exile group, the Iraqi National Congress, which may in turn have passed it on to Iran. INC leader Ahmad Chalabi has denied his group was involved in any wrongdoing.
Linkage, if any, between the two leak investigations remains unclear.
But they both center on office of Defense Undersecretary Douglas Feith, #3 Pentagon official. Feith's office, which oversees policy matters, has been the source of numerous controversies over the past 3 years. His office had close ties to Chalabi and was responsible for postwar Iraq planning that the administration has acknowledged was inadequate. Before the war, Feith & his aides pushed the now-discredited theory that former Iraqi leader Saddam Hussein was in league with al-Qaeda.

No one is known to have been charged with any wrongdoing in the current investigation. Officials cautioned that it could result in charges of mishandling classified information rather than the more serious charge of espionage. Israeli govt yesterday strenuously denied it had spied on U.S., its main benefactor on the global scene.
American Israel Public Affairs Committee, powerful pro-Israel lobby that top officials said is suspected of serving as a conduit to Israel for the midlevel analyst, also has denied any wrongdoing. Analyst Larry Franklin works for Feith deputy, William Luti, and served as an important, albeit low-profile, adviser on Iran issues to Feith & Deputy Defense Secretary Paul Wolfowitz.
Former Defense Intelligence Agency analyst Franklin, who lives in West Virginia, could not be reached for comment yesterday. Investigators are said to be looking at whether Franklin acted with authorization from his superiors, one official said.

2 sources disclosed yesterday that the information believed to have been passed to Israel was the draft of a top-secret presidential order on Iran policy, known as a National Security Presidential Directive. Because of disagreements over Iran policy among President Bush's advisers, the document is not believed to have been completed.
Having a draft of the document, which some Pentagon officials may have believed was insufficiently tough toward Iran, would have allowed Israel to influence U.S. policy while it was still being made. Iran is among Israel's main security concerns.

Two or three AIPAC staff members have been interviewed in connection with the case. In a prepared statement, AIPAC said any allegation of criminal conduct was "false and baseless." It is "cooperating fully" with investigators, AIPAC's statement said.
Israeli officials insisted they stopped spying on the United States after the exposure of Jonathan Pollard, who was arrested in 1985 and sentenced to life in prison for spying for Israel.
White House spokesman Scott McClellan declined to discuss the continuing investigation.
In a statement issued late Friday, the Pentagon said it "has been cooperating with Justice Dept on this matter for an extended period of time. It is the DoD understanding that the investigation within the DOD is limited in its scope."

But other sources said the FBI investigation is more wide-ranging than initial news reports suggested. They said it has involved interviews of current and former officials at the White House, Pentagon and State Dept. Investigators have asked about the security practices of several other Defense Dept civilians, they said.
Franklin's name surfaced in news reports last year when it became known that he and another Pentagon MidEast specialist, Harold Rhode, met in late 2001 with Manucher Ghorbanifar, an Iranian arms merchant who played a role in the 1980s Iran-contra scandal.
Defense Secretary Donald Rumsfeld said publicly last year that nothing came of the meeting, which reportedly was brokered by former National Security Council official Michael Ledeen. Rhode could not be reached for comment yesterday.

… 61-page DEA task-force report that contained the details about this spy ring was first revealed in detail on 3.4.02 by Intelligence Online (IO), respected Internet news service based in Paris, France, elaboration in some respects on earlier findings by Carl Cameron of Fox News. The IO story was picked up by leading French daily Le Monde, and, in some respects, by the Associated Press, but was just as quickly dropped.
Referring to the reports, the March 15 issue of Forward, old respected Jewish newspaper in America, commented that: "Despite angry denials by Israel & its American supporters, reports that Israel was conducting spying activities in U.S. may have a grain of truth, the Forward has learned." Forward commented smugly that: "Both French & Fox reports were dismissed by Israel & its supporters and received limited coverage in the American media."
LeMonde & Fox (as well as IO) suggested the likelihood that these Israeli operatives were spying on Arab terrorist cells operating in U.S. and almost certainly had advance knowledge about 9.11.01. AP was careful not to mention any of this aspect of the story.

British intelligence & military analysis publication Jane's Information Group noted the peculiar absence of reporting in the American media on the "explosive story" of the huge network of Israeli spies that made headlines around the world: …
Reports of Israeli "art students" calling on DEA employees across the country began as early as January 2000 and continued through June 2001.
What is not clear is what the ring of more than 120 agents was up to and why some Israelis linked to the attacks in NY & Wash.D.C. were allowed to flee or were sent back to Israel after 9.11.01 on visa violations, rather than being charged & prosecuted.

The "art students" are reported to be active agents in electronic surveillance units of the Israeli military. The Israelis covered the country in "organized" teams of eight to 10 people, with each group having a team leader. The DEA document lists the Israelis' military and intelligence specialties as "special forces," "intelligence officer," "demolition/explosive ordnance specialist," "bodyguard to head of Israeli army," "electronic intercept operator," and "son of a 2 star (Israeli) army general."
… Comverse Infosys (now called Verint) … relationship of these companies to detained Israelis is detailed in the 60-page document. The DEA document reveals that many of the Israeli operatives had addresses in San Diego CA, Little Rock AR, Irving TX and south Florida very close to the homes of Arabs suspected of 9.11.01 involvement.

Alleged hijacker, Mohammad Atta, lived at 3389 Sheridan St. in Hollywood, FL, while a few blocks away, at 4220 Sheridan, a group of the Israelis resided. Especially in Florida, where 10 of the 19 alleged 9.11.01 terrorists lived, revelations about the Israeli activities bolster speculation that the Israelis had advance knowledge but did not pass intelligence on to the U.S.
Justice Dept official briefed on an ongoing multi-agency task force investigating the Israeli spy ring was quoted by newsweekly Insight as having said: "We think there is something quite sinister here but are unable at this time to put our finger on it."
Another law-enforcement official said: "The higher-ups don't want to deal with this and neither does the FBI because it involves Israel."

DEA report found that several military bases also had experienced unauthorized entries by the Israelis incl 2 bases from which Stealth aircraft and other secret military units operate. Unauthorized photographing of military sites and civilian industrial complexes, such as petroleum-storage facilities, also was reported, the document confirms. In great detail, the DEA document contains "scores of encounters" between federal agents & Israeli agents posing as art students.
The seemingly innocuous cover was used to gain access to sensitive U.S. offices and military installations, such as MacDill AFB March 2001, and Tinker AFB in Oklahoma City one month later, where "a special alert" was issued because of the aggressive Israeli agents. Tinker houses AWACS surveillance planes and repairs B-1 bombers. The Oklahoman, prompted by the French revelations, recently reported that 10 months ago 4 of the Israeli agents carrying military IDs were detained at Tinker AFB.

In virtually every incident reported by the DEA field-offices the Israelis used the same methods: Israelis would attempt to enter secure buildings, take photographs, follow federal agents when they left buildings, show up at their homes and circle their neighborhoods, visiting their houses and then departing. At a DEA agent's house in Chicago, Israelis were so aggressive the police were called.
One report, titled "Suspicious Activities Involving Israeli Art Students at DEA Facilities," lists more than 180 documented-incident cases. "The nature of the individuals' conduct, combined with intelligence information and historical information regarding past incidents involving Israeli organized crime, leads IS [DEA's Internal Security division] to believe the incidents may well be an organized intelligence-gathering activity," said one classified document quoted by Insight.

"This is very odd behavior under any situation," says a DEA official who had heard but not yet seen the reports until Insight shared them. "The patterns are clear and they pose a significant danger to our officers in the field." Guillaume Dasquie, of IO, told American Free Press that he had acquired solid evidence of the authenticity of the DEA document, and would reveal new evidence to counter claims made by Justice Dept of Justice that there had been "no case of Israeli espionage" in U.S. and that the matter was "an urban myth."
The Israeli spy ring was "examined at the highest levels of the Bush administration," according to Dasquie. On March 13, IO was informed by an official at Justice Dept that the report had been handed over to the department's Joint Terrorism Task Force. The same day, at a DEA press conference, agency's administrator Asa Hutchinson said that he had passed the document along to "other agencies" working on the matter.

On March 14, IO said it has a copy of a memorandum dated March 4 and signed by asst atty general for admin Robert Diegelman, . The memo was addressed to officials in charge of the Justice Dept's information systems. It called on them to forbid information system access to all non-U.S. citizens and no longer use foreign-supplied computer & communication gear.
The memo referred to a warning entitled Justice Dept Order 2640.2D Information Technology Security and sent out on last July 12 which cautioned against using information technology sold by foreign firms. The warning of July 12 confirmed that the DEA's report was a security concern at the highest level.

The DEA task force issued an initial report in June of last year that listed the names of 125 Israeli nationals and described their activities in U.S.. The document suggests that the ring had infiltrated federal buildings, according to IO, and that Israeli computer companies sell equipt to U.S. govt depts.
The DEA purchased $25 million worth of interception equipt from a number of Israeli companies named in the Sept. 1997 report. An AP report from Washington on March 9 confirmed that the DEA document had been the joint work of a task force. The AP report confirmed that several of the Israelis had never enrolled in the art colleges they claimed to attend in Israel.

In addition, IO reported: "We've also obtained an internal document from the US Coast Guard, an Intelligence Bulletin dated 1.17.02. Reserved for security bosses in America's biggest companies, the bulletin regularly tracks all attempts to penetrate protected sites recorded by the US Coast Guard."
According to IO: The Jan. 17 issue described the case of a man and woman "of MidEast origin" taking pictures of a refinery. When questioned they said they were "art students" even though they were able to discuss technical details concerning refineries. Other cases of suspicious activity were also recorded.

AttyGeneral Ashcroft spokesman initially attempted to dismiss the story as an "urban myth." However, the NY based Forward effectively exposed Ashcroft's prevarication when it admitted on March 15:
In March 2001, the federal National Counter intelligence Executive issued a warning urging employees to report all contact with people describing themselves as Israeli art students. It said some had gone to private residences of sr U.S. officials under the guise of selling art.

"These individuals have been described as aggressive," the warning said. However, the warning added that there may be 2 groups involved, one with an "apparently legitimate money-making goal while the second, perhaps a non- Israeli group, may have ties to a Middle Eastern Islamic fundamentalist group."
… Attempting to put a positive spin on the revelations, Forward contends that tensions between U.S. and Israel arise not from the fact that U.S. believed the Israelis were spying on Americans, but because the Israelis had failed to advise U.S. that they were engaged in spying against Arabs on American soil.

Wash.D.C.   The FBI has, for the past 2 years, been investigating whether classified intelligence has been passed to Israel by AIPAC. The Franklingate scandal was merely a sideshow, sr US officials & other sources told the Wash. Post. The counterintelligence probe, which is different from a criminal investigation, focuses on a possible transfer of intelligence more extensive than whether Franklin passed on a draft presidential directive on US policy toward Iran, the sources said.
FBI is examining whether highly classified material from the National Security Agency, which conducts electronic intercepts of communications, was also forwarded to Israel, they said. A sr official told the paper that National Security Advisor Condoleezza Rice and her deputy Stephen J. Hadley have known of the investigation since it has begun.

Investigation of Franklin is coincidental to the broader FBI counterintelligence probe, which was already long underway when Franklin came to the attention of investigators, U.S. officials and sources said. On Tuesday, Franklin was seen for the first time since the affair was published, while he arrived at a lecture held at Sheppard University, where he has been teaching history for the past 5 years.
Last night it was reported that 2 AIPAC employees suspected of involvement in the affair were Steven Rozen, who is in charge of foreign affairs in the committee, and Keith Weisman, an expert of Iran. NY Times has reported that veteran AIPAC worker Rozen is considered a brilliant, energetic and one of the people that have the most influence in the organization. He is also known to have a wide spectrum of contacts in Washington.
Weisman, who is not as senior as Rozen, is thought to be a thorough & reliable analyst who has a vast knowledge of MidEastern affairs. Officials said both are cooperating with authorities.

"Franklingate" espionage scandal is beginning to look like a surfeit of hype forced into bed with a paucity of fact. A sr administration official told the press that this does not look like a case of spying. "From what we know, Larry Franklin looks more like an incompetent fool way out of his depth than a spy. He apparently passed on some papers to Israel without realizing the ramifications of his actions".
The source added that both Israel & U.S. regularly exchange sensitive information. "At most Larry Franklin is guilty of poor judgment in determining what he should or should not share with Israel".
Another sr source said that Israel did not need Franklin's information. Israel's contacts with high-level officials are such that a phone call to the US would have been sufficient to elicit the information.

A sr Jewish source told Maariv this looks more like a case driven by domestic political agenda than any real security concerns. "The fact that this affair became public 2 days before the GOP convention is probably not a coincidence. We know there are lots of people out there who have an agenda to discredit the neo-conservatives, irrespective of the facts", he said. He also mentioned the possibility of inter-turf scuffling between various US govt intelligence and security agencies as a possible contributing factor.

Israeli diplomat denies any improper behavior   Spy scandal sputtering out, looks like a surfeit of hype forced into bed with a paucity of fact.
8.30.04   B.Kaspit & M.Fox Maariv

#2 diplomat at Israeli embassy in Washington Naor Gilon categorically denies any allegations of wrongdoing or inappropriate behavior. "My hands are clean. I have nothing to hide, all my activities are well within the parameters of accepted diplomatic norms and procedure". Gilon has been named as having met with Pentagon analyst Larry Franklin who is suspected of handing over classified documents to Israel.

Mr. Eisenberg, who pioneered Israel's trade relations with China, was to have returned to Tel Aviv next week to host a meeting with the Chinese minister of transport and other senior Chinese officials. Mr. Eisenberg reportedly was born in Munich. In 1939 he fled Nazi persecution of the Jews for Shanghai and later Japan. He married the daughter of a Japanese artist and opened a diamond factory in Japan. He is credited with recognizing early on that Japan had a need for iron ore, and finding a way to import it from South America. As he began to amass riches, Eisenberg decided to move his family back to Israel so they could be closer to their roots.
Prime Minister Benjamin Netanyahu yesterday called Mr. Eisenberg one of Israel's dearest citizens, and one of its leading industrialists, saying he contributed a great deal to the country's economy and to its international ties, the radio said. A spokesman said the funeral would be held in Israel early next week.

Missiles highlight German trade with Israel
1.18.03   Roger Boyes Times London

German Patriots, two systems comprising 128 missiles, are also said to be on loan for 2 years. Defence sources confirm that Israeli technicians have been in Germany for several months of operational training. Germany's strict arms export laws forbid weapons sales to areas of tension, but the Patriot deal is likely to be app