U.S. Police and Intelligence Hit by Spy Network

In the wake of the Sept. 11 terrorist attack, the FBI has stumbled on the largest espionage ring ever discovered inside the United States. The U.S. Justice Department is now holding nearly 100 Israeli citizens with direct ties to foreign military, criminal and intelligence services.

The spy ring reportedly includes employees of two Israeli-owned companies that currently perform almost all the official wiretaps for U.S. local, state and federal law enforcement.

The U.S. law enforcement wiretaps, authorized by the Communications Assistance for Law Enforcement Act (CALEA), appear to have been breached by organized crime units working inside Israel and the Israeli intelligence service, Mossad.

Both Attorney General John Ashcroft and FBI Director Robert Mueller were warned on Oct. 18 in a hand-delivered letter from local, state and federal law enforcement officials. The warning stated, "Law enforcement's current electronic surveillance capabilities are less effective today than they were at the time CALEA was enacted."

The spy ring enabled criminals to use reverse wiretaps against U.S. intelligence and law enforcement operations. The illegal monitoring may have resulted in the deaths of several informants and reportedly spoiled planned anti-drug raids on crime syndicates.

The penetration of the U.S. wiretap system has led to a giant spy hunt across the globe by American intelligence agencies. U.S. intelligence officials now suspect the spy ring shared and sold information to other nations.

"Why do you think Putin so nonchalantly and with such great fanfare announced the shutdown of the Lourdes listening post in Cuba?" noted Douglas Brown, president of Multilingual Data Solutions Inc. and program director at the Nathan Hale Institute.

"Besides the PR benefit right before his visit here, the Russians don't need it anymore. They've scraped together a cheaper, more effective monitoring system. Is the Israeli company an element of that system? I don't know," stated Brown.

"With all the whining and crying about Echelon and Carnivore, critics, domestic and foreign, of U.S. electronic eavesdropping vastly overestimate our abilities to process and disseminate the stuff," noted Brown.

"The critics also underestimated the incompetence and total ineptness of the people running our intelligence and law enforcement services during the Clinton-Gore years. One guy uses his home computer for storing top secret documents; another high- tech guru guy can't figure out how to save and retrieve his e-mail, and the guy in charge of everything is having phone sex over an open line with one of his employees," said Brown.

"On the other hand, the Europeans, including the Russians, have been much more focused on the nuts and bolts of practical systems to process the information they scoop up. The stories linking German intelligence and the L&H scandal got very little play here but were widely noted in the European software community," said Brown.

"Except for a few Germans and an occasional Pole, nobody can match the Russians in designing and developing algorithms. We may have some of the world's greatest programmers, but the Russians and Europeans do a better job of matching up linguists and area experts with their programmers," noted Brown.

The discovery of a major spy ring inside the United States is straining the already tense relations with Israel. Although, Israel denied any involvement with the penetration of the U.S. wiretap system, the CIA and FBI are investigating the direct government ties to the former Israeli military and intelligence officials now being held by the Justice Department.

One company reported to be under investigation is Comverse Infosys, a subsidiary of an Israeli-run private telecommunications firm. Comverse provides almost all the wiretapping equipment and software for U.S. law enforcement.

Custom computers and software made by Comverse are tied into the U.S. phone network in order to intercept, record and store wiretapped calls, and at the same time transmit them to investigators.

The penetration of Comverse reportedly allowed criminals to wiretap law enforcement communications in reverse and foil authorized wiretaps with advance warning. One major drug bust operation planned by the Los Angeles police was foiled by what now appear to be reverse wiretaps placed on law enforcement phones by the criminal spy ring.

Several U.S. privacy and security advocates contend the fault actually lies in the CALEA legislation passed by Congress that allowed the spy ring to operate so effectively. Lisa Dean, vice president for technology policy at Free Congress Foundation, delivered a scathing critique of the breach of the U.S. law enforcement wiretap system.

"From the beginning, both the political right and left warned Congress and the FBI that they were making a huge mistake by implementing CALEA. That it would jeopardize the security of private communications, whether it's between a mother and her son or between government officials. The statement just issued by law enforcement agencies has confirmed our worst fears," concluded Dean.

"How many more 9/11s do we have to suffer?" asked Brad Jansen, deputy director for technology policy at the Free Congress Foundation.

"The CALEA form of massive surveillance is a poor substitute for real law enforcement and intelligence work. It is an after-the-fact method of crime fighting. It is not designed to prevent crime. Massive wiretapping does not equal security. Instead, we have elected to jeopardize our national security in exchange for poor law enforcement," said Jansen.

"For example, FINCEN monitoring of all money transactions did not detect al-Qaeda, nor did it find Mohamed Atta before he boarded his last flight. It was an ATM receipt left in his rental car that led the FBI to the bin Laden bank accounts," noted Jansen.

"The CALEA approach is the same approach law enforcement has been pushing for a number of years. It's the same approach that was used to push Carnivore, Magic Lantern, FINCEN and even the failed Clipper project. This approach leads to a compromise in national security and in personal security for the American public," said Jansen.

"In addition, there is always government abuse of these kinds of systems," stated Jansen. "Law enforcement on all levels does a very poor job in policing itself. We need to hold our police and government officials to the highest standards."

"This also hurts the U.S. economy when the whole world knows that our communication systems are not secure. We cannot compete with inferior products when other countries are exporting secure software and hardware. New Zealand, India and Chile already offer security products that actually provide real security," stated Jansen.

"The current mentality of law enforcement is what failed to protect us from 9/11. CALEA wiretaps will not protect us from terror attacks in the future. The system does not provide better intelligence information. It actually leads to less security and more crime. We get the worst of both worlds," concluded Jansen.

Globe and Mail

link

U.S. arrests of Israelis a mystery

Most charged with immigration violations either have been deported or will be

By DOUG SAUNDERS

With a report from Associated Press

Monday, December 17, 2001 – Print Edition, Page A7

LOS ANGELES -- U.S. officials have arrested, detained and questioned hundreds of people on vague suspicions of ties to terrorism since Sept. 11, but a few dozen cases are especially mysterious: They are Israelis, young and apparently Jewish, working in the United States on temporary visas and have little obvious connection to Islamic extremism.

The U.S. government has offered no explanation for the detentions, estimated to be as many as 60 in number, and some of them have begun speaking out in protest and asking courts to end their detention. But Washington appears to be treating them as palpable threats: Many remain in jail. Most have been charged with immigration violations, and either have been or will be deported.

Based on what the Israelis say about the questions they have been asked, federal officials appear to believe they are either Muslim extremists hiding behind false Israeli identities or spies working for the Mossad, Israel's intelligence agency.

If the latter is the case, it raises the possibility that Washington is using its antiterrorism campaign as an excuse to round up other groups of people it wants out. "They asked if I was spying on anybody," said Yaniv Hani, 22, who spent four weeks in custody after Sept. 11 and now faces charges from the Immigration and Naturalization Service for working with an improper visa. He said Federal Bureau of Investigation officials asked him whether he was really Muslim before switching to questions about possible ties to Mossad. Mr. Hani worked for a number of years for Israel's military police.

Israel has protested the arrests. Mark Regev, a spokesman for the Israeli embassy in Washington, said the FBI has not contacted Israel about spying allegations, and that "not a single one has been charged with intelligence violations. It has all been visa violations."

Another possibility is that the FBI suspects the Israelis of taking part in a clandestine operation. A majority of those arrested were employees of a Florida company, Quality Sales, that hires vacationing Israeli youth to work at vending carts in U.S. shopping malls.

Thomas Dean, a lawyer for the company, acknowledged that the Israelis had been issued the wrong type of visa, since they were tourists on working vacations rather than permanent workers. However, he noted that their cases had all been labelled "special interest" by the INS, a new designation indicating that they are suspects in the antiterrorism campaign, not regular immigration violators.

"Clearly that was what the FBI, from the very beginning, was very interested in talking about -- their activity in the Israeli military or any kind of intelligence agency."

(Israel does have a history of spying against the United States, even though the two nations are officially allies. The most famous case is that of Jonathan Pollard, a U.S. military official convicted in 1987 of espionage for stealing top U.S. military secrets on behalf of Israel.)

Also, five of the Israelis came to the FBI's attention after they were seen by New Jersey residents on Sept. 11 making fun of the World Trade Center ruins and going to extreme lengths to photograph themselves in front of the wreckage. The FBI seized and developed their photos, one of which shows Sivan Kurzberg flicking a cigarette lighter in front of the smouldering ruins in an apparently celebratory gesture.

Steven Noah Gordon, a lawyer for the five, told The New York Times that their behaviour may have been offensive, but said the behaviour was not criminal -- "and they were being treated as if it was." The five have since been deported.

U.S. officials have offered no explanation for the arrests, even to immigration judges. Last month, when the INS asked that bail be denied to 11 of the Israelis, a judge rejected the request, saying the government had been less than forthcoming with evidence.

"Although the [INS] alleges that these cases are 'special,' it has failed to present any credible evidence of the basis for this finding," Judge Elizabeth Hacker wrote. "The service has failed to submit any evidence of terrorist activity or of a threat to national security."

05/29/2000

FBI Probes Espionage at Clinton White House

By J. Michael Waller and Paul M. Rodriguez

waller@insightmag.com and rodriguez@insightmag.com

A foreign spy service appears to have penetrated secret communications in the Clinton administration, which has discounted security and intelligence threats.

The FBI is probing an explosive foreign-espionage operation that could dwarf the other spy scandals plaguing the U.S. government. Insight has learned that FBI counterintelligence is tracking a daring operation to spy on high-level U.S. officials by hacking into supposedly secure telephone networks. The espionage was facilitated, federal officials say, by lax telephone-security procedures at the White House, State Department and other high-level government offices and by a Justice Department unwillingness to seek an indictment against a suspect.

The espionage operation may have serious ramifications because the FBI has identified Israel as the culprit. It risks undermining U.S. public support for the Jewish state at a time Israel is seeking billions of tax dollars for the return of land to Syria. It certainly will add to perceptions that the Clinton-Gore administration is not serious about national security. Most important, it could further erode international confidence in the ability of the United States to keep secrets and effectively lead as the world’s only superpower.

More than two dozen U.S. intelligence, counterintelligence, law-enforcement and other officials have told Insight that the FBI believes Israel has intercepted telephone and modem communications on some of the most sensitive lines of the U.S. government on an ongoing basis. The worst penetrations are believed to be in the State Department. But others say the supposedly secure telephone systems in the White House, Defense Department and Justice Department may have been compromised as well.

The problem for FBI agents in the famed Division 5, however, isn’t just what they have uncovered, which is substantial, but what they don’t yet know, according to Insight’s sources interviewed during a year-long investigation by the magazine. Of special concern is how to confirm and deal with the potentially sweeping espionage penetration of key U.S. government telecommunications systems allowing foreign eavesdropping on calls to and from the White House, the National Security Council, or NSC, the Pentagon and the State Department.

The directors of the FBI and the CIA have been kept informed of the ongoing counterintelligence operation, as have the president and top officials at the departments of Defense, State and Justice and the NSC. A “heads up” has been given to the House and Senate Intelligence Committees, but no government official would speak for the record.

“It’s a huge security nightmare,” says a senior U.S. official familiar with the super-secret counterintelligence operation. “The implications are severe,” confirms a second with direct knowledge. “We’re not even sure we know the extent of it,” says a third high-ranking intelligence official. “All I can tell you is that we think we know how it was done,” this third intelligence executive tells Insight. “That alone is serious enough, but it’s the unknown that has such deep consequences.”

...

A senior government official who would go no further than to admit awareness of the FBI probe, says: “It is a politically sensitive matter. I can’t comment on it beyond telling you that anything involving Israel on this particular matter is off-limits. It’s that hot.”

It is very hot indeed. For nearly a year, FBI agents had been tracking an Israeli businessman working for a local phone company. The man’s wife is alleged to be a Mossad officer under diplomatic cover at the Israeli Embassy in Washington. Mossad — the Israeli intelligence service — is known to station husband-and-wife teams abroad, but it was not known whether the husband is a full-fledged officer, an agent or something else. When federal agents made a search of his work area they found a list of the FBI’s most sensitive telephone numbers, including the Bureau’s “black” lines used for wiretapping. Some of the listed numbers were lines that FBI counterintelligence used to keep track of the suspected Israeli spy operation. The hunted were tracking the hunters.

“It was a shock,” says an intelligence professional familiar with the FBI phone list. “It called into question the entire operation. We had been compromised. But for how long?”

This discovery by Division 5 should have come as no surprise, given what its agents had been tracking for many months. But the FBI discovered enough information to make it believe that, somehow, the highest levels of the State Department were compromised, as well as the White House and the NSC. According to Insight’s sources with direct knowledge, other secure government telephone systems and/or phones to which government officials called also appear to have been compromised.

The tip-off about these operations — the pursuit of which sometimes has led the FBI on some wild-goose chases — appears to have come from the CIA, says an Insight source. A local phone manager had become suspicious in late 1996 or early 1997 about activities by a subcontractor working on phone-billing software and hardware designs for the CIA.

The subcontractor was employed by an Israeli-based company and cleared for such work. But suspicious behavior raised red flags. After a fairly quick review, the CIA handed the problem to the FBI for follow-up. This was not the first time the FBI had been asked to investigate such matters and, though it was politically explosive because it involved Israel, Division 5 ran with the ball. “This is always a sensitive issue for the Bureau,” says a former U.S. intelligence officer. “When it has anything to do with Israel, it’s something you just never want to poke your nose into. But this one had too much potential to ignore because it involved a potential systemwide penetration.”

Seasoned counterintelligence veterans are not surprised. “The Israelis conduct intelligence as if they are at war. That’s something we have to realize,” says David Major, a retired FBI supervisory special agent and former director of counterintelligence at the NSC. While the U.S. approach to intelligence is much more relaxed, says Major, the very existence of Israel is threatened and it regards itself as is in a permanent state of war. “There are a lot less handcuffs on intelligence for a nation that sees itself at war,” Major observes, but “that doesn’t excuse it from our perspective.”

For years, U.S. intelligence chiefs have worried about moles burrowed into their agencies, but detecting them was fruitless. The activities of Israeli spy Jonathan Pollard were uncovered by accident, but there remains puzzlement to this day as to how he was able to ascertain which documents to search, how he did so on so many occasions without detection, or how he ever obtained the security clearances that opened the doors to such secrets. In all, it is suspected, Pollard turned over to his Israeli handlers about 500,000 documents, including photographs, names and locations of overseas agents. “The damage was incredible,” a current U.S. intelligence officer tells Insight. “We’re still recovering from it.”

...

Also there has been concern for years that a mole was operating in the NSC and, while not necessarily supplying highly secret materials to foreign agents, has been turning over precious details on meetings and policy briefings that are being used to track or otherwise monitor government activities.

The current hush-hush probe by the FBI, and what its agents believe to be a serious but amorphous security breach involving telephone and modem lines that are being monitored by Israeli agents, has even more serious ramifications. “It has been an eye opener,” says one high- ranking U.S. government official, shaking his head in horror as to the potential level and scope of penetration.

As for how this may have been done technologically, the FBI believes it has uncovered a means using telephone-company equipment at remote sites to track calls placed to or received from high-ranking government officials, possibly including the president himself, according to Insight’s top-level sources. One of the methods suspected is use of a private company that provides record-keeping software and support services for major telephone utilities in the United States.

A local telephone company director of security Roger Kochman tells Insight, “I don’t know anything about it, which would be highly unusual. I am not familiar with anything in that area.”

U.S. officials believe that an Israeli penetration of that telephone utility in the Washington area was coordinated with a penetration of agents using another telephone support-services company to target select telephone lines. Suspected penetration includes lines and systems at the White House and NSC, where it is believed that about four specific phones were monitored — either directly or through remote sites that may involve numbers dialed from the complex.

“[The FBI] uncovered what appears to be a sophisticated means to listen in on conversations from remote telephone sites with capabilities of providing real- time audio feeds directly to Tel Aviv,” says a U.S. official familiar with the FBI investigation. Details of how this could have been pulled off are highly guarded. However, a high-level U.S. intelligence source tells Insight: “The access had to be done in such a way as to evade our countermeasures … That’s what’s most disconcerting.”

Another senior U.S. intelligence source adds: “How long this has been going on is something we don’t know. How many phones or telephone systems we don’t know either, but the best guess is that it’s no more than 24 at a time … as far as we can tell.”

And has President Clinton been briefed? “Yes, he has. After all, he’s had meetings with his Israeli counterparts,” says a senior U.S. official with direct knowledge. Whether the president or his national- security aides, including NSC chief Sandy Berger, have shared or communicated U.S. suspicions and alarm is unclear, as is the matter of any Israeli response. “This is the first I’ve heard of it,” White House National Security Council spokesman Dave Stockwell tells Insight. “That doesn’t mean it doesn’t exist or that someone else doesn’t know.”

Despite elaborate precautions by the U.S. agencies involved, say Insight’s sources, this alleged Israeli intelligence coup came down to the weakest link in the security chain: the human element. The technical key appears to be software designs for telephone billing records and support equipment required for interfacing with local telephone company hardware installed in some federal agencies. The FBI has deduced that it was this sophisticated computer-related equipment and software could provide real-time audio feeds. In fact, according to Insight’s sources, the FBI believes that at least one secure T-1 line routed to Tel Aviv has been used in the suspected espionage.

The potential loss of U.S. secrets is incalculable. So is the possibility that senior U.S. officials could be blackmailed for indiscreet telephone talk. Many officials do not like to bother with using secure, encrypted phones and have classified discussions on open lines.

...

full article

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.