Iran-Contra II? Fresh scrutiny on a rogue Pentagon operation

Washington Monthly, Oct, 2004 by Joshua Micah Marshall, Laura Rozen, Paul Glastris

On Aug. 27, CBS News reported that the FBI is investigating a suspected mole in the Department of Defense who allegedly passed to Israel, via a pro-Israeli lobbying organization, classified American intelligence about Iran. The focus of the investigation, according to U.S. government officials, is Larry Franklin, a veteran Defense Intelligence Agency Iran analyst now working in the office of the Pentagon's number three civilian official, Undersecretary of Defense for Policy Douglas Feith.

The investigation of Franklin is now shining a bright light on a shadowy struggle within the Bush administration over the direction Of U.S. policy toward Iran. In particular, the FBI is looking with renewed interest at an unauthorized back-channel between Iranian dissidents and advisers in Feith's office, which more-senior administration officials first tried in vain to shut down and then later attempted to cover up.

Franklin, along with another colleague from Feith's office, a polyglot Middle East expert named Harold Rhode, were the two officials involved in the back-channel, which involved on-going meetings and contacts with Iranian arms dealer Manucher Ghorbanifar and other Iranian exiles, dissidents and government officials. Ghorbanifar is a storied figure who played a key role in embroiling the Reagan administration in the Iran-Contra affair. The meetings were both a conduit for intelligence about Iran and Iraq and part of a bitter administration power struggle pitting officials at DoD who have been pushing for a hard-line policy of "regime change" in Iran against other officials at the State Department and the CIA who have been counseling a more cautious approach.

Reports of two of these meetings first surfaced a year ago in Newsday, and have since been the subject of ongoing investigation by the Senate Select Committee on Intelligence. Whether or how the meetings are connected to the alleged espionage remains unknown. But the FBI is now closely scrutinizing them.

While the FBI is looking at the meetings as part of its criminal investigation, to congressional investigators the Ghorbanifar back-channel exemplifies the out-of-control bureaucratic turf wars that have characterized and often hobbled Bush administration policy-making. An investigation by The Washington Monthly--including a rare interview with Ghorbanifar--adds weight to those concerns. The meetings turn out to have been far more extensive and much less under White House control than originally reported. One of the meetings, which Pentagon officials have long characterized as merely a "chance encounter," seems in fact to have been planned long in advance by Rhode and Ghorbanifar. Another has never been reported in the American press. The administration's reluctance to disclose these details seems clear: the DoD-Ghorbanifar meetings suggest the possibility that a rogue faction at the Pentagon was trying to work outside normal U.S. foreign policy channels to advance a "regime-change" agenda not approved by the president's foreign policy principals or even the president himself.

The Italian Job

The first meeting occurred in Rome in December 2001. It included Franklin, Rhode, and another American, the neoconservative writer and operative Michael Ledeen, who organized the meeting. (According to UPI, Ledeen was then working for Feith as a consultant). Also in attendance was Ghorbanifar and a number of other Iranians. One of the Iranians, according to two sources familiar with the meeting, was a former senior member of the Iranian Revolutionary Guard who claimed to have information about dissident ranks within the Iranian security services. The Washington Monthly has also learned from U.S. government sources that Nicolo Pollari, the head of Italy's military intelligence agency, SISMI, attended the meetings, as did Italian Minister of Defense Antonio Martino, who is well-known in neoconservative circles in Washington.

Alarm bells about the December 2001 meeting began going off in U.S. government channels only days after it occurred. On Dec. 12, 2001, at the U.S. embassy in Rome, America's newly-installed ambassador, Mel Sembler, sat down for a private dinner with Ledeen, an old friend of his from Republican Party politics, and Martino, the Italian defense minister. The conversation quickly turned to the meeting. The problem was that this was the first that Ambassador Sembler had heard about it.

According to U.S. government sources, Sembler almost immediately set about trying to determine what he could about the meeting and how it had happened. Since U.S. government contact with foreign government intelligence agencies is supposed to be overseen by the CIA, Sembler first spoke to the CIA station chief in Rome to find out what if anything he knew about the meeting with the Iranians. But that only raised more questions because the station chief had been left in the dark as well. Soon, both Sembler and the Rome station chief were sending anxious queries back to the State Department and CIA Headquarters in Langley; Va., respectively; raising alarms on both sides of the Potomac.