Spy probe tests US-Israel ties

At issue: whether a Pentagon analyst passed secrets to an Israeli lobby group, and whether that group passed the material to Israel.

The nascent spy probe unfolding in the nation's capital could end up complicating ties between the US and Israel at a critical time in the war on terror for the Bush administration - and raise new questions about how closely the two allies should cooperate on sensitive issues.

Word leaked over the weekend that for more than a year the FBI has been investigating a Pentagon official for possibly providing Israel classified information - including a draft of a presidential directive on US policies toward Iran - through an Israeli lobby in Washington, the American Israel Public Affairs Committee (AIPAC).

Whether true or not, the revelations could sour relations between the US and one of its closest allies in the war on terror. The two countries have long shared intelligence - the US passes Israel information to help prevent attacks on its homeland and Israel shares intelligence from a stable of native Arab speakers who operate in parts of the world the US can't.

Moreover, at a time when the US is the sole superpower, wielding enormous influence, particularly in areas like the Middle East, experts say it is not unusual for friendly allies to go one step further and spy on Washington. The problem is, as perhaps happened in this case, when the snooping goes beyond acceptable bounds.

"If they are found to be spying on us, it wouldn't be a shock," says Jim Walsh, an international security expert at Harvard University's John F. Kennedy School of Government. "But the closer the friendship, and the more sensitive the information, the more likely it is to leave an impression on the personal relationships. People will feel betrayed, particularly government leaders."

The Pentagon official identified as being at the center of the probe is Lawrence Franklin, an Iran specialist at the Defense Intelligence Agency and a former colonel in the Air Force Reserves. Reports indicate that Mr. Franklin is being investigated for allegedly passing on sensitive papers about US policy toward Iran to AIPAC, which then supposedly handed them on to the Israeli government. Franklin works in the office of William Luti, who reports to Douglas Feith. Mr. Feith and the policy branch he heads at the Pentagon have been under scrutiny because of the role they played in formulating the Pentagon's Iraq war strategy.

Franklin hasn't been available for comment. Some people who know him have said they think the accusations are groundless. The Pentagon released a statement saying it is fully cooperating with the FBI investigation, which it insists is "limited in scope." The Israelis, for their part, are vehemently denying complicity in any espionage activity. "Israel does not engage in intelligence activities in the US," Israeli Prime Minister Ariel Sharon said in a statement.

AIPAC, too, proclaims innocence. "Any allegation of criminal conduct by AIPAC or our employees is false and baseless," a statement says.

Still, now that the probe has become public, speculation will continue until a conclusion is reached. And whether Israel is guilty or not, there will be residual damage to the relationship, experts say. For one thing, it reminds people of the time Israel was caught spying on the US once before. In 1987, a US Navy intelligence analyst, Jonathan Pollard, admitted to selling state secrets to the Israelis. "I think this will escort us for many years to come," says Danny Yatom, a former chief of the Mossad, Israel's foreign intelligence arm. "There was one attempt made by Pollard, and since then there is still an assessment that Israel will try again whenever it is pushed into a corner."

In addition, experts say the relationship between the US and Israel has become so lax - because of the cozy ties between the two countries at the moment - that there was bound to be this sort of problem. "The Israelis have always had more access than other friendly countries," says Patrick Lang, former head of Middle East intelligence at the Defense Intelligence Agency. "The liaison relationships between the Israeli and American services are highly developed, codified, and have functioned for many years."

In this climate, he says, it is easy to share information without checking the rulebook, which can lead to problems. Indeed, some experts say the level of sharing will provoke other questions, even if the incident turns out not to be serious.

"Why does this guy think he should share this type of information? asks Mr. Walsh. "If this is just standard operating procedure, then it does raise serious policy issues."

It is still not clear whether the charges will be serious (possibly espionage), or something more mundane (mishandling of documents), or whether there will be charges at all. FBI officials reportedly were tipped to a potential problem months ago by a series of email exchanges. The investigation recently ratcheted up to the point where Justice Department officials have begun briefing Pentagon officials.

• Josh Mitnick contributed from Tel Aviv.