By Greg Miller
Times Staff Writer
6:39 PM PST, March 26, 2005
WASHINGTON — In its scramble to marshal resources for gathering intelligence
on al-Qaida and Iraq, the CIA shut down a spy ring it was operating in South
America that was providing a rare glimpse into the activities of Iranian militants
and intelligence networks, according to a former agency official involved
in the operation.
The program, which had taken five years to assemble, , had succeeded to the
point that several of the CIA's informants had been invited to take part in
religious training inside Iran, the former official said.
But the operation was dismantled by CIA officials who were skeptical of its
value, the former official said, and were under growing pressure to redeploy
agency funds and personnel from South America and other regions seen as less
critical than the nation's expanding war fronts.
Iran's intelligence service has been active in South America for decades,
officials said. The decision to pull the plug on the CIA-run program came
in 2002, after President Bush had declared Iran part of an "axis of evil"
along with Iraq and North Korea, but before confronting Iran over its nuclear
program and its support for terrorist activities became a top priority for
the administration.
The agency has struggled to obtain reliable intelligence on Iran. The official
who was involved in managing the spy ring said that it was among the few successes
the CIA had in recent years obtaining reliable intelligence on Iran.
"I believe now if we're forced to go back into Iran, we're going to be starting
from near zero," the official said, referring to intelligence on the Islamic
regime. The Bush administration recently endorsed European efforts to negotiate
with Iran to dismantle its nuclear enrichment program, but has not ruled out
the possible use of military strikes or covert operations.
Further, the official said that the South American operation had put the CIA
in position to learn of plots devised by Iran and elements of Hezbollah, which
were linked to attacks against Jews in South America during the 1990s.
"I will not say we stopped a terrorist act but will say we were in close enough
that had one been planned, we would have had that opportunity," said the official,
who spoke on condition of anonymity because of the sensitivity of the subject.
CIA officials declined to discuss details of the operation, but disputed the
suggestion that the agency had sacrificed a successful or potentially valuable
program. A CIA spokesman said that the agency "did not stop or scale back
any worthwhile clandestine collection effort against Iran as a result of a
realignment of agency resources in support of the war on terrorism or intelligence
collection efforts in Iraq."
Former CIA officials also defended the agency's decisions, while acknowledging
difficult choices in the past four years as the agency was stretched to its
limits by U.S. involvement in Afghanistan, Iraq and elsewhere. The former
officials said many programs were curtailed or killed as the CIA "surged"
from one conflict to another.
"We faced some really tough budget issues, and we had to do some tough prioritization
on some things," said James L. Pavitt, who retired last year as head of the
CIA's clandestine service.
Pavitt said he could not discuss specific operations, and that he was not
familiar with the South American venture. But he expressed skepticism that
a high-value program -- particularly one that was aimed at gathering intelligence
on Iran -- had been axed.
"The fact of the matter is that anything that had genuine merit that was of
critical import, we would have struggled but found a way to continue," Pavitt
said. "If it was of marginal input or import, it would have been looked at
harshly."
He added: "That's not to say that there weren't some mistakes made, things
stopped that should have been kept."
Several current and former officials said that South America, Africa and Europe
were areas where CIA operations were particularly vulnerable to cuts.
Stations in South America and Africa sometimes were left so threadbare that
the agency had to resort to what one former high-ranking official called "circuit
riding." The term refers to a practice in which stations and bases in certain
regions are all but shuttered, with agency operatives visiting periodically
to meet with sources and make payments.
"We borrowed from Peter to pay Paul," said the former high-ranking official,
who left the agency last year and spoke on condition of anonymity. Because
of the agency's intelligence priorities, he said, "You're going to take more
people out of Paraguay than you are out of Moscow or Beijing."
The spy ring in South America targeting Iran was an early casualty.
Because the United States does not have diplomatic relations with Iran, and
the country is considered a "denied" territory by the CIA, the agency has
had to undertake other means to gather intelligence on Tehran, the capital.
In places with large Iranian populations, such as Los Angeles, the CIA has
sought to recruit immigrants who still travel to Iran or have relatives there.
The South American operation relied on a network of South American nationals
who had been placed on the CIA payroll after having attracted the interest
of suspected Iranian intelligence operatives in the region.
"They were in touch with Iranians of interest, Hezbollah, and they were just
ripe to being recruited (by the CIA) and 'run' in some way," said the former
agency official involved in the operation.
(Begin optional trim)
Iran and its spy service, the Ministry of Intelligence and Security, have
long had a significant presence in South America. U.S. intelligence officials
said the region's lax border security and active trade routes are attractions
to an Islamic republic eager to use illicit means to acquire technology and
materials that the country cannot otherwise get because of restrictions on
trade with the United States and other nations.
So-called Iranian "trade delegations" travel extensively through the continent,
officials said.
"Most check in through Bogota, spend time in Colombia, and travel to Ecuador,
Peru, Argentina, Chile and the tri-border area (shared by Peru, Bolivia and
Paraguay)," the former CIA official said. The tri-border area is home to a
large Shiite Muslim community.
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Hezbollah, the militant Iranian-backed Islamic organization, has a significant
presence in South America, officials said. Hezbollah, which also has a prominent
political presence in Lebanon, is considered by some experts to be among the
most dangerous terrorist groups in the world.
Iran and Hezbollah are believed to have used South America as an operational
and recruiting base for at least two decades. Iran was suspected of involvement
in devastating attacks in the 1990s, including the 1994 bombing that killed
nearly 100 people at a Jewish community center in Buenos Aires, Argentina,
and a 1992 attack that destroyed the Israeli embassy in that city.
Some experts believe that Iran and Hezbollah could use recruits in South America
to penetrate the United States. "They're looking for converts, operatives,"
said Mike Scheuer, a former CIA counterterrorism official. "If you can convert
an Argentine to be a Shia Muslim, he's not going to look like a Shia, and
it's going to be much easier to get into the U.S. with an Argentine passport
than from Ghana or Egypt or somewhere else."
Over a period of several years, the CIA assembled a group of South American
informants who were in contact with Iranians there. "We dangled our people
out there and the Iranians recruited us," the former official said.
Some were seen as valuable by the Iranians because of their business or government
contacts, the former CIA official said. Others "were not viewed as the brightest
and were not politically connected, but were there to carry out an operational
need, be it a procurement or a terrorist operation," the former official said.
"They were like the goons that were going to get tasked."
Over a period of years, some of the informants increasingly gained the trust
of the Iranians they were in contact with, to the point that several were
taken to Qom, a holy city in Iran, for religious study, the former official
said.
The program was seen as a valuable source of information on Iranian procurement
efforts in South America, Hezbollah cells in the region, as well as the methods
and activities of Tehran's intelligence service.
"We saw technology transfers, money transfers, false documents," the former
official said. "I don't know whether it would have been good for internal
intelligence inside Iran. But given that Iran is such a tough nut to crack,
it was amazing to me how successful this was."
(Begin optional trim)
The program had first survived CIA funding cuts in the late 1990s when there
were hopes for a thaw in relations between the United States and Iran, but
the CIA's stations in South America banded together to provide continued funding.
"Then 9-11 happened and I was just told to shut it down," said the former
CIA official. The agency's informants, who had been operating under false
identities, were, the official said, "dropped without protection."
(End optional trim)
The former official who described the operation retired from the agency last
year and cited frustration with the decision to close the South American program
as a reason for discussing it. The official discussed the matter in telephone
interviews, expanding on an account first provided to the KNBC television
station in Los Angeles. Other CIA officers vouched for the source's credibility
and confirmed the official's role in South America.
(Optional add end)
The demise of the South American operation underscores the triage-like environment
at the agency in recent years, former officials said.
The post-Sept. 11 mobilization was the first in a wave of taxing deployments.
In Afghanistan and Iraq, the agency began by seeking volunteers from its stations
around the world and in the United States. But such efforts quickly proved
inadequate, officials said, and the agency resorted to a series of "drafts."
"Each division had to cough up a number of bodies," said Lindsay Moran, a
former CIA case officer who left the agency in 2003. At first, stations in
various regions were instructed to send at least one case officer, but subsequently,
there were demands for more people.
"In Afghanistan, they were a little more discerning about who they sent over,
mainly special operations guys and guys with military backgrounds," Moran
said.
As the buildup for war in Iraq got under way, "We had this situation where
the job really wasn't done in Afghanistan, and they started pulling people
back from Afghanistan and sending them to Iraq."
After Iraqi President Saddam Hussein was toppled from power, the agency continued
to send people to its Baghdad station even as the environment became so dangerous
that they were sometimes unable to leave their secure compounds.
Other agency officials defended the deployments but acknowledged that the
agency's presence on other continents has been eroded significantly.
To meet the enormous demand for case officers in Afghanistan, Iraq and at
agency headquarters, the CIA relied on a combination of reducing its forces
in certain areas -- particularly South America and Africa -- and rehiring
large numbers of agency retirees.
A former high-ranking CIA official involved in deployment decisions said the
agency at various times had to redeploy as many as 1,000 people, including
case officers, analysts and support staff.
Copyright 2005 Los Angeles Times