Chalabi Reportedly Told Iran That U.S. Had Code

Chalabi Reportedly Told Iran That U.S. Had Code By JAMES RISEN and DAVID JOHNSTON

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WASHINGTON, June 1 — Ahmad Chalabi, the Iraqi leader and former ally of the Bush administration, disclosed to an Iranian official that the United States had broken the secret communications code of Iran's intelligence service, betraying one of Washington's most valuable sources of information about Iran, according to United States intelligence officials.

The general charge that Mr. Chalabi provided Iran with critical American intelligence secrets was widely reported last month after the Bush administration cut off financial aid to Mr. Chalabi's organization, the Iraqi National Congress, and American and Iraqi security forces raided his Baghdad headquarters.

The Bush administration, citing national security concerns, asked The New York Times and other news organizations not to publish details of the case. The Times agreed to hold off publication of some specific information that top intelligence officials said would compromise a vital, continuing intelligence operation. The administration withdrew its request on Tuesday, saying information about the code-breaking was starting to appear in news accounts.

Mr. Chalabi and his aides have said he knew of no secret information related to Iran and therefore could not have communicated any intelligence to Tehran.

American officials said that about six weeks ago, Mr. Chalabi told the Baghdad station chief of Iran's Ministry of Intelligence and Security that the United States was reading the communications traffic of the Iranian spy service, one of the most sophisticated in the Middle East.

According to American officials, the Iranian official in Baghdad, possibly not believing Mr. Chalabi's account, sent a cable to Tehran detailing his conversation with Mr. Chalabi, using the broken code. That encrypted cable, intercepted and read by the United States, tipped off American officials to the fact that Mr. Chalabi had betrayed the code-breaking operation, the American officials said.

American officials reported that in the cable to Tehran, the Iranian official recounted how Mr. Chalabi had said that one of "them" — a reference to an American — had revealed the code-breaking operation, the officials said. The Iranian reported that Mr. Chalabi said the American was drunk.

The Iranians sent what American intelligence regarded as a test message, which mentioned a cache of weapons inside Iraq, believing that if the code had been broken, United States military forces would be quickly dispatched to the specified site. But there was no such action.

The account of Mr. Chalabi's actions has been confirmed by several senior American officials, who said the leak contributed to the White House decision to break with him.

It could not be learned exactly how the United States broke the code. But intelligence sources said that in the past, the United States has broken into the embassies of foreign governments, including those of Iran, to steal information, including codes.

The F.B.I. has opened an espionage investigation seeking to determine exactly what information Mr. Chalabi turned over to the Iranians as well as who told Mr. Chalabi that the Iranian code had been broken, government officials said. The inquiry, still in an early phase, is focused on a very small number of people who were close to Mr. Chalabi and also had access to the highly restricted information about the Iran code.

Some of the people the F.B.I. expects to interview are civilians at the Pentagon who were among Mr. Chalabi's strongest supporters and served as his main point of contact with the government, the officials said. So far, no one has been accused of any wrongdoing.

In a television interview on May 23, Mr. Chalabi said on CNN's "Late Edition" that he met in Tehran in December with the Iranian supreme leader, Ayatollah Ali Khamenei, and the Iranian president, Mohammad Khatami. He also said he had met with Iran's minister of information.

Mr. Chalabi attacked the C.I.A. and the director of central intelligence, George J. Tenet, saying the agency was behind what Mr. Chalabi asserted was an effort to smear him.

"I have never passed any classified information to Iran or have done anything — participated in any scheme of intelligence against the United States," Mr. Chalabi said on "Fox News Sunday." "This charge is false. I have never seen a U.S. classified document, and I have never seen — had a U.S. classified briefing."

Mr. Chalabi, a member of the Iraqi Governing Council, said, "We meet people from the Iranian Embassy in Baghdad regularly," but said that was to be expected of Iraqi officials like himself.

Some defenders of Mr. Chalabi in the United States say American officials had encouraged him in his dealings with Iran, urging him to open an office in Tehran in hopes of improving relations between Iran and Washington. Those defenders also say they do not believe that his relationship with Iran involved any exchange of intelligence.

Mr. Chalabi's allies in Washington also saw the Bush administration's decision to sever its ties with Mr. Chalabi and his group as a cynical effort instigated by the C.I.A. and longtime Chalabi critics at the State Department. They believe those agencies want to blame him for mistaken estimates and incorrect information about Iraq before the war, like whether Iraq possessed weapons of mass destruction.

One of those who has defended Mr. Chalabi is Richard N. Perle, the former chairman of the Defense Policy Board. "The C.I.A. has disliked him passionately for a long time and has mounted a campaign against him with some considerable success," Mr. Perle said Tuesday. "I've seen no evidence of improper behavior on his part. No evidence whatsoever."

Mr. Perle said he thought the C.I.A. had turned against Mr. Chalabi because he refused to be the agency's "puppet." Mr. Chalabi "has a mind of his own," Mr. Perle said.

American intelligence officials said the F.B.I. investigation into the intelligence leak to Iran did not extend to any charges that Mr. Chalabi provided the United States with incorrect information, or any allegations of corruption.

American officials said the leak about the Iranian codes was a serious loss because the Iranian intelligence service's highly encrypted cable traffic was a crucial source of information, supplying Washington with information about Iranian operations inside Iraq, where Tehran's agents have become increasingly active. It also helped the United States keep track of Iranian intelligence operations around the world.

Until last month, the Iraqi National Congress had a lucrative contract with the Defense Intelligence Agency to provide information about Iraq. Before the United States invasion last year, the group arranged for Iraqi defectors to provide the Pentagon with information about Saddam Hussein's government, particularly evidence purporting to show that Baghdad had active programs to develop weapons of mass destruction. Today, the American intelligence community believes that much of the information passed by the defectors was either wrong or fabricated.

THE STRATFOR WEEKLY 28 May 2004

Overdoing Chalabi By George Friedman

On Feb. 19, in a piece entitled "Ahmed Chalabi and His Iranian Connection," Stratfor laid out the close relationship Chalabi had with the Iranians, and the role that relationship played in the flow of intelligence to Washington prior to the war. This week, the story of Chalabi, accused of being an Iranian agent by U.S. intelligence, was all over the front pages of the newspapers. The media, having ignored Chalabi's Iranian connections for so long, went to the other extreme -- substantially overstating its significance.

The thrust of many of the stories was that the United States was manipulated by Iran -- using Chalabi as a conduit -- into invading Iraq. The implication was that the United States would have chosen a different course, except for Chalabi's disinformation campaign. We doubt that very much.

First, the United States had its own reasons for invading Iraq. Second, U.S. and Iranian interests were not all that far apart in this case. Chalabi was certainly, in our opinion, working actively on behalf or Iranian interests -- as well as for himself -- but he was merely a go-between in some complex geopolitical maneuvering.

Iran wanted the United States to invade Iraq. The Iranians hated Saddam Hussein more than anyone did, and they feared him. Iran and Iraq had fought a war in the 1980s that devastated a generation of Iranians. More than Hussein, Iraq represented a historical threat to Iran going back millennia. The destruction of the Iraqi regime and army was at the heart of Iranian national interest. The collapse of the Soviet Union had for the first time in a century secured Iran's northern frontiers. The U.S. invasion of Afghanistan secured the Shiite regions of Afghanistan as a buffer. If the western frontier could be secured, Iran would achieve a level of national security it had not known in centuries.

What Iran Wanted

Iran knew it could not invade Iraq and win by itself. Another power had to do it. The failure of the United States to invade and occupy Iraq in 1991 was a tremendous disappointment to Iran. Indeed, the primary reason the United States did not invade Iraq was because it knew the destruction of the Iraqi army would leave Iran the dominant power native to the Persian Gulf. Invading Iraq would have destroyed the Iraq-Iran balance of power that was the only basis for what passed for stability in the region.

The destruction of the Iraqi regime would not only have made Iran secure, but also would have opened avenues for expansion. First, the Persian Gulf region is full of Shia, many of them oriented toward Iran for religious reasons. For example, the loading facilities for Saudi oil is in a region dominated by the Shia. Second, without the Iraqi army blocking Iran, there was no military force in the region that could stop the Iranians. They could have become the dominant power in the Persian Gulf, and only the permanent stationing of U.S. troops in the region would have counterbalanced Iran. The United States did not want that, so the conquest of Kuwait was followed by the invasion -- but not the conquest -- of Iraq. The United States kept Iraq in place to block Iran.

Iran countered this policy by carefully and systematically organizing the Shiite community of Iraq. After the United States allowed a Shiite rising to fail after Desert Storm, Iranian intelligence embarked on a massive program of covert organization of the Iraqi Shia, in preparation for the time when the Hussein regime would fall. Iranian intentions were to create a reality on the ground so the fall of Iraq would inevitably lead to the rise of a Shiite-dominated Iraq, allied with Iran.

What was not in place was the means of destroying Hussein. Obviously, the Iranians wanted the invasion and Chalabi did everything he could to make the case for invasion, not only because of his relationship with Iran, but also because of his ambitions to govern Iraq. Iran understood that an American invasion of Iraq would place a massive U.S. Army on its western frontier, but the Iranians also understood that the United States had limited ambitions in the area. If the Iranians cooperated with U.S. intelligence on al Qaeda and were not overly aggressive with their nuclear program, the two major concerns of the United States would be satisfied and the Americans would look elsewhere.

The United States would leave Iraq in the long run, and Iran would be waiting patiently to reap the rewards. In the short run, should the United States run into trouble in Iraq, it would become extremely dependent on the Iranians and their Shiite clients. If the Shiite south rose, the U.S. position would become untenable. Therefore if there was trouble -- and Iranian intelligence was pretty sure there would be -- Shiite influence would rise well before the Americans left.

Chalabi's job was to give the Americans a reason to invade, which he did with stories of weapons of mass destruction (WMD). But he had another job, which was to shield two critical pieces of information from the Americans: First, he was to shield the extent to which the Iranians had organized the Shiite south of Iraq. Second, he was to shield any information about Hussein's plans for a guerrilla campaign after the fall of Baghdad. These were the critical things -- taken together, they would create the dependency the Iranians badly wanted.

What the United States Wanted

The Americans were focused on another issue. The balance of power in the Persian Gulf was not a trivial matter to them, but it had taken on a new cast after Sept. 11. For the United States, the central problem in the Persian Gulf -- and a matter of urgent national security -- was the unwillingness of Saudi intelligence and security services to move aggressively against al Qaeda inside the kingdom. From the U.S. viewpoint, forcing Saudi Arabia to change its behavior was the overriding consideration; without that, no progress against al Qaeda was possible.

The United States did not see itself as having many levers for manipulating the situation in Saudi Arabia. The Saudis were convinced that ultimately the United States would not be able to take decisive action against the Saudis, and the Saudi government was more concerned about the internal political consequences of a crackdown on al Qaeda, than it was about the United States. It felt confident it could manage the United States as it had in the past.

The United States did not want to invade Saudi Arabia. The House of Saud was the foundation of Saudi stability, and the United States did not want it to fall. It wanted to change the Saudi strategy. Invading Saudi Arabia could have led to global economic disaster if oil shipments were disrupted. Finally, the invasion of Saudi Arabia, given its size, terrain and U.S. resources, was a difficult if not impossible task. The direct route would not work. The United States would take an indirect route.

If you wanted to frighten Saudi Arabia into changing its behavior without actually launching military operations against it, the way to do that would be: (a) demonstrate your will by staging an effective military campaign; and (b) wind up the campaign in a position to actually invade and take Saudi oil fields if they did not cooperate. The Saudis doubted U.S. will and military capacity to do them harm (since Kuwait would never permit its territory to be used to invade Saudi Arabia). The solution: an invasion of Iraq.

The United States wanted to invade Iraq as an indirect route to influence Saudi Arabia. As in any military operation, there were also subsidiary political goals. The United States wanted to get rid of Hussein's regime, not because it was complicit with al Qaeda, but because it might later become complicit. Secondly, it wanted to use Iraqi territory as a base to pressure Syria and Iran as well.

Chalabi's claims about Iraqi WMD did not instigate the invasion, because the United States did not invade Iraq to get rid of WMD. An invasion would be the most dangerous route for doing that, because the other side might actually surprise you and use the weapons on your troops. You would use air strikes and special operations troops. What Chalabi did by providing his intelligence was, however, not insignificant. The administration had two goals: the destruction of al Qaeda and protection of the United States from WMD. By producing evidence of WMD in Iraq, Chalabi gave Donald Rumsfeld and Paul Wolfowitz the tool they needed. By introducing evidence of WMD, they triggered an automatic policy against Iraq having them, which closed off an argument -- not really a raging argument -- in the administration. It was important, but not earth shattering.

There was a deeper dimension to this. The strategic planners in the administration were old enough to remember when Richard Nixon began the process that broke the back of the Soviet Union -- his alliance with China against the Soviets. During World War II, the United States allied with Stalin against Hitler, preventing a potential peace agreement by Stalin. The United States had a known policy of using fault lines among potential enemies to split them apart, allying with the weaker against the stronger. If the United States allying with Stalin or Mao was not considered beyond the pale, then the Bush administration planners had another alliance in mind.

The fault line in the Islamic world is between Sunni and Shia. The Sunni are a much larger group than the Shia, but only if you include countries such as Indonesia. Within the Persian Gulf region, the two groups are highly competitive. Al Qaeda was a Sunni movement. Following U.S. grand strategy, logic held that the solution to the problem was entering into an alliance of sorts with the Shia. The key to the Shia was the major Shiite power -- Iran.

The United States worked with Iranian intelligence during the invasion of Afghanistan, when the Iranians arranged relationships with Shiite warlords like Ahmed Khan. The United States and Iran had cooperated on a number of levels for years when it concerned Iraq. Therefore there were channels open for collaboration.

The United States was interested not only in frightening Saudi Arabia, but also in increasing its dependence on the United States. The United States needed a lever strong enough to break the gridlock in Riyadh. An invasion of Iraq would achieve the goal of fear. An alliance with Iran would create the dependency that was needed. The Saudis would do anything to keep the Iranians out of their oil fields and their country. After the invasion of Iraq, only the United States could stop them. The Saudis were trapped by the United States.

What Chalabi Didn't Say

What is important to see here is how the Iranians were using the Americans, and how the Americans were using the Iranians. Chalabi was an important channel, but hardly the only one. It is almost certain that his role was well known. Chalabi was probably left in place to convince the Iranians that the United States was naive enough to believe them, or he was there simply as a token of good faith. But nothing he said triggered the invasion.

It was what he did not say that is significant. Chalabi had to know that the Iranians controlled the Iraqi Shia. It is possible that he even told the Pentagon that, since it wouldn't change fundamental strategy much. But there is one thing that Chalabi should have known that he certainly didn't tell the Americans: that Hussein was going to wage a guerrilla war. On that point, there is no question but that the Pentagon was surprised, and it mattered a lot.

Chalabi did not share intelligence that the Iranians almost certainly had because the Iranians wanted the Americans to get bogged down in a guerrilla war. That would increase U.S. dependence on the Shia and Iran, and would hasten the American departure.

Iranian intelligence had penetrated deep into Iraq. The preparations for the guerrilla war were extensive. Iran knew -- and so did Chalabi. The United States would still have invaded, but would have been much better prepared, militarily and politically. Chalabi did not tell the Pentagon what he knew and that has made a huge difference in the war.

We suspect that the Pentagon intelligence offices and the CIA both knew all about Chalabi's relation to Iranian intelligence. The argument was not over that, but over whether this disqualified his intelligence. The Pentagon had made up its mind for strategic reasons to invade Iraq. Chalabi's intelligence was of use in internal disputes in the administration, but decided nothing in terms of policy. The CIA, understanding that Chalabi was not really a source in the conventional sense but was a geopolitical pawn, did not like the game, but didn't call the Department of Defense on it until after DOD got into trouble in Iraq -- and the CIA wanted to make certain that everyone knew it wasn't their mistake.

Chalabi was a minor player in a dance between Iran and the United States that began on Sept. 11 and is still under way. The United States wants a close relationship with Iran in order to split the Islamic world and force the Saudis to collaborate with the Americans. The Iranians want to use the United States in order to become the dominant power in the Persian Gulf. Each wants the other to be its hammer. In all of this, Chalabi was only an actor in a bit part.

The one place in which he was significant was negative -- he kept the United States in the dark about the impending guerrilla war. That was where he really helped Iran, because it was the guerrilla war that locked the United States into a dependency on the Iraqi Shia that went much farther than the United States desired, and from which the United States is only now starting to extricate itself. That is a major act of duplicity, but it is a sin of omission, not commission.

In a way, the Americans and the Iranians used Chalabi for their own purposes. The Iranians used him to screen information from the Americans more than to give false information. The Americans used him to try to convince the Iranians that they had a sufficient degree of control over the situation that it was in their interests to maintain stability in the Shiite regions. At this point, it is honestly impossible to tell who got the better of whom. But this much is certain. Chalabi, for all his cleverness, is just another used up spook, trusted by no one, trusting even fewer. Geopolitics trumps conspiracy every time.

There are no names as sources in this article. It remains anonymous. But at least now they have specified a charge.

And what is it? Read carefully.

"American officials said"

Notice, no organization specified, let alone a name.

"that about six weeks ago, Mr. Chalabi told the Baghdad station chief of Iran's Ministry of Intelligence and Security that the United States was reading the communications traffic of the Iranian spy service"

Oh? So, did the American official here Chalabi telling him so? No. It is an inference, not testimony. We can tell, because of the next paragraph. But the presentation is decidedly slippery. It pretends there are two data points rather than one. Watch carefully.

"According to American officials,"

Notice - doesn't claim it is the same source. Not giving names can be very flexible. Note also the plural.

"the Iranian official in Baghdad, possibly not believing Mr. Chalabi's account,"

Notice - pure speculation. Trying to get the story to gel. What follows is the only data point actually known.

"sent a cable to Tehran detailing his conversation with Mr. Chalabi, using the broken code. That encrypted cable, intercepted and read by the United States, tipped off American officials"

In other words, the actual evidence here is an Iranian to Iranian intelligence cable. In a broken code. About the code being broken.

And the reason we think the Iranians were telling the truth is? That supposedly they didn't believe the report and thought the code was safe. It is just as likely their test of whether the code was still safe, was the accusation against Chalabi. If they want to destroy him, all they have to do is allege that he works for them, right?

"to the fact that Mr. Chalabi had betrayed the code-breaking operation, the American officials said."

Notice the way it is elevated to a fact. On what basis? That the Iranians said so. Whatever the Iranians say in cabels in a broken code must be true. Even if they are obviously aware of at least the allegation that the code has been compromised.

So, that does tell us one thing. The smear is Iranian. It was meant to test whether the code was broken. When we dumped Chalabi, they knew instantly that the answer was "yes". As a bonus, they got us to destroy one of our allies, just by insinuating that he worked for them.

If we had any confirmation on the Chalabi end, that would be another story, more like the one the anonymous officials are trying to tell. But we don't. We as yet have no reason to think so. Everything we've been told is perfectly compatible with the following alternative -

1. The Iranians suspected we had broken the code, by some other means (use of the intel in Iraq etc). Only has to be a suspicion.
2. To test the suspicion they alleged something about Chalabi - with no helped from Chalabi - in their suspect code.
3. We believe every word the Iranians tell us.
4. As a result, they confirm out break of the code and get rid of Chalabi.
5. Anonymous officials leak all of it. They have their own motives for number 3.

It is possible Chalabi told the Iranians something, but now we know the only evidence for it is an anonymous Iranian allegation. If they find confirmation in records taken from him, fine, they will have a case. As yet they have an Iranian smear that they want to believe.

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