- Note- This stunning series ran on Fox News
- some months ago. It is well worth reading.
- Fox News Special Report
- Part One
- BRIT HUME, HOST: It has been more than 16 years since
a civilian working for the Navy was charged with passing secrets to Israel.
Jonathan Pollard pled guilty to conspiracy to commit espionage and is serving
a life sentence. At first, Israeli leaders claimed Pollard was part of
a rogue operation, but later took responsibility for his work.
- Now Fox News has learned some U.S. investigators believe
that there are Israelis again very much engaged in spying in and on the
U.S., who may have known things they didn't tell us before Sept. 11. Fox
News correspondent Carl Cameron has details in the first of a four-part
- (BEGIN VIDEOTAPE)
- CARL CAMERON, FOX NEWS CORRESPONDENT: Since Sept. 11,
more than 60 Israelis have been arrested or detained, either under the
new patriot anti-terrorism law, or for immigration violations. A handful
of active Israeli military were among those detained, according to investigators,
who say some of the detainees also failed polygraph questions when asked
about alleged surveillance activities against and in the United States.
- There is no indication that the Israelis were involved
in the 9/11 attacks, but investigators suspect that they Israelis may have
gathered intelligence about the attacks in advance, and not shared it.
A highly placed investigator said there are "tie-ins." But when
asked for details, he flatly refused to describe them, saying, "evidence
linking these Israelis to 9/11 is classified. I cannot tell you about evidence
that has been gathered. It's classified information."
- Fox News has learned that one group of Israelis, spotted
in North Carolina recently, is suspected of keeping an apartment in California
to spy on a group of Arabs who the United States is also investigating
for links to terrorism. Numerous classified documents obtained by Fox News
indicate that even prior to Sept. 11, as many as 140 other Israelis had
been detained or arrested in a secretive and sprawling investigation into
suspected espionage by Israelis in the United States.
- Investigators from numerous government agencies are part
of a working group that's been compiling evidence since the mid '90s. These
documents detail hundreds of incidents in cities and towns across the country
that investigators say, "may well be an organized intelligence gathering
- The first part of the investigation focuses on Israelis
who say they are art students from the University of Jerusalem and Bazala
Academy. They repeatedly made contact with U.S. government personnel, the
report says, by saying they wanted to sell cheap art or handiwork.
- Documents say they, "targeted and penetrated military
bases." The DEA, FBI and dozens of government facilities, and even
secret offices and unlisted private homes of law enforcement and intelligence
personnel. The majority of those questioned, "stated they served in
military intelligence, electronic surveillance intercept and or explosive
- Another part of the investigation has resulted in the
detention and arrests of dozens of Israelis at American mall kiosks, where
they've been selling toys called Puzzle Car and Zoom Copter. Investigators
suspect a front.
- Shortly after The New York Times and Washington Post
reported the Israeli detentions last months, the carts began vanishing.
Zoom Copter's Web page says, "We are aware of the situation caused
by thousands of mall carts being closed at the last minute. This in no
way reflects the quality of the toy or its salability. The problem lies
in the operators' business policies."
- Why would Israelis spy in and on the U.S.? A general
accounting office investigation referred to Israel as country A and said,
"According to a U.S. intelligence agency, the government of country
A conducts the most aggressive espionage operations against the U.S. of
any U.S. ally."
- A defense intelligence report said Israel has a voracious
appetite for information and said, "the Israelis are motivated by
strong survival instincts which dictate every possible facet of their political
and economical policies. It aggressively collects military and industrial
technology and the U.S. is a high priority target."
- The document concludes: "Israel possesses the resources
and technical capability to achieve its collection objectives."
- (END VIDEO CLIP)
- A spokesman for the Israeli embassy here in Washington
issued a denial saying that any suggestion that Israelis are spying in
or on the U.S. is "simply not true." There are other things to
consider. And in the days ahead, we'll take a look at the U.S. phone system
and law enforcement's methods for wiretaps. And an investigation that both
have been compromised by our friends overseas.
- HUME: Carl, what about this question of advanced knowledge
of what was going to happen on 9/11? How clear are investigators that some
Israeli agents may have known something?
- CAMERON: It's very explosive information, obviously,
and there's a great deal of evidence that they say they have collected
- none of it necessarily conclusive. It's more when they put it all together.
A bigger question, they say, is how could they not have know? Almost a
- HUME: Going into the fact that they were spying on some
- CAMERON: Correct.
- HUME: All right, Carl, thanks very much.
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- Part 2
- BRIT HUME, HOST: Last time we reported on the approximately
60 Israelis who had been detained in connection with the Sept. 11 terrorism
investigation. Carl Cameron reported that U.S. investigators suspect that
some of these Israelis were spying on Arabs in this country, and may have
turned up information on the planned terrorist attacks back in September
that was not passed on.
- Tonight, in the second of four reports on spying by Israelis
in the U.S., we learn about an Israeli-based private communications company,
for whom a half-dozen of those 60 detained suspects worked. American investigators
fear information generated by this firm may have fallen into the wrong
hands and had the effect of impeded the Sept. 11 terror inquiry. Here's
Carl Cameron's second report.
- (BEGIN VIDEOTAPE)
- CARL CAMERON, FOX NEWS CORRESPONDENT (voice-over): Fox
News has learned that some American terrorist investigators fear certain
suspects in the Sept. 11 attacks may have managed to stay ahead of them,
by knowing who and when investigators are calling on the telephone. How?
- By obtaining and analyzing data that's generated every
time someone in the U.S. makes a call.
- UNIDENTIFIED FEMALE: What city and state, please?
- CAMERON: Here's how the system works. Most directory
assistance calls, and virtually all call records and billing in the U.S.
are done for the phone companies by Amdocs Ltd., an Israeli-based private
- Amdocs has contracts with the 25 biggest phone companies
in America, and more worldwide. The White House and other secure government
phone lines are protected, but it is virtually impossible to make a call
on normal phones without generating an Amdocs record of it.
- In recent years, the FBI and other government agencies
have investigated Amdocs more than once. The firm has repeatedly and adamantly
denied any security breaches or wrongdoing. But sources tell Fox News that
in 1999, the super secret national security agency, headquartered in northern
Maryland, issued what's called a Top Secret sensitive compartmentalized
information report, TS/SCI, warning that records of calls in the United
States were getting into foreign hands - in Israel, in particular.
- Investigators don't believe calls are being listened
to, but the data about who is calling whom and when is plenty valuable
in itself. An internal Amdocs memo to senior company executives suggests
just how Amdocs generated call records could be used. "Widespread
data mining techniques and algorithms.... combining both the properties
of the customer (e.g., credit rating) and properties of the specific 'behavior.'"
Specific behavior, such as who the customers are calling.
- The Amdocs memo says the system should be used to prevent
phone fraud. But U.S. counterintelligence analysts say it could also be
used to spy through the phone system. Fox News has learned that the N.S.A
has held numerous classified conferences to warn the F.B.I. and C.I.A.
how Amdocs records could be used. At one NSA briefing, a diagram by the
Argon national lab was used to show that if the phone records are not secure,
major security breaches are possible.
- Another briefing document said, "It has become increasingly
apparent that systems and networks are vulnerable.Such crimes always involve
unauthorized persons, or persons who exceed their authorization...citing
on exploitable vulnerabilities."
- Those vulnerabilities are growing, because according
to another briefing, the U.S. relies too much on foreign companies like
Amdocs for high-tech equipment and software. "Many factors have led
to increased dependence on code developed overseas.... We buy rather than
train or develop solutions."
- U.S. intelligence does not believe the Israeli government
is involved in a misuse of information, and Amdocs insists that its data
is secure. What U.S. government officials are worried about, however, is
the possibility that Amdocs data could get into the wrong hands, particularly
organized crime. And that would not be the first thing that such a thing
has happened. Fox News has documents of a 1997 drug trafficking case in
Los Angeles, in which telephone information, the type that Amdocs collects,
was used to "completely compromise the communications of the FBI,
the Secret Service, the DEO and the LAPD."
- We'll have that and a lot more in the days ahead - Brit.
- HUME: Carl, I want to take you back to your report last
night on those 60 Israelis who were detained in the anti-terror investigation,
and the suspicion that some investigators have that they may have picked
up information on the 9/11 attacks ahead of time and not passed it on.
- There was a report, you'll recall, that the Mossad, the
Israeli intelligence agency, did indeed send representatives to the U.S.
to warn, just before 9/11, that a major terrorist attack was imminent.
How does that leave room for the lack of a warning?
- CAMERON: I remember the report, Brit. We did it first
internationally right here on your show on the 14th. What investigators
are saying is that that warning from the Mossad was nonspecific and general,
and they believe that it may have had something to do with the desire to
protect what are called sources and methods in the intelligence community.
The suspicion being, perhaps those sources and methods were taking place
right here in the United States.
- The question came up in select intelligence committee
on Capitol Hill today. They intend to look into what we reported last night,
and specifically that possibility - Brit.
- HUME: So in other words, the problem wasn't lack of a
warning, the problem was lack of useful details?
- CAMERON: Quantity of information.
- HUME: All right, Carl, thank you very much.
- Part 3
- BRIT HUME, HOST: Last time we reported on an Israeli-based
company called Amdocs Ltd. that generates the computerized records and
billing data for nearly every phone call made in America. As Carl Cameron
reported, U.S. investigators digging into the 9/11 terrorist attacks fear
that suspects may have been tipped off to what they were doing by information
leaking out of Amdocs.
- In tonight's report, we learn that the concern about
phone security extends to another company, founded in Israel, that provides
the technology that the U.S. government uses for electronic eavesdropping.
Here is Carl Cameron's third report.
- (BEGIN VIDEOTAPE)
- CARL CAMERON, FOX NEWS CORRESPONDENT (voice-over): The
company is Comverse Infosys, a subsidiary of an Israeli-run private telecommunications
firm, with offices throughout the U.S. It provides wiretapping equipment
for law enforcement. Here's how wiretapping works in the U.S.
- Every time you make a call, it passes through the nation's
elaborate network of switchers and routers run by the phone companies.
Custom computers and software, made by companies like Comverse, are tied
into that network to intercept, record and store the wiretapped calls,
and at the same time transmit them to investigators.
- The manufacturers have continuing access to the computers
so they can service them and keep them free of glitches. This process was
authorized by the 1994 Communications Assistance for Law Enforcement Act,
or CALEA. Senior government officials have now told Fox News that while
CALEA made wiretapping easier, it has led to a system that is seriously
vulnerable to compromise, and may have undermined the whole wiretapping
- Indeed, Fox News has learned that Attorney General John
Ashcroft and FBI Director Robert Mueller were both warned Oct. 18 in a
hand-delivered letter from 15 local, state and federal law enforcement
officials, who complained that "law enforcement's current electronic
surveillance capabilities are less effective today than they were at the
time CALEA was enacted."
- Congress insists the equipment it installs is secure.
But the complaint about this system is that the wiretap computer programs
made by Comverse have, in effect, a back door through which wiretaps themselves
can be intercepted by unauthorized parties.
- Adding to the suspicions is the fact that in Israel,
Comverse works closely with the Israeli government, and under special programs,
gets reimbursed for up to 50 percent of its research and development costs
by the Israeli Ministry of Industry and Trade. But investigators within
the DEA, INS and FBI have all told Fox News that to pursue or even suggest
Israeli spying through Comverse is considered career suicide.
- And sources say that while various F.B.I. inquiries into
Comverse have been conducted over the years, they've been halted before
the actual equipment has ever been thoroughly tested for leaks. A 1999
F.C.C. document indicates several government agencies expressed deep concerns
that too many unauthorized non-law enforcement personnel can access the
wiretap system. And the FBI's own nondescript office in Chantilly, Virginia
that actually oversees the CALEA wiretapping program, is among the most
agitated about the threat.
- But there is a bitter turf war internally at F.B.I. It
is the FBI's office in Quantico, Virginia, that has jurisdiction over awarding
contracts and buying intercept equipment. And for years, they've thrown
much of the business to Comverse. A handful of former U.S. law enforcement
officials involved in awarding Comverse government contracts over the years
now work for the company.
- Numerous sources say some of those individuals were asked
to leave government service under what knowledgeable sources call "troublesome
circumstances" that remain under administrative review within the
- (END VIDEOTAPE)
- And what troubles investigators most, particularly in
New York, in the counter terrorism investigation of the World Trade Center
attack, is that on a number of cases, suspects that they had sought to
wiretap and survey immediately changed their telecommunications processes.
They started acting much differently as soon as those supposedly secret
wiretaps went into place - Brit.
- HUME: Carl, is there any reason to suspect in this instance
that the Israeli government is involved?
- CAMERON: No, there's not. But there are growing instincts
in an awful lot of law enforcement officials in a variety of agencies who
suspect that it had begun compiling evidence, and a highly classified investigation
into that possibility - Brit.
- HUME: All right, Carl. Thanks very much.
- Part 4
- This week, senior correspondent Carl Cameron has reported
on a longstanding government espionage investigation. Federal officials
this year have arrested or detained nearly 200 Israeli citizens suspected
of belonging to an "organized intelligence-gathering operation."
The Bush administration has deported most of those arrested after Sept.
11, although some are in custody under the new anti-terrorism law.
- Cameron also investigates the possibility that an Israeli
firm generated billing data that could be used for intelligence purpose,
and describes concerns that the federal government's own wiretapping system
may be vulnerable. Tonight, in part four of the series, we'll learn about
the probable roots of the probe: a drug case that went bad four years ago
- (BEGIN VIDEOTAPE)
- CARL CAMERON, FOX NEWS CORRESPONDENT (voice-over): Los
Angeles, 1997, a major local, state and federal drug investigating sours.
The suspects: Israeli organized crime with operations in New York, Miami,
Las Vegas, Canada, Israel and Egypt. The allegations: cocaine and ecstasy
trafficking, and sophisticated white-collar credit card and computer fraud.
- The problem: according to classified law enforcement
documents obtained by Fox News, the bad guys had the cops' beepers, cell
phones, even home phones under surveillance. Some who did get caught admitted
to having hundreds of numbers and using them to avoid arrest.
- "This compromised law enforcement communications
between LAPD detectives and other assigned law enforcement officers working
various aspects of the case. The organization discovered communications
between organized crime intelligence division detectives, the FBI and the
- Shock spread from the DEA to the FBI in Washington, and
then the CIA. An investigation of the problem, according to law enforcement
documents, concluded, "The organization has apparent extensive access
to database systems to identify pertinent personal and biographical information."
- When investigators tried to find out where the information
might have come from, they looked at Amdocs, a publicly traded firm based
in Israel. Amdocs generates billing data for virtually every call in America,
and they do credit checks. The company denies any leaks, but investigators
still fear that the firm's data is getting into the wrong hands.
- When investigators checked their own wiretapping system
for leaks, they grew concerned about potential vulnerabilities in the computers
that intercept, record and store the wiretapped calls. A main contractor
is Comverse Infosys, which works closely with the Israeli government, and
under a special grant program, is reimbursed for up to 50 percent of its
research and development costs by Israel's Ministry of Industry and Trade.
- Asked this week about another sprawling investigation
and the detention of 60 Israeli since Sept. 11, the Bush administration
treated the questions like hot potatoes.
- ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: I would just
refer you to the Department of Justice with that. I'm not familiar with
- COLIN POWELL, SECRETARY OF STATE: I'm aware that some
Israeli citizens have been detained. With respect to why they're being
detained and the other aspects of your question - whether it's because
they're in intelligence services, or what they were doing - I will defer
to the Department of Justice and the FBI to answer that.
- (END VIDEOTAPE)
- CAMERON: Beyond the 60 apprehended or detained, and many
deported since Sept. 11, another group of 140 Israeli individuals have
been arrested and detained in this year in what government documents describe
as "an organized intelligence gathering operation," designed
to "penetrate government facilities." Most of those individuals
said they had served in the Israeli military, which is compulsory there.
- But they also had, most of them, intelligence expertise,
and either worked for Amdocs or other companies in Israel that specialize
in wiretapping. Earlier this week, the Israeli embassy in Washington denied
any spying against or in the United States - Tony.
- SNOW: Carl, we've heard the comments from Ari Fleischer
and Colin Powell. What are officials saying behind the scenes?
- CAMERON: Well, there's real pandemonium described at
the FBI, the DEA and the INS. A lot of these problems have been well known
to some investigators, many of who have contributed to the reporting on
this story. And what they say is happening is supervisors and management
are now going back and collecting much of the information, because there's
tremendous pressure from the top levels of all of those agencies to find
out exactly what's going on.
- At the DEA and the FBI already a variety of administration
reviews are under way, in addition to the investigation of the phenomenon.
They want to find out how it is all this has come out, as well as be very
careful because of the explosive nature and very political ramifications
of the story itself - Tony.
- SNOW: All right, Carl, thanks.