http://www.amconmag.com/2008/2008_06_02/cover.html

The Spy Who Loves Us
Pay no mind to the Mossad agent on the line.
by Philip Giraldi
June 2, 2008 Issue
Copyright © 2008 The American Conservative

Excerpt:

After Israeli spy Jonathan Pollard was sentenced to life in prison in 1986, the U.S. negotiated an understanding with Israel—a “gentlemen’s agreement” —stipulating that neither nation would thenceforth conduct espionage operations in the other’s territory without consent. But the agreement was a sham from the beginning. The Israeli government didn’t even honor its commitments in the aftermath of the Pollard case, failing to return the estimated 360 cubic feet of stolen information to enable the U.S. to conduct a damage assessment. The United States, for its part, continued to recruit and run agents inside Israel throughout the 1980s and 1990s. And it was known within the intelligence and counterintelligence communities that Israel did the same in the United States. David Szady, the FBI’s assistant director for counterintelligence, was so dismayed by the level of Israeli spying in the late ’90s that he called in the head of the Israeli Embassy’s Central Institute for Intelligence and Special Activities (Mossad) office and told him, “Knock it off.”

...

Virtually every U.S. government body concerned with security has confirmed that Israeli espionage takes place, though it is frequently not exposed because FBI officers know that investigating these crimes is frustrating and does no favors for their careers. But Israel always features prominently in the annual FBI report called “Foreign Economic Collection and Industrial Espionage.” The 2005 report states, “Israel has an active program to gather proprietary information within the United States. These collection activities are primarily directed at obtaining information on military systems and advanced computing applications that can be used in Israel’s sizable armaments industry.” It adds that Israel recruits spies, uses electronic methods, and carries out computer intrusion to gain the information.

...

In early 2001, several federal government agencies noticed a series of intrusive approaches by Israelis who were ostensibly selling paintings. In June, the Drug Enforcement Administration made a compilation of the activities of the so-called “art students” in a classified report, which was later leaked. The report documents 125 specific attempts by Israelis to gain entry to government offices, residences of government employees, and even Defense Department facilities between January and June 2001. The Israelis “targeted and penetrated military bases” and were observed trying to enter federal buildings from back doors and parking garages. One detained Israeli was caught wandering around the federal building in Dallas with a detailed floor plan in hand. Many of those arrested were found to have backgrounds in “military intelligence, electronic surveillance intercept, or explosive ordnance units.”

Now, there may have been an Israeli student subculture in the U.S. selling cheap reproductions. But it is also clear that the art-student mechanism was used by intelligence officers to provide cover for espionage. The students were organized in cells of eight to ten members that traveled in vans, which provide concealment for electronic equipment. Several of the students were able to afford expensive airline tickets to hop from plane to plane, two of them flying in one day from Hamburg to Miami, then to Chicago, and finally winding up in Toronto on tickets that cost $15,000 each. In Miami and Chicago, they visited two government officials to try to sell their art. Another student had in his possession deposit slips for $180,000. Six students used cellphones provided by a former Israeli vice consul. Many claimed to be registered at either the University of Jerusalem or the Bezalel Academy of Arts in Jerusalem, but not a single name could be connected to the student body list of Bezalel, and there is no University of Jerusalem.

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And then there are the movers. Urban Moving Systems of Weehawken, New Jersey was largely staffed by Israelis, many of whom had recently been discharged from the Israeli Defense Forces. As has been widely reported, three movers were photographed celebrating in Liberty State Park against the backdrop of the first collapsing World Trade Center tower. The celebration came 16 minutes after the first plane struck, when no one knew that there had been a terrorist attack and the episode was assumed to be a horrible accident. The owner of the moving company, Dominik Suter, was questioned once by the FBI before fleeing to Israel. He has since refused to answer questions.

Whether the movers and the art students had jointly pieced together enough information to provide a preview of 9/11 remains hidden in intelligence files in Tel Aviv, but the proximity of both groups to 15 of the hijackers in Hollywood, Florida and to five others in northern New Jersey is suggestive.

Speculation about 9/11 aside, it is certain that Urban Moving was involved in an intelligence-collection operation against Arabs living in the United States, possibly involving electronic surveillance of phone calls and other communications. When they were arrested, the five Israelis working for Urban Moving had multiple passports and nearly $5,000 in cash. They were held for 71 days, failed a number of polygraph exams, and were finally allowed to return to Israel after Tel Aviv admitted that they were Mossad and apologized.

Between 55 and 95 other Israelis were also arrested in the weeks following 9/11, and a number were reported to be active-duty military personnel. The FBI came under intense pressure from several congressmen and various pro-Israel groups to release the detainees. The order to free them came from Judge Michael Mukasey, now the U.S. attorney general. An FBI investigator noted, “Leads were not fully investigated” due to pressure from “higher echelons.” According to one source, the White House may have made the final decision to terminate the inquiry. Though the investigation could have gone much farther, the FBI identified two of the Weehawken movers as Israeli intelligence officers and confirmed that Urban Moving was a front for Mossad to “spy on local Arabs.” One CIA officer involved in the investigation concluded, “The Israelis likely had a huge spy operation.

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Two Israeli companies in particular—Amdocs and Comverse Infosys, both of which are headquartered in Israel—do significant business in the United States. Amdocs, which has contracts with the 25 largest telephone companies in the U.S. that together handle 90 percent of all calls made, logs all calls that go out and come in on the system. It does not record the conversations themselves, but the records provide patterns, referred to as “traffic analysis,” that can provide intelligence leads. In 1999, the National Security Agency warned that records of calls made in the United States were winding up in Israel. Amdocs also has an apparent relationship with some of the art students who were arrested in 2001. Several were provided with bond money by an Amdocs executive.

Arabesque: Worth reading the entire article. For the record, Philip Giraldi is a former CIA agent. I have found many of his articles to be well sourced and informative.