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AIPAC, Israel's Lobby, Imposes Crippling Sanctions on America ... Again

By Grant Smith

IRMEP, Al-Jazeerah &, March 15, 2010

The Israel lobby's campaign against US and international corporations doing business with Iran is gearing up this week. 

The tip of the spear is the American Israel Public Affairs Committee sponsored expansion of the Iran Sanctions Act of 1996.  If signed into law by president Obama, the legislation would institute onerous new monitoring to ensure exports never enter Iran, along with mandatory divestment from and penalties for any corporations discovered doing business in Iran. A new type of "office of special plans" at the Treasury Department that AIPAC and its think tank lobbied to create by executive order in 2004 is also on the warpath.  Stuart Levey, the head of the office of "Terrorism and Financial Intelligence" is traveling to Switzerland, Saudi Arabia, the United Arab Emirates and Oman "pointing out that they face dramatic risks by doing business with Iran."   Israeli Deputy Foreign Minister Danny Ayalon finished a long set of meetings urging the US National Security Council to impose harsh sanctions on Iran.
The New York Times started the week with a list of corporations doing business in Iran and their US government procurement revenues.  Most companies on this list long ago appeared on hit lists compiled by AIPAC for quiet divestment campaigns in state legislatures across the country.  The New York Times ominously highlights in red any company that may be a "possible violator of the Iran Sanctions Act." National Public Radio's Scott Simon, after reading it, was apoplectic.  He fretted aloud on the air whether US companies and subsidiaries on the target list were "betraying their country's national security interests."
What should Americans make of this drive to label all companies doing business with Iran unpatriotic smugglers?  First, they should consider the source of the multi-tiered Iran sanctions drive.  Then, they should start getting angry.
The proto Israel lobby was born in the cradle of a real arms theft and smuggling operation [pdf] that relentlessly preyed on the United States in the 1940s.  Violating US arms export controls and bans on weapons transfers to the Middle East, this network certainly did "betray national security"--but managed to establish a small state in Palestine.  The Director of US Central Intelligence judged that "U.S. national security is unfavorably affected by these developments and that it could be seriously jeopardized by continued illicit traffic in the implements of war." That was an understatement, but none of the financiers of the arms smuggling network ever faced any consequences.  When The Pledge, a tell-all book about the smuggling network, was published in 1970 the Department of Justice received public protests about the vast unpunished arms smuggling.  The Internal Security Section duly wrote and internally circulated a 9-page book report about the people, dates, and crimes committed.  The Chief of the Foreign Agents Registration Unit then responded to one protester that any arms smuggling prosecutions would be barred by the statute of limitations, though he did forward complaints to the FBI and State Department.
The Israel lobby further developed the ethos that "no crime for Israel would be punished in the US" when it allegedly stole and smuggled US weapons grade uranium from NUMEC, "an Israeli operation from the beginning" according to CIA Tel Aviv station chief John Hadden.   A secret nuclear arsenal would allow Israel to initiate "The Samson Option" pulling down the entire world if it were ever threatened--a capability judged worth all the stealing and law breaking.
Isaiah L. Kenen, a propaganda officer for the Israeli Ministry of Foreign Affairs office in New York in 1948, made it his business to infiltrate Israeli government mandates into US political party platforms while dodging Department of Justice orders that he register and conduct his business openly as an Israeli foreign agent.  Like AIPAC this week, Kenen even used the New York Times as a trumpet in his November 2, 1961 Near East Report to deny that Dimona was a nuclear weapons plant.  Six weeks after the DOJ cracked down with its final Foreign Agent order on Kenen and company in 1963 after a massive (Israeli-funded) stealth propaganda and lobbying campaign that rivaled the one currently unfurling in the US, Kenen was forced to abandon his American Zionist Council front for the Israeli government, and incorporated AIPAC in Washington, DC.  AIPAC went on to stage a full assault on US governance--from attacking the sanctity of our electoral process to trafficking in classified national security information--all to acquire unprecedented power on behalf of its foreign principals.
The most relevant example of AIPAC-Israeli government tag-team law-breaking went on display this week in the form of 49 declassified FBI files.  In 1984 71 major US corporations and worker organizations said "no" to an earlier AIPAC economic power grab (a demand to lower all US import barriers to Israeli products while allowing Israel to continue blocking US exports).  Israeli minister of economics Dan Halpern stole [pdf] a US government document containing proprietary information and business secrets supplied by US industries most opposed to the Israel Lobby's economic power grab.  Halpern passed it to AIPAC, which made great use of it to undermine the entire advice and consent process.  Douglas Bloomfield, AIPAC's top lobbyist, even made an illicit copy of the classified document after AIPAC was explicitly ordered to return it to the US government (rather than ever do time in jail, Bloomfield now fantasizes about militarily playing the United Arab Emirates off Iran).
The aftermath of this earlier economic crime against US industry has now become clear.  By locking many US products of export quantity out of Israel, the trade agreement has delivered an $80 billion dollar cumulative deficit (adjusted for inflation) to the US since enacted.  In contrast, last year all other (legitimate) bilateral agreements with such countries as Singapore and Morocco actually produced a $86.33 billion total trade surplus to the US.  AIPAC's trajectory clearly indicates it is a true believer of Julius Caesar's dictum "If you must break the law, do it to seize power, in all other cases observe it."  But does such ill-gotten might make right?
Americans should be outraged that a foreign lobby like AIPAC is actually trying to write the rules--when warranted application of the law would have abolished it years ago. AIPAC and other nodes of Israel's lobby successfully broke important US laws to seize power in America.  They now expect US private enterprise and workers --the world-s best--to open their own little "offices of special plans" to carefully track company products, profits, and investments in the name of Israel.  But this new tax ignores some mighty important facts.
Iran is a signatory to the Nuclear Nonproliferation Treaty and there's no evidence that it is anywhere near producing nuclear weapons.  Non-signatory Israel, with its vast secret arsenal of nuclear weapons--likely built with uranium stolen (but never paid for) from the United States--suddenly demands rule of law from America.  Laws drafted by AIPAC.  (And by the way, it'll cost taxpayers at least $76 million to clean up the nuclear waste at NUMEC.)
Israel and its US lobby actually think Americans will go for all of this, that we're a forgetful and obedient lot, who don't care much about our laws, economy, or jobs--who are just aching to get into AIPAC's newly fabricated economic straightjacket.
Better think again.


The full report hyperlinks to a new internal Department of Justice document acquired and placed online yesterday by the Israel Lobby Archive:,

 joining a new 49 page archive of declassified FBI files of an investigation into AIPAC-Israeli economic espionage and theft of US government property placed online on March 10 at:



FBI Investigates AIPAC for espionage and theft of government property in 1984


Declassified FBI files reveal a long running espionage and theft of government documents investigation targeting the American Israel Public Affairs Committee (AIPAC) and the Israeli embassy in Washington DC during the 1984 US-Israel Free Trade Area negotiations.    The FBI uncovered allegations that an agent of the Israeli intelligence services worked undercover as a member of AIPAC's staff.

A quarter century after the tainted negotiations led to passage of  US-Israel preferential trade pact, it remains the most unfavorable of all US bilateral trade agreements, producing chronic deficits, lack of US market access to Israel and ongoing theft of US intellectual property. 


Document/File Date Contents

The Washington Field Office (WFO) of the FBI notifies the FBI Director of the possible theft of classified documents from the International Trade Commission and begins an investigation into Israeli espionage.  The American Israel Public Affairs Committee's possession of the documents and their circulation in the US Congress by "Israelis" is noted.  The report states the President's negotiating position was "compromised" and speculates that the document was "stolen or given to the AIPAC."

06/21/1984 WFO reports to the FBI Director that "Israelis were offering copies of this document to members of Congress because the United States Trade Representative was slow in delivering them."

The United States Trade Representative's legal counsel receives confirmation from AIPAC that it possessed the report.  The FBI documents that "the president's negotiating position concerning a trade agreement between the United States and the State of Israel is compromised because this report divulges those products and industries that have been identified by the International Trade Commission as being the most sensitive to imports from Israel."

08/13/1984 Preliminary WFO investigation to the FBI Director reports that "the confidential report on trade with Israel was likely taken while being prepared at the International Trade Commission (ITC)" and that "this confidential report contains no national defense information and was originally classified to protect the U.S. bargaining position during negotiations with Israel."

"Personnel at USTR and ITC were most angered by the fact that the American-Israel Public Affairs Committee (AIPAC) had apparently attempted to influence members of Congress with the use of a purloined copy of the ITC report and had usurped their authority."

"WFO files disclose that AIPAC is a powerful pro-Israel lobbying group staffed by U.S. citizens."  "WFO files contain an unsubstantiated allegation that a member of the Israeli Intelligence Service was a staff member of AIPAC."

WFO sets objective "To identify individuals responsible for the unauthorized disclosure of the contents of the ITC report to the government of Israel and employees of AIPAC through interviews of ITC personnel and congressional staff aides."

08/16/1984 Airtel transmission with handwritten notes.
08/30/1984 The FBI Director reports that "In discussions with the Department of Justice (DOJ) regarding captioned case, DOJ opined that captioned matter did not represent a violation of the espionage statute as it was reported that no national defense information was utilized in the preparation of the report.  DOJ advised that a violation of the theft of government property {TGP} status has occurred and that the merits of the TGP violation should be presented to the local United States Attorney's Office for a Prosecutive Opinion."
09/19/1984 Special Agent in Charge Norman A. Zigrossi agrees that matter lacks prosecutive merit.
09/21/1984 U.S. Attorney declines prosecution under theft of government property (TGP) statutes.
12/06/1984 Washington Filed Office notifies FBI director that it terminated the investigation.
11/01/1985 Assistant Attorney General Stephen S. Trott of the Criminal Division of the Department of Justice orders the FBI director to reopen the investigation as a theft of government property and disclosure of confidential business information crime.  The FBI is directed to report to the Public Integrity Section.
11/15/1985 The FBI director relays the DOJ letter and orders the Washington Field Office to reopen and "expeditiously conduct investigation in accordance with the provisions of Section 52, Manual of Investigative Operations and Guidelines."
11/22/1985 Israeli spy Jonathan Pollard is reported arrested outside the Israeli embassy in possession of classified US national defense documents.
12/17/1985 Special Agency John Hosinki reports a December 3, 1985 meeting with AIPAC in which he demands information about "1. Who at AIPAC had knowledge of this report being in the possession of AIPAC, 2. Who received or handled this report at AIPAC, 3. Who furnished this report to AIPAC," and the current residence for an AIPAC employee with knowledge of the matter.

Attempts to contact the AIPAC employee between December 3 and December 11 "proved negative".

12/19/1985 FBI special agents interview a former AIPAC employee (Margaret "Peggy" Blair according to the book Spy Trade) in the presence of her lawyers.
12/19/1985 FBI special agents interview an AIPAC employee (Ester Kurz according to the book Spy Trade) in the presence of her lawyers.
01/08/1986 Washington Field Office advises the FBI Director that a diplomat at the Israeli embassy in Washington D.C. (Dan Halpern according to the book Spy Trade) passed the stolen classified document to AIPAC.

"Logical investigation dictates that BLANK be interviewed regarding this matter.   However, due to the fact that BLANK has been grated immunity against prosecution in the U.S., WFO is considering this matter closed.  WFO will re-open this matter if authority is granted regarding the interview of BLANK."

01/14/1986 Washington Field Office presents a summary of the investigation.  "Appropriate officials at the U.S. Department of State and at the U.S. Department of Justice will be requested to review this matter and make a determination regarding the feasibility of interviewing [the Israeli diplomat] concerning captioned matter."
01/28/1986 A supervisory special agent (SSA) orders that "captioned investigation be reopened by WFO.  SSA BLANK stated that Department of Justice had requested additional interviews be conducted in furtherance of this investigation.  Specifically, SSA BLANK requested that BLANK of the Israeli Embassy and Mr. BLANK of AIPAC be interviewed by WFO personnel to obtain all details regarding their contact with documents mentioned in this investigation."

FBI special agents interview an AIPAC employee (Douglas Bloomfield according to the book Spy Trade) in the presence of his lawyers.

Bloomfield explains that AIPAC duplicated the original classified document before returning it to the USTR:

"Prior to returning the document, BLANK asked to have a duplicate copy of the document made so that the staff of the AIPAC could further examine the report."


FBI special agents interview an Israeli diplomat  (Minister of economics Dan Halpern according to the book Spy Trade)

"...advised that at some unrecalled time in 1984 he received this USITC report pertaining to free trade between American and Israel.  BLANK advised that he received this document from someone that he would not identify.  He indicated that he received this information in his official capacity as a diplomat and that it would be against the principals of diplomatic work to divulge any information pertaining to the identity of the individual who provided him the report."

03/31/1986 Washington Field Office presents a summary of the Investigation.  "In view of the above information and due to the fact that BLANK has claimed diplomatic immunity in this matter, active investigation into this matter will be discontinued at WFO. Washington Field will be contacted by the USTR or the ITC if pertinent information is developed regarding this or similar incidents."
01/14/1987 US Department of Justice orders the FBI director to close the investigation.





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