WASHINGTON — WASHINGTON - The FBI has launched an investigation into who disclosed to Ahmad Chalabi that the United States had broken an Iranian communications code, information he reportedly passed on to the Iranian intelligence service.
Federal law enforcement officials confirmed yesterday that the FBI's counterintelligence division was investigating the leak to Chalabi, head of the Iraqi National Congress and until recently the Pentagon's favorite to rule Iraq.
"We're not looking into Chalabi so much as we're looking into who provided him that information," one official said.
Intelligence sources said the FBI is focusing on a small group of U.S. officials, particularly from the Defense Department, who worked with Chalabi regularly and who had the Special Compartmented Intelligence clearance required for reading communications intercepts.
U.S. intelligence agencies, meanwhile, were conducting damage assessments in the wake of Chalabi's alleged disclosure to the Iranian intelligence station in Baghdad that its code had been broken, sources said. A CIA spokesman declined to comment.
"Anytime there's a compromise of this sort it presents a major problem," said Richard J. Kerr, the former CIA deputy director who is leading an internal agency investigation into the CIA failures in its assessments of whether Iraq had weapons of mass destruction.
Kerr, who said he had not been briefed on details of the case, said the communications intercepts "clearly would have been a major source of understanding of what the Iranians were doing in Iraq and how they were doing it."
A former CIA station chief in the Middle East, speaking on condition of anonymity, said the damage could be enormous, at least in the short run. "Since the Iranians play such a big role in Iraq and have certain objectives - some of which are not shared by us - we now have become blinded to how they are conducting operations to achieve those objectives."
David Kahn, an intelligence code specialist and a former editor at Newsday, said Iran had several options to thwart U.S. eavesdropping. A temporary fix, he said, would be to change the keys in the encryption machines.
"You change the settings," he said. "So instead of typing 3964 you type 4217." But the National Security Agency's supercomputers could break those codes "after a little while."
The Iranians also could buy commercially available encryption software, much of which has codes virtually impossible to break. The main drawback is that such software is slow, he said. Or, he said, the Iranians could buy much faster encryption microchips and install them in their computers.
In the long run, Iran might have to buy new encryption machines or make major modifications to those they have. Those are costly and time-consuming fixes, said Kahn, author of The Reader of Gentlemen's Mail and four other books on codes and ciphers.
But that's what Iran did in the early 1990s, when it discovered that Swiss-made Crypto A.G. machines had been secretly rigged by the National Security Agency to permit the spy agency to easily break its codes.
Officials declined to discuss how the United States had managed to break Iran's code and whether the code was limited to its intelligence service. Damage to U.S. intelligence could be even more severe if the same code was used by Iran's diplomatic corps and military.
Access to code books or, preferably, the encryption machines, have been major intelligence undertakings for decades, especially as codes have become virtually impossible to break analytically.
The New York Times reported yesterday that the United States learned of Chalabi's alleged role in disclosing that the United States had broken Iran's code six weeks ago when the Iranian station chief in Baghdad cabled Iran to detail his conversation with Chalabi. He told Iran that Chalabi's source had been drunk when he passed the information to Chalabi.
The Bush administration, which had invited Chalabi to the president's State of the Union address in January, has been distancing itself from the banker and mathematician as information started to leak that Chalabi and members of his Iraqi National Congress had been providing Iran with sensitive information.
Newsday disclosed last week that the Defense Intelligence Agency concluded in a recent audit that Iran also had been passing disinformation to the United States through the Iraqi National Congress.
Newsday is a Tribune Publishing newspaper.