Part 4:
Carl Cameron Investigates

FNC
Carl Cameron

This partial transcript of Special Report with Brit Hume, Dec. 14, was provided by the Federal Document Clearing House. Click here to order the complete transcript.

Part 4 of 4

TONY SNOW, HOST:  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 in L.A. 

(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 Secret Service."

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 the report.

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. 

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