Part 1:
Carl Cameron Investigates

FNC
Carl Cameron

This partial transcript of Special Report with Brit Hume, Dec. 11, was provided by the Federal Document Clearing House. Click here to order the complete transcript.

Part 1 of 4

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 series.

(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 activity."

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 ordinance units."

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 direct quote.

HUME: Going into the fact that they were spying on some Arabs, right?

CAMERON: Correct.

HUME: All right, Carl, thanks very much.

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