From JCPOA to FTA – cutouts can cost the US billions.

An Israeli intelligence entity called “Black Cube” targeted Obama administration officials such as former foreign policy advisor Ben Rhodes and outside experts, such as the National Iranian American Council’s Trita Parsi, that advocated for passage of the JCPOA known as the “Iran nuclear deal.” Though most media reports reference Black Cube’s self-designation as a “private intelligence company” while noting it employs former Mossad officers, there are reasons to doubt it is entirely unconnected from the Israeli government, which wanted to undermine the JCPOA. Israeli spy Shai Masot, secretly recorded in an Al Jazeera undercover video, freely admitted Israel was setting up just such private corporations to clandestinely do its bidding. While not solely responsible for the Trump Administration’s decision to ditch the JCPOA, Black Cube’s intelligence operation clearly tried to inch the US closer to open military conflict with Iran, which could cost countless lives and trillions of dollars.

Black Cube’s covert operations targeting the JCPOA and previously as a gun-for-hire against Harvey Weinstein’s victims at first glance seem risky, reckless and rushed. Blind offers of cash for consulting on “movie projects” via email solicitations, using thin LinkedIn profiles and Wix generated websites. Recorded phone calls to incriminate or blackmail unknowing victims. Why use such a clumsy foreign cutout to target mostly U.S.-based American citizens?

The answer is simple, Black Cube as an overseas cutout can be folded up or reconstituted in the extremely unlikely event of criminal investigation. It is disposable. It therefore provides a thick layer of insulation between the users of potentially illegally obtained information and the gatherer. If Black Cube had managed to gather incriminating information on Parsi or Rhoads via illegally recorded phone calls while either was located in a two-party consent state, Black Cube could still pass the information to friendly recipient journalists and interest groups in the US, eager to trash the JCPOA, and who could not be prosecuted.

Cutouts performing illegal activity for Israel’s US operatives are not new. Rather, cutouts are now a preferred model for Israeli intelligence operations targeting the United States when the stakes are very high. While damage assessments are hard to quantify in most cases, one operation can be precisely calculated every year: cutout Dan Halpern’s economic espionage against US industry has through 2017 cost America precisely $170.72 billion.

In the mid-1980s Israel was in an economic crisis, begging the Reagan administration for billions in emergency aid. AIPAC and its economic gurus such as Stanley Fischer demanded that the US unilaterally lower all of its tariffs to Israeli exports, a program internally dubbed, “Duty Free Treatment for US Imports from Israel.” Realizing that even this euphemistic framing was a bit of a giveaway, the lobby later redubbed it the “US Israel Free Trade Area,” incorrectly implying that US producers would someday have improved Israeli market access (which they, for the most part, never gained).

There was only one problem. US industry, from chemical giants to agricultural and labor interests, were universally opposed to the “FTA”, seeing it as a Trojan horse for future deals that would prioritize obscure foreign or special interests over domestic US industry. Their formal written opposition, lodged with the International Trade Commission, put Israel’s US lobbying entity, the American Israel Public Affairs Committee in a bind. AIPAC needed to know the details of each industry’s secret submissions to ITC, in order to effectively lobby against them on Israel’s behalf. But AIPAC couldn’t just have friends inside the ITC hand them a copy of the classified industry report to study and circulate. AIPAC needed a cutout.

This was the role of Dan Halpern, Israeli Minister of Economics. Halpern obtained a copy of the classified ITC report – he would not tell the FBI how(PDF) – and passed it to AIPAC’s lobbyists to reproduce, circulate and begin their lobbying and PR campaign for the FTA. AIPAC defeated powerful US industry groups using their own data against them. When the FTA fully went into effect, it reversed a formerly balanced trading relationship with one producing an enormous trade surplus for Israel. By cumulative, inflation adjusted deficit, it is still America’s single worst performing bilateral FTA.

After an initially robust counterintelligence and theft of government property investigation, the FBI realized that because Dan Halpern could claim diplomatic immunity, neither Halpern nor AIPAC could be successfully prosecuted.

The new revelations of Black Cube and the JCPOA present only a slightly new twist on an old cutout tactic Israel deploys when the stakes are high enough. Rather than claim diplomatic immunity like Halpern, Black Cube can simply slink away to whatever darkly lit cubicles at the Kidon or wherever it came from, to later reemerge for Israel’s next major initiative targeting America.