The Lie Factory

That became the mantra of the shadow agency within an agency.

Putting Wurmser in charge of the unit meant that it was being run by a pro-Iraq-war ideologue who'd spent years calling for a pre-emptive invasion of Baghdad and who was clearly predisposed to find what he wanted to see. Adding another layer of dubious quality to the endeavor was the man partnered with Wurmser, F. Michael Maloof. Maloof, a former aide to Perle in the 1980s Pentagon, was twice stripped of his high-level security clearances‚ -- once in late 2001 and, again, last spring, for various infractions. Maloof was also reportedly involved in a bizarre scheme to broker contacts between Iraqi officials and the Pentagon, channeled through Perle, in what one report called a "rogue [intelligence] operation" outside official CIA and Defense Intelligence Agency channels.

As the momentum for war began to build in early 2002, Wolfowitz and Feith beefed up the intelligence unit and created an Iraq war-planning unit in the Pentagon's Near East and South Asia Affairs section, run by Deputy Undersecretary of Defense William Luti, under the rubric "Office of Special Plans," or OSP; the new unit's director was Abram N. Shulsky. By then, Wurmser had moved on to a post as senior adviser to Undersecretary of State John Bolton, yet another neocon, who was in charge of the State Department's disarmament, proliferation, and WMD office and was promoting the Iraq war strategy there. Shulsky's OSP, which incorporated the secret intelligence unit, took control, banishing veteran experts‚ -- including Joseph McMillan, James Russell, Larry Hanauer, and Marybeth McDevitt‚ -- who, despite years of service to NESA, either were shuffled off to other positions or retired. For the next year, Luti and Shulsky not only would oversee war plans but would act aggressively to shape the intelligence product received by the White House.

Both Luti and Shulsky were neoconservatives who were ideological soul mates of Wolfowitz and Feith. But Luti was more than that. He'd come to the Pentagon directly from the office of Vice President Cheney. That gave Luti, a recently retired, decorated Navy captain whose career ran from combat aviation to command of a helicopter assault ship, extra clout. Along with his colleague Colonel William Bruner, Luti had done a stint as an aide to Newt Gingrich in 1996 and, like Perle and Wolfowitz, was an acolyte of Wohlstetter's. "He makes Ollie North look like a moderate," says a NESA veteran.

Shulsky had been on the Washington scene since the mid-1970s. As a Senate intelligence committee staffer for Senator Daniel Patrick Moynihan, he began to work with early neoconservatives like Perle, who was then an aide to Senator Henry Jackson. Later, in the Reagan years, Shulsky followed Perle to the Pentagon as Perle's arms-control adviser. In the '90s, Shulsky co-authored a book on intelligence called Silent Warfare, with Gary Schmitt. Shulsky had served with Schmitt on Moynihan's staff and they had remained friends. Asked about the Pentagon's Iraq intelligence "cell," Schmitt‚ -- who is currently the executive director of the Project for the New American Century‚ -- says that he can't say much about it "because one of my best friends is running it."

According to Lt. Colonel Kwiatkowski, Luti and Shulsky ran NESA and the Office of Special Plans with brutal efficiency, purging people they disagreed with and enforcing the party line. "It was organized like a machine," she says. "The people working on the neocon agenda had a narrow, well-defined political agenda. They had a sense of mission." At NESA, Shulsky, she says, began "hot-desking," or taking an office wherever he could find one, working with Feith and Luti, before formally taking the reins of the newly created OSP. Together, she says, Luti and Shulsky turned cherry-picked pieces of uncorroborated, anti-Iraq intelligence into talking points, on issues like Iraq's WMD and its links to Al Qaeda. Shulsky constantly updated these papers, drawing on the intelligence unit, and circulated them to Pentagon officials, including Rumsfeld, and to Vice President Cheney. "Of course, we never thought they'd go directly to the White House," she adds.

Kwiatkowski recalls one meeting in which Luti, pressed to finish a report, told the staff, "I've got to get this over to 'Scooter' right away." She later found out that "Scooter" was none other than Lewis "Scooter" Libby, Vice President Cheney's chief of staff. According to Kwiatkowski, Cheney had direct ties through Luti into NESA/OSP, a connection that was highly unorthodox.

"Never, ever, ever would a deputy undersecretary of Defense work directly on a project for the vice president," she says. "It was a little clue that we had an informal network into Vice President Cheney's office."

Although Feith insists that the OSP did not seek to gather its own intelligence, Kwiatkowski and others sharply disagree. Staff working for Luti and Shulsky in NESA/OSP churned out propaganda-style intelligence, she says. As an example, she cited the work of a U.S. intelligence officer and Arabic specialist, Navy Lt. Commander Youssef Aboul-Enein, who was a special assistant to Luti. "His job was to peruse the Arabic-language media to find articles that would incriminate Saddam Hussein about terrorism, and he translated these." Such raw intelligence is usually subject to a thorough vetting process, tracked, verified, and checked by intelligence professionals. But not at OSP‚ -- the material that it produced found its way directly into speeches by Bush, Cheney, and other officials.

According to Melvin Goodman, a former CIA official and an intelligence specialist at the National War College, the OSP officials routinely pushed lower-ranking staff around on intelligence matters. "People were being pulled aside [and being told], 'We saw your last piece and it's not what we're looking for,'" he says. "It was pretty blatant." Two State Department intelligence officials, Greg Thielmann and Christian Westermann, have both charged that pressure was being put on them to shape intelligence to fit policy, in particular from Bolton's office. "The Al Qaeda connection and nuclear weapons issue were the only two ways that you could link Iraq to an imminent security threat to the U.S.," Thielmann told the New York Times. "And the administration was grossly distorting the intelligence on both things."

Besides Cheney, key members of the Pentagon's Defense Policy Board, including Perle and ex-House Speaker Newt Gingrich, all Iraq hawks, had direct input into NESA/OSP. The offices of NESA were located on the Pentagon's fourth floor, seventh corridor of D Ring, and the Policy Board's offices were directly below, on the third floor. During the run-up to the Iraq war, Gingrich often came up for closed-door meetings with Luti, who in 1996 had served as a congressional fellow in Speaker of the House Gingrich's office.

As OSP got rolling, Luti brought in Colonel Bruner, a former military aide to Gingrich, and, together, Luti and Bruner opened the door to a vast flow of bogus intelligence fed to the Pentagon by Iraqi defectors associated with Chalabi's Iraqi National Congress group of exiles. Chalabi founded the Iraqi National Congress in 1992, with the help of a shadowy CIA-connected public-relations firm called the Rendon Group, one of whose former employees, Francis Brooke, has been a top aide to Chalabi ever since. A scion of an aristocratic Iraqi family, Chalabi fled Baghdad at the age of 13, in 1958, when the corrupt Iraqi Hashemite monarchy was overthrown by a coalition of communists and the Iraqi military. In the late 1960s, Chalabi studied mathematics at the University of Chicago with Wohlstetter, who introduced him to Richard Perle more than a decade later. Long associated with the heart of the neoconservative movement, Chalabi founded Petra Bank in Jordan, which grew to be Jordan's third-largest bank by the 1980s. But Chalabi was accused of bank fraud, embezzlement, and currency manipulation, and he barely escaped before Jordanian authorities could arrest him; in 1992, he was convicted and sentenced in absentia to more than 20 years of hard labor. After founding the INC, Chalabi's bungling, unreliability, and penchant for mismanaging funds caused the CIA to sour on him, but he never lost the support of Perle, Feith, Gingrich, and their allies; once, soon after 9/11, Perle invited Chalabi to address the Defense Policy Board.

According to multiple sources, Chalabi's Iraqi National Congress sent a steady stream of misleading and often faked intelligence reports into U.S. intelligence channels. That information would flow sometimes into NESA/OSP directly, sometimes through Defense Intelligence Agency debriefings of Iraqi defectors via the Defense Human Intelligence Service, and sometimes through the INC's own U.S.-funded Intelligence Collection Program, which was overseen by the Pentagon. The INC's intelligence "isn't reliable at all," according to Vincent Cannistraro, a former CIA chief of counterterrorism. "Much of it is propaganda. Much of it is telling the Defense Department what they want to hear, using alleged informants and defectors who say what Chalabi wants them to say, [creating] cooked information that goes right into presidential and vice presidential speeches."

Bruner, the aide to Luti and Gingrich's former staffer, "was Chalabi's handler," says Kwiatkowski. "He would arrange meetings with Chalabi and Chalabi's folks," she says, adding that the INC leader often brought people into the NESA/OSP offices for debriefings. Chalabi claims to have introduced only three actual defectors to the Pentagon, a figure Thielmann considers "awfully low." However, according to an investigation by the Los Angeles Times, the three defectors provided by Chalabi turned up exactly zero useful intelligence. The first, an Iraqi engineer, claimed to have specific information about biological weapons, but his information didn't pan out; the second claimed to know about mobile labs, but that information, too, was worthless; and the third, who claimed to have data about Iraq's nuclear program, proved to be a fraud. Chalabi also claimed to have given the Pentagon information about Iraqi support for Al Qaeda. "We gave the names of people who were doing the links," he told an interviewer from PBS's Frontline. Those links, of course, have not been discovered. Thielmann told the same Frontline interviewer that the Office of Special Plans didn't apply strict intelligence-verification standards to "some of the information coming out of Chalabi and the INC that OSP and the Pentagon ran with."

In the war's aftermath, the Defense Intelligence Agency‚ -- which is not beholden to the neoconservative civilians at the Pentagon‚ -- leaked a report it prepared, concluding that few, if any, of the INC's informants provided worthwhile intelligence.

So far, despite all of the investigations under way, there is little sign that any of them are going to delve into the operations of the Luti-Shulsky Office of Special Plans and its secret intelligence unit. Because it operates in the Pentagon's policy shop, it is not officially part of the intelligence community, and so it is seemingly immune to congressional oversight.

With each passing day, it is becoming excruciatingly clearer just how wrong U.S. intelligence was in regard to Iraqi weapons and support for terrorism. The American teams of inspectors in the Iraq Survey Group, which has employed up to 1,400 people to scour the country and analyze the findings, have not been able to find a shred of evidence of anything other than dusty old plans and records of weapons apparently destroyed more than a decade ago. Countless examples of fruitless searches have been reported in the media. To cite one example: U.S. soldiers followed an intelligence report claiming that a complex built for Uday Hussein, Saddam's son, hid a weapons warehouse with poison-gas storage tanks. "Well," U.S. Army Major Ronald Hann Jr. told the Los Angeles Times, "the warehouse was a carport. It still had two cars inside. And the tanks had propane for the kitchen."

Countless other errors and exaggerations have become evident. The thousands of aluminum tubes supposedly imported by Iraq for uranium enrichment were fairly conclusively found to be designed to build noncontroversial rockets. The long-range unmanned aerial vehicles, allegedly built to deliver bioweapons, were small, rickety, experimental planes with wood frames. The mobile bioweapon labs turned out to have had other, civilian purposes. And the granddaddy of all falsehoods, the charge that Iraq sought uranium in the West African country of Niger, was based on forged documents‚ -- documents that the CIA, the State Department, and other agencies knew were fake nearly a year before President Bush highlighted the issue in his State of the Union address in January 2003.

"Either the system broke down," former Ambassador Joseph Wilson, who was sent by the CIA to visit Niger and whose findings helped show that the documents were forged, told Mother Jones, "or there was selective use of bits of information to justify a decision to go to war that had already been taken."

Edward Luttwak, a neoconservative scholar and author, says flatly that the Bush administration lied about the intelligence it had because it was afraid to go to the American people and say that the war was simply about getting rid of Saddam Hussein. Instead, says Luttwak, the White House was groping for a rationale to satisfy the United Nations' criteria for war. "Cheney was forced into this fake posture of worrying about weapons of mass destruction," he says. "The ties to Al Qaeda? That's complete nonsense."

In the Senate, Senator Jay Rockefeller (D-W.Va.) is pressing for the Intelligence Committee to extend its investigation to look into the specific role of the Pentagon's Office of Special Plans, but there is strong Republican resistance to the idea.

In the House, Rep. Henry Waxman (D-Calif.) has introduced legislation calling for a commission to investigate the intelligence mess and has collected more than a hundred Democrats‚ -- but no Republicans‚ -- in support of it. "I think they need to be looked at pretty carefully," Waxman told Mother Jones when asked about the Office of Special Plans. "I'd like to know whether the political people pushed the intelligence people to slant their conclusions."

Congressman Waxman, meet Lt. Colonel Kwiatkowski.