The arrest of Suleiman Abu Ghaith, Osama bin Laden’s son-in-law, has led to a fresh examination of a little-known chapter in George W. Bush’s “War on Terror’ -- secret talks between U.S. and Iranian officials in 2002 and 2003 aimed at working out an exchange of al Qaeda leaders detained in Iran for Iranian dissidents under U.S. control in Iraq.

The proposed deal fell apart when Washington balked at sending the Iranian dissidents -- members of the People's Mujahedin of Iran, best known by the acronym MEK -- to what they believed would be certain death at the hands of Iranian authorities, current and former U.S. and Iranian officials told NBC News.

Ghaith, who is being held in a New York jail cell after spending a decade in Iran among the al Qaeda group, pleaded not guilty last week to charges of conspiring to kill Americans.

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Ghaith has provided an account of his travels to U.S. law enforcement officials, included in a 22-page statement that has yet to be released. He was arrested in Turkey after leaving Iran, transferred to U.S. custody in Jordan and then flown to New York, according to U.S. officials, who spoke with NBC News on condition of anonymity.

 

 

The U.S. has never had a clear idea of the conditions under which members of al Qaeda’s “management council” were held in Iran, but one former U.S. official, also speaking on condition of anonymity, said last week that they were hidden "in the blackest of the black boxes" inside Iran's intelligence apparatus. Iranian officials have told NBC News the al Qaeda officials were "in jail" in the Islamic Republic.

While U.S. officials believe the al Qaeda leaders were initially allowed to contact other members of the terrorist organization as they continued to plot attacks against the U.S. and its allies, Alireza Miryousefi, spokesman at the Iranian mission to the United Nations, said that was never the case.

“Our position about al Qaeda is clear," he said Thursday. "Iran has never permitted al Qaeda to have any activity or operation from or inside Iran.” 

The al Qaeda leaders detained after fleeing Afghanistan as the Taliban regime collapsed at the end of 2001 also had family members and bodyguards with them, bringing the total number in the group into the hundreds.

Among the terror group’s leaders taken into custody were Ghaith, Saif al Adel, al Qaeda’s military leader, Saad bin Laden, the deceased son of the late al Qaeda leader, and liaisons with other Sunni terrorist groups, including Chechen rebels in Russia.

U.S. and Iranian officials say that the group -- armed "with a ton of cash," as one U.S. official put it -- bribed their way across the Iran-Afghanistan border and hoped that Iran would treat them as "the enemy of my enemy," as another former U.S. official said.  But they were rounded up not long after their arrival.

The former U.S. officials say the CIA did not learn of the group's presence in Iran until the middle of 2002, at which point the U.S. used back-channel communications to arrange secret talks with representatives of Iran. This was months after President George W. Bush, in his State of the Union address, described Iran as part of an "axis of evil" – along with Saddam Hussein's Iraq and Kim Jong Il's North Korea – presenting a "grave and growing danger" to the U.S.

The talks have been reported before, though previous accounts received little media attention.

In a passage in his memoir, "At the Center of the Storm," then-CIA Director George Tenet, wrote, "In mid-2002 we learned that portions of al Qaeda’s leadership structure had relocated to Iran. This became much more problematic, leading to overtures to Iran and eventually face-to-face discussions with Iranian officials in December 2002 and early 2003. Ultimately, the al Qaeda leaders in Iran were placed under some form of house arrest, although the Iranians refused to deport them to their countries of origin, as we had requested." 

Tenet didn't detail what went on during the discussions, but in another passage said that at the same time the U.S. was meeting with Iranian officials, the CIA learned that the al Qaeda group was not only communicating with Saudi-based leaders of the terrorist group on operational matters, but also trying to obtain nuclear weapons. 

Related: Abu Ghaith trial may illuminate Iran's treatment of al Qaeda leaders it detained

A senior Iranian official, U.N. Ambassador Javad Zarif, also told NBC News and others in 2007 about the discussions with U.S. officials.

In the 2006 book, "Losing Iraq: Inside the Post-War Reconstruction Fiasco," Columbia University Professor David L. Phillips quoted Zarif as saying Iran was reluctant to turn over the al Qaeda officials to the U.S. or other governments, as the US requested, until and unless the U.S. repatriated high-ranking officials of the MEK -- an acronym derived from the group’s Farsi name, Mojahedin-e-Khalq.

The MEK opposed the Iranian regime and was housed, trained and armed by Saddam Hussein during the Iran-Iraq War. After the U.S. defeated Iraq in April 2003, the MEK came under U.S. control.

While confirming that the U.S. and Iran discussed trading the MEK leaders for the al Qaeda group, two former U.S. officials told NBC News that the proposal came from the Iranian side and was essentially a non-starter.  

"The Iranians told us, 'We will only talk if you do something about MEK,' the most preferred option was giving them up," said one senior intelligence official at the time. "But someone would have to be a really bad person for us to turn him over to Iran. We could have done something to rein them in, yeah, but as bad as the agency thought these guys (the MEK) were, and we did, it would have been a Draconian step ... and we weren't prepared to do that."

That wasn't the only reason for the Bush administration's reluctance, said the former official.

"There were interests in the Pentagon, (neo-conservative members of the Bush administration) who thought the MEK could be the vehicle that would overthrow the government of Iran," the former official said, adding sarcastically, "the same way they had such great success with Ahmad Chalabi in Iraq." 

Over CIA objections, Pentagon officials had fostered a relationship with Chalabi in hopes that he could establish himself as a leader of Iraqi dissidents in post-Saddam Iraq . Chalabi, however, was unable to deliver on his promises to unite the many dissident factions.

At the same time, Iran had its own reasons for holding onto the al Qaeda members, according to one U.S. counterterrorism official. Many in U.S. intelligence believe that Iran wanted to keep them as bargaining chips -- and not just with the U.S. They were in effect hostages. If al Qaeda or allied Sunni terrorist groups carried out attacks in Iran, as had occurred in the 1990s, the group could face harm. 

Whatever chance the talks had of succeeding ended in May 2003. Just days after Zarif met with Zalmay Khalilzad, then the Bush administration's special envoy to Afghanistan, al Qaeda attacked a residential compound in Riyadh, Saudi Arabia, killing 31 people, including nine Americans, according to the former U.S. officials. It was the largest number of U.S citizens killed by al Qaeda since the 9-11 attacks.

After the Riyadh attack, U.S. Secretary of Defense Donald Rumsfeld said the U.S. had intercepted phone conversations implicating al Qaeda members in Iran in the bombings. The CIA was uncertain how much the Iranian government knew about the planning for the attack, but as one former U.S. official said, "It was hard for us to believe that a government as controlling as Iran didn't know" what was happening "in their country when we knew what was going on in their country. It was an article of faith."

At that point, the former official said, the Bush administration shut down communications with Iran and encouraged the Saudis to tell the Iranian government that it would not tolerate any further attacks, noting that U.S. officials also suspected Iran played a role in the 1996 bombing of the Khobar Towers, an American military residence outside Dhahran, Saudi Arabia. That attack killed 19 U.S. servicemen.

"The Saudis were encouraged to confront Iran," said the official. "We also pointed out that al Qaeda's long-term goal was to decapitate the Saudi regime. We reminded them of that."

A national security official within the Bush administration said the U.S. believed that following the protest, Iran did put additional restrictions on the al Qaeda officials. The former U.S. official said that during the latter half of the 2000s, no operational communications were detected between the al Qaeda leaders in Iran and what is known in the intelligence community as "al Qaeda Central" – bin Laden and his then-deputy and current al Qaeda leader Ayman al-Zawahri.

"Every once in a while, we would intercept non-operational communications from them to relatives back home. That was it," said one former high-ranking U.S. official.

Why has Abu Ghaith been released, or as one current U.S. official reported, "expelled" from Iran? Little is known publicly, but one of the former U.S. officials speculates that with bin Laden dead and al Qaeda Central operations near moribund, he and the other members of the “management council” have little value as leverage or as hostages. 

Abu Ghaith is unlikely to have any operational information because he has been in Iran for so long.  Now, the current and former U.S. officials say, his intelligence value may be more about his captivity in Iran and whether he was released or escaped.

Abu Ghaith will be back in court early next month for a preliminary hearing, at which point a trial date will be set. At that point, either the prosecution or defense is likely to reveal a bit more about what is one of the last remaining mysteries of the 9-11 aftermath.

Where are they now?
The U.S. is uncertain as to the whereabouts of many of the other al Qaeda leaders who were held by Iran.

At least one other high ranking official of al Qaeda found his way out of Iran in recent years. Mahfouz Ould al-Walid, known by his nom de guerre “Abu Hafs the Mauritanian,” was released from jail in July 2012 by Mauritanian authorities after reportedly being extradited by Iran.  Officials in the West African nation said they freed the former senior adviser to bin Laden after he renounced al Qaeda.

There have been reports over the last several years that Al-Adel, the former al Qaeda military leader, also has left Iran, but U.S. officials say none has been verified.

Saad bin Laden was inadvertently killed in July 2009 in a Predator drone strike in Pakistan directed at another suspected terrorist, U.S. officials say.

Al Qaeda’s chief financial officer, Sheik Saeed, whose real name was Mustafa Abu al-Yazid, also was killed in a drone strike in Pakistan on May 21, 2010, according to NBC News terrorism consultant Evan Kohlmann, also a senior partner with the Flashpoint Partners consulting company. There is no indication of when or under what circumstances Saeed left Iran. 

Other former Iranian captives whose whereabouts are unknown include  Thirwat Shihata, former head of the Egyptian Islamic Jihad; Abdullah Ahmed Abdullah, deputy chair of the management council; and Abu Dahak, a Yemeni who reportedly acted as a facilitator with Chechen rebels

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Speaking firms representing ex-FBI Director Louis Freeh and former chairman of the Joint Chiefs of Staff Gen. Hugh Shelton have received federal subpoenas as part of an expanding investigation into the source of payments to former top government officials who have publicly advocated removing an Iranian dissident group from the State Department list of terrorist groups, three sources familiar with the investigation told NBC News.

The investigation, being conducted by the Treasury Department, is focused on whether the former officials may have received funding, directly or indirectly, from the People's Mujahedin of Iran, or MEK, thereby violating longstanding federal law barring financial dealings with terrorist groups. The sources, all of whom spoke on condition of anonymity, said that speaking fees given to the former officials total hundreds of thousands of dollars.

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"This is about finding out where the money is coming from," an Obama administration official familiar with the probe said. "This has been a source of enormous concern for a long time now. You have to ask the question, whether this is a prima facie case of material support for terrorism."

Freeh and Shelton are among 40 former senior U.S. government officials who have participated in a public lobbying campaign – including appearing at overseas conferences and speaking at public rallies – aimed at persuading the U.S. government to remove the MEK from the terror list.

First-class flights
Many of the speakers have received fees of about $30,000 or more per talk and first-class flights to European capitals, according to two sources familiar with the arrangements.

Edward Rendell, a former Pennsylvania governor and ex-Chairman of the Democratic National Committee, whose speaking firm also received a subpoena, has received $160,000 over the past year for appearing at about seven conferences and rallies, including some in Paris, Brussels and Geneva, according to his office. (Rendell is a contributor to MSNBC TV.)

The former officials have said they were told the fees came from wealthy American and foreign supporters of the MEK, not the group itself — and they resent any suggestion they are abetting a terrorist group. 

"We're all pretty miffed," Shelton told NBC News. "None of us involved in this would say a good word about anyone suspected of being a terrorist." But Shelton said that he's "pretty passionate" that the MEK represents a legitimate resistance group fighting to overthrow "America's number one enemy" — the Iranian government.

In a statement Friday, Hossein Abedini, a spokesman for the MEK,also  denied the group has ever “paid senior former U.S. officials or any other dignitary in the U.S.”

 “This is an utter lie and there is not even a scintilla of truth to it,” Abedini said. “The MEK, as the legitimate opposition to the clerical regime, enjoys international recognition in Europe and the U.S. The objective of this failed propaganda is to weaken the widespread public support of the members of Congress, officials and scores of U.S. generals for … revoking of the illegitimate and unjust terror listing of the MEK.”

Shelton said that he was informed by Keppler Speakers, the agency that handles his speaking engagements, that it had been subpoenaed for records of talks he has given over the past year at conferences and rallies sponsored by the MEK. He said Freeh told him that Greater Talent Network, the firm that handles the former FBI director's speaking engagements, also received a subpoena.

Freeh did not respond to requests for comment. (A Keppler executive also did not respond. Reached by phone, Tom Marcosson, an executive vice president of Greater Talent, declined to comment.)

But Rendell told NBC News that he received an email this week from Freeh's office alerting him and more than three dozen other former senior officials that subpoenas were being issued by the Treasury Department Office of Foreign Assets Control. The email asked that the former senior officials contact Freeh and former Attorney General Michael Mukasey. Freeh and Mukasey, who have been among the leaders in the campaign to "delist" the MEK, are hiring a lawyer to represent all former senior officials caught up in the investigation, the email from Freeh's office said, according to Rendell.

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John Sullivan, a spokesman for the Treasury Department, said the department does not comment on "potential" investigations. But he added in an email: "The MEK is a designated terrorist group, therefore U.S. persons are generally prohibited from engaging in transactions with or providing services to this group. The Treasury Department takes sanctions enforcement seriously and routinely investigates potential violations of sanctions law."

It is unclear how far Treasury Department officials intend to push the probe — or why they chose to launch it now, more than a year after the lobbying campaign began. But NBC News has obtained one possible clue: A small Pennsylvania-based speakers firm called Speakers Access wrote an email in September inviting a Washington based national security expert to speak at a conference in Geneva, Switzerland "on behalf of our client, National Council of Resistance of Iran, Foreign Affairs Committee." The National Council of Resistance is considered by the Treasury Department to be one of the "aliases" of the MEK and is itself designated as a terror group. 

'Mistake'
The email was later turned over to the FBI and other U.S. officials. The Speakers Access executive who wrote the email, who asked not to be identified, said the email was a "mistake" and that the client was actually another organization — "the Committee for Human Rights in Iran," which is not on the terror list but which has the same contact in Paris as the National Council of Resistance of Iran.

The executive said Speakers Access has since ceased any dealings with either group and turned over all its records on the matter after receiving a Treasury Department subpoena months ago.

The investigation comes at a time of intense internal debate about the MEK, in part spurred by assertions it could prove a useful ally in pressuring the Iranian government to suspend its nuclear program. NBC News reported recently that MEK operatives, trained by the Israeli Mossad, are believed by some U.S. intelligence officials to have been involved in the assassination of Iranian nuclear scientists — a report that the group has denied as "absolutely false."

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U.S. officials say that the MEK has a long history of terrorist acts, including bombings and assassinations, against Iranian leaders during the 1980s and that at least six Americans died in such attacks. The group — which was once allied with Iraqi dictator Saddam Hussein — is also viewed warily because of the slavish devotion of its followers to its Paris based leader, Maryan Rajavi.

"The MEK has a crazy edge to it," said Michael Leiter, former director of the National Counter-Terrorism Center and an NBC News consultant. "It always struck me as a cult as much as a terrorist group."

But the group's supporters say it has long since publicly renounced violence and that Rajavi has proclaimed the group's adherence to democratic principles. "They want the mullahs out of Iran and they want to replace them with a constitution based on the Declaration of Independence," said Shelton.

The group has also generated sympathy over the plight of its followers at Camp Ashraf, a paramilitary camp on the Iran-Iraq border, where they have been detained – and until recently protected – by the U.S military since the 2003 invasion of Iraq. U.S. officials have been seeking the group's cooperation to resettle the estimated 2,500 remaining MEK members at Camp Ashraf to a new facility near the Baghdad airport, where they can be processed by the United Nations as refugees and resettled elsewhere.  

But the process has stalled – in part over disputes about the conditions of transfer – and MEK advocates say they fear the government of Iraqi Prime Minister Nouri al-Maliki, at Iran's urging, may move in to slaughter the group’s members. "This could be a humanitarian disaster," said Rendell.

Rendell said that there have been weekly conference calls among a "core group" of former U.S. senior officials participating in the lobbying campaign, organized by Freeh, to talk about ways to prod the State Department to remove the MEK from the terror list and protect its followers at Camp Ashraf. He identified this group as including former Homeland Security Secretary Tom Ridge, former Democratic National Committee Chair Howard Dean and Mukasey — all of whom have publicly spoken out on behalf of the MEK and spoken at its rallies.

Officials act as middle men
These weekly conference calls have also turned into back channel negotiations over the Camp Ashraf issue. In recent weeks, Rendell said, State Department Ambassador Daniel Fried, the special envoy for detainee issues, has joined the phone calls, urging the pro-MEK "core" members to pass along messages to MEK leaders in Paris, Rendell said.

"The core group talks to Freeh every week," he said. "It's Ridge, myself, Dean, Freeh, Mukasey. Shelton has joined us on occasion. … We were the ones that Fried asked to communicate with the MEK, telling them, 'This is the best deal you're going to get.' He will say, 'Listen, you guys have to persuade the MEK to do this. Tell them, OK, tell Paris, they have to persuade the people to get on the buses (at Camp Ashraf.) We then communicate [with the MEK]."

Fried declined comment. But a senior State Department official confirmed his participation in the calls as a means of communicating with MEK leaders in Paris — something U.S. officials are barred from doing — in order to work out a "peaceful" resolution over the conflict over Camp Ashraf. 

Rendell said that he and other members of the core group have met with Rajavi in Paris and sent emails to her chief deputy, Farzin Hashemi, passing along Fried's messages. "The bottom line is, we all believe we are protecting people," he said.

But the bottom line for some U.S. officials is that the former government officials participating in the pro-MEK campaign are being paid handsomely for promoting a dubious cause sponsored by an officially designated terrorist group. Despite the public lobbying campaign, there is still deep suspicion about the MEK and its motives — and concerns that once its members leave Camp Ashraf, many of its followers will return to terrorism, said one senior official speaking on condition of anonymity.

"It's extraordinary that so many distinguished public servants would shill for a group that has American blood on its hands," the official said.