Sinbad The Spy

In the last two years, there had been repeated leaks that some of the best intelligence on the Iranian nuclear program was coming from Germany, which was explained as one reason the Europeans (and Germany in particular) were leading the diplomatic offensive against Tehran and letting the US take a back seat in negotiations.

It turns out that a key source of intelligence for the BND, Germany's intelligence service, was coming from a rather dodgy businessman who has just been arrested for smuggling key technology into... wait for it... Iran. Der Spiegel has published the first story on the case, and I am reproducing a full BBC Monitoring translation after the jump. First some choice excerpts:

His colleagues know the businessman from Iran as manager of a medium-sized company based in Hesse: a dignified gentleman, 61 years of age, who had just returned from a trip abroad.

The customs officers know him as a smuggler of armaments technology for Iran - this, at least, is the suspicion that has now landed him in pre-trial detention.

The BND knows him as "Sinbad." This was the cover name under which he spied for the German foreign intelligence service for more than a decade.

. . .

The documents that Sinbad supplied came obviously from the holy of holies of the state apparatus in Tehran. He obtained pictures of tunnel rock drills, details of secret deposits, and up-to-date documents on progress in developing carrier technology for nuclear warheads. The information must have come mainly from ministries in Tehran to which he had excellent access. In Pullach, where Department 1 is based that supervised Sinbad, and in Berlin, where the analysts of Department 3 processed Sinbad's information, everyone was thrilled. What the source from Tehran served up went together well with the fragments that the BND obtained from other sources.

As a result, a relationship of mutual trust developed between the BND and its spy in the mid-1990s, when their cooperation began. The BND paid its top spy about 1 million euros, an unusually high amount that is invested only in exceptional cases. He was, an officer said, "one of our best-quality sources in the area of proliferation in general."


Apparently "Sinbad" was delivering technology for use in delivery systems -- the Shahab series of missiles unveiled by Iran in recent years and that are a more plausible medium-term threat/deterrent against Israel and US allies (or installations) in the region, even if they don't carry a nuclear payload. So perhaps the Iranians very well knew who they were dealing with, giving him info on a nuclear program they know they won't be able to complete in the near-future anyway, in exchange for making progress on building a more effective deterrent against a US/Israeli preemptive strike on the nuclear program. If you can deter and project strength effectively, after all, then you can afford to take the time on the nuclear program anyway.
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BBC Monitoring Europe - Political Supplied by BBC Worldwide Monitoring

October 15, 2008 Wednesday

German loses top spy over arms trading with Iran

Text of report by independent German news magazine Der Spiegel website on 13 October

[Report by Holger Stark: "Sinbad's End" - first paragraph is Der Spiegel introduction.]

An Iranian businessman has been the top source of the German Intelligence Service (BND) spying in Tehran - now, his cover was blown. The German Government is afraid of massive diplomatic problems as a result.

One of the most spectacular spy stories of the current decade had a very unspectacular end. The investigators of the Customs Criminological Office waited until the elderly gentleman had gone through passport control in Frankfurt Airport on Sunday before last [ 5 October], before they stepped forward. Handcuffs clicked, and the man was led away.

His colleagues know the businessman from Iran as manager of a medium-sized company based in Hesse: a dignified gentleman, 61 years of age, who had just returned from a trip abroad.

The customs officers know him as a smuggler of armaments technology for Iran - this, at least, is the suspicion that has now landed him in pre-trial detention.

The BND knows him as "Sinbad." This was the cover name under which he spied for the German foreign intelligence service for more than a decade.

The story of the man is a modern version of the sailor from the world of fairytales. He is a travelling salesman from the Orient, with whom you can never be sure where his loyalty lies in the end. Just as his role model from the Tales of the Thousand and One Nights, the modern Sinbad travelled half the world, doing business in Tehran, in Germany, and in Canada, of which he holds a second citizenship. He became a prosperous businessman, trading in high-technology goods - and secret information.

Until now, Sinbad had been one of the best and most important sources for the BND overall. He delivered information from a region that is regarded as a no-go area for diplomats and intelligence services more than any other: Iran, the country of the mullahs and its unpredictable head of state Mahmud Ahmadinezhad, who wants to lead his nation to the status of nuclear power. Planting a spy in Iran is the crowning achievement of any intelligence service that they all try to attain: Israel's Mossad, Britain's MI6, the American CIA - and Germany's BND.

Yet the case holds barely foreseeable complications now. Sinbad's information filled the blank areas on the map of the BND; it was sent straight to the Foreign Ministry and had been an important element for the German Government's policy towards Iran for years. The data delivered by the spy were repeatedly directly incorporated in the situation analyses of Foreign Minister Frank-Walter Steinmeier (Social Democratic Party).

Germany's influence in the negotiations over Iran's nuclear programme is mainly due to Steinmeier's clever tactics, consisting of a mix of concessions and threats. They were also based on unusually detailed information - also thanks to Sinbad. The German Government now fears that the reaction of the mullahs will be draconian, when it becomes obvious for how long the BND was active in Tehran and what methods it used. It worries over a whole range of potential backlashes, from a burden on diplomatic relations to intelligence countermeasures.

The documents that Sinbad supplied came obviously from the holy of holies of the state apparatus in Tehran. He obtained pictures of tunnel rock drills, details of secret deposits, and up-to-date documents on progress in developing carrier technology for nuclear warheads. The information must have come mainly from ministries in Tehran to which he had excellent access. In Pullach, where Department 1 is based that supervised Sinbad, and in Berlin, where the analysts of Department 3 processed Sinbad's information, everyone was thrilled. What the source from Tehran served up went together well with the fragments that the BND obtained from other sources.

As a result, a relationship of mutual trust developed between the BND and its spy in the mid-1990s, when their cooperation began. The BND paid its top spy about 1 million euros, an unusually high amount that is invested only in exceptional cases. He was, an officer said, "one of our best-quality sources in the area of proliferation in general."

Yet doubts were also voiced in Pullach early on, as to whether someone that acts with such nonchalance could perhaps have more than one principal. It appeared to be barely conceivable to the German officers that the government in Tehran did not keep an eye specifically on the dynamic businessman who travelled through the world entirely unhindered, which only very few Iranians can do.

The intelligence people tried to dispel doubts whether the Iranian intelligence service had, perhaps, sent the West manipulated playthings through Sinbad. Yet a large part of the information he supplied had been confirmed. In several cases, he delivered pointers to other proliferation cases. And was the profit that Sinbad made from the barely fathomable business deals of his companies not attractive enough to carry on?

Carry on he did. With the knowledge of the BND, the businessman established a company in Canada and another one in Germany, in central Hesse. This role enabled him to travel a lot. In the end, it was his undoing.

The reason is that, apart from the intelligence services, an authority had cast out its net that is regarded as one of the most efficient supervisors in the area of arms exports: the Customs Criminological Office (ZKA) in Cologne. That was the net in which Sinbad got caught.

The tax authorities had accidentally selected the businessman at the start of the year to conduct a foreign trade audit. A look into the books revealed serious discrepancies. The documents were sent to the ZKA, telephones were tapped, e-mail traffic monitored, and the businessman put under observation - until the ZKA discovered what it was looking for. Sinbad's company seems to have exported equipment that can be used for the Iranian missile programme. Since September 2007, deliveries appear to have been completed in two cases, with two more being planned. The master spy had not told the BND a word.

The equipment is of "dual use" [previous two words published in English], which means that it can be used both for military and civilian purposes. However, the recipient to whom the deliveries were sent is on a blacklist, which currently comprises some 25 firms in Iran - these are the companies of which the German Government assumes that they are involved in the "very ambitious launch vehicle programme." This makes doing business with them unlawful.

The Federal Prosecutor's Office in Karlsruhe assumes that the equipment was destined for the production of Shahab missiles, which are Tehran's pride and joy. With an estimated range of 1,300 to 1,600 kilometres, they can fly to Israel - and perhaps be tipped with nuclear warheads in the future. This is why deliveries that could be meant for the Shahab programme are monitored especially keenly.

The customs investigators soon realized that the businessman was a BND informer; the relevant clues were supplied while he was under surveillance. As a result, a first crisis meeting took place between the spy's supervising officers and the federal prosecutors. The code of criminal procedure allows staying preliminary proceedings when there is a "risk of a grave disadvantage for the Federal Republic of Germany." This is the way in which such cases are resolved in most other countries. The BND would have been pleased to rescue its source.

However, the law provides for such an emergency measure to be taken by a constitutional state in cases of offences relating to state security only. Yet in Sinbad's case, the point at issue was a breach of the External Trade Act. It was soon obvious, therefore, that the statutory loophole was not applicable. On top of that, Chief Federal Prosecutor Monika Harms raised massive objections to a deal, because the law did not allow that. BND President Ernst Uhrlau accepted her point of view although the consequences were foreseeable.

Apart from foreign policy issues, the damage caused by the arrest is enormous, particularly for the BND. In the future, it will be far more difficult to obtain insider information on the Iranian armaments programme. The BND must also deal with the question whether it should get its informer a new identity.

The reason is that Sinbad is threatened with imprisonment because of the exports - but what comes afterwards will be much worse. The revenge of the Iranian intelligence service when dealing with traitors can be terrible; only recently, a revolutionary court sentenced businessman Ali Ashtari, who is assumed to have spied for Mossad, to death. Sinbad would hardly have a better fate, should the Iranian service get hold of him.

Why the spy betrayed his government in Tehran, while simultaneously delivering armaments is an open question. Perhaps he thought he was inviolable. It is not unusual for informers to consider themselves as sacrosanct; they may live in the firm conviction that they are immune to the banality of the judicial machinery. Or perhaps, as a businessman, he wanted to clean up twice.

In the end, he was loyal to just one party: himself.

Source: Der Spiegel website, Hamburg, in German 13 Oct 08



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Issandr El Amrani

Issandr El Amrani is a Cairo-based writer and consultant. His reporting and commentary on the Middle East and North Africa has appeared in The Economist, London Review of Books, Financial Times, The National, The Guardian, Time and other publications. He also publishes one of the longest-running blog in the region, www.arabist.net.