The Washington Times

Military analyst's terror warning fell on deaf ears

August 26, 2002

By Bill Gertz

First of three parts
Bill Gertz, defense and national security reporter for The Washington Times, in his new book, "Breakdown" (Regnery Publishing), details pervasive intelligence problems that allowed the United States to be blindsided by Islamist terrorists on September 11.

Kie Fallis arrived at work determined to keep arguing his view that terrorists were about to attack a U.S. target.

For Mr. Fallis, "work" was the headquarters of the Pentagon's intelligence arm, the Defense Intelligence Agency. He encountered Jay Saunders, chief of the DIA's Persian Gulf Division, on his way into the agency's offices at Bolling Air Force Base in suburban Washington. Insiders call the place the Death Star in homage to the Empire's space station in "Star Wars."

"I'm going to keep pushing this issue today," Mr. Fallis told Mr. Saunders, "until something is done or until I get my ass kicked."

Mr. Fallis, a former Army interrogator turned intelligence analyst in the Terrorism Analysis Division, was one of the agency's top specialists on Iran and fluent in its Farsi tongue.

It was Oct. 12, 2000; the clock was ticking toward a date just under a year away. He already had pieced together the methodology and connections of Osama bin Laden's al Qaeda terrorist network, using commercial software known as Analyst's Notebook. The results were alarming: Many of those involved in previous attacks against U.S. interests appeared to be planning new strikes.

Just three weeks earlier, bin Laden had released his latest videotape message, calling for more attacks on the United States. But Mr. Fallis' repeated warnings to superiors of an imminent terrorist attack in Turkey or the Persian Gulf were dismissed.

Kie Fallis' story is one of many that expose deep, systemic problems within the Defense Intelligence Agency and other U.S. intelligence agencies in tracking and preventing terrorist attacks. It is a story of poor leadership, mismanagement and bad judgment, common to the intelligence failures that led to September 11.

Hours earlier that Oct. 12 and half a world away, two men left an apartment in a two-story, concrete-block building with a panoramic view of the harbor in Aden, Yemen, a desert port on the southern tip of the Arabian Peninsula.

The two men, radical Muslims, climbed into a red Nissan SUV a few hours before dawn and drove down the hill to a house where they had stashed a small fiberglass boat on a trailer. Their accents identified them to neighbors as men from Hadhramaut, a remote province 500 miles northeast of Aden and a haven for Islamic terrorists. It is also the ancestral homeland of Osama bin Laden.

The two men were part of a terrorist cell that had spent months plotting to blow up a U.S. warship. Now their Nissan strained to pull the boat, in which they had secreted a bomb containing several hundred pounds of the U.S. military explosive C-14.

The bomb was wrapped in a metal case that would intensify the impact on its target: the USS Cole, one of the Navy's most advanced guided-missile destroyers, then making its way around the Cape of Aden.

The terrorists launched their white fiberglass boat at 10:45 a.m. They motored slowly toward a floating refueling dock a mile away, the Dolphin, where the Cole and other Navy ships put in as a security precaution to keep their distance from the shore. Other skiffs were taking garbage off the Cole and putting aboard equipment and food.

The Cole sailors on security duty, watching the small boat approach, assumed it was from a resupply company. The suicide bombers smiled and waved to the sailors, who waved back.

The bomb detonated as their boat reached the midsection of the ship, directly in line with the mess deck. The blast killed 17 U.S. sailors, blowing most of them apart when it tore a hole in the side of the ship 40 feet by 40 feet. The Cole listed to the side. Only the heroic efforts of her crew saved the ship from sinking.

Denying and discrediting

Back at the DIA, Mr. Fallis' heart sank as he received the first report of the attack on the Cole. Disgusted, he quit in protest that day.

Mr. Fallis had recently finished a year with the FBI, investigating the deadly bombings of the Khobar Towers barracks in Dharan, Saudi Arabia, in 1996 and of the U.S. embassies in Kenya and Tanzania in 1998. In tracking bin Laden's al Qaeda network, he found that the terror group was intimately linked to Iran's intelligence and security services.

Mr. Fallis' resignation letter sent to the DIA's director, Vice Adm. Thomas R. Wilson, cited "significant analytical differences" with supervisors. Worse, he said, at least two more terrorist attacks were coming, likely in Bosnia or Malaysia.

"This was a huge intelligence failure," Mr. Fallis said.

He was treated like an enemy as soon as his resignation was accepted. His access to a computer was immediately cut off, his e-mail account deleted. Supervisors refused to speak to him; they didn't ask why he was leaving.

One DIA security official told Mr. Fallis during an exit interview that the terror division's leadership was trying to discredit him. Yet his performance appraisal of July 2000 called his previous year's service "distinguished," the highest rating possible, as did all previous appraisals. An intelligence medal was "in the pipeline." He never got it.

An agency spokesman, Navy Capt. Mike Stainbrook, acknowledged that "an analyst" quit Oct. 12, but said employees "resign from the DIA every month for personal reasons."

"We categorically deny that any threat information has been suppressed in the case of the USS Cole, Yemen or Aden, nor would we ever suppress such information."

Mr. Fallis, however, never claimed the information was suppressed; he correctly stated that an appropriate official warning based on it never was produced.

He recounted to several investigators how he had made it clear to at least five DIA intelligence officials that al Qaeda and Iranian-backed terrorists were planning deadly attacks.

Connecting the dots

As Mr. Fallis saw it, fellow analysts working "the bin Laden account" simply were not reading intelligence reporting on Iran or other Middle Eastern terrorist groups. Specialists focusing on Iranian terrorists were not reading intelligence on bin Laden.

As a result, each "problem set," as the analysts call them, was analyzed in a vacuum. Mr. Fallis, however, asked and was allowed to research both sides of the problem.

"I began finding all these relationships," he said, "between al Qaeda terrorists and the Iranians, specifically those organizations directly controlled by Iran's supreme leader, Ali Khamenei. Al Qaeda and Iran were also connected to terrorists who belong to the Egyptian Islamic Jihad and the Egyptian Islamic Group."

By May 2000, Mr. Fallis had written a highly classified report on his findings, most based on information gleaned months earlier.

"I obtained information in January of 2000 that indicated terrorists were planning two or three major attacks against the United States," he said. "The only gaps were where and when."

A red flag pointing to the Cole bombing appeared in mid-September 2000 when bin Laden issued the videotape that aired on Qatari satellite television, an Arabic-language news service. "Every time he put out one of these videotapes, it was a signal that action was coming," Mr. Fallis said.

As September ended, the DIA and the rest of the intelligence community - the CIA, the FBI, the National Security Agency and the State Department's Bureau of Intelligence and Research - received extremely solid information, supported by several sources, that an attack was imminent.

"I went to my supervisor, and he told me there wasn't going to be a warning issued," Mr. Fallis said.

But the reason the DIA refused to put out a warning had nothing to do with intelligence. It had everything to do with office politics. Mr. Fallis had previously dated a co-worker in the terrorism division. She was the analyst who produced the report less than a month before the Cole bombing that said an attack by terrorists in a small boat against a U.S. warship was impossible. Some supervisors incorrectly believed Mr. Fallis was trying to spite her by arguing otherwise.

"My methodology was right," Mr. Fallis said. "And it didn't have anything to do with who I dated."

An alarming link

One piece of the puzzle that Mr. Fallis uncovered was an intelligence report about a secret meeting of al Qaeda terrorists in a condominium complex in Malaysia in January 2000.

Information obtained after September 11 identified two of them as Khalid al-Midhar and Nawaf al-Hazmi, who would be on American Airlines Flight 77 when it crashed into the Pentagon.

They met with a former Malaysian army captain, Yazi Sufaat, described by Malaysian authorities as a key link in Southeast Asia for al Qaeda, who later would be tied to the bombing of the Cole.

What alarmed U.S. intelligence at the time was that Malaysian security officials traced the men to the Iranian Embassy there, where they spent the night.

Sufaat would meet weeks later in Malaysia with Zacarias Moussaoui, the 33-year-old French citizen who is the only one charged so far with involvement in the September 11 attacks. Authorities said Sufaat paid Moussaoui $35,000, which is believed to have helped finance the plot.

For Mr. Fallis, the "eureka point" before the Cole bombing in determining an impending terrorist attack came from a still-classified intelligence report in September 2000, which he will not discuss. But after the bin Laden video surfaced that same month, Mr. Fallis said, he "knew then it would be within a month or two."

In the video, bin Laden, wearing a dagger in his belt, demands the release of Muslim prisoners, including Sheik Omar Abdel Rahman, leader of Egyptian Islamic Jihad. Rahman had drawn a life sentence in prison for his role in the 1993 bombing of the World Trade Center and subsequent plot to bomb bridges and tunnels in New York City.

The video ends with this admonition from Ayman al-Zawahiri, a top aide to bin Laden: "Enough of words, it is time to take action against this iniquitous and faithless force [the United States], which has spread troops through Egypt, Yemen and Saudi Arabia."

A warning from the DIA backed by other intelligence agencies would have put U.S. military forces - especially those in hot spots such as Yemen - on higher alert. And a warning could have led to canceling the Cole's refueling stop in Aden.

'No evidence'

Kenneth Bacon, the Pentagon's chief spokesman, put out a statement asserting that an unnamed DIA analyst who had resigned had no information providing "tactical warning" - the specific time and place - of an attack on the warship.

However, issuing previous terrorism warnings or less specific "advisories" had not required such information. Only a few months earlier, the DIA's terrorism division had published an advisory on possible terrorist attacks against a Group of Eight economic summit without possessing relevant details.

Adm. Wilson, the DIA director, sent a notice via e-mail to the agency's civilian and military personnel more than four months after the Cole bombing, on Feb. 28, 2001. An investigation by the Defense Department's Office of the Inspector General, Adm. Wilson wrote, "found no evidence to support the public perception that information warning of an attack on [the] Cole was suppressed, ignored, or even available in DIA."

He continued to have confidence in the DIA's "analytical process and in our people," Adm. Wilson said.