WASHINGTON — In its scramble to marshal resources for gathering intelligence on Al Qaeda and Iraq, the CIA shut down a spy ring it was operating in South America that was providing a rare glimpse of the activities of Iranian militants and intelligence networks, according to a former agency official involved in the operation.
The program, which had taken five years to assemble, penetrated Iranian intelligence operations in South America and succeeded to the point that several of the CIA's informants were taken to Iran for religious training, the former official said.
But the operation was dismantled by CIA officials who were skeptical of its value, the former official said, and who were under growing pressure to redeploy agency funds and personnel from South America and other regions seen as less crucial than the nation's expanding war fronts.
Iran's intelligence service has been active in South America for decades, officials said. The decision to pull the plug on the CIA-run program came in 2002, after President Bush had declared Iran part of an "axis of evil" along with Iraq and North Korea, but before the administration made confronting Iran over its nuclear program and its support for terrorist activities a top priority.
For The Record
Los Angeles Times Wednesday March 30, 2005 Home Edition Main News Part A Page 2 National Desk 1 inches; 38 words Type of Material: Correction
Iran intelligence -- An article in Sunday's Section A about U.S. efforts to gather intelligence on Iran said the tri-border area of South America consists of Peru, Bolivia and Paraguay. The tri-border area comprises Paraguay, Brazil and Argentina.
The agency has struggled to obtain reliable intelligence on Iran. The official who was involved in managing the spy ring said it was among the few successes the CIA had had in recent years.
"I believe now if we're forced to go back into Iran, we're going to be starting from near zero," the official said, referring to intelligence on the Islamic regime. The Bush administration has recently endorsed European efforts to negotiate with Iran to dismantle its nuclear enrichment program, but has not ruled out the possible use of military strikes or covert operations.
Further, the official said the South American operation had put the CIA in position to learn of plots by Iran and elements of Hezbollah, which were linked to attacks against Jews in South America during the 1990s.
"I will not say we stopped a terrorist act but will say we were in close enough that had one been planned, we would have had that opportunity," said the official, who spoke on condition of anonymity because of the sensitivity of the subject.
CIA officials declined to discuss details of the operation, but disputed the suggestion that the agency had sacrificed a successful or potentially valuable program.
A CIA spokesman said the agency "did not stop or scale back any worthwhile clandestine collection effort against Iran as a result of a realignment of agency resources in support of the war on terrorism or intelligence collection efforts in Iraq."
Former CIA officials also defended the agency's decisions, while acknowledging difficult choices in the last four years as the agency was stretched to its limits by U.S. involvement in Afghanistan, Iraq and elsewhere. The former officials said many programs were curtailed or killed as the CIA "surged" from one conflict to another.
"We faced some really tough budget issues, and we had to do some tough prioritization on some things," said James L. Pavitt, who retired last year as head of the CIA's clandestine service.
Pavitt said that he could not discuss specific operations and that he was not familiar with the South American venture. But he expressed skepticism that a high-value program -- particularly one that was aimed at gathering intelligence on Iran -- had been axed.
"The fact of the matter is that anything that had genuine merit that was of critical import, we would have struggled but found a way to continue," Pavitt said. "If it was of marginal input or import, it would have been looked at harshly."
He added: "That's not to say that there weren't some mistakes made, things stopped that should have been kept."
Several current and former officials said that South America, Africa and Europe were areas where CIA operations were particularly vulnerable to cuts.
Stations in South America and Africa were sometimes left so threadbare that the agency had to resort to what one former high-ranking official called "circuit riding." The term refers to a practice in which stations and bases in certain regions are all but shuttered, with agency operatives visiting periodically to meet with sources and make payments.
"We borrowed from Peter to pay Paul," said the former high-ranking official, who left the agency last year and spoke on condition of anonymity. Because of the agency's intelligence priorities, he said, "you're going to take more people out of Paraguay than you are out of Moscow or Beijing."
The spy ring in South America targeting Iran was an early casualty.