A Hizbullah Mole?

Prouty, the court papers suggest, may have had a personal motive for seeking information about Chahine and Hizbullah. Her sister, Elfat El Aouar, had by then married Chahine, and in August 2002 both of them had attended a "fund-raising event in Lebanon." The keynote speakers at the event, according to the court papers, were Chahine and Sheikh Muhammad Hussein Fadlallah, the spiritual leader of Hizbullah, who has been designated by the U.S. Treasury Department as a "Specially Designated Global Terrorist."

Chahine was subsequently charged in two federal indictments. One of them last year accused him of skimming $20 million from his chain of restaurants in Detroit and routing some of that cash to unnamed persons in Lebanon. (Prouty's sister was also charged in that case. She has since pleaded guilty and was sentenced to 18 months in prison last May.) In the second indictment last month, Chahine—now believed to be a fugitive in Lebanon—was charged with conspiring with a former senior official of Homeland Security's office of Immigration and Customs Enforcement (ICE) in Detroit to extort funds from former employees of Chahine's La Shish restaurant chain. (Although he has since left the country, Chahine's lawyer has denied that Chahine had any involvement in terrorism.) The ICE official, Roy Bailey, was accused of misusing his position to accept "large sums of currency and other property in return for granting immigration benefits," according to a Justice Department press release last month. (Bailey has entered a plea of not guilty.)

Officials emphasized that there is still there is much they don't know about Prouty's activities—most important, whether she was actively providing U.S. government intelligence to Hizbullah. But the FBI acknowledged Tuesday that they didn't discover Prouty's connections to Hizbullah until December 2005—apparently as a result of the ICE bribery probe—more than two years after she left the bureau to go work for the CIA's Clandestine Service. Eventually the bureau alerted the agency and the CIA later reassigned her to a less sensitive position, a U.S. official said. But while both agencies are still doing damage-control assessments, the mere fact that Prouty got as far as she did has stunned the counterintelligence community. "This is not good," said one chagrined senior official, who, like all officials quoted anonymously in this story, declined to speak on the record owing to the sensitivity of the subject.

Paul Gimigliano, a CIA spokesman, said, "The CIA, among other federal agencies, cooperated with the investigation. Ms. Prouty was a midlevel employee who came to us in 2003 from the FBI, where she had been a special agent. The naturalization issue occurred well before she was hired by the Bureau. She formally resigned from the federal service as part of her plea agreement."

Terror Watch, written by Michael Isikoff and Mark Hosenball , appears online weekly

© 2007