U.S. military advisors arriving in Iraq better be careful who they talk to and where they go: Their Iraq ‘allies’ will almost certainly be spying on them.

According to three current and former CIA officers, the Iraqi government, led by Muslim Shiites with close ties to Iran, has waged an aggressive campaign against the spy agency and other U.S. security personnel in the country for several years.  “They cover us like a blanket,” says former CIA official John Maguire, who was deputy CIA station chief in Iraq in 2004 and maintains widespread contacts there as an oil business consultant.

The first targets of Iraq’s counterspies were CIA contacts in the fledgling Iraq National Intelligence Service, or INIS, set up by the CIA in 2004, Maguire and others say. Its first chief was a longtime CIA asset, Gen. Mohammed Shahwani, an Iraqi Sunni who had plotted against the late dictator Saddam Hussein. The INIS soon came under assault by the rival, Shiite-led Ministry of Interior, headed by Prime Minister Nuri al-Maliki.

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“They fired all the guys who they considered suspect, which was basically all the guys we put into the [intelligence] service, and solidified control around the Shia and Iran,” Maguire tells Newsweek. In 2007 Shahwani was ousted. “Then their technological operations [against the CIA] began in earnest. About two years ago was when they really started to work us hard.”  

According to Maguire and another former CIA operations officer, the Iraqis acquired sophisticated cell phone monitoring equipment, probably from Iran, and began tracking CIA operators to identify their spies, especially inside the Maliki government. “It wasn’t so much the agency people they were interested in as who they were meeting and talking to,” says another CIA source, a paramilitary operations specialist who did three tours in Iraq. Although he was not authorized to discuss the subject, he agreed to be quoted on condition of anonymity because he felt U.S. advisers just arriving in Iraq needed to be warned.

“They are very aggressive,” he says of the Iraqi security services. “They have the best equipment Iran has,” including devices known as StingRays, that can lock onto a cell phone and extract all its data, from contacts to photos and music.

CIA operators in Iraq today, Maguire explains, make it too easy for Iraqi agents to know who they’re meeting. “They are working out of the Green Zone,” the high security area of Baghdad which is home to the U.S. embassy, Maguire notes.  “Everything they do is done on phones. And Iraq and Iran can see that... “

It’s a common lament of CIA oldtimers that the current crop of operators don’t measure up to past standards. But Maguire is appalled at how easy at least some CIA spy-handlers, called case officers in espionage jargon, make it for the Iraqis to find them. “I can't tell you the number of times I've been driving around the city the last several years and I would see a station motorcade come by with a lead car, a car with a case officer in it and a follow car.  And the case officer would be in the passenger seat and have his feet on the dash reading a newspaper. That is not clandestine collection tradecraft. It's embarrassing.”

To enhance security, more CIA operators need to hide in the city, he says. “When the situation deteriorated in 2004, we stopped crossing the [security] lines to get into the Green Zone,” Maguire says.  “We stayed in the city in safe houses with our assets. There's no reason, with today's technology, to come back to the embassy to send classified messages. You can send them from everywhere. Crossing security lines is always the most risky, from both a safety and a counterintelligence aspect, so if you don't go into the Green Zone, you don't come up on a lot of people's screens.”

While dealing with the current emergency, the U.S. and Iraq will maintain the fiction that they are allies. According to the Pentagon, 90 U.S. military advisers will begin setting up one of two joint information centers where U.S. and Iraqi personnel will share intelligence.

“They better be careful,” the CIA paramilitary officer says. “The Iraqis are going to be all over them.”

Jeff Stein writes SpyTalk from Washington. He can be reached via spytalk[at]hushmail.com.