The Complex

Did Iran's Spies Try to Steal U.S. Stealth Plane's Secrets?

The apparent downfall of Mozaffar Khazaee began at a freight company in Long Beach, Calif. It was there in November that customs officers cracked open two shipping crates that the 59-year-old allegedly was sending to Iran. Inside, authorities say, was a massive trove of documents for the United States' next-generation fighter plane, the $392 billion F-35 Joint Strike Fighter. Now Khazaee, a naturalized U.S. citizen from Iran, faces a slew of criminal charges, up to 10 years in prison, and a $250,000 fine.

Khazaee, a former defense contractor who worked on the high-tech stealth plane, was arrested Jan. 9 at Newark Liberty International Airport in New Jersey, where he was in between legs on an international flight. He already had flown from his home in Indianapolis to Newark, and was waiting to catch a connecting flight to Frankfurt, Germany. His final destination? Tehran, authorities say.

Already, the case has raised questions about whether more criminal charges may be filed against Khazaee or people with whom he associated. A criminal complaint filed Jan. 8 in U.S. District Court in Connecticut, where Khazaee lived until recently, charges him with transporting, transmitting and transferring in interstate or foreign commerce goods obtained by theft, conversion or fraud. But the case remains under investigation, with personnel from the FBI, Department of Homeland Security, the U.S. Customs and Border Protection Service, the Air Force Office of Special Investigations, and the Defense Criminal Investigative Service all involved.

According to court documents, investigators are working to determine whether Khazaee broke any laws laid out in the U.S. Arms Export Control Act, the Iranian Transactions Sanctions Regulations, and the International Emergency Economic Powers Act, the latter of which allows the United States to regulate commerce after declaring a national emergency in response to any threat to the nation that has a foreign source. Also of note, while Khazaee does not currently face any espionage charges, the case will be prosecuted by a group that includes an attorney with the Justice Department's counterespionage section, authorities say.

The case raises complicated diplomatic issues for the United States at a time when the State Department has cultivated a closer relationship with Tehran than it has in years. On Sunday, Iran, the United States and five other world powers announced the specifics of a six-month plan to reduce Tehran's nuclear program beginning Jan. 20, in exchange for the United States easing crushing economic sanctions that have been in place for years.

A criminal complaint filed in U.S. District Court in Bridgeport, Conn., outlines how federal authorities nabbed Khazaee. It says customs officers inspected a shipment Khazaee had sent from Connecticut to a freight company in Long Beach to be sent to Hamadan, Iran, on the NYK Libra, a Panama-flagged shipping vessel. The documentation for the shipment said household goods were inside the crates, but investigators found "sensitive technical manuals, specification sheets, and other proprietary material relating to the United States Air Force's F35 Joint Strike Fighter ('JSF') program and military jet engines." The freight company was told Khazaee's shipment was being sent to his brother-in-law, to be held until Khazaee returned to Iran, the criminal complaint says.

On Dec. 4 and 5, agents with the Department of Homeland Security examined Khazaee's shipping crates. They contained 44 boxes with thousands of pages of documents on the F-35, according to the criminal complaint, signed by Breanne Chavez, a special agent with Homeland Security. Many of the pages indicated they were the possession of three different defense contractors -- not identified in the court documents -- who have worked on the plane.

Investigators learned later in December that Khazaee had worked previously for "Company A," one of the three contractors whose documents were in his crates, authorities say. He had left the company on Aug. 19 as the company laid off employees. The organization is not identified in court documents, but it is aviation giant Pratt & Whitney, the Connecticut-based company said in a statement to Foreign Policy. Pratt makes engines for the fifth-generation fighter, which is expected to become a centerpiece of U.S. air power in the future.

Pratt & Whitney personnel told federal agents with Homeland Security and the FBI on Dec. 26 that during the Khazaee's time with the company, his team had conducted strength and durability tests for components of all of Pratt's engines, including the F119 engine it built solely for use in another Air Force fighter, the F-22 Raptor. Upon leaving the company, Khazaee signed paperwork acknowledging his responsibility to surrender all Pratt-related material, the criminal complaint says.

In December, investigators also interviewed personnel from the other two unidentified companies referenced in the criminal complaint, it says. In both cases, employees said Khazaee had signed agreements stating he would not keep any company documents. Neither corporation is named. A spokesman for Lockheed Martin, the lead company on the F-35, told Foreign Policy that officials there are aware of the investigation and cooperating with authorities, but declined to say whether they were one of the companies cited in the criminal complaint.

As Defense News noted Monday, another company with involvement in the F-35 is Rolls-Royce, which has corporate offices in Indianapolis, where Khazaee last lived before his arrest. A Rolls-Royce official told Foreign Policy that the company was cooperating with authorities, but declined to comment further, citing the ongoing investigation.

The incident is the latest for the F-35 program that has both national security and diplomatic implications. Reuters reported earlier this month that the Pentagon repeatedly waived laws banning the use of Chinese parts in the aircraft to keep the program on schedule in 2012 and 2013. Congress' investigative agency, the Government Accountability Office, is currently reviewing what happened, Reuters reported. Computer hackers also have targeted F-35 program information repeatedly, dating at least as far back as 2009.

The Pentagon is aware of the Khazaee case, said Joe DellaVedova, a spokesman for the F-35 program.

"The F-35 Joint Program Office has been alerted to the investigation, and will cooperate fully with legal authorities pursuing the case," he said. "No additional comment will be made while the investigation is ongoing."

Lockheed Martin photo

National Security

What Withdrawal? U.S. Pumps More Cash Into Afghanistan's $500 Million Dam

In October 2011, U.S. Marines in Afghanistan launched a massive operation, pushing northeast along treacherous Route 611 in Helmand province to tangle with insurgents in Kajaki, then one of the last districts in Helmand without a large presence of U.S. forces. The major goal at the time: root out the Taliban in a series of firefights and connect the landmark hydroelectric facility in the region, the Kajaki Dam, with the rest of province. Doing so would allow at long last for the belated installation of a third turbine planned to jump-start electricity for tens of thousands of people in the region.

More than two years later, what's left of the U.S. military and civilian presence in Afghanistan is trying, finally, to complete the project, which began in 2002 and has cost an estimated $500 million. The U.S. Agency for International Development (USAID) will provide oversight as Afghanistan's power utility launches a contract competition to decide which company will install the third turbine. The two-phase project will likely cost about $75 million, according to a recent letter from John Sopko, the U.S. special inspector general for Afghanistan reconstruction (SIGAR). And it won't be completed until 2015, well after the last U.S. combat forces leave the country.

USAID also has reached a new two-year, $3 million with Black and Veatch, the Kansas-based engineering company that has worked on the dam for years. The company will continue to provide technical support to Afghanistan and whoever it selects to install the third turbine.

But the work to install the final turbine, said to be collecting dust at the dam since it was delivered in late 2008, will come at a tenuous time. The U.S. military no longer has control of the region or the road it cleared in 2011 to make way for the supplies needed to complete the project. Marines left their last base in Kajaki in December, turning over control of the security to Afghan forces, 1st Lt. Garth Langley, a Marine Corps spokesman, told Foreign Policy. The U.S.-led military coalition has ceded control of security across most of the country to Afghan forces despite serious questions about their long-term viability.

Installation of the turbine also will come as top U.S. officials remain at odds with Afghan President Hamid Karzai, who continues to refuse to sign an agreement hammered out between the two nations that is supposed to set the conditions for long-term American involvement in Afghanistan. U.S. officials have said it must be signed within weeks in order for the United States to stay beyond 2014, but Karzai is unlikely to do so, according to a recent cable by U.S. Ambassador James Cunningham and obtained by the Washington Post.

Nevertheless, USAID maintains that the dam can blossom. The organization also says that although U.S. military commanders protested a decision last year to put Afghanistan's power utility, Da Afghanistan Breshna Sherkat (DABS) in charge of the project, it has enough oversight to make sure work is completed. Putting the Afghans in charge, USAID maintains, is part of the U.S. transition out of the country. USAID already has rehabilitated the first two decrepit turbines at the dam despite significant security challenges, boosting power to the point that 185,000 Afghans receive it, the organization said.

"Throughout this process, USAID and DABS have worked closely together, and USAID has approved the process by which the contract was selected to ensure transparency," a USAID spokesman said in a statement to Foreign Policy. "We will continue to provide quality assurance and quality control throughout the process of installing the third turbine, including reviewing vouchers of the contractor."

If the work is not completed, it would perpetuate more than a decade of heartbreak and frustration in the region. Dozens of U.S. Marines have been killed fighting insurgents in the region, and a tour of the nearby village by this writer in spring 2012 showed that it was devastated from years of fighting, with power lines hanging at grotesque angles and walls on many compounds crumbling. Civilians lived there anyway, primarily along a straight stretch of paved road said to be a runway the Soviet military built after invading the country in 1979.

Construction of the dam was first completed by the United States in the 1950s as part of an ambitious project to introduce irrigation and electricity across the region. After years of fierce fighting between the Soviet army and the mujahedeen, the Soviets pulled out of the country, leaving behind tanks, anti-aircraft guns, and other military equipment that dotted picturesque cliffs and hills that would have been inviting, were it not for the land mines hidden there.

The work isn't the only electric project the United States has planned in coming years in Afghanistan, either. It continues to move on the Power Transmission Expansion and Connectivity project, an expansive effort that would join a network of power stations built in several parts of the country.

The United States has set aside more than $260 million for the effort, according to SIGAR. It is considered Afghanistan's major power initiative, and it will link smaller networks in the northern and southern portions of the country, according to the Pentagon's November report to Congress on Afghanistan. Several related efforts are ongoing, including the U.S. Army Corps of Engineers recently advertising that it wants to erect up to $100 million in power lines across the northern network in Kabul and Logar provinces.

Still, it is the dam in Kajaki that has captured attention for its beauty, gross mismanagement, and surrounding violence.

It's a metaphor, in many ways, for the country as a whole.

State Department photo