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Leak Behind ‘State of War’ Killed Successful Operation, Agents Say

ALEXANDRIA, Va. (CN) - Prosecutors blaming a former CIA agent for exposure of a supposedly botched operation had witnesses testify Wednesday to the program's promise.

The second day of Jeffrey Alexander Sterling's trial continued under the same veil of secrecy established Tuesday. A large gray screen blocked witnesses' faces from the courtroom audience, and codenames and partial real names protected their identities.

First to the stand Wednesday was "Mrs. Merlin," the wife of a Russian scientist who served as a CIA asset in the late 1990s and early 2000s.

Sterling had been the handler for this woman's husband, codename Merlin, during two of his years with the CIA.

When New York Times journalist James Risen featured this scientist and his work on Operation Merlin prominently in Chapter 9 of his 2006 book "State of War: The Secret History of the CIA and the Bush Administration," the government set it sights on Sterling as Risen's source.

Mrs. Merlin testified that she never spoke in detail with her husband about his work with the CIA, which, as Risen's book described, involved trying to slow the progress of Iran's nuclear program by having Merlin sell them faulty nuclear weapons blueprints.

Though "State of War" says that Merlin and his case officer had doubts about the plan, since the blueprint flaws were allegedly too obvious, Mrs. Merlin testified that her husband never expressed concerns about his role with the agency.

When she read "State of War," Mrs. Merlin said she was shocked, and very concerned that someone would use the information in the book to find and threaten her husband, herself or her family.

"The information in the book can be very useful to KGB," Mrs. Merlin said.

No one from Russian intelligence ever approached the Merlin family about the book, nor did anyone else, but Mrs. Merlin said it still worries her that someone might.

A retired nuclear-weapons engineer for one of the national laboratories took the stand next to describe the painstaking efforts a team of engineers put into designing for the CIA a Russian-looking schematic of a flawed fire set, the mechanism in a nuclear weapon that essentially ignites the bomb.

The engineer, identified as "Walter C.," undercut the assertion in Risen's book that Operation Merlin may have helped the Iranians, since they could conceivably fix any obvious flaws in the Merlin design and wind up with a functioning weapon.

Walter C. said the flaws in the fire set were so well hidden and complex that a team of highly trained American nuclear engineers could only find about 25 percent of the flaws. Iranian scientists, who were much farther behind in nuclear experience, would never be able to use the plans to make working nuclear weapons, Walter C. added.

"There was a single guiding principle: Do no harm," Walter C. said. "We didn't want to deliver into Iranian hands anything that would help Iran or come back to hurt the U.S."

The national laboratory team and the CIA were both confident that the fire-set operation, referred to as either Operation Merlin or Classified Program No. 1, would present no danger to the U.S., producing long-lasting benefits instead if successful, Walter C. said.

After the engineer, the court heard six hours of testimony from senior CIA agent Robert "Bob" S., who served as an operations director in the CIA's nuclear counter proliferation program and oversaw Operation Merlin.

Bob S. walked prosecutors through nearly every meeting and record of Classified Program No. 1, from conception to its shutdown because of Risen's book. The CIA's nuclear-counter-proliferation division, which is responsible for slowing foreign enemies' progress in their nuclear programs, developed the idea for Classified Program No. 1 in early 1997, Bob S. said.

The agent described how Merlin was promoted from his informational asset position to an operational asset as engineers began designing false fire sets. Merlin had the perfect background as a former engineer at the Russian nuclear site Arzamas-16, and he had the "chutzpah" to work in the field and present himself as a nuclear engineer willing to sell secrets, according to Bob S.'s description.

Merlin was "engaged and interested" in the operation, Bob S. said, and he had valuable contributions. When initially presented with the false fire set plans at a meeting with Bob S. and Sterling, Merlin said, "This won't work."

Merlin saw missing components in the fire-set design, but the scientists behind the design had planned it that way, Bob S. said.

The agent said the scientists took Merlin's concerns seriously but assured him that everything was designed specifically according to the CIA's plan. Merlin was on board and enthusiastic, especially as the time drew nearer for him to deliver the plans to Iranians, the agent continued.

Sterling took over as Merlin's case officer around the time Merlin received the plans, and Bob S. said the two developed a good rapport. Though he said Merlin became a sometimes-difficult asset, he added Sterling worked well with him.

"There were no problems with the defendant's performance," Bob S. said of Sterling.

Merlin delivered the false fire-set plans to a mailbox in Vienna in early 2000. From there, all that was left to do was wait for the Iranians to reach out to Merlin for the promised additional information, for which he expected them to pay steeply. A few months after the drop, a new case officer was transferred to Merlin and Sterling was no longer involved in the operation.

When "State of War" was published in 2003, Merlin had not heard anything further from the Iranians, but it was not inconceivable that they would have taken three to five years to study the plans and develop the complex fire sets, Bob. S said.

The publication of the book meant the CIA had to drop Classified Program No. 1 and deactivate Merlin as an asset.

"It shut it down completely and made all of our efforts for naught," Bob S. said.

Leaking CIA information to the world "has a chilling effect," Bob S. said, and the negative impacts of Risen's book were significant.

Less than an hour before court recessed for the day, the courtroom had its own leak when defense attorney Barry Pollack accidentally referred to Bob S. by his full last name during cross-examination. After a tense pause, counsel conferred with U.S. District Judge Leonie Brinkema at the bench, but nothing further was said about the incident.

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