DOJ May Dismiss Spy Case Against AIPAC Lobbyists

April 23, 2009— -- The Justice Department may drop charges against two pro-Israel lobbyists suspected of spying for Israel and transmitting national security information to Israeli diplomats and journalists, sources briefed on the case tell ABC News. This news comes after allegations surfaced earlier in the week that Rep. Jane Harman (D-CA) promised to intervene in the case on behalf of the lobbyists, according to published reports in Congressional Quarterly and elsewhere.

Law enforcement officials say the Justice Department may have to dismiss the espionage charges and tell ABC News a review is underway to possibly dismiss the entire case against Steve Rosen and Keith Weissman, both former lobbyists for the American-Israeli Political Action Committee.

The main issue surrounds disclosing potential classified information at trial or the "graymail" defense, which involves the assumption that in order for an adequate defense to be made classified, information must be disclosed at trial. Late last February, the 4th Circuit Court of Appeals issued an opinion in the case favorable to the lobbyists' possible defense by allowing some information to be presented at trial the Justice Department deems classified.

The legal wrangling in the case involves the Classified Information Procedures Act known as CIPA. In their Feb. 24 opinion, the 4th circuit noted, "The court, after conducting such a CIPA hearing, determined that a substantial volume of the classified information was indeed relevant and admissible."

In the proceedings which have been ongoing since 2005, when Rosen and Weissman were charged, the government indicated that at trial they intended to introduce a summary of an FBI report which would show that Weismann had passed along information from the report to Israeli officials. The AIPAC defense attorneys also have said they wish to show the same FBI report and show that information in it could have been derived from other sources.

Lawyers for Rosen and Weissman did not return calls or messages left by ABC News. Officials briefed on the deliberations say some in the Justice Department and FBI want to press forward with the case that has been tangled up for years.

The recent disclosures about Rep. Harman being picked up on court-approved wiretaps may have been produced in discovery materials as the government and defense get ready for trial.

Harman released a statement saying the CQ story "recycles three year-old discredited reporting of largely unsourced material to manufacture a 'scoop'. . ."

"Congresswoman Harman has never contacted the Justice Department about its prosecution of present or former AIPAC employees," the statement asserted. On Tuesday, Harman called on the Justice Department to release unredacted copies of "all transcripts and other investigative material" relating to the flap.

A status conference in the case is set for May 6.

Concerns about sensitive information also involve an Israeli Defense briefing document which the government did not intend to use at trial but which the defense wished to use. The government sought to redact portions of these memos claiming they included classified information, but the defense contends that none of the information may be currently classified.

Rosen and Weisman were charged with transmitting national defense information. The trial has been set for June. A former Pentagon analyst Lawrence Franklin pleaded guilty to providing Rosen and Weissman with some of the classified materials. Franklin was sentenced to 12 years in prison in 2006.

Justin Rood contributed to this report.

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