(JTA) — Pennsylvania’s homeland security director quit in the wake of revelations that he hired an Israeli-American agency that reported peaceful protests as potential terrorist threats.

Jim Powers resigned two weeks after Gov. Ed Rendell said that he was "deeply embarrassed" by revelations of a $125,000 contract with the Philadelphia-based Institute of Terrorism Research and Response.

Rendell announced the resignation at a news conference last Friday, although for weeks he had insisted that he wanted Powers to stay.

"Jim is a good man who made a very significant mistake in judgment," the governor said at the news conference.

Rendell terminated the contract with ITRR immediately upon learning of it.

The state’s Office of Homeland Security contracted the institute to track threats, then relayed its reports to many law enforcement and private groups.

Its "alerts" included an animal rights protest, a natural gas drilling protest, a gay and lesbian festival, and a rally to support a Rendell-backed campaign for boosted education funding.

Powers subsequently apologized to the groups. State security officials who had been privy to the bulletins described them as amateurish.

The institute, which claims to have a Jerusalem office, is run by directors who among other claims list experience in Israel’s security services. It also runs training programs in Israel.