This past Monday, the FBI released counterespionage surveillance video that sheds new light on the case of convicted felon, former NASA employee Stewart Nozette. The imperfectly-redacted video, which was obtained by the Institute for Research: Middle Eastern Policy (IRMEP) under the Freedom of Information Act, appears to reveal Nozette saying in 2009 that he gave classified U.S. government information to “Israeli Aircraft,” also known as Israel Aerospace Industries (IAI).

But Nozette was convicted for agreeing to sell U.S. government secrets to Israel, i.e., attempted espionage, not for having sold the secrets. A nonprofit run by Nozette received $225,000 in “consulting fees” from IAI in the ten years before he was stung by the FBI. If Nozette released classified information to IAI, the implications are important.

Above is the video just released by the government (not to be confused with the video previously released to the press, here). At about 2:21, Nozette seems to indicate that he already gave information to Aircraft.

According to IRmep’s Grant Smith, in conversation with me:

Nozette’s counsel fought this video’s release in court. They reveal Nozette asking for a “token” and receiving cash in envelopes, talking about where he had stored stolen classified info on hard drives, and apparently talking about having already passed classified info to IAI. (which someone at DOJ helpfully redacted, but not entirely).

This apparent revelation leads to the question of why our government didn’t say anything about IAI, a much bigger fish than Nozette. When questioned by Smith, US Attorney Ron Machen denied that classified information was passed by Nozette to Israel. But Israel Aerospace Industries is Israel’s prime aerospace and aviation manufacturer. It produces aerial systems for the military and is wholly owned by the government of Israel.

Smith goes on:

“If Nozette did pass secrets to the Israeli government, the least our Justice Department should have done was to investigate and disclose who from IAI was paying Nozette, how they would meet, how Nozette was tasked, and why he was under the impression that he was already working for Mossad, through IAI. In this case, embarrassment of the Israeli government would have been the best punishment and deterrent to any future shenanigans. Instead they tried to censor the tape (though not the court documents). “When Telegy was caught illegally shipping oscilloscopes to Israel through a front a couple years ago, the US fined the US node, and it collapsed. The US wouldn’t have had to fine IAI, it could have simply withheld a payment on the Arrow project, like Bush I symbolically withheld loan guarantees, citing the reason why. But that didn’t happen. Or prosecutors could have loudly shut down the bogus Nozette “Alliance for Competitive Technology” nonprofit by pulling its charter, citing the IAI payments for information. That didn’t happen either. “By hermetically sealing off all responsibility for Israel by nailing Nozette with a Mossad impersonator, and then telling the American people that no classified information was ever passed to Israel, the Justice Department has, once again, guaranteed that something like this will happen again. The record is clear on that.”

Here’s more on IAI from Business Wire: New FBI counterespionage surveillance video release reopens concerns about Israel Aerospace Industries Ltd.– IRmep

In the 1950s the state-owned IAI was established and led by Adolph “Al” Schwimmer, an American felon convicted for serially violating U.S. arms export controls. Schwimmer fraudulently obtained heavily discounted surplus U.S. aircraft from the War Assets Administration. In the 1960s IAI obtained stolen French Mirage 5 jet fighter plans in order to build its own copycat Kfir jet fighter. In the 1980s IAI relied on the American Israel Public Affairs Committee to win U.S. funding for the development of the troubled Lavi jet fighter. The Lavi program was terminated in 1987 after questionable Israeli technology transfers to China. The U.S. has paid for half of the jointly developed IAI/Boeing Arrow Anti-Missile system since 1988. Since 2007 the AIPAC has lobbied for hundreds of millions in additional U.S. taxpayer funding for the new Arrow III, beyond the $3 billion in military aid already provided to Israel annually. [Earlier this week] AIPAC DC convention attendees will lobby Congress against cutting under sequestration any funding to IAI or other aid to Israel.

Reflecting on spies and the pressure to release Pollard ahead of Obama’s visit to Israel— why did our government go easy the Israelis?