We'll start with Newsweek, which has details of the sting.

It was just a Washington lunch—one that the FBI happened to be monitoring. Nearly a year and a half ago, agents were monitoring a conversation between an Israeli Embassy official and a lobbyist for American Israel Public Affairs Committee, or AIPAC, as part of a probe into possible Israeli spying. Suddenly, and quite unexpectedly, in the description of one intelligence official, another American "walked in" to the lunch out of the blue. Agents at first didn't know who the man was. They were stunned to discover he was Larry Franklin, a desk officer with the Near East and South Asia office at the Pentagon. . . .

FBI counterintelligence agents began tracking him, and at one point watched him allegedly attempt to pass a classified U.S. policy document on Iran to one of the surveillance targets, according to a U.S. intelligence official. But his alleged confederate was "too smart," the official said, and refused to take it. Instead, he asked Franklin to brief him on its contents—and Franklin allegedly obliged. Franklin also passed information gleaned from more highly classified documents, the official said. If the government is correct, Franklin's motive appears to have been ideological rather than financial. There is no evidence that money changed hands. "For whatever reason, the guy hates Iran passionately," the official said, referring to the Iranian government.

I like that "for whatever reason" qualifier. So, just how sinister is Franklin? Not very, says the L.A. Times.

A U.S. official with knowledge of the case expressed doubts Saturday that Franklin's alleged actions rose to the level of espionage. Instead, he said it was more likely that Franklin, who maintains close ties with Israeli officials, passed documents to Israel without knowing the seriousness of his actions. "From everything I've seen, the guy's not a spy," the official said. "The guy's an idiot."

According to the official, the closeness of the U.S. relationship with Israel means that top officials of the two nations often share sensitive information. Nevertheless, Franklin should have known what information was and was not permissible to be shared, he said. "We knew this guy had the relationship for a while, and he shared some stuff beyond what he should be sharing," the official said.

Maariv sub-heads its article, "Supposed Israeli mole looking more and more like a simple jackass." And here's a bit from WaPo:

"The whole thing makes no sense to me," said Dennis Ross, special envoy on the Arab-Israeli peace process in the first Bush administration and the Clinton presidency. "The Israelis have access to all sorts of people. They have access in Congress and in the administration. They have people who talk about these things," said Ross, now a senior fellow at the Washington Institute for Near East Policy.

The JPost reports tonight that the charges against Franklin are looking less like espionage and more like mishandling of classified information. And the two AIPAC staffers accused of playing middleman? They probably won't be charged at all.

All in all, then, sounds like much ado about nothing, right? Not so fast. DEBKA headline:

Future arrests – if made - in case of suspected Israeli mole in Pentagon under FBI investigation will denote its political import, seriousness and indicate authorship of leaked story

WaPo again:

[T]he probe has been broadened in recent days to include interviews at the State and Defense departments and with Middle Eastern affairs specialists outside government, officials and others familiar with the inquiry said yesterday.

The New York Times notes, tantalizingly, that the FBI is trying to gain Franklin's cooperation in the investigation. For what? To roll over on who? Pinch's boys are loaded for bear:

A government official who has been briefed on the investigation said that F.B.I. officials had earlier expressed an interest in interviewing two of Mr. Franklin's superiors, Douglas Feith, the under secretary of defense for policy, and Paul Wolfowitz, the deputy defense secretary, although there is no sign that they are a focus of the investigation. It could not be learned whether the F.B.I. had decided to go ahead with those interviews.

Former government officials have also been contacted by the F.B.I. in recent days, apparently in an effort to gain a better understanding of the relationships among conservative officials with strong ties to Israel.

Back to the L.A. Times:

[S]ome who have worked with [Franklin] offer a different picture, saying he was very influential in high-level Pentagon policy debates. "You're not talking about someone toiling away in the bowels of the U.S. government," said a former Pentagon official who worked for Feith until last year and spoke on condition of anonymity. "Franklin was the go-to guy on Iran issues for Wolfowitz and Feith."

Did Feith enlist Franklin to do his dirty work for him? Doubtful, says Newsweek: "Officials say they have no evidence that either Feith or Luti had any knowledge of Franklin's discussions with the Israelis."

Looming in the background here: Franklin's meeting in December 2001 with an Iranian dissident who figured prominently in the Iran-Contra scandal. The papers clearly want it to be relevant, but alas, per Newsweek, "so far, there is no evidence that the Ghorbanifar contacts are related to the espionage probe." Undaunted, the L.A. Times throws Ahmed Chalabi into the mix by noting that Franklin has "close ties" to him, but they're forced to admit that "it is unclear whether the investigations into Franklin and Chalabi are connected." And here's Agence France Presse (per the JPost), desperately hoping to blame Israel for America's invasion of Iraq:

Since June, federal agents have been investigating whether Pentagon officials gave classified information to former Iraqi exile leader Ahmed Chalabi, according to AFP. Feith's office had close ties to Chalabi and advocated the now-discredited theory that Saddam Hussein had ties to al Qaida, an argument used to push the case for war. Feith's office was also instrumental in post-war planning, now seen as inadequate.

Speaking of the Israelis, what do they have to say about all this? Three things: 1) Pollard; 2) Pollard; 3) Pollard. Back to Newsweek:

Ephraim Sneh, a member of Parliament and a retired general who has been monitoring the development of nukes in Iran for years, said that Israel would be crazy to spy on its best friend. "Since Pollard, we avoid any intelligence activity on U.S. soil," Sneh said in an interview. "I know the policy; I've been in this business for years. We avoid anything that even smells like intelligence-gathering in the U.S."

WaPo corroborates:

One Israeli official familiar with the situation said yesterday that his government had checked "every organ here" to make sure that no part of government was involved. "We checked everything possible, and there's absolutely nothing. It's a non-event, from the Israeli point of view. Someone leaked this to [hurt] . . . the president, AIPAC and the Jews on the eve of the Republican convention," he speculated.

Former Mossad chief Danny Yatom says his agents were instructed after the Pollard case to avoid illegal espionage activity against the United States at all costs. Cabinet member Natan Sharansky, meanwhile, blames the whole thing on a CIA/Pentagon turf war. One other interesting possibility floated by WaPo: "[T]he very closeness of the relationship between the United States and Israeli governments -- and especially the tight connections between the Israelis and Feith's policy office -- may have led officials to become sloppy about rules barring release of sensitive information."

So there you go. That's the way it was, Sunday, August 29, 2004. As for the Arab News, they're sure the scandal is just the biggest thing ever.