US intelligence proved disastrously wrong in concluding in 2007 that Iran had ended its quest for nuclear weapons, including, as it stated in a footnote, its "nuclear weapon design and weaponization work and covert uranium conversion-related and uranium enrichment-related work". In reaching this flawed verdict the CIA depended heavily on information supplied by its secret agents in Iran. This raises the question: was the CIA misled by its own spies into believing that the threat of sanctions had worked in ending Iran’s surreptitious effort to obtain nuclear weapons?When US intelligence analysts prepared to write the National Intelligence Estimate (NIE) for 2007, they were confronted much the same mountain of evidence that led their predecessors to conclude with high confidence in the 2006 NIE that Iran was secretly engaged in a nuclear weapons program. The CIA still had verified reports that Iran had experimented with Polonium 210, a key ingredient in the trigger of early-generation nuclear bombs. It had documents recovered from a stolen laptop describing Iran’s efforts to fit a warhead in the nose cone of its Shahab 3 missile that would detonate at an altitude of 600 meters, which is too high for anything but a nuclear warhead to be effective. It had a detailed Iranian narrative, written in Farsi, describing how a Russian scientist helped Iran conduct experiments to configuring high-tension electric bridge wire to detonate simultaneously at different points. And according to IAEA experts, the only use for such precise coordination is to detonate a nuclear weapons. It also had found Iranian technical drawings for a 400-meter long tunnel rigged with the kind of precise remote sensors used to measure pressure from a nuclear underground test. They had reports that Iran had most likely acquired a digital copy of a Chinese nuclear warhead design from the A. Q Khan’s network. It had further established that Iran had the blue prints for a high voltage block, called a TBA 480, necessary to assure the proper compression of the nuclear core in the warhead. And it had satellite surveillance of Iran’s crash program at Natanz to build a nuclear enrichment plant– a facility US intelligence estimated could house up to 50,000 high-speed centrifuges.To be sure, taken individually, such suspicious activities might have a non-nuclear explanation. For example, according to Iran, the purpose of its Polonium 210 experiments was merely to find a power source for an Iranian spacecraft (though Iran did not have ant known space program at the time of their Polonium 210 extraction.) But taken together these efforts added up in all the CIA’s estimations prior to 2007 to an inescapable conclusion: Iran was going Nuclear.So what had changed in 2007? One answer is that the CIA was the receipt of new secret intelligence from Iran. It provided convincing evidence that the facilities of the weapons-design program revealed on the stolen laptop, code named Project 111, had been closed down by Iran in 2003. This was confirmed by satellite photographs showing that a buildings involved in it had been bulldozed, communications intercepts revealing that scientists were no longer working at the location, and a high-level defector from the Iranian Revolutionary Guard reporting that "Project 111," had stopped functioning. Since the CIA had revealed it knew about Project 111, and even supplied technical drawings from it to the IAEA, it was not that surprising that the Revolutionary Guard, which runs Iran’s nuclear activities, would shut down a compromised project.The real intelligence issue was how to interpret the closure of Project 111. Had the design work been secretly moved to another location by the Revolutionary Guard to avoid further scrutiny by the CIA and IAEA? Had it been closed because the warhead design had been solved with the acquisition of the digital blueprints of the Chinese nuclear weapon which Iran got from the A.Q. Khan network? Or had the Revolutionary Guard closed it because Iran had abandoned its decade-long quest for a nuclear weapon?Deciphering the intentions behind a Revolutionary Guard action is no easy task in a closed and terrorized society in which the US has no diplomatic relations and little direct access to decision-makers. It therefore had little choice but to rely on the human "assets" in its espionage apparatus to illuminate the intentions behind the shut-down of project 111. Over the years, the CIA had recruited a network of Iranian agents which had, or claimed to have, access to nuclear work. These agents provided reports about Iran's nuclear program that allowed the authors of the 2007 NIE to cite secret evidence in support of the conclusion that "Tehran’s decision to halt its nuclear weapons program suggests it is less determined to develop nuclear weapons than we have been [previously] judging."As a result, in a stunning departure from the previous assessments on Iran by US intelligence, the 2007 NIE declared in its summary: "We judge with high confidence that in fall 2003, Tehran halted its nuclear weapons program." Even more astonishingly, It attributed the "halt" to "increasing international scrutiny and pressure resulting from exposure of Iran’s previously undeclared nuclear work" which meant that the threat of sanctions had worked in ending Iran’s surreptitious effort to obtain nuclear weapons.As we now know the Revolutionary Guard, instead of ending its secret nuclear program, was secretly completing new facilities in 2007. For example, at Fordo, 20 miles north of the holy city of Qum, it was reinforcing tunnels leading inside a mountain cavern designed to house a new uranium enrichment plant. (This underground facility was only disclosed by Iran to the IAEA in late 2009.) Clearly, Tehran’s intentions was not to abandon, a nuclear program in which it had invested tens of billions of dollars.What may have misled the CIA was a gaping flaw in its espionage apparatus in Iran after 2004. New York Times reporter James Risen reveals in his book "State of War" that since the CIA had no embassy base in Iran, it relied on state-of-the-art satellite transmissions to communicate with its agents. Then, in 2004, a CIA communications officer made a disastrous mistake. She accidentally included in a satellite transmission to an agent the data that could be used to identify "virtually every spy the CIA had in Iran." The error was compounded, , according to Risen, because the recipient of the transmission turned out to be a double-agent controlled by the Iranian security service. If so, the Iranians knew the identity of all the agents that the CIA had arduously maneuvered into positions of access as well as the technical methods by which the CIA communicated with them after 2004. The CIA's putative agents in Iran would have little choice but to allow the Iranian security service to control all the information they delivered to the CIA. If not, they would be eliminated and replaced. One of the agent who the CIA used for its 2007 NIE was Shahram Amiri. In 2004 and 2005, he had been working at Malek Ashtar University of Technology in Tehran, where research was done for Project 111. He reportedly provided details to the CIA about the termination of Project 111. Of course, to be credible, misinformation is designed so it will check out. And, according to the CIA, it did check out with the information it was receiving from its other sources. So it, and the 2007 NIE, had "high confidence" in its conclusion that Iran had given up on weaponization. In 2009, Amiri agreed to meet a CIA officer in Saudi Arabia. After that rendezvous, he was flown back to America (he now claims against his will.) The CIA, according to the Washington Post, offered to pay him $5 million. Meanwhile, Iran claimed he had been drugged and kidnapped. Then this July, he re-defected back to Tehran via a taxi trip to the Pakistan Embassy in Washington DC. Rejoined with his wife and young son at a press conference, Iran claimed that he had been operating as its double-agent in an espionage game. That he was willing to walk away from the CIA's $5 million bonus and into the waiting arms of Iranian intelligence officers leaves little doubt that the Iranian security service had the ultimate leverage over him. Did they control his secret reports when the CIA was preparing its NIE in 2007? That question no doubt will be hotly debated within the intelligence community for years to come. If Risen is correct that the CIA's sources and methods had been compromised after 2004.But the willful blindness factor should not be underestimated. The most effective deception tells an audience what it wants to hear. Members of the newly-reorganized Nation Intelligence unit who authored the NIE may have wanted to believe that Iran would quit its nuclear weapons program, since it confirm their hope that US sanctions were working.Whether the misleading conclusions in the CIA’s 2007 NIE proceeded from Iranian deception or American self-deception, they were not without consequences. The immediate effect of the 2007 NIE was to undercut the case for taking more drastic action. To the extent that it was believed that Iran had already ended its nuclear program, other countries had little incentive to join in imposing further sanctions. It also provided time for Iran to upgrade its centrifuges and increase its stockpile of lowly-enriched Uranium gas. Indeed, by 2009, it had enough fuel, if it chose to further process it in its centrifuges, for at least one nuclear bomb.The moral of this sad spy story is that the information exchanged in an espionage game cannot be taken for granted. Spies that are viewed "assets" in a closed country can turn out to be a very risky liabilities.***