Trial begins, prosecutors say ex-CIA man exposed a top agency asset with leaks to reporter

ALEXANDRIA, Va. — A former CIA officer unnecessarily exposed one of the agency's top assets by leaking details of a covert operation in Iran to a New York Times reporter, prosecutors told a jury Tuesday.

The long-delayed leak trial of ex-CIA man Jeffrey Sterling of O'Fallon, Missouri, began in U.S. District Court with jurors receiving a lesson in spycraft from a parade of CIA officers — testifying behind a tall gray divider wall to shield their identity from the public — who recruited and managed a Russian nuclear expert nicknamed "Merlin."

Prosecutors say Sterling divulged classified information to journalist James Risen about a plan to have Merlin funnel flawed blueprints to Iran to cripple that nation's nuclear ambitions.

Defense lawyers countered that the government has no direct evidence proving Sterling was Risen's source, and that the CIA focused its suspicions on Sterling because he had become an outcast for claiming racial discrimination at the agency.

Sterling, 47, was charged back in 2010 but his trial has been delayed for years, largely due to wrangling over whether Risen could be forced to testify about his dealings with Sterling. In June, the U.S. Supreme Court turned aside an appeal from Risen seeking immunity from a trial subpoena on First Amendment grounds.

Ultimately, though, prosecutors opted against putting Risen on the stand after free-press advocates lobbied Attorney General Eric Holder to avoid a legal showdown that could have ended with the reporter being thrown in jail for contempt of court for refusing to testify about his confidential sources.

As a result, Risen will play only a minor role at trial, and focus shifted Tuesday from Risen to Sterling.

Assistant U.S. Attorney Jim Trump said in opening statements that Sterling was motivated to spill CIA secrets by greed and bitterness after he filed a racial discrimination lawsuit against the CIA, and the agency rejected an offer to settle his case for $200,000.

"He struck back with the only weapon he had: secrets, the agency's secrets," Trump said.

Without Risen's testimony, Trump outlined a series of circumstantial evidence he said will prove that Sterling illegally leaked information critical to the national defense. He pointed out that Risen had written an on-the-record article about Sterling's discrimination complaint, a series of emails and phone calls between Risen and Sterling, and descriptions in Risen's 2006 book, "State of War," that describe the Merlin operation as a botched scheme in almost the exact same way that Sterling described the operation to staffers on congressional intelligence committees after he had become disgruntled at the CIA. Trump said Sterling is the only person involved in Merlin who describes it as a botched effort — an accusation Trump said is untrue.

But defense lawyer Ed MacMahon said the prosecution's circumstantial evidence proves nothing. He said it just as easily could have been Hill staffers who leaked the information about Merlin to Risen. He said the CIA is angry because it feels the Merlin operation was unfairly described as a calamity in Risen's book and that the government is prosecuting Sterling as a means of vindicating its program.

"A criminal case is not the place the CIA goes to get its reputation back," MacMahon said.

The first witnesses Tuesday were CIA case officers who described the importance of Merlin as a CIA asset. Merlin and his wife had emigrated from Russia in the early '90s, and CIA headquarters immediately targeted them as potential treasure troves of information. Both had worked in a Russian plant that assembled and disassembled nuclear weapons.

A case officer identified in court only as "Stephen B." testified that he was at first unsuccessful at recruiting Merlin but plied him with cash — at one point showing him a suitcase with $50,000. Merlin eventually agreed to a deal in which he would receive $300,000 for two years' worth of cooperation with the CIA. The information Merlin provided at headquarters was rated as "outstanding" by CIA headquarters.

Later, the CIA hatched a plan where Merlin would pose as a disgruntled Russian willing to sell nuclear blueprints to the Iranians. But the blueprints would contain hidden mistakes that render them inoperable, said another case agent, Laurie D. Even Merlin did not know that the blueprints he was peddling were flawed, Laurie D. said.

"That way he would have plausible deniability" if something went awry, she said.

A gray wall separated the lawyers, judges and jury from the public half of the courtroom during the CIA officers' testimony. The trial is expected to last more than two weeks, and could include government testimony from former Secretary of State Condoleezza Rice.