[Roberts:] You're in THE SITUATION ROOM. And happening now, is the Bush administration targeting Iran. The "New Yorker" Seymour Hersh says the U.S. is significantly stepping up covert operations against Iran. I'll talk with Hersh right here on THE SITUATION ROOM just ahead. Pitch battles in the streets of Seoul, South Korea, protests against U.S. beef imports rocked South Korea's capital and inflamed anti-U.S. sentiment. And the mysterious death of a pregnant U.S. soldier. Police now say she apparently was murdered. And the Army is joining in the hunt for her killer. Wolf Blitzer is off today. I'm John Roberts in New York. You're in THE SITUATION ROOM. A growing and secret Bush administration war chest, funding escalating undercover operations inside Iran aimed at destabilizing the government. Pulitzer prize-winning journalist Seymour Hersh makes detail and disturbing allegations in the "New Yorker." He's going to join us live in just a moment. But first, CNN's senior Pentagon correspondent Jamie McIntyre is here. Jamie, what are you picking up on this story today?
[Jamie Mcintyre, Cnn Senior Pentagon Correspondent:] Well, today, John, there was no comments from the White House, some non-denials from the Pentagon, and a little bit of sneering from the State Department.
[Mcintyre:] The allegation that U.S. special ops commandos have been conducting covert operations into Iran from southern Iraq drew a quick and unequivocal denial from the U.S. ambassador to Baghdad.
[Ryan Crocker, U.s. Ambassador To Iraq:] I can tell you flatly that U.S. forces are not operating across the Iraqi border into Iran, in the south or anywhere else.
[Mcintyre:] But investigative reporter Seymour Hersh whose "New Yorker" magazine article claims the U.S. efforts are part of a $400 million covert campaign to destabilize Iran's government argues the operations are so super secret, Ambassador Crocker may be out of the loop. That assertion was mocked by the State Department's spokesman.
[Tom Casey, State Dept. Spokesman:] Yes, I'm sure it's common for conspiracy minded journalists to know more than the U.S. ambassador to a country. I don't think that's an argument that really holds water.
[Mcintyre:] Nevertheless, senior Pentagon officials have hinted to CNN that CIA and other highly classified operations are conducted from time to time inside Iran but they have never confirmed it. In a statement the CIA said "As a rule, it does not comment on allegations regarding covert operations." Still, some members of Congress were not so quick to dismiss the idea that the U.S. is working secretly in Iran to stop its meddling in Iraq.
[Sen. Joe Lieberman  Connecticut:] I think we should be doing whatever we can to let the Iranians know they can't continue this. And not expect us to take some action against them on this basis.
[Mcintyre:] Hersh says some of the U.S. forces operating in Iran may be coming from the other border, Afghanistan. And he suggests their mission in part is to gather intelligence about Iran's suspected nuclear weapons program possibly to lay the groundwork for a military strike. Pentagon officials who won't talk publicly because of the highly classified nature of the effort have hinted to CNN that there's a sort of tit for tat going on, that the U.S. is trying to do to Iran what Iran is attempting to do in Iraq. That is support the groups that oppose the central government, and thereby, undermine it John?
[John Roberts, Cnn Anchor:] Jamie McIntyre with the background on the story for us. Jamie, thanks. And joining me now is the author of the article, Seymour Hersh. You heard what Tom Casey had to say at the State Department. He called you "a conspiracy minded journalist." He also said, this is something you didn't hear there, "After I stop laughing, I'll try to address the story for you." What do you say?
[Seymour Hersh, The "new Yorker":] Well, it's tough because I was on your network yesterday, and he said what he said. And what am I going to do, say he is not telling the truth? Just to be perfectly honest, I can tell you that in the article I wrote, I go to great lengths in citing people by name, including Admiral William Fallon. One of the issues Fallon had along with the problems of speaking out against the bombing in Iran, which he did, that was the obvious cause of his dismissal. But there was a bigger part to the story, which is really, frankly, that he wanted to know exactly what the special ops guys were doing inside Iran. And he wasn't getting the whole story. He was increasingly agitated about it. I will tell you right now categorically, that had a lot to do particularly with Vice President Cheney being quite angry at him about this. He wanted Fallon, who after all is the Centcom commander in charge of the war in Iran, Iraq and Afghanistan; he wanted them out of the way when it came to special ops. So it isn't that impossible that some of the activities that Crocker, who is a very honorable guy, didn't know about. Because otherwise I just don't think he would say something that's not true. Because I will tell you right now, the cross-border operations have been going on from southern Iraq into getting al Kutz and interrogating them back in town. And along with that, back in Iraq. And along with that, there's a separate operation, a task force that's run by the joint special operations command out of, I think I can probably say this, Heart province. It's a big enough province. We're running a separate operation funneling people and the special agents and equipment into Iran from there.
[Roberts:] Now, you did cite General Fallon by name. But there are also a lot of unnamed sources in your article. You say that these unnamed sources have seen classified documents which they related to you. Did you ever see the classified documents yourself?
[Hersh:] Actually what I said in the article was pretty carefully said. I said those who are familiar with the documents. We never quite said anybody saw a finding. A presidential finding is very highly classified. And absolutely I can tell you right now, I did not see a presidential finding.
[Roberts:] How can you be sure these people were being straight with you and they weren't operating from some political perspective?
[Hersh:] I certainly think they were operating from a political perspective in the sense that they're totally pro-Pentagon, pro-war, pro-our armed forces, pro-our soldiers but are very much against the policy in Iran. And I can tell you also that some people there know the "New Yorker's" very rigorous fact checking process. There were more than one or two or three people I talked to about this. This is a great deal of concern about this new finding and the money that was spent, and a great deal of concern about the fact that Congress really doesn't know what the special operation command is doing in Iran because the White House refuses to tell Congress anything about military operations. Only the CIA operations are briefed to the Congress, the special committees.
[Roberts:] Let me take you back a couple of years ago to another article that you wrote in the "New Yorker" about the same subject, which I believe I was filling in for Wolf on special edition or "LATE EDITION" one day and had you in to talk about it. And what you said in this article, "the Bush administration has increased clandestine activities inside Iran and intensified planning for a possible major air attack." Nothing has happened since then. That was two years ago. What about Jamie McIntyre was reporting about a moment ago that this is not a prelude to a major attack? This is simply trying to do to Iran the same thing that Iran is ostensibly doing in Iraq. And it's a major irritant to the government there, trying to keep it off-balance.
[Hersh:] What the joint special the JSOC is doing, the joint special operations command are high value target hunters. They're hunterkiller teams. They're the best we have. Please don't think I'm in any way denigrating them. They're great soldiers, great warriors. They've been assigned by this White House, by the president, they've been given basically worldwide cart blanche when we isolate a high-value target in the global war on terrorism, they are permitted, they are authorized by executive order to go into any country without telling the ambassador or the station chief and find the guy, capture them if they can, if not take other means, killing them included. Let me go on. One of the targets, and I write about this, a target designated by the vice president's office in this case, are Iranian nuclear scientists. We would love to get an Iranian nuclear scientist. We'd like to capture one, bring them back to the United States, show the world what the White House believes, which is that Iran is much farther along in its weapons program.
[Roberts:] I'm sure they would. But is that laying the groundwork for major military operations in Iran?
[Hersh:] No, the groundwork had been laid, as you just mentioned. Listen, the submarines are ready. The destroyers are ready. The cruise missiles are ready. We've been exercising and training on this for years. We're ready to go. Of course we have been for a long time. We've got that country targeted. That doesn't mean it's going to happen.
[Roberts:] Does this idea of a covert activity a big deal? We had General David Grange on with Kyra Phillips earlier on "NEWSROOM" today. Here's what he said about covert activity of the nature you say is going on in Iran.
[General David Grange, U.s. Army:] I hope we're doing it. I think every country in the world does covert operations. Remember, covert operation is one where the act is not hidden, it's the sponsor of the act that's hidden. And it gives you an opportunity for a plausible denial. It's important to do covert operations to shape our interests abroad.
[Roberts:] So he's saying this sort of activity that you talk about in your article, he would expect would be going on.
[Hersh:] I could also tell you the classic definition of a covert operation, also involves doing activity that would not be legal, would not be considered legal in the country in which you're operating. I can also tell you that a finding, there's one of the bars to a finding, one of the findings in the legal requirements, one of the legal requirements of a finding for CIA operations that it cannot be against the American constitution or the laws. There's a lot of problems in the whole process. One of the major points I'm making, and I disagree about covert operations in this sense. We have a purpose here. We're still trying to undermine the government. There's been an enormous increase in activities, terrorism, bombings. If anybody looks at the scale of operations in the last four, five months, the scale of reported incidents inside Iran, they're going up exponentially. As I say in the article, I don't know whether we're responsible for it, but it is interesting. And again
[Roberts:] I'm sorry, we're running out of time. I just wanted to thank you very much for coming on. It's an interesting article, certainly a lot of food for thought.
[Hersh:] Absolutely.
[Roberts:] Thanks for being with us today. Appreciate it.
[Hersh:] Bye-bye.
[Roberts:] A pregnant soldier, a murder scene and a mysterious letter, coming up, the clue that's taking the case to a whole new level. Plus, surrounded by flags, Barack Obama speaks out about patriotism, why he's blaming himself for some of the criticism. You're in THE SITUATION ROOM