Federal Justice Department flaks have denounced reports of a massive Israeli spy ring as an "urban myth" -- despite solid reporting by Fox News, a French online service -- and by CL. Along with our Tampa sister paper, Weekly Planet, CL was the first American newspaper to obtain, substantially quote from and publish a confidential 60-page Drug Enforcement Administration document detailing the apparent spying by Israeli "art students" who tried to gain access to sensitive federal buildings, military bases and intelligence officials' homes.

A deafening silence is all we got from federal spokesmen. If the reports are true, and they are, then the U.S. intelligence brass either allowed spying by a friendly nation - or were incompetent.

CL now has obtained additional proof of the spying.

Among other accusations is that the ring was related to high-tech Israeli companies that sold products to the federal government and telecommunications companies. The Israelis, so it is thought, could have monitored federal wiretaps and gained information on every call placed through America's 25 largest phone companies. Many of the 120 Israelis detained in recent months had connections to the companies, as well as backgrounds in electronic intelligence for their country's military.

One document obtained by CL -- from sources with years of close cooperation with both U.S. and Israeli intelligence services - is a March 4 letter from Robert Diegelman, an assistant attorney general. In it, he commands that with sensitive Justice Department communications, "Foreign Nationals shall not be allowed to access or assist in the development, operation, management or maintenance of the equipment." CL sources say this move results directly from the disclosures about the Israeli spy network.

A Dec. 18 e-mail among DEA communications employees makes clear that the agency underwent self-scrutiny as the "result of the Fox network expose on Israeli counterintelligence activities."

CL also has verified with more than a half-dozen DEA agents specific parts of the 60-page document - DEA Washington spokesmen won't confirm or deny the authenticity of the report despite their own agents' confirmation.

Jack Wall, DEA's supervisor in Montgomery, Ala., said the portions of the document pertaining to his office were "definitely" accurate. Other agents didn't want to be named.

See atlanta.creativeloafing.com/2002-03-20/fishwrapper.html

The spy story comes at a time when journalists are beleaguered with conspiracy theories. The 9-11 terrorist attack has pumped up wild speculation to screeching levels.

But it's journalists' job to listen and investigate. Here's one reason I keep an open mind to tales -- and then verify.

About 20 years ago, my phone at a South Florida newspaper rang, and a woman told me America was being invaded by Fidel Castro's soldiers -- right on the beach outside her condo.

I put my hand over the mouthpiece and asked a veteran police reporter, "Hey, you hear anything about an invasion over at ..."

"That's just Phyllis," the reporter interrupted. "She calls a couple of times each week. The size of the invasion depends on how much she's had to drink."

A few nights later, Phyllis called again. Another invasion. Russians, I think. Over the next few months, a whole host of evil people used Phyllis' beach to launch their attacks on America.

One night, she breathlessly whispered: "I swear, I haven't been drinking. Not a drop. There really are guys on the beach with guns. And they're sneaking around my apartment."

Being that we're talking South Florida during the heyday of the cocaine cowboys, chaps with guns on the beach wasn't exactly far-fetched. So, I called a copshop reporter on the radio and asked her to run by Phyllis' address. I explained to the reluctant reporter: "Look, she's an old lady and she might be in trouble."

Twenty minutes later, the reporter called. "You wouldn't believe what the hell is happening here!" she shouted into the phone.

What was happening was that a boatload of heavily armed, blackened-faced, wet-suited CIA guys -- no kidding -- while on a "practice exercise" (more likely on a run to Cuba to restock Fidel's humidor with poison cigars) had become lost and had smacked aground on Phyllis' beach.

Aside from what it taught me about spooks (aka Laurel and Hardy), I also learned something about conspiracy theories. Sometimes there's a little truth in conspiracies -- even if the story is coming from a crank teetering on top of a soapbox.

Even Georgia has conspiracies (why, Scarlett, that's just hard to believe).

Sometime this week, a bunch of toadies for the banking industry -- commonly called state legislators -- will run into a cloakroom at the Capitol. Their mission will be to put a stake into the heart of Gov. Roy Barnes' bill to end some of the most abusive practices in what's called predatory lending.

Earlier this year, I wrote how tens of thousands of Georgians are ripped off by unscrupulous lenders -- and, how a conspiracy between some legislators and the banking industry had gutted last year's legislation authored by state Sen. Vincent Fort. (atlanta.creativeloafing.com/2002-01-09/cover.html)

Well, the conspiracy is back -- to your detriment.

Barnes had introduced his own version of Fort's bill. Overall, that's good even though some key areas are neglected. Barnes' version would set triggers -- if a loan exceeded about 13 percent in interest, the lender would be prohibited from gouging consumers with a variety of loathsome fees and schemes.

At a hearing in the House Banking Committee March 20, the public's mood was loudly for a strong bill. But the legislators, disdainful of citizens and with their strings snuggly held by the bankers, didn't vote.

If the bill isn't passed this week, it's dead for the year. But a non-vote would sorely irritate Barnes.

So there will be a vote -- but no time or place will be announced. It will probably transpire quickly in a cloakroom, and, with no one looking, either the legislation will be killed or a version of the bill that's a roadmap on how to screw the public will be substituted.

Meanwhile, polls show 80 percent of Georgians support restrictions on predatory lending. Maybe some of the conspirators will be reminded of that come election time.

The state Department of Administrative Services has launched a probe of Kennesaw State University in response to a Web posting in February by school administrators that makes allegedly defamatory statements about two former professors. The educators, Candace Kaspers and Bari Levingston, in the 1990s sued KSU over their firings -- and their cases essentially rebutted the very sort of smears recently posted by the school. Kaspers won $750,000 and Levingston settled her case for $150,000.

The state Board of Regents ordered the inflammatory posting taken off KSU's website, according to documents obtained by CL. Apparently not trusting KSU's administrators to refrain from further bomb-tossing, the Regents slammed down a "no comment" policy on the school's bosses.

The KSU posting was in response to a Feb. 20 CL article outlining the case of Paul Lapides, a professor who claims the university slimed him with anti-Semitism, intimidated a female student in an attempt to get her to make false statements, and that KSU has consistently violated the state's open records law.

Ironically, in trying to control the fallout from CL's articles, Associate Vice President Gordon Harrison, in a memo to President Betty Siegel, said the school should react with "common sense," and that "it would be easy to knee jerk and put a lot of copy in the media."

Oops. The Web posting means KSU opted for the knee-jerk approach.

I'd like to make the case that KSU has mounted a conspiracy, but that would be overly generous. What's clear is that the administration's behavior is characterized by inept retaliation and cover-your-ass spin doctoring.

On the retaliation side, in addition to running off outspoken professors, CL has now been targeted. Last year, KSU ran about $7,000 in advertising with the paper. Results were so good, the school bumped it to $17,000. Following CL's recent reports, the school cancelled the contract.

I have no problem with advertisers doing what they want with their money. But KSU is spending your money. The decision on where and when to advertise should be based on marketing strategy and results -- not ham-fisted politics.

As William Kaspers, the husband and attorney for Candace Kaspers, told me, the state repeatedly steps in bail KSU out of jams. "That allows [KSU administrators] to be as reckless as they want," the lawyers says.

As I learned when interviewing Siegel, her staff had not advised her of many important facts in the litigation. That seems to be SOP at KSU. In a recent memo, veep Harrison urges that all information go through him and other aides, who will "filter" out material they feel the president doesn't need to see.

Unrest is bubbling up at the university. Professors say that at recent faculty meetings, there have been discussions of "doing the most severe thing" -- code word for calling for a vote of no confidence in Siegel.

Senior Editor John Sugg, who flies to work in a black helicopter, can be reached at 404-614-1241 or by e-mail at john.sugg@ creativeloafing.com.