The Jane Harman/Alberto Gonzales/AIPAC controversy

CQ Politics has posted an explosive story today that spells bad news for Rep. Jane Harman (D-CA) and former Bush AG Alberto Gonzales:

Rep. Jane Harman , the California Democrat with a longtime involvement in intelligence issues, was overheard on an NSA wiretap telling a suspected Israeli agent that she would lobby the Justice Department to reduce espionage-related charges against two officials of the American Israeli Public Affairs Committee, the most powerful pro-Israel organization in Washington.

Harman was recorded saying she would “waddle into” the AIPAC case “if you think it’ll make a difference,” according to two former senior national security officials familiar with the NSA transcript.

In exchange for Harman’s help, the sources said, the suspected Israeli agent pledged to help lobby Nancy Pelosi , D-Calif., then-House minority leader, to appoint Harman chair of the Intelligence Committee after the 2006 elections, which the Democrats were heavily favored to win.

Seemingly wary of what she had just agreed to, according to an official who read the NSA transcript, Harman hung up after saying, “This conversation doesn’t exist.”

Harman declined to discuss the wiretap allegations, instead issuing an angry denial through a spokesman.

“These claims are an outrageous and recycled canard, and have no basis in fact,” Harman said in a prepared statement. “I never engaged in any such activity. Those who are peddling these false accusations should be ashamed of themselves.”

It’s true that allegations of pro-Israel lobbyists trying to help Harman get the chairmanship of the intelligence panel by lobbying and raising money for Pelosi aren’t new.

They were widely reported in 2006, along with allegations that the FBI launched an investigation of Harman that was eventually dropped for a “lack of evidence.”

What is new is that Harman is said to have been picked up on a court-approved NSA tap directed at alleged Israel covert action operations in Washington.

And that, contrary to reports that the Harman investigation was dropped for “lack of evidence,” it was Alberto R. Gonzales, President Bush’s top counsel and then attorney general, who intervened to stop the Harman probe.

Why? Because, according to three top former national security officials, Gonzales wanted Harman to be able to help defend the administration’s warrantless wiretapping program, which was about break in The New York Times and engulf the White House.

Ed Morrissey’s got background info on the story here. Read more via Malkin.

AJ Strata has an interesting take here.