This might be old news to some here, but Operation Merlin was the subject of the 60 Minutes/Couric interview with Valerie Plame that got scrubbed from their program last week. It's worth a re-visit:
George Bush insists that Iran must not be allowed to develop nuclear weapons. So why, six years ago, did the CIA give the Iranians blueprints to build a bomb?
In an extract from his explosive new book, New York Times reporter James Risen reveals the bungles and miscalculations that led to a spectacular intelligence fiasco
Thursday January 5, 2006
The Guardian
She had probably done this a dozen times before. Modern digital technology had made clandestine communications with overseas agents seem routine. Back in the cold war, contacting a secret agent in Moscow or Beijing was a dangerous, labour-intensive process that could take days or even weeks. But by 2004, it was possible to send high-speed, encrypted messages directly and instantaneously from CIA headquarters to agents in the field who were equipped with small, covert personal communications devices. So the officer at CIA headquarters assigned to handle communications with the agency's spies in Iran probably didn't think twice when she began her latest download. With a few simple commands, she sent a secret data flow to one of the Iranian agents in the CIA's spy network. Just as she had done so many times before.
But this time, the ease and speed of the technology betrayed her. The CIA officer had made a disastrous mistake. She had sent information to one Iranian agent that exposed an entire spy network; the data could be used to identify virtually every spy the CIA had inside Iran.
Mistake piled on mistake. As the CIA later learned, the Iranian who received the download was a double agent. The agent quickly turned the data over to Iranian security officials, and it enabled them to "roll up" the CIA's network throughout Iran. CIA sources say that several of the Iranian agents were arrested and jailed, while the fates of some of the others is still unknown.
~snip~
The code name for this operation was Merlin; to the officer, that seemed like a wry tip-off that nothing about this programme was what it appeared to be. ... On paper, Merlin was supposed to stunt the development of Tehran's nuclear programme by sending Iran's weapons experts down the wrong technical path. The CIA believed that once the Iranians had the blueprints and studied them, they would believe the designs were usable and so would start to build an atom bomb based on the flawed designs. But Tehran would get a big surprise when its scientists tried to explode their new bomb. Instead of a mushroom cloud, the Iranian scientists would witness a disappointing fizzle. The Iranian nuclear programme would suffer a humiliating setback, and Tehran's goal of becoming a nuclear power would have been delayed by several years. In the meantime, the CIA, by watching Iran's reaction to the blueprints, would have gained a wealth of information about the status of Iran's weapons programme, which has been shrouded in secrecy.
~snip~
http://www.guardian.co.uk/iran/story/0,12858,1678220,00.html