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Seymour Hersh has been writing about the Bush administration's aggressive stance against Iran for years now. His latest article for The New Yorker, "Preparing the Battlefield", Hersh claims that the Bush administration has been carrying out clandestine operations in Iran for some time now, with the funding and cooperation of the Democratic leadership in Congress.

HERSH: I think this is another example of putting an awful lot of pressure on the Iranian government. There's been a dramatic increase in kinetic events and chaos inside of Iran. Almost every other day, there's another story in the Iranian press -- I write about this in the article, too -- about things blowing up, et cetera, et cetera. It looks like things are falling apart, a little bit. And the central government certainly has more trouble.

And I think the goal of this operation, this incredible operation, with all this money -- and, by the way, it's the Democrats in Congress who basically looked the other way and said, take the money and run. They did not stop this money, the leadership that I'm talking about, the Democratic leadership.

So, basically, my guess is that -- I don't think we can safely say that any military action is off the table, no matter what happens. And that's -- as I say, I wish I'm going to be wrong about all that, but this is really, sort of, an amazing development.

CROWLEY: Absolutely. I want to read a graph out of your book because it goes to the oversight of the Democrats you just mentioned. [snip] "'The oversight process has not kept pace -- it's been co-opted by the administration,' the person familiar with the contents of the findings said. 'The process is broken and this is dangerous stuff we're authorizing.'"

Tell me, first, what your sources say is so dangerous about this?

HERSH: The president has to give a finding on covert action, any action that's covert. In other words, when CIA goes in some place, if they get caught, there could be spies.

So he has to tell the Congress about it. And the military simply is -- the president, since 9/11, has decided anything we do militarily, we don't have to tell anybody in Congress about.

Guest host Candy Crowley brings on Iraq Ambassador Ryan Crocker to officially deny that any cross border operations have taken place, but Hersh points out that Crocker may not be in the loop--plausible deniability being the operative word.

That is simply a reality, that when you run secret operations, if you're not telling the commander, the military commander of the Central Command, who is supposedly running the country -- you may not tell the ambassador everything. Sometimes it's better not to have the ambassador know.

Full transcripts below the fold:

CROWLEY: While the Bush administration has been emphasizing tough diplomacy with Iran, it's also been escalating covert U.S. military actions against the country. That's according to investigative journalist Seymour Hersh, who reveals the details in a new article for the New Yorker magazine, titled "Preparing the Battlefield." He joins us now.

That sounds a little ominous. Let me ask you first, if you -- what is the headline that readers will take away from this article?

HERSH: Well, one of the basic points is that, no matter what we say about diplomacy, you know, carrot and stick, the stick is working pretty hard and the stick is working overtime. This president did escalate the covert war, the secret war inside Iran.

We've been doing stuff inside Iran since '05 pretty much, pretty heavily, you know, looking at the nuclear facilities, collecting intelligence, trying to undermine the regime, et cetera, et cetera.

But there was a significant escalation this year. First of all, they got a great deal of authorization to spend up to $400 million. That doesn't mean he's spent it all yet, but he's got that kind of authorization from one of the secret committees.

Anybody who saw "Charlie Wilson's War" -- you know, Charlie Wilson was able to generate a lot of money secretly. That's what happens in Congress.

And the other major thing is, we've sent in a special task force that operates out of Afghanistan into Iran. I give notice what Ambassador Crocker said about not cross-border. And I have a lot of respect for him and I don't want to challenge him. But the fact is, we're inside; we're not necessary cross-border. We have teams inside Iran.

And these include joint special operation forces, our most elite commando unit. And basically, they're guys that go after high-value targets around the world. You know, they capture them or kill them.

So it's a significant increase in American potential for damage inside Iran.

CROWLEY: I do want to let our audience hear from Ambassador Crocker, and then I want to ask you the difference between what he's denying and what you're saying. Here he is.

(BEGIN VIDEO CLIP)

CROCKER: I haven't read the article, Candy, but I can tell you flatly that U.S. forces are not operating across the Iraqi border into Iran, in the south or anywhere else.

(END VIDEO CLIP)

CROWLEY: So they're not -- I mean, is he denying something you didn't say? I can't quite get the difference here.

HERSH: Well, you know, it's complicated. Because one of the things in the article -- it's a long article in the New Yorker -- one of the things I described is that one of the problems Admiral Fallon, the former commander of CENTCOM, who ran into trouble because he spoke about not wanting to bomb Iran.

Another factor in Fallon's problems with the White House, particularly with Mr. Cheney, the vice president, was that Fallon wasn't able to learn what was going on, all he wanted to know, about covert operations, CIA operations inside Iran and Afghanistan.

That is simply a reality, that when you run secret operations, if you're not telling the commander, the military commander of the Central Command, who is supposedly running the country -- you may not tell the ambassador everything. Sometimes it's better not to have the ambassador know.

But the other point is, we certainly are going cross-border, on short forays, grabbing Al Quds members, bringing them back. We've been doing that for a long time.

He may not know the extent to which we're operating deeply with commandos or -- not so much -- with our special forces inside Iran. So it's possible. Because he's not somebody -- he'll spin it, but he's not somebody who won't say something he doesn't believe.

CROWLEY: So what's the end game here? What are they trying to accomplish?

Is it to end the war in Iraq?

Is it to overturn the government in Iran?

Is it greasing the skids for a preemptive strike?

What are they doing there?

HERSH: That's a great question because I don't know. And, boy, do I wish -- I've been writing about Iran for about three years, almost constantly, in the New Yorker, sort of, this, you know, "Chicken Little, the sky is falling." And I sure wish I could be wrong about it.

But the end game is, as far as -- and I do have some access into some of the thinking, particularly in the vice president's office. They do not want -- Bush and Cheney do not want to leave Iran in place with a nuclear program, with, they believe, a nuclear weapons program. They simply don't believe the national intelligence estimate that came out late last year that said they haven't done anything in nuclear weapons since '03. They just don't believe it.

So they believe that their mission is to make sure that, before they get out of office next year, either Iran is attacked or it stops its weapons program.

I do believe that. I think this is another example of putting an awful lot of pressure on the Iranian government. There's been a dramatic increase in kinetic events and chaos inside of Iran. Almost every other day, there's another story in the Iranian press -- I write about this in the article, too -- about things blowing up, et cetera, et cetera.

It looks like things are falling apart, a little bit. And the central government certainly has more trouble.

And I think the goal of this operation, this incredible operation, with all this money -- and, by the way, it's the Democrats in Congress who basically looked the other way and said, take the money and run. They did not stop this money, the leadership that I'm talking about, the Democratic leadership.

So, basically, my guess is that -- I don't think we can safely say that any military action is off the table, no matter what happens. And that's -- as I say, I wish I'm going to be wrong about all that, but this is really, sort of, an amazing development.

CROWLEY: Absolutely. I want to read a graph out of your book because it goes to the oversight of the Democrats you just mentioned.

HERSH: Sure.

CROWLEY: This is from your book -- sorry -- from your article.

"'The oversight process has not kept pace -- it's been co-opted by the administration,' the person familiar with the contents of the findings said. 'The process is broken and this is dangerous stuff we're authorizing.'"

Tell me, first, what your sources say is so dangerous about this?

HERSH: The president has to give a finding on covert action, any action that's covert. In other words, when CIA goes in some place, if they get caught, there could be spies.

So he has to tell the Congress about it. And the military simply is -- the president, since 9/11, has decided anything we do militarily, we don't have to tell anybody in Congress about. That's all preparing the battlefield. That's the title of the piece.

And so what Congress gets told is something about CIA operations, and that's why they had a finding, but nothing about what the military is doing on the ground inside Iran.

And so the people in the Senate -- the House, particularly, the Defense Appropriations Subcommittee, Charlie Wilson's old subcommittee, we're talking about Congressman Obey, Congressman Murtha, some of the others are really concerned because they're approving programs about which they don't have the whole story, and they know it. And they don't know what to do about it. And it's a source of enormous tension.

The problem is it's also secret. Nobody wants to talk about it. Nobody can talk about it. It's a world that the White House controls because it's very top secret. The presidential finding that I'm writing about is a document you don't discuss on CNN. If you're the ambassador, you don't talk about it.

I understand Senator McConnell was here. And the senators are able to say -- those who know can say, "I can't talk about it."

So we in the public don't get much of a look. And for me, as a journalist, to write about this is difficult because, often, a lot of other journalists won't be able to make heads or tails of what I'm doing, because they can't simply find the people that will talk about.

CROWLEY: Right, absolutely.

I've got about 15 seconds. Can you give me, in a nutshell, why it's so dangerous?

Is it because it could prompt a war with Iran if they were to find these special-ops people?

HERSH: We have the special operations people, and they're great people. They're very loyal soldiers. They do what they're told, going around, killing people around the world without ambassadors knowing it, without the CIA station chiefs knowing it, without Congress knowing.

If that doesn't sound like -- you know, with this president, if that doesn't make people nervous, I don't know what else would, I can just tell you.

CROWLEY: Seymour Hersh, another blockbuster story, the New Yorker.

Thank you so much. You all ought to go out and get a copy. We will be right back.