The British press is abuzz over reports that “U.S. intelligence agencies” monitored the phone calls of Princess Diana in the months leading up to her death. According to the Evening Standard, the wiretapping operation was conducted without the permission of British security agencies, and continued up until the night that Diana died in a Paris car crash. The Standard’s sister paper, the Daily Mail, claims that American intelligence agencies have “a number” of files on Diana and her closest associates, classified at both the secret and top secret levels. Those reports cannot be released because it would cause “exceptionally grave damage” to national security.”

Revelations about the alleged surveillance operation were leaked just days before release of an official report into Diana’s death, conducted by Lord Stevens, former Commissioner of London’s Metropolitan Police. The Stevens report is expected to conclude that Diana, her boyfriend Dodi Fayed and their driver, Henri Paul, died as a result of injuries sustained in that car crash on 31 August 1997. Lord Stevens also notes that Mr. Paul’s drunken state was a significant factor in the fatal accident; at the time of the wreck, Paul’s blood alcohol level was more than three times the French standard for intoxication.

But reports about wire-tapping and spy agencies will renew speculation about conspiracy theories about Diana’s death. Mr. Fayed’s father, Egyptian business tycoon Mohammed Fayed, has long maintained that the accident was part of a conspiracy between U.S. intelligence agencies and their British counterparts. Despite the wiretapping revelations in the Stevens’ report, support for those theories remains weak. Mr. Fayed has an interest in shifting the blame to other parties, since Mr. Paul was on his payroll at the time of the crash. Interestingly enough, Henri Paul was also in the employ of a French intelligence service, but that’s a scandal for another time.

As far as the wiretapping goes, it has all the trappings of a cooperative venture between U.S. intelligence and its British partners. According to the Standard, Princess Diana first attracted the interest of our spy agencies in 1997, amid plans to vacation at the Hamptons estate of billionaire Teddy Forstmann. Because the trip also included her sons, the planned visit had to be approved by British security services–which rejected the proposal, citing potential threats in the U.S. or potential security problems at Mr. Forstmann’s home. Rejection of the Forstmann visit prompted Diana to accept an invitation from Dodi Fayed, which put her in Paris on that fateful August day.

The Standard reports that it was Diana’s associates–and not the princess herself–that attracted the attention of U.S. intelligence. But it’s not exactly clear what prompted the wire taps, who approved them, and how the operation was carried out. British press accounts indicate that conversations between Mr. Forstmann and Princess Diana were monitored for several weeks in 1997. Forstmann, a controversial Wall Street dealmaker, was reportedly Diana’s boyfriend at the time. But the surveillance apparently continued after that relationship cooled, suggesting that other individuals may have been the target(s).

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But let’s backtrack for a moment. If interest in Mr. Forstmann prompted the original wire-taps, then there ought to be some sort of legal “paper trail,” since (a) He is an American citizen; (b) he was residing in the U.S. at the time of the operation, and (c) such operations normally require probable cause, and the prior approval of a federal judge. So far, even redacted court records for a wire tap have not emerged. Mr. Forstmann was eventually sued in Connecticut, accused of violating a contract with the state, which had invested money in one of his deals. However, those charges emerged long after his relationship with Diana, and there are no records of any court-approved wiretaps in association with the Connecticut case, which was settled in 2004.

As for the elder Mr. Fayed (or al-Fayed, as he styles himself), there’s an even longer history of deal-making, including a lengthy association with his former brother-in-law, Saudi arms dealer Adnan Khashoggi. Based on that history, the British government has long denied his applications for citizenship, claiming that he is not of good character. Yet despite those concerns, there appears to be little–at least at first blush–that would attract the interest of the U.S. intelligence community. Indeed, Fayed’s involvement with Khashoggi largely ended when he divorced his first wife and most of his recent deals (at least the “known” transactions) have been aimed at expanding his British portfolio.

Which brings us back to the original target of the surveillance operation and who was behind it. At least on the surface, the U.S. intelligence community had little reason to monitor Princess Diana and her jet-setting peers in the summer of 1997. On the other hand, there was considerable interest in her activities (and untimely passing) within the British government and the royal family, as dramatized in the recent film The Queen. So, if the Brits were concerned about keep tabs on a troublesome princess, how to do it without violating their own laws? Why, let the Americans do it. Or the Aussies. Or the Canadians.

Most of you have probably heard of an intelligence-sharing program called Echelon, supposedly a joint effort of the U.S. National Security Agency (NSA) and its Anglo-Saxon partners. At this point, we’ll repeat the standard disclaimer; officially, the agency won’t say whether the program exists, and has denied its existence in the past. But a number of organizations are convinced that it is in operation, including the European parliament, which issued a lengthy report on Echelon back in 2001. A more recent analysis of how the program might work can be found here.

If this arrangement exists (nod, nod; wink wink), it would have been relatively easy for the U.K. intelligence establishment to ask its foreign partners to keep an eye on Diana. Having the Americans, Australians or Canadians run the operation would allow the British to get the information they desired (after requisite sanitization by a “foreign” service) while complying with their own surveillance laws. Better yet, if the effort was ever compromised, it could be blamed on someone else (in this case, the Americans), while the British spooks keep their knickers clean.

One more observation: British investigators (and their press) are quick to note that MI5 and MI6 (the U.K.’s counter-intelligence and external intelligence services, respectively) had no knowledge of the operation. But no mention is made of GCHQ, Britain’s SIGINT organization, which works closely with its American, Australian and Canadian counterparts. If there is a U.K. connection to this operation–and I believe there almost certainly is–then, that linkage would most likely run through GCHQ, and not MI5 or MI6. By focusing on those agencies–and not CGHQ–the Stevens inquiry seems to have hit upon an ideal “official” solution. Point out the obvious (her driver was too drunk to get behind the wheel), tantalize the public with hints of a spy operation (that can be blamed on someone else), and ignore potential connections that might lead back to the British establishment.


Addendum: The term “exceptionally grave damage” is used to describe the inadvertent disclosure of Top Secret/SCI information. In the case of the Diana files, this would tend to suggest a SIGINT operation, versus a law enforcement wiretap. But when you consider the motive for such an effort, the trail still points toward London; not Washington, Ottawa or Canberra.

Additionally, Vox Popoli connects all the Diana dots and manages to tie everything together. Makes sense to me.

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