The Spy Chief Who Was Caught by Accident

 

by Thomas S. Karat | Oct 9, 2026 | 1 Comment

In February 2003, the intelligence that August Hanning’s service had handed to Washington turned up in Colin Powell’s presentation to the United Nations Security Council, in the case for invading Iraq. On the morning of 6 October 2026, masked officers walked Hanning, now eighty, out of his house near Münster in handcuffs, on suspicion of attempted treason and espionage. The secrets that undid him had been sitting on a hard drive in that house, and some of them had been shared with Berlin by its allies. The United States is the first of those allies.

Among the roughly 2,000 classified files the former German intelligence chief is accused of keeping at home were reports from foreign partner services. They covered Iran’s nuclear program and the Russian military, and some carried the secret markings of allied agencies. The Federal Intelligence Service, the BND, is one of the main channels through which American intelligence moves into and out of Europe, which makes the files a retired spymaster is accused of trafficking, in part, Washington’s.

Hanning led the BND from 1998 to 2005 before moving to the Interior Ministry. Arrested alongside him in Bavaria was a second man, identified under German privacy rules only as Manfred D., once Hanning’s office manager and afterward chief of staff to a run of later BND presidents until this past March. Prosecutors say the two agreed in the spring of 2010 that Manfred D. would feed his former boss secret material for money, and that he did so until June 2022, handing over about 2,000 classified documents, many of them the briefings prepared for the weekly intelligence meeting at the Chancellery, where the heads of Germany’s security agencies trade assessments. Hanning was to profit from the material through the private consulting business he built after leaving the state. In at least one case he used it to prepare an analysis for a foreign intelligence service, and he kept up a long exchange with a second foreign officer.

What that costs the service’s partners is the part German officials are not trying to soften. A leak on this scale is treated inside the trade as an absolute catastrophe: a partner that shared its intelligence with the BND now has to assume this intelligence may have left the building, and the ordinary answer is to cut the supply. The United States is the largest of those partners. American intelligence reaches the BND, and flows back out of it, on the understanding that Berlin can hold it, and a former chief hoarding partner-service reports on a drive at home is that understanding coming apart. Inside the BND and allied services the fear that secrets were leaking through Hanning had circulated for years without proof. The proof arrived by accident.

German security officials call it a chance find. In September 2025 the Hamburg state criminal police searched Hanning’s home and offices for evidence in a case unrelated to espionage, the abduction of the children of the steakhouse heiress Christina Block. Sorting the seized material, investigators came upon the storage device holding recent top-secret BND files that Hanning had no right to possess. The federal prosecutor took the case in May 2026. The abduction trial is its own lurid business, and one strand of it reaches Hanning: the Hamburg prosecutor says a security firm called System 360, run by Hanning and a retired city police officer, had tried to seize the same children in 2022 and to smear their father with a planted drive of child-abuse images. Hanning denies it, and is reported to have accepted more than 100,000 euros for linking Block to a private Israeli intelligence company that carried out the job.

The intelligence that reached Powell came from a single man. Rafid Ahmed Alwan, an Iraqi who turned up at a Munich refugee center in 1999, told German intelligence a story about mobile biological-weapons laboratories in Iraq; the BND passed his reporting to the Americans in 2000 while refusing to certify it and declining to let the CIA near the man. The one American who met him, a Defense Intelligence Agency officer, came away doubting him, and the German service doubted him too. In December 2002 a cable reached CIA Director George Tenet carrying a letter from Hanning, confirming that the BND would not permit direct American access to the source. Powell built the biological half of his case on Curveball all the same. The laboratories did not exist, and the source was later written off as a fabricator. The partnership that fed Washington the mobile-lab story is the same one whose files a kidnapping warrant has now found on a retiree’s hard drive, and the official who signed the letter to Tenet is the man in the dock.

What Hanning did after government is where the case stops being about one man. Three months after leaving office he founded Hanning Consult, selling his knowledge and his contacts; its clients included Kazakhstan, and its business reached into Russia and China. He took the chair of Pluteos AG in Lucerne, which sold governments and companies geopolitical situation reports. He signed on with the British firm G3 as a senior adviser and later its regional head for Russia and the former Soviet republics, and he set up GSC4, a business-intelligence house working Russia, the former Soviet space, China, and the Arab world. A whole market runs this way, on former officers selling the access and the standing the state gave them, and the United States runs the largest version of it. The firm named in the Block affair belongs to the same market. CGI Group is staffed by former Israeli intelligence officers and headed by Yaakov Peri, who ran Israel’s Shin Bet from 1988 to 1994, the man Israeli media and the Hamburg court placed at the other end of Hanning’s introduction. When the buyer is a steakhouse heiress and the product is a team of operatives, the trade is called private security. When the buyer is a foreign government and the product is a classified assessment, the same trade is called treason.

Which government bought Hanning’s assessment is the question the coverage answered before the prosecutors did. The office has named no country, and says he kept active contact with two foreign services, both unnamed; the reporters who broke the story add that the analysis was not for Russia. Der Spiegel, citing unnamed sources, reported the recipient was an Azerbaijani intelligence operative, and the corroboration in public is a seat Hanning held on the board of a German-Azerbaijani lobby group. Azerbaijan rejects it as a “smear campaign.” Correctiv’s reporting points instead to the Russia and China ties in his consulting books, and officials told the Financial Times the case had no Russian dimension. Germany’s own government spokesman said the allegations, for now, remain allegations.

The gap between what the prosecutor has and what the headlines carry is where this becomes an American problem of a second kind. A domestic failure, a retired official who could not keep the state’s secrets out of his spare room, is being fitted with a foreign flag before the evidence is in, and a foreign flag turns a corruption story into a security emergency. The emergency is already being put to use. The BND is in the middle of the largest expansion of its powers in its history, reaching toward sabotage and a revived counterespionage arm, and its current president spent the days around the arrest warning of a coming armed clash with Russia. A scandal that exposes how little the secret state can hold becomes, in the retelling, the argument for giving it more secrecy and more confrontation, with Washington expected to match each step.

German lawmakers reached for the right words while missing the door they stood in. The lobbying and consulting of former officials of the state, said the Green parliamentarian Konstantin von Notz, is “a gateway for hostile intelligence services.” The Christian Democrat Roderich Kiesewetter called for tighter vetting of former public servants in security work. The oversight committee’s chair, Marc Henrichmann, warned that anyone who allied with the enemies of German democracy would be found out; Hanning was found out because a custody warrant met a hard drive. The gateway von Notz named was one his own government licensed, in four registered companies trading on a former president’s access and on the secrets a serving officer carried out to him.

Hanning remains in custody, his claim that he is being prosecuted unfairly set against the files on the drive. The scandal points somewhere other than Baku or Moscow. The intelligence partnership sold to the public as the thing that keeps them safe is the same one that sold them the Iraq War, and it cannot keep its own files out of a consultant’s house. The weeks ahead will be spent arguing for more of it. The industry that gave a retired spymaster something to sell, and a reason to keep the state’s secrets within reach of a buyer, will not be in the dock beside him.

Thomas Karat writes investigative work published at karat.substack.com and the Libertarian Institute, drawing on a corporate career and academic training as a behavior analyst to examine how institutions manufacture consent and influence.

https://original.antiwar.com/thomas_karat/2026/10/08/the-spy-chief-who-was-caught-by-accident/