Former chairman, joint chiefs of staff General Hugh Shelton attends the Symposium to mark the 33rd Anniversary of the Iranian Revolution at The Waldorf-Astoria on February 11, 2012.
Former top-ranking U.S. officials may have received payments from a notorious Iranian dissident group that is on the State Department list of terrorist groups, and then lobbied for it to be taken off the list, sources told NBC News.
Among those caught in the investigation of about 40 people and subpoenaed by the Treasury Department are former FBI Director Louis Freeh and the former Chairman of the Joints Chiefs of Staff, Gen. Hugh Shelton, the sources said.
The investigation is looking into whether the former officials received hundreds of thousands of dollars in speaking fees from the People's Mujahedin of Iran, or MEK, which would violate federal law which bars financial transactions with groups on the State Department's list.
When asked about the allegations, Shelton told NBC that he and the other officials were "pretty miffed."
"None of us involved in this would say a good word about anyone suspected of being a terrorist," he said.
He added that he supports MEK though, which he told NBC is a legitimate resistance group fighting to overthrow the government in Iran, a country he referred to as "America's number one enemy".
But the group, which found itself on the State Department's list after allegedly killing six Americans in the 1970s, carried out a series of bombings and assassinations against the Iranian regime in the 1980s and was also a big supporter of Iraqi dictator Saddam Hussein. After Hussein's death, they were accused of being a thorn in the side of Iraq's Shiite-dominated government as they tried to mend ties with Iran.
Sources told NBC that former government officials received fees of more than $30,000 a talk and were flown first class to Europe. The officials claimed that they were told the fees came from wealthy Americans or foreign supporters of the group — but not the group itself.
Many of the speaking arrangements were made through speaking booking firms, according to the report.
"This is about finding out where the money is coming from," an Obama administration official familiar with the probe said. "This has been a source of enormous concern for a long time now. You have to ask the question, whether this is a prima facie case of material support for terrorism."
Though the MEK has lobbied for years to get off of the State Department's list, experts say they were too dependent on the whims of their Paris-based leadership and are known to change strategies, motives and endgames without warning.
There's no guarantee, experts warned NBC, that they won't return to terrorism without warning.
"It's extraordinary that so many distinguished public servants would shill for a group that has American blood on its hands," one senior official told the network.
The subpoenas come only days after Foreign Policy magazine reported that the multimillion-dollar lobbying campaign on behalf of (and paid for by) the MEK has hurt an international effort to move the group from a secretive hideout on the Iraqi-Iranian border to a new home — to avoid a bloody clash with the Iraqi military.
The Iraqi military has entered the hideout two times before, resulting in bloody clashes.
The U.N. and State Department’s efforts have been made increasingly difficult as a result of the advocates, FP reported.
“This is hard enough without paid advocates making it worse,” one official told the magazine.