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The Associated Press says the former FBI agent was sent to Iran on an unauthorized spying mission for the CIA.
The US government has long maintained that Robert Levinson was a private citizen on a business trip to Iran when he went missing nearly seven years ago.
But an investigation by the Associated Press has revealed that the 65-year-old was actually on the payroll of the CIA, albeit unofficially, and was on an “intelligence gathering mission” when he vanished from the Iranian island of Kish in March 2007.
The Washington Post backed up the AP report's claims that Levinson was working for the CIA.
The intelligence agency told media it had “no comment” on the allegations.
Levinson, an ex-Federal Bureau of Investigation agent, was sent to the Islamic Republic by CIA analysts who had “no authority” to run spying operations, the AP said.
His job was to dig up information about the Iranian regime, according to its report.
After he disappeared and the rogue mission was discovered, three veteran CIA analysts were “forced out of the agency,” the AP said, and another seven were disciplined.
The CIA also paid the Levinson family $2.5 million, the Post cites former US intelligence officials as saying, the agency having concluded that "it was responsible for Levinson while he was in Iran."
"The AP first confirmed Levinson's CIA ties in 2010 and continued reporting to uncover more details. It agreed three times to delay publishing the story because the US government said it was pursuing promising leads to get him home," the AP said in its report.
"The AP is reporting the story now because, nearly seven years after his disappearance, those efforts have repeatedly come up empty. The government has not received any sign of life in nearly three years. Top US officials, meanwhile, say his captors almost certainly already know about his CIA association."
The AP report was based on documents and interviews with current and former US and foreign officials with knowledge of the search for Levinson.
US officials have no idea if Levinson, a father of seven who suffers from diabetes and high blood pressure, is alive or dead; the last proof of life came three years ago.
The FBI has offered a $1 million reward for information leading to Levinson’s safe return to US soil, and Washington has repeatedly asked Tehran for helping in finding the American citizen. Iran claims it has no idea where he is.
The Levinson family issued a statement this week beseeching the US government to do more to find their missing loved one.
"Bob is a courageous man who has dedicated himself, including risking his own life, in service to the US government. But the US government has failed to make saving this good man's life the priority it should be. There are those in the US government who have done their duty in their efforts to find Bob, but there are those who have not," the statement said.
"It is time for the US government to step up and take care of one of its own. After nearly seven ears, our family should not be struggling to get through each day without this wonderful, caring, man that we love so much."