The government is accusing a one-time journalist and Congressional aide of secretly becoming a paid Iraqi intelligence agent before trying to influence her distant cousin -- the White House chief of staff -- on U.S. policy.

Charges brought Thursday by federal prosecutors in Manhattan against 41-year-old Susan Lindauer (searchhinted at Hollywood-style espionage with packages left in what the prosecutor's office described as prearranged "dead drop" operations in Baltimore.

But the defendant told WBAL-TV outside the Baltimore FBI office that prosecutors were mistaken in charging her with conspiring to act as an unregistered agent of the Iraqi Intelligence Service (searchand with engaging in prohibited financial transactions with the Iraqi government.

"I'm an anti-war activist and I'm innocent," she said after her arrest in her hometown of Takoma Park, Md. "I did more to stop terrorism in this country than anybody else. I have done good things for this country. I worked to get weapons inspectors back to Iraq when everyone else said it was impossible."

In court, Lindauer was relaxed and smiling as she faced charges that carry a potential penalty of 25 years in prison. She declined to speak afterward, as did two court-appointed defense lawyers.

She was released to a halfway house in Baltimore, where U.S. Magistrate Judge Susan Gauvey ordered a psychiatric evaluation and said she can be released as soon as bond is posted for her $500,000 bail.

The indictment said she accepted $10,000 for working for the Iraqi Intelligence Service from 1999 to 2002, including payments for lodging at the Al-Rashid Hotel in Baghdad and expenses during meetings in New York City with Iraqi agents.

The government portrayed the agency as a spy nest responsible for foreign intelligence collection, counterintelligence, covert actions and terrorist operations including the attempted assassination of former President Bush.

The indictment makes no mention of Lindauer's congressional staff work. She was not directly charged with espionage.

According to the indictment, Lindauer delivered a letter "to the home of a United States government official" on Jan. 8, 2003, in which she described her access to members of dictator Saddam Hussein's regime "in an unsuccessful attempt to influence United States policy."

The U.S. official was not identified. But a government official, speaking on condition on anonymity, said the recipient of the letter was White House Chief of Staff Andrew Card (search), a distant cousin of Lindauer.

White House spokesman Scott McClellan said that the last time Card recalls seeing or talking to Lindauer was during January 2001 inaugural events. McClellan said the FBI interviewed Card about his contact with Lindauer and that Card cooperated fully.

Card told the FBI that Lindauer had tried to contact him on behalf of the former regime several times.

The indictment did not specify a motive.

The arrest came as a surprise in Washington, where Lindauer had a long history as a journalist and a political aide.

She worked at Fortune, U.S. News & World Report and the Seattle Post-Intelligencer before going into politics. Her father, John, was the Republican nominee for governor of Alaska in 1998.

She worked for Rep. Peter DeFazio, D-Ore., in 1993 and Rep. Ron Wyden, D-Ore., in 1994. She joined the office of Sen. Carol Moseley Braun, D-Ill., as press secretary in 1996. In 2002, she worked for Rep. Zoe Lofgren, D-Calif.

In a release, Lofgren said she was "shocked to learn" of the arrest and that she had no further contact with Lindauer since a two-month work stint ended in May 2002.

"To my knowledge, this former employee had no access to sensitive information. Obviously, I had no reason to think that she was involved in this alleged activity," Lofgren said.

The indictment stems from a series of encounters and exchanges in recent years.

The government said Lindauer returned in March 2002 from a trip to Iraq with $5,000 in cash received from Iraqi agents, breaking a law prohibiting transactions with a government that sponsors terrorism.

Lindauer's work allegedly continued through last month, when she maintained contact with an FBI agent posing as a Libyan intelligence service operative who wanted to support resistance groups in postwar Iraq.

The indictment said she met the agent last July in Baltimore, "and discussed the need for plans and foreign resources to support resistance groups operating within Iraq." Acting on the agent's orders, Lindauer left documents at a spot in Takoma Park twice last August, the indictment said.

Lindauer's father owned newspapers in Alaska. After his defeat in the governor's race, he pleaded no contest to two charges related to his campaign finances. He received probation and a fine.