(Marvin Joseph — The Washington Post)

John Dullahan, a 66-year-old Vietnam veteran and career Army officer, was stripped of his security clearance in 2009. Under a national security clause invoked by the Pentagon, he could not be provided with the information on the accusations that led to his termination, or attempt to contest the move under the normal appeals process.

Now, as part of a settlement, Dullahan will receive all back pay and benefits from the date of his termination, as well as $25,000 and attorney’s fees, according to his lawyer, Mark Zaid. Dullahan will formally retire from DIA at the end of the month.

The settlement does not restore Dullahan’s security clearance.

“I’m grateful for half-measures,” said Dullahan, who was born in Ireland and became a U.S. citizen in 1973. “I wanted my job back. I wanted my name cleared. And I will continue to fight this slander.”

Dullahan has already arranged to apply for a security clearance through a contractor, and if he is denied, he will probably sue, his lawyer said.

Dullahan was fired after apparently failing three polygraphs — each time, he believes, when he was asked if he had ever spied for the Soviet Union. He can’t be sure because the Pentagon said it would damage the national security to provide any reason for Dullahan’s firing, the first time in at least 15 years that it has used this provision of the law.

Dullahan denies any wrongdoing, and believes he may have failed because of nervousness during the unusually stringent polygraphs, which brought up an earlier, dismissed allegation of disloyalty.

In the 1980s, Dullahan served several tours in the Middle East as part of the U.N. Truce Supervision Organization, a multinational mission that also included Soviet officers. At the time, he was accused of inappropriate contact with the Soviets after he socialized with them on a couple of occasions. The charge was dismissed, but Dullahan’s wife, also a DIA official, believes he was scarred by the experience, and the memory of it affected his polygraph.

The polygraph was administered because Dullahan had been asked to participate in a classified program. He accepted, but the position was subject to an FBI-administered polygraph.

After he was fired, Dullahan appealed to the secretary of defense, his only option. In one of his last acts before stepping down, Robert M. Gates granted Dullahan’s appeal, writing that he was “not convinced that procedures prescribed in other provisions of law that authorize your termination could not have been invoked in your case.”

That changed the landscape, allowing the settlement, Zaid said. The attorney said it is still not clear why the Pentagon invoked the national security clause. He suspects Dullahan may have been a test case.

“Someone came down incredibly harsh to see if they could set a precedent,” said Zaid. “Could we utilize this new power we believe we now have without oversight. In the end, DIA did the right thing.”