In June, Hezbollah announced that it had captured two, perhaps three, CIA spies who had infiltrated its organization. Last week, the story finally made headlines in the U.S. press. According to some former U.S. officials, Hezbollah may have identified as many as a dozen CIA informants within its organization.This is only the agency’s latest setback at the hands of a terrorist organization. In December 2009, an al-Qaida suicide bomber killed seven CIA officers at an American compound in Afghanistan. In April 1983, a Hezbollah car bomb destroyed the U.S. embassy in Beirut, killing 60 people, including 17 Americans, eight of whom were CIA employees. Given the agency’s track record, very few intelligence and Middle East experts were surprised by last week’s revelation that the CIA had been handed another loss in the region.But the analysts have gotten it wrong on the bottom line. Though most experts and commentators are making this out to be bad for the CIA—and many current and former U.S. officials believe it is—it’s actually Hezbollah that comes out the big loser.Hezbollah’s entire prestige is built on the idea that it is a highly disciplined organization that is nearly impossible to infiltrate. Indeed, Hezbollah General Secretary Hassan Nasrallah’s June speech announcing that Hezbollah had rolled up CIA assets was the party’s first public admission that it’d been compromised by hostile services. Hezbollah, said Nasrallah, had the “courage to confront the truth.”The truth is that no matter how many American spies Hezbollah ultimately captured, being infiltrated by a hostile clandestine service is evidence of weakness. Moreover, as the Cold War showed, uncovering moles may result in tighter security measures, but the fact that they went unnoticed in the first place almost invariably demoralizes any organization built on loyalty and secrecy. In the 1960s and ’70s, paranoia crippled the CIA’s head of counterintelligence, James Jesus Angleton, after he became convinced that the agency had been penetrated by Soviet agents. In Hezbollah’s case, the damage will likely be worse, because this incident exposes the utter falsehood of the party of God’s divinely fashioned self-mythology.Nonetheless, Hezbollah officials are putting up a good front. “The resistance blinded American intelligence eyes,” one Hezbollah member of Lebanese parliament said last week. Perhaps he’s right—even as there are plenty of good reasons for the American intelligence community to encourage Hezbollah to think it bested the CIA. But contrary to its reputation, Hezbollah may be more vulnerable to hostile clandestine services than any organization in the history of espionage. Hassan Nasrallah certainly thinks so. Unique among world leaders, Nasrallah lives in hiding. He has spent the last five years since the end of the party’s 2006 war with Israel bunkered underground because he fears his organization is so porous that the Israelis have a good shot at assassinating him.Other recent intelligence triumphs against Hezbollah include Israel destroying most of the party’s long- and medium-range missiles within the first few hours of the 2006 war. Perhaps most spectacularly, Hezbollah’s legendary commander, Imad Mugniyeh, was assassinated in February 2008 in the middle of Damascus. Then there was an Israeli spy ring that penetrated Hezbollah. And even though more than 100 people have been detained by Hezbollah and arrested by Lebanese security forces for espionage since April 2009, things keep blowing up—literally—in Hezbollah strongholds. Maybe the blast last week at a Hezbollah arms depot in Tyre was just an accident. Or perhaps it was a timely reminder that there are plenty of hostile assets still operating successfully in some of Hezbollah’s most sensitive areas.It is best, then, to treat Hezbollah’s Spartan reputation with a grain of salt. Unfortunately, many Western experts legitimize the party’s propaganda. For instance, Hezbollah leadership denied for many years that Mughniyeh had any official relationship to the organization. It was bad enough that researchers and journalists swallowed the party’s line. But even after Hezbollah buried Mughniyeh with full honors—not merely as a Hezbollah martyr, but as a pillar of the party’s revered leadership—regional experts never stopped to wonder: If Hezbollah lied about that, maybe they were lying about other things as well.Obviously Hezbollah, like all security and intelligence institutions, dissimulates. What’s different about Hezbollah is that its fictions are the foundation of a self-image that touches not only on earthly matters, but on heavenly ones as well. The CIA is the intelligence service of a regular state; it is designed and ruled by human beings and therefore imperfect in its very nature. Hezbollah, however, is not a regular political organization, but the party of God. The arms of the resistance are sacred, entrusted with the duty of liberating Jerusalem, and its victories, like the 2006 war, are divine. But as it turns out, Hezbollah is not divine. It’s in fact quite flawed. And so the CIA story comes as another blow in a series of shocks to the Islamic resistance’s prestige.Only credulous Western media sources believe that Hezbollah won a “divine victory” over Israel in 2006. The Shiite community in southern Lebanon knows better, which is why tens of thousands of them tried to flee when a rocket was fired from their area during the middle of Cast Lead in 2008-09. Even Hezbollah knows it is deterred, which is why the border with Israel has been relatively quiet since then.On the domestic front, Hezbollah isn’t faring much better. In 2009, a financier close to the party and nicknamed the Lebanese Madoff was found to have stolen more than half a billion dollars from the Shiite community. Hezbollah’s May 2008 attack on Sunni neighborhoods in Beirut and on Druze regions in the mountains sullied the resistance—through the use of weapons that, according to Hezbollah mythology, are only to be used against the Zionist invaders, not fellow Lebanese.Even more significantly, Hezbollah has been named in the assassination of former Lebanese Prime Minister Rafik Hariri. In August, the Special Tribunal for Lebanon indicted four Hezbollah operatives, including two of Mughniyeh’s brothers-in-law, for their role in the killing. In other words, the party of God stands accused of murdering one of the Middle East’s major Sunni leaders, which puts Hezbollah in a dangerous position with its Sunni neighbors inside Lebanon and around the region. It certainly doesn’t help the party’s reputation that its Syrian patron, President Bashar al-Assad, has been slaughtering members of the Sunni-majority uprising in neighboring Syria.Without Assad, Hezbollah will lose its supply lines. Even with Assad fighting to survive, circumstances are trying for Hezbollah. In the eyes of the regional Sunni majority, the regime in Damascus and Hezbollah are no longer Arabs at war with Israel—they are minorities, killing fellow Arabs on behalf of the Iranians.It’s true the CIA has made plenty of mistakes in Beirut over the last several decades, and the U.S. intelligence community may have blundered badly in this instance, too. And yet no one knows exactly the parameters of the game now under way in Lebanon, where a number of regional and international actors—including, among others, Syria, Iran, Saudi Arabia, France, Israel, and the United States—all have a stake in the outcome. All we know for certain is that the timing is bad for Hezbollah, divine no more.Lee Smith is the author of The Consequences of Syria.