The showdown with Pervez was set for June 9, 1987, in the bar of Toronto’s Harbour Castle Hotel, overlooking Lake Ontario. Pervez and New hunkered down at a table, sipping Johnnie Walker whiskeys and discussing the transaction. As the negotiations dragged on, they moved upstairs to New’s room to make the final arrangements for price and delivery dates. Pervez insisted that Carpenter inflate the price to give him a kickback of $45,180. When New pretended to balk, Pervez sweetened the deal, promising to order eleven more shipments of steel, worth about two million dollars. He said he also wanted to buy beryllium, a compound strictly controlled because of its uses in increasing the explosive power of fissile material in atomic bombs.
Suddenly Pervez stopped, looked at New warily, and said, “You could be a spy.”
The Pakistani had shown no hesitation before, and New was taken aback at the thought of losing his quarry so close to the finish line. “They don’t hire spies who are bald-headed and have glasses,” the undercover agent replied. “They’re all James Bond with the broads, you know.”
Pervez was mollified and, presumably trying to make amends for any offense, told New, “The Kahuta client is ready.”
“It’s going to the Kahuta plant?” New repeated, emphasizing the disclosure for the videotape being made secretly by another agent in the next room. Pervez acknowledged the destination.
The initial transaction for the steel was being financed by a $447,450 letter of credit drawn on the Toronto headquarters of the Bank of Credit and Commerce International. Known as BCCI, the privately owned bank was playing a major role in financing Pakistan’s nuclear-procurement operation, using its branches worldwide to provide letters of credit and payments for the purchases.
BCCI’s founder was Agha Hasan Abedi, a Pakistani financier who had built the bank into a network throughout the Middle East, Europe, Africa, and North America. Among his partners in it were Kamal Adham, a former head of intelligence for Saudi Arabia, and Sheik Zayed bin Sultan al-Nahayan, the ruler of Abu Dhabi. Abedi also cultivated a close friendship with President Zia and contributed ten million dollars to a private scientific center named for Pakistani finance minister Ghulam Ishaq Khan and directed by A. Q. Khan. Among BCCI’s other clients were the CIA, terrorist Abu Nidal, the Colombian drug cartels, and an assortment of arms dealers and shady businessmen. Eventually, a money-laundering case in Florida toppled the entire institution, creating one of the biggest banking scandals in history.
In Toronto, the negotiations over the maraging steel concluded with an agreement that Pervez would travel to the manufacturing plant in Pennsylvania to inspect the material for the first shipment and receive his kickback in cash. He promised to bring along ul-Haq to inspect the steel. Barlow and the team were excited, anticipating the arrest of a big fish like ul-Haq and throwing a wrench into Pakistan’s progress. Before the trap could be sprung, however, they had to take a risky step. Two days before the takedown, Barlow alerted McGoldrick about the pending arrests. McGoldrick promised the information would be closely held. But the fears of a leak proved well-founded when Robert Peck, the deputy assistant secretary of state for Near East Affairs, sent a notice alerting the Pakistani government to the operation.
Ul-Haq was still in Europe, scheduled to fly to the United States the next day, when he was alerted to the sting. The less fortunate Pervez never got the word and arrived on schedule in Reading, where he was arrested in front of his wife and children, who had driven with him from Toronto. Ul-Haq’s failure to show was a major blow to the team, leaving its members without the main target and without the strongest link to the Pakistani government. Some of the damage was repaired when the arresting officers seized documents from Pervez that offered direct evidence that he was working for the government’s nuclear program, spelling out that the steel was for a military program and a nuclear plant. There was even a letter from ul-Haq urging Pervez not to forget that the purchase was in Pakistan’s “national interest.” As a result, the case was still seen as a victory, and Barlow was a hero within the CIA, praised by his superiors and nominated for the agency’s “exceptional accomplishment award,” one of its highest honors. “I’m famous, at least in this clandestine world,” Barlow told himself.
His moment in the limelight, however, was about to end badly.
THE SUMMER of 1987 was a time of trouble and change at the CIA. The previous year, a Lebanese magazine had disclosed that the Reagan administration had sold weapons to Iran in an attempt to win release of American hostages being held in Lebanon by Hezbollah, a terrorist organization aligned with Tehran. Money from the arms was earmarked for rebels trying to overthrow the elected Sandinista government in Nicaragua. The elaborate arrangement had been orchestrated by the National Security Council inside the White House, and it violated a number of laws, including a prohibition against trade with Iran. The resulting scandal, known as Iran-Contra, implicated numerous administration figures, including CIA boss William Casey, who had died prior to testifying before a congressional committee. Casey had been replaced at the agency by William Webster, a retired federal judge with an unblemished reputation, whose chief task was to restore the integrity of the CIA.
Webster’s resolve faced one of its first tests after the arrest of Pervez. Congressman Solarz demanded a top-secret briefing for his House Foreign Affairs Subcommittee from the CIA and the State Department, on the implications of the case. He suspected strongly that Pakistan had violated his amendment. When Casey was in charge of the CIA, the only person authorized to brief Congress on Pakistan’s nuclear program had been David Einsel, a retired Army major general who had been brought into the intelligence community as counterproliferation chief by Casey and shared the director’s unwavering commitment to defeating the Soviets in Afghanistan, no matter what the cost. In a highly unusual departure from procedure, Einsel always provided the briefings unaccompanied by anyone else from the agency and was never required to clear his talking points with anyone at the agency or elsewhere in the intelligence community. Under the newly arrived Webster, Einsel no longer had free rein, so when the Solarz request got to Langley, Barlow was chosen to represent the CIA and accompany the general to the hearing. Barlow followed procedure, spending days getting approval for his testimony and talking points from his superiors at the CIA as well as from the State Department and other agencies. He sought to ensure that any comments he made reflected the latest information about Pakistan’s illegal purchases while protecting the classified aspects of the cases. “I had never had anything to do with the U.S. Congress,” said Barlow. “But I wasn’t worried. The general counsel at the CIA said, ‘Just tell the truth.’ That’s what I planned to do.”
Barlow and Einsel were scheduled to testify in the secure briefing room on the House side of the Capitol, and as they walked down the hallway Barlow was surprised to see a mob of onlookers outside another hearing room. Someone said Marine Lieutenant Colonel Oliver North from the National Security Council was testifying before the Tower Commission, which was investigating the Iran-Contra affair.
Barlow and Einsel were accompanied by a woman from the CIA’s congressional liaison office who offered only a first name, Michelle. The three of them were escorted to a long table, and they sat down as about a dozen congressmen, along with their aides, filed into the room and took seats at the dais. Barlow noticed that the atmosphere was tense, and he attributed it to the recent front-page headlines about the Pervez case, which made Congress look foolish for continuing aid to Pakistan despite its flouting of American laws. But Barlow had a deeper concern: Just before leaving for Capitol Hill that day, his boss, Dick Kerr, had voiced concern that Einsel had been working with people at the State Department to keep the full story of Pakistan’s procurement activities from Congress.
Solarz didn’t waste time getting to the point, asking the witnesses about the arrest of Pervez and the involvement of ul-Haq in the steel case. “Are these people agents of the government of Pakistan?” he demanded.
“Well, we
don’t really know that,” Einsel replied.
Barlow’s head swiveled abruptly. He couldn’t have heard correctly, and he looked quizzically at his colleague. Long before the Pervez case, the CIA had a thick file on ul-Haq, and everyone involved in counterproliferation at the CIA, from Einsel on down, knew that ul-Haq and Pervez were working on behalf of Khan’s laboratory.
“Have there been any other cases involving agents of Pakistan?” asked Solarz.
“No,” said Einsel.
Barlow was shocked by the outright lie. Trying to avoid eye contact with Solarz, he stared down at his talking points, which listed many other Pakistani attempts to violate American export laws. Finally, he shook his head vigorously to display his opposition to what Einsel was saying. Eventually the questioning turned to Barlow, who was still shaken by Einsel’s testimony. Referring to his notes, Barlow said emphatically that the CIA and other agencies had plenty of evidence that Pervez and many others had been trying to buy American nuclear technology on behalf of the government of Pakistan. Furthermore, he said, there was plenty of evidence that ul-Haq worked directly for the Pakistani procurement network.
Einsel interrupted, trying to contain his anger as he said, “Richard is only repeating unreliable rumors.”
“How many cases have there been?” one of the congressmen asked Barlow.
“Scores,” he blurted out, before Einsel cut him off.
The CIA liaison leaned over to Barlow and snapped at him in a harsh whisper: “This is Einsel’s show. Let him run it.”
The contradictory testimony from the CIA officials surprised everyone in the room, including Robert Peck, the State Department official, who was sitting in the back of the hearing room. He rushed out, grabbed another government official outside the room, and told him: “You’ve got to testify. That S.O.B. Barlow is telling them all sorts of things, and you’ve got to straighten it out.” The official protested that he had not been cleared to attend the briefing and could not repair the damage.
The ride back to CIA headquarters passed in stony silence. By the time Einsel and Barlow arrived, word had spread about the testimony, and congressional staffers had been on the telephone to the CIA demanding an explanation for the glaring discrepancies. The episode exposed a long-standing division within the CIA. Einsel and others demanded that Barlow be fired. But the young analyst had his defenders among those who had been reluctant to conceal information from Congress, particularly given the continued investigation into Iran-Contra. Before taking any disciplinary action, Barlow’s division chief said he would wait for the transcript of the hearing, which would take several days.
Barlow’s honesty threatened to pull down the curtain on the charade that had enabled the administration to continue funneling aid to Pakistan and the Afghan guerrillas. He had gone from hero to goat overnight. An agency tainted by Iran-Contra had no appetite for another scandal, accidental or not. Walking the halls the day after his testimony, Barlow glanced through the open door of an office occupied by analysts involved in the Afghan war and saw his name drawn inside a “No Smoking” sign—a circle with a line through it. Later that same day, Robert Peck telephoned from the State Department and accused Barlow of being a traitor.
When the hearing transcript arrived, a review showed no justification for firing Barlow. His immediate supervisor said Barlow had followed orders and provided Congress with nothing beyond his authorized talking points. The controversy would not die, however, and others within the agency and the State Department were adamant that Barlow had gone too far. An informal memo was circulated among the agencies that were part of the nonproliferation working group outlining changes to his duties, which included removing Pakistan from his portfolio. Barlow was transferred temporarily to the Justice Department as the CIA expert for the Pervez and Mandel prosecutions.
Alarmed and confused by conflicting signals, Barlow turned to Dick Kerr, who had spotted his talents as an analyst when he first arrived and remained a mentor. Kerr told him to keep doing what he had been doing, but Barlow couldn’t escape the sense that his days at the CIA were numbered. Though Webster gave him an award for the Pervez case, Barlow felt like he was being made a scapegoat because the truth had been withheld from Congress for years. The pressure took a toll on Barlow’s personal life, too. He and Cindy, who had recently joined the CIA herself, began to argue. He considered leaving the agency to save his marriage. Customs had offered him a job chasing bad guys, something that seemed black-and-white compared with the troubling grays of the CIA. In the end, however, Barlow decided that he would stick it out because he had done nothing wrong.
On December 17, Pervez was convicted of conspiracy to export maraging steel and beryllium to Pakistan. The conviction got headlines in most major newspapers, including The Washington Post and The New York Times. Members of Congress could not have missed the verdict or misunderstood its significance. Yet the day after the jury’s decision, a congressional conference committee took a contradictory step and approved legislation providing another $480 million in foreign aid to Pakistan. But the conviction could not be ignored, and the next month President Reagan invoked the Solarz amendment for the first time, acknowledging that he had been forced to do so because of the Pervez conviction. Still, Reagan immediately waived the sanctions, declaring that it was in the national interest for military and financial assistance to continue flowing to Pakistan.
CHAPTER 14
MAN OF THE YEAR
KHAN RESEARCH LABORATORIES had evolved into a nuclear city-state, with thousands of employees who could take advantage of private schools, hospitals, and a world-class cricket field. A promotional video for KRL boasted that the lab’s cricket team was “on the verge of improvement.” Khan presided like a benevolent dictator, micromanaging details one minute and passing out thousands of dollars in cash bonus payments the next. The blank check he had negotiated years earlier with Bhutto was still good, and he had become wealthy not from his meager government salary but from kickbacks that he skimmed routinely from purchases for Kahuta. His take was never excessive enough to draw attention; it was just an accepted part of doing business in a country that was corrupt to its core.
The scientific accomplishments at Kahuta were little short of a miracle. While advanced countries had struggled for decades to master uranium enrichment, Pakistan accomplished the task in a relatively brief period, using stolen designs and black-market technology. The dramatic results were not so much due to Khan’s brilliance as a scientist as they were testament to his skill in assembling the technology and attracting the teams of technicians and engineers to make it work. By the mid-1980s, Kahuta had expanded to cover more than a dozen buildings. Huge halls housed thousands of centrifuges linked by elaborate piping and vacuum systems courtesy of loose regulations in Germany, Switzerland, and other industrialized countries. Gleaming four-story research laboratories contained the latest sophisticated machinery sold by Swiss and Dutch companies. Radioactive “hot zones” were built four stories underground to guard against enemy attack. No one thought Kahuta’s massive footprint in the isolated area had escaped the spy satellites, and the location was so well-known that local bus drivers referred to the stop as the bomb factory.
Near the end of 1986, India initiated the largest military exercise of its modern history in the desert area of Rajasthan, mobilizing four hundred thousand troops and more than one thousand armored vehicles just one hundred miles from the Pakistani border. General Krishnaswami Sundarji, the aggressive new Indian army leader, called it Operation Brass Tacks, but for those on the Pakistani side of the border, it seemed more like Armageddon. Zia sent almost the entire Pakistani Army racing to the border, and by the middle of January two armies faced each other within firing range, and the threat of the world’s first all-out nuclear war loomed large.
In Washington, the standoff created a sense of panic, fueled by intelligence reports that Sundarji was preparing to send his forces sweeping across the border, an invasion that Pakistan’s
smaller forces stood no chance of stopping and would destabilize the region. Backed into a corner, Zia’s only chance seemed to be the threat of a counterattack using nuclear weapons. For the threat to be credible in Delhi, however, Zia had to let the Indians know that he had a nuclear capability, so once again the intelligence agency turned to Khan.
On January 28, a Pakistani journalist named Mushahid Hussain arrived at Khan’s house, accompanied by an Indian journalist, Kuldip Nayar. Khan greeted them with a white Australian parrot on his shoulder and a cat at his feet. As the houseman served tea to his guests, Khan began speaking about Pakistan’s nuclear program, boasting that Kahuta had produced highly enriched uranium and that other Pakistani scientists had mastered plutonium reprocessing. Pakistan, Khan asserted, had the bomb, and he wanted the world to know. “What the CIA has been saying about our possessing the bomb is correct and so is the speculation of some foreign newspapers,” Khan told the Indian journalist. Khan added a blunt warning: “Nobody can undo Pakistan or take us for granted. We are here to stay, and let it be clear that we shall use the bomb if our existence is threatened.”
Nayar left Khan’s house with a scoop of international significance. Surprisingly, he had difficulty finding an outlet for his blockbuster. He wanted to publish the story in the West for maximum impact, fearing it would be dismissed as propaganda if it appeared first in the Indian press. After he was turned down at several publications, the respected London Observer accepted Nayar’s story. On March 1, The Observer published a lengthy article on its front page recounting the interview and quoting Khan. Diplomatic maneuvers ended Operation Brass Tacks without incident a few weeks earlier, but the article caused a sensation. The Reagan administration was deeply embarrassed and angry. Ignoring intelligence about the extent of Pakistan’s nuclear program was one thing, but it was another matter when a Pakistani scientist boasted about it in the international press. Indian prime minister Rajiv Gandhi criticized the United States for allowing Pakistan to develop nuclear weapons while continuing to provide military and financial assistance to the Zia regime.
The Nuclear Jihadist: The True Story of the Man Who Sold the World's Most Dangerous Secrets...And How We Could Have Stopped Him Page 18