The Nuclear Jihadist

by Douglas Frantz

  Tinner’s move to Malaysia presented both opportunities and obstacles for the CIA. He would be able to provide information about the status of the centrifuge manufacturing, but his knowledge of the ring’s broader activities would be more limited because Dubai remained the central transfer point for the increasing flow of equipment to Libya. When Mad Dog learned that Tinner was moving, he notified his supervisor in Vienna and began planning a long stay in Kuala Lumpur.

  Malaysian government authorities later claimed that both their inspectors and the legitimate employees of Scomi lacked the technical expertise to understand exactly what Tahir was producing at the plant. Despite the precision of the work and the use of imported parts and specialized high-strength aluminum, the authorities said the workers thought they were indeed making tubes for the oil and water-treatment industries.

  As the centrifuge factory was coming together, work in South Africa was progressing on the elaborate piping system. Johan Meyer had persuaded Tahir to provide him with a videotape taken inside Kahuta that showed a similar installation. Combined with the original drawings, the video helped Meyer visualize the two-story array of pipes, valves, and high-pressure tanks. As he reported his progress back to Tahir, Meyer received installments on the thirty-three-million-dollar contract. Meyer didn’t expect to finish until late 2002, but he was captivated by the complexity of the project and came to regard it as a work of art.

  For Khan, the dream of providing another Muslim country with a nuclear arsenal was tantalizingly within reach. Despite the odds and obstacles, he appeared to be on the verge of pulling off another miracle. By early 2002, dozens of shipments were finding their way to Libya, and work was under way on a pilot enrichment plant, where Libyan technicians could learn how to operate the larger facility. The pilot plant was being built in a nondescript, abandoned warehouse on the outskirts of Tripoli at a place called Al Hashan. Twenty Libyan technicians had already been trained by Tinner during extended stays in Dubai. In April 2002, the first of three small centrifuge cascades was ready for testing at Al Hashan. Libya had made the first real step toward the bomb.

  The centrifuge tests required a small supply of uranium hexafluoride, sales of which are highly regulated. In September 2000, Khan had managed to include two small cylinders in a large shipment of seventy-nine crates of centrifuge components from Kahuta to Tripoli. The shipment was carried by Shaheen Air International, the airline controlled by a retired Pakistani Air Force general. Mohammad Matuq Mohammad, the head of Libya’s nuclear program, had insisted from the beginning that Khan provide a far larger amount of the gas for additional tests until Libya completed its own plant to convert processed uranium ore into the gas, but Khan no longer had access to Kahuta’s stockpile of gas. Instead, Khan turned to the only other source he could think of, North Korea.

  Even after he was sacked, Khan’s nuclear trade with the North Korean regime had remained steady, and he continued to travel to Pyongyang to meet with nuclear scientists working on the secret enrichment program there. In February 2001, he arranged the shipment of large cylinders containing nearly two tons of uranium hexafluoride from North Korea to Dubai, where it was sent on to Libya. Instead of his usual barter arrangement, Khan paid for the shipment with money from Libya.

  By this time, the network had received millions of dollars from the Libyans. The proceeds were laundered through a series of bank accounts throughout Europe and the Middle East, with electronic wire transfers bouncing from bank to bank. Some accounts were held by front companies or straw men who collected a small fee for the use of their names; others were numbered accounts in Switzerland and Liechtenstein. In Khan’s case, his personal cut went to at least four separate bank accounts in four separate countries. The payment for the uranium hexafluoride was a good example of how the system worked. A Libyan bank wired $2 million to a Dubai account controlled by Khan. The payment, minus about $200,000 kept as commission by Khan, was then transferred to a North Korean bank in Dubai. The third bank sent the money to yet another financial institution in Macao, a region in the South China Sea with a reputation as a haven for drug runners, spies, and arms dealers and long used by North Korea to launder money. In this case, the money arrived in an account belonging to New Hap Hieng Investment Company, a North Korean government entity long accused by the United States of selling technology for chemical, biological, and nuclear weapons.

  CHAPTER 25

  DIPLOMATIC CHESS

  WASHINGTON WAS IN THE GRIP of a heat wave on August 14, 2002, when an Iranian exile named Alireza Jafarzadeh stepped to the podium at the National Press Club. Few reporters in the room knew Jafarzadeh or had heard of the organization he represented, the National Council of Resistance of Iran, but they soon realized this story would make headlines—Jafarzadeh was about to blow the lid off Iran’s secret nuclear program. “Today I am going to reveal to you top secret sites of the Iranian regime that they had succeeded to keep secret until today,” he said as the TV cameras rolled and a dozen reporters scribbled in notebooks. “One of these two top secret projects is in the city of Natanz. . . . The other one is Arak’s atomic facility.”

  Work at Arak and Natanz had been under way for some time, yet both projects had eluded detection by American spy satellites and other intelligence operations. Iranian authorities had selected the two locations carefully to conceal the nuclear work as long as possible. Each city was remote, and neither was associated with the country’s military-industrial complex or its supposedly minor civilian nuclear research. Jafarzadeh’s small exile group was exposing a well-kept secret, and its accusations were to reverberate in the months to come.

  Natanz is a small mountain town about two hundred miles south of Tehran, known for its bracing climate and fruit orchards. There, he said, the Iranians were digging two huge holes in the ground to house thousands of centrifuges to enrich uranium. The halls would be buried twenty-five feet below the surface and covered with eight and a half feet of concrete as protection against air attacks like the one that had knocked out Iraq’s Osirak reactor in 1981. Near Arak, a city of 500,000 people in western Iran best known for the weaving of fine Persian carpets, work was nearly complete on a heavy-water plant that could be used to support a reactor capable of producing weapons-grade plutonium. In addition to those major facilities, Jafarzadeh identified several front companies and smaller installations he said were involved in the clandestine weapons program. Most of the sites identified as part of the network were part of established research centers or military installations, but one of them was a mysterious outlier. Jafarzadeh said that centrifuge development had been carried out at a company called Kalaye Electric, a supposed clock manufacturer on the outskirts of Tehran.

  Jafarzadeh said the information had come from people inside Iran who were going public in hopes of discrediting and ultimately ousting the current regime. What he did not reveal was NCRI’s association with the People’s Mujahedin of Iran, an organization that had been designated as a terrorist group by the State Department since 1997. Even after that, however, NCRI was allowed to maintain a small office in Washington. Jafarzadeh built close ties with neoconservatives in the Bush administration and emerged as both the spokesman for NCRI and an Iran analyst for Fox News.

  Some of the details he provided that day eventually turned out to be slightly off. The enrichment halls at Natanz were going to be seventy-five feet underground, and the work at Arak had barely begun. But commercial satellite photos posted on the Internet the next day by a small but influential Washington think tank, the Institute for Science and International Security—run by former UN weapons inspector David Albright—confirmed that major work was under way at Natanz and that construction had started at Arak.

  At the headquarters of the IAEA, the allegations hit like a bombshell. Since the discovery of Saddam’s secret weapons program and the disclosure of North Korea’s hidden bomb project, the agency had been struggling to invigorate its inspection system along the lines suggested by Hans Blix, to avo
id the late discovery of yet another clandestine nuclear-weapons effort. The question raised by the new accusations about Iran was, Did the IAEA have the resources and ability to do just that?

  The discovery that Saddam had gotten perilously close to a bomb without the knowledge of the outside world had spurred a movement to provide new powers for the IAEA, and on May 15, 1997, the agency’s board had met in special session to approve a document known as the Additional Protocol, which embodied the proposals first made by Blix in 1991. Under its provisions, inspectors had the authority to visit any suspicious location on just twenty-four hours’ notice—too little time, it was hoped, for a country to cover up illegal nuclear activities. The protocol also gave the agency the authority to ask formal questions about inconsistencies or suspicions involving a country’s nuclear program, whether declared or not.

  The change was a big step in giving the agency’s investigative arm real enforcement authority, but in order for those powers to be effective, the culture had to be transformed, too. Blix and others had recognized that the IAEA needed to develop a new mind-set among its inspectors and other officials that relied on skepticism, not acceptance. But the agency is a large, labyrinthine bureaucracy, and change had been slow in coming. Toward the end of the 1990s, some senior officials realized that changing the mind-set of the existing inspectors was harder than simply looking for a new type of inspector. “In the past, they were just accountants,” explained Pierre Goldschmidt, who took over in 1999 as head of the agency’s safeguards division. “Now we require analytical minds, even a detective’s mind. We stress teamwork and a comprehensive view that looks for inconsistencies and anomalies that might signal something suspicious is going on.”

  Implementing the Additional Protocol meant persuading individual countries to sign the amendment, which also required ratification by the appropriate government bodies. In the case of the United States, the Clinton administration signed the protocol in June 1998 but did not submit it to the Republican-controlled Senate because of doubts that it would be ratified. The new inspections regime could be used only in countries that had ratified the protocol. But by the summer of 2002, only twenty-six of the 140 countries with safeguards agreements with the IAEA had approved the protocol. Australia and Canada were among them, but other signers were small countries with little or nothing in the way of nuclear programs. China was the only nuclear-weapons state that had ratified the agreement. Some in the United States and Russia objected that the inspections were too intrusive; France and Britain were not to ratify until 2004. Among the other countries that had not adopted the protocol was Iran.

  OLLI HEINONEN lived on the outskirts of Vienna. On August 15, a few hours after Jafarzadeh’s press conference in Washington, he was sitting down to breakfast when he opened the newspaper and saw an article describing the disclosures. He could scarcely believe what he read. As a senior official at the IAEA, he knew that inspections had not uncovered a hint of trouble with the Iranian program. Not a word about a plant being built in Natanz. Nothing about a heavy-water facility in Arak or a clock factory called Kalaye. Because Iran had signed the NPT and reached a safeguards agreement with the IAEA, it was obligated to report any nuclear work to the agency, yet none of this had come to Heinonen’s attention. Normally a self-contained man, he was fuming by the time he pulled into the garage beneath the IAEA headquarters and rushed to his office to get onto the Internet and track down a transcript of Jafarzadeh’s press conference.

  Heinonen had spent nearly twenty years at the IAEA. He had a doctorate in radiochemistry from the University of Helsinki and had worked as a researcher at Finland’s nuclear-research center before joining the IAEA in 1983, out of a commitment to curtailing proliferation. Thanks to a keen intellect and dogged determination, he had risen through the ranks and was now head of Division B, one of three groups within the safeguards department that monitored compliance with IAEA agreements worldwide. Heinonen was in his early fifties, with a stocky build and shock of reddish hair that often fell across his broad forehead. A typical Finn, he rarely showed emotion, sitting impassively through diatribes by aggrieved ambassadors or calmly mediating endless bureaucratic disputes within the agency. Often after the complainants departed, Heinonen let loose a wry joke about their performance that bent his colleagues double with laughter. That particular morning, however, Heinonen was in no mood for jokes. Iran was on his watch list, and he had been on many inspection trips to its declared nuclear-research sites in Tehran and Esfahan. He knew the country had the money, industrial infrastructure, and technical know-how to undertake something of the magnitude of building an atomic bomb, yet he had had no hint of a secret weapons program.

  The IAEA operates at a deliberate pace, even faced with what seemed to be an emergency. Mohamed ElBaradei, its sixty-year-old director general, was a respected Egyptian diplomat and law professor at New York University before succeeding Hans Blix at the helm of the agency in 1997. The son of a distinguished Cairo lawyer, ElBaradei had studied law at Cairo University before joining the country’s diplomatic service, with postings in Geneva and New York. While in New York, he earned a doctorate in international law and developed an addiction to the New York Knicks and the NBA. He joined the IAEA in 1984 and held a series of ever-higher positions before he was chosen as director general.

  Blix had begun transforming the IAEA into a more aggressive overseer, and ElBaradei had pursued that agenda with vigor. Still, he had to tread with caution to avoid antagonizing countries that felt the agency was moving too quickly, as well as those that feared it was going too slowly. His biggest worry was that nuclear weapons would fall into the hands of terrorists, but he saw communication and diplomacy as the most effective means of avoiding that catastrophe. “What I bring to the job is an understanding that a lot of these issues can only be resolved through dialogue,” he said in describing his role. “It’s like a small family. You will never solve your problem until you sit around the dining table and put your grievances on the table and find how to move forward. Some people equate that with being soft—that if you do not pound on the table and if you do not scream, then you are being soft. I think that is a total misconception.”

  The day after the Washington press conference about Iran, ElBaradei asked Heinonen to write a letter to the Iranian ambassador to the IAEA, Ali Akbar Salehi, seeking an official response to the accusations about a secret nuclear program. The Iranian’s response condemned the exile group, but it did not address the specifics of the accusations. ElBaradei then summoned Pierre Goldschmidt, Heinonen, and a half-dozen other senior officials to his office on the twenty-seventh floor of the IAEA headquarters. Seated around an oblong conference table, the group debated how to get to the bottom of the accusations. The threshold question was whether the information was accurate—the exile group obviously had its own agenda and was probably not above twisting the facts or even making them up. On the other hand, the satellite photos made clear that something big was under way at Natanz.

  ElBaradei was not a nuclear scientist, so he relied heavily on Heinonen to interpret the satellite photos and other information flowing into the agency about what Iran might be doing. ElBaradei and Heinonen had a strong friendship, dating to the early 1990s when they worked side-by-side in North Korea, and the director general trusted Heinonen’s judgment and restraint. The Finn contended that the satellite photos alone were cause for the agency to take the allegations seriously. Other information buttressed the notion that Iran was concealing major nuclear work. Kenneth Brill, the American ambassador to the IAEA, had told ElBaradei that American intelligence regarded the information from the exiles as credible, though Brill provided little in the way of evidence, a long-standing pattern in the relationship between the agency and the United States.

  The Americans shared intelligence with the IAEA when it suited their purpose and withheld information when they chose to do so. In this case, they were happy to point the finger at Iran, which was regarded by the Bush administrati
on as part of the so-called axis of evil. The American government was the biggest single contributor to the IAEA budget and loaned numerous experts to the agency, but Washington had been reluctant over the years to share much intelligence because the agency employed nuclear scientists and technicians from a number of countries that the United States suspected of harboring or even pursuing secret nuclear ambitions. In fact, neither the Americans nor the British had disclosed anything they knew about Khan’s network and its sales to Iran, North Korea, and Libya, leaving the agency in the dark as the CIA and MI6 tracked the network around the world.

  In July, just a month before the disclosures about Iran, the knowledge about Khan’s operation had been discussed by the heads of Britain’s intelligence agencies and other senior policymakers in secret session in London. The group had gathered to examine a report that concluded Khan was selling nuclear technology to several countries in the Middle East and that he was central to clandestine nuclear-weapons development in Libya. The report made clear that the Americans and British knew that Khan had moved his base of operations to Dubai and that his ring had set up a production plant in Malaysia. The CIA and MI6 had identified numerous suppliers, bank accounts, and transportation routes used by the network in what the report described as “the first case of a private enterprise offering a complete range of services to enable a customer to acquire highly enriched uranium for nuclear weapons.”