A High-Risk Nuclear Stakeout

Nuclear warhead plans that Pakistani scientist Abdul Qadeer Khan sold to Libya were more complete and detailed than previously disclosed, raising new concerns about the cost of Washington’s watch-and-wait policy before Khan and his global black market were shut down last year.

Two Western nuclear weapons specialists who have examined the top-secret designs say the hundreds of pages of engineering drawings and handwritten notes provide an excellent starting point for anyone trying to develop an effective atomic warhead.

“This involved the spread of very sensitive nuclear knowledge, and it is the most serious form of proliferation,” one of the specialists said. Both described the designs on condition that their names be withheld because the plans are classified.

The sale of the plans is particularly troubling to some investigators because the transaction occurred at least 18 months after U.S. and British intelligence agencies concluded that Khan was running an international nuclear smuggling ring and identified Libya as a suspected customer, according to U.S. officials and a British government assessment.

Interviews with current and former government officials and intelligence agents and outside experts in Washington, Europe and the Middle East reveal a lengthy pattern of watching and waiting when it came to Khan and his illicit network.

The trail dated back more than 20 years as Khan went from a secretive procurer of technology for Pakistan’s atomic weapons program, which he headed, to history’s biggest independent seller of nuclear weapons equipment and expertise.

For most of those years, Khan’s primary customers were Iran and North Korea. In 2002, President Bush said the countries were part of an “axis of evil,” in part because of nuclear programs nourished by Khan and his network.

Despite knowing at least the broad outlines of Khan’s activities, American intelligence agencies regularly objected to shutting down his operations. And policymakers in Washington repeatedly prioritized other strategic goals over stopping him, according to current and former officials.

Some officials said that even as the picture of the threat posed by Khan’s operation got clearer and bigger in 2000 and 2001, the intelligence was too limited to act on.

Other officials said the CIA and the National Security Agency, which eavesdropped on Khan’s communications, were so addicted to gathering information and so worried about compromising their electronic sources that they rebuffed efforts to roll up the operation for years.

“We could have stopped the Khan network, as we knew it, at any time,” said Robert J. Einhorn, a top counter-proliferation official at the State Department from 1991 to August 2001. “The debate was, do you stop it now or do you watch it and understand it better so that you are in a stronger position to pull it up by the roots later? The case for waiting prevailed.”

Current and former Bush administration officials say the patience paid off. They say that in late 2003, combined U.S. and British intelligence on Khan finally yielded enough information to persuade Libyan leader Moammar Kadafi to relinquish his nuclear technology and turn over conclusive evidence used to shut down the Pakistani scientist, who by then had been removed as head of his nation’s primary nuclear laboratory.

“A.Q. Khan is a textbook case of government doing things right,” John S. Wolf, then assistant secretary of State for nonproliferation, said when Kadafi gave up his nuclear equipment.

Others say that the price of patience was too high, emphasizing that for years Khan fed the nuclear ambitions of countries that the U.S. says have ties to terrorism and pose major foreign policy problems.

“I don’t see what was gained by waiting,” said George Perkovich, a nonproliferation expert at the Carnegie Endowment for International Peace in Washington. “Iran got centrifuge equipment and knowledge at the very least, and possibly a weapons design. We don’t even know what North Korea got.”

An American diplomat in Europe was more blunt, saying, “It’s absolutely shocking that Khan spread nuclear knowledge while he was being watched.”

As a global inquiry into Khan’s network enters its second year, investigators from several countries and the United Nations’ International Atomic Energy Agency in Vienna are trying to answer two vital questions -- how much damage did Khan do and how did he stay in business for so long?

The challenge has been made tougher by Pakistan’s refusal to allow outside investigators to question Khan, who is under house arrest in Islamabad, and because his network began systematically shredding papers and deleting e-mails in the summer of 2002, after realizing it was under surveillance.

Investigators said the previously undisclosed destruction of records is making it harder to discover whether the network sold its deadly wares, including the warhead plans, to as yet unidentified countries or even extremist organizations. It also increases the chances that remnants of the ring will re-emerge. “Regrettably, they had a long time to destroy evidence,” said a senior investigator who had interviewed members of the network. “They knew they were being watched.”

A detailed chronology of the long history of Khan and the spies who watched him, based on extensive interviews and hundreds of pages of public and confidential records, provides an unusual look at the inherent tension between gathering intelligence and taking action, which allowed the scientist and his network of engineers and middlemen to operate unchecked.

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Path to Deception

Abdul Qadeer Khan, believed to have been born in India in 1935, moved with his family to Pakistan in 1952 in the aftermath of ethnic violence in India. He was a bright student whose studies took him to Europe, where he eventually received a doctorate in metallurgy.

In May 1972, Khan started work for an engineering firm in Amsterdam that was a major subcontractor for Urenco, a British-Dutch-German consortium founded two years earlier to develop advanced centrifuges to enrich uranium for civilian power plants.

Though he was supposed to work only with material labeled confidential, over the next 3 1/2 years Khan got access to top-secret dossiers on every aspect of the enrichment process, according to a lengthy report prepared last year by Dutch anti-nuclear activists.

When he returned to Pakistan in December 1975 with his Dutch wife, Hendrina, and their two daughters, ostensibly for a holiday, he carried with him designs he had copied while working in the Netherlands, intelligence and law enforcement authorities said.

His timing was excellent. Pakistan had fought wars in 1965 and 1971 with neighboring India and the two countries were locked in a race to develop nuclear weapons.

Khan mailed his resignation letter to Amsterdam and quickly assumed a primary role in the Pakistani government’s nuclear program, which would succeed in testing its first bombs in 1998 partly because of Khan’s skills.

Initially, he served under the nation’s atomic energy commission, but he bristled at the constraints and won the right to work without official oversight.

“He asked for and received autonomy and an unlimited budget,” said Feroz Khan, a retired Pakistani brigadier general and nuclear expert who is not related to A.Q. Khan. “There was no accountability.”

Enriching natural uranium to weapons grade is a complicated process requiring huge arrays of slim cylinders called centrifuges and sophisticated machinery to regulate them as they spin at twice the speed of sound.

Pakistan did not have the material to manufacture the delicately balanced centrifuges or much of the other equipment required, so Khan used his outsize budget to establish a clandestine procurement network.

The first purchases were from companies associated with Urenco and were orchestrated through Pakistani embassies in Europe in 1976, creating what became known as the Pakistani pipeline.

Alarm bells rang in 1978 after a British company sold Pakistan high-frequency electronic devices used in the enrichment process. The ensuing investigations pointed at Khan, according to media reports at the time.

President Jimmy Carter cut off U.S. assistance to Pakistan in April 1979 when it was discovered that Khan had stolen plans from Urenco and was using them in Pakistan’s nuclear effort.

But the U.S. sanctions were short-lived. The Soviet invasion of Afghanistan later that year pushed counter-proliferation concerns to the back burner and lowered the heat on Khan and Pakistan for the next decade. During that period, Islamabad was the principal conduit for huge amounts of U.S. aid to anti-Soviet fighters in neighboring Afghanistan.

The Dutch were unable to prove that Khan stole the designs, but in 1983 he was convicted in absentia of writing two letters seeking classified nuclear information. The conviction was overturned because he never received a proper summons.

A former CIA agent who worked in the region said the Reagan administration had “incontrovertible” knowledge of Pakistan’s progress toward the bomb and Khan’s central role in procuring material, but chose not to act.

The pattern and priorities had been established. Throughout the 1980s, the Reagan and Bush administrations sent $600 million a year in military and economic assistance to Pakistan for its help on Afghanistan, according to a report last month by the Congressional Research Service.

Not until the Soviets pulled out of Afghanistan did the first President Bush reimpose sanctions on Pakistan, in 1990, for developing atomic weapons.

But U.S. intelligence had not lost complete sight of Khan. The CIA was told in 1989 that the Pakistani scientist was providing centrifuge designs and parts to Iran, said two former U.S. officials who read the reports.

Not for the first time, however, U.S. intelligence officials and policymakers underestimated Khan’s talent for spreading nuclear know-how.

“We knew he traveled a lot, but we thought it was probably related to imports rather than exports,” said Einhorn, who read about the Iran link when he joined the State Department nonproliferation bureau in 1991. “We thought the Iran connection had fallen off during the 1990s and that Iran was mainly looking to Russia rather than Pakistan for its nuclear supplies.”

In fact, Khan started providing material to Iran in 1987 and continued as its primary nuclear supplier for at least a decade, recent reports by the International Atomic Energy Agency state. As demand for his wares grew, he turned for help to many of the companies and engineers supplying Pakistan.

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Tapping Old Contacts

The network was a sort of old boys club from Urenco. It included Dutch, German and Swiss members, former Urenco subcontractors who had gotten rich helping Khan turn Pakistan into a nuclear power.

But rivalries developed within the group as orders from Iran slowed in the mid-1990s, and Khan, even as he ran Pakistan’s enrichment facilities, tried to expand his illicit sales to other countries, investigators said.

“Some guys got along and some guys didn’t,” said an investigator who spoke on condition of anonymity. “A.Q. dealt with them individually. There were some group meetings, but there was never a meeting of all the major players at once.”

Khan developed a particularly close friendship with B.S.A. Tahir, a Sri Lankan businessman who eventually turned his computer business in Dubai into the network’s operational base. The two men traveled together frequently and twice made the Muslim pilgrimage to Mecca, Saudi Arabia.

Khan visited at least a dozen countries in the Middle East and Africa in search of new customers for the network, but nuclear weapons proved a harder sell than he had imagined, investigators said.

In 1997, he got a cold reception when he told an audience of scientists and military officers in Damascus that Syria should acquire its own nuclear weapons to counter Israel’s arsenal, said a former Syrian official who attended the talk.

But that same year he appeared to strike it rich. At a series of meetings in Istanbul, Turkey, and Casablanca, Morocco, he made a deal to sell Libya a complete bomb-making factory for approximately $100 million.

This appears to have been the network’s biggest transaction, and it led Khan to take a risk and expand beyond the original participants and his own safe base in Pakistan.

The Libya deal was taking shape just as Khan reaped enormous benefits at home. On May 28, 1998, the desert of southwestern Pakistan rumbled deeply as five nuclear weapons were detonated. It was Pakistan’s first nuclear test and it answered India’s detonation of three bombs two weeks earlier.

Already a powerful figure, Khan basked in nationwide adulation as he was dubbed the father of the Islamic bomb, a title that many experts say exaggerated his role. Still, he boasted in an interview with a Pakistani magazine about evading efforts to stop him and exploiting Western greed.

“Many suppliers approached us with the details of the machinery and with the figures and numbers of instruments and materials,” he said. “They begged us to purchase their goods.”

Even with his role in making nuclear weapons now in the open, Khan continued to quietly make deals with other nations. In late 1998, U.S. intelligence picked up evidence that he was trading enrichment technology to North Korea in return for missiles capable of carrying nuclear warheads into India, a former senior U.S. official who read the reports said.

The suspicions were added to a growing, highly classified chronology of Khan’s actions kept at the State Department, said another former senior official.

In January 1999, Deputy Secretary of State Strobe Talbott raised the North Korean deal at a lunch in Islamabad with then-Pakistani Prime Minister Nawaz Sharif. He asked Sharif to stop the illicit trade in nuclear technology and end the deals with Pyongyang, Talbott wrote in his 2004 book “Engaging India.” A second U.S. official who attended the meeting corroborated the account.

Though Talbott did not mention Khan by name, the second official said it was clear that Talbott was talking about Khan when he asked for a halt to the nuclear proliferation and the deals with North Korea, which intelligence data showed were being handled directly by Khan through his research laboratory in Pakistan.

“It is true that Pakistan has important defense cooperation with North Korea, but it is for conventional military equipment,” Sharif replied, according to the second official. “Nothing nuclear is taking place.”

Former Pakistani officials said the Americans never provided hard information that could have led to action against Khan, though critics argue that the scientist could not have conducted his business without at least a wink and a nod from Pakistan’s military establishment.

“They were very vague warnings and there was no real evidence or we would have acted,” Feroz Khan, the former Pakistani brigadier general who is a visiting professor at the Naval Postgraduate School in Monterey, Calif., said in a telephone interview.

The situation for Abdul Qadeer Khan began to deteriorate after Sharif was ousted in a coup in October 1999 by Gen. Pervez Musharraf, the head of the armed forces.

Aides to Musharraf said he tried almost immediately to assert control over the country’s nuclear establishment, including imposing the first audit requirements on Khan Research Laboratory, the government complex renamed after him that was his base of operations.

Khan resisted and Musharraf ultimately forced him out as head of the lab, though he lavished praise on Khan at his retirement banquet, saying his team had “sweated, day and night, against all odds and obstacles, against international sanctions and sting operations, to create, literally out of nothing, with their bare hands, the pride of Pakistan’s nuclear capability.”

The unprecedented restrictions at home coincided with increasing demand for centrifuges and other goods for Libya’s bomb-making factory. Khan responded by finding new sources of equipment in South Africa and Malaysia.

Pakistan was known in U.S. intelligence circles as a “hard target,” which meant penetrating Khan’s inner circle and his facilities there was extremely difficult. Pakistani authorities were aware of U.S. interest in their nuclear facilities and took steps to protect them and their scientists.

The shift to other locations for production created a new vulnerability that was quickly exploited by the U.S., most likely by eavesdropping on phone calls and monitoring e-mail.

“We were inside his residence, inside his facilities, inside his rooms,” said George J. Tenet, the former director of the CIA, describing that period to an audience last year.

A former U.S. intelligence officer said the CIA and National Security Agency were focused on the Khan network and collecting important pieces of the puzzle, but both agencies argued for caution out of a strong desire to protect sources and methods.

“In the NSA’s case, we could be talking about the potential compromise of a collection system costing millions of dollars or a specific, crucial source that would be evident if the information were acted on,” the former officer said.

The best public source of information for what intelligence agencies were learning at the time is a report issued in July by a British government commission. Two U.S. officials described the report as an accurate reflection of information shared between the CIA and its British equivalent, MI6.

By April 2000, intelligence showed that Khan was supplying uranium enrichment equipment to at least one customer in the Middle East, thought to be Libya, the report says. Five months later, intelligence operatives learned that the network was mass producing centrifuge components for a major project.

When the new Bush administration came into office in January 2001, the CIA briefed officials at the National Security Council on the dangers posed by Khan. The NSC officials recognized the threat as well as the need to get as much information as possible before acting, said two people involved in the talks.

“The suspicion was that the intelligence guys were all about reporting and watching and they had to overcome that,” said Richard Falkenrath, an NSC staff member at the time. “The other question was, ‘What would we do about Khan, what would Pakistan tolerate?’ ”

Throughout 2001, the CIA and MI6 tracked Khan’s activities. A comprehensive assessment in March 2002 concluded that Khan’s network had moved its base to Dubai and established production facilities in Malaysia.

A few months later, new information led the agencies to conclude that Khan’s network was central to a Libyan nuclear weapons program.

By January 2003, the British were concerned that “Khan’s activities had now reached the point where it would be dangerous to allow them to go on,” the report says.

Libyan officials later would tell the Americans and British that Khan had delivered the warhead plans to them in late 2001 or early 2002. Wolf, the former assistant secretary of State, said he was unsure whether the Americans or British knew about the plans until after the Libyans decided to give up their nuclear ambitions.

Even as the danger mounted, there was a new constraint on action. The terrorist attacks on New York City and the Pentagon on Sept. 11, 2001, had restored Pakistan as a vital ally, and U.S. officials were reluctant to take any step that might jeopardize the fight against Al Qaeda and the Taliban.

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Unraveling the Network

The endgame for Khan began in March 2003. Seif Islam, Kadafi’s elder son, approached an MI6 agent in London with an offer to talk about rumors that Libya possessed weapons of mass destruction, several officials briefed on the episode said.

Intelligence agents from the CIA and MI6 held sporadic talks with the head of Libyan intelligence, Mousa Kusa, through the spring and summer. The U.S. and Britain wanted Libya to give up its chemical weaponry and nuclear technology, and Kadafi wanted assurances that in return economic sanctions hobbling its economy would be removed.

In August, with the issue still unresolved, British intelligence got a tip about a shipment that would be leaving Khan’s factory in Malaysia for Libya. U.S. spy satellites tracked the shipment, and the vessel was eventually diverted by U.S. and Italian authorities to an Italian port, where five crates of delicate centrifuge components were unloaded.

U.S. officials involved in the episode said the interception finally persuaded the Libyan leader to give up his weapons programs, a decision Kadafi announced on Dec. 19, 2003.

As part of the deal, teams from the U.S., Britain and the International Atomic Energy Agency arrived in Libya in January 2004 to dismantle the 500 tons of nuclear equipment that Khan’s network had shipped there. The most sensitive material was loaded onto a U.S. military cargo plane that had been stripped of its identifying marks and flown nonstop to the national weapons laboratory in Oak Ridge, Tenn.

Among the items on the plane was a sealed pouch containing the warhead designs, said people involved in the shipment.

The two nuclear weapons specialists who examined the top-secret plans said the Libyans had handed them over in two plastic shopping bags. They said identifying marks had been removed but the designs were clearly for a warhead tested by China in 1966 and later provided to Pakistan.

One bag contained about 100 production drawings for fabricating the warhead; the other held hundreds of pages of handwritten notes and unclassified documents from sources such as the U.S. Department of Energy.

The notes, written in English by at least four people, were numbered sequentially and appeared to be the detailed records of a year-long seminar given long ago by Chinese experts to Pakistanis on how to build the warhead, the experts said.

Even before Kadafi made his announcement, U.S. officials had confronted Musharraf with the Libyan evidence against Khan, leaving the Pakistani leader with little choice but to act.

But Khan remained too popular -- and Musharraf’s grip on power too tenuous -- for a public arrest. Instead, Khan was placed under house arrest and made a brief televised confession on Feb. 4, 2004, and he was pardoned immediately.

Since then, Pakistan has kept Khan outside the reach of investigators, leaving many questions about the proliferation network unanswered.

In one troubling discovery, investigators and customs officials in Europe say they recently found signs that elements of the network had resumed work. This time, the client again is Pakistan, which investigators suspect is trying to get material for a new generation of centrifuges.

“With Pakistan today, it’s hard to know how much they need, but already a couple of items have been stopped very recently, including a shipment of high-strength aluminum for centrifuges,” an investigator said.

In the meantime, Congress has approved and funded a request for a three-year, $3-billion package of economic and military assistance to Pakistan, which remains a key ally in the Bush administration’s war on terrorism.