Chicago Trial's Explosive Revelations (The Daily Beast)

NEW YORK – The verdict is in: David Headley's accomplice is found guilty. Sebastian Rotella reports on the unprecedented glimpse into the terrorist mindset the case offered-and the fallout for U.S.-Pakistan relations.

The terrorism trial of Tahawwur Rana, a minor accomplice whose trial ended Thursday in a guilty verdict on two of three counts, offered an extraordinary look into the underworld of terrorism and espionage in South Asia and had repercussions much closer to home.

The five days of testimony of confessed American terrorist and Pakistani spy David Coleman Headley were unprecedented in a U.S. courtroom. Headley delivered explosive revelations about how officers in Pakistan's Inter-Services Intelligence Directorate (ISI) funded, supported and directed the 2008 Mumbai attacks along with the Lashkar-i-Taiba militant group.

Because of his mix of front-line experience and high-level contacts, Headley's testimony was like a seminar in how terrorists communicate in code, do surveillance on targets and assemble plots while spies oversee the operations from the shadows like puppeteers. The case also showed how a growing number of serving and former Pakistani military officers have put their lethal talents at the service of Lashkar, al Qaeda and other groups. It revealed the impunity with which ISI officers and terrorists alike operate in Pakistan even when they target Americans and other Westerners. (See our readers' guide to the trial.)

The evidence combined with the indictment of Headley's ISI handler in the murders of six American victims of the Mumbai attacks has worsened the already troubled U.S. Pakistani-relationship. "The trial has been yet another bump in the road for U.S.-Pakistan relations," said Stephen Tankel, author of a forthcoming book titled Storming the World Stage: the Story of Lashkar-e-Taiba.

At the same time, the trial left enduring mysteries.

It did not answer questions about whether Sajid Mir, a Lashkar mastermind caught on tape directing the slaughter in Mumbai by phone, was once a Pakistani military officer. It did not explore the extent to which ISI chiefs beyond Headley's handler, known only as Major Iqbal, were aware of the Mumbai plot, which ultimately killed 166 people. Headley testified that he believed top ISI leadership was not aware, but he also said he thought Iqbal's commanding officer and his unit of the spy agency knew about the operation.

Finally, prosecutors managed to skirt two delicate and interconnected issues that the U.S. government refuses to discuss: Headley's role as a U.S. informant and the failure of the FBI to stop his terrorist activity despite at least six warnings during seven years. Headley revealed that he was simultaneously an extremist and an informant for the Drug Enforcement Administration for at least two years, and that he gathered counterterror intelligence as well as doing anti-drug work.

Headley testified that he stopped working for the DEA in September 2002, but that did not change contradictions and gaps in the U.S. government's official version. The DEA has stated that he was deactivated in early 2002, while other agencies have said he remained an informant until as late as 2005.

"The lack of clarity reinforces suspicions that the U.S. government knew more about Headley than it has revealed."

The lack of clarity reinforces suspicions that the U.S. government knew more about Headley than it has revealed and that his role as an informant shielded him from more aggressive scrutiny in the years before his arrest in October 2009.

"I don't feel we got the whole story about Headley as an informant from the Americans," said a European counterterror official involved in the investigation. "I believe he was a drug informant and also some other kind of informant."

The jury did not get the whole story either. Headley had already pleaded guilty to doing reconnaissance in Mumbai and for a plot in Denmark. The official focus of the trial was the narrower issue of charges of material support of terrorism against Rana, who owns an immigration consulting firm in Chicago. He was accused of supporting Headley's reconnaissance for the Mumbai and Denmark attacks and of overall support for Lashkar. Prosecutors charged that Rana let Headley open an office of the firm in Mumbai and use the business as cover for his surveillance in India and Denmark.

The verdict suggested a common-sense analysis by the jury. Headley testified that the Mumbai plot was a joint operation in which he was directed by Major Iqbal of the ISI and the Lashkar handler named Mir. The defense established that Rana communicated with Major Iqbal, but not any Lashkar masterminds. Rana's lawyers argued that Headley, Rana's boyhood friend, was a skilled manipulator who convinced Rana that he was doing intelligence for the ISI against India, Pakistan's arch-enemy, and kept him in the dark about the Mumbai plot.

The acquittal on the charge of supporting the Mumbai plot indicates that the jury accepted that argument. But they apparently rejected the idea that Rana remained a dupe once the carnage in India had happened. Headley soon enlisted Rana to assist his reconnaissance on a newspaper in Denmark that has become an internationally known target of terrorists after publishing caricatures of the Prophet Mohammad in 2005. Because Rana was a devout Muslim, it seems hard to believe he did not suspect anything at that point.

Rana's conviction is a small victory. Washington has been pressing Pakistan for more than a year to arrest Major Iqbal as well as Mir and a half-a-dozen other Lashkar chiefs who have been implicated as masterminds. Despite abundant evidence and the U.S. federal indictment, the Pakistani government has not pursued those fugitives. They are not in hiding and continue to be involved in terrorist plotting, U.S. investigators say.

Lashkar is simply too powerful and too close to the Pakistani security forces, according to Western and Indian counterterror officials. Pakistani officials fear that arresting major figures in Lashkar, which has not attacked the Pakistani state, could result in violent backlash and further instability.

"They think they have to leave these Lashkar cadres free to control the organization," an Indian anti-terror official said. "They are worried that if they move against them, it could be a civil-war situation."

An award-winning foreign correspondent and investigative reporter, Sebastian worked for almost 23 years for the Los Angeles Times, covering everything from terrorism to arts to the Mexican border. He served most recently as a national security correspondent in Washington, D.C., and his previous posts include international investigative correspondent and bureau chief in Paris and Buenos Aires, with assignments in the Middle East and North Africa.

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Pakistan's Spy Agency and Terrorism (The Daily Beast)

NEW YORK – Mansoor Ijaz says the real danger inside Pakistan is its powerful spy organization, Inter-Services Intelligence—and that an even more notorious outfit is an ISI-affiliate called S-Wing.

The murder of a prominent Pakistani journalist, Syed Saleem Shahzad, who was kidnapped last Sunday in Islamabad after repeated threats by Inter-Services Intelligence, Pakistan's premier spy agency, should be a clarion call to the international community about the increasingly strident and lawless behavior of certain elements operating freely inside Pakistan's military and intelligence organizations. Shahzad's abduction occurred a few days after he wrote a forthright article suggesting that the militant attack on Pakistan's main naval base near Karachi on May 22 was in retaliation for an army crackdown on al Qaeda cells infiltrating its inner sanctum. His murder was clearly a warning to other seekers of truth that ISI thuggery knows no limits. (Of course, the ISI has denied any involvement in the killing.)

Questions about the ISI's role in Pakistani society have intensified in the aftermath of the U.S. raid on Osama bin Laden's Abbottabad compound, where he had been hiding in plain sight for the past six years. Further doubts about the ISI’s intent and motives were raised in a Chicago courtroom last week when witness testimony linked the ISI to the Pakistani terror group, Lashkar-e-Taiba, that allegedly carried out the 2008 Mumbai terrorist attacks. One hundred and seventy people died in that three-day siege of India's largest commercial hub.

The finger of responsibility in these recent events often points to a shadowy outfit of the ISI dubbed the S-Wing. A notorious group of operatives, the S-Wing is made up of active ISI officers, recent retirees, and plain-clothes civilians with highly specialized training—all dedicated to protecting and preserving Pakistan's territorial integrity using any method, at any cost, with no regard for collateral damage. As black-ops units go, it is about as thuggish and ruthless as is possible, without being a criminal organization.

That is why the S-Wing should be declared a sponsor of terrorism under the “Foreign Governmental Organizations” designation by the U.S. State Department. It no longer matters whether the ISI is willfully blind, or explicitly complicit, in the murderous plots attributed to the S-Wing, which the ISI routinely denies any knowledge of or responsibility for. S-Wing must be stopped dead in its tracks before immeasurable harm comes from the missionary zeal of its agents, no matter how misguided their mission may be.

What has become clear in the weeks since bin Laden was shot dead on Pakistani soil, and a nation stood shocked and humiliated, is that the people of Pakistan are not America's enemies.

What has become clear in the weeks since bin Laden was shot dead on Pakistani soil, and a nation stood shocked and humiliated, is that the people of Pakistan are not America's enemies. They know less than we do about the machinations of their spymasters, and are powerless to do anything about it. Neither is Pakistan's incompetent and toothless civilian government America’s enemy, even if its politicians and officials love to line their pockets with our taxpayer dollars while disingenuously shielding the ISI from public scrutiny.

The enemy is the ISI—it runs Pakistan from the shadows like a puppet master. The ISI is a danger to civilized societies everywhere, because it nurtures and breeds hatred among Pakistan's Islamist masses, and then uses their thirst for jihad as a foreign policy sledge hammer against Pakistan's neighbors and allies, often for no purpose besides just creating chaos. Its financial, logistics, and intelligence support of myriad jihadist groups in Kashmir thrice brought India and Pakistan to war—once a near-nuclear confrontation. Its S-Wing planning and logistics support for Afghanistan's Taliban from Pakistani soil has so muddied the waters in Afghan-Pakistan relations that President Hamid Karzai turned to India to counterbalance Pakistan's negative influences on his country. War, against both its neighbors, may be big business for Pakistan's army and intelligence organs, but the damage to civil life is nearly catastrophic—and it must now stop.

That the ISI even operates a special unit like the S-Wing to do the nation's dirty work demonstrates Pakistani state malfeasance in a manner that can no longer be ignored, compromised with, or tolerated by the U.S. government—indeed, by any government anywhere. What's worse, there is a growing likelihood that the ISI no longer controls the monsters it has created within its highly insulated and cellular organizational structure.

The time has come for America to take the lead in shutting off the political and financial support that gives life to an organ of the Pakistani state dedicated to undermining global anti-terror efforts. The ISI embodies the scourge of radicalism and Islamist terror that emanates from the soil it runs roughshod over. It defies common sense that a country that produced the Muslim world's first Nobel laureate in 1979, a president of the International Court of Justice at The Hague in 1970, and a rock-star musician in the 1990s, can allow the thuggery and criminality that nurtured Khalid Sheikh Mohammed's evil genius, harbored Osama bin Laden and other al Qaeda criminals, sold its nuclear secrets for profit, and murdered its brightest democracy-loving politicians, to define its identity as a nation.

We must help Pakistan by ending the ISI's reign of terror over its own citizens, and giving the ordinary people of Pakistan a chance to take their country back from the thugs who rule over them.

Mansoor Ijaz, an American of Pakistani ancestry, negotiated Sudan's offer of counterterrorism assistance to the Clinton administration in 1997. He was also involved in the negotiation of the ceasefire in Kashmir between militants backed by ISI and Pakistan's armed forces and Indian security forces in August 2000.

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Pakistan's bin Laden Suspects (The Daily Beast)

NEW YORK – A new terrorism trial will spotlight the shadowy wing of Pakistan's spy agency—and could help determine who was harboring bin Laden. Philip Shenon reports.

Among the world's spy agencies, few have more secrets than Pakistan's Inter-Services Intelligence Directorate, or ISI, Washington's often unreliable ally in the war on terror. And within ISI, no secrets are more closely held than those of "S Wing," the notorious "black operations" unit that is reported to serve as Pakistan's liaison to the Taliban, Al Qaeda and the homegrown anti-India extremist group that carried out the 2008 terrorist siege of Mumbai, India's largest city; there is widespread suspicion in Pakistan that S Wing played a role in providing sanctuary there to Osama Bin Laden.

This week, however, the secrets of S Wing are threatening to spill out in a Chicago courtroom when jury selection begins in the trial of a Pakistani-born businessman accused of using his U.S. visa-processing company to provide logistical cover for the attacks in Mumbai, where 170 people were killed, including six Americans.

Law-enforcement and national-security officials tell The Daily Beast that the trial will offer the fullest public accounting—anywhere—of the deadly treachery of S Wing, which is believed to have had a key role in organizing the Mumbai attacks. (Within ISI, operations are divided into lettered sections, with S managing the spy agency's operations in neighboring Afghanistan and India.)

"I'm not sure you'll hear the prosecutors refer to S Wing by name, but that's the part of ISI that is tied into this case," said an American national-security official in Washington who requested anonymity discussing sensitive matters. "S Wing is the black-ops part of ISI. And nothing would have been more black ops for the ISI than" the Mumbai attacks, he said.

The official said it was widely assumed in Washington—though unproved—that if any element of ISI was responsible for providing sanctuary for Bin Laden during his years in Pakistan, "it had to have been S Wing at work."

If any element of ISI was responsible for providing sanctuary for Bin Laden during his years in Pakistan, says one U.S. national-security official, "it had to have been S Wing at work."

The ISI has denied any support for terrorist groups, Al Qaeda in particular, and has insisted that it had no knowledge of Bin Laden's presence—apparently, for years—in the city of Abbottabad, home to the military academy that is Pakistan's equivalent to West Point.

On Friday, Pakistan's spy chief, Lieut. Gen. Ahmed Shuja Pasha, lashed out at the United States, angrily denouncing the American raid that killed Bin Laden as a violation of Pakistan sovereignty. He acknowledged, however, that Bin Laden's ability to hide out in Pakistan represented an embarrassing intelligence failure for ISI.

The United States has expressed alarm for years over evidence of ties between ISI, which functions as Pakistan's equivalent of the CIA, and the Taliban and Al Qaeda. There has been special alarm in Washington over the operations of S Wing, which appears to exist as a power unto itself within ISI, maintaining close ties with militant groups that the Pakistani government otherwise purports to consider its enemies. S Wing is alleged by American officials to have been involved in arming the insurgents in Afghanistan who are at war with—and killing—American troops.

Marvin Weinbaum, a former State Department intelligence analyst on Pakistan, said that even after pumping billions of dollars into the Pakistani military and the ISI since the 9/11 attacks, Washington still knows remarkably little about the ISI's inner works—and even less about S Wing.

He said that S Wing oversees the ISI's most sensitive operations and that its leadership includes several military officers who go through the motions of retirement so they can serve in the shadowy unit.

"It's a retirement of convenience," said Weinbaum, now a scholar at the Middle East Institute, a Washington think tank. "They conveniently retire people for the purpose of association with the unit, so there's plausible deniability for the military with these operations. The Army can claim they had no part in them."

In the Chicago trial, the defendant, Tahawwur Rana, is accused of providing logistical support to the terrorist scouting operations of Lashkar-e-Taiba, the Pakistani group that mounted the attacks in Mumbai three years ago.

American officials say Lashkar is largely a creation of the ISI and has often been used as a proxy to mount attacks on India, which is still seen by the Pakistani military as their nation's existential threat. Although labeled a terrorist group by the United States, Lashkar has broad public support in Pakistan.

The star prosecution witness against Rana is expected to be a childhood friend, David Headley, a 50-year-old Pakistani-American who has already pleaded guilty to terrorism charges and confessed that he used Rana's visa-processing company as a front to travel to India and scout the Mumbai targets.

According to American officials, Headley will testify that he was recruited for the operation by an ISI officer associated with S Wing—identified in court papers as "Major Iqbal"—and that the officer served as his handler throughout.

The Justice Department announced last month that Major Iqbal, who remains at large, apparently in Pakistan, has also been indicted in the case. In what was seen by officials elsewhere in the U.S. government as an effort to avoid new damage to relations with Pakistan, the department did not identify Major Iqbal as an ISI officer, citing him in the indictment only as "a resident of Pakistan who participated in planning and funding attacks by Lashkar."

Philip Shenon is an investigative reporter based in Washington D.C. Almost all of his career was spent at The New York Times, where he was a reporter from 1981 until 2008. He is the bestselling author of The Commission: The Uncensored History of the 9/11 Investigation. He has reported from several warzones and was one of two reporters from The Times embedded with American ground troops during the invasion of Iraq in the 1991 Gulf War.

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Our Pakistan Problem Manages to Get Worse (The Daily Beast)

NEW YORK – The fallout from Pakistan's failure to capture Osama bin Laden 45 miles from the capital seemed like rock bottom. But a terrorism trial that begins Monday will include allegations that the ISI runs terrorist camps and helped plan the Mumbai attacks, while bin Laden’s archives could reveal Pakistan complicity. John Barry on the issues Washington confronts as tensions with Pakistan heighten.

“Pakistan,” a very senior U.S. military officer recently mused, “is the problem from hell. Always has been. Always will be.” And he said that before the U.S. dispatched Navy SEALs deep into Pakistan to kill Osama bin Laden. In the wake of the raid, tensions between the U.S. and Pakistan have spiraled—and are about to heighten further.

The discovery that bin Laden’s long-time refuge, from which he appears to have been able to play a continuing role in al Qaeda, was only a short walk from Pakistan’s West Point is reason enough for a crisis in U.S./Pakistan relations. But Chicago’s federal courthouse sees on Monday the start of a terrorism trial at which the main witness, a U.S. citizen named David Headley, is expected to describe multiple training spells in terrorist camps run by Pakistan’s Inter-Services Intelligence Directorate, and to detail the involvement of ISI officers in the planning of the terrorist assault on Mumbai in November 2008, in which some 170 people died, among them six Americans. Pakistan has already denied everything Headley will say. But what was already a U.S./Pakistan crisis will become a U.S./Pakistan/India crisis.

It comes as no surprise, then, that, as the Washington Post reports, senior administration officials are locked in a debate about the future of U.S. relations with Pakistan. Here, from two sources knowledgeable about the debate, are some of the issues President Obama and his senior advisers are grappling with:

• Does the U.S. need to do anything? Or anything rapidly?

U.S. officials have long assumed that Pakistan’s leaders—or at least its military and intelligence service—were playing a double game: With one hand, assisting U.S. efforts to kill or capture some terrorists, and targeting Predator strikes against some of the insurgent groups based inside Pakistan. And with another hand, protecting Afghan groups and continuing to plot against India. (Defense Secretary Robert Gates—his no-illusions views of what states will do educated by years at the CIA—has publicly lain this out, adding that it was to be expected, given Pakistan’s view of its strategic situation.)

The discovery of bin Laden’s hideout perhaps alters U.S. judgments about where Pakistan has been striking this balance between cooperation and hostility. But, arguably, it changes nothing fundamental in U.S. perceptions of the uneasy relationship.

We’re trapped in a classic bad marriage. Can’t live with them. Can’t live without them.”

A chief of French intelligence back in the Cold War once famously remarked that, in running all double agents, the operative question was: “Are you getting the fat or the lean?”—the good stuff or chicken feed. Since 9/11 the U.S. judgment has been that, on the whole, it’s been getting the “lean” from Pakistan. Pakistan allows passage of the endless convoys ferrying critical U.S. war supplies from Karachi up into Afghanistan. Covert Pakistan cooperation—including a forward base for Predators—has been essential in killing hundreds of insurgents, and in capturing some of bin Laden’s key aides. (Pakistan is correct to say that information from at least two of these provided early leads to bin Laden’s whereabouts.) It is also true that Pakistan’s military has taken vastly more casualties in its own assaults on the tribal areas than coalition forces have suffered in Afghanistan. So, as that very senior U.S. officer summed up the U.S./Pakistan relationship: “We’re trapped in a classic bad marriage. Can’t live with them. Can’t live without them.”

• Will Pakistan continue its cooperation with the U.S.?

A mid-level administration official observed last week: “Pakistan has the initiative. What happens now is up to them.” In tense debates before Obama authorized the SEALs raid, his officials tried to foresee what the reactions would be in Pakistan. Popular outrage was taken for granted. The real question was: how would Pakistan’s political and military/intelligence elite react? Sources say that a majority view among Obama’s advisers was that, after a few weeks of uproar, Pakistan’s power group would revert to its established course: public protests as necessary, but continuing covert cooperation. Most of Obama’s advisers reportedly thought a total breakdown of U.S./Pakistan relations was unlikely.

So far, this judgment seems to have been borne out. Friday’s session of Pakistan’s parliament generated the expected denunciations of the raid and U.S. policies in general—but also, significantly, a call for a parliamentary inquiry into the failures of the military and ISI to prevent the SEALs raid. That demand will almost certainly go nowhere; but optimists in the Obama administration view it as a first step in what they hope is a nascent effort to bring the Pakistan Army and ISI under some semblance of civilian oversight. That slim hope seems misplaced: At the end of the parliamentary debate, the house closed ranks behind the powerful military.

Meanwhile, the U.S. has been given access to bin Laden’s wives—though only under the watch of Pakistani minders. Sources say the wives had evidently been coached to say nothing, so the sessions yielded little. Still, providing access is seen as a conciliatory gesture. Quiet discussions also are under way about returning the wreckage of the SEAL helicopter that crashed during the raid. It’s assumed that Pakistani engineers have been combing through the debris; but so far foreign experts—the U.S. has in mind the Chinese, especially—appear not to have been given direct access. Finally, the Pakistan military has been silent on details it must know about the U.S. raid. How back-up forces—in Chinooks and other Black Hawks—were deployed during the raid remains secret. Embarrassment may explain Pakistani silence on this and other details. But the silence is being taken as another conciliatory gesture.

The critical unknown, sources say, remains the attitude of Army chief of staff, Gen. Ashraf Kayani. The boss of ISI, Lt. Gen. Shuja Pasha wants to quit, according to a senior Pakistani official. Pasha apparently has offered his resignation three times since the raid—twice in closed-door leadership sessions, and then during the heated parliamentary discussion. It’s been refused each time, even by the critical parliament in its marathon session. But administration officials see Kayani as the driving figure behind Pakistan’s long-term response to the crisis. Kayani sat in basilisk silence during the parliamentary session. What one U.S. official called “a problem we had not adequately foreseen” is that Kayani apparently has taken the U.S. decision not to inform him about the SEALs raid as an unforgivable slight on his personal honor. It calls into question, he apparently thinks, his whole relationship—and by extension, Pakistan’s—with the administration. Kayani has to be mollified somehow. Sen. John Kerry’s mission to Pakistan this weekend—at President Obama’s request—has that as one of its objectives.

• What about bin Laden’s archives scooped up by the CIA operatives who accompanied the SEALs on the raid?

It will take weeks or more before the U.S. has really figured out what these reveal. Meanwhile, the trove is seen as a sword poised in classic Damoclean fashion over the heads of Pakistan’s leadership. “They have to be concerned what we will learn about Pakistan’s relationship with al Qaeda and perhaps other terrorist groups,” said one U.S. official. So the trove is a lever to, at the least, nudge Pakistan’s continued cooperation. But what if the trove does reveal Pakistani complicity at high levels in bin Laden’s operations? How should the Administration handle that?

Administration officials see an even trickier problem looming. Say the trove gives good leads to the whereabouts of bin Laden’s number two, Ayman al Zawahiri. The U.S. assumes Zawahiri, too, has been living in Pakistan—at least until he learned of bin Laden’s death. Should the administration share this information with the Pakistanis and request their cooperation? Or should the CIA pursue the trail unilaterally, and pave the way for another raid?

• What, finally, of Mullah Omar and the rest of the Taliban leadership broadly called the Quetta Shura?

The CIA, sources say, has some confidence it knows the whereabouts in Pakistan of Omar and his colleagues. But they’ve been outside the geographic limits of Predator strikes agreed with Pakistan. Should they remain untouchable? President Obama is eager to announce this summer a major drawdown of U.S. troops in Afghanistan. His military commanders’ advice is likely to be that a sizable pullout is feasible—so long as the campaign is stepped up against the Taliban and associated groups in Pakistan.

If Pakistan’s evolving reactions to the SEALs raid over the next few weeks indicate that meaningful cooperation with the U.S. is now at an end, there are those within the administration who are willing to contemplate unilateral action against Mullah Omar and the Quetta Shura. Whatever the consequences for U.S./Pakistan relations. That’s how serious the crisis in relations with Pakistan has become.

John Barry joined Newsweek's Washington bureau as national security correspondent in July 1985. He has reported extensively on American intervention in Afghanistan, Kosovo, Haiti, Bosnia, Iraq and Somalia and efforts for peace in the Middle East. In 2002, he co-wrote "The War Crimes of Afghanistan" (8/26/02 cover) which won a National Headliner Award. He won the 1993 Investigative Reporters & Editors Gold Medal for his investigation of the shooting down of an Iranian airliner by the USS Vincennes, as well as a 1983 British Press Award—the British equivalent of a Pulitzer—for his reconstruction of the US-Soviet negotiations to ban intermediate range nuclear missiles in Europe.

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