The Nuclear Jihadist: The True Story of the Man Who Sold the World's Most Dangerous Secrets...And How We Could Have Stopped Him

by Douglas Frantz

  The increasing press attention also renewed the focus on Khan and Pakistan. A couple of articles in the American press in the middle 1990s had suggested that Pakistan was assisting Iran with a nuclear program, but the allegations had been dismissed. But as 2003 wore on, more specific information linking Khan to the Iranian effort came out in the press, and it mirrored the suspicions of Olli Heinonen and Trevor Edwards.

  CHAPTER 27

  THE DROWNING MAN

  THE STRAIT OF MALACCA is a narrow, perilous five-hundred-mile-long waterway that forms the main passage between the Pacific and the Indian oceans. It borders Malaysia, Indonesia, and Singapore. The thousands of oil tankers, freighters, and tugs that ply its waters carry more than one quarter of the world’s trade, and they are constantly on the lookout for pirates who hide among the thousands of tiny islands and inlets. At first light one day in late August 2003, five forty-foot-long wooden crates were loaded onto one of the anonymous ships that work off the coast of Malaysia. The crates had come from Scomi Precision Engineering and were marked “agriculture machinery,” with a shipping invoice that said the cargo was bound for Aryash Trading Company in Dubai. Two men discreetly watching the loading process from across the dock knew what the real contents were and where they were headed—roughly twenty-five thousand casings, pumps, tubes, flanges, and other parts, all manufactured to precise tolerances from high-strength aluminum, bound for warehouses in Libya.

  The Scomi plant run by the Khan network had produced the components, the fourth and largest shipment to Libya since the plant had started operating in December 2002. The two watchers had monitored the earlier shipments, too, thanks to a steady stream of information from Urs Tinner, who had been supervising production at the plant for nearly a year. Throughout that time, Tinner had continued to provide regular reports on the progress to the CIA through his handler, the agent nicknamed Mad Dog.

  As the Malaysian ship left port and pounded through the swells of the Indian Ocean on its nearly four-thousand-mile voyage to the Persian Gulf, the CIA monitored its progress with spy satellites. The agency wasn’t worried about losing the vessel because they knew that it would arrive in the Port of Dubai around mid-September, depending on the seas, where the crates would be loaded onto another ship for the last leg of the voyage. The CIA would be there to watch, too.

  On the other side of the Indian Ocean from Malaysia, Johan Meyer had finished testing his masterpiece of stainless-steel tubes, valves, and tanks at his Tradefin factory outside Johannesburg. Instead of using uranium hexafluoride, he and his technicians used helium to make sure the gas feed and withdrawal systems functioned and that the vacuum valves held. The entire system had worked perfectly. After the test, Meyer took detailed photographs of each section and numbered each of the thousands of individual parts sequentially. The two-story apparatus was dismantled and packed into eleven forty-foot shipping containers. The photos of the numbered parts were then turned into flow charts so technicians could reassemble everything properly. “The plans went into great detail, including how much time it would take, to the minute, for each step in the process and the numbers of skilled or unskilled workers required for each step,” said an expert who later examined the documentation. By August, the shipment was ready for delivery, but Meyer still wasn’t sure where it was headed.

  Meyer had his suspicions, however. In late May, two Arabs had arrived at Tradefin to watch the test, staying at a nearby Holiday Inn and arriving at the factory early each morning for a week. They said little and watched intently, talking quietly to each other in Arabic. When Meyer tried to question them about the destination for the finished product, they refused to answer. At the end of the successful test, the men nodded and disappeared. A few days after the visit, Meyer received another installment in his bank account. Previous transfers had come from banks in Dubai, but this time the money had come from Libya, a fact that alarmed Meyer. He knew from the start that he was building a system to operate an enrichment plant, but he hadn’t guessed that he was doing it for the government of an outcast nation regarded as an international sponsor of terrorism.

  Meyer’s contraption was one of the last pieces of the nuclear puzzle being assembled for Libya. By this time, the Khan network had sent dozens of shipments of nuclear technology to Tripoli. There were electronic regulators and power supplies from Turkey, sophisticated machine tools from Switzerland and South Korea, P-2 centrifuge prototypes from Pakistan, large quantities of high-strength aluminum and maraging steel from Singapore and Malaysia, uranium hexafluoride from China. Two form-flowing lathes from Spain had found their way to Libya after an odyssey from Dubai to South Africa; once in Tripoli, the machines were equipped with computerized controls that allowed them to operate at the precision levels required to produce centrifuge rotors. Dozens of Libyan technicians were completing training in Dubai, Spain, and other countries. Several elements for the eventual bomb factory were still missing, but the basics were coming together—Libya was not far away from setting up production facilities to enrich uranium.

  Some of the equipment had civilian applications and had been shipped openly to Libya by reputable companies without knowing that it was for a nuclear-weapons program. Much of it, however, arrived with false bills of lading and invoices, purposely mislabeled as industrial goods or agricultural products. From long years of illicit trafficking in goods for Pakistan and Iran, the network had established procedures designed to conceal the nature of its shipments from prying customs authorities and intelligence agents. But such subterfuge in a business where trust was in short supply had led to basic bookkeeping problems. Legitimate shipments were accompanied by detailed invoices to identify the precise contents and their costs. Buyers could check the delivery against the invoice to make sure they got what they had paid for. But when shipments were misidentified deliberately and invoices were fiction, there was no way for the recipients to make sure they were receiving everything. So the network’s members had resorted to taking digital photographs of the contents of each shipment to avoid later disputes.

  Secrecy had become something of an obsession among those who knew the full scope of the work being done for Libya. When engineers at the Malaysian plant finished manufacturing a particular component, Urs Tinner retrieved the drawings on which it was based, telling the employees he was protecting trade secrets. What he was really doing was erasing as much of his presence as possible in preparation for the day the CIA would stop watching and take action against the network. He expected that the Americans would protect him, but he still wanted to cover his tracks.

  Tahir was the general manager and chief finance officer for Khan, Inc., and most of the machinery and equipment was first shipped to his SMB Computers in Dubai, where it was repackaged and shipped to Libya. When paying suppliers in Europe and elsewhere, Tahir used a series of international banks and front companies, bouncing millions of dollars from account to account. Like Meyer, the suppliers may have had their suspicions about the true nature of the business, but they were well paid and unlikely to ask too many questions. The subterfuge was expensive, both in terms of the premiums paid for equipment and the commissions siphoned off along the way by various middlemen, front companies, and the network’s members. No one bothered with exact calculations, but rough estimates were that the Libyans were routinely charged double the going rate for much of what they bought, a fact that drew occasional complaints from Tripoli. By the summer of 2003, Libya’s payments to the network totaled roughly eighty million dollars, with no bomb in sight.

  And now the CIA and Britain’s MI6 were closing in on two fronts: In addition to the spies who had watched the ship leave Malaysia, diplomats thousands of miles away were trying to persuade Libya to give up its weapons program through secret negotiations.

  THE NEGOTIATIONS were not Libya’s first attempt to make amends with the international community. Four years earlier, during the Clinton administration, a senior Libyan intelligence official had approached a CIA agent with an offer
: Libya would give up its chemical weapons in exchange for easing sanctions imposed in the 1980s because of its support of international terrorism. The administration refused outright, explaining that the only way out of isolation for Libya was to take responsibility for the downing of Pan Am flight 103 over Lockerbie, Scotland, in 1988, something Gadhafi was not ready to do. The British, however, were more receptive to the Libyan approach, opening the door for quiet talks that led to reestablishing diplomatic ties and opening an embassy in Tripoli in July 1999. Over the next two years, the British led negotiations involving the United States and Libya that tried to resolve responsibility for the Pan Am bombing as a first step in Libya’s rehabilitation. Progress was slow, even after a Libyan agent was convicted in Scotland in January 2001 of participating in the plot to set off the bomb. Gadhafi refused to accept responsibility for the disaster or agree to restitution for the families of the 259 passengers and crew, mostly Americans, and the eleven people on the ground who had died.

  Gadhafi had come to power in 1969 and imposed his own brand of revolutionary theory on the desert country, which is three times the size of France. He presented a dashing figure, often parading through Tripoli or foreign capitals in flowing robes and surrounded by female bodyguards, and his imposing photograph appeared on billboards blanketing the country. For Western governments and his own neighbors, he was an often troublesome, frequently contradictory figure, using Libya’s oil revenues to finance arms for the Irish Republican Army, ordering the assassination of dissidents living abroad, and harboring terrorist Abu Nidal for years, at the same time as he promoted women’s rights and rejected Islamic fundamentalism. In the 1970s and 1980s, oil money translated into cheap housing and free utilities for every Libyan, though international sanctions after Lockerbie and other incidents had eaten into the largesse by the 1990s.

  After September 11, Gadhafi recognized that international terrorism had taken a brutal turn, and he risked being crushed by the American response unless he quickly altered his ways. The Libyan leader knew from painful personal experience that the Americans could lash out when harmed or threatened. Though the Libyan leader did not receive a warning telephone call from Colin Powell on September 12, as Musharraf and other world leaders had, he was nearly frantic with fear that the Americans would bomb his country. Emerging from his desert hideaway, he delivered a series of speeches denouncing bin Laden and the terrorism against the United States. According to a confidential cable from the American embassy in Cairo, he called “every Arab leader on his Rolodex” to persuade them to condemn the attacks, too. When the Americans did not reassure Gadhafi that he would be spared in this new war, he turned to America’s biggest ally in the region, Crown Prince Abdullah of Saudi Arabia, and begged him to intercede on his behalf.

  Gadhafi had survived on his wits for nearly four decades, and in the end his fear of American retaliation forced him to dispatch a new team of negotiators to London to reach a deal on Lockerbie. The team that arrived in October 2001 was led by Musa Kousa, Gadhafi’s intelligence chief, in some ways an odd choice for a sensitive diplomatic mission. He had studied for a master’s degree in sociology at Michigan State University in the 1970s, but he was better known for the trail of terror he had left around Europe. In 1980, Kousa had been expelled as head of Libya’s mission in London after two dissidents he had singled out for criticism were murdered. A 1995 report by MI5, Britain’s domestic intelligence agency, described Kousa as the head of Libyan intelligence, which was responsible for terrorist acts throughout Europe and Africa. Kousa personally had been implicated in the planning of the 1986 Berlin bombing and the downing of a French passenger plane over Niger in 1989 that had killed 170 people.

  But that was all in the past for both sides in the aftermath of September 11. Kousa had orders to settle the Pan Am dispute, restore Gadhafi to the good graces of the United States and Britain, and avoid an American attack. The United States had its own motives for sitting down with a regime still regarded as an enemy: The American negotiators, led by William Burns, the assistant secretary of state for Near East affairs, wanted to enlist the Libyan leader in George Bush’s “war on terror.”

  The negotiations took several months, but in May 2002, Libya accepted responsibility for the airliner’s fate and later agreed to pay $2.7 billion to the families of the victims. The decision marked a seismic shift in Libya’s relations with the outside world, but the Americans and British were not done. Both countries knew that Libya maintained stockpiles of chemical weapons, but its nuclear program was a more closely guarded secret. The trick for the negotiators was to persuade Libya to relinquish its nuclear ambitions without revealing the extent to which they had penetrated the network supplying the equipment to Tripoli. Without tipping their hand, the Americans and the British envoys made clear that lifting sanctions meant that Libya would have to abandon all of its weapons of mass destruction.

  Making the Lockerbie settlement was a far easier step for Gadhafi than giving up his plans for a nuclear arsenal, which would fulfill his dream of being the most powerful leader in the Arab world. The communications channel remained open on the WMD issue, but little progress was made until March 2003, when Seif Islam Gadhafi, the Libyan leader’s eldest son and designated heir, contacted British intelligence and asked for a meeting to talk about reforms in the Middle East.

  Seif was seen as a credible representative of his father, whose willingness to negotiate over weapons of mass destruction would be an important breakthrough. British intelligence and the CIA had been sharing information about Libya’s nuclear program for nearly three years, and they had what they thought was a pretty complete picture of the progress, though senior agents recognized that they could not be certain about every aspect of a clandestine operation. The offer of negotiations provided an opportunity to get a better sense of how far along the Libyans were and, perhaps, persuade Gadhafi to give up his quest.

  News about the upcoming meeting between the British agents and Seif Gadhafi was relayed to Washington, where George Tenet added the topic to his daily intelligence briefing for Bush in the Oval Office. British prime minister Tony Blair arrived at Camp David for meetings with Bush just days before the start of the Iraq war. Tenet and his British counterpart, Sir Richard Dearlove, participated in the conversation. While much of the briefing was devoted to Iraq, the Libyan overture was on the agenda, too. The group debated Gadhafi’s possible motives, deciding that he had finally realized that his attempt to develop nuclear weapons was more trouble than it was worth. Tenet left the meeting with instructions from the president to find the right person to negotiate with Gadhafi.

  On March 19, the day before the start of the war in Iraq, Seif Gadhafi met with two British agents at a London hotel. He was nervous, as he acknowledged in a later interview with 60 Minutes, explaining: “It was quite unique at the time for me because I was face to face with the British secret service for the first time in my life and with the people who I regarded for a long time as devils, as enemies for me, and I was quite nervous that something goes wrong. And then one of them said one day history would recognize that a huge and historic initiative started in a small room in a small hotel.”

  Gadhafi wanted to talk about his father’s vision for a joint initiative to reform the political process in the Middle East. The senior agent replied, “We are happy to be allies and work together in the Middle East, but first we have critical issues we have to sort out.” Gadhafi suspected that the British agent was talking about Libya’s weapons of mass destruction, and he agreed that it was a topic worth discussing. “I know my father very well, and I know his way of thinking,” Gadhafi said. “I know for a long time that he is ready to tackle this issue, the WMD issue, with the West if there is the right deal and the right terms.”

  Back in Washington, the person Tenet chose to deal with Libya was Stephen Kappes, a former Marine officer who had been stationed in the Middle East and Europe since joining the CIA in 1981. John McLaughlin, deputy director of the CIA
at the time, later described Kappes as the ideal choice. “You don’t send just anyone to do this,” he explained. “It was an enormously difficult, complicated, and high-stakes mission.” Kappes was currently in Washington, where he was chief of the team that had penetrated the Khan network, so he knew well the extent of Gadhafi’s nuclear-procurement operation. He also had maintained back-channel communications with Kousa over the years. In the days that followed, Tenet and Kappes met several times with Bush and Vice President Dick Cheney to discuss how to handle the negotiations with Libya. It would be tricky—at a time when Bush had declared war on terror, he could hardly be seen cozying up to a man identified with international terrorism—and Cheney cautioned that the United States had to avoid the appearance of rewarding Ga-d-hafi’s bad behavior. Still, if Gadhafi could be persuaded to give up his weapons programs, it would appear that the war in Iraq had created the kind of deterrence that Bush and Cheney desired fervently. The prize was big—no regime had given up a nuclear weapons program, with the exception of South Africa.

  In the weeks that followed, Kappes and his British counterparts met several times with Musa Kousa and other Libyans in London and other European capitals. Progress remained slow. The Libyans were cagey and didn’t want to admit too much in case the deal fell through, refusing to acknowledge that they had chemical weapons, let alone a secret nuclear program. The British took the lead in the negotiations because the initial contact had come through them, and they had an embassy in Tripoli and an ambassador who spoke fluent Arabic. But it was clear that Gadhafi’s goal of reintegration into the international community could not be achieved without the blessing of the Americans.