Directorate S

by Steve Coll

  TWENTY-SEVEN

  Kayani 3.0

  On Monday, September 13, 2010, a warm and cloudy late summer’s day in Washington, President Obama descended to the White House Situation Room for a National Security Council meeting. Corruption in Afghanistan was on the agenda. Defense Secretary Robert Gates, C.I.A. director Leon Panetta, and Secretary of State Hillary Clinton took their places. Their briefing books contained a classified white paper from Richard Holbrooke’s office. It sought to distinguish among three categories of Afghan graft. There was “high-level” theft, meaning by Hamid Karzai’s relatives. There was “predatory” theft by cabinet officeholders and presidential appointees who depended on the Karzai family’s patronage. These were referred to as criminal patronage networks, or C.P.N.s. One prominent C.P.N. included the executives and borrowers at Kabul Bank, where, it had been discovered, about $800 million in depositor funds had been distributed to influential politicians and power brokers, who had made no effort to pay back interest or principal. And finally, there was “functional” corruption, which might range from routine payoffs demanded by a traffic cop to the marketplace of bribery required to land jobs in the Afghan bureaucracy, from which the purchaser of a position could pursue further rake-offs to recoup the price of office.

  What did this taxonomy of corruption imply for American war strategy? The paper had been commissioned in part to address a bitter conflict within the U.S. embassy and I.S.A.F. headquarters in Kabul. The dispute had drawn in the C.I.A. and the Department of Justice, among other agencies. It concerned how much immunity should be granted to longtime C.I.A. allies suspected of graft. Some officials held that the Obama administration should accept some corruption as endemic and concentrate on a “kingpin” strategy, to make an example of high-level offenders. The paper at least allowed the administration to “decide what matters and what doesn’t,” as Holbrooke put it.1

  Robert Gates and Karl Eikenberry, the ambassador in Kabul, who appeared at the N.S.C. meeting by secure video, pointed out that Karzai had become “obsessed” with the “denigration” of Afghan sovereignty, partly because of the American anticorruption drive targeting Karzai’s family. Gates said he thought Karzai’s resentment was “legitimate,” all things considered. The defense secretary, a former career C.I.A. analyst, proceeded to attack the agency for having so many Afghan officials on its payroll.

  “We do it all over the world,” Panetta retorted.

  “We are the principal source of corruption” in Afghanistan, Gates went on. American contracting in Afghanistan had become larger than the opium and heroin trade, he pointed out.2

  “We have to step back and reassess,” Obama said. If Karzai “can paint us as occupiers, violators of sovereignty, how can we possibly work with him?” If the administration did not figure out how to successfully cut back aid and military involvement in Afghanistan, the president added, Congress would do it for them.

  Petraeus championed the anticorruption drive. His command had studied the problem and although there were “no good answers,” he said via video, “if we can’t win on anticorruption,” N.A.T.O. could not succeed in handing off the war as planned to Afghan forces loyal to Karzai. A problem was that building up the legitimacy of the Afghan government required routing massive sums of aid money through a Kabul bureaucracy that stole systematically. Yet the more traditional strategy, allowing U.S.A.I.D. to independently vaccinate children or clean up water supplies, meant money went to Beltway contractors, exacerbating the appearance that Karzai was a figurehead.3

  The reach of official theft and racketeering was breathtaking, Petraeus’s investigators had discovered that summer in Kabul. I.S.A.F’s anticorruption task force headed by Brigadier General H. R. McMaster had opened an investigation into Kabul Bank; it appeared that many of the hundreds of millions of dollars missing from the institution had been siphoned offshore, to the benefit of diverse Afghan officeholders. There were now several American task forces investigating corruption in Kabul, in addition to McMaster’s. They found crimes everywhere they looked. A police chief in eastern Afghanistan ran a kidnapping operation out of his Kabul office. Afghan soldiers died of starvation at the National Military Hospital because pervasive bribery left the facility stripped of supplies. Petraeus pushed Karzai to fire the country’s surgeon general and the hospital commander. A former Afghan watermelon salesman ran a trucking firm, Host Nation, with contracts worth about $360 million from the Pentagon, in concert with Ahmed Wali Karzai’s racketeering operations in Kandahar.4

  Petraeus funded an investigations unit at the Afghan Central Bank. It started to report on million-dollar deposits and other transactions in real time, exposing diverse Afghan officials and businessmen moving inexplicably large sums. When investigators questioned those Afghans, they claimed, sometimes plausibly, that unknown criminals had hijacked their identities. Forensic accountants traced hundreds of millions of dollars to banks in Bahrain, Germany, Canada, the United States, and Dubai. Investigators at the Department of Justice in Washington employed civil forfeiture laws to seize illicit funds or else imposed sanctions to freeze assets in place. Sometimes, if there was evidence that Taliban commanders benefited from particular schemes, the American anticorruption task forces even handed over classified case files to I.S.A.F. for the inclusion of accused individuals on the Joint Priorities Effects List, the “kill or capture” targeting dossier.5

  Yet American policy remained laced with contradictions, as the exchange between Gates and Panetta in the Situation Room highlighted. The C.I.A. put warlords and Karzai aides on its payroll for information, security, and stability. Simultaneously, Petraeus’s command, Justice prosecutors, and Treasury investigators tried to put some of the same men in jail.

  “If we can’t tell our story on metrics of progress, there will be tough months ahead,” Petraeus told the National Security Council meeting. He said that I.S.A.F. had “broken Taliban momentum” and would soon take and hold the villages west of Kandahar occupied at such high cost by the Second Combat Brigade.

  In the weeks following, the White House and the State Department distilled a refined anticorruption doctrine. It was tempting but unrealistic to jail members of the Karzai family in the middle of a war designed to convince Afghans of Hamid Karzai’s legitimacy. If theft by an Afghan official violated U.S. law directly, the Justice Department would take action. But this was plausible only if the accused was a dual Afghan and American national or if the scheme touched American banking or passed through American territory. If not, the United States would brief Karzai about the facts and encourage him to prosecute. Ultimately, however, Karzai would decide. Unfortunately, his record was well established.

  “Afghans liberated this country, not the U.S.,” Karzai told a visitor to the Arg Palace that autumn. “Now the U.S. blames us for its failures. They have failed to win over the country.” The Obama administration “is feeding the U.S. press about these so-called scandals. The U.S. screwed up our elections deliberately” and now “the Americans are trying to weaken me again.” Karzai added, “I do believe in conspiracies. There have been major conspiracies against me, so do you blame me if I believe in them?”6

  Those at I.S.A.F. headquarters who regarded the defeat of corruption as a cause that could not be compromised found Obama’s search for balance deeply frustrating. At the White House, the doctrine became a pillar of emerging policy designed as realism but which could sound like condescension or worse: “Afghan-good-enough.”

  —

  By that September, five months after its formation, the N.S.C.’s secret Conflict Resolution Cell had reached a turning point on another track of exit strategy from Afghanistan: talking directly to the Taliban about peace.

  Doug Lute and the cell’s interagency membership prepared to make a formal recommendation to the president that he authorize direct talks with the enemy. Over the summer, the cell had identified three “threads” of possible negotiation with Taliban
leaders. One was through Tayeb Agha, the young aide to Mullah Mohammad Omar who had been talking to the German government. A second was with Mullah Akhtar Mansour, the former Taliban aviation minister who had become the Taliban’s number two. British intelligence had made contact with a man claiming to be Mansour, although the man’s identity was questionable. Petraeus had provided the man safe passage to Kabul, where he had met Karzai and accepted tens of thousands of dollars in cash as an incentive to keep talking. A third “thread” had been developed by the C.I.A. Its operatives had made contact with a son-in-law of Gulbuddin Hekmatyar, the former C.I.A. and I.S.I. client in the war against the Soviet Union now aligned with the Taliban.

  Three days after the N.S.C. meeting, the cell met to approve a top secret decision memo for Obama’s signature. The memo authorized direct American talks with the Taliban for the first time. The State Department, and in particular Holbrooke, would liaise with German diplomats to develop the talks with Tayeb Agha. Because Petraeus had supervised the contact with Mullah Mansour, I.S.A.F. would own that negotiation. And the C.I.A. would pursue its track with the Hekmatyar family. The overall premise of the Taliban talks at this stage, as Lute described it, began with a recognition “that the war will not end without a political settlement (the nature of which was still very unclear); that while the Afghan government should lead, it cannot deliver a settlement by itself; that to be durable any agreement had to be rooted in a broader regional process . . . and that any Afghan political process [needed] to be broader than just the government and the insurgents, in order to avoid turning an insurgency into an ethnic civil war.”

  National Security Adviser Tom Donilon delivered the decision memo to President Obama on September 17. After Obama signed it, instructions were distributed as a formal order to those few at the Pentagon, C.I.A., and State then aware of the policy.7

  In late September, speaking to reporters outside Kabul, Petraeus disclosed that there were “very high-level Taliban leaders who have sought to reach out to the highest levels of the Afghan government.” Petraeus cast the negotiation as one in which the United States supported an initiative by Hamid Karzai, as “we did in Iraq, as the U.K. did in Northern Ireland.” The American involvement reflected a recognition that “you are not going to kill or capture your way out of an industrial-strength insurgency.” The general’s indiscretion made headlines and roiled Holbrooke’s office and the White House. It also put a powerful and popular general on record in support of talking to the Taliban, in alignment with Obama’s newly enacted but still-secret memo. Petraeus’s gifts had always included knowing how to manage superiors.8

  —

  Ahmed Pasha was furious about the American engagement with the Taliban, which he knew about in a fragmentary way. That September, the I.S.I. director met with Jonathan Bank, the C.I.A. station chief in Islamabad, to vent about American perfidy. Bank had no reason to be surprised at Pasha’s anger. The National Security Agency listened to the I.S.I. director’s phone conversations. Recent intercepts documented the Pakistani spy chief ranting about being excluded from N.A.T.O. contacts with the Taliban. Of course, it was hard to evaluate such signals intelligence. Pasha and Kayani were well aware of American intercept capabilities; they themselves lobbied to obtain the technologies. So they might use their phone conversations to broadcast manipulative positions, knowing that the Americans might be inclined to interpret such overheard conversations as authentic.

  “You guys are arrogant to think you can have repeated conversations with the Taliban without our knowledge,” Pasha told Bank. “We know about your meetings in Germany. If you don’t include us we will be forced to act in the interest of Pakistan.” Pasha even showed Bank copies of travel records for Tayeb Agha and the supposed Mullah Mansour.

  Direct talks between the United States and Tayeb Agha hadn’t actually started yet—Pasha was confused about that. But Germany, Britain, and Norway were all in secret discussions with Taliban leaders. Pasha will “push Haqqani,” the I.S.I.’s most reliable client in the Taliban coalition, as Pakistan’s preferred representative for peace negotiations, Jonathan Bank reported. I.S.I. hoped that the Haqqani network could “deliver eastern Afghanistan” to Pakistani influence in any possible settlement.

  Only a handful of senior C.I.A. officials happened to know that autumn of 2010 that C.I.A. analysts had recently opened an investigation of a house in Abbottabad, Pakistan, where Osama Bin Laden might be hiding. The house had suspicious characteristics. C.I.A. analysts had no idea whether I.S.I. was protecting this possible hideout. This would be a season of games within games between the C.I.A. and I.S.I. More contact with Pasha was better than less contact.

  Ashfaq Kayani arrived in Washington on October 19. The army chief’s itinerary included a meeting with Secretary of State Clinton. They gathered in the Deputies Conference Room on the State Department’s seventh floor. Kayani opened his briefcase and took out a dog-eared copy of Bob Woodward’s recently published book, Obama’s Wars. Kayani had underlined many passages. The book had provided him with useful insights about how the Obama administration made decisions. Its disclosures of sensitive high-level discussions about Kayani and his cooperation with the United States had embarrassed him. Following on the publication of State Department cables by WikiLeaks, Kayani felt exposed, at risk of being painted as an American lackey within his own high command, whose generals typically had less exposure to the United States than he had enjoyed at Leavenworth and in Hawaii. “How is it that such sensitive discussions are leaked in great detail?” he asked Clinton.9

  When he met Mullen, Kayani returned to a delicate subject they had been reviewing privately for months. Should Kayani engineer and accept a three-year extension as chief of army staff and de facto head of state? Mullen wanted him to extend but talked with him gently about the pros and cons. In public, the Obama administration emphasized the importance of Pakistani democracy and civilian rule; in private, it negotiated for the continuation of favorable military control. The rigid promotion and retirement system in the Pakistan Army meant that if Kayani stayed on, he would effectively cap the promotion opportunities of colleagues and force their retirements. That could stir resentment. Kayani’s credibility in the army arose from his sergeant’s son persona, after the egoism of Musharraf. If he extended his time in power, it would look as if he was putting himself and his family’s business interests ahead of institutional norms. On the other hand, Pakistan was in the middle of a low-grade civil war. The Pakistani Taliban were threatening major cities; Karachi was a mess, even by the measures of its recent violent history. Asif Zardari was a weak civilian leader. Kayani offered continuity. If he stayed, he could ensure that the next election would go off as planned, to determine a successor to Zardari, whom Kayani by now viewed with undisguised contempt. “I want Pakistan to emerge as a normal democracy,” he insisted to Mullen repeatedly.

  Mullen enjoyed the closest relationship with Kayani, but the admiral’s natural congeniality caused him to pull too many punches, some Pakistan watchers at the White House, Pentagon, and C.I.A. felt. Mullen was well aware that some colleagues saw him as too credulous about Kayani. In fact, he was coming to think of his Pakistani friend as I.S.I. personified—a man of layers and deflections, comfortable in command of both Directorate C and Directorate S. On balance, Mullen told the Obama cabinet, it was better to keep going with Kayani.

  At the White House that October, Kayani met with national security staff in the Roosevelt Room. By design, Obama dropped by, feigning surprise to find Kayani. (Because the Pakistani general was not a head of state or government, Obama did not want to violate protocol or undermine civilian rule in Pakistan by setting up a formal meeting.) Kayani handed Obama an updated version of his July white paper on the future of U.S.-Pakistani relations, a ten- to fifteen-page paper that would become known as “Kayani 3.0.”

  The Americans had been expecting this. Intelligence collection before Kayani’s visit showed that the a
rmy chief had been working long hours to refine his latest memorandum. Kayani told White House officials that he had written this latest version himself. He hoped the document would shape a joint American and Pakistani strategy to stabilize Afghanistan. Among other things, he had refined his demands about ending India’s presence in Afghanistan, acknowledging that India could have an economic role.

  Kayani addressed the paper to Obama, Mullen, Marine General James Mattis, who was Petraeus’s successor at Central Command, Doug Lute, and Colin Powell, the retired secretary of state. It was like a war college thesis, one person who read it remarked. The document had five parts, titled “Afghanistan,” “Pakistan-Afghanistan Relations,” “The Federally Administered Tribal Areas,” “Pakistan-Indian Relations,” and “Pakistan’s Concerns.” The essence of Kayani’s argument was: You can’t win your war; we know Afghanistan. “They beat the Russians, they beat the British, they are beating you,” as he told one senior State Department official. Could they now find a way to talk honestly about what would follow? And he had requests: We will also require your help in settling Kashmir and other strategic problems between Pakistan and India, he wrote.10

  “Pakistan is quite adequately aware of U.S. concerns regarding Pakistan,” Kayani wrote. His sense of grievance was transparent: “Pakistan has transitioned from ‘most sanctioned ally’ to ‘most bullied ally.’”

  Yet he wanted Obama to cooperate on a plan for joint negotiations with the Taliban. I.S.I. had now been promoting such talks for a decade. “Peace in Pakistan will only be possible if Afghanistan is peaceful,” Kayani wrote. “An early end to conflict in Afghanistan is one of Pakistan’s key strategic interests. . . . This is a defining moment, time for political process to take the lead and enable people of Afghanistan to take charge of their destiny. . . . The United States and Pakistan wish to see Afghanistan free of extremist and radical forces. . . . It is the political strategy which should provide a focus for military strategy.”