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PAKISTAN - On A Razor's Edge, March 2004


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Synopsis of "On a Razor's Edge"

VOICES IN THE WHIRLWIND
Assessing Musharraf's Predicament

INTERVIEW WITH SHARMEEN OBAID
The Brink of Peace

ESSENTIAL BACKGROUNDERS FROM THE NEW YORK TIMES
Reporting on the Nuclear Scandal

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Background, Government, Issues

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Essential Backgrounders From the New York Times
A Tale of Nuclear Proliferation: How Pakistani Built His Network

This article was reported and written by William J. Broad, David E. Sanger and Raymond Bonner.; Reporting for this article was contributed by David Rohde and Talat Hussain from Pakistan, Craig S. Smith from the Netherlands and Tim Golden from New York.

The break for American intelligence operatives tracking Abdul Qadeer Khan's nuclear network came in the wet August heat in Malaysia, as five giant cargo containers full of specialized centrifuge parts were loaded into one of the nondescript vessels that ply the Straits of Malacca.

The C.I.A. had penetrated the factory of Scomi Precision Engineering, where one of the nuclear network's operatives -- known to the workers only as Tinner -- watched over the production of the delicate machinery needed to enrich uranium for nuclear bombs.

Spy satellites tracked the shipment as it wended its way to Dubai, where it was relabeled "used machinery" and transferred to a German-owned ship, the BBC China. When it headed through the Suez Canal, bound for Libya, the order went out from Washington to have it seized, according to accounts from American officials.

That seizure led to the unraveling of a trading network that sent bomb-making designs and equipment to at least three countries -- Iran, North Korea and Libya -- and has laid bare the limits of international controls on nuclear proliferation.

Yesterday, President Bush proposed to enhance that system by restricting the production of nuclear fuel to a few nations. Page A18.

The scope and audacity of the illicit network are still not fully known. Nor is it known whether the Pakistani military or government, which had supported Dr. Khan's research, were complicit in his activities.

But what has become clear in recent days is that Dr. Khan, a Pakistani national hero who began his rise 30 years ago by importing nuclear equipment to secretly build his country's atom bomb, gradually transformed himself into the largest and most sophisticated exporter in the nuclear black market.

"It was an astounding transformation when you think about it, something we've never seen before," said a senior American official who has reviewed the intelligence. "First, he exploits a fragmented market and develops a quite advanced nuclear arsenal. Then he throws the switch, reverses the flow and figures out how to sell the whole kit, right down to the bomb designs, to some of the world's worst governments."

The story of that transformation emerges from recent interviews on three continents -- from Islamabad, Pakistan's capital, to Kuala Lumpur, Malaysia; from the streets of Dubai, where many of the deals were cut, to Washington and Vienna, where intelligence agencies and the International Atomic Energy Agency struggled to understand and defuse the threat.

Taken together, they show how Dr. Khan assembled a far-reaching organization of scientists, engineers and business executives who operated on murky boundaries between the legal and the illegal, sometimes underground but often in plain view, unencumbered by international agreements that prohibit trafficking in nuclear technology.

Dr. Khan started in the mid-1980's, according to nuclear proliferation experts, by ordering twice the number of parts the Pakistani nuclear program needed, and then selling the excess to other countries, notably Iran.

Later, his network acquired another customer: North Korea, which was desperate for a more surreptitious way to build nuclear weapons after the United States had frozen the North's huge plutonium-production facilities in Yongbyon.

And in the end he moved on to Libya, his ultimate undoing, selling entire kits, from centrifuges to enrich uranium, to crude weapons designs. Investigators found the weapons blueprints wrapped in bags from an Islamabad dry cleaner.

In his speech yesterday, Mr. Bush said the network even sold raw uranium to be processed into bomb fuel. He also identified Dr. Khan's deputy -- "the network's chief financial officer and money-launderer," he called him -- as Bukhari Sayed Abu Tahir, a businessman in Dubai, who, investigators say, placed the order for the Libyan equipment.

One longtime trading partner of Dr. Khan's was Peter Griffin, a British engineer who said in an interview that he had been a supplier to Pakistan for two decades, in the period when Dr. Khan was building nuclear weapons.

"Anything that could be sent to Pakistan, I sent to Pakistan," he said. But he said that all his sales had been approved by British trade authorities.

Mr. Griffin is also the partner in a Dubai company that investigators said placed the order for materials that wound up on the ship headed for Libya, although he denies knowing anything about that shipment.

For years hints of Dr. Khan's operation circulated widely among intelligence officers and officials in Pakistan, the United States and elsewhere. But Pakistan's president, Gen. Pervez Musharraf, confronted Dr. Khan only after the BBC China was seized on its way to Libya and evidence of the network tumbled out. Last week Dr. Khan issued a public confession and then was pardoned by General Musharraf.

The deference shown Dr. Khan at the end began decades before, when he was working secretly and successfully to make his country a nuclear power.

"Khan had a complete blank check," said one aide close to General Musharraf. "He could do anything. He could go anywhere. He could buy anything at any price."

Research Roots in Holland

Dr. Khan's start came with India's first atomic test in 1974, an event that so traumatized Pakistan that developing its own weapon became the country's most pressing goal. "We will eat grass or leaves, even go hungry, but we will get one of our own," said Zulfiqar Ali Bhutto, then the prime minister.

Dr. Khan, a bright young Pakistani metallurgist working in the Netherlands, lent his aid. From his perch at Urenco, a European consortium, he possessed blueprints of the world's best centrifuges -- the hollow metal tubes that spin very fast to enrich natural uranium into bomb fuel.

A set of thousands of centrifuges, called a cascade, concentrates the rare U-235 isotope to make a potent fuel.

"I saw top-secret technical drawings in his house," recalled Frits Veerman, a Dutch colleague who shared an office with Dr. Khan.

Dr. Khan stole the designs, Dutch investigators found, and he fled back to Pakistan in 1976. He used the blueprints and his knowledge to set up an enrichment project in Kahuta, near Islamabad, that reported directly to the prime minister. He drew heavily on Dutch lists of nearly 100 companies that supplied centrifuge parts and materials.

"They literally begged us to buy their equipment," Dr. Khan boasted in 2001 in a publication celebrating the 25th anniversary of his Pakistani laboratory. "My long stay in Europe and intimate knowledge of various countries and their manufacturing firms was an asset."

Business executives and merchants, including German, Dutch and French middlemen, flocked to Pakistan to offer price lists for high-technology goods and learn what Pakistan needed. The multilingual Dr. Khan led the acquisition effort. His shopping spree spanned the world.

"Africa was important because of the materials needed," said a senior Pakistani official involved in the investigation of Dr. Khan. "Europe was crucial for bringing in high-tech machines and components. Dubai was the place for shipments and for payments.

"We were not the first beneficiaries of this network. But the intensity of Pakistan's nuclear acquisition effort did enlarge the market. Everybody knew that there is a buyer out there, loaded with money and hellbent on getting this ultimate weapon."

Even in the early days, the trade was no secret. Washington sent Germany dozens of complaints about their leaky export-control system that let "dual use" technology leave even though some was clearly intended for Pakistan's nuclear program, said Mark Hibbs, a Germany-based editor of a technical journal, Nucleonics Week. But many of those warnings were ignored, he said.

Mr. Veerman said Dutch companies continued to work with Dr. Khan after it was clear he was developing centrifuges for a weapon. Dr. Khan even sent scientists to the Netherlands in the late 1970's for centrifuge-related training.

Eventually the flow of technology reversed, two senior Pakistani military officials involved in the probe of Dr. Khan said. "These contacts and channels were later used for sending technology out of Pakistan by certain individuals," a military official said, "including Dr. A. Q. Khan."

From Buyer to Seller

Dr. Khan had three motives, investigators say. He was eager to defy the West and pierce "clouds of the so-called secrecy," as he once put it. He was equally eager to transfer technology to other Muslim nations, according to a senior Pakistani politician. "He also said that giving technology to a Muslim country was not a crime," the politician said.

But another motive appears to have been money. As Dr. Khan's nuclear successes grew, so did his wealth. He acquired homes and properties, including a tourist hotel in Africa.

A family friend said Dr. Khan spoke of the centrifuge designs he perfected as if the technology belonged to him personally, not to Pakistan. A senior politician said that in meetings with Chaudry Shujat Hussain, leader of a pro-Musharraf political party, Dr. Khan never spoke of selling the technology, only of "sharing" it.

He started slowly. He simply ordered more parts in the black market than he needed for Pakistan.

At first, Western intelligence agencies tracking Dr. Khan were perplexed.

"In the 1980's, I remember being told by officials that Khan was over-ordering centrifuge parts and they couldn't understand why," recalled Simon Henderson, a London-based author who has written extensively about Dr. Khan. It eventually became clear that the extras went to clients outside Pakistan.

Around 1987, Dr. Khan struck a deal with Iran, which wanted to build 50,000 centrifuges of a type known as P-1, for Pakistan-1, an entry-level model, Western investigators found. If ever completed, a plant that size would let Tehran make fuel for about 30 atom bombs each year.

As Pakistan's own technology became more sophisticated, Dr. Khan sold old Pakistani centrifuges and parts, Western investigators found, some contaminated with highly enriched uranium.

Iran appears to have acquired such second-hand gear. "They were not happy to discover they overpaid for old wares," said one American intelligence official. But for Iran, it was a start.

A Pakistani military official involved in the investigation of Dr. Khan said foreign requests for technology "came on paper, in person, through third parties, in meetings with Khan himself."

The scientist then used the vast logistic system available to him, which included government cargo planes, to ship the components to middlemen, who cloaked the source.

"The same network, the same routes, the same people who brought the technology in were also sending it out," said the military official.

In the final stages of his export career, Dr. Khan simply used his middlemen to order large shipments of parts for foreigners, even if Pakistan had no apparent role in the transaction and appeared to receive no direct benefits, American investigators said.

A Made-to-Order Customer

When Libya embarked on a two-step effort to become a nuclear-weapons nation, Dr. Khan's network was presented with an opportunity to sell a particularly sophisticated system. The network was moving to a new level of ambition.

Libya's initial focus was the aging P-1 design, American and European investigators said. But eventually the Libyans sought a more efficient technology, the P-2, made of maraging steel, a superhard alloy. That design has steel rotors that could spin nearly twice as fast as earlier aluminum ones, doubling the rate of enrichment.

The central figure in the Libyan P-2 effort, American officials said, was Mr. Tahir, a Sri Lankan native who had moved to Dubai as a child. Dr. Khan had attended Mr. Tahir's wedding in 1998, Malaysian officials said.

In his speech yesterday, Mr. Bush said Mr. Tahir used a company in Dubai, SMB Computers, "as a front for the proliferation activities of the A. Q. Khan network." Corporate records list him as an owner.

Another associate whose name surfaced in the Libyan deal was Mr. Griffin, the British engineer who long procured gear for Dr. Khan, according to investigators in several countries, corporate records and company officials.

Interviewed by telephone from France, Mr. Griffin, 68, declined to discuss details of his early relationship with Dr. Khan but said he had known him for decades. "We met ages ago," he said.

Mr. Griffin said that all the items he sent to Pakistan were approved by the British Department of Trade and Industry and that he had done nothing illegal. He said the British authorities had seized his computer in June from his home in France. That had given rise to false "suspicions that Gulf Technical Industries and myself were doing things for Libya," Mr. Griffin said. "There's no such truth in it."

In June 2000, according to investigators and public records, Mr. Griffin set up a trading company in Dubai, Gulf Technical Industries. The following year, it contracted with a Malaysian manufacturing conglomerate to make sophisticated parts.

The manufacturer, Scomi Group Berhad, said it signed a contract with Gulf Technical in December 2001 to supply the components. Mr. Griffin and Mr. Tahir had met with company officials months earlier, in February 2001, to discuss the possible deal, said Rohaida Ali Badaruddin, a Scomi spokeswoman. After the contract was signed, Scomi set up Scomi Precision Engineering, hired some 40 workers, bought costly machine tools and began work, she said.

Dr. Khan provided the blueprints for the machines and parts, said a close aide to General Musharraf who is familiar with the Pakistani investigation. "He had given most of the designs," the aide said. At one point Dr. Khan suggested that two of his senior aides join the Malaysian enterprise, the aide said.

Scomi Precision made its first shipment to Gulf Technical in December 2002 and the last in August 2003. Investigators said the shipments were largely P-2 centrifuge parts.

Throughout the work at Scomi Precision, the man known as Tinner, an engineer sent from Dubai by Mr. Tahir, was on site overseeing the work, a Scomi official said.

In a statement, Scomi said the shipments had consisted only of "14 semifinished components." Company officials said they never knew of the intended use of the parts.

A senior Bush administration official disputed the company's account, saying it would be highly unlikely that someone there did not know what they were producing. American and European weapons experts also said that the shipment headed for Libya contained thousands of centrifuge parts.

"Their goal was far reaching," a top European nuclear expert said of the Libyans. "They had ordered this very large amount."

Mr. Griffin acknowledged that he had been to Malaysia and that he and Mr. Tahir had met with Scomi officials. But he said the discussion had to do with exports of tank trucks, a deal he said never materialized. Mr. Griffin said that if Mr. Tahir had continued to meet with Scomi officials, or struck any deals, he had not authorized it.

But a Scomi official insisted the meeting was to discuss Scomi's contract for finely tooled parts.

Malaysian officials said Mr. Tahir was under investigation in Malaysia, but was not under arrest. His younger brother, Sayed Ibrahim Bukhari, said in a telephone interview this week that Mr. Tahir does not hold any ownership position in SMB Computers.

Mr. Bush said the Malaysian authorities had assured Washington that the Scomi factory was no longer producing centrifuge parts.

An American expert said the Libyans planned on making at least 10,000 of the machines. Such a complex would make enough highly enriched uranium each year for about 10 nuclear weapons.

But the advanced centrifuges never reached Libya. They were seized on the BBC China.

When investigators went to Libya, they found that Dr. Khan's network had also provided blueprints for a nuclear weapon. For investigators, it was a startling revelation of how audacious and dangerous the black market had become. And it made them recognize that they did not know who else out there was buying and selling.

Mohamed ElBaradei, director general of the International Atomic Energy Agency, said, "We haven't really seen the full picture."

This article was originally published in The New York Times on February 12, 2003. Copyright © 2003 The New York Times. For more New York Times articles please visit www.nytimes.com.

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• "Inquiry Suggests Pakistanis Sold Nuclear Secrets" (December 22, 2003)
• "Delicate Dance for Musharraf in Nuclear Case" (February 8, 2004)
• "A Tale of Nuclear Proliferation: How Pakistani Built His Network" (February 12, 2004)

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