May 20, 2007 in Nation/World

CIA finds Iraq resources fund al-Qaida in Pakistan

Greg Miller Los Angeles Times

WASHINGTON – A major CIA effort launched last year to hunt down Osama bin Laden has produced no significant leads on his whereabouts, but has helped track an alarming increase in the movement of al-Qaida operatives and money into Pakistan’s tribal territories, according to senior U.S. intelligence officials familiar with the operation.

In one of the most troubling trends, U.S. officials said that al-Qaida’s command base in Pakistan increasingly is being funded by cash coming out of Iraq, where the terrorist network’s operatives are raising substantial sums from donations to the anti-American insurgency as well as kidnappings of wealthy Iraqis and other criminal activity.

The influx of money has bolstered al-Qaida’s leadership ranks at a time when the core command is regrouping and reasserting influence over its far-flung network. The trend also signals a reversal in the traditional flow of al-Qaida funds, with the network’s leadership surviving to a large extent on money coming in from its most profitable franchise, rather than distributing funds from headquarters to distant cells.

Al-Qaida’s efforts were aided, intelligence officials said, by Pakistan’s withdrawal in September of tens of thousands of troops from tribal areas along the Afghanistan border where bin Laden and his top deputy, Ayman al-Zawahiri, are believed to be hiding.

Little more than a year ago, al-Qaida’s core command was thought to be in a financial crunch. But U.S. officials said cash shipped from Iraq has eased those troubles.

“Iraq is a big moneymaker for them,” said a senior U.S. counterterrorism official.

The evolving picture of al-Qaida’s finances is based in part on intelligence from an aggressive effort launched last year to intensify the pressure on bin Laden and his senior deputies.

As part of a “surge” in personnel, the CIA deployed as many as 50 clandestine operatives to Pakistan and Afghanistan – a dramatic increase over the number of CIA case officers permanently stationed in those countries. All of the new arrivals were given the primary objective of finding what counterterrorism officials call “HVT1” and “HVT2.” Those “high value target” designations refer to bin Laden and al-Zawahiri.

The surge was part of a broader shake-up at the CIA designed to refocus on the hunt for bin Laden, officials said. One former high-ranking agency official said the CIA had formed a task force that involved officials from all four directorates at the agency, including analysts, scientists and technical experts, as well as covert operators.

The officials were charged with reinvigorating a search that had atrophied when some U.S. intelligence assets and special forces teams were pulled out of Afghanistan in 2002 to prepare for the war with Iraq.

Nevertheless, U.S. intelligence and military officials said, the surge has yet to produce a single lead on bin Laden’s or al-Zawahiri’s location that could be substantiated.

“We’re not any closer,” said a senior U.S. military official who monitors intelligence on the hunt for bin Laden.

The lack of progress underscores the difficulty of the search more than five years after the Sept. 11 attacks. Despite a $25 million U.S. reward, current and former intelligence officials said, the United States has not had a lead on bin Laden since he fled American and Afghan forces in the Tora Bora region of Afghanistan in early 2002.

“We’ve had no significant report of him being anywhere,” said a former senior CIA official who, like others interviewed for this article, spoke on condition of anonymity when discussing U.S. intelligence operations.

President Bush is given detailed presentations on the hunt’s progress every two to four months, in addition to routine counterterrorism briefings, intelligence officials said.

The presentations include “complex schematics, search patterns, what we’re doing, where the Predator flies,” said one participant, referring to flights by unmanned airplanes used in the search.

Still, officials said, they have been unable to answer the basic question of whether they are getting closer to their target.

“Any prediction on when we’re going to get him is just ridiculous,” said the senior U.S. counterterrorism official. “It could be a year from now or the Pakistanis could be in the process of getting him right now.”

In a written response to questions from the Los Angeles Times, the CIA said it “does not as a rule discuss publicly the details of clandestine operations,” but acknowledged it had stepped up operations against bin Laden and defended their effectiveness.

“The surge has been modest in size, here and overseas, but has added new skills and fresh thinking to the fight against a resilient and adaptive foe,” CIA spokesman Paul Gimigliano said in the statement.

The CIA spies are part of a broader espionage arsenal aimed at bin Laden and al-Zawahiri that includes satellites, electronic eavesdropping stations and the unmanned airplanes.

Current and former U.S. intelligence officials involved in the surge said it had been hobbled by a number of other developments. Chief among them, they said, was Pakistan’s troop pullout last year from border regions where the hunt has been focused. Just months after the CIA deployed dozens of additional operatives to its station in Islamabad, Pakistan – as well as bases in Peshawar and other Pakistani locations – Pakistani President Pervez Musharraf announced “peace agreements” with tribal leaders in Waziristan.

Driven by domestic political pressures and rising anti-American sentiment, the agreements called for the tribes to rein in the activities of foreign fighters, and bar them from launching attacks in Afghanistan, in exchange for a Pakistani military pullback.

But U.S. officials said there is little evidence that the tribal groups have followed through.

“Everything was undermined by the so-called peace agreement in north Waziristan,” said a senior U.S. intelligence official responsible for overseeing counterterrorism operations. “Of all the things that work against us in the global war on terror, that’s the most damaging development. The one thing al-Qaida needs to plan an attack is a relatively safe place to operate.”

The pullback took significant pressure off al-Qaida leaders and tribal groups protecting them. It also made travel easier for operatives migrating to Pakistan after taking part in the insurgency in Iraq. Some of these veterans are leading training at newly established camps, and are positioned to become the “next generation of leadership” in the organization, said the former senior CIA official.

“Al-Qaida is dependent on a lot of leaders coming out of Iraq for its own viability,” said the former official, who recently left the agency. “It’s these sorts of guys who carry out operations.”

The administration’s concern was underscored when Vice President Dick Cheney and Deputy CIA Director Stephen Kappes visited Musharraf in Pakistan in February to prod him to crack down on al-Qaida and its training camps.

The Pakistani pullback also has reopened financial channels that had been constricted by the military presence. The senior U.S. counterterrorism official said there are “lots of indications they can move people in and out easier,” and that operatives from Iraq often bring cash.

“A year ago we were saying they were having serious money problems,” the official said. “That seems to have eased up.”

The cash is mainly U.S. currency in relatively modest sums – tens of thousands of dollars. The scale of the payments suggests the money is not meant for funding elaborate terrorist plots, but for covering the day-to-day costs of al-Qaida’s command: paying off tribal leaders, hiring security and buying provisions.

Al-Qaida in Mesopotamia, as the network’s Iraq branch is known, has drawn increasingly large contributions from elsewhere in the Muslim world – largely because the fight against U.S. forces has mobilized donors across the Middle East, officials said.

“Success in Iraq and Afghanistan is the reason people are contributing again, with money and private contributions coming back in from the gulf,” said the senior U.S. counterterrorism official.

He added that al-Qaida in Mesopotamia also has become an effective criminal enterprise.

“The insurgents have great businesses they run: stealing cars, kidnapping people, protection money,” the counterterrorism official said. The former CIA official said the activity is so extensive that the “ransom-for-profit business in Iraq reminds me of Colombia and Mexico in the 1980s and ‘90s.”

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