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SPECIAL REPORT-Why U.S. mistrusts Pakistan's powerful spy agency

Thu, 5 May 2011 13:29 GMT

Source: reuters // Reuters

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* Pakistan's ISI had no warning of bin Laden raid

* Keeping ISI in the dark, Obama showed depth of distrust

* Pakistan's spies long used militants as weapon of war

* Relations may get tougher under new CIA boss Petraeus

By Chris Allbritton and Mark Hosenball

ISLAMABAD/WASHINGTON, May 5 (Reuters) - In 2003 or 2004, Pakistani intelligence agents trailed a suspected militant courier to a house in the picturesque hill town of Abbottabad in northern Pakistan. There, the agents determined that the courier would make contact with one of the world's most wanted men, Abu Faraj al-Libbi, who had succeeded Sept. 11 mastermind Khalid Sheik Muhammad as al Qaeda operations chief a few months earlier. Agents from Pakistan's powerful and mysterious Inter-Services Intelligence agency, known as the ISI, raided a house but failed to find al-Libbi, a senior Pakistani intelligence official told Reuters this week.

Former Pakistan President Pervez Musharraf later wrote in his memoirs that an interrogation of the courier revealed that al-Libbi used three houses in Abbottabad, which sits some 50 km (30 miles) northeast of Islamabad. The intelligence official said that one of those houses may have been in the same compound where on May 1 U.S. special forces killed al Qaeda leader Osama bin Laden.

It's a good story. But is it true? Pakistan's foreign ministry this week used the earlier operation as evidence of Pakistan's commitment to the fight against terrorism. You see, Islamabad seemed to be pointing out, we were nabbing bad guys seven years ago in the very neighborhood where you got bin Laden.

But U.S. Department of Defense satellite photos show that in 2004 the site where bin Laden was found this week was nothing but an empty field. A U.S. official briefed on the bin Laden operation told Reuters he had heard nothing to indicate there had been an earlier Pakistani raid.

There are other reasons to puzzle. Pakistan's foreign ministry says that Abbottabad, home to several military installations, has been under surveillance since 2003. If that's true, then why didn't the ISI uncover bin Laden, who U.S. officials say has been living with his family and entourage in a well-guarded compound for years?

The answer to that question goes to the heart of the troubled relationship between Pakistan and the United States. Washington has long believed that Islamabad, and especially the ISI, play a double game on terrorism, saying one thing but doing another.

MARRIAGE OF CONVENIENCE

Since 9/11 the United States has relied on Pakistan's military to fight al Qaeda and Taliban forces in the mountainous badlands along Pakistan's border with Afghanistan. President George W. Bush forged a close personal relationship with military leader Musharraf.

But U.S. officials have also grown frustrated with Pakistan. While Islamabad has been instrumental in catching second-tier and lower ranked al Qaeda and Taliban leaders, and several operatives identified as al Qaeda "number threes" have either been captured or killed, the topmost leaders - bin Laden and his Egyptian deputy Ayman al Zawahiri -- have consistently eluded capture.

The ISI, which backed the Taliban when the group came to power in Afghanistan in the mid-1990s, seemed to turn a blind eye -- or perhaps even helped -- as Taliban and al-Qaeda members fled into Pakistan during the U.S invasion of Afghanistan after 9/11, according to U.S. officials.

Washington also believes the agency protected Abdul Qadeer Khan, lionized as the "father" of Pakistan's bomb, who was arrested in 2004 for selling nuclear secrets to Iran, Libya and North Korea.

And when Kashmiri militants attacked the Indian city of Mumbai in 2008, killing 166 people, New Delhi accused the ISI of controlling and coordinating the strikes. A key militant suspect captured by the Americans later told investigators that ISI officers had helped plan and finance the attack. Pakistan denies any active ISI connection to the Mumbai attacks and often points to the hundreds of troops killed in action against militants as proof of its commitment to fighting terrorism.

But over the past few years Washington has grown increasingly suspicious-and ready to criticize Pakistan. The U.S. military used association with the spy agency as one of the issues they would question Guantanamo Bay prisoners about to see if they had links to militants, according to WikiLeaks documents made available last month to the New York Times.

U.S. Secretary of State Hillary Clinton said last July that she believed that Pakistani officials knew where bin Laden was holed up. On a visit to Pakistan just days before the Abbottabad raid, Admiral Mike Mullen, chairman of the U.S. Military's Joint Chiefs of Staff, accused the ISI of maintaining links with the Taliban.

As the CIA gathered enough evidence to make the case that bin Laden was in Abbottabad, U.S. intel chiefs decided that Pakistan should be kept in the dark. When U.S. Navy Seals roped down from helicopters into the compound where bin Laden was hiding, U.S. officials insist, Pakistan's military and intel bosses were blissfully unaware of what was happening in the middle of their country.

Some suspect Pakistan knew more than it's letting on. But the Pakistani intelligence official, who asked to remain anonymous so that he could speak candidly, told Reuters that the Americans had acted alone and without any Pakistani assistance or permission.

The reality is Washington long ago learned to play its own double game. It works with Islamabad when it can and uses Pakistani assets when it's useful but is ever more careful about revealing what it's up to.

"On the one hand, you can't not deal with the ISI... There definitely is the cooperation between the two agencies in terms of personnel working on joint projects and the day-to-day intelligence sharing," says Kamran Bokhari, Middle East and South Asia director for global intelligence firm STRATFOR. But "there is this perception on the part of the American officials working with their counterparts in the ISI, there is the likelihood that some of these people might be working with the other side. Or somehow the information we're sharing could leak out... It's the issue of perception and suspicion."

The killing of bin Laden exposes just how dysfunctional the relationship has become. The fact that bin Laden seems to have lived for years in a town an hour's drive from Islamabad has U.S. congressmen demanding to know why Washington is paying $1 billion a year in aid to Pakistan. Many of the hardest questions are directed at the ISI. Did it know bin Laden was there? Was it helping him? Is it rotten to the core or is it just a few sympathizers?

What's clear is that the spy agency America must work with in one of the world's most volatile and dangerous regions remains an enigma to outsiders.

GENERAL PASHA

ISI chief Lieutenant General Ahmed Shuja Pasha visited Washington on April 11, just weeks before bin Laden was killed. Pasha, 59, became ISI chief in September 2008, two months before the Mumbai attacks. Before his promotion, he was in charge of military operations against Islamic militants in the tribal areas bordering Afghanistan. He is considered close to Pakistan military chief General Ashfaq Parvez Kayani, himself a long-time ISI chief.

A slight man who wastes neither words nor movements, Pasha speaks softly and is able to project bland anonymity even as he sizes up his companions and surroundings. In an off-the-record interview with Reuters last year, he spoke deliberately and quietly but seemed to enjoy verbal sparring. There was none of the bombast many Pakistani officials put on.

Pasha, seen by U.S. officials as something of a right-wing nationalist, and CIA Director Leon Panetta, who was in the