The following excerpt is from Bill Gertz's new book, Treachery, available for only $19.95 from the FrontPage Magazine Bookstore. Click here for Part I.
Part II: Libyan Sincerity on Arms in Doubt
Musa Kusa, the head of Libya's spy agency, got the attention of Britain's Foreign Office and MI6 intelligence service when he contacted them in March 2003.
Kusa was a man with blood on his hands. He had been deputy chief of Libyan intelligence when two of its agents were dispatched to blow up Pan Am Flight 103 in December 1988, killing all 259 on board and 11 on the ground.
When Kusa informed the British officials that he had an offer from Libyan dictator Moammar Gadhafi, they heard him out.
Kusa said Libya would agree to rid itself of all nuclear and chemical weapons and materials, along with longer-range missile delivery systems. Gadhafi's condition: Britain and the United States must help remove the sanctions on his regime and normalize relations with Libya, an officially designated state sponsor of terrorism.
The CIA was skeptical.
"You're talking to the most suspicious organization in the world," said one intelligence official who was closely involved in the negotiations.
Still, a decision was made at the highest levels of both governments — by President Bush and Prime Minister Tony Blair — to pursue the talks.
To Douglas Feith, U.S. undersecretary of defense for policy, Gadhafi's apparent decision to "open up" reflected a victory in Bush's global war on terrorism, which focused on the connections among terrorist organizations, weapons of mass destruction and state sponsors of terrorism.
For many years, Gadhafi tried to remain at that intersection while attempting to buy his way off the list of rogue states, Feith said.
"When President Bush made it clear that living at that intersection is really dangerous," Feith said, "Gadhafi decided he was going to come clean."
Over several months, CIA officers and British diplomatic and intelligence officials held secret meetings with Libyan representatives in London. In May 2003, Gadhafi himself met with U.S. and British officials in Tunisia. That fall, a CIA and MI6 team visited Libya.
Before a second planned visit to Libya could take place, another event exposed a clandestine network of nuclear suppliers headed by scientist Abdul Qadeer Khan, the father of Pakistan's nuclear-weapons program.
And that same month, October 2003, a U.S.-initiated diversion and search of a German-flagged ship bound for Libya from the United Arab Emirates also called into question Gadhafi's sincerity in negotiating Libya's nuclear and chemical disarmament.
Khan's key man
What one CIA official called a "breakthrough" in the secret arms talks with Libya was the result of electronic eavesdropping conducted by the supersecret U.S. National Security Agency (NSA).
Back in 2000, U.S. intelligence agencies had put Khan under clandestine electronic surveillance and soon confirmed long-held suspicions that he was a major figure in the proliferation of nuclear weapons. Intercepts revealed that Khan's network of companies and contacts stretched from Southeast Asia to Europe.
The intercept that reached NSA headquarters in early October 2003 concerned Khan and key associate Buhary Seyed Abu Tahir, a Sri Lankan businessman. Tahir, having married a Malaysian in 1998, was a permanent resident of Malaysia.
U.S. officials said Tahir and his brother owned SMB Group, a company based in Dubai, United Arab Emirates.
Tahir did work with SCOMI Precision Engineering, known as SCOPE, a subsidiary of a petroleum-services company that produced centrifuge parts for Libya's growing nuclear-weapons program. SCOPE had a plant in Shah Alam, Malaysia, about 95 miles southeast of the capital of Kuala Lumpur, where it worked on centrifuge components for Gadhafi.
The evidence in the NSA intercept led investigators directly to Tahir, who would reveal the extent of his involvement with Khan and the reach of Khan's network. Investigators later concluded that Tahir's company served as a front for numerous black-market deals for nuclear technology; he was a key player in building Libya's program.
Tahir's first contact with A.Q. Khan occurred in 1985, when Tahir visited Pakistan and won a contract to supply air-conditioning equipment to the Khan Research Laboratory.
U.S. officials concluded that Tahir played a critical role in Khan's covert nuclear-weapons network, which would sell equipment — specifically centrifuge components — to Libya, Iran, North Korea and other rogue states. The network cleverly disguised transactions by also selling commercial equipment used in oil drilling, water treatment and other unrelated endeavors.
Investigators reveal that in about 1995, Khan asked Tahir to send two containers of centrifuge parts from Dubai to Iran aboard an Iranian merchant ship.
Iran paid Tahir and Khan about $3 million. The cash was delivered in suitcases to a guesthouse in Dubai that Khan used during frequent visits to the Persian Gulf.
In 1997, Libyan intelligence agents reportedly contacted Khan and requested help in developing a uranium-enrichment system with centrifuges. Several meetings between Khan and the Libyans followed, including one in Istanbul. Among those present were Khan, Tahir and two Libyan arms-procurement officials, Mohamad Matuq Mohamad and a man identified only as Karim. The Libyans said they wanted to build a centrifuge and were willing to pay for it, whatever the cost.
Khan, Tahir and Mohamad met several times between 1998 and 2002 — at least once in Dubai and once in Casablanca, Morocco, Tahir later said.
In 2001, Khan notified Tahir that Pakistan had sent Libya a shipment of uranium hexafluoride, the gas necessary to produce highly enriched uranium for nuclear bombs. By 2001 and 2002, Khan was sending centrifuge components for complete machines aboard Pakistani cargo flights to Libya.
Tahir told Malaysian investigators that he thought the centrifuge design had been copied from the P1 model, which Pakistan adapted from a centrifuge plan stolen from the European conglomerate Urenco.
The Libyans put the centrifuges in a nuclear facility code-named Project Machine Shop 1001. Tahir said Libya used middlemen to set up the facility and to obtain equipment, including a lathe to make centrifuge components and a furnace to temper them.
Tahir identified a key middleman as Peter Griffin, a British national who was retired and living in France. Griffin's son now headed his company, Gulf Technical Industries.
Tahir disclosed the names of other nuclear agents. One was the late Heinz Mebus, an engineer who helped Khan smuggle centrifuge designs to Iran in 1984 and 1985.
Another supplier was Gotthard Lerch, a German who lived in Switzerland and at one time worked for the German company Leybold Heraeus, producer of vacuum technology. Lerch tried to help the Libyans obtain specialty pipes for Machine Shop 1001 from South Africa, but was unable to conclude the deal even after Libya paid for the tubes in advance.
Tahir also fingered Gunas Jireh, a Turkish national whom Khan had hired to supply aluminum casting and a centrifuge dynamo for the Libyan nuclear program. Another Turk, engineer Selim Alguadis, supplied the Libyan nuclear program with electrical cabinets and voltage-regulator equipment.
Tahir said some of the most important contributors to the Libyan nuclear program came from a Swiss family, the Tinners.
Friedrich Tinner, a mechanical engineer, had worked covertly with Khan since the 1980s and was able to provide safety valves for centrifuges obtained from European manufacturers. Tinner arranged for the goods to be shipped to Libya by way of Dubai.
Tinner's son, Urs, worked for Tahir and helped set up SCOPE's factory in Malaysia in December 2001. Urs was also in charge of setting up Libya's machine shop. At one point, he coordinated with brother Marco, owner of Switzerland's Traco Co., to import key machines to Libya. Urs also procured machines from Britain, France and Taiwan.
In all, the Khan network helped Libya purchase more than a hundred machine tools for its plant. Libya's goal was to produce a cascade of 10,000 centrifuges to make highly enriched uranium for nuclear bombs.
Stopping a ship
The Libyans made other efforts to hide their nuclear procurement. When purchasing raw materials for centrifuge components, they chose a grade of aluminum tubes that was not controlled for export and thus would not raise suspicions among intelligence agencies.
Libya purchased 300 metric tons of tubes from a Singapore-based company that was a subsidiary of the German company Bikar Metalle. Tahir then arranged for the tubes to be machined at the SCOPE plant in Malaysia.
Between December 2002 and August 2003, even while the Libyans were in disarmament talks with British and U.S. intelligence, Tahir sent the tubes to Libya in four shipments via a trading company in Dubai.
But Libya's ongoing nuclear advances were thwarted Oct. 4, 2003, seven months after its spy chief, Kusa, first reached out to the British.
That was the day the CIA alerted German and Italian authorities that the German-flagged ship BBC China was bound for Libya with parts for its nuclear program.
The vessel had set sail from Dubai. The U.S. government contacted the ship's owner, the German company BBC Chartering and Logistic GmbH, and asked for help in blocking the shipment. With that assistance and the presence of a U.S. warship, the vessel was diverted to a port in Italy.
This was considered the first action of what is now known as the Proliferation Security Initiative, the Bush administration's program for halting illegal-weapons sales.
When investigators boarded the BBC China and seized the cargo, they confirmed that five shipping containers contained parts that could have helped Gadhafi build nuclear bombs.
The containers were filled with wooden boxes bearing the SCOPE logo. All the goods were made of high-quality aluminum used to make high-speed centrifuges for enriching uranium. Also on board were the aluminum casting goods and dynamo that nuclear agent Gunas Jireh had procured for Libya.
U.S. intelligence agencies previously had not known the extent of Libya's nuclear-arms program.
Two weeks later, investigators discovered that Tahir had arranged to ship electrical components to Libya for its machine plant.
Caught in the act, Libya was forced to publicly reveal it had worked secretly to build nuclear as well as chemical weapons.
Gadhafi, concerned about his legacy and an economy hit hard by sanctions, made a startling announcement two months later, in December 2003. The dictator said Libya would abandon its nuclear and chemical arms programs, limit the range of its missiles and comply with numerous international weapons treaties.
Libya ultimately admitted it had spent some $500 million since the late 1990s in developing nuclear weapons.
Gadhafi's announcement was widely hailed as a victory in the effort to stem the flow of nuclear-weapons technology to rogue states.
Feith, the U.S. undersecretary of defense, was more cautious. But he acknowledged that Libya's pledge to disarm could be an important step.
Feith suggested that Gadhafi adopted this approach after the sobering U.S.-led ousters of the Taliban from Afghanistan and Saddam from Iraq.
"At that point, Gadhafi, having tried for years to get off the 'bad list' [of rogue states] by means short of opening up, decided that he had to open up," Feith said. "Now, what does one infer from that? I suppose it seems as if he came to the conclusion that it was too risky being coy, it was too risky trying these lesser means to get off the bad list.
"And it became more urgent for him to get off the bad list when he saw the fate of the Taliban regime and the Saddam Hussein regime."
Still, the Libyans have continued to deny the existence of a biological-weapons program, even though numerous intelligence reports indicate they have such a program.
Feith and other U.S. officials were right to be cautious and skeptical about Gadhafi's disarmament pledge. In May, the United Nations' International Atomic Energy Agency (IAEA) produced a report that confirmed their suspicions.
The confidential report praised the Libyan government for allowing inspectors to examine nuclear-weapons facilities, and it disclosed for the first time the exact locations of those sites. But on the whole, the report was a sobering reminder that much remained unknown about the Libyan nuclear-weapons program.
The report stated, for example, that Libya failed to provide documents confirming the program had been dismantled. And U.S. officials said the Libyans could not account for major portions of components and equipment.
The IAEA report stated that a container of centrifuge components "actually arrived in Libya in March 2004."
The report concluded that "nearly all of the technology involved in Libya's past nuclear activities was obtained from foreign sources, often through intermediaries."
The IAEA did not identify countries or persons, but those involved included at least one declared nuclear-weapons state, probably Russia or China; an Eastern European nation; a Western European company; a Far Eastern country; and a "supplier state" thought to be Pakistan.
"Libya has stated that centrifuge-related training had been provided by foreign experts at locations in Africa, Asia, Europe, the Middle East and Southeast Asia," the report said.
The stark conclusion was that Libya, known to support international terrorism, received much assistance in building the most deadly weapons known to man.
Reason for doubt
The report's most alarming section related to whether the Libyans tried to make a nuclear warhead. Libyan government officials said that in January, they turned over to the United States all documents and drawings related to nuclear weapons design and manufacturing. They asserted that the data never had been transferred in electronic form.
"It is practically impossible for the agency to prove or disprove such statements," the IAEA reported, highlighting just how much remained unknown about the Libyan program — and the difficulty of weapons monitoring and verification in general.
Libya received design data for nuclear warheads in late 2001 or early 2002, but the Libyans said they did not act on the information or even check whether it was credible or practical. The IAEA doubted this.
"This is surprising," the IAEA report said, "given the substantial effort that was being devoted to uranium enrichment."
U.S. officials familiar with Libya's program said the design data originated in China and probably had been re-exported from Pakistan through Khan's network.
As it did in Iran, the IAEA discovered trace amounts of weapons-grade uranium on centrifuge components in Libya. The highly enriched uranium may have come from equipment sent from Pakistan or it could have been produced in Libya.
Whatever the case, the discovery raised serious questions about how far along the Libyan nuclear program was — and whether Libya's promises could be trusted.
Click here to read Part III. Click here for Part I. Purchase Bill Gertz's new book, Treachery, available for only $19.95 from the FrontPage Magazine Bookstore.