Booming Business in D.C.

A federal criminal investigation has uncovered evidence that the government of Pakistan made clandestine purchases of U.S. high-technology components for use in its nuclear weapons program in defiance of American law.

Federal authorities also say the highly specialized equipment at one point passed through the hands of Humayun Khan, an Islamabad businessman who they say has ties to Islamic militants...

U.S. law prohibits the sale of equipment that can be used in nuclear weapons programs to Pakistan and some other countries as part of the effort to curb nuclear proliferation. Officials accuse Humayun Khan and Karni of conspiring to break those laws by concealing the nature of the transactions. Humayun Khan has not been charged with any crime, but the Commerce Department on Jan. 31 banned him from doing business in the U.S...

...efforts by two U.S. agencies to send investigators to Pakistan to gather more evidence have hit a bottleneck in Washington, said officials knowledgeable about the case.

The impasse is part of a larger tug-of-war between federal agencies that enforce U.S. nonproliferation laws and policymakers who consider Pakistan too important to embarrass. The transactions under review began in early 2003, well after President Pervez Musharraf threw his support to the Bush administration's war on terrorism and the invasion of neighboring Afghanistan to oust Pakistan's former Taliban allies.

"This is the age-old problem with Pakistan and the U.S. Other priorities always trump the United States from coming down hard on Pakistan's nuclear proliferation. And it goes back 15 to 20 years," said David Albright, director of the Washington-based Institute for Science and International Security. Albright, a former United Nations weapons inspector in Iraq, favors getting tougher with Pakistan.

U.S. and European officials involved in nonproliferation issues say they recently discovered evidence that Pakistan has begun a new push to acquire advanced nuclear components on the black market as it tries to upgrade its decades-old weapons program.

Current and former intelligence officials said the same elements of the Pakistani military that they suspected of orchestrating efforts to buy American-made products may also have worked with Abdul Qadeer Khan, the so-called father of the Pakistani nuclear program who supplied weapons know-how and parts to Iran, North Korea and Libya. Abdul Qadeer Khan and Humayun Khan are not related.

The scheme U.S. investigators are trying to unravel involves Humayun Khan and Asher Karni, a South African electronics salesman and former Israeli army major.

Aided by Karni, who pleaded guilty to violating export control laws and began cooperating with U.S. authorities shortly after his arrest 15 months ago, investigators have traced at least one shipment of oscilloscopes from Oregon to South Africa and on to Humayun Khan.

The trail did not end there, however. According to recently unsealed Commerce Department documents, agents followed the shipment to the Al Technique Corp. of Pakistan, which had not been listed on any of the shipping or purchasing documents.

Al Technique describes itself as a manufacturer of precision lasers and other military-related products. But for federal investigators, "it was a big red flag," one U.S. official said.

"It's definitely a front for nuclear weapons, for their WMD project," the official said. The company is on a U.S. list of firms banned from buying equipment such as the special oscilloscopes that can be used to test and manufacture nuclear weapons.

Like others interviewed for this report, the American official spoke on condition of anonymity, citing the political sensitivity of the case, the records of which have been sealed by a federal judge. The judge also has imposed a gag order on all participants.

U.S. officials suspect that the Pakistani government was the customer behind another purchase they say Humayun Khan made from Karni: 200 U.S.-made precision electronic switches that can be used in detonating nuclear weapons.

U.S. law prohibits the sale of equipment that can be used in nuclear weapons programs to Pakistan and some other countries as part of the effort to curb nuclear proliferation. Officials accuse Humayun Khan and Karni of conspiring to break those laws by concealing the nature of the transactions. Humayun Khan has not been charged with any crime, but the Commerce Department on Jan. 31 banned him from doing business in the U.S. for 180 days.

Halting illegal transfers of nuclear weapons components is a cornerstone of the administration's Proliferation Security Initiative, and the departments of Commerce and Homeland Security moved quickly to pursue leads after Karni's arrest.

His cooperation has allowed U.S. officials to significantly expand their investigation. As many as several dozen suspects are under scrutiny in Pakistan, India, South Africa, the United Arab Emirates and elsewhere, officials say.

Humayun Khan's involvement in the deal aroused concern because he has been linked to several militant groups, including the All Jammu and Kashmir Muslim Conference, a Pakistani party that allegedly supports fighters in the disputed territory of Kashmir.

Last year, federal prosecutors used Karni's ties to Humayun Khan to argue successfully against the South African being released on bail while awaiting trial.

"This case represents one of the most serious types of export violations imaginable," one prosecutor argued in a court filing.

U.S. agents began gearing up for an investigative trip to Pakistan in early 2004. They had recently completed a mission to South Africa that produced a wealth of evidence. They hoped to question Humayun Khan and others, locate missing components and pursue further leads.

But when the Commerce and Homeland Security departments asked the State Department to clear the investigators' trip, they did not get permission. Law enforcement officials complain that the delay has allowed the trail to grow cold...

Humayun Khan, in a telephone interview from Islamabad, denied any involvement with the recent shipments, saying that "someone else" ordered the oscilloscopes and the switches, had them shipped to his office, then snatched them somewhere along the way.

"It's very tragic," Humayun Khan said. "You don't know where these things are landing. They come through and they vanish."

He said Washington has allowed dozens of black market companies to flourish in Pakistan and elsewhere by selectively enforcing its nonproliferation laws.

"It's all about politics," Humayun Khan said. "If they don't want us to develop these things, they would do everything they can to stop it…. You [the American government] close one eye and open the other at particular times to these things that have been going on."

He said dozens of front companies throughout South Asia and the Middle East were procuring such components from U.S. firms for questionable purposes.

Humayun Khan said he had e-mailed detailed information to U.S. investigators about at least 10 Pakistani companies that he claimed routinely engaged in illicit schemes to buy goods from U.S. suppliers, including Tektronix Inc., the Oregon firm that allegedly sold him the oscilloscopes...