Unprecedented Peril Forces Tough Calls

By the time Bush arrived in office, according to a recent British government report, the CIA and Britain's Secret Intelligence Service knew that "Khan was at the center of an international proliferation network" supplying uranium equipment "to at least one customer in the Middle East, thought to be Libya." Khan not only dealt in designs but also had begun mass production of components.

The U.S. government had a dilemma. The picture was alarming, incomplete and dependent on sensitive intelligence sources. And the man at the center of suspicion had a stature in Pakistan that easily exceeded Musharraf's.

The Bush administration sent envoys to Islamabad with deliberately opaque words of warning. Something was amiss at Khan Research Laboratories, they said, and its secrets were being marketed abroad. One official said Assistant Secretary of State Robert Einhorn told the three-star general overseeing Pakistan's strategic nuclear force: "Either you are not on top of this or you are complicit. Either one is disturbing."

U.S. officials did not mention Khan by name. They feared a confrontation that could break Musharraf's grip on power and, in the worst-case scenario, Thielmann said, bring about a "fundamentalist government in Pakistan that had nuclear weapons."

According to a senior Pakistani adviser, Khan's retirement banquet was Musharraf's attempt to satisfy Washington. "In order not to raise suspicions" at home, the official said, Musharraf retired another top official the same night.

The Bush administration, one U.S. policymaker said, welcomed Musharraf's decision to close the spigot on his nuclear technology. "At least," the policymaker said, "that's what we hoped it was."

It did not turn out that way. Khan changed titles but kept access to his labs. His global sales flourished.

By the second half of 2001, "the British government was certainly getting nervous that A.Q. Khan was continuing to supply stuff that might not be detected before we intervened to close it down," said a high-ranking British official with access to contemporary intelligence reports.

Most alarming was this: The CIA and British intelligence saw that Khan had more than one customer, but they could identify only Libya.

After the Sept. 11 attacks, Bush demanded a change in Pakistan's relationship with the Taliban and al Qaeda. Deputy Secretary of State Richard L. Armitage was preparing a list of "non-negotiable" demands for Pakistan's military intelligence chief, Mahmud Ahmed. The administration briefly debated: Should Khan be on the list?

Feroz Hassan Khan, who was then a director in the army's strategic plans division, said in an interview that "there would have been a positive response" if Armitage had used that moment to demand action against the nuclear black market. But Bush's national security team believed the United States could push Musharraf no harder.

Six weeks later, then-CIA Director George J. Tenet brought Bush news that a participant in the meeting described as sending the president "through the roof": Two Pakistani nuclear scientists, Sultan Bashiruddin Mahmood and Chaudhary Abdul Majid, had met with bin Laden in Afghanistan that summer. Tenet did not know whether they had a connection to Abdul Qadeer Khan -- much later, officials said, it grew clear they did not -- but he rushed to Islamabad to demand U.S. access to their questioning.