Unprecedented Peril Forces Tough Calls

With a supply of enriched uranium, Pyongyang would not need plutonium to build bombs. The CIA's best estimate, Bush administration officials said, was that North Korea could add two weapons to its arsenal each year.

On Oct. 5, 2002, Assistant Secretary of State James A. Kelly returned from a hastily arranged trip to Pyongyang with stunning news. When he confronted the North Koreans about U.S. suspicions, they responded by belligerently acknowledging his claims.

The Bush administration dispatched Kelly to brief allied ambassadors. One of them asked whether Bush would seek U.N. Security Council attention for Pyongyang. Kelly replied, according to a diplomat who was present, "The Security Council is for Iraq." Kelly said through a spokesman he does not remember the remark.

"Having been burned once," Falkenrath said, Bush's advisers refused to "start talking about benefits, carrots" for North Korea in exchange for further promises. "They say insanity is to just repeat the same behavior and expect a different outcome," he said.

The president's advisers agreed that North Korea must halt its uranium program but could not agree on steps to compel -- or provide incentives for -- Pyongyang's compliance. For the next six months -- a consuming period from the run-up to war in Iraq to the fall of Baghdad -- Bush largely set North Korea aside. His administration took no further action save to organize ongoing six-nation talks that began in August 2003.

In the same period, North Korea broke the seals on its stored plutonium, expelled U.N. inspectors, restarted its Yongbyon reactor and withdrew from the nuclear Nonproliferation Treaty.

"We had a choice and we played it tough, and so did they, and now we're stuck," said a senior intelligence official.

Bolton defended the record.

"This is quibbling, to say they had two plutonium-based weapons and now they have seven," Bolton replied. "The uranium enrichment capability gives them the ability to produce an unlimited number." That program, he said, began when Clinton sought to normalize relations with North Korea and Madeleine K. Albright, his secretary of state, was "dancing in Pyongyang and watching parades."

Einhorn, assistant secretary of state for nonproliferation under Clinton and through most of Bush's first year, said in an interview that "we were sniffing on the wrong trail through much of the '90s." Iran misdirected attention to a controversial reactor at Bushehr, when its more dangerous purchases of centrifuge equipment were going to a village called Natanz. Later, in 2003, the International Atomic Energy Agency would discover that Iran's supplier was Khan.

On Aug. 14, 2002, an exiled Iranian opposition group held a news conference in Washington to disclose the Natanz plant.

"The firepower of the U.S. government was directed at -- we were getting ready to go to war," said Falkenrath, who was senior director for proliferation strategy on the National Security Council staff and deputy White House homeland security adviser before leaving government in the spring. "There was stuff going on with Iran and North Korea" in interagency discussions, he said, "but it wasn't as intense as what was happening in Iraq."

In the Oval Office on Oct. 30, 2002, IAEA Director General Mohamed ElBaradei told Bush he had spoken to Iranian leaders and believed they could still be dissuaded from enriching uranium. According to sources with access to written accounts of their meeting, ElBaradei said Iran wanted to talk and offered to help open a quiet channel. Bush demurred.

The president's advisers were at a stalemate on what to do about Iran. One senior participant in the interagency debate, whose shorthand description matched that of many others, said the Defense Department and Vice President Cheney's office "tended toward a 'regime change' view of Iran," while State said "regime change is nice if you can get it at an acceptable price, but you can't."

That argument had begun nine months earlier, when deputy national security adviser Stephen J. Hadley asked the CIA to assess, among other things, the stability of the Iranian government. The agency's report said Iran was evolving toward democracy and that U.S. attempts to undermine the mullahs would cement them in power. Participants in the debate said Deputy Defense Secretary Paul D. Wolfowitz dismissed the report as "one man's opinion."

In a bid for consensus, Hadley supervised preparation of a national security presidential directive to guide Iran policy. Two officials who read the draft said it contained no more than a sentence on nuclear weapons -- calling for U.S. efforts to delay, disrupt and deter Iran's acquisition. Defense officials tried to insert more muscular language, participants said, and Secretary of State Colin L. Powell's representatives proposed incentives -- such as U.S. agreement to Iran's entry into the World Trade Organization -- if Iran changed its behavior in ways that could be verified.

Mutual vetoes by competing camps left those changes unmade and the document unsigned as Bush completes his term.

Twice more after ElBaradei's visit, Tehran signaled interest in discussing its nuclear program. Swiss Ambassador Tim Guldimann arrived in Washington carrying an plan he had discussed with Mohammad Sadegh Kharazi, a nephew of Iranian Foreign Minister Kamal Kharazi and Iran's ambassador to France. The agenda laid out the framework of a "grand bargain." The administration brushed it aside. "We're not interested in any grand bargain," Bolton said.

To avoid "misunderstanding and potential conflict," one official said, the Bush administration did permit secret talks as it prepared to launch two wars on Iran's border. Periodically over 18 months, the two sides discussed their mutual interests in Afghanistan and Iraq. But "instructions were clear" to the U.S. negotiators, a Bush administration policymaker said: "Don't bring up the nukes."

It was Libya's entire nuclear weapons program, bought over a decade for $100 million and change from Khan. On Dec. 19, three months before, Libya had become the first country since 1995 to pull up a nuclear program by its roots -- a striking accomplishment for Bush and Blair.

Explaining that success has become the subject of sharp debate within the administration. Advocates of a hard-line approach to Iran and North Korea argue that Libya's example proves their case. They said isolation, relentless pressure and the U.S. invasion of Baghdad compelled Libyan leader Moammar Gaddafi to give up his program -- and that the United States promised nothing in return. Bush and Cheney, on the campaign trail, adhere to that story line.

Their account begins in March 2003, when Gaddafi's son approached British authorities just before U.S. bombing began in Baghdad, and ends in December, when Gaddafi cut a final deal just after Hussein was pulled from a shallow bunker by U.S. forces.

"There were a lot of things that were clearly operating but to say the deployment of hundreds of thousands of U.S. forces had no impact is silly," a proponent of that analysis said.

Other accounts embrace a wider span of time. Libya suffered crushing economic sanctions in 1992, after the 1988 destruction of Pan Am 103 over Lockerbie, Scotland. Gradual cooperation with U.S. and British investigators in the 1990s suspended the U.N. sanctions. Gaddafi renewed diplomatic relations with London and sought to do so with Washington. Beginning in the summer of 2002, Gaddafi sent intelligence officers to discuss his weapons programs with British intelligence. In March 2003, his son Saif joined the negotiations, and the CIA after that.

Those talks got a final push on Oct. 4, 2003, after investigators received a tip about a German-registered ship bound for Tripoli, the BBC China, with a cargo of thousands of centrifuge components. Authorities diverted the ship to the Italian port of Taranto, they confronted Gaddafi's government and, within days, the Libyan leader allowed British and U.S. experts into Libya.

Flynt Leverett, then director for Middle East affairs on the NSC staff -- now a Brookings Institution fellow who has advised the presidential campaign of Sen. John F. Kerry (D-Mass.) -- said U.S. and British officials offered Libya an "explicit quid pro quo." If Libya relinquished its weapons programs, the United States would lift its sanctions and allow the U.N. sanctions permanently to lapse. That would open the door to lucrative oil deals for both countries. Saif Gaddafi has said in published interviews that his father also received assurances that the United States and Britain would not interfere with his continuation in office.

Bush administration hard-liners, who oppose any such incentives for Iran or North Korea, deny that negotiation was involved.

"It's 'engagement' like we engaged the Japanese on the deck of the Missouri in Tokyo Bay in 1945," said one influential advocate of that view, who declined to be quoted by name. "The only engagement with Libya was the terms of its surrender."

One key clue is a ship that never arrived. Not long before Libya's disarmament, scientists in Tripoli placed an order for additional centrifuge parts. Because Khan's network operated through intermediaries, the Libyans do not know who was going to make the components, or where. Investigators in Washington, London and Vienna said they have been unable to learn.

A more disturbing unknown is the source of Libya's small cache of highly enriched uranium.

Most troubling are orders, invoices and manifests found in Khan's overseas records describing shipments that cannot be accounted for by known customers. U.S. and IAEA investigators have several suspects for a "fourth customer" -- officials named Syria, Egypt, Sudan, Saudi Arabia and Kuwait in approximate order of interest -- but no substantial evidence has surfaced.

The Khan network, in many ways, "is al Qaeda all over again," said one U.S. investigator. Bush said in a Sept. 30 debate with Kerry that "the A.Q. Khan network has been brought to justice." The investigator asked, "Does it matter if we get the leadership? Are the cells, manufacturers and middlemen independent? Do we really know who they are? Hard to believe this is the only one out there."

Since his televised confession on Feb. 4 -- and immediate pardon -- Khan has been held in conditions that Pakistani officials liken to "house arrest." Pakistani intelligence agents accept written questions from U.S. or U.N. investigators. They send replies at their discretion. Information obtained elsewhere, Wolf said, makes clear that Khan "is being less than fully candid."

"Khan knows too much about Pakistan's program" for Musharraf to permit unrestricted questioning, said Feroz Khan, a former nuclear adviser to the Pakistani president. "Also, he is a man of tremendous organizing ability and you never know, his services may be required again some day."

The night of Abdul Qadeer Khan's confession, Musharraf summoned editors from all over Pakistan to Islamabad. Speaking in Urdu for a domestic audience, he complained bitterly that "Muslim brothers" in Libya "didn't even ask us before giving us away," according to a translation of the transcript made for The Post.

Facing Musharraf from a semicircle of colleagues, one editor asked whether Pakistan would submit to outside demands -- for compliance with the Nonproliferation Treaty, for U.N. inspectors to see Khan's records and for an impartial inquiry into the army's alleged complicity with Khan.

"Negative to all three of them," Musharraf replied. "We will do no such thing."

Half the world's stockpile of plutonium and highly enriched uranium is in Russia. About 600 metric tons are warehoused in some form. Of that quantity, the Department of Energy reported at the end of 2003 that 22 percent is satisfactorily secured with U.S. technical and financial assistance. The department predicted that such "comprehensive" upgrades would cover 26 percent of the stockpile by the end of this year.

Extrapolating from those figures in his first debate with Bush, Kerry said it would take 13 years to secure Russia's bomb ingredients at the current pace.

"The big gorilla in the basement is the material from Russia and Pakistan," said Robert L. Gallucci, dean of the Georgetown School of Foreign Service and a classified consultant to the CIA and Energy Department laboratories. "This is the principal, major national security threat to the United States in the next decade or more. I don't know what's in second place."

Securing the materials is laborious, expensive and dangerous work. Bush decided to let two of the major programs lapse because Russia declined to accept a change in the agreement that would shield U.S. firms from liability for worker safety.

Sen. Pete V. Domenici (R-N.M.), who asked to testify before the Senate Foreign Relations Committee on June 15, noted Bush's emphasis on the "immense threat" of nuclear terrorism and said acidly, "I wonder if he has been advised that liability -- that the liability issue is preventing destruction of enough plutonium for about 10,000 weapons?"

The Bush administration speaks with many voices about securing global stockpiles of nuclear materials. Some of the loudest are skeptical.

"I don't believe that at this point, or for some number of years, there's been a significant risk of a Russian nuclear weapon getting into terrorist hands," Bolton said. "I say that in part because of all the money we've spent . . . but also because the Russians themselves are completely aware that the most likely consequence of losing control of one of their own nuclear weapons is that it will be used in Russia."

Bush has spoken in favor of "cooperative threat reduction programs" funded under 1991 legislation sponsored by Sen. Richard G. Lugar (R-Ind.) and then-Sen. Sam Nunn (D-Ga.). He has also sought to reduce their budgets. His 2005 budget request would cut the Defense Department's efforts to secure foreign nuclear stockpiles by $41 million, or 9 percent. On the other hand, Bush has added substantially to budgets that pay for "decommissioning" old U.S. nuclear weapons. That appears to account for his assertion in the debate with Kerry that he increased spending on nuclear cleanup programs by 35 percent.

Gallucci, who held arms control posts under presidents from Gerald Ford to Clinton, said he finds himself "on the edge of saying really shocking things."

"If tomorrow morning we lost a city, who of us could have said we didn't know how this could happen?" he said. "I haven't felt like this in all the years I've been in government or the nine since I've been [out]. I am -- I don't want to say scared, because that's not what I want to project, but I am deeply concerned for my family and for all Americans."

Researcher Robert Thomason contributed to this report.