By Richard Leiby
Washington Post Staff Writer
Saturday, December 27, 2008
After a federal jury in New York swiftly convicted a major Afghan heroin trafficker and Taliban supporter named Haji Bashir Noorzai, the government promptly issued the usual celebratory news release thanking the men and women of the DEA and FBI for their "countless sacrifices" in making the case.
Left out was any credit to the party most responsible for the government's victory: an unusual three-man private intelligence firm called Rosetta Research and Consulting.
At the instigation of the Drug Enforcement Administration, Rosetta agents lured Noorzai to America and delivered him right into the feds' hands. He spent 11 days in an Embassy Suites Hotel in Manhattan in 2005, enjoying room service and considering himself a guest of the U.S. government -- until he was arrested. He was imprisoned for three years awaiting his trial, which concluded in September. He faces up to life in prison when he is sentenced in January.
Noorzai's capture should have been Rosetta's finest hour. Instead, it led to the company's downfall. A close examination of the case reveals how a spy firm trafficking in sensitive intelligence for profit got sandwiched between conflicting government goals: Noorzai, one of the company's best sources, was considered an asset by the intelligence side of the government, even as the law enforcement side considered him a criminal.
The tale reveals some of the rivalries, ugly choices and ironies that permeate this shadowy world. The company that thought it might get a $2 million reward was dragged into an internal Justice Department investigation. The FBI employees who helped the firm ended up in trouble with their own agency.
Rosetta, which spent lavishly in its pursuit of Noorzai, got nothing for arranging his capture and ended up going broke. Investors thought their money was going toward building an anti-terrorism database, not to helping the government snare a drug kingpin.
"I certainly -- my partner and I -- had no idea," said Paul Hanly, a New York lawyer who joined with four others to invest $1 million in Rosetta Research.
The role of Rosetta and its agents was not aired during Noorzai's trial; the topic was ruled off-limits by the judge. Most people connected to the company won't talk publicly about it. Spokesmen for the DEA and Justice Department declined to comment on Rosetta.
Whatever else it was, the sting operation was a unique blending of public and private sector efforts that appears to have taken the outsourcing of federal law enforcement to new levels, according to interviews and internal Rosetta documents reviewed by The Washington Post.
"It's bizarre. I've never heard of anything like that," said Thomas V. Cash of the risk consulting firm Kroll Inc., who during his 25-year career as a top-ranking DEA official presided over the apprehension and conviction of deposed Panamanian dictator Manuel Antonio Noriega. "This case, and how it was totally handled in a new manner, certainly seems to have ignored all I know about international drug investigations."
In the summer of 2003, two businessmen -- Mike A., a former Army captain, and Patrick J., a former Treasury Department financial-crimes analyst -- founded Rosetta. Its mission was to assist in a mammoth legal case filed on behalf of victims of the Sept. 11, 2001, attacks by tracking the flow of terrorist-connected money. The Post is not using the men's full names because of the sensitive nature of their undercover work.
The documents show that another aim of Rosetta's principals was to turn a profit by developing a database of terrorist financial information that could be sold to banks, securities firms and the government.
The main on-the-ground sleuth for Rosetta was Mike A., now 47, a West Point graduate and Special Forces veteran who had worked in war zones in Afghanistan and Iraq, spoke Arabic and cut a swaggering figure.
For Rosetta, Mike A. met with confidential sources overseas, sometimes secretly taping them while they discussed links among the Taliban, al-Qaeda and drug traffickers, according to highly detailed "Project Rosetta Reports" written by its operatives and later obtained by The Post.
Patrick J., now in his early 50s, unraveled intricate money transactions. He was heavyset and more comfortable behind a computer than playing secret agent. Neither would comment for this article.
Mike A. had friends in the Defense Department, including an aide to then-Defense Secretary Donald Rumsfeld. Mike A. showed his friend some of the information he was turning up on his travels, including purported documents from fugitive Taliban chieftain Mohammad Omar, internal Rosetta e-mails show; the official checked them out, and they could not be authenticated.
Rosetta also had frequent contact with an FBI agent who had a counterterrorism background and was copied on its reports, according to company documents. (An FBI spokesman said the bureau would not comment on the matter.)
The Rosetta people assigned themselves code names to be used in their reports: R1 for Mike A., R2 for Patrick J. and R3 for Brian M., a retired agent for the Immigration and Naturalization Service who had previously worked for an Afghan wireless company. The FBI agent was given the handle "GM."
In hindsight, Rosetta's future took a major turn when an opium grower it was tracking was designated by President Bush in June 2004 as one of the world's most wanted drug kingpins.
Haji Bashir Noorzai was a hulking, 6-foot-4 bearded Afghan in his early 40s who lived in Quetta, Pakistan, with three wives. Noorzai was chief of a million-member familial tribe in the Kandahar province of Afghanistan.
In an affidavit in his criminal case, he traced a history of cooperating with U.S. officials, including the CIA, dating to 1990. In early 2002, following the U.S. invasion of Afghanistan, Noorzai said he turned over to the U.S. military 15 truckloads of Taliban weapons, including "four hundred anti-aircraft missiles of Russian, American and British manufacture."
From the perspective of the CIA and Defense Department, Noorzai could be a useful intelligence asset. But law enforcement officials continued to consider him a notorious criminal whose drug proceeds supported militants battling U.S. forces. Rosetta's interest seemed purely commercial: to pump him for information that could be reported back to its clients, the Rosetta documents indicate.
In July 2004, Mike A. and Brian M. set out to woo Noorzai. They spread money around to his friends and were able to meet some of them at the J.W. Marriott in Dubai. By August, the Rosetta agents returned to the Marriott for two days of discussions with Noorzai himself, referred to in their reports as HBN.
"His hair and beard were neatly trimmed," they wrote on Aug. 9. "HBN wore a watch with a silver band and gold bezel. HBN was soft-spoken, had a sense of humor and never lost his temper."
Noorzai flatly denied that he had ever supported al-Qaeda or dealt drugs. "I have never dealt in narcotics," he said, according to transcripts labeled as work product for Motley Rice, a law firm underwriting part of the Rosetta intelligence project. The firm was hoping to use intelligence gathered by Rosetta in its uphill battle attempting to link the Saudi royal family to the Sept. 11 hijackers.
Mike A. was reassuring, telling the translator: "Look, I want Haji Bashir to understand, this project that we're working on is not a counter-narcotics project."
"The goal of this project is not to arrest anybody," Mike A. went on. "It's to gather information that's correct, good information, and develop the kinds of relationships that allow us to successfully confront this problem."
Noorzai agreed to assist the Americans, and said he would travel to the United States if he got a guarantee of safe passage, court documents show. At one point he posed for pictures with his new American friends, giving the thumbs-up sign.
But when the Rosetta operatives arranged for Noorzai to meet with officials from the FBI and the Defense Department, the CIA and the U.S. ambassador in the United Arab Emirates blocked the plans, according to Rosetta e-mails. (A State Department spokesman declined to comment.)
By this time those who had put up money for Rosetta were growing impatient. The lawyers at Motley Rice were looking for some return on their money.
In October, Mike A. assured Motley Rice in an e-mail that government contracts were forthcoming and the FBI would no longer be getting information "for free."
At some point that fall, Rosetta's contacts in the FBI tipped off their counterparts at the DEA that the company had a line in to Noorzai. Ivan Fisher, Noorzai's attorney, said then-DEA Administrator Karen Tandy was eager to bag Noorzai; landing him would reflect well on the Bush administration's anti-drug and anti-terrorism campaigns.
"It was Tandy who changed everything," Fisher said. (Tandy, who left government work last year, declined to comment.)
In January 2005, the Justice Department informed Rosetta that Noorzai was under secret indictment in New York. A debate ensued: Betraying Noorzai to the feds could endanger Rosetta operatives and compromise their informant network. But there was an upside. Rosetta might finally get government contracts. And it could secure some cash by collecting a big reward for Noorzai -- as much as $2 million, Rosetta documents indicate.
Despite misgivings, the company cut a deal with the Justice Department and the DEA to persuade Noorzai to fly to New York, according to court filings. That April, the drug lord was accompanied on his flight from Dubai by Mike A., Brian M. and two Afghan men he presumed to be his confidants, both "in the pay of Rosetta," Fisher said.
When Noorzai got off the plane, he was met by DEA agents, who drove him to his hotel, kept him well fed and talking, and made sure he knew he had a right to an attorney. But Noorzai declined the offer every day, evidently figuring that he had no reason for one: He was there to help his American hosts.
On April 22, Noorzai made calls to his family in Pakistan, telling his mother that he was fine but still busy with his work for the U.S. government, a DEA affidavit states.
The next day, he was told that he was under arrest.
Noorzai's lawyers argued that the government lied and used duplicity to make its case. The government lawyers argued that the capture was legal. The judge agreed.
Before the trial, court documents show, Tandy had nominated the FBI agent who helped Rosetta for an award for his role in making the Noorzai case. Instead, the Justice Department's Office of the Inspector General began investigating the agent and another FBI employee for their involvement with Rosetta.
The company's financial records, intelligence reports and e-mails were subpoenaed. The inspector general learned that the FBI employee had obtained information from FBI databases and sent it to Rosetta, in part to "provide information to placate investors," according to one affidavit. That employee also received a house-hunting trip "in anticipation of being hired by Rosetta," the affidavit stated.
The inspector general's office would not release its report, citing a policy protecting privacy rights of "lower-level" employees.
Rosetta never got any reward for Noorzai's capture. Fisher said the company was turned down because Mike A. was also working all along for the U.S. government.
Staff researcher Julie Tate contributed to this report.