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In Nuclear Net’s Undoing, a Web of Shadowy Deals | Khan

In Nuclear Net’s Undoing, a Web of Shadowy Deals - Series - NYTimes.com

By WILLIAM J. BROAD and DAVID E. SANGER

The president of Switzerland stepped to a podium in Bern last May and read a statement confirming rumors that had swirled through the capital for months. The government, he acknowledged, had indeed destroyed a huge trove of computer files and other material documenting the business dealings of a family of Swiss engineers suspected of helping smuggle nuclear technology to Libya and Iran.

The files were of particular interest not only to Swiss prosecutors
but to international atomic inspectors working to unwind the activities
of Abdul Qadeer Khan,
the Pakistani bomb pioneer-turned-nuclear black marketeer. The Swiss
engineers, Friedrich Tinner and his two sons, were accused of having
deep associations with Dr. Khan, acting as middlemen in his dealings
with rogue nations seeking nuclear equipment and expertise.

The Swiss president, Pascal Couchepin, took no questions. But he
asserted that the files — which included an array of plans for nuclear
arms and technologies, among them a highly sophisticated Pakistani bomb
design — had been destroyed so that they would never fall into
terrorist hands.

Behind that official explanation, though, is a far more intriguing
tale of spies, moles and the compromises that governments make in the
name of national security.

The United States had urged that the files be destroyed, according
to interviews with five current and former Bush administration
officials. The purpose, the officials said, was less to thwart
terrorists than to hide evidence of a clandestine relationship between
the Tinners and the C.I.A.

Over four years, several of these officials said, operatives of the
C.I.A. paid the Tinners as much as $10 million, some of it delivered in
a suitcase stuffed with cash. In return, the Tinners delivered a flow
of secret information that helped end Libya’s bomb program, reveal
Iran’s atomic labors and, ultimately, undo Dr. Khan’s nuclear black
market.

In addition, American and European officials said, the Tinners
played an important role in a clandestine American operation to funnel
sabotaged nuclear equipment to Libya and Iran, a major but little-known
element of the efforts to slow their nuclear progress.

The relationship with the Tinners “was very significant,” said Gary S. Samore, who ran the National Security Council’s
nonproliferation office when the operation began. “That’s where we got
the first indications that Iran had acquired centrifuges,” which enrich
uranium for nuclear fuel.

Yet even as American officials describe the relationship as a major
intelligence coup, compromises were made. Officials say the C.I.A.
feared that a trial would not just reveal the Tinners’ relationship
with the United States — and perhaps raise questions about American
dealings with atomic smugglers — but would also imperil efforts to
recruit new spies at a time of grave concern over Iran’s nuclear
program. Destruction of the files, C.I.A. officials suspected, would
undermine the case and could set their informants free.

“We were very happy they were destroyed,” a senior intelligence official in Washington said of the files.

But in Europe, there is much consternation. Analysts studying Dr.
Khan’s network worry that by destroying the files to prevent their
spread, the Swiss government may have obscured the investigative trail.
It is unclear who among Dr. Khan’s customers — a list that is known to
include Iran, Libya and North Korea but that may extend further — got the illicit material, much of it contained in easily transmitted electronic designs.

The West’s most important questions about the Khan network have been consistently deflected by President Pervez Musharraf of Pakistan,
who resigned last Monday. He refused to account for the bomb designs
that got away or to let American investigators question Dr. Khan,
perhaps the only man to know who else received the atomic blueprints.
President Bush, eager for Pakistan’s aid against terrorism, never
pressed Mr. Musharraf for answers.

“Maybe that labyrinth held clues to another client or another rogue
state,” said a European official angered at the destruction.

The Swiss judge in charge of the Tinner case, Andreas Müller, is not
terribly happy either. He said he had no warning of the planned
destruction and is now trying to determine what, if anything, remains
of the case against Friedrich Tinner and his sons, Urs and Marco.

Some details of the links between the Tinners and American
intelligence have been revealed in news reports and in recent books,
most notably “The Nuclear Jihadist,” a biography of Dr. Khan by Douglas
Frantz and Catherine Collins. But recent interviews in the United
States and Europe by The New York Times have provided a fuller portrait
of the relationship — especially the involvement of all three Tinners,
the large amounts of money they received and the C.I.A.’s extensive
efforts on their behalf. Virtually all the officials interviewed spoke
on condition of anonymity because they were not authorized to discuss
matters that remain classified.

The destroyed evidence, decades of records of the Tinners’
activities, included not only bomb and centrifuge plans but also
documents linking the family to the C.I.A., officials said. One
contract, a European intelligence official said, described a C.I.A.
front company’s agreement to pay the smugglers $1 million for
black-market secrets. The front company listed an address three blocks
from the White House.

The C.I.A. declined to comment on the Tinner case, but a spokesman,
Paul Gimigliano, called the disruption of Dr. Khan’s network “a genuine
intelligence success.”

With the evidence files destroyed and a trial in question, it is
unlikely that the full story of the Tinners will be told any time soon.
If it is, it is unlikely to come from the elder Mr. Tinner.

Approached at his home in Haag, Switzerland, near the Liechtenstein
border, Mr. Tinner, 71, was polite but firm in his silence. “I have an
agreement not to talk,” he told a reporter.

Beginning a Double Life

An inventor and mechanical engineer, Friedrich Tinner got his start
in Swiss companies that make vacuum technology, mazes of pipes, pumps
and valves used in many industries. Mr. Tinner received United States
patents for his innovative vacuum valves.

By definition, his devices were so-called dual-use products with
peacetime or wartime applications. Governments often feel torn between
promoting such goods as commercial boons and blocking them as security
risks.

As recounted in books and articles and reports by nuclear experts,
Mr. Tinner worked with Dr. Khan for three decades, beginning in the
mid-1970s. His expertise in vacuum technology aided Dr. Khan’s
development of atomic centrifuges, which produced fuel for Pakistan’s
nuclear arsenal, now variously estimated at 50 to 100 warheads.

Yet while Mr. Tinner repeatedly drew the attention of European
authorities, who questioned the export of potentially dangerous
technology, he never faced charges. Mr. Tinner’s involvement with Dr.
Khan deepened beginning in the late 1990s, when, joined by his sons, he
helped supply centrifuges for Libya’s secret bomb program.

In 2000, American officials said, Urs Tinner was recruited by the
C.I.A., and American officials were elated. Spy satellites can be
fooled. Documents can lie. Electronic taps can mislead. But a
well-placed mole can work quietly behind the scenes to get at the truth.

For instance, the United States had gathered circumstantial evidence
that Iran wanted an atom bomb. Suddenly it had a direct view into
clandestine Iranian procurement of centrifuges and other important
nuclear items.

“It was a confirmation,” recalled Dr. Samore, the former national security official who is now director of studies at the Council on Foreign Relations.
“That was much more significant than Libya,” because that country’s
atomic program was in its infancy whereas Iran’s was rushing toward
maturity.

Despite considerable income from their illicit trade, the Tinners
had money problems, a European intelligence official said. Eventually,
Urs Tinner persuaded his father and younger brother to join him as
moles, and they began double lives, supplying Dr. Khan with precision
manufacturing gear and helping run a centrifuge plant in Malaysia even
as their cooperation with the United States deepened.

At the time, Washington was stepping up efforts to penetrate Libya’s
bomb program. In early 2003, the European official said, the Tinners
and C.I.A. agents met at a hotel in Innsbruck, Austria, to discuss
cooperative terms. Several months later, in Jenins, a Swiss mountain
village, Marco Tinner signed a contract dated June 21, 2003, with two
C.I.A. agents, the official said.

The contract outlined the sale of rights that the Tinners held for
manufacturing vacuum gear, and of proprietary information about the
devices. In exchange, $1 million would be paid to Traco Group
International, a front company Marco Tinner had established in Road
Town, the capital of the British Virgin Islands, on the island of
Tortola.

In the contract, according to the European intelligence official,
the two C.I.A. agents used cover names — W. James Kinsman and Sean D.
Mahaffey — and identified their employer as Big Black River
Technologies Inc. In military and intelligence work, “black” means
clandestine. In the contract, Black River gave an address on I Street
in Washington, the intelligence official said. But no business
directory lists the company, and employees in the mailroom at the
address said they had no records for a company of that name.

Four months after the signing of the contract, American and European
authorities seized cargoes of centrifuge parts bound for Libya. “The
Tinners were a source,” a former Bush administration official said.

Two other officials credited the Tinners with helping end the Libyan
bomb program. In Libya, investigators found the rudiments of a
centrifuge plant and a blueprint for a basic atom bomb, courtesy of Dr.
Khan’s network. The Bush administration celebrated Libya’s abandonment
as a breakthrough in arms control.

But the secret lives of the Tinners began to unravel. The Malaysian
police issued a report naming them as central members of Dr. Khan’s
network. An official of VP Bank Ltd., Traco’s business agent in the
Virgin Islands, said it ended that relationship in early 2004, when
Marco Tinner was exposed.

Under growing pressure, Dr. Khan confessed. His clients turned out
to include not only Libya but Iran and North Korea, and his
collaborators turned out to be legion.

“We will find you,” Mr. Bush said in February 2004 of Dr. Khan’s
associates, “and we’re not going to rest until you are stopped.”

Acts of Sabotage

After the Tinners were arrested, Swiss and other European
authorities began to scrutinize their confiscated files and to conduct
wide inquiries. European investigators discovered not only that the
Tinners had spied for Washington, but that the men and their insider
information had helped the C.I.A. sabotage atomic gear bound for Libya
and Iran. A former American official confirmed the disruptions, saying
the technical architect of the operation was “a mad-scientist type” who
took pleasure in devising dirty tricks.

An American intelligence official, while refusing to discuss
specifics of the sabotage operation or the Tinners’ relationship with
the C.I.A., said efforts to cripple equipment headed to rogue nuclear
states “buy us some time and space.” With Iran presumably racing for
the capability to build a bomb, he added, “that may be the best we can
hope for.”

The sabotage first came to light, diplomats and officials said, when inspectors from the International Atomic Energy Agency
traveled to Iran and Libya in 2003 and 2004 and discovered identical
vacuum pumps that had been damaged cleverly so that they looked
perfectly fine but failed to operate properly. They traced the route of
the defective parts from Pfeiffer Vacuum in Germany to the Los Alamos National Laboratory
in New Mexico, the birthplace of the bomb. There, according to a
European official who studied the case, nuclear experts had made sure
the pumps “wouldn’t work.”

A more serious disruption involved a power supply shipped to Iran
from Turkey, where Dr. Khan’s network did business with two makers of
industrial control equipment.

The Iranians installed the power supply at their uranium enrichment
plant at Natanz. But in early 2006, it failed, causing 50 centrifuges
to explode — a serious, if temporary, setback to Iran’s efforts to
master the manufacture of nuclear fuel, the hardest part of building a
bomb. (Iran says its nuclear efforts are for electricity, not weapons.)

Gholamreza Aghazadeh, the head of the Iranian Atomic Energy
Organization, told a reporter last year that Iranian investigators
found that the power supply had been manipulated.

After the episode, he added, “we checked all the imported instruments.”

Discussions With Washington

In 2005, Swiss authorities began asking the United States for help
in the Tinner case. Among other things, they wanted information about
the Libyan centrifuge program to press charges of criminal export
violations. For more than a year, the Swiss made repeated requests.
Washington ignored them.

“Its lack of assistance needlessly complicates this important
investigation,” David Albright, of the Institute for Science and
International Security, a private group in Washington, told Congress in
May 2006. Mr. Albright said he had helped Swiss prosecutors write to
the State Department.

The Swiss turned to the I.A.E.A. for help in assessing the Tinner
cache. European officials said the agency was surprised to find
multiple warhead plans and judged that most had originated in Pakistan.
The country denied that Dr. Khan had access to nuclear weapon designs
and questioned the agency’s conclusions.

In late July 2007, according to Swiss federal statements, the
justice minister, Christoph Blocher, flew to Washington for talks with Mike McConnell, the director of national intelligence; Alberto R. Gonzales, then the attorney general; and Robert S. Mueller III, the F.B.I. director.

Officially, the statements said, the main topic was “cooperation in
the criminal prosecution of terrorist activities.” But the real agenda
was what to do about the Tinners.

A former Bush administration official said different government
agencies had differing views of the case. The State Department wanted
the bomb plans destroyed as a way to stem nuclear proliferation, while
the C.I.A. wanted to protect its methods for combating illicit nuclear
trade.

The C.I.A. also wanted to help the Tinners. “If a key source is
prosecuted,” a former senior official involved in the case said, “what
message does that send when you try to recruit other informants?”

American officials discussed a range of possible outcomes with the
Swiss and expressed their clear preferences. The best result, they
said, would be turning over the family’s materials to the United
States. Acceptable would be destroying them. Worst, according to the
former administration official, would have been making them public in a
criminal trial, where defense lawyers would have probably exposed as
much American involvement as possible in hopes of getting their clients
off the hook.

A Furor Over Destroyed Files

Last March, Mr. Müller became the examining magistrate in the Tinner
case, charged with assessing if a trial was warranted. Soon after, he
was quoted as saying the evidence files contained “obvious holes.”
Sketchy reports of deleted computer files and shredded documents had
been circulating, but he was the first identified official to hint at a
widespread destruction. Then, on May 23, the Swiss president, Mr.
Couchepin, revealed that Switzerland had begun a series of
extraordinary actions just days after Mr. Blocher, the justice
minister, returned from Washington.

Swiss citizens are prohibited from aiding foreign spies. But in his
statement, the president said that in late August 2007, the government
canceled a criminal case against the Tinners for suspicions of aiding a
foreign government. Though unmentioned, the C.I.A. seemed to peer out
from his statement.

On Nov. 14, his statement continued, the government decided to
destroy “the comprehensive holding of the electronic files and
documents” seized from the Tinners. The most dangerous items, the
president said, included “detailed construction plans for nuclear
weapons, for gas ultracentrifuges for the enrichment of weapons-grade
uranium, as well as for guided missile delivery systems.” International
atomic inspectors, he added, supervised the destruction.

Mr. Couchepin said keeping the documents “was incompatible with
Switzerland’s obligations” under the Nuclear Nonproliferation Treaty
and added, “Under all circumstances, this information was not to reach
the hands of a terrorist organization or an unauthorized state.”

The statement provoked a political furor. Some politicians and
columnists accused Switzerland of surrendering to Washington’s agenda
and violating Swiss neutrality. Among the strongest critics was Dick
Marty, a prominent Swiss senator. “We could have respected the treaty
by avoiding their publication and putting them under lock and key,” he
was quoted as saying on Swissinfo, the Web site of the Swiss
Broadcasting Corporation. Destroying them, he added, “ could lead to
the collapse of the legal case.”

Many European officials dismissed the government’s arguments about terrorists and rogue states as empty.

“If they had kept the material in federal possession for years, why
not keep holding it?” asked Victor Mauer, a senior official at the
Center for Security Studies of the Swiss Federal Institute of
Technology. “Their explanation is not convincing.”

An Action’s Repercussions

In an interview, a senior European diplomat familiar with the
I.A.E.A. said the destruction could have repercussions far beyond the
criminal case.

For one thing, he said, the international atomic agency had been
allowed to examine only parts of the archive. He called it “a good
sample” and judged that the agency had missed no significant clues.
Even so, he said, the agency might “come to regret” its inability to
examine the materials further for insights into hidden remnants of Dr.
Khan’s network.

And while the Swiss president made much of the proliferation danger,
the diplomat insisted that the warhead designs were in many respects
sketchy and incomplete. “These are almost like studies — bits and
pieces,” he said, adding that they “wouldn’t be enough to let you build
a replica.”

So while they might have little or no value for a terrorist with no
atomic experience, the plans might prove quite helpful for an ambitious
state intent on building a nuclear arsenal. He said the agency had no
evidence that Iran had acquired the bomb plans.

The diplomat added that the Swiss had “lots of possibilities” other
than destruction. He said they had no legal obligation to destroy the
files under the nonproliferation treaty, and could have put them under
I.A.E.A. seal in Vienna or Switzerland.

Several European officials speculated that Washington might actually
have kept secret copies of the archive. A senior American official said
the United States had reviewed the material but declined to say if
there were copies.

As for the Tinners, the father was released in 2006, pending legal
action. In a brief interview at his home, Mr. Tinner pleaded ignorance
about basic aspects of the criminal case, such as where the authorities
kept the materials that had belonged to him and his sons. “The
newspapers know more about these things than I do,” he insisted.

Should the case fall apart, the Tinners would join a growing list of
freed associates of Dr. Khan. In June, Malaysia released the network’s
chief operating officer, B. S. A. Tahir, saying he was no longer a
national security threat. The authorities have kept the Tinner brothers
in jail for fear that they might flee the country. In late May, a Swiss
court rejected their bail application, and early this month, the ruling
was upheld. But the judges also told the authorities that they could
not hold the brothers indefinitely without charging them.

With much of the evidence gone, the magistrate, Mr. Müller,
expressed frustration at finding “no answers to the really interesting
questions in this case.” He declined to predict how it might turn out.

“At the moment,” he said, “it is impossible to make any schedule, since the case is in many aspects extraordinary.”

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