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The American Behind India’s 9/11—And How U.S. Botched Chances to Stop Him

Headley returned via Atlanta on Aug. 5. He was on a watch list now. Airport inspectors questioned him, then let him go so the FBI could continue surveillance. Investigators soon came to suspect he had been involved in the Mumbai attacks. They dug into his past, debriefing his former DEA handler and reviewing records of prior inquiries, officials say.

The two-month surveillance operation drew high-level interest, according to Mudd, the former top FBI national security official.

“I remember hearing about the case and it immediately boiling up to the top of our morning threat briefings,” Mudd said. “We sat down every morning with the director of the FBI and with the attorney general to talk about what’s happening in the United States. … And all of a sudden you have … an [al Qaeda-] affiliated organization, Laskhar-i-Taiba, that had a presence in the heartland of the United States and not only a presence but a man who’d been involved in a murder of 160-something people.”

On Oct. 9, the FBI arrested Headley at Chicago’s O’Hare Airport. He was bound for Pakistan with his Denmark videos in his luggage. He had planned to meet with his terror bosses and return to Denmark. He had been talking about an attack he could do himself, perhaps assassinating an editor, according to officials and testimony.

Headley’s former DEA handler came to Chicago for the arrest. The drug agent’s presence sent an unspoken message: time to cooperate. FBI agents read Headley his rights, and he started talking. He kept talking for 15 days.

His interrogation and later trial testimony provided unprecedented evidence on Lashkar, the ISI, al Qaeda, plots, targets, leaders, methods. Supervised by agents, he communicated with people overseas in attempts to lure Mir out of Pakistan and set a trap for a militant in Germany, according to testimony.

None of it worked. So Headley turned on Rana, his old friend. He revealed that Rana had helped him use his immigration firm as cover during the Mumbai and Denmark plots. He testified against Rana at the Chicago trial, which ended with a conviction on two of three counts of material support of terrorism.

Headley agreed to a plea bargain that spared him from the death penalty and extradition to India, Denmark or Pakistan. He now faces a maximum sentence of life in prison. According to investigators, he has steadfastly protected one person: his Pakistani wife, Shazia.

“His condition when he spoke to us was that he accepted no questions about Shazia,” said the Indian counterterror official familiar with the Indian interrogation of Headley. “He said: ‘She is the only one who has given me four children. Despite my philandering, she has been faithful. She has been loyal to me. She is a devoted Muslim. I admire her.’”

Epilogue: Questions And Contradictions

The epilogue has been like the prologue: a trail of impunity and mystery.

In addition to Major Iqbal, Mir and two other accused Lashkar masterminds were indicted this year by U.S. federal prosecutors. Despite abundant evidence, Pakistan has not arrested or charged them — or half a dozen other top suspects, officials say.

The targeting of the West in Mumbai and Denmark has raised fears that Lashkar could become a more formidable threat than a diminished al Qaeda.

“Now we wonder if they think about the political ramifications of an attack on the U.S. or the West,” a U.S. counterterror official said. “The presumption has been that they did, or that ISI did and controlled their targeting with this mindset. Is it really a constraint now? Do they really worry about a crackdown if they do another attack on the West? What would be going too far for them?”

Pakistan’s Federal Investigative Agency, the equivalent of the FBI, is in charge of the investigation. But in reality, no one in Pakistan is trying to arrest Major Iqbal, Sajid Mir or the others, U.S. and Indian officials say.

Pakistani officials deny that Major Iqbal was an ISI officer. That only makes it harder to understand why he has not been arrested. It raises questions about the potential knowledge and involvement of ISI chiefs.

The director of the ISI during the period in which the Mumbai plot developed, Gen. Nadeem Taj, stepped down two months before the 2008 attacks as the result of pressure from foreign governments concerned that he was soft on militants, according to Western officials. Taj previously was the top military officer in the garrison city of Abbottabad during the period that Osama bin Laden established himself in hiding there, officials say.

“We, as a government, want to say that the Pakistanis are in our corner,” said Faddis, the former CIA counterterror chief. “Obviously, it’s way more complicated than that. And there are a whole bunch of folks in Pakistan and in the ISI who are not at all on the same sheet of music with us here. So even when they have cooperated with us over the years, it is often basically because they’ve been forced to. …Then we have a number of individuals within ISI who are very sympathetic to the folks that we are targeting.”

The official U.S. version of the case presents contradictions as well.

In response to ProPublica stories last year detailing the 2005 tip about Headley, the Office of the Director of National Intelligence led a multiagency review of Headley’s contacts with the U.S. government. But the DNI has declined to discuss the findings or any consequences. During the review process, agencies pointed fingers at each other, according to knowledgeable officials.

Although the litany of warnings about Headley paints a grim picture, officials at the FBI and other agencies assert that the allegations lacked specificity. They say Lashkar was not seen as a major threat before Mumbai. They cite the sheer volume of terror-related leads, especially after the Sept. 11 attacks. And they say some problems in tracking threats revealed by the case have been corrected as systems have improved.