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

The transcript of the Nov. 16, 2001, hearing does not resolve the disputed versions. The prosecutor apparently did not know about Headley’s extremism, unauthorized travel or the task force interview weeks before; he called him an “outstanding supervisee” with “no problems.” The judge said probation was being ended “for the purposes of him returning” to Pakistan, and mentioned Headley’s “continuing cooperation.”

In the frenzied aftermath of Sept. 11, U.S. intelligence agencies were scrambling to recruit spies. With his language skills, Pakistani connections and undercover talents, Headley had potential. A U.S. law enforcement official familiar with the case said he doubts the government ended the probation early just to reward Headley, and even let him leave the country, because he suddenly decided to stop being an informant.

“It’s preposterous,” the official said. “It defies any sort of logic at all. U.S. attorneys are not in the business of granting presents for people. In the post-9/11 environment, there was a big push for intelligence assets.”

A number of DEA informants moved to counterterror work during that period. Some were passed to the FBI or CIA, and a few were run jointly by the DEA with other agencies, according to former U.S. law enforcement and intelligence officials.

In fact, a counterterror source said the DEA had discussions with the FBI and other agencies in late 2001 about which agency could best use Headley. The discussions cited his allusion to a relative in the ISI as a potential benefit, the counterterror source said.

During his testimony this year, Headley said nothing about deciding to end his service as an informant before going to Pakistan. Asked when he stopped working for the DEA, he testified: “The following year, in September. … It was the time that I had signed up for.”

The world of informants is hazy, according to law enforcement veterans. Agents at the DEA, FBI and other agencies sometimes use unofficial “hip-pocket” sources, the veteran officials said. Ex-informants sometimes surface and provide intelligence. Or they try to use past relationships with the government to justify their behavior when they get in trouble.

Officials at other agencies say Headley remained a DEA operative in some capacity as late as 2005. The senior DEA official denied that, citing the agency’s detailed records on informants. He said he had no information on whether Headley shifted to intelligence work for another agency but would not rule out that possibility.

The CIA and FBI deny that Headley worked for them. Today, nobody wants any part of him.

Chapter 4: The Path to Holy War

By February 2002, Headley was training in Lashkar’s mountain camps. He did a three-week introductory course on ideology and jihad.

The U.S. and Pakistan had outlawed Lashkar. But the ISI continued to fund, train and direct the group, which refrained from attacking Pakistan. The group’s global networks and storefront offices in Pakistan made it easier to join than al Qaeda. Lashkar camps churned out thousands of militants, some of whom went on to lead al Qaeda plots in the West.

That summer, Headley returned to New York and proposed to his Canadian-born girlfriend with a diamond ring in Central Park. Photos show he had bulked up and grown a long beard. His sharp profile and receding, slicked-back hair gave him a hawk-like look.

In June, Headley visited his mother in Oxford, Pa., a small town about 50 miles from Philadelphia where she then ran a day-care center. She had become stout, favored colorful dresses and wore her hair short and dyed blonde. She was a regular customer at the Morning Glories café and spent many afternoons talking to co-owner Phyllis Keith.

One day, Headley’s mother said she was concerned because he was training in militant camps in Pakistan. She told Keith he was increasingly fanatical and had described meeting teen-age trainees who had later died, according to U.S. officials.

“It was kind of like mother to mother: ‘I’m really worried about my son,’” Keith recalled.

Keith had seen Headley once at the café. On a catering visit to his mother’s home, she noticed his car parked behind the house as if he were hiding it. Keith called the FBI in Philadelphia and told them about the mother’s account of Headley’s involvement with militants in Pakistan. The conversation lasted about five minutes, she said.

Headley later told an associate that an FBI agent had gone to his mother’s house and asked about him. But the FBI says there was no such visit. An agent in Philadelphia did basic record checks and closed the case, a law enforcement official said. The official did not know whether the agent was aware of the interview of Headley in New York the year before. Headley’s links to the DEA probably caused the FBI to see him as less of a threat, officials say.

Headley did his second Lashkar training stint in August. When he was not at the camps, he lived with his Pakistani wife in Lahore. By then, two of their four children had been born.

On Dec. 11, 2002, Headley returned to New York to marry his fiancée there. At the airport, border inspectors sent him to the secondary inspection area for questioning. It was not the first time. After his heroin smuggling arrest in 1988, border agencies placed him on a “drug lookout” list and stopped him at airports in 1993, 1996 and 2001 for questioning and luggage searches, according to U.S. officials.

This time, however, inspectors were on alert for potentially suspicious travel patterns to Pakistan and other hubs of terrorism. They found nothing amiss. Headley was not on a watch list, and the inspectors did not know about the allegations by O’Donnell and Keith, according to U.S. officials.