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Saturday, September 13, 2008

Swiss engineers, a nuclear black market and the CIA
By William J. Broad and David E. Sanger
Monday, August 25, 2008
The president of Switzerland stepped to a podium in Bern in 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 black marketeer. The Swiss engineers, Friedrich Tinner and his two sons, were accused of having deep associations with 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 questionable 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 CIA.
Over four years, several of these officials said, operatives of the CIA 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 Khan's nuclear black market.
In addition, U.S. and European officials said, the Tinners played an important role in a clandestine U.S. 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 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 U.S. officials describe the relationship as a major intelligence coup, compromises were made. Officials say the CIA feared that a trial would not just reveal the Tinners' relationship with the United States - and perhaps raise questions about U.S. 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, CIA officials reasoned, would undermine the case and likely 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 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 Khan's customers - a list that is known to include Iran, Libya and North Korea, but which 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. Musharraf refused to account for the bomb designs that got away or to let U.S. investigators question Khan, perhaps the only man to know who else received the atomic blueprints.
President George W. Bush of the United States, eager for Pakistan's cooperation on terrorism, never pressed Musharraf for answers.
"Maybe that labyrinth held clues to another client or another rogue state," said a European official angry 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 of the files, and he 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 U.S. intelligence have been revealed in news reports and in recent books, most notably "The Nuclear Jihadist," a biography of 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 CIA'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 business records as well as bomb and centrifuge plans, but also documents linking the family to the CIA, officials said. One contract, a European intelligence official said, described a CIA front company's agreement to pay the smugglers $1 million for black-market secrets. The front company, Big Black River Technologies, listed an address three blocks from the White House.
The CIA declined to comment on the Tinner case, but a spokesman, Paul Gimigliano, called the disruption of 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 Tinner.
Approached at his home in Haag, Switzerland, near the Liechtenstein border, Tinner, 71, was polite but firm in his silence. "I have an agreement not to talk," he told a reporter.
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. Tinner received U.S. 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, Tinner worked with Khan for three decades, beginning in the mid-1970s. His expertise in vacuum technology aided Khan's development of atomic centrifuges, which produced fuel for Pakistan's nuclear arsenal, now variously estimated at 50 to 100 warheads.
Yet while Tinner repeatedly drew the attention of the European authorities, who questioned the sale of potentially dangerous technology to foreigners, he was never charged with violating export laws.
As described in U.S. and other government reports, Tinner's involvement with Khan quickened beginning in the late 1990s, when, joined by his sons, he helped supply centrifuges for Libya's secret bomb program.
In 2000, U.S. officials said, Urs Tinner was recruited by the CIA, and U.S. 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 plenty of circumstantial evidence that Iran was seeking an atom bomb. Suddenly it had a direct view into clandestine Iranian procurement of centrifuges and other nuclear items.
"It was a confirmation," recalled 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 nuclear trade, the Tinners had developed serious money problems, a European intelligence official said. Eventually, Urs Tinner persuaded his father and younger brother to join him as moles, and they began a double life, supplying 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, European investigators said, the Tinners and CIA agents met at a hotel in Innsbruck, Austria, to discuss cooperative terms. Several months later, in the Swiss mountain village of Jenins, Marco Tinner signed a contract dated June 21, 2003, with two CIA agents, the European official said.
The contract outlined the sale of rights that the Tinners held for manufacturing vacuum gear, as well as 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 CIA agents used cover names - W. James Kinsman and Sean Mahaffey - and identified their employer as Big Black River Technologies.
In the contract, Black River gave an address on I Street in Washington, the intelligence official said. But no business directory lists such a company, and employees in the mailroom at the given address said they had no records for a company of that name.
Four months after the signing of the contract, U.S. 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 Khan's network. The Bush administration hailed Libya's abandonment as a breakthrough in arms control.
But the secret lives of the Tinners began to unravel. The Malaysian police issued a public report naming them as central members of Khan's black market.
An official of VP Bank, Traco's business agent in the British Virgin Islands, said it ended that relationship in early 2004, when Marco Tinner was exposed.
Under growing pressure, Khan confessed. His clients turned out to include not only Libya but also Iran and North Korea, and his collaborators turned out to be legion.
"We will find you," Bush said in February 2004 of Khan's associates, "and we're not going to rest until you are stopped."
After the Tinners were arrested, Swiss and other European authorities began to scrutinize their confiscated files and to conduct wide inquiries. In interviews, officials said investigators were hampered by the codes that the Tinners had employed to hide their dealings.
European investigators discovered not only that the Tinners had spied for Washington, but also that the men and their insider information had helped the CIA sabotage atomic gear bound for Libya and Iran. A former U.S. official confirmed the disruptions, saying the technical architect of the operation was "a mad-scientist type" who took considerable pleasure in devising dirty tricks.
A U.S. intelligence official, while refusing to discuss specifics of the sabotage operation, the Tinners' precise role in it or any other aspect of their relationship with the CIA, 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."
In 2005, Swiss authorities began asking the United States for help on the Tinner case. Among other things, they wanted information about the Libyan centrifuge program to press charges of criminal export violations.
It is unclear if the Swiss knew then that the Tinners had been U.S. spies. But they soon became aware that something unusual was going on. For more than a year, the Swiss made repeated requests. Washington ignored them.
In late July 2007, the Swiss justice minister, Christoph Blocher, flew to Washington for talks with Mike McConnell, the director of national intelligence; Alberto Gonzales, then the attorney general; and Robert Mueller 3rd, the FBI director, according to Swiss federal statements.
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 CIA wanted to protect its methods for combating illicit nuclear trade.
The CIA 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?"
U.S. 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 U.S. involvement as possible in hopes of getting their clients off the hook.
In March, 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 of the material.
Then, on May 23, the Swiss president, Couchepin, revealed that Switzerland had begun a series of extraordinary actions just days after Blocher, the justice minister, returned from Washington.
Swiss citizens are prohibited from assisting foreign spies. But in his statement, the president said that in late August 2007 the government had canceled a criminal proceeding against the Tinners for suspicions of aiding a foreign government.
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.
Couchepin said keeping the documents "was incompatible with Switzerland's obligations" under the Nuclear Nonproliferation Treaty and "posed a formidable security risk to Switzerland and the community of states."
As for the Tinners, the father was released in 2006, pending legal action.
In a brief interview at his home, 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 Khan. In June, Malaysia released the network's chief operating officer, B.S.A. Tahir, saying he was no longer a national security threat; Pakistan recently relaxed the terms of Khan's house arrest.
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, 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."
Souad Mekhennet contributed reporting from Frankfurt, and Uta Harnischfeger from Zurich.

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