In one of the most troubling trends, U.S. officials said al-Qaida's command base in Pakistan increasingly is being funded by cash from Iraq...

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WASHINGTON — A major CIA effort launched last year to hunt down Osama bin Laden has produced no significant leads, but has helped track an alarming increase in the movement of al-Qaida operatives and money into Pakistan’s tribal territories, according to senior U.S. intelligence officials.

In one of the most troubling trends, U.S. officials said al-Qaida’s command base in Pakistan increasingly is being funded by cash from Iraq, where the terrorist network’s operatives are raising substantial sums from donations to the insurgency as well as kidnappings of wealthy Iraqis and other criminal activity.

The influx of money has bolstered al-Qaida’s leadership ranks at a time when the core command is regrouping. The trend also signals a reversal in the traditional flow of al-Qaida funds, with the leadership surviving to a large extent on money from its most profitable franchise, rather than distributing funds from headquarters to distant cells.

Al-Qaida’s efforts were aided, intelligence officials said, by Pakistan’s withdrawal in September of tens of thousands of troops from tribal areas along the Afghanistan border where bin Laden and his top deputy, Ayman al-Zawahri, are believed to be hiding.

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Little more than a year ago, al-Qaida’s core command was thought to be in a financial crunch. But U.S. officials said cash shipped from Iraq has eased those troubles.

“Iraq is a big moneymaker for them,” a senior U.S. counterterrorism official said.

Big undercover effort

The evolving picture of al-Qaida’s finances is based in part on intelligence from an aggressive effort launched last year to intensify pressure on bin Laden and his top deputies.

The CIA deployed as many as 50 clandestine operatives to Pakistan and Afghanistan — a dramatic increase over the number of case officers permanently stationed in those countries. New arrivals were given the primary objective of finding what counterterrorism officials call “HVT1” and “HVT2.” Those “high value target” designations refer to bin Laden and al-Zawahri.

The CIA operation was part of a broader shake-up designed to refocus on the hunt for bin Laden, officials said. One former high-ranking agency official said the CIA had formed a task force that involved officials from all four agency directorates, including analysts, scientists and technical experts, as well as covert operators.

The officials were charged with reinvigorating a search that had atrophied when some intelligence assets and special-forces teams were pulled out of Afghanistan in 2002 to prepare for war with Iraq.

Nevertheless, U.S. intelligence and military officials said, not a single lead that could be substantiated has been produced on the location of bin Laden or al-Zawahri.

“We’re not any closer,” said a senior U.S. military official who monitors the intelligence on the hunt for bin Laden.

Despite a $25 million reward, current and former intelligence officials said, the United States has not had a lead on bin Laden since he fled U.S. and Afghan forces in the Tora Bora region of Afghanistan in early 2002.

“We’ve had no significant report of him being anywhere,” said a former senior CIA official who, like others interviewed for this article, spoke on condition of anonymity when discussing U.S. intelligence operations. U.S. spy agencies have not even had information that “you could validate historically,” the official said, meaning a tip on a previous bin Laden location that could be verified subsequently.

President Bush is given detailed presentations on the hunt’s progress every two to four months, in addition to routine counterterrorism briefings, intelligence officials said.

The presentations include “complex schematics, search patterns, what we’re doing, where the Predator flies,” said one participant, referring to flights by unmanned airplanes used in the search.

Still, officials said, they have been unable to answer the basic question of whether they are getting closer to their target.

“Any prediction on when we’re going to get him is just ridiculous,” the senior U.S. counterterrorism official said.

Pakistan’s pullback

In a written response to questions from the Los Angeles Times, the CIA said it “does not as a rule discuss publicly the details of clandestine operations,” but acknowledged that it had stepped up operations against bin Laden and defended their effectiveness.

“The surge has been modest in size, here and overseas, but has added new skills and fresh thinking to the fight against a resilient and adaptive foe,” CIA spokesman Paul Gimigliano said in the statement. “It has paid off, generating more information about al-Qaida and helping take terrorists off the street.”

Current and former U.S. intelligence officials involved in the operation said it had been hobbled by other developments. Chief among them, they said, was Pakistan’s troop pullout last year from border regions where the hunt has been focused. Only months after the CIA deployed dozens of additional operatives to Pakistan, Pakistani President Pervez Musharraf announced “peace agreements” with tribal leaders in Waziristan.

Driven by domestic political pressures and rising anti-American sentiment, the agreements called for the tribes to rein in the activities of foreign fighters, and bar them from launching attacks in Afghanistan, in exchange for a Pakistani military pullback.

But U.S. officials said there is little evidence that the tribal groups have followed through.

The pullback took significant pressure off al-Qaida leaders and the tribal groups protecting them. It also made travel easier for operatives migrating to Pakistan after taking part in the insurgency in Iraq. Some of these veterans are leading training at newly established camps, and are positioned to become the “next generation of leadership” in al-Qaida, the former senior CIA official said.

“Al-Qaida is dependent on a lot of leaders coming out of Iraq for its own viability,” said the former official, who recently left the agency. “It’s these sorts of guys who carry out operations.”

The official added that resurgent Taliban forces in Afghanistan are “being schooled” by al-Qaida operatives with experience fighting in Iraq.

Money is flowing

Pakistan’s pullback also has reopened financial channels that had been constricted by the military presence.

The senior U.S. counterterrorism official said there are “lots of indications they can move people in and out easier,” and that Iraq operatives often bring cash.

“A year ago we were saying they were having serious money problems,” the official said. “That seems to have eased up.”

The cash is mainly U.S. currency in relatively modest sums — tens of thousands of dollars. The scale of the payments suggests the money is not meant for funding elaborate terrorist plots, but for covering al-Qaida’s day-to-day costs: paying off tribal leaders, hiring security and buying provisions.

Al-Qaida in Iraq has drawn increasingly large contributions from elsewhere in the Muslim world — largely because the fight against U.S. forces has mobilized Middle East donors, officials said.

“Success in Iraq and Afghanistan is the reason people are contributing again, with money and private contributions coming back in from the gulf,” the senior U.S. counterterrorism official said.

He added that al-Qaida in Iraq also has become an effective criminal enterprise.

“The insurgents have great businesses they run: stealing cars, kidnapping people, protection money,” the counterterrorism official said.

The former CIA official said the activity is so extensive that the “ransom-for-profit business in Iraq reminds me of Colombia and Mexico in the 1980s and ’90s.”

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