Al Qaeda's 'Pre-Election' Plot

It's called the President's Daily Threat Report (PDTR), or, in bureaucratic shorthand, the Putter. The document is so secret that only about a half-dozen people in the U.S. government are allowed to see it. When the Putter contains especially sensitive information, a red stripe runs down the side. At 6:40 a.m. on Friday, July 30, Fran Townsend, the president's homeland-security adviser and counterterror chief for the national-security staff, opened up her red-striped Putter and received a jolt.

For several months, the U.S. government had been picking up reports from its spies, electronic intercepts and "liaison services" (friendly intelligence services) of a Qaeda plot to strike the American homeland before the November election. High-level Qaeda operatives had been traveling from around the world to the outlaw wilds along the Afghanistan-Pakistan border, apparently to meet and plan, NEWSWEEK has learned. These terror summits had an uncanny resemblance to the Qaeda meeting in Malaysia in January 2000 that firmed up the 9/11 plot. But no one seemed to know the essential details: What were the targets? When would Al Qaeda strike? And were the attackers already in the United States?

The Friday-morning Putter revealed that an undercover operation on the far side of the world was starting to bear fruit. In mid-July, the Pakistanis, working with the CIA, had arrested a Qaeda operative named Mohammed Neem Noor Khan and "flipped" him--turned him into an undercover agent who could lead investigators right into the Qaeda network. The 25-year-old computer engineer was a Qaeda facilitator, a midlevel logistics man who knew and communicated with the top operatives meeting to plan an attack on the United States. In an interview with NEWSWEEK, Townsend recalled thinking, "This is the real deal"--a chance to crack the plot.

It was the break the Feds had been praying for, but, unfortunately, also a chance to further bewilder the American public, who have been made fearful, cynical or just plain dizzy by trips up and down the threat ladder. In an effort to sort out what to believe, NEWSWEEK spoke with most of the senior intelligence officials involved in assessing what they call the "pre-election" plot. Constrained by secrecy and a desire to put a positive spin on the story, these officials were not entirely forthcoming, but they did reveal enough to gauge the seriousness of the Qaeda plot. The more difficult question is whether the public revelations not only unduly frightened the American people but, in the long run, made them less safe. U.S. officials firmly deny it, but a knowledgeable British source argues that, by going public, Bush administration officials compromised an ongoing surveillance operation that ultimately could have uncovered more about Al Qaeda operations around the world. Top U.S. intelligence officials do concede that they are often faced with difficult --trade-offs--move now, and disrupt the plot? Or keep watching and waiting in hopes of learning more?

There can be little doubt that Al Qaeda is trying to strike the American homeland before Nov. 2. "We are in the midst of Al Qaeda efforts to attack the U.S. on a scale as big or larger than 9/11," says John Brennan, chief of the Terrorist Threat Integration Center, the interagency operation that consolidates threat information (and produces the Putter). The decision to raise the threat level to Code Orange ("high") last week was not, as partisans and conspiracists suggested, a Republican political stunt intended to slow John Kerry as he came out of the Democratic convention. But the announcement was clumsily handled, and the confusing press accounts that followed mostly obscured a larger and more important story.

The uncomfortable truth is that a frantic, multibillion-dollar, global intelligence effort has not been able to answer--definitively, at any rate--the scariest and most basic question: are there Qaeda operatives inside the United States? "We have to assume there are," says Townsend. "But we don't know. The reports are mixed." Certainly, at least a few Qaeda operatives have entered America at some point since 9/11. The FBI is hotly investigating whether Khan was one of them. And Khan's arrest has already led to the detention of some major Qaeda operatives in England and Pakistan, and will flush out still more in days to come.

But will the current crack-down roll up a sleeper cell in America? Or did the news of his arrest tip off other operatives, still unknown, who have gone to ground, possibly inside the United States? Presumably, the targeted institutions are now safe, or at least safer. But do the terrorists have a Plan B to simply shift to a different set of targets? Even with Osama bin Laden on the run and much of its former leadership dead or in jail, Al Qaeda's central command remains surprisingly strong. But have some of its operating cells simply slipped below the radar?

Townsend, a no-nonsense former mob prosecutor who wears Jimmy Choo spike heels (which typically go for about $450 a pair) and a bejeweled ring shaped like an American flag, is one of a core group of top officials who devote their lives to heading off the next attack. After reading the Putter that Friday morning, Townsend picked up the secure phone and called FBI Director Robert Mueller. "I was just about to call you," said Mueller, who had been reading his own copy of the Putter. From her basement office in the West Wing, Townsend hastened upstairs to see her boss, national-security adviser Condoleezza Rice. They had barely begun to talk when President George W. Bush, out on the campaign trail, called in from Air Force One. He, too, had been briefed on the alarming intel, and he began asking questions, trying to make sure, Rice told NEWSWEEK, "that we were on top of it."

By midmorning, most of the key officials from the CIA, Defense and Homeland Security were seated in the White House Situation Room or piped in by videophone. Khan, it turned out, owned a laptop computer with a trove of information on its discs and drives. The CIA was still working feverishly to download and decode the computer's files, reported Acting CIA Director John McLaughlin, but the initial findings were ominous. Al Qaeda, it appeared, was aim-ing at financial targets in New York and a city in a foreign country (NEWSWEEK sources declined to identify which one). By the next day, Saturday, July 31, the CIA had identified five buildings: the New York Stock Exchange in downtown Manhattan and the midtown Citigroup building; the Prudential Financial building in Newark, N.J., and the World Bank and International Monetary Fund in Washington, D.C. The buildings had been carefully cased: Al Qaeda scouts had delivered pages of detail on traffic patterns and structural weaknesses. McLaughlin later told NEWSWEEK that he was struck by the "sophistication" and "professionalism" of the reports.

The decision to go public was a no-brainer, several top officials insisted to NEWSWEEK. "It would have been unconscionable not to tell the New York Stock Exchange, or the World Bank, or Citigroup 'People have been casing your buildings and you need to be concerned about security'," says Rice. But the administration bungled the alert. On Sunday, Aug. 1, Tom Ridge, the decent, well-intentioned but politically tone-deaf head of the Department of Homeland Security, coupled his announcement of the buildings targeted by Al Qaeda with a plug for the president's antiterror policies. Ridge's sense of urgency and risk was underscored when police carrying machine guns began patrolling the streets and subways around the targets as well as the area around the Capitol in Washington. Civilians naturally assumed that Qaeda agents had been recently lurking nearby and might still be there, with bombs ready to blow up.

Only the next day did the press learn that the buildings had been cased three or four years earlier--before 9/11. (At a press briefing that Sunday, a "senior intelligence official" did say that the casing operation "dates from before 9/11," but he went on to emphasize that Al Qaeda planning "probably continues even today," and most reporters failed to pick up on the nuance.) The headlines on Tuesday were full of "never mind" stories, downplaying the risk, which in turn set out the government spinners to insist that no, no, the threat really was serious. On Wednesday, the papers were full of warnings that Al Qaeda typically takes years to plan and stage an operation. The fact that Al Qaeda had cased the buildings some years before might only mean that it was finally ready to attack.

No wonder the public was confused. In fairness to the government, officials have to walk a fine line. They can't fail to warn the public of a genuine threat (and get blamed for it later); at the same time, they don't want to create panic or blow sensitive ongoing operations. Mixed signals--and wrong guesses--are inevitable. Perhaps the only way to understand what the government knows--and does not know--about the threat is to start at the beginning, with the first disclosures that Al Qaeda might still have sleeper cells in the United States after 9/11 or be trying to recruit or infiltrate new martyrs and helpers for another "spectacular" against the American homeland.

The operational mastermind of the 9/11 plot was a man named Khalid Shaikh Mohammed, referred to in government documents as "KSM." In March 2003, KSM was captured in Pakistan. Subjected to the classified but presumably persuasive interrogation methods of the CIA, KSM began talking--but selectively. Intelligence officials believe that he was most interested in protecting the identities of Al Qaeda operatives inside the United States. "He would throw out a bone to delude people into believing he was cooperating," says one former senior U.S. law-enforcement official who regularly reviewed the interrogation reports. (According to the 9/11 Commission Report published last month, an in-ternal agency analysis was titled "Khalid Shaykh Mohammed's Threat Reporting--Precious Truths Surrounded by a Bodyguard of Lies.")

KSM did lead investigators to an Ohio truckdriver named Iyman Faris, who had a cockamamie scheme to cut down the Brooklyn Bridge (abandoned when the "weather is too hot"--i.e., police surveillance was too intense, and the cables proved too thick for wire cutters). But he was cagey about his plans for post-9/11 attacks, insisting, for instance, that a list of ZIP codes found in his notebook was only to help him find some e-mail addresses.

Ksm coughed up some other names. "Foremost among these individuals is Abu Issa al-Britani, a Pakistani-born extremist who holds a passport from the United Kingdom," reads a secret FBI report obtained by NEWSWEEK. Al-Britani is better known as Esa al-Hindi, trained in bin Laden's terror camps and the author of a fiery tract, "The Army of Madinah in Kashmir," which exhorts martyrs to join the worldwide jihad with "stealthy modern-day war stratagems," including "germ warfare."

In 1999 and again in 2000, KSM--and, possibly, Osama bin Laden himself--dispatched al-Hindi as part of an advance team to case targets in New York. In the summer of 2000 several Qaeda men--including a pair of the 9/11 hijackers, Muhammad Atta and Marwan Al-Shehhi--were cruising about New York looking for symbols to destroy. They were instructed to inspect what their instructions called "Jewish areas" like the Diamond District in midtown, as well as the New York Stock Exchange. According to the intelligence document obtained by NEWSWEEK, al-Hindi was also "cleared for an operation against London's Heathrow airport that was scheduled for June 2003." (The Heathrow attack never came off.)

KSM was apparently interested in recruiting African-Americans inside the United States. According to the intelligence document, al-Hindi noticed that a local British imam employed African-American bodyguards with families in Montana. "KSM tasked him with traveling to Montana to recruit the bodyguards' family members," according to the report, which does not reveal whether al-Hindi may have succeeded in this somewhat bizarre mission.

Since 9/11, al-Hindi has been living in Britain at least some of the time. Once his name surfaced in the KSM interrogations last year, he became a figure of considerable interest to U.S. and British intelligence. An elusive man who uses different aliases, he has apparently been the subject of on-and-off surveillance. After the Pakistanis and CIA captured Khan in mid-July, al-Hindi's name popped up again--potentially as a central player in the "pre-election" plot.

It appears that al-Hindi was the author of some of those detailed surveillances of the five financial institutions. Was he also a key figure in alleged new plots to blow them up? Though the casing was done before 9/11, the CIA was able to determine that the reports on the surveillance were actually written up after the attacks--and that someone called them up on Khan's computer as recently as last January. NEWSWEEK has learned that someone accessed what one senior government official guardedly (and vaguely) referred to as "preparatory material" as recently as two or three weeks ago.

A British intelligence source, speaking on background to NEWSWEEK, was indignant that Americans blew a chance to secretly watch al-Hindi while he continued to move around and make contact with other Qaeda operatives. An old intel rule is "Let the plot run." Historically, the British have been astonishingly patient, even coldblooded, about not revealing their sources. During World War II, British intelligence allowed U-boat wolf packs to attack convoys rather than prematurely reveal that the Allies had broken the German codes.

A senior U.S. intelligence official tells NEWSWEEK that the British did not know al-Hindi's whereabouts when his name came up in the meetings of top officials two weekends ago. Indeed, they were worried that he might actually accelerate plans to strike once his casing reports were revealed. (The British found al-Hindi on Tuesday and arrested him, along with a dozen others suspected of Qaeda ties.) According to all the top federal officials interviewed by NEWSWEEK, there was no real debate. Regardless of the risk of alerting al-Hindi or others, the public must be notified of the threat. The only question was how.

Cooperation between the Feds and local officials has long been a source of miscommunication or misunderstanding. Since 9/11, the Feds have tried to work more closely with the locals, though old tensions die hard (at a White House counterterror meeting observed by NEWSWEEK, a senior official asked a staffer, "Have we shared with the state and locals?" The answer came back, "Maybe more than we should"). Still, almost as soon as the Putter made its rounds of Washington high officialdom on Friday, July 30, the decision was made to bring New York Police Commissioner Ray Kelly into the loop.

The Feds regard Kelly as a bit of an independent operator. After the Madrid bombings in March, Kelly sent New York City detectives to Spain to learn important details, like the type of cell phones used by the terrorists. The presence of New York City cops at the overseas crime scene did not endear them to the FBI, in part because the New York cops apparently got there first. "We want every bit of information that we can get to better protect the city. We're very parochial. We're focused on New York," Kelly told NEWSWEEK.

On Sunday, Aug. 1, when Kelly heard, via videophone, Tom Ridge's plan to go public with the threat, the New York police commissioner was unenthusiastic. Kelly refused to comment about what was said on the call, but a New York law-enforcement source familiar with the discussion said, "Ridge was rolling with that 'the president has to level with the American people' kind of crap." At the meeting, Kelly worried aloud that naming the targets would not make the city any safer.

But in Washington, officials argued that keeping a low profile--by, for instance, alerting just the security officers for the targeted institutions--wouldn't work. The story would inevitably leak and cause an even bigger fuss because the government would be accused of hiding dangers from the public.

The U.S. government cannot come right out and admit this, but following the old rule of waiting and watching may not be tenable, given how little the intelligence community really knows about Al Qaeda and its possible presence inside the United States. Interviewed by NEWSWEEK, Townsend said that the intelligence community believes Al Qaeda has filled the positions vacated by KSM and others captured or killed. The talent level may not be as high, she says, but the organization goes on. The CIA and its foreign counterparts have identified some of the Qaeda operatives, but they are in the dark about others.

Gary Bald, the assistant FBI director for counterterrorism, told NEWSWEEK that the bureau has "over 500" Qaeda-related cases in the United States. Many of these will, as bureau officials say, "wash out." Most of the others are not suspected "sleeper" agents but possible sympathizers and facilitators. In recent weeks, the FBI has been knocking on a lot of doors in Muslim neighborhoods in the United States, asking questions like "Do you know of any Muslims who have had access to hazardous materials?" (Some Arab groups encourage cooperation; others advise silence and calling a lawyer.)

But the bureau has had a hard time getting a fix on an actual Qaeda network. Staffers on the 9/11 Commission debated, sometimes hotly, whether the 9/11 hijackers had the benefit of a support network inside the United States. The report cites "worrisome evidence" that two of the key 9/11 hijackers may well have had accomplices. The intelligence community is feverishly looking for links between these possible Qaeda supporters and the new plots against U.S. financial institutions. Khan, the computer engineer captured in Pakistan, was in e-mail or phone contact with several people in America, says a senior intelligence official, but "it might have been his completely innocent great-aunt," says the official.

The FBI has long been reluctant to investigate mosques in the United States, but last week agents arrested an Islamic cleric who had been caught in a sting operation seeking to fund the purchase of a shoulder-fired missile launcher. The Feds have long had their suspicions about the imam, Yassin Muhiddin Aref, whose phone and e-mail were tapped by federal investigators. He was overheard speaking to contacts in Ansar al Islam, a terrorist group based in Iraq with ties to Al Qaeda. (U.S. troops found an address book at the Ansar al Islam camp with Aref listed as a "commander.") But his Kurdish dialect was so obscure the Feds had trouble getting quick translations.

So it goes in the shadow wars. Every morning, when she arrives at her basement office in the West Wing shortly after 6:30 a.m., Fran Townsend hopes to have more news of breakthroughs appear in her red-striped Putter. Her office is a tad morbid: a giant overhead photo of the hole left of the World Trade Center after 9/11 decorates her walls; a model of the Twin Towers, with gashes in the side, sits on her desk. She is known for pushing the bureaucracy; her motto, she says, is "Get it done." The mother of two children, ages 9 and 2i, she is away from home a lot. But, Townsend says with a smile, "I'd rather fight the fight today so my kids don't have to worry about it."

With Mark Hosenball, John Barry and Michael Isikoff in Washington, Peg Tyre and Mehammed Mack in New York, Rana Foroohar, Sarah Sennott and Emily Flynn in London

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