"Operation Enduring Payouts"

By Rone Tempest and Bob Drogin, Los Angeles Times June 1, 2002

PESHAWAR, Pakistan -- Sitting on lawn furniture inside the screened-in porch of a Peshawar safe house, the CIA officer made his pitch bluntly to Haji Mohammed Zaman.

Was he prepared to kill Al Qaeda Arabs? the American asked. Zaman, a powerful warlord from eastern Afghanistan, nodded. With that, the operative handed him $10,000 in cash and a sleek hand-held Thuraya satellite telephone.

"Is that all?" Zaman demanded angrily, according to a senior Western diplomat who witnessed the exchange in November, as Taliban forces were collapsing in Afghanistan. "Is that all you give to someone who knows where to find Osama bin Laden?"

The answer, clearly, is no. No one has yet snagged the Bush administration's $25-million "dead or alive" bounty on Bin Laden. But a senior intelligence official in Washington says America's spy service has distributed "tens of millions of dollars" in cash since last fall in the effort to find him, as well as in other covert operations.

The CIA's small army of operatives often has worked less like James Bond than like bagmen, handing out bundles of $100 bills--often with sequential serial numbers--to purchase intelligence and support.

Sometimes the money bought less than complete loyalty. Sometimes the Americans bought bogus information. And some officials question whether the practice is counterproductive in the long run.

"All money does is buy you information," explained a Capitol Hill staffer familiar with the operation. "It doesn't necessarily buy you reliable information."

But other officials say the CIA payoffs played a critical role in persuading commanders from the Northern Alliance and other opposition groups to provide proxy fighters last fall to help oust the Taliban and search for Al Qaeda members.

"Sometimes you can do more with $100 bills than with bullets," said the intelligence official, who, in keeping with his agency's policy, spoke on condition of anonymity. "And if we can rent guys to help, that's fine."

The going rate, other officials said, was $100,000 for warlords; far less for lower-ranking commanders, village elders and the like. Generous cash payments also encouraged some Taliban commanders to switch sides, or to abandon their positions and go home.

"The Taliban conquered the country with bribery and negotiation," said a former CIA officer familiar with the operation. "And basically, that's the way we reconquered it--with help from air power."

Agency spokesman Bill Harlow declined to discuss the CIA's use of cash in Afghanistan. And although most Afghan commanders deny receiving payoffs, the evidence suggests otherwise.

In Kabul, for example, three car dealers along Parwan Say, the city's commercial strip, said they sold "dozens and dozens and dozens" of new and late-model SUVs--including fully loaded Toyota Land Cruisers costing up to $60,000--to cash-rich Northern Alliance warlords and their commanders in November, December and January after the Taliban abruptly abandoned the city.

"These commanders, they were fighting each other to get these cars," one dealer said. "We couldn't satisfy them all."

The dealers said the cars were sold for cash, usually crisp 1999 series $100 bills, often with sequential serial numbers. Afghan merchants note the dates closely because many are convinced that 1988, 1990 and 1993 dollars are counterfeit, and refuse to accept them.

The scene was much the same in Pakistan. Early last fall, as Afghan warlord Gul Agha Shirzai gathered his men near the Pakistani border city of Quetta, U.S. forces airdropped assault rifles, sleeping bags, ammunition, radios and other gear to fight the Taliban.

But Shirzai's aides say the warlord was also given boxes of U.S. dollars and Pakistani rupees. At one point, they say, he even got a Land Cruiser containing cash. Shirzai is now governor of Kandahar province.

Witnesses say stacks of dollars and rupees, as well as satellite phones, were handed out to ethnic Pushtun commanders at two safe houses in Peshawar on Nov. 13 to enlist their support. The Northern Alliance, composed mostly of Tajik, Uzbek and Hazara ethnic minorities, had just taken Kabul, the capital, and provincial Taliban governments and garrisons were collapsing across eastern Afghanistan.

Pakistani smugglers willing to haul communications gear, weapons and other equipment to U.S.-backed proxy forces also got satchels of cash. So much money changed hands that the value of the dollar fell sharply against the rupee, and local prices shot up.

"Money, money, money," said local truck driver Yar Khan. "That was what was happening. Bagmen ... were offering varying amounts of money, from $5,000 to $1 million and more for arrangements to deliver goods to the commanders who wanted to fight the Taliban or desert them."

Khan said old smuggling tracks "became the lifeline of the anti-Taliban forces."

And the CIA knew the way.

In the late 1980s, the agency secretly funneled $3 billion worth of weapons and ammunition to rebels fighting Soviet forces in Afghanistan. Supplies were hauled by mule, truck, horse, motorcycle and foot on about 300 trails that cross the rugged border.

Back then, recalls former CIA operative Milton Bearden, rebel commanders prized his gifts of multi-pocketed Banana Republic photographers' vests and top-of-the-line Bianchi leather holsters. "I always had beads and mirrors in my duffle bag," he joked.

This time, the CIA kit bag contained compact Thuraya satellite phones. Sales jumped at the Abu Dhabi-based company as U.S. and British intelligence agencies ordered thousands of the $660 black handsets for Afghan contacts. They quickly became status symbols, and some commanders claimed three or four.

Inevitably, the CIA got scammed in Afghanistan.

A Pakistani intelligence official said a Peshawar shopkeeper and his cohort got $50,000 from the CIA for a tip on Bin Laden's location--then disappeared with the money. "It turned out to be a swindle," said the official, who spoke on condition of anonymity.

More important, officials say, warlords misled U.S. intelligence during the battle of Tora Bora in December. Despite intense bombing of suspected Al Qaeda caves and encampments, hundreds of fighters--perhaps Bin Laden himself--apparently escaped by buying safe passage from Afghan commanders who were supposedly aiding U.S. forces.

U.S. officials suspect Zaman, who had ridiculed the $10,000 offer at the Peshawar safe house, of milking money and support during the battle by providing phony intelligence about Bin Laden and inflating reports of enemy fighters.

The CIA had given support to Zaman's 4,000 anti-Soviet fighters in the 1980s. He lost out in the civil war that followed the Soviets' withdrawal and eventually became a political refugee in France.

Zaman returned home in November after the Taliban abandoned his former political perch, the regional capital of Jalalabad, and soon received new supplies, vehicles and cash to join the battle at Tora Bora.

But Zaman neglected to send food, blankets or ammunition to his troops, forcing them to retreat, and he announced a cease-fire with Al Qaeda that was immediately denounced by U.S. officials. Today Zaman is security chief in Jalalabad, a powerful position in a city that traditionally has thrived on smuggling and drugs.

The other key U.S. ally at Tora Bora, Hazrat Ali, wasn't totally reliable, either. U.S. officials say that Ali allowed his troops to escort Al Qaeda fighters into Pakistan during the battle. Today, Ali is a powerful figure in Nangarhar province, where Jalalabad is located. He drives a new Land Cruiser and commands a fleet of other vehicles.

Others reputed to have received CIA largess now help run the Defense, Justice and Foreign ministries in the interim post-Taliban government. A senior Western aid official in Kabul questions whether that's wise.

"They make mercenaries of these people, then put them in charge and expect a democratic government to emerge," said the official, also speaking on condition of anonymity. "You can't build a democracy based on bribery."

Intelligence officials defend the practice.

"There is a long and strong tradition of buying just about anything in Afghanistan," a senior CIA official said. "You win battles by striking deals. The loyalty a warlord gets with his men is usually from physically taking care of them. He provides cash, housing and food. That's a big part of the equation."

The equation isn't new for the CIA. Gene Cullen, a former CIA covert commando, said he and other officers routinely paid up to $25,000 to informants during America's military and humanitarian mission in Somalia in the early 1990s.

The intervention became a disaster when 18 Army Rangers and Delta Force soldiers, as well as hundreds of Somalis, were killed in the "Black Hawk Down" attack in 1993. But Cullen said the CIA sees cash as one of its best weapons.

"Let's face it," he said. "The one thing we do have is a lot of money."

Tempest reported from Afghanistan and Pakistan. Drogin reported from Washington. Times staff writers David Zucchino and Eric Slater in Afghanistan and Greg Miller in Washington, and special correspondent Talat Hussain in Pakistan, contributed to this report.