Good Muslim, Bad Muslim: America, the Cold War, and the Roots of Terror (19 page)

The Bankers of the Jihad

The privatization of the jihad covered all key operations, from recruitment to funding. One of the paymasters of the jihad was the enormously successful Pakistani bank, Bank of Credit and Commerce International (BCCI), set up by the Pakistani tycoon Agha Hassan Abedi. Established in 1972, BCCI collapsed in 1991, soon after the end of the Afghan War, precipitated by charges of fraud, bribery, and conspiracy in American courts. With fourteen thousand employees and offices in seventy countries, BCCI was incorporated in two tax havens and used two sets of auditors, allowing it to avoid publishing meaningful consolidated accounts. As international regulators proceeded to close many BCCI branches, some $9.5 billion of depositors’ money was found to be missing. The New York prosecutor called it “the largest bank fraud in New York financial history.”

This opinion was not shared by all, who felt the BCCI was
framed, having served a purpose throughout the Afghan War, including a large number of depositors among whom both Agha Hassan Abedi and BCCI continued to retain loyal support. Was the BCCI one in a line of such crooked banks as the Castle Bank, through which the CIA had funneled cash for anti-Castro operations in Cuba and that it used whenever it needed the services of corrupt or criminal banks for overseas operations? Or was it one among Agha Hassan Abedi’s several initiatives, undertaken during a brilliant career dedicated to breaking the colonial monopoly of western institutions but corrupted by the CIA-brokered alliance? Or was it, most likely, both? It was possible BCCI’s crime had been that it had worked both sides of the fence, being available for covert operations by all those in need: from the Palestinian Abu Nidal group, to Pakistani, Argentinean, and Libyan initiatives to acquire nuclear weapons (as
Time
magazine charged), to CIA and DIA covert operations. Most certainly, though, the CIA’s decision to privatize the Afghan jihad led to the emergence of several rogue private actors, among which al-Qaeda was one and BCCI another.

Given the privatized nature of the Afghan jihad, it should come as no surprise that the congressional subcommittee charged with investigation into “the BCCI Affair” found it extremely difficult to elicit information from both the CIA and the Bank of England. The subcommittee complained that whereas “initial information” supplied by the CIA was “untrue,” information supplied later was “incomplete.” The subcommittee concluded that “the CIA knew more about BCCI’s goals and intentions concerning the U.S. banking system than anyone else in government,” and yet “it failed to provide the critical information it had gathered to the correct users of the information—the Federal Reserve and the Justice Department.” Worse still, the CIA continued to use both
BCCI and First American, BCCI’s secretly held U.S. subsidiary, even “after the CIA knew that BCCI as an institution was a fundamentally corrupt criminal enterprise.”

The subcommittee faced a similar stone wall with the Bank of England. Even after it “learned of BCCI’s involvement in the financing of terrorism and in drug money laundering” in 1988 and 1989 and was advised of “evidence of fraud” by its auditors, Price Waterhouse, the bank tentatively agreed “to permit BCCI to restructure as three ‘separate’ institutions” in London, Abu Dhabi, and Hong Kong. Despite a 1989 investigation by District Attorney Robert Morgenthau, in April 1990 the Bank of England permitted BCCI “to move its headquarters, officers and records out of British jurisdiction to Abu Dhabi,” with “profound negative consequences for investigations of BCCI around the world.” When the U.S. Federal Reserve attempted to investigate BCCI, it, too, faced “lack of cooperation” from the Serious Fraud Office of the British government.

CIA denials about links with BCCI could not stand in the face of British and American investigative reports. The media—particularly such networks as ABC—reported that CIA accounts in BCCI London branches were used to pay “scores of British subjects and residents who had worked as informants for the CIA.” Soon after,
The Financial Times
cited the Pakistani finance minister’s confirmation that “the CIA used BCCI branches in Pakistan to channel money, presumably through the ISI, to the Afghan jihad.” The trickle of information on CIA-BCCI links turned into a flood as Senator John Kerry’s investigating committee reported “that a Senate aide who worked to supply the Moujahideen with Stinger missiles and other weapons, Michael Pillsbury, kept a close relationship with BCCI front-man Muhammad Hammoud.” Finally, on February 23, 1992, NBC reported that Agha Hassan Abedi
had been meeting CIA director William Casey “secretly for three years in Washington’s Madison Hotel.” Soon after, the CIA’s acting director admitted to collusion between the agency and BCCI.

The more the larger picture became known, the more it became clear that BCCI’s connection with the CIA predated the Afghan jihad. BCCI was a regular conduit used by Saudi intelligence to channel funds for covert CIA operations: Saudi funds were known to have been regularly deposited in secret BCCI accounts in Switzerland, London, and Miami, for use by CIA’s proxies in southern Africa and Central America. The congressional investigation listed a whole host of U.S. and foreign officials who “float in and out of BCCI at critical times in its history.” The names included former CIA directors Richard Helms and William Casey, principal U.S. foreign agents such as Adnan Khashoggi and Manucher Ghorbanifar, and Saudi intelligence officials such as Kamal Adham and Abdul Raouf Khalil. The Saudi-BCCI link was exposed in the plea bargain reached in the 1992 federal trial in New York. When Kamal Adham, the Saudi chief of intelligence, pleaded guilty to charges of conspiracy and agreed both to pay a fine of $105 million and to disclose some of BCCI’s labyrinthine global operations—but not before his lawyers and associates had hinted that further “disclosures about Afghanistan” might have come in the absence of a plea bargain.

Cost to Pakistan

The Afghan jihad had a deeper effect on the Pakistani state and society than it did on any other country outside of Afghanistan. The military claimed that the creation of a national security state would in reality be the building of an Islamic state. Zia ul-Haq was convinced that Pakistan would not survive unless it was as
regimented as Israel: “Pakistan is like Israel, an ideological state. Take out Judaism from Israel and it will collapse like a house of cards. Take Islam out of Pakistan and make [it] a secular state; it would collapse. For the past four years we have been trying to bring Islamic values to this country.” The imperative was clear: Pakistan could be held together only by an ideological project.

The heart of the national security state was the ISI, also the executive agency for the Afghan jihad. Given the proxy nature of its jihad, the CIA was aware that it needed the full cooperation of the ISI to be effective in Afghanistan and, more generally, in Soviet central Asia. The more the anti-Soviet jihad grew, the more the ISI moved to the center of governmental power in Pakistan. The Islamization of the anti-Soviet struggle drew inspiration from the Islamization of the Pakistani state under Zia and in turn reinforced it. The ISI came to see itself as the defender and the custodian of Islam. The Islamization of state agencies continued after Zia’s death. Blasphemy laws, as well as the 1979 Hudud Ordinance, which put extraordinary emphasis on corporal punishment and tended to subordinate the judiciary to executive control, remained in place. The Jamaat-e-Ulema-Islam (JUI), a key party in the alliance behind the Afghan jihad, became a part of Prime Minister Benazir Bhutto’s governing coalition in 1993. The JUI was the party of Pakistani Deobandis and was the sponsor of the Taliban, the ideological product of Deobandi madrassahs. Entry into government gave the JUI its first opportunity to build close relations with both the ISI and the army. The harvest came soon after: when the Taliban took power in Kabul in 1995, they handed over the training camps to the JUI.

Two related processes intensified the negative impact of the Pakistani state on its society. Intimate links with the CIA gave the ISI access to state-of-the-art surveillance, allowing it to closely
monitor the Pakistani people; also, the easy availability of arms led to the proliferation of armed factions and an associated “Kalashnikov culture.” Central to the ISI’s impact on Pakistani society was its patronage of a number of jihadi organizations, which in reality were paramilitary forces that claimed the mantle of Islam. The two most important such groups were Lashkar-i-Tayyaba (Soldiers of Medina) and Harkat ul-Ansar (Volunteers Movement). Lashkar-i-Tayyaba was estimated to have fifty thousand militants and was “the leading group in the ‘jihad’ to ‘liberate’ Indian Kashmir.” Harkatul Ansar was formed to support the Afghan jihad, and its members were the most dedicated of the Taliban. Its leader was Osama bin Laden, and it was once funded by the United States. When declared a “terrorist” organization by the United States in 2001, it promptly changed its name to Harkatul Mujahideen and continued to function without missing a step. Thus, the Afghan jihad came to be joined to the Kashmiri jihad.

The madrassahs did not close after the Soviet withdrawal from Afghanistan in February 1989. The post-Soviet graduates of these madrassahs were known as the “second wave” of militants. The
Los Angeles Times
interviewed one of them, twenty-two-year-old Iftikar Haider. His life story gives us a glimpse into the kind of impulse that could lead a young man into the ranks of the jihad. “The sole child of a poor family that fled to Gujranwala in Pakistan from India after losing its farm and most of its members in the blood bath of the Indian partition,” Haider “grew up hearing gruesome tails of Hindu and Sikh cruelty toward Muslims from his father, a low-level worker in the government Agricultural Department.” Haider underwent his first military training in 1990. His life took a fateful turn on December 6, 1992, the day a “mob of Hindu zealots in the northern Indian town of Ayodhya tore down an unused mosque built on the site where, the Hindu god-king
Ram was born.” It was estimated that twelve hundred people, mostly Muslims, died in the month of communal rioting that followed. The following February, Haider enlisted with Markaz-ud-Daawa-Wal-Irshad, one of the jihadi groups, and infiltrated Indian-administered Kashmir. Two of his comrades-in-arms were killed, but Haider was captured and confined in the high-walled prison in Kot Bhalwal outside Jammu in southern Kashmir, where he was interviewed by the
Los Angeles Times
reporter. Even in captivity he was “alert, clear-eyed and unremorseful.” He told the reporter, “My religion says that whosoever is an oppressor must be combated. Even if he is a Muslim, like Hosni Mubarak [the Egyptian President] or Moammar Kadafi [the Libyan leader], we should fight them. Wherever there is oppression, Markaz-ud-Daawa-Wal-Irshad will be fighting for the oppressed.” To the reporter who interviewed him, Haider “sounded like an Islamist version of righteous Tom Joad, protagonist of John Steinbeck’s
The Grapes of Wrath.”

The more the jihadi culture grew, the more it inflamed doctrinal differences inside Pakistan, turning them into political differences to be settled through armed confrontation. Both major religious sects—Sunni and Shi’a—developed their own paramilitary groups during the 1980s: the Sunni organized the Sipah-e-Sahaba (Soldiers of the First Four Caliphs) and the Shi’a responded in kind, with Sipah-e-Muhammad (Soldiers of Muhammad). As the sectarian conflict raged, it turned Pakistani society into a microcosm of Afghanistan. As in Afghanistan, the Pakistani jihadi culture tended to go hand in hand with the drug culture, and the effect of the heroin and opium trade was devastating. The increase in local heroin processing led directly to an increase in its local consumption. The number of officially registered heroin addicts in Pakistan rose from 130 in 1977 to 30,000 in 1988, but the UN
Drug Control Program estimated that the actual heroin-addicted population had gone from negligible in 1979 to 1.3 million by 1985, “a much steeper rise than in any [other] nation.” By 1997, the UNIDCP estimate had risen to 1.7 million heroin addicts. As Pakistani society reeled from a combination of militarization and a rapidly spreading drug culture, it became clear that even if the Afghan jihad was over, its effects on Pakistan society were not.

The Outcome: Taliban

The CIA jihad made no effort to create a single organization out of the myriad of Afghan mujahideen groups. This was a consequence of, on the one hand, the extremely sectarian character of Islamist ideology that came to dominate the Afghan jihad and, on the other, the political objectives that guided the Americans.

There were seven mujahideen groups in all. They reflected every kind of fissure, internal and external, to which the Afghan resistance was subject. The internal differences in the Afghan jihad were of two different kinds. The first involved regional (north vs. south), linguistic (Farsi vs. Pashtun), and ethnic (Pashtun vs. non-Pashtun) differences. Historically, Afghan society managed its cultural diversity through a highly decentralized polity and society. A centralizing state project was likely to exacerbate rather than contain these differences. The lesson of history is clear: cultural differences need not translate into political differences.

A different kind of internal division arose from doctrinal differences, as between Shi’a and Sunni. Doctrinal distinctions, too, did not have to translate into ideological and political differences. That this happened was a direct consequence of the nature of the political ideology that came to dominate Afghan politics and the state. The overriding ideological difference among the
seven mujahideen groups was between two political points of view: traditionalist nationalists and Islamist ideologues. The traditionalists generally came from the religious leadership, whereas the ideologues came mainly from the ranks of political intellectuals. Traditionalists tended to treat doctrinal distinctions—as those between Shi’a and Sunni—as nonpolitical; in contrast, the tendency of ideologues was to turn doctrinal and cultural differences into political divisions. To understand why Islamist ideologues—and not Muslim traditionalists—emerged in charge of Afghanistan through the civil war, we need to understand not just the internal composite that was Afghan society but also how external forces played upon internal differences.