The Bush Administration has expressed shock at disclosures that Pakistan, our ally in the war on terror, has been running a nuclear secrets bazaar. In fact, according to the British news teams' sources within US intelligence agencies, shortly after President Bush's inauguration, his National Security Agency (NSA) effectively stymied the probe of Khan Research Laboratories, the Pakistani agency in charge of the bomb project. CIA and other agents told BBC they could not investigate the spread of “Islamic Bombs” through Pakistan because funding appeared to originate in Saudi Arabia.

Greg Palast and David Pallister received a California State University Project Censored Award for this expose based on the story broadcast by Palast on BBC television's top current affairs program.

According to both sources and documents obtained by the BBC, the Bush Administration “spike” of the investigation of Dr. Khan’s Lab followed from a wider policy of protecting key Saudi Arabians including the Bin Laden family.

Noam Chomsky, who read the story on page one of the Times of India, has wondered, “Why wasn’t this all over US papers?”

To learn why, read the following excerpt from the 2003 edition of Palast’s book, The Best Democracy Money Can Buy:

The "Back-Off" Directive and the Islamic Bomb

A top-level CIA operative who spoke with us on condition of strictest anonymity said that, after Bush took office, "There was a major policy shift" at the National Security Agency. Investigators were ordered to "back off " from any inquiries into Saudi Arabian financing of terror networks, especially if they touched on Saudi royals and their retainers. That put the Bin Ladens, a family worth a reported $12 billion and a virtual arm of the Saudi royal household, off limits for investigation. Osama was the exception; he remained a wanted man, but agents could not look too closely at how he filled his piggy bank. The key rule of any investigation, "follow the money," was now violated, and investigations-at least before September 11-began to die.

And there was a lot to investigate-or in the case of the CIA and FBI under Bush-a lot to ignore. Through well-known international arms dealers (I'm sorry, but in this business, sinners are better sources than saints) our team was tipped off to a meeting of Saudi billionaires at the Hotel Royale Monceau in Paris in May 1996 with the financial representative of Osama bin Laden's network. The Saudis, including a key Saudi prince joined by Muslim and non-Muslim gun traffickers, met to determine who would pay how much to Osama. This was not so much an act of support but of protection-a pay off to keep the mad bomber away from Saudi Arabia.

The crucial question here is that, if I could learn about this meeting, how did the CIA miss it? In fact, since the first edition of this book, other sources have disclosed that the meeting was monitored by French intelligence. Since U.S. intelligence was thus likely informed, the question becomes, Why didn't our government immediately move against the Saudis?

I probed our CIA contact for specifics of investigations that were hampered by orders to back off of the Saudis. He told us that the Khan Laboratories investigation had been effectively put on hold.

You may never have heard of Khan Laboratories, but if this planet blows to pieces this year, it will likely be thanks to Khan Labs' creating nuclear warheads for Pakistan's military. Because investigators had been tracking the funding for this so-called "Islamic Bomb" back to Saudi Arabia, under Bush security restrictions, the inquiry was stymied. (The restrictions were lifted, the agent told me without a hint of dark humor, on September 11.)

Dr. A. Q. Khan is the Dr. Strangelove of Pakistan, the "father" of their bomb and, says a former associate, a crusader for its testing . . . on humans. On April 25, 1998, Khan met at the Kushab Research Center with General Jehangir Karamat, then army chief of staff, to plan a possible preemptive nuclear strike on New Delhi, India. The Saudis lit a fuse under this demented scheme by telling Pakistan intelligence that Israel had shipped India warplanes in preparation for a conventional attack on Pakistan. We only know these details because a young researcher who claims he was at the meeting wrote a horrified letter threatening to make the plan to bomb India public, a threat which appears to have halted the scheme.

After writing down his objections, the whistle-blower, Iftikhar Khan-Chaudhry, ran for his life to London, then the USA, seeking asylum. Khan-Chaudhry, when questioned, seemed to know too little to be the top nuclear physicist he claimed, and far too much about A. Q. Khan's bomb factory to be the tile company accountant Pakistan claims. Pakistan police, failing to arrest him, jailed, beat and raped his wife, suggesting they wanted him to keep secret something more interesting than bookkeeping methods.

Whether his story was real or bogus, I can't possibly tell. The point is that intelligence agencies under Clinton, based on many other leads as well, were following up on the Saudi connection until the Bush team interfered.

Greg Palast is author of the NY Times bestseller The Best Democracy Money Can Buy (Penguin USA 2003). See Greg Palast's award-winning reports for BBC Television and the Guardian papers of Britain at www.GregPalast.com.  Contact Palast at his New York office: media@gregpalast.com.

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