Tahawwur Rana Trial: Terror Suspect Claims Pakistan Intelligence Agency Knew About Mumbai Attack Plot

05/23/2011 09:11 am ET | Updated Jul 23, 2011

CHICAGO — The government's key witness in the trial of a Chicago businessman accused of helping coordinate the 2008 Mumbai attacks described on Monday how he made multiple scouting trips to India before the rampage and gave frequent updates about his progress to his two Pakistani handlers – one from a militant group and the other from the country's main intelligence agency.

The federal terrorism trial of businessman Tahawwur Rana is being closely watched around the world for what the attack's scout – Rana's longtime friend David Coleman Headley – might reveal about possible links between the anti-India militant group, Lashkar-e-Taiba, and Pakistan's Inter-Services Intelligence agency, known as the ISI.

Headley already has pleaded guilty to laying the groundwork for the Mumbai attacks, and he agreed to testify against Rana to avoid the death penalty, making him one of the most valuable U.S. government counterterrorism witnesses.

What Headley says during the trial has the potential to inflame tensions between Pakistan and India and place more pressure on the already frayed U.S. and Pakistani relations. His testimony also could add to the questions about Pakistan's commitment to catch terrorists and the ISI's connections to Pakistan-based terror groups, especially after Osama bin Laden was killed by U.S. forces in a military garrison town outside Islamabad earlier this month.

The Pakistani government has denied that the ISI orchestrated three-day siege in Mumbai that left more than 160 people dead, including six Americans. Pakistani intelligence officials have not commented on the trial.

"Headley's testimony is a nail in the coffin of U.S.-Pakistani strategic cooperation," said Bruce Riedel, a former White House adviser on Middle Eastern and South Asian issues. "Until now his commentary has gotten very little attention outside India, now it will finally get the attention it deserves here."

After opening statements Monday, the government called Headley, a Pakistani-American, to the witness stand where he spent hours detailing the formulation of the attacks and Rana's alleged help in providing cover for his surveillance activities in India.

Headley, clean-shaven and balding, wore a light blue golf shirt with a dark windbreaker during testimony at the federal courthouse in Chicago. Speaking so softly at times that attorneys had to remind him to speak louder, Headley said he has been involved with Lashkar-e-Taiba for more than a decade, but he wasn't working with someone in the ISI until years later after he was arrested by tribal police near Afghanistan. It was then he said he met a major in the ISI and told him what he and Lashkar were planning.

This ISI major, Headley said, was "very pleased" with what he heard and asked if Headley would work with one of his ISI associates. Headley agreed and said he was released from custody. Headley soon received a call from a man he referred to during his testimony as "Major Iqbal," which the U.S. government says is an alias. Headley said he then met Iqbal in a safe house in Lahore, Pakistan and described his plans with Lashkar and his assignment to take videos of Mumbai in preparation of an operation.

Headley said ISI provided financial and military assistance to Lashkar, and he assumed they worked under the same umbrella. He said Iqbal and his Lashkar handler,Sajid Mir, were in communication, but he would meet with them separately in Pakistan. Headley said when he would take videos of sights in Mumbai, he would first share them with Iqbal and then with Mir.

"All these things I discussed with Major Iqbal, I went over it with Sajid again," Headley told jurors.

Before moving to Mumbai in late 2006, Headley said he first came to Chicago, met with Rana and explained the plot in hopes of persuading Rana to let him open a branch of his immigration services business as a cover.

"I knew my friend had an office and I could persuade him to help us out," Headley told jurors.

With Rana's help, Headley said he set up an immigration consulting business in Mumbai and secured work visas to travel in and out of India. Headley described conversations he had with Rana while he was visiting in Chicago, and the prosecution showed emails between the two men discussing the immigration business and Mumbai operation through coded words.

Headley said he first told Rana about his involvement with Lashkar in In August 2005. Headley said his friend was surprised to learn this, but did not say he disapproved.

Earlier Monday, attorneys painted opposing portraits of Rana, a Pakistani-born Canadian who has lived in Chicago for years.

"The defendant knew all too well that when Headley travels to a foreign country, people may die," Assistant U.S. Attorney Sarah Streicker told jurors.

But defense attorney Charles Swift described Headley as a man who had been manipulating people for years, including Rana, a Pakistani-born Canadian who has lived in Chicago for years. Swift said Headley has a history of cooperating with the government in order to get out of trouble and spoke of Headley's work with the Drug Enforcement Administration in the 1990s. At one point, Swift said, Headley was working for the DEA, Lashkar and Pakistani intelligence at the same time.

Rana, 50, has pleaded not guilty in the case. His name is the seventh one on the federal indictment, and the only defendant in custody. Among the six others charged in absentia is Mir and Iqbal.

Headley's testimony is expected to resume Tuesday morning.