Posted 10 October 2006

The cornerstone of the high-profile terrorism investigation in Lodi, Calif. was a convenience store clerk turned FBI informant, Naseem Khan. But Khan’s role in that case has raised questions about the use of undercover informants. How does the process work, and when is the line crossed?

The FBI has a long history of recruiting and cultivating informants and knows that the careful use of an incentive — monetary or otherwise — is key. Some officials in the intelligence world use an acronym, M.I.C.E., to categorize the incentives: Money (a bribe), Ideology (sympathizing with an insider), Compromise (blackmail or reduced jail time) or Ego (medals, plaques). In Khan’s case, the primary incentive was financial: $230,000 paid over the course of the investigation.

Rudy Guerin, the former deputy assistant director of the FBI’s Foreign Counterintelligence Division, explained to FRONTLINE that the standard process for cultivating informants is to "start low and work your way up. Obviously, the informants that would be in a position to assist the most are the hardest to recruit, the hardest to gain access to but still are viable targets." For instance, he said, it’s constructive to have sources in a community serving as "eyes and ears," since they can provide firsthand information on anything new or unusual. In this role they can also assess the personalities of persons of interest to law enforcement.

But figuring out the right incentive isn’t the hard part — the real challenge is finding a person who is a fit for the job. "You usually have to deal with some unsavory individuals," said Fred Burton, a former State Department counterterrorism expert who relied on an informant in capturing 1993 World Trade Center bomber Ramzi Yousef. "It takes a killer to know a killer." For that reason, Burton stresses that intelligence from an informant should be "backstopped" with other sources.

The challenges in using informants are further complicated by the nebulous rules and regulations governing the process. "The informant program is under constant siege because agents do not like working it," says James Wedick, a former FBI agent who served as a consultant for the defense in the Lodi, Calif. terrorist trial. Wedick says there are gray areas in the rules; opinions from the U.S. attorney are often required. The Justice Department’s oversight body, the Office of the Inspector General, reported in September 2005 that agents complied fully with informant guidelines only 13 percent of the time.

The use of informant Naseem Khan illustrates some of these problems. Khan, who used to live in Lodi, first came to the FBI’s attention when he made the sensational claim that he saw Al Qaeda’s second-in-command, Ayman al-Zawahiri, at the Lodi mosque in the late 1990s. Prosecutors now admit that Khan was mistaken. The FBI used Khan to collect intelligence on the imams at the Lodi mosque. Over four years, Khan posed as a computer engineer working on the mosque’s Web site, all the while recording conversations with members of the community, including 19-year-old Hamid Hayat.

The outcome didn’t surprise James Wedick, who worked extensively with informants during his FBI career. In an interview with FRONTLINE Wedick questioned Khan’s credibility and alleged that he tried to entrap Hamid Hayat by goading him into attending a terrorist training camp. Wedick points to a recorded conversation between the two men where Khan says to Hamid, "You told me, ‘I’m going to a training camp, I’ll do this, I’ll do that.’ You’re sitting idle. You’re wasting time."

The problem of entrapment by FBI informants — persuading a suspect to commit a crime he would not have otherwise committed — looms over another recent terrorist case. In June 2006 authorities charged seven Miami men, who called themselves the "Sea of David," with plotting to blow up the Sears Tower in Chicago. Although the men were indicted on terror-related charges, the investigation has found no evidence that the group had contact with an actual terrorist — except for an FBI informant posing as one. Defense attorneys charge that the informant, by providing money, a meeting place and equipment, linked the admittedly anti-American group to half-hearted plans to which the group had no commitment and lacked the ability to carry out.

Of course, not all investigations involving informants raise questions. In a case cited by Ron Suskind in his book, The One Percent Doctrine, an informant close to Al Qaeda leaders told the FBI that a cyanide gas attack on New York City subways had been called off "45 days from zero hour." Without that informant, U.S. intelligence would have been in the dark about a potentially deadly plot.

An article in the September 11, 2006 New Yorker profiled Jamal Ahmed Fadl, "arguably the United States’ most valuable informant on Al Qaeda." Fadl has given the U.S. government crucial intelligence about the group’s operation, made positive I.D.s of suspected members and provided testimony crucial to the conviction of four Al Qaeda associates for their role in the 1998 embassy bombings in Africa.

In spite of criticisms and some botched cases, informants remain an essential tool. As former State Department expert Fred Burton puts it, "It’s a complicated mess to deal with, but the use of informants is critical to the disruption of terrorist plots."

This article was a project of the Investigative Journalism for Print and Television Seminar at the University of California at Berkeley, Graduate School of Journalism, taught by Reva and David Logan Distinguished Professor Lowell Bergman and Rob Gunnison under the direction of investigative journalist Marlena Telvick. Reporting by Jeff Kearns, Charlotte Buchen, Jordan deBree, Cathy Bussewitz, Lee Wang and Center for Investigative Reporting intern Taylor Valore. Additional research by Matt Levin, Kate Golden and Joseph De Avila. Additional editing by Alison Pierce of the Center for Investigative Reporting. Special thanks to the Reva and David Logan Foundation and the Gruber Family Foundation.