In calling for a clear, strong, and long-term commitment to the military-dominatedgovernment of Pakistan despite serious concerns about that country's nuclear proliferation activities, The Final Report of the 9/11 Commission cast into sharp relief two long-standing dilemmasconcerning U.S. policy towards Pakistan and South Asia. First, in an often strained securityrelationship spanning more than five decades, U.S. and Pakistani national security objectives haveseldom been congruent. Pakistan has viewed the alliance primarily in the context of its rivalry withIndia, whereas U.S. policymakers have tended to view it from the perspective of regional stabilityand U.S. global security interests. Mutual security agreements concluded with Pakistan in 1954 and1959, which remain in force, were part of the U.S. "Containment" policy towards the SovietUnion. (2) Second, U.S.nuclear nonproliferation objectives towards Pakistan (and India) repeatedly have been subordinatedto other important U.S. goals. During the 1980s, Pakistan exploited its key role as a conduit for aidto the anti-Soviet Afghan mujahidin to avoid U.S. nuclear nonproliferation sanctions and receiveannually some $600 million annually in U.S. military and economic aid. Underscoring Pakistan'sdifferent agenda, some of the radical Islamists favored by its military intelligence service laterformed the core of Al Qaeda and the Taliban. During the 1980s, Pakistan successfully exploited its importance as a conduit for aid to theanti-Soviet Afghan mujahidin both to forestall the imposition of economic and military sanctionsotherwise required by U.S. nuclear nonproliferation laws and to gain some $600 million annuallyin U.S. military and economic aid. Ironically, not only did Pakistan develop its nuclear weaponscapability during the 1980s while receiving major U.S. economic and military assistance, butbecause it was partially hostage to Islamabad's own foreign policy objectives, the United Statesunwittingly facilitated the rise of a radical anti-U.S. Islamic terrorist movement. (3) The ranks of Al Qaeda andthe Taliban include some of the very same radical Islamists nurtured by Pakistan's Inter-ServicesIntelligence (ISI) organization and supported and armed by the CIA in the successful effort to drivethe Soviet Army out of Afghanistan. Some observers view this unwanted legacy as cause for notlosing sight of U.S. nuclear nonproliferation and other interests when seeking to forge closerantiterrorism ties to a country that has been a major and recent source of the proliferation of nucleartechnology and materials, and which also faces some degree of risk of itself falling under the controlof radical Islamists. This report seeks, in part, to explore whether there may be ways for gainingmore leverage with Pakistan on the proliferation issue without jeopardizing Islamabad's cooperationon terrorism. Figure 1. Country Map of Pakistan Neither the 9/11 Commission Report nor legislation enacted to implement itsrecommendations directly address the issue of balancing U.S. assistance to promote counterterrorismcooperation and stabilize Pakistan against Islamist extremism, with curbing nuclear proliferationactivities emanating from Pakistan. Congress endorsed and funded for FY2005 only a request fromthe Bush Administration for a new five-year, $3 billion, package of U.S. economic and militaryassistance to Pakistan. Congress also signaled its concern that Pakistan was not sufficientlycooperating with U.S. efforts to eliminate A.Q. Khan's illicit nuclear supply network by revising anexisting reporting requirement under the Foreign Assistance Act, 1961, amended, but did notcondition U.S. assistance to Pakistan on the imposing of any specific performance-relatednonproliferation requirements. (4) (See Legislation section at the end of this report.) In theory, achieving the two most critical U.S. policy objectives relating to Pakistan --defeating radical Islamic terrorism and deterring nuclear proliferation -- should be complementary,since the acquisition of nuclear weapons by terrorists is, in the words of the Vice-Chairman of the9/11 Commission, former Representative Lee Hamilton, "the ultimate nightmare." In practice,however, the historical record shows that the dual American objectives often have been operationallyincompatible, especially the goals of promoting democracy and preventing nuclear proliferation. From that perspective, Vice-Chairman Hamilton observed at an August 24, 2004 hearing of theHouse International Relations Committee, "I think Pakistan represents as tough a problem as thereis in American foreign policy today." (5) Press reports in late December 2004 and early 2005 concerning the covert supply networkestablished by A.Q. Khan underscored the challenge of addressing simultaneously the terrorist andnuclear proliferation threats in U.S. policy towards Pakistan. The New York Times reported onDecember 26, 2004, that both the Bush Administration and the United Nations' International AtomicEnergy Agency (IAEA) had gathered evidence in the Middle East and Asia indicating that Khan'snetwork may be much more extensive than previously assumed. The extent and degree of threatposed by Khan's network has become apparent through the discovery in Libya of plans for an atomicbomb and other elements of a "nuclear starter kit," evidence that Pakistan has been the source ofmost of Iran's uranium enrichment know-how and technology, strong indications that Pakistan hasbeen the main source of centrifuges or components for North Korea's secret uranium enrichmentprogram. U.S. and officials and experts of the IAEA strongly suspect that Khan's network also wasinvolved in transporting North Korean uranium hexafluoride gas (UF6), the feedstock for uraniumenrichment centrifuges, to Libya. (6) In addition to A.Q. Khan's network, U.S. officials revealed the existence of another illicittrafficking ring in January 2004, this one involved in illegally exporting sensitive U.S. technologyfor Pakistan's own nuclear weapons and missile programs. In September 2004, an Israeli arms dealerresident in South Africa, Asher Karni, pleaded guilty to five Federal felony charges related to hiskey role in a number of unlicensed exports of sensitive dual-use U.S. technology to Pakistan viaSouth Africa and Dubai, including high speed switches called triggered spark gaps, which can beused in nuclear weapons. Karni's customer in Pakistan was an Islamabad-based company, Pakland,owned by Humayun Khan (no relation to A.Q. Khan), with long-standing ties to Pakistan's militaryand nuclear establishment. U.S. officials say that Karni's Cape Town company also suppliedmissile-related and possibly nuclear-related technology to India. (7) (See details below). (8) In the face of continuing evidence that Pakistan remains involved in nuclear proliferationactivities, some Members of Congress and some policy analysts and observers are concerned thatthe United States may be ignoring the lessons of the 1980s in again subordinating its nuclearnonproliferation interests to other policy objectives. During the 108th Congress, these concerns wereraised by some Members of Congress in committee hearings and in proposed legislation that did notreceive action. Pending legislation in the 109th Congress likewise appears to reflect, in part, the desire ofsome Members of Congress to recalibrate the balance between U.S. counterterrorism andnonproliferation objectives. These initiatives would condition U.S. assistance on more cooperationfrom Pakistan concerning A.Q. Khan's network and the curtailment of other actions by Pakistan tooppose or undermine U.S. efforts to curb nuclear proliferation. (See details in section entitled"Legislation" at the end of this report.) This report briefly recounts previous failed efforts to reconcile conflicting American regionalsecurity and nuclear nonproliferation policy objectives regarding Pakistan; (2) documents A.Q.Khan's role, whether with or without official involvement, in supplying nuclear technology to"rogue" states and how these activities escaped detection by U.S. intelligence agencies; (3) considersissues regarding the nature, objectives, and viability of the military-dominated government headedby President Pervez Musharraf; and, (4) outlines a series of unilateral and multilateral U.S. options,with a discussion of the advantages and disadvantages of each, for gaining further nuclearnonproliferation cooperation from Pakistan and forestalling future exports from Pakistan of nuclearand dual-use components, materials, and technology. This report will not be further updated. The 9/11 Commission Report emphasizes the need for "hard choices"and "difficult long-termcommitments" to Pakistan. (9) The Report explicitly notes that the need for a pragmatic approachinevitably involves compromises with other important U.S. interests such as democracy and nuclearnon-proliferation. The Report does not address the issue of where the balance should be struckbetween supporting the Musharraf government as a necessary means of fighting terrorism. Perhaps because of its relatively narrow mandate, the 9/11 Commission focused more on the urgency of maintaining a stable and cooperative government in Islamabad that would remain apartner in the war against terrorism and less on Pakistan's role as a source of nuclear proliferation.In the view of the 9/11 Commission, maintaining close cooperation with Pakistan in the fight againstAl Qaeda and keeping Pakistan's nuclear capabilities out of the hands of terrorists depends criticallyon supporting President Pervez Musharraf's vision of a moderate, modernizing Islamic state. The 9/11 Commission addressed only in an oblique manner the issue of Pakistan's pastnuclear proliferation activities and the risk of further proliferation emanating from Pakistan. TheReport's section on Pakistan acknowledges, but does not dwell on, Pakistan's continuing potentialto be a source of technology and know-how for other states or terrorist groups intent on acquiringnuclear weapons.