Originally Published 2003-10-15 06:42:17 Published on Oct 15, 2003
The US Treasury Department's decision to designate the gangster based in Pakistan, Dawood Ibrahim, as a terrorist on October 16, 2003, was undoubtedly belated but could still prove to be a milestone in the War on Terrorism if Washington could arm-twist President General Pervez Musharraf to hand over the criminal to the interrogators for questioning about his links with al Qaida and other terrorist groups.
Dawood's ISI links could trouble Musharraf
The US Treasury Department#146;s decision to designate the gangster based in Pakistan, Dawood Ibrahim, as a terrorist on October 16, 2003, was undoubtedly belated but could still prove to be a milestone in the War on Terrorism if Washington could arm-twist President General Pervez Musharraf to hand over the criminal to the interrogators for questioning about his links with al Qaida and other terrorist groups. The problem is General Musharraf may not like to do so because of Dawood#146;s long association with Pakistan#146;s intelligence agency, the Inter-Services Intelligence (ISI).

This paper traces the history of crime syndicates in Karachi and the support, both material and moral, criminals like Dawood Ibrahim drew from Pakistan establishment.

The takeover of Karachi by the crime syndicates had begun with an agreement Pakistan signed with a land-locked Afghanistan allowing duty free import of goods through the port of Karachi. The agreement was called the Afghan Transit Trade agreement. What might have been a legitimate trade route became the starting point of a flourishing smuggling racket that came to be known as the "Quetta-Chaman transport mafia". Trucks laden with foreign goods would start from Karachi and travel up to Jalalabad or Kandahar from where they would return to Pakistan to off-load in countless smuggled goods#146; markets that flourished in various cities, including Karachi. The volume of smuggled goods increased to such high proportions after the Taliban took over Afghanistan that a study conducted by the Pakistan Institute of Development Economics calculated the annual turnover to be a staggering Rs 100 billion (US$2.5 billion), about one-third of Pakistan#146;s reported black economy of Rs 350 billion.

It was this smuggling route that was used first by the drug lords and then by the CIA-ISI combine to push drugs into newer markets in Europe and the United States itself during the Afghan jihad.

Though opium had been cultivated and used in the Indian subcontinent for several centuries and the British had exported it to China to balance the trade deficit caused by heavy imports of tea in the pre-Independence era, the real boom came about after 1979 when the United States decided to oust its Cold War opponent, the Soviet Union, from Afghanistan.

The first to taste blood was the Pakistan Army and ISI officials who were co-opted by the CIA to run the jihad on behalf of the US in Afghanistan. In the years that followed the beginning of the Afghan jihad, there was an explosion in opium production in Pakistan. The figures reached up to 800 metric tonnes a year, almost 70 per cent world#146;s total opium production. More ominous was that the quantum jump in the number of opium processing labs---from one mobile laboratory in Landi Kotal in 1979, the number rose to more than 60 labs in Khyber Agency alone. The result was that by 1991 as much as 70 metric tonnes of heroin was passing through the country, primarily via Karachi, to various international destinations.

The deep involvement of Army and ISI officials in the narcotics trade made the crime syndicates entrenched in Karachi more bold and powerful. Under the protective umbrella of the State, the drug barons spread their network, recruited from the ranks of ethnic and sectarian outfits that flourished in Karachi, kept the local police on their pay-rolls and funded the politicians openly. In fact, the stakes in the narcotics trade have been so high that a substantial number of sectarian and ethnic clashes are motivated by the moolah that the drugs brought in and not the mullahs who spewed venom in the name of religion from the Binori mosque complex of Karachi.

The bare statistics alone are startling. The global illicit drug industry#146;s annual turnover is over $300 billion, of which the Pakistan#146;s share is $10 billion, almost one-fourth of the country#146;s annual Gross Domestic Product of $40 billion. It is not surprising, therefore, that there were 40 major heroin syndicates in Pakistan after the jihad began. Today, their number could run into several hundred, many of whom operate from Karachi, the obvious exit point for drugs. During the jihad, it was the National Logistics Cell, the army-run trucking company, that took weapons supplied by the CIA from the Karachi port to Peshawar and Quetta and returned with heroin for export. Today, the criminal syndicates run trucking companies that first transport opium to the processing laboratories in the frontier regions of Pakistan like the Khyber Agency where Chinese chemists are employed to process raw opium and then to Karachi from where the finished product, heroin, is either shipped or air freighted to Europe and other destinations.

According to the Anti-Narcotics Force#146;s regional directorate in Sindh, drugs reach Karachi from Balochistan and the North West Frontier Province via Khuzdar, Jacobabad or Dera Ghazi Khan. The smugglers take hashish through the Makran coast while heroin consignments in smaller quantities are carried in oil tankers and cargo trucks to the Quaid-e-Azam International airport at Karachi. Smuggling also takes place through the port with the connivance of the local crew or port staff.

A large number of carriers are African nationals, mostly Nigerians. They pose as garment traders, stay in cheap hotels and return with narcotics hidden in capsules which they swallow to avoid detection. They also smuggle heroin either stitched in garments or hidden inside large thread reels. Last year, the police arrested 42 foreigners, 35 of them Nigerians and recovered 62 kgs of heroin.

These carriers are generally ignorant about the suppliers-an elaborate network of dealers that runs through innumerable gangs, often rivals that operate under the umbrella of a few syndicates. The Memon family runs one such syndicate in Karachi. The clout and collusion it enjoys was revealed when the controversial Mehran Bank#146;s Chairman, Yunus Habib, admitted to donating Rs 140 million to the former Army Chief, General Aslam Beg, in 1990, who in turn deposited the amount in the various clandestine accounts operated by the ISI.

According to Beg, Rs 60 million was spent by the ISI on election purposes and the remaining was placed in Special Funds of the ISI. But what he did not elaborate on was that Habib was involved not only in quite a few embezzlement cases but was also a key conduit for money laundering on behalf of the ISI and various criminal syndicates which worked in tandem. Habib later said he had collected money from a businessman living in Karachi who was part of the Memon syndicate.

But the most powerful syndicate in Karachi that runs with the blessings of the establishment is the one headed by Dawood Ibrahim who not only has the local police and politicals on his side but the powerful Army and the ISI as well. In fact one amazing instance of his clout was the desperate manner in which Islamabad tried to protect him when the Indian government sought his extradition from President Pervez Musharraf during his Agra visit in July 2001.

Born in Maharashtra#146;s Ratnagiri district as a Mumbai police constable#146;s son, Dawood Sheikh Ibrahim Kaskar rose rapidly through the ranks of the Mumbai underworld and escaped to Karachi after engineering the Mumbai serial blasts in 1993, for which the Indian government has been pursuing him ever since.

On arriving in Pakistan, Dawood was given a backdated passport in Rawalpindi and a 6000-sq metres plot in the posh Clifton area of Karachi. His two trusted lieutenants, Abdul Razzak Memon alias Tiger Memon and Shakeel Ahmed alias Chhota Shakeel too were settled in Karachi by the ISI-Memon in the Shara-e-Faisal Boulevard and Shakeel in the Defence Housing Authority enclave.

Dawood was advised to take up the real estate business which he did with a vengeance, grabbing prime properties, quite often illegally, and constructing shopping malls and residential apartments by violating all possible building byelaws. A large number of his properties are in Gulshan-e-Iqbal. Dawood#146;s aide, Tiger Memon, constructed a multi-storied commercial complex topped with a glittering glass crown on the main Shara-e-Faisal Boulevard on a site designated as a public park. When an NGO, Shehri, protested about the unauthorised occupation and illegal construction and filed a case against Memon, the organisers were told by the ISI to withdraw the case. More intimidation followed. When a well-known journalist, Ghulam Husnain, exposed the nexus between Dawood and the military-intelligence establishment in September 2001 in a Newsline cover story titled Portrait of a Don, he was picked up ISI agents and confined for several days before being released. The journalist was so shaken up by the experience that till date he has not mustered courage to reveal what really happened to him.

It wasn#146;t just Dawood and his brothers alone who were slicing up Karachi#146;s real estate. There was one case where the JUI leader, Maulana Fazlur Rehman, colluded with Benazir Bhutto#146;s husband Asif Zardari to break all rules and help a contractor, Haji Masood, to build the 20-storey Samia Trade Towers. As for Dawood, with the kind of patronage he received, he quickly moved on to "bigger and better" vocations like the parallel credit system, hundi. He also re-established his gold and drug smuggling network that he had left behind in Mumbai. So meteoric was his rise that he even revived Pakistan#146;s Central Bank with a huge dollar loan. His next big venture was match fixing. The Midas#146; touch that he enjoyed, the don quickly became the King of Match Fixing with many of the Pakistan cricket players on his rolls. Former Captain Javed Miandad in particular was considered close to him.

Besides the criminal syndicates, other groups that were affected adversely by the coming of Dawood to Karachi was the MQM which till then had the monopoly in the illicit business cornered by Dawood & Co. It was Altaf Hussain#146;s MQM and the breakaway Haqiqi faction which had the last word in real estate rackets and extortion till Dawood was brought in by the ISI. It was not long before most of the Haqiqi members along with activists of SSP joined the Dawood Syndicate as it grew its tentacles and began to control the Karachi underworld.

It was also the beginning of another kind of war in Karachi: The Gang War. On August 25, 2001, Karachi witnessed first of these wars that many expect would become part of the city life in the days to come. In a brazen ambush, four policemen were shot and the city#146;s biggest gambling operator, Shoaib Khan alias Shoaib Rummywala, was injured seriously. The Haji Ibrahim Bholoo group carried out the attack.. Ibrahim was Shoaib#146;s former partner and had mysteriously gone missing in January last year. The police later discovered his body. Both Shoaib and Bholoo were on the rolls of the Dawood Syndicate.

These gang wars are often instigated by the intelligence agencies to keep a check on various criminal gangs, most of which they harbour for their own interest. As a result, most of the killings go unreported and unsolved. In the first eight months of 2001, at least 82 mutilated bodies, suspected to be those of criminals, were found in Karachi. None of the murders were investigated.

The proximity of intelligence agencies to Dawood is not a secret in Karachi. A top Pakistani security agency reportedly provides the heavy escort of armed guards that he moves around with. Many of his assistants are either retired or serving personnel from intelligence and security agencies, including the Army. Besides the money that the illicit businesses provide, there is evidence that Pakistani intelligence agencies use the criminal syndicates for intelligence gathering and recruitment of potential terrorists. Dawood, for instance, with the help of extensive network in India has been helping the agencies with intelligence gathering on a regular basis. His associate Bholoo was an informer in South Africa on MQM activities. Dawood#146;s writ runs in places as widely dispersed as Kathmandu, Mombasa, Pretoria, Dhaka, Colombo and Dubai. Incidentally, these are the areas where the ISI has been quite active in the recent past, linking up with Islamist organisations that spawn and shelter terrorist groups like Hamas and Al Qaida.

Although there is not much evidence available in the public domain about the role of the Dawood Syndicate in acting as a bridge between the ISI and various religious and terror groups in these areas (barring the Mumbai blast case), an Interpol report in 1996 said that Anees Trading Company, a shell company run by Dawood, was luring young, unemployed men from the continent with the promise of jobs and sending them to terrorist training camps.

There is clear evidence that the intelligence agencies had been using these criminal syndicates to act as hawala channels for terrorist organisations operating from India. In 1997, the Delhi Police stumbled upon an elaborate network of hawala channels that originated from a person called #146;Qazi Saheb#146;, a key conduit of Dawood and his associate, Tiger Memon, to Hijb-ul Mujahideen operating in Kashmir. In fact, the Gujarat police in India had already found such a linkage with the arrest of four terrorists of the Jammu Kashmir Islamic Front (JKIF), the group responsible for the initial phases of terrorism in Kashmir, on June 2, 1996. Their interrogation revealed that Memon had helped JKIF carry out the May 21, 1996 bomb blast in New Delhi#146;s Lajpat Nagar that killed a dozen people. In 1998, a diary found from the body of a top Hijb commander, Ali Mohammad Dar alias Burhanuddin Hijazi (eliminated by Jammu and Kashmir police#146;s Special Operations Group), revealed more details of the possible nexus that existed between the underworld operating from Dubai and Karachi and the ISI with terrorist groups.
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.