Inside the A-Bomb Bazaar

UK ALIZAI/EPA
The father of the Islamic bomb, Khan may be the godfather of proliferation

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U.S. officials are convinced that Khan was the key player in the barters that Pakistan made with North Korea. A 1994 agreement with the U.S. froze work at Pyongyang's nuclear-fuel reprocessing plant. Three years later, in exchange for the design of the centrifuges plus components to enrich uranium, Pakistan obtained from North Korea 600mile-range, nuclear-capable Nodong missiles that Khan's lab retooled and renamed the Ghauri. U.S. intelligence alleges he made a dozen or so visits to Pyongyang over several years.

Iran may have been another client. Investigators from the International Atomic Energy Agency (IAEA) who examined suspected nuclear facilities in Iran late last year found signs of a Pakistan connection. They uncovered evidence showing that when Iran's own efforts to master enrichment failed in the late 1980s, Tehran acquired Pakistani-style centrifuge technology, including parts and detailed designs for machines remarkably similar to ones in KRL's workshops. Western intelligence says Khan paid several clandestine visits to Iran's Bushehr nuclear-power plant, though he denies it.

When mercurial Libyan dictator Muammar Gaddafi abruptly renounced his nuclear ambitions at the end of December, he exposed another case of Pakistani proliferation. Investigators now exploring Libya's projects have found "interconnections" with Pakistan's technology and a backdoor trading network, according to a New York Times report. The U.S. thinks oil-rich Libya first began funding Pakistan's nuclear development in the 1970s and periodically supplied raw uranium. Washington officials say Gaddafi was eventually rewarded with Pakistan's centrifuge designs and secret supplies of essential materiel that helped Libya close in on nuclear-fuel production.

Khan is hardly the only Pakistani scientist to raise international suspicion. Shortly after 9/11, two retired nuclear experts with ties to Muslim extremists were questioned by the FBI about allegations that they had discussed developing weapons with al-Qaeda. Islamabad's current inquiry is focused on a group of Khan subordinates. The investigators tell TIME that Khan acknowledges "authorizing" some of their trips to Libya, Iran and North Korea but says he had "no idea" whether they were conducting clandestine business on their own. But Khan is widely regarded as the man with the knowledge and the authority to make the big deals. He was in complete, unchallenged control of KRL until 2001. A former colleague of his claims that Khan could fly anywhere without permission, make any deal he wanted. The tall, silver-haired scientist amassed a personal fortune that pays for a lavish lifestyle. His position and revered status would earn plenty of perks. But many, including U.S. intelligence officials, believe he acquired those riches peddling his nuclear expertise.

In rare public statements, Khan has insisted he is a peaceful man opposed to nuclear proliferation. (He denied TIME's requests for an interview.) A former Musharraf aide says Khan's megaton ego almost as much as U.S. charges that he ran a nuclear bazaar persuaded Musharraf to force him into retirement. But Pakistani investigators remain leery of squeezing the national hero too tightly. Khan is a public icon, his hawkish face known to every schoolchild. Arresting him could trigger dangerous protest among Islamist extremists and senior military officers who feel Musharraf has already gone too far in appeasing the White House. Khan's travel has been restricted, and even inside Pakistan, he is always accompanied by two military officers. He rarely leaves his Islamabad mansion except to venture out to feed wild monkeys that swing down in the nearby forest. Officials in Washington meanwhile cross their fingers that Musharraf can and will make sure that with Khan sealed away, Pakistan's nuclear giveaway is over.