Arshad Pervez

Arshad Z. Pervez was a native of Pakistan who moved to Canada in 1967 and ran an import-export business in Toronto. In July 1987 he was arrested in Philadelphia while arranging the shipment to Pakistan of maraging steel, a high-strength steel used in gas centrifuges, and he had also sought beryllium for the same buyer, a Lahore firm that United States officials regarded as a procurement agent for the nuclear network of A.Q. Khan.¹²

A.P. Enterprises

Pervez incorporated A.P. Enterprises in Toronto in 1986 and contracted with companies in Saudi Arabia and Pakistan to export pillows, food, mini-TVs, satellite antennas, computers and lumber. In October 1986 he asked a business acquaintance to find a source of "maraging steel" and was referred to Carpenter Technology Corporation of Pennsylvania. Carpenter's staff told him the steel required a Commerce Department license for use in an unsafeguarded nuclear facility; one of them, Tomley, notified the Nuclear Regulatory Commission and the United States Customs Service. In November 1986 Tomley and the Customs special agent John New, posing as a marketing analyst for Carpenter, met Pervez in Toronto, where he named his client as Inam Ul-Haq of Multinational Corporation of Lahore.¹

The Sting

Pervez offered a series of end uses: the Pakistani equivalent of NASA, a research project of Karachi University's engineering program, rocket motors, high-speed compressors and turbines, and antitank weapons. Told in December 1986 that a cash payment to the licensing officer might be needed, he said he would pay 5,000 dollars and then asked to reduce the "kickback" to 3,000. On January 13, 1987, he met in Philadelphia the Customs special agent Frank Rovello, who was posing as a Commerce Department licensing officer, and gave him 1,000 dollars as a down payment on the license. The next day he toured Carpenter's plant at Reading; at dinner Tomley told him he believed the end use was the uranium enrichment plant in Pakistan, and, according to New, Pervez nodded. About a month later he mailed two end-use statements, one in the name of Noeem Pasha, general manager of Multinational, and one from the Pakistan Council of Scientific and Industrial Research, stating that the steel would be used for turbines and compressors.¹

The Commerce Department issued a false license on March 31, 1987. At a later meeting in Toronto Pervez added beryllium to the order, and when New said it was illegal to ship, remarked that "the United States won't mind a small piece." When New suggested that other hard metals were for "another application in the plant at Kahuta," Pervez answered, "Could be," and at the end of the meeting said that "the Kahuta client is ready." On June 18, 1987, he gave New the dimensions and chemical formula of the beryllium by telephone and asked him to commingle it with the steel. In July he drove to Philadelphia to arrange the first shipment of steel and make another payment to Rovello, and was arrested.¹

Exhibits assembled for the prosecution included his notebooks, with entries reading "atom," "military," and "my expert is procurement manager for nuclear plant." In a letter of early 1987 Ul-Haq told him that "personal interests must not be allowed to overtake national interests," that "in this bargain I have suffered a loss of nearly 15000 $," and that the loss could be "made up" by an "order for other items." A State Department intelligence report called Pervez "a convenient tool" for Pakistani procurement agents, who had supplied him with nuclear "shopping lists." Ul-Haq left the United States before he could be arrested. On September 2, 1987, the U.S. consulate in Lahore reported a secondhand claim, which its source had not witnessed, that the Pakistani government had detained him and was rotating him among locations in Pakistan-controlled Kashmir.²

Trial

A federal grand jury indicted Pervez and Ul-Haq on eight counts on July 28, 1987. Pervez admitted the elements of the bribery counts and claimed entrapment. On December 17, 1987, the jury convicted him of conspiracy to defraud the government, attempting to export beryllium without a license, and making false statements to the Commerce Department about the steel, and acquitted him on the bribery and interstate travel counts; Ul-Haq was also found guilty of conspiracy and false statements. According to the State Department, the jurors found Pervez's testimony "confused and not credible" and "accepted the theory that [he] was part of a plot to send nuclear materials to Kahuta for an enrichment program aimed at producing nuclear bombs." He was sentenced to five years' imprisonment on the conspiracy count, with sentence suspended and five years' probation on the remaining counts.¹²

On the day of the verdict President Ronald Reagan certified to Congress that he had "concluded that Pakistan does not possess a nuclear explosive device," which allowed aid to Pakistan to resume. Kenneth Adelman of the Arms Control and Disarmament Agency had argued since the arrest for invoking the Solarz amendment, which required a cut-off of aid when a recipient's agents illegally procured nuclear materials in the United States, warning that if the administration "lawyer[ed] our way around" it, "Zia will conclude once again that he need do nothing about his bomb program." In January 1988 the White House invoked the amendment and waived it.²

Appeal and Plea

On March 6, 1989, the United States Court of Appeals for the Third Circuit (Judges Becker, Hutchinson and Scirica) vacated the conspiracy and beryllium convictions and ordered a new trial on them under Mathews v. United States, and remanded for a hearing on entrapment on the false statement counts.¹ The ruling allowed Pervez to seek a retrial on all counts. After plea negotiations he pleaded nolo contendere to the count of illegal export of beryllium, and he was released from prison on April 4, 1990, on the basis of time served. The State Department's legal adviser, Abraham Sofaer, wrote that the outcome "did not suggest either innocence on the defendant's part or a lack of evidence supporting the government's case."²

The Kerry-Brown Senate report stated that arms trafficking involving the Bank of Credit and Commerce International "included the financing of Pakistan's procurement of nuclear weapons through BCCI Canada, as documented in the Parvez case," citing the testimony of the State Department's deputy legal adviser, Alan Kreczko. The Third Circuit's opinion does not mention BCCI or any bank.¹³