We have previous posts on the subject of Headley's connection with DEA and his co-operation and geting reduced sentence and all and how he mingled with diplomatic crowd while in Mumbai and playing golf to get networking with such groups. There is more then a reasonable amount of circumstantial evidences that he sure had some official US government connections in the 1997-2002 time frame. couple of jurnos in USA also digged up on his connection with DEA and here is what they found!
Making of a Terrorist
David Headley, now suspected of aiding the Mumbai attacks, was a U.S. drug informant, Gerald Posner confirms. Did this help him become a terrorist? And was he actually a double agent? Plus: Read Philip Shenon’s exclusive report on Headley’s ties to visa companies.
The news that a 49-year-old Chicagoan, David Headley, was arrested on 12 counts of murder and providing material support to a terror group for last year’s deadly attack in Mumbai, has again raised the specter of homegrown terrorists, that may even, as The Daily Beast reported, have served as a kind of “underground railroad” to bring other militants into the country.
The Daily Beast has since learned that Headley’s connections to the Drug Enforcement Administration's murky intelligence unit—which I confirmed yesterday—might have played a role in his alleged conversion to terrorism. Additionally, sources at a foreign intelligence agency tell me that he might have been a double agent who turned on the U.S.
Indian intelligence believes that Headley was an undercover U.S. agent who went rogue, says a source familiar with their thinking.
Headley was allegedly valuable to Lakshar-e-Taiba—the Pakistani terror group that pulled off the Mumbai attack—because as an American he traveled easily and undetected between the U.S., India, Pakistan, and Denmark (where he’s been linked to a plot to kill a Danish cartoonist who angered fundamentalist Muslims with his lampooning cartoons of the Prophet Muhammad). Born in Washington, but raised mostly in Pakistan, Headley’s father was a former Pakistani diplomat and his mother a onetime Philadelphia socialite. It’s there that Headley moved in the 1970s to live with his mother and attended a community college.
In February 1997, Headley was arrested in New York for conspiracy to import heroin into the U.S. The indictment was brought under his original name, Daood Saleem Gilani, along with a codefendant James Leslie Lewis. (Lewis got a 10-year sentence, later reduced to 100 months.)
Headley was detained pending trial. After the U.S. Attorney's Office in the Eastern District of New York submitted five sealed documents, Headley was released on bond (those sealed papers are probably the official notice that he had chosen to cooperate with prosecutors, and he did later testify for the government in another heroin case). Headley got a 15-month sentence and five years of supervised release. My review of the court documents in the case indicates that Headley was scheduled to turn himself in on October 9, 1998. A week before that, the prosecutors submitted another sealed letter into the file. Headley’s surrender date was postponed for a month. When he did turn himself in, he was delivered to the low-security Federal Correctional Institution in Fort Dix, New Jersey.
The following July, a letter endorsed by Headley’s New York-based attorney, Howard Leader, requested permission for Headley to travel to Pakistan from August 10, 1999, through September 15. Judge Carol Amon granted the unusual request for the Pakistani travel. By that time, a former agent with the DEA discloses to The Daily Beast that Headley had begun cooperating with the agency, whose investigators had originally made the case against him. (The DEA had no comment on any aspect of Headley or his alleged informant status.)
There is no record of that first trip Headley took to Pakistan for the feds, and Fort Dix refuses to disclose any information about his supervised leave from their facility in 1999. But the same DEA source, who fingers Headley as an informant, says he did travel to Pakistan that year and conducted undercover surveillance operations on an Afpak drug gang. What is indisputable is that on November 16, 2001, just two months after the 9/11 attacks, Leader, Headley’s attorney, and an assistant U.S. attorney, Loan Hong, made a joint application to Judge Amon to terminate Headley’s supervised release three years early. Judge Amon agreed and discharged Headley from any further probation
Does anyone still believes us admin just were impressed with his behavior and thought he didnt need any supervision within 2 months of 9/11 and all out efforts launched to activate what ever resources USA had in responce to 9/11?
Here is a report that spells out what might unfold in near future, trying to discredit that he might have been a CIA agent, in this really "Curious Case of Headley"
Rumors of David Headley, rogue CIA asset
By DAVEED GARTENSTEIN-ROSS December 11, 2009 5:45 PM
David Headley was convicted on heroin smuggling charges in 1998, and the available evidence overwhelmingly suggests that the following year he did undercover surveillance work in Pakistan for the DEA in exchange for a reduced sentence. During his time in Pakistan in 1999, his surveillance target was reportedly a drug gang based in Afghanistan/Pakistan. This has given rise to speculation among Indian officials that Headley's work for the U.S. government may have gone beyond the DEA. The speculation holds that DEA may have passed Headley on to the CIA, given his experience in Pakistan, and the CIA in turn used Hadley to infiltrate Lashkar-e-Taiba. These rumors do not contend that the Mumbai attacks were thus a CIA operation; rather, they suggest that Headley had "gone rogue" by 2006 and thrown his lot in with LeT completely. Gerald Posner has a piece in the Daily Beast that does a good job of showing the factual backdrop that fueled this speculation.
I should say at the outset that the rumors are by no means completely outlandish, but I do not think they're correct. I spoke with a senior US intelligence official today who works on Afghanistan/Pakistan, and told me unequivocally that Headley was never a CIA asset. Though I assess this source to be extremely trustworthy, most people quite reasonably do not put too much stock in the denials of unnamed officials, so let me provide a couple of reasons why I believe his denial to be correct.
First, it isn't clear when this speculation holds that Headley was passed along to the CIA to be used as an asset. The Posner piece makes clear that this could not have occurred before November 2001, when Headley's attorney and an assistant US attorney jointly applied to have Headley's supervised release terminated three years early. But the unfortunate fact (which speaks to the US intelligence community's blind spots) is that LeT was at that point not considered a top priority. LeT was not designated a Foreign Terrorist Organization by the US State Department until Dec. 26, 2001, following the attack on the Indian parliament. Even after that, it wasn't until 2003-2004 that the intelligence community was truly focused on LeT. This may create timeline problems for some of this speculation that in turn give rise to additional questions (i.e., why would Headley have an incentive to start working for the CIA in 2003 if he had already been released from prison?).
Second, the speculation may assume a degree of interagency cooperation that generally does not exist. Most US government agencies are quite hesitant to turn their assets over to the CIA, because they then lose any kind of access to those assets. Beyond that, the DEA and CIA have very different mandates, and penetrating a drug gang is far easier than penetrating LeT. This was particularly true when LeT had a closer working relationship with Pakistan's Inter-Services Intelligence agency (ISI), and the ISI's counterintelligence services helped to shield LeT from penetration. But even now Pakistani jihadist groups are careful about providing access to outsiders, something made clear by this Wall Street Journal article. So it isn't clear that Headley would be easily passed from the DEA to the CIA.
These are two reasons supporting my source's unequivocal statement that Headley did not work for the CIA. As I said earlier, I trust the official with whom I spoke, but let me make one final point. If Headley were a CIA asset, we will know very, very soon. This is because Headley faces some serious criminal charges, and almost certainly is being threatened with the prospect of extradition to India -- something he does not want under any circumstances. If Headley had ever worked for the CIA, his lawyers would present this fact, and soon, as a sort of entrapment defense: arguing that the present charges are unfair because the US government initially made him reach out to LeT. If he never raises such a defense, hopefully these rumors will be short-lived.
I had posted at very start of thread that FBI been given complete control over the case and unprecedented interaction of FBI with its India counterparts and keeping CIA out of the loop does sound like US government has something to hide and efforts are on to control what, how much and when, comes out in public about the whole case!
If Daood Gilani is "cooperating with authorities" why has he "pleaded not guilty to the charges" 
