In one e-mail exchange intercepted by U.S. intelligence last July, Headley and the operative talked about going “to see rahul [sic].” The FBI affidavit states that, from a review of Headley’s e-mails, “it is clear that ‘Rahul’ refers to a prominent Indian actor with the first name of 'Rahul.' ”

The Indian press has been filled with speculation—and denials—about the identity of “Rahul” and various Bollywood actresses who might have been associated with him and Headley (see here and here). The Indian press has reported—and Indian officials confirmed to NEWSWEEK’s Sudip Mazumdar—that the Rahul in question is not actually an actor but Rahul Bhatt, the son of a famous Bollywood filmmaker, Mahesh Bhatt, who was a fitness trainer at a posh Mumbai gym that Headley frequented during multiple trips to the city in which he was suspected of conducting surveillance for last year’s Mumbai attacks. There is no indication the trainer was a participant in the terror plot, and the Indian press reports he is cooperating in the probe. 

But a close reading of the FBI affidavit, and other court documents filed in the case, suggests the Headley case has provided more fruitful nuggets for investigators on a host of other fronts.

The FBI is expanding its investigation in a Chicago terrorism case to determine whether a key suspect may have helped scout targets for last year’s massive coordinated attack in Mumbai, India that killed 166 people, according to U.S. law enforcement officials.

The Justice Department announced late last month that it had charged two Chicago-area men—David Coleman Headley, the son of a former Pakistani diplomat, and a childhood friend, Tahawwur Hussain Rana-- for plotting to attack a Danish newspaper for publishing cartoons deemed offensive to the Prophet Mohammed.

But since then, the case has taken some dramatic turns that have attracted the interest of Indian Government investigators and transformed it into one of the most significant international terrorism cases that the FBI has brought since 9/11, the officials say.

After his arrest at Chicago’s O’Hare Airport on Oct. 3, Headley waived his rights to a lawyer and admitted to FBI agents that he had worked directly with Ilyas Kashmiri—a notorious Al Qaeda linked terrorist – to plan the assassination of an editor of the Danish newspaper (who he mistakenly believed was Jewish) and the cartoonist who drew the cartoon of Mohammed, according to a detailed 47 page FBI affidavit filed in federal court on Nov. 6.

The Obama administration didn't hesitate recently to pick a fight with Fox News, but its Department of Homeland Security now appears to have backpedaled on a report expressing concern about what its analysts earlier this year described as "right-wing extremists." Back in April, Homeland Security's intelligence analysis division produced a nine-page "assessment" describing how the nation's economic problems and the ascent of the first African-American president "could create a fertile recruiting environment for right-wing extremists" and might even lead to violence between such groups and the government. Although the paper was stamped "for official use only" and bits of it were labeled "law enforcement sensitive." the document quickly made its way onto the Internet. Its contents provoked howls of rage from conservative activists (some of which was reflected in reports from ... Fox News). The report's critics expressed particular outrage at a paragraph stating that returning veterans "possess combat skills and experience that are attractive to right-wing extremists." The report stated directly that Homeland Security's intelligence shop was "concerned that right-wing extremists will attempt to recruit and radicalize returning veterans in order to boost their violent capabilities." (Despite these concerns, the report also acknowledged up front that the Feds had "no specific information that domestic right-wing terrorists are currently planning acts of violence.")

After the report became public, Homeland Security Secretary Janet Napolitano backed away from it, telling members of Congress that it had been disseminated to state and local officials without proper authorization. She said the department's procedures for vetting such documents had not been followed. But Napolitano also indicated that the report would be "replaced or redone in a much more useful and much more precise fashion." After gunmen with extreme right-wing pedigrees separately killed a Kansas abortion doctor and a security guard at Washington's Holocaust Museum, some liberal activists raised questions as to when Homeland Security was going to produce an updated version of the April report. 

That is unlikely to happen. Instead, said a source familiar with Homeland Security Department thinking, the contents of the April report have already been sliced and diced and put into other reports about extremism that the department has no plans to make public.

By Mark Hosenball and Michael Isikoff

The Fort Hood shooting may soon become more politically explosive. Two U.S. intelligence officials Thursday night confirmed to Declassified key details of a just-breaking ABC News report--that in emails sent to a radical Yemeni cleric, accused shooter Nidal Hasan asked when jihad is appropriate, and said “I can’t wait to join you” in the afterlife.

One U.S. official, who did not want to be named discussing sensitive information, said the emails could be “a problem,” but cautioned that they still needed to be viewed in context.

In background briefings for reporters and members of Congress, U.S. officials have insisted that Hasan’s communications with radical imam Anwar al Awlaki were consistent with a paper he was researching as an Army psychiatrist at the Walter Reed Medical Center. After a Joint Terrorism Task Force reviewed the emails last spring and concluded that Hasan was “not involved in terrorist activities or terrorist planning,” FBI and U.S. Army officials chose not to open an investigation. But members of Congress now are demanding answers about what the FBI and Army knew—and the ABC report is likely to fuel those demands. (The ABC story also reports that, while earning a salary of $92,000 a year including his housing and food allowances, Hasan contributed $20,000 to $30,000 a year to Islamic charities.)

To respond to Congress--and to prepare for Hasan’s trial--U.S. intelligence officials have been wrestling with how much of the email chain (intercepted by U.S. intelligence) can be declassified without compromising sources and methods. Given the leaks, that question may soon be academic.

Attorney General Eric Holder acknowledged on Wednesday a previously unspoken proviso to the controversial decision to try alleged 9/11 mastermind Khalid Sheikh Mohammed and four co-conspirators in a federal court in New York: even if the defendants are somehow acquitted, they will still stay behind bars.

Holder's comments at a hearing before the Senate Judiciary Committee would seem to turn the criminal justice system on its head. The whole point of a criminal trial is to determine guilt—and if the government fails to make its case beyond a reasonable doubt, the defendant walks free.

At least that's the way the system usually works.

Two internationally prominent apostles of violent jihad, one of whom has been awaiting extradition to the U.S. for a decade, have been able to issue proclamations and exhortations supporting Al Qaeda even though they are locked up in one of Britain's most secure prisons, a new report by a British research group claims. The report raises questions about prison security for leading jihadists just as the U.S. Justice Department prepares to house Khalid Sheikh Mohammed and four other Al Qaeda operatives in a high-rise New York prison to await trial in Manhattan Federal Court for their role in the 9/11 attacks.

The Quilliam Foundation, a think tank set up by former members of Islamic extremist groups and financially supported by Britain's Home Office, alleges in a report published Monday that Adel Abdel Bary, a veteran leader of the Egyptian Islamic Jihad faction headed by Al Qaeda deputy chief Ayman al-Zawahiri, and Abu Qatada, a Jordanian cleric sometimes described as Osama bin Laden's ambassador in Europe, have been able to produce "pro-jihadist propaganda and fatwas" over the last two years even though they are locked up in Long Lartin, one of Britain's most formidable jails. The foundation's report also argues that British prisons remain a significant breeding ground for Islamic extremism and that measures the U.K. government has taken to curb jailhouse radicalization have been ineffective.

By Michael Isikoff, Daniel Klaidman, and Mark Hosenball

Earlier this year, when justice Department prosecutors began trying to assemble a case against Khalid Sheikh Mohammed and four alleged co-conspirators for orchestrating the 9/11 attacks, Attorney General Eric Holder Jr. told them to make it airtight. “I cannot have a case that is not won,” Holder said, a senior Justice official tells NEWSWEEK. But the team agonized over one key question: how to prosecute the detainees without the trial being derailed by embarrassing disclosures about CIA “enhanced interrogation” techniques. For months, Justice officials say, they scoured case files for evidence “untainted” by rough interrogations or other “extralegal” methods. They were so nervous about torture allegations that they even decided against using confessions made to an FBI “clean team” that questioned the detainees after they were transferred from CIA custody to Guantánamo. The reason: prosecutors couldn’t be sure the FBI agents’ questioning wasn’t influenced by information they had previously gleaned from tough CIA treatment.

Federal and local New York authorities maintain they are well prepared to handle any security threats that could arise from the Obama administration’s decision to try five 9/11 co-conspirators, including alleged attack mastermind Khalid Sheikh Mohammed, in a federal court in New York City. A federal law-enforcement official, who asked for anonymity when discussing sensitive information, said that the U.S. Marshals Service—which is responsible for courthouse security and transporting federal prisoners—has been working “for months” on security measures for possible trials of accused 9/11 perpetrators, as well as other terrorist suspects who had been held in the military prison facility in Guantánamo, Cuba, and/or in a now shuttered network of secret detention facilities maintained by the CIA. Among security measures the Marshals Service has already undertaken are assessments of the risks the presence of high-level Qaeda prisoners, such as Mohammed, would pose for New York—and what kind of bodyguard squads will be needed to guard trial participants, like judge and jury.

The New York Police Department, which will have a major role in any security operation to protect the federal court and prison complex in lower Manhattan, says it’s standing by for a trial. "It's highly appropriate that those accused in the deaths of nearly 3,000 human beings in New York City be tried here, and the NYPD is prepared for the security required," Police Commissioner Raymond W. Kelly told NEWSWEEK in a written statement.

Any trial of Mohammed, and the other four 9/11 defendants designated for a civilian court trial by Attorney General Eric Holder, is expected to take place in one of the two federal courthouses located around Foley Square, a block from City Hall in lower Manhattan. As they await trial, the defendants are expected to be held for months, or even years, in a high-rise, high-security Federal prison known as the Metropolitan Correctional Center, which is adjacent to the courthouse complex. A windowless footbridge connects the prison to the older of the two federal courthouse buildings, where some high-profile terrorism trials—including the trial of 1993 World Trade Center bombing mastermind (and Mohammed's nephew) Ramzi Yousef—took place. A tunnel connects the prison to the new courthouse so the prisoners will never need to be taken outside. The prison is well accustomed to holding high-risk and high-profile prisoners, ranging from terrorists like Yousef and Qaeda operatives accused of bombing U.S. Embassies in Africa in 1998 to notorious Mafia dons.

A law-enforcement official said it’s still going to be months before any of the prisoners are brought to New York. At the very least, the administration has to give Congress 45 days' notice before bringing the prisoners into the United States.

At least one gun used by Nidal Malik Hasan at Fort Hood was an FN Herstal 5.7 semiautomatic—which also happens to be a weapon of choice for Mexican cartels who battle the military and police. It is a favorite weapon among straw purchasers in the United States, who buy guns that are then smuggled south of the border, fueling the violence there.

There is a common saying among law enforcement in Arizona: the people and drugs go north, the guns go south. Earlier this year, special agent in charge of the ATF’s Phoenix office, William Newell, and fellow agent Thomas Mangan gave me a glimpse of their basement vaults, overflowing with guns nabbed by the AFT en route—illegally—to Mexico. The ATF estimates some 95 percent of guns recovered from criminal gangs in Mexico come from the U.S.

The CIA has decisively won a long-running turf fight with the director of national intelligence, the CIA’s ostensible boss, over who will be the top U.S. intelligence representatives in foreign countries, NEWSWEEK has learned. According to a White House ruling, in every country where U.S. intelligence agencies operate, the CIA’s station chief will continue to be the most senior U.S. intelligence officer, intelligence officials told NEWSWEEK.

The ruling represents a big victory for CIA Director Leon Panetta and a setback for the national-intelligence czar, retired Navy Adm. Dennis Blair. Blair had argued in high-level meetings for months that as the nation’s intelligence overlord, he should have the power, in special circumstances, to name an officer from an agency other than the CIA as his “DNI representative” in countries where U.S. intelligence officers are stationed. That would theoretically make such a person superior to the local CIA chief. The issue was presented for resolution several weeks ago to Vice President Joe Biden.

Only hours before President Obama took off for Asia on Thursday, his national-security adviser landed in Pakistan on an unannounced trip to meet with senior Pakistani officials, a White House official said. Jim Jones is "going to continue the discussions that Secretary [of State Hillary] Clinton had" on her own recent visit, said the official, who would talk about the trip only on condition of anonymity. Jones plans to fly on to Asia afterward to join the president on his nine-day trip to Japan, Singapore, China, and South Korea.

The reason for Jones' visit remains unclear, but it is very likely related to Obama's strategic rethink of the war in neighboring Afghanistan (though Jones is not planning to visit there, the official said). The president is expected to announce a decision on how many additional troops he will send to Afghanistan at some point after his Asia trip concludes on Nov. 19. The administration's internal deliberations have been marred by open dissension about the U.S. presence in Afghanistan, leading to some speculation that Obama might want to send a message of strength and commitment by stopping in central Asia on his return.

Most recently it was reported that U.S. Ambassador to Afghanistan Karl Eikenberry's has questioned whether Gen. Stanley McChrystal's recommendation to add at least 40,000 troops is prudent as long as the government of President Hamid Karzai fails to reform. Clinton seemed to sympathize with that position on Thursday at a news conference in Manila, when she said she is concerned about Afghanistan's "corruption, lack of transparency, poor governance [and] absence of the rule of law." Eikenberry's own concerns go back to his days as U.S. commander on the ground in Afghanistan in 2006. In an interview with NEWSWEEK then, Eikenberry said he was leery of sending more troops, saying what was really needed were additional nation-building resources and a "political solution."