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Poisonous Friendship at|Heart of Mumbai Terror Plot

CHICAGO (CN) - In September 2009, a pair of childhood friends rambled southwest out of Chicago toward a farm in rural Kinsman, reminiscing about plotting the 2008 Mumbai attacks that left 164 dead. So says one of the friends, admitted terrorist David Headley.

As sometimes happens with friends, there has been a falling out. Headley is the key government witness now in a trial that could put his "closest friend in the world," Chicago-based businessman Tahawwur Rana, behind bars for the rest of his life.

This testimony ensures that Headley will meet the same fate, instead of facing the death penalty for his participation in the terrorist attacks orchestrated by the Lashkar-e-Taiba.

Headley spoke at length about the Mumbai plot in the second day of direct examination on Tuesday, claiming to have kept Rana informed at every turn and to have received material aid from the Pakistan-born Canadian citizen.

In day three on the stand, Headley described how Lashkar had set its sights on Denmark to exact retribution for the Jyllands-Posten newspaper's publication of controversial cartoons depicting the Prophet Muhammad in 2005.

Prosecutors played several of Headley's surveillance videos, including one of a Royal Guard parade that he and fellow Mumbai plotter Sajid Mir joked about assailing with grenades. Rana is accused of having supported this plot as well by arranging Headley's flights and attempting to find the address of cartoonist Kurt Westergaard.

Assistant U.S. Attorney Daniel Collins teased out several incriminating statements purportedly made by Rana. Headley recalled Rana saying that Mir should be commended for his "tactical brilliance" in planning the Mumbai attacks.

Facing his old friend in the courtroom, Headley, a Pakistani-American born in Washington D.C., then reenacted his side of a conversation with Rana during a 2009 trip to the latter's farm in Kinsman, a tiny town located a couple hours outside of Chicago.

Headley remembered telling Rana that he gave his Copenhagen reconnaissance report to Pasha, a Lashkar operative known only by his alias, who would then pass the information on to Ilyas Kashmiri, a known al-Qaida operative in line to succeed Osama bin Laden.

According to Headley's transcript, he spoke with Rana on these matters like a person in the know, using code words and aliases.

He explained that he shared such information because "it was just ... general gossip that was going on in my life."

Part of that gossip concerned "four targets that I liked," Headley said, elaborating that they were the Jyllands-Posten offices in Copenhagen, Bollywood in Mumbai, the famous Somnath Temple in Gujarat, India, and India's right-wing political party Shiv Sena.

While Headley considered targeting Shiv Sena founder Bal Thackeray, ultimately he and his Lashkar contacts abandoned the plot as implausible.

Headley added that a fifth target, India's National Defense College, caught his eye because it would mean more Indian officers would die "than had been killed in all the previous [Indo-Pakistani] wars."

Rana was not merely a sounding board through all this, Headley testified. Allegedly, Rana warned his friend that, at age 48, Headley was getting a little old for such intrigues and "could start working at [Rana's] farm." Headley said he wanted to get his targets first.

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"[Rana] said, 'Even if you get those four targets, you're still not going to stop,'" Headley recalled.

"Was that true?" Collins asked.

"Probably," Headley replied.

The prosecution also spent time Wednesday defining the coded language Lashkar members used. "Sick" or "in the hospital" meant detained; "gotten married" meant "been killed."

Previously Headley explained that "Doc Guy" was a code name for Rana, who holds a medical degree. But a transcript introduced Wednesday shows that "Doctor" or "Mr. Doctor" was a code name for Kashmiri. In the same conversation, Pasha asks Headley to "convey [his] regards to the Doctor," which allegedly refers to Rana.

"I will tell Doctor now about this news regarding Doctor," Headley replied at one point, according to the transcript.

Headley concluded his testimony by confirming that he promised "to be complete and truthful" about Rana in exchange for leniency and not having to face extradition. He also confirmed the lawyers characterization of Rana as his "closest friend the world."

In cross-examination, Rana's attorney, Charlie Swift, took pains to show that the deceitful Headley has manipulated the upright and naive Rana since the beginning of their lifelong "friendship."

Headley, self-described as a "very bad" student, admitted that the "very good" Rana helped him through school when they both studied at Pakistan's prestigious Hasan Abdal military cadet college.

Problems with his stepmother in his teenage years drove Headley to leave Pakistan and move in with his mother in Philadelphia, but Headley said he nevertheless fell out of religious practice and began abusing drugs and alcohol. He got back in touch with his good influence, Rana, and yet Rana never shared Headley's vices, according to the defense.

About six years later, in 1984, the two met again in Pakistan. Rana was in military medical school, and Headley was "attempting to smuggle heroin into the United States." Headley used the unwitting Rana as a cover, taking advantage of the fact that traveling with a military doctor would prevent officials from inspecting the cab in which he smuggled heroin. When asked what would have happened if the cab had been searched anyway, Headley said it "would have been terrible for [Rana]."

"And he was your best friend in the world?" Swift asked.

"Yes," Headley replied.

Later, Headley did prison time while Rana served on the United Nations' Gulf War coalition "with distinction." Rana left Pakistan after developing altitude sickness while serving in the Siachen Glacier region, the world's highest battlefield at 21,000 feet.

Back in the United States, he bailed Headley out of jail by "post[ing] his house." Headley soon became an informant for the Drug Enforcement Administration, a fact he only mentioned to Rana in passing.

By 2002, Headley had joined Lashkar and began training, which Swift revealed included "manipulating people" and learning how to "get leverage, outwit or seduce," as well as "techniques to hide who [he was]."

In Headley's first day on the witness stand, he explained that Rana's Chicago-based company, First World Immigration, provided him with the perfect cover to conduct surveillance in Mumbai before the 2008 attacks. Under cross Wednesday, he conceded that Rana had a legitimate "business purpose" for opening an office in Mumbai. Rana had many Indian clients, and the area in which he lived featured a large Indian population.

One Lashkar operative, the shadowy figure known only as Major Iqbal, gave Headley $25,000 to offer Rana a "free office," Headley said, adding that Rana did not know where the money came from.

Headley acknowledged that Rana, a Deobandi Muslim, could never join Lashkar, which he says requires members to adhere to the Salafi faith. More radical Salafis, such as those who belong to Lashkar, are usually referred to as Wahhabi.

Despite these differences, Headley said he had hoped Rana would convert because "he had always ... tried to help me, make me a better person, and make me religious."

Ironically, Headley later asked Rana to conceal his Muslim faith so that he could meet Headley's contacts in Shiv Sena, a Hindu organization, and Rana refused.

The government's case against Rana continues to foreshadow troubling possibilities for relations between India, Pakistan and the Unites States. Headley acknowledged that Lashkar "is really about a religious war against India" and recalled taking courses designed to assist ongoing fighting in Kashmir.

Headley has also raised startling connections between Lashkar and Pakistan's Inter-Services Intelligence (ISI) agency. The so-called Major Iqbal, who Headley said trained him for Lashkar, is thought to be an officer in the ISI. Headley noted Wednesday that, although he never met Iqbal in uniform or with anyone in uniform, he once saw him in a "military jeep."

Though Rana's team has not yet been able to look at several of the prosecution's sealed documents, including the evidentiary roadmap known as a Santiago proffer, U.S. District Judge Harry Leinenweber gave the Chicago Tribune access to them on Wednesday. The Tribune had argued that keeping the proffer sealed "undermine[d] the benefits of public scrutiny." The court plans to work with attorneys to release more documents in the coming days.

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