Who paid the “blood money” to set Raymond Davis free?

U.S. citizen and CIA contractor Raymond Davis was released from a Pakistani prison on Wednesday after $2.3 million was paid to the families of the two Pakistani men he shot and killed and Secretary of State Hillary Clinton said repeatedly on Wednesday that the United States had not paid any "blood money" to win his release.

But that’s not the whole story. The truth is that the Pakistani government paid the victims’ families the $2.3 million and the U.S. promised to reimburse them in the future, according to a senior Pakistani official.

Clinton’s interview with NPR’s Steve Inskeep was only one of many where Clinton refused to say how the money got into the hands of the Pakistani victims’ families. Here’s the exchange:

SECRETARY CLINTON: Well, first of all, the United States did not pay any compensation. The families of the victims of the incident on January 27th decided to pardon Mr. Davis. And we are very grateful for their decision. And we are very grateful to the people and Government of Pakistan, who have a very strong relationship with us that we are committed to strengthening.

QUESTION: According to wire reports out of Pakistan, the law minister of the Punjab Province, which is where this took place, says the blood money was paid. Is he mistaken?

SECRETARY CLINTON: Well, you’ll have to ask him what he means by that.

QUESTION: And a lawyer involved in the case said it was 2.34 million. There is no money that came from anywhere?

SECRETARY CLINTON: The United States did not pay any compensation.

QUESTION: Did someone else, to your knowledge?

SECRETARY CLINTON: You will have to ask whoever you are interested in asking about that.

QUESTION: You’re not going to talk about it?

SECRETARY CLINTON: I have nothing to answer to that.

In several other interviews, Clinton told reporters to ask the families — or anyone else other than the U.S. government — how the reported $2.3 million appeared. Obama administration officials want to focus on the fact that Davis is now returning home, not the quid pro quo that made it happen.

"The understanding is the Pakistani government settled with the family and the U.S. will compensate the Pakistanis one way or the other," the senior Pakistani official told The Cable.

The U.S. government didn’t want to set a precedent of paying blood money to victims’ families in exchange for the release of U.S. government personnel, the source said, adding that the deal also successfully avoided a ruling on Davis’s claim of diplomatic immunity — an issue that had become a political firestorm in Pakistan.

As the Washington Post‘s David Ignatius explains, the deal for Davis was part of a larger agreement to mend ties between the CIA and Pakistan’s Inter Services Intelligence (ISI), the country’s main spy agency. Relations between the two agencies, which were already strained, totally broke down after the Davis incident because the ISI no longer trusted the CIA to inform them of its activities inside Pakistan. The two victims Davis shot and killed were allegedly ISI agents. But now, the two spy agencies will sit down and establish "new rules of engagement" and resume cooperation, the official said.

"Now ISI and CIA are working on ensuring that their relationship remains on track and there are no future undeclared CIA operations in Pakistan that result in jeopardizing bilateral relations," the official explained.

Sen. John Kerry (D-MA) played a key role in getting the deal done. He traveled to Pakistan in February to lobby for the deal with a host of Pakistani interlocutors.

"This deal had four principal architects," Ignatius wrote. "Hussein Haqqani, Pakistan’s ambassador to Washington, who shared the ‘blood money’ idea with Sen. John Kerry, chairman of the Senate Foreign Relations Committee. Kerry then traveled to Pakistan, where he met with President Asif Ali Zardari, with the leaders of the Punjab government that was holding Davis, and with top officials of the ISI. Haqqani also visited CIA Director Leon Panetta the evening of Feb. 28 to share the ‘blood money’ idea with him, according to a U.S. official. The final details were worked out by Panetta and ISI Director-General Ahmed Shuja Pasha."

In the end, the Pakistanis and the U.S. government can claim the deal is a win-win scenario. For Pakistan, the families’ grievances have been resolved: They have been relocated within the country and the settlement is in accordance with Pakistani law. Moreover, the government of Punjab province was on board, and Zardari was able to find a solution to what had become a messy political situation for him.

U.S. officials, meanwhile, can claim victory for having secured Davis’s return and will argue that no precedent was set on the subject of diplomatic immunity that could be used against the United States in the event of a similar incident in the future.

"Pakistani diplomacy worked out well, quietly and behind-the-scenes," the official said. "Pakistan’s anti-U.S. media and its Jihadi sources were, as always, louder than the realities."