CIA killer walks free after ‘blood money’ deal

The case against Raymond Allen Davis, who claims he shot the pair in self-defence, was dropped after the “blood money” payment.

The killings and his arrest had strained ties between Pakistan and the US and added to anti-America sentiment.

Punjab Law Minister Rana Sanaullah said Davis was charged with murder yesterday but then immediately pardoned by the families of the victims in exchange for compensation as is permitted under Pakistani law.

Washington insisted Davis, on contract to the CIA, was acting in self-defence against robbers when he shot the men while driving through Lahore on January 27.

Some reports claimed they were members of Pakistan’s Inter Services Intelligence agency.

The US had insisted that Davis had diplomatic immunity and demanded Pakistan free him immediately.

Pakistani officials, faced with criticism by Islamist parties and members of the public, had refused to state clearly whether he had immunity.

Pakistani officials had suggested that the payment of “blood money” was the best solution and in recent days speculation mounted that such a deal was in the works.

Mr Sanaullah said Davis was charged with murder before members of the dead men’s families were taken into the court, where they signed papers formally forgiving him in exchange for 2.3m US dollars. Judges then acquitted him on all charges.

In what appeared to be a carefully choreographed end to the diplomatic crisis the US Justice Department opened an investigation into the killings.

It thanked the dead men’s families for “their generosity” in pardoning Davis, but did not mention any money changing hands.

Given the high stakes for both nations, few imagined either side would allow it to derail the relationship. The main question was how long it would take to reach a deal.

The case dominated headlines and television shows in Pakistan, with pundits using it to whip up hatred against the already unpopular United States.

While the case played out in court, many analysts said that the dispute was essentially one between the CIA and the ISI, and that they would need to resolve their differences before Davis could be freed.

One ISI official said CIA director Leon Panetta and ISI chief Gen. Shuja Pasha talked in mid-February to smooth out the friction between the two spy agencies.

A second ISI official said as a result of that conversation the ISI - which along with the army is a major power in the country - then backed an effort to help negotiate the “blood money.”