United States Attorney General John Ashcroft held a news conference via satellite while visiting officials in Moscow. Justice Department officials in Washington called him a significant terrorism figure and President Bush weighed in to agree.
But two months later, U.S. law enforcement officials close to the case, say Jose Padilla is probably a "small fish" with no ties to al Qaeda cell members in the United States.
The FBI's investigation has produced no evidence that Padilla had begun preparations for an attack and little reason to believe he had any support from al Qaeda to direct such a plot, said one of the officials, speaking on condition of anonymity.
CBS News Correspondent Jim Stewart first reported that FBI sources were "backing off" Ashcroft's assertion that there was a specific, developed and real plan to use a "dirty bomb" in the U.S.
Padilla, 31, is being held in a military brig in South Carolina as an enemy combatant, a legal designation allowing the government to jail him without formal criminal charges. His attorney has argued in court that he is being held illegally and should be released.
Investigators have said they believe Padilla, a Muslim convert and a former Chicago gang member, ventured overseas in search of clerics connected to the most radical branch of Islamic fundamentalism.
In early June, Ashcroft announced from Moscow via satellite hookup that Padilla was arrested at O'Hare International Airport in Chicago. Ashcroft's deputies also convened a news conference in Washington.
"We have disrupted an unfolding terrorist plot to attack the United States by exploding a radioactive dirty bomb," Ashcroft said, adding that the government's suspicions about Padilla's plans came from "multiple, independent, corroborating sources."
Now, two law enforcement officials close to the case say there is no evidence a plot was under way. However, one had been "thought out as a possibility," an official said.
Padilla's attorney, Donna Newman, said the government was avoiding a court case because it has little evidence against him.
"What we could analyze from government statements is that they didn't have sufficient evidence to charge him," Newman said. "All they could do was allege that he was somehow involved in the talking stages of a plan and they didn't even allege his role. And that is supposed to be enough to hold him without trial?"
Justice Department officials declined to comment on the matter Tuesday.
A "dirty bomb" does not produce a nuclear explosion; it spreads radioactive material over a large area. Scientists say it is more likely to cause widespread sickness and panic than deaths.
Since Padilla's arrest, the government has been more low-key in announcing arrests of terrorism suspects. No news conference was held when James Ujaama was taken into custody last month in Denver. Instead, law enforcement officials simply confirmed the apprehension when reporters asked.
Ujaama was arrested as a material witness to terrorist activity and flown to Virginia. Federal authorities say they believe he supplied computer equipment to an al Qaeda terrorist camp in Afghanistan.
Most of the information that led to Padilla's arrest came from captured al Qaeda operational chief Abu Zubaydah, officials said. Zubaydah, the highest-ranking terrorist leader taken into U.S. custody since Sept. 11, was captured and wounded in a raid in Faisalabad, Pakistan, in late March.
One U.S. law enforcement official said the information Zubaydah is supplying during interrogations is not always accurate and investigators are treating his comments with increasing skepticism.
For months, Padilla worked out of Lahore, Pakistan, and twice met with senior al Qaeda operatives in Karachi in March, government officials have contended. Padilla and the others are alleged to have discussed a radiological weapon plot, as well as proposals to bomb gas stations and hotel rooms.
Investigators have since decided Padilla may have attended the meetings more as an observer than a participant, one U.S. official said.
Still, other officials suggest Padilla was important to the government's terrorism investigations. A senior law enforcement official said he may have been a scout, chosen for his ability to move around the United States legally with a driver's license and passport.
There are no plans to bring Padilla before a military tribunal and U.S. officials have argued he can be held until the government declares an end to the war on terrorism.