The Cost Of Cooperation

This story was written by Armen Keteyian, Phil Hirschkorn, and Michael Rey of the CBS Evening News Investigative Unit.

Osama Eldawoody is someone who did exactly that by spying on his fellow Muslims.

"I'm American," Eldawoody told CBS News Chief Investigative Correspondent Armen Keteyian. "I like to do my part for my country."

As a paid confidential informant for the New York Police Department, Eldawoody helped the government derail a post-9/11 plot that would have been one of the city's worst nightmares — an attack on its subway system.

That nightmare almost came true two years ago — until the NYPD, backed by hours of incriminating conversations taped by Eldawoody, busted two men in August 2004 for plotting to bomb the busy Herald Square station underneath Macy's, the world's biggest department store.

In an exclusive interview with CBS News and subsequent walk past the targeted subway site, Eldawoody detailed how he became a paid "CI" (confidential informant), and how he obtained crucial evidence against the plotters who would later be convicted. He also talked openly about the personal and financial cost of his cooperation.

"I got damaged, big-time," he says. "I'm in a bad situation."

Eldawoody says his experience as an informant has become a financial hardship. Government payments — totaling $100,000 over three years, according to court records — covered little more than his expenses and could stop at any time. He was forced to turn down a lucrative translator job in Iraq that would have allowed him to support himself, his wife, and daughter because he had to remain in this country for the trial.

What also upsets Eldawoody is his belief the government failed to live up to another critical condition — to keep his real name a secret. "After I risk my life for America, my country and for people of my country, and now I'm asking God for help," Eldawoody says.

Eldawoody, 50, a naturalized American citizen from Egypt, says 9/11 the attacks motivated him, and that a routine post-9/11 police visit to his Staten Island home in 2002 opened a dialogue with an NYPD detective, who recruited him to the counter-terrorism cause.

"When I signed up for this, I didn't know what I was going to do," says Eldawoody, who went undercover in 2003.

At first, Eldawoody played a bit part — he was assigned to visit mosques in Staten Island and Brooklyn, to take down license plates in the parking lot, and to keep his eyes and ears open for talk of jihad or holy war. "They said, 'OK, go to pray and see if things are going on.' I asked, 'like what?' They said, 'like radical — if you hear radical conversations, just to keep your eyes and ears open," Eldawoody says.

He once reported that a visiting imam had told congregants a Muslim should "arm yourself with weapons to defend Islam." But otherwise, Eldawoody's more than 500 visits to mosques were uneventful.

However, in early 2004, following a lead developed by a Bangladesh-born undercover police officer, the NYPD told Eldawoody to befriend a young Pakistani named Matin Siraj, who worked in an Islamic bookstore next to a mosque in the Bay Ridge section of Brooklyn.

When Siraj learned that Eldawoody had a degree in nuclear engineering, he asked him if he knew how to make a nuclear bomb. As time went on, Siraj and a friend of his, James Elshafay, began discussing schemes to detonate a car bomb on city bridges, including the Verrazano, which spans the entrance to New York Harbor.

"He's a terrorist. He wants to harm the country and the people of the country. That's what I thought immediately," says Eldawoody, who in the spring of 2004 began secretly taping dozens of conversations with Siraj and Elshafay.

"Our people's time is coming," Siraj said, according to Eldwaoody's later trial testimony, referring to attacks on Americans. "So let's do it."

According to Eldawoody, Siraj was motivated by U.S. policies in the Middle East — siding with Israel over the Palestinians, invading Iraq, harshly treating prisoners in Abu Ghraib. "He was saying that if we do not attack the Americans, they will keep on harming Muslims," Eldawoody testified. "I will teach them nice lesson."

As Eldawoody told CBS News: "They were hoping to take revenge against America. That's what they were hoping — to destroy the country, the economy."

Eldawoody believes the talk could well have turned into action. The men possessed a bomb-making manual, had drawn maps of the subways lines running through Manhattan's Herald Square station and scouted their target — but unbeknownst to them, they were under police surveillance.

In grainy black-and-white videotapes recorded with a camera hidden in the dashboard of Eldawoody's car, the men discuss carrying 20 to 30 pounds of explosives in backpacks and putting their homemade bombs into garbage cans on the subway platform.

This wasn't a suicide mission, and the men never acquired any explosives before their arrest. The men had no terror group affiliation, although following a police suggestion, Eldawoody claimed to represent a fictitious group called The Brotherhood.

Thanks to Eldawoody's undercover work, Elshafay pleaded guilty before this year's trial for Siraj, at which Eldawoody was the first prosecution witness and spent eight days on the stand testifying in U.S. District Court in Brooklyn.

Eldawoody is the one who entrapped my client," defense attorney Martin Stolar told CBS News. "If Eldawoody had never come along, Matin would not have been involved in anything."

But the jury rejected the argument, convicting Siraj in May after a five-week trial.

"No kind of entrapment whatsoever. The opposite is right: He was the one who was pushing me," Eldawoody says.

After the trial, fears of revenge attacks prompted Eldawoody to move with his wife and daughter to another state. However, he admits, has not received any specific threats. Nor has the NYPD.

As for his dispute over money, Eldawoody says he continues to be paid by the NYPD — a $1,200-a-month stipend that has grown to $3,200 — but the informant is looking for a new job and the government's help in finding it. He says the police pressured him to give up last year's offer from Titan Corp., a government contractor, to work as an Arabic translator in Iraq. That job would have paid him an annual base salary of $90,000. He says that opportunity is no longer available.

"I need something permanent. That's what I need. I need to make a living," Eldawoody says. "I am asking them to fix what they did."

Eldawoody worries that his ordeal might discourage other Arabs and Muslims from cooperating with the government in its war on terror. "I don't think this would encourage anyone to help," he says.

The federal prosecutors in Brooklyn who won convictions in the Herald Square subway bombing plot would not comment on the case or Eldawoody's complaint. They cited the upcoming sentencing of Siraj and his pending motions for a new trial. The 24-year-old faces 25 to 30 years in prison when he's sentenced on Nov. 21 by U.S. District Judge Nina Gershon. Elshafay is still awaiting sentencing.

In a written statement about Eldawoody, NYPD Commissioner Ray Kelly told CBS News, "He's a hero who did a great service to the people of New York. We will continue our dedicated efforts to ensure the safety and well-being of him and his family."