Washington Memo

By Massimo Calabresi, Adam Zagorin

Four days after Pakistani President Pervez Musharraf declared emergency rule last November, a top State Department expert boarded a British Airways flight on her way to Pakistan for urgent strategy talks with U.S. diplomats at the embassy there. The stakes were high: President Bush had just called for Musharraf to hold new elections. In Pakistan, the military had begun a violent crackdown against demonstrators.

In the diplomat's bag were several classified documents improperly removed from the main State building. One of the intelligence documents was particularly sensitive, says a department official familiar with the incident. "It dealt with longer-term contingencies and scenarios for the state of emergency: how long could it last, what are the pressure points, what are U.S. interests," the official says.

TIME has learned that those classified documents went missing, for a short time at least. A few days after her flight, the diplomat realized she no longer had the documents. As required, she informed diplomatic security. At the same time, British Airways called State and said the airline had found the sensitive materials. The diplomat was recalled and reassigned, and State launched a damage assessment.

The department declined to comment. Its report found no "serious damage to [U.S.] national security." The diplomat has had her security clearance reinstated. But insiders say the loss of documents was a serious security breach. The U.S., scrambling for leverage at a particularly delicate moment, had potentially shown its hand to Musharraf or one of many political factions trying to overthrow him. Two officials who read the report say it didn't determine who had gained access to the secrets. "One would like to believe that only airline officials saw this stuff," a senior U.S. official told TIME, but that "wouldn't be the best assumption to make."