In a photo from the Kashmiri American Council's website, executive director Syed Ghulam Nabi Fai speaks with the press at a United Nations event in Geneva. (Photo: KAC)

In June 2009, I traveled to Islamabad to do some research for a story about Kashmir. It was a routine reporting trip, in which I did the rounds of various think-tank experts, officials, politicians and other sources well known to any journalist writing about the region.

While I was there, I got a request: Ghulam Nabi Fai, head of the Fairfax, Virginia-based Kashmiri American Council happened to be in town and wanted to meet. Why not? I thought. It might be instructive to hear the views of U.S.-based Kashmiris. I met him in the restaurant of the Serena Hotel, where Fai was staying. Polished and friendly, he said he was in town to meet with every political party in Pakistan and every leader in Pakistani-controlled Kashmir in order to establish a “common minimum agenda” on Kashmir, a consensus view that could be used to get India to the negotiating table. He was sure that the dialogue between India and Pakistan, which had been derailed after the 2008 attack on Mumbai, would restart within weeks (in fact, it took almost two more years) and that peace would surely be possible if only Kashmiris were included in the process.

(PHOTOS: The Taliban’s War in Pakistan)

His unabashed optimism was familiar to me — I had seen it among other South Asian immigrants to the U.S. who take up political causes in their native places with an enthusiasm and idealism unknown to those back home, who live with the messier day-to-day reality of political compromise. What struck me, though, was his fixation on a few words uttered by Barack Obama in an interview with my colleague Joe Klein in October 2008, when he was still a candidate for President:

So, building a different relationship with the Pakistani government, the Pakistani military, the ISI. Working with Pakistan, this government to deliver for its people so it gains legitimacy, in all regions of the country. Working with Pakistan and India to try to resolve, and Kashmir, crisis in a serious way. Those are all critical tasks for the next administration. Kashmir in particular is an interesting situation where that is obviously a potential tar pit diplomatically. But, for us to devote serious diplomatic resources to get a special envoy in there, to figure out a plausible approach, and essentially make the argument to the Indians, you guys are on the brink of being an economic superpower, why do you want to keep on messing with this? To make the argument to the Pakistanis, look at India and what they are doing, why do you want to keep on being bogged down with this particularly at a time where the biggest threat now is coming from the Afghan border? I think there is a moment where potentially we could get their attention. It won’t be easy, but it’s important.

Fai was frustrated that Obama hadn’t acted on the idea of a special envoy, but he was sure it was still possible. He told me: “There is urgency as long as President Obama is concerned. That’s why there is a hope. He must appoint a special envoy on Kashmir. Make President Obama listen to Candidate Obama.” I knew that a special envoy was a non-starter — outside intervention on Kashmir is anathema to India — so I didn’t take Fai’s views very seriously and didn’t quote him in the story.

All this seems a lot more interesting in light of Fai’s arrest yesterday for “participating in a long-term conspiracy to act as agents of the Pakistani government in the United States without disclosing their affiliation with the Pakistani government as required by law.” Fai is not accused of being a spy — only of failing to register as an agent of Pakistan — but an FBI affidavit filed with the complaint alleges that Fai’s organization, and two other Kashmir Centers in London and Brussels, are run by elements of the Pakistani government, including Pakistan’s military intelligence service, the Inter-Services Intelligence Agency (ISI). Fai has denied having any relationship with anyone in the Pakistani government.

(PHOTOS: Osama bin Laden’s Pakistan Hideaway)

Even if Fai is acquitted of the charges, the political damage has been done. Obama floating the idea of a special envoy must have been the pinnacle of Fai’s efforts as a lobbyist, and that work is now discredited. The New York Times notes that one of the main recipients of Fai’s campaign contributions, Rep. Dan Burton (R-Indiana), “has been a champion for Kashmiri causes in Congress, appealing to Presidents Bill Clinton and Obama to get more involved in attempted to mediate a settlement between India and Pakistan over the border region.” Burton released a statement saying he was “deeply shocked by Dr. Fai’s arrest. I’ve known Dr. Fai for 20 years and in that time I had no inkling of his involvement with any foreign intelligence operation and had presumed our correspondence was legitimate.”

Burton says he’ll donate the contributions from Fai to the Boy Scouts of America. The other damage is much more difficult to undo. The conflict over Kashmir is, indeed, a cloud hanging over India and Pakistan, and this incident will only add to the suspicion and mistrust that pervades almost any effort to resolve it.