By NBC News’Carol Grisanti and Fakhar Rehman
LAHORE, Pakistan – Raymond Davis, a 36-year-old burly CIA contractor, was charged with two counts of murder in the shooting deaths of two Pakistanis Wednesday. Then in a swift turn of events, he was quickly pardoned because the victims’ families accepted monetary compensation in exchange for his freedom. 

Rana Sanullah, the law minister for Punjab province, where Davis was held, said that the families accepted the “blood money,” as it is called, and then signed papers to pardon him.

Raja Irshad, a lawyer with close ties to Pakistan’s army, was recently added to the legal team representing the families of the two victims. He told NBC News that 200 million rupees, ($2.34 million) was paid to the victim’s legal heirs. “I was present in the court,” said Irshad. “The deal was done in front of me.” If true, it would be the highest amount of blood money ever paid in Pakistan. 

U.S. officials confirmed Davis’ release Wednesday and Secretary of State Hillary Clinton commented on it to reporters in Cairo.

"The families of the victims of the January 27 incident pardoned Mr. Davis and we are very grateful for decision. We appreciate the actions they took that enabled Mr. Davis to leave Pakistan and head home,” Clinton said.

She said that the U.S. government did not pay any compensation to the family and would not respond to reporter questions about whether the Pakistanis or a third party did.

Under Islamic law, an aggrieved party can accept compensation and in return pardon the crime. In Pakistan, the blood money formula is often used to settle murder cases.

Asad Manzoor, another lawyer representing the families, said his clients were forced to take the money and sign the pardon papers. “They were taken to the jail last night and forced to sign,” he said.

“Blood money was going to be the only way out,” a senior Pakistani government official told NBC News. “It had been decided that it was the only way this case would be settled.” 
 
Spy stakes 
Davis was working undercover for the CIA, allegedly, trying to infiltrate Lashkar-e-Taiba, (Army of the Pure) one of Pakistan’s most notorious militant groups. Pakistan’s premier spy agency, the Inter-Services Intelligence, was in all likelihood spying on him. Lashkar was trained and funded by the ISI, to fight India in Kashmir. They would not have liked American spies prying into their secrets.

“This is a question of national interests and we have to safeguard our interests,” a Pakistani intelligence official told NBC News, requesting anonymity. “We can work together with the CIA – but no one can be allowed to go it alone on our soil.”

In the end, Davis was at the center of a high stakes showdown between the CIA and the ISI. At stake was the entire relationship between the U.S. and Pakistan, vital allies in the U.S.-led war on terror.

Shooting in broad daylight
“The Raymond Davis affair,” as it was called in Pakistan, is a story that could have been ripped straight off the pages of a John le Carré novel – except that it unfolded, for real, in broad daylight, in heavy traffic, in the city of Lahore and was witnessed by scores of onlookers.

In late January, Davis fatally shot two young Pakistani motorcyclists, at a busy intersection, from inside his car. He then jumped out and fired some more – shooting one victim down as he tried to run away.

Davis called for help and CIA agents in another car sped to his rescue, running over and killing a third Pakistani man and in a classic case of hit and run, sped away. 

Davis told the police the men were armed and trying to rob him. He pleaded self-defense. The police say Davis used excessive force shooting the men 10 times with his Glock pistol. The autopsy report says both men were shot in the back.

U.S. Embassy officials repeatedly demanded Davis’ immediate release on grounds that he was a diplomat and was entitled to blanket immunity under the 1961 Vienna Conventions on Diplomatic Relations.

But Pakistan’s Foreign Office had issued Davis a non-diplomatic I.D. card upon his arrival according to Pakistan’s own laws – the Diplomatic and Consular Privilege Act, 1972 – and never recognized his full diplomatic status. U.S. officials insisted Pakistan is a signatory to the Vienna Conventions and that an international treaty trumped any technicality in their domestic laws.

Father: ‘I want blood for blood’
The families of the two men said they didn’t care about the laws governing diplomats – they just wanted revenge. 

Imran Haider, is the brother of Faizan Haider, the 21-year-old who was killed. He seemed convinced that his family would not consider a deal involving monetary compensation.

“My brother was shot in the back while he was running,” Haider told NBC News in an interview on Sunday. “We are seeking justice in the courts and pray to God that Raymond Davis will be punished for his crime. We do not want America’s money; we just want justice for our brother.”

Shamshad Ali, the father of one of the other victims, 17-year-old Faheem Shamshad, put it this way:

“This man must hang for the way he killed my son,” he said. “I want justice; I want blood for blood.”

Ali’s other son, Waseem Shamshad, emphasized that four people are dead because of Davis. Faheem’s wife committed suicide by swallowing rat poison when she heard Faheem was dead. They were married only four months.

“We have suffered an enormous loss,” he stressed. Davis killed our baby brother. Then my sister-in-law killed herself. Our friend, Faizan died with Faheem and an innocent Pakistani was run over and killed – that driver never even stopped his car. We cannot accept blood money and pardon him. If we do, the Americans will just keep coming and killing us.”

Pakistan’s religious parties and right wing groups used the Davis affair to whip up a new brew of anti-Americanism on the Pakistani streets and warned the weak civilian government not to cave to U.S. pressure. Demonstrators across the country protested with banners and slogans to “Hang Raymond Davis.”

There are reports the families have already left the country – their cell phones are switched off and the doors to their home are allegedly unlocked with no one inside. Neighbors say they feared reprisals from some of Pakistan’s hardliners.

It is not clear if Raymond Davis will have to face U.S. justice in the killing of the two Pakistanis. But a deal was done. So for the meantime Davis is a free man, on his way home – his long ordeal finally over.