The Los Angeles Times quoted officials as saying that the payments have triggered intense debate within the US government, because of 'long-standing suspicions that the ISI continues to help Taliban who undermine American efforts in Afghanistan and provide sanctuary to Al Qaeda members in Pakistan'.
But US officials have continued the funding because the ISI's assistance is considered crucial. 'Almost every major terrorist plot this decade has originated in Pakistan's tribal belt, where ISI informant networks are a primary source of intelligence,' the paper reports.
The White House National Security Council has 'this debate every year', said a former high-ranking US intelligence official involved in the discussions.
Despite deep misgivings about the ISI, the official said 'there was no other game in town'. The payments to Pakistan are authorised under a covert programme initially approved by former President George Bush and continued under President Barack Obama.
'The CIA payments are a hidden stream in a much broader financial flow the US has given Pakistan more than $15 billion over the last eight years in military and civilian aid,' said the Los Angeles Times.
'The ISI has used the covert CIA money for a variety of purposes, including the construction of a new headquarters in Islamabad -- that project pleased CIA officials because it replaced a structure considered vulnerable to attack. It also eased fears that the US money would end up in the private bank accounts of ISI officials,' it said.
Given the size of overt military and civilian aid to Pakistan, CIA officials argue that their own disbursements -- particularly the bounties for suspected terrorists -- should be considered a bargain, the Daily Times reports.
'They gave us 600 to 700 people captured or dead,' said one former senior CIA official, who worked with the Pakistanis. 'Getting these guys off the street was a good thing, and it was a big savings to (US) taxpayers.'