According to accounts in both The Times of India and India Today, former ISI chief Lt. Gen. Mahmud Ahmad instructed Sheikh to send the $100,000 to Atta.
"A direct link between the ISI and the WTC attack could have enormous repercussions," the Times article said. "The U.S. cannot but suspect whether there were other senior Pakistani Army commanders who were in the know of things."
It added: "Evidence of a larger conspiracy could shake U.S. confidence in Pakistan's ability to participate in the anti-terrorism coalition."
The Times says Ahmad lost his job only after India shared with the FBI evidence showing a link between the general and Sheikh's wiring of funds to Atta.
J-e-M's accounts were frozen not long after Dennis M. Lormel, director of FBI's financial crimes unit, confirmed the $100,000 transaction, if not the source.
"They wired over $100,000 into Mr. [Mohamed] Atta a year ago," he testified in October, not identifying who "they" were.
The Bush administration has said the money trail is a crucial link in uncovering the support network for the 19 hijackers, and then destroying that network.
However, a major hub of that network is in Pakistan, and it's still active, as India learned, tragically, last month.
Pakistani President Pervez Musharraf has banned J-e-M and arrested Azhar. But Azhar is not the only terrorist on India's list of wanted terrorists from Pakistan.
