Adam Gadahn has not been seen on the web since his video called "An Invitation for Reflection and Repentance" in early January 2008. Since around May, there have been rumors that he was killed along with Abu Laith al-Libi on the night of 28 January, in a drone strike against the home of a tribal boss in Mir Ali, North Waziristan. But whereas Abu Laith was soon eulogized across the jihadi internet, Gadahn was not mentioned.
Going a little further back, Gadahn is thought to have scripted Usama Bin Ladin's strange speech of September 2007, in which the latter wears a trimmed and dyed beard and talks about Western pop topics such as global warming and Noam Chomsky. That Bin Ladin video -- his first appearance in three years -- mystified the mujahideen.
Gadahn narrated AQ's 9-11 anniversary videos for five consecutive years 2003-2007, but there is no sign of him in 2008.
As for what happened to him, I see these possibilities:
1) he was killed by our side
2) he was killed by al-Qa'ida
3) he has died in some other way
4) he has been demoted or reassigned by AQ
5) he has been captured
6) he has surrendered
7) he has dropped out of AQ and is now a fugitive from both sides.
Theory 1 is popular but personally I wouldn't bet on it. AQ practically always eulogizes its martyrs, but on Gadahn they are silent.
Theory 4 looks pretty good. Insofar as the purpose of terrorism is to terrorize people, Adam Gadahn is a dud as a terrorist.
Theory 2 is quite feasible. AQ could have a number of different motives for getting rid of Gadahn, and quite a variety of scenarios could have prompted them to do so.
Theory 7 is a long shot. Gadahn is narcissistic and he loves the sound of his own voice. Life on the run, alone, and needing to keep quiet, would be too much for him.
Theories 5 and 6 are fairly tenable. If Gadahn were in custody and were cooperating, our side would not say a word about it and neither would the other side -- publicly. Privately there would be some more or less serious consternation. The same would apply if Gadahn has died accidentally and neither side knows what happened to him -- a variety of Theory 3.
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