- The Washington Times - Sunday, May 23, 2004

This time Ahmad Chalabi’s detractors may have outsmarted themselves. By raiding his Baghdad compound, seizing files and computers, U.S. occupation authorities have conferred on Mr. Chalabi the credentials of an anti-American leader. How could he still be considered an American stooge if L. Paul Bremer, chief U.S. administrator in Iraq, authorized a joint U.S. Iraqi swoop on his house?

Mr. Chalabi, complaining bitterly about his former American friends immediately played the anti-U.S. card like a true Middle Eastern professional. The Americans, he told reporters, have outworn their welcome in Iraq and should let Iraqis run their own affairs and leave. Before the raid on his family and party — Iraqi National Congress (INC) — headquarters, Iraqis regarded him as the American puppet he once was. Now he was properly credentialed as a pol who had stood his ground against the increasingly unpopular occupier.

The chubby, portly Shi’ite scion of an old Iraqi political family lost favor with his American neoconservative backers when he betrayed a promise he had made about Israel before being flown back by the Pentagon — with some 700 U.S.-trained militia — to the Iraq he had left as a teenager more than 40 years ago. Sponsored by Vice President Dick Cheney, Deputy Defense Secretary Paul Wolfowitz, former Defense Policy Board Chairman Richard Perle, and Defense Undersecretary Douglas Feith, Mr. Chalabi was put on the U.S. payroll to the tune of $340,000 a month. He cemented his alliance with the neocon establishment by pledging to recognize and sign a peace treaty with Israel when he made it to the top of the emerging post-Saddam Hussein political establishment.

In recent months, Mr. Chalabi gradually eased himself out of the neocon grip. First he went to Tehran to lay the groundwork for a rapprochement between Iraq and its neighbor Iran.

Under Saddam, the two countries fought a bloody 8-year war (1980-88) that cost some 1 million lives. U.S. authorities suspect Mr. Chalabi passed on to his Iranian interlocutors classified U.S. intelligence. With Tehran’s blessing, Mr. Chalabi went to establish cordial relations with Grand Ayatollah Ali Sistani, Iraq’s supreme Shi’ite leader. None of these Chalabi political maneuverings was compatible with the promise to sign peace with Israel.

Responding to congressional critics, the Pentagon severed Mr. Chalabi’s stipend a month ago. The money originally was allocated to the head of INC for prewar intelligence supplied to the Pentagon by Iraqi defectors. Much of this information provided the rationale for Operation Iraqi Freedom. There was only one problem with the intelligence gems Mr. Chalabi supplied: They were, for the most part, phony.

Some of the “intelligence” turned out to be deliberate disinformation. A number of defectors reaching London and joining INC in recent years were coached in what to tell American debriefers when they got to the U.S.

The State Department and CIA were wise to the deception early in the game. Both agencies discounted defectors’ stories about Saddam’s weapons of mass destruction, along with tales of a strategic alliance between al Qaeda and the former dictator. But the Defense Intelligence Agency stuck to Mr. Chalabi as a valuable intelligence asset — until last month.

During the past 13 months, Mr. Chalabi patiently built an influential machine with some of the dollar funds his men discovered. As a prominent member of the provisional governing authority, where he managed economic and financial affairs, he spun a web that included the ministers of finance, oil and trade and the managing director of Iraq’s leading bank.

Mr. Chalabi has also been in charge of de-Ba’athification, the massive purge of former members of Saddam’s ruling Ba’ath Party.

A mathematical wizard (Ph.D. in mathematics, University of Chicago), Mr. Chalabi started his banking career in exile by creating the Petra Bank in Jordan in the early 1980s. His also courted the Jordanian royal family, particularly former Crown Prince Hassan, the late King Hussein’s brother. Thousands of Jordanians entrusted their savings to Mr. Chalabi’s banks, which had branches in Beirut, Geneva and Washington.

Before the decade of the ‘80s was out, the Petra Bank collapsed and Mr. Chalabi escaped to Syria, hiding in the trunk of a royal palace car organized by Prince Hassan. Losses in Jordan and other branches totaled $500 million.

In 1992, Mr. Chalabi was sentenced in astentia to 22 years hard labor by a Jordanian state security court on 31 charges of embezzlement, theft, misuse of depositor funds and speculation with the Jordanian dinar. The court also handed down harsh sentences and fines to 16 others, including several brothers and relatives who were members of the Petra board.

Jordan’s former Central Bank Governor Mohammed Said Nabulsi told United Press International, “Chalabi was one of the most notorious crooks in the history of the Middle East.” Mr. Chalabi said the Jordanian royal family framed him because he had evidence about secret weapons trafficking between the two Husseins — Saddam and the king.

Mr. Chalabi makes many prominent Americans, European and Arabs uneasy because they don’t know what several tons of Mukhabarat documents seized by INC will reveal about their secret dealings with Saddam. Rumor has it they contain names of all foreigners rewarded by Saddam for services as “agents of influence.” These reportedlyinclude the names of Qatar-based Al Jazeera reporters who worked for Iraqi intelligence.

After his escape from Jordan to Syria, Mr. Chalabi flew to London, where he denounced King Hussein. He then sent out scores of all-expenses-paid invitations to Iraqi exiles to a conference in Vienna a month later. The conference created INC — and made Mr. Chalabi its president. The rest is history.

Arnaud de Borchgrave is editor at large of The Washington Times and of United Press International.

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