Iraqi opposition leader suspected of misusing U.S. funds, but may get more

Knight Ridder NewspapersFebruary 20, 2002 

WASHINGTON — Now that President Bush has decided to get rid of Saddam Hussein, Americans are likely to start hearing about an Iraqi exile named Ahmad Chalabi, the most prominent leader of the opposition to his country's dictator.

The smooth, 57-year-old former banker personifies the dilemma for anyone who is looking for an alternative to Saddam, who has repressed his nation and threatened other Persian Gulf countries for more than two decades.

Chalabi has survived a banking scandal in Jordan, including a criminal conviction, defections by fellow opponents to Saddam, seesaws in American policy and accusations that his group misused U.S. funds.

But with no clear alternative in sight, Chalabi sees opportunity again as Bush searches for ways to oust Saddam.

He received a warm reception at the Pentagon and Capitol Hill earlier this month, arriving in Washington on the heels of Bush's declaration that Iraq is part of an "axis of evil."

He brought with him a plan to topple the regime in Baghdad modeled on the U.S. victory in Afghanistan: Arm ethnic groups that have long rebelled against Saddam, and back them up with massive American firepower and U.S. advisers.

"We are encouraged by their response," Chalabi said of his request for combat training for his forces.

Bush has yet to settle on a plan for ousting Saddam and toppling his government to get rid of the threat of Iraq's weapons of mass destruction. And while Chalabi may be wise to the ways of Washington, current and former U.S. officials who have dealt with him have deep doubts about his chances against the still-formidable Iraqi army.

The CIA severed its relationship with Chalabi's Iraqi National Congress after the group was unable to account for millions in U.S. covert aid. "It all went down a rat hole," said a former agency official, speaking on condition of anonymity.

Chalabi claims to have 40,000 men in northern Iraq ready to take on Saddam. But most of those are ethnic Kurds, whose readiness to fight Baghdad is uncertain because Saddam brutally crushed their past revolts and the United States gave them limited support.

The Iraqi leader has 10 times as many troops, plus paramilitary forces.

Most of all, critics say, Chalabi has failed to mold an effective political organization or fighting force out of Sunni and Sh'ia Muslims, Kurds, monarchists and others who oppose Saddam and his brutal regime.

Chalabi's insistence on absolute control of the movement "basically alienated a lot of good people," said Hatem Mukhlis, the son of a prominent Iraqi family who broke with the INC and is working to establish an alternative opposition group. The INC should be renamed the "Ahmad National Congress. There's no Iraqi National Congress anymore," he added.

"He's very eloquent. He gives you the impression he's the only one who can do anything," said Mukhlis, who, like Saddam and the Baghdad elite, is a Sunni Muslim. Chalabi is a Sh'ia.

The United States has tried for a decade to unify the Iraqi opposition, with little success.

The lowest point came in August 1996, when the Kurdish Democratic Party asked for Saddam's help in fighting its longtime rival, the Patriotic Union of Kurdistan. The Iraqi army invaded the autonomous Kurdish zone, in the process crushing a CIA operation to destabilize Saddam and executing hundreds of Iraqis who ere working for the agency.

The incident underscored the lack of unity among Saddam's opponents. While Chalabi was not directly to blame, he has done little before or since to unify the opposition.

He "is entirely ineffective, except in one area, which is undermining other opposition groups," said a former U.S. official with long experience in the region. "He has basically become a huge liability to the Iraqi opposition," said the official, who spoke on condition of anonymity.

Chalabi attributes the criticism to squeamish State Department and CIA officials who do not want to try to oust Saddam, a step that most U.S. allies in the Middle East and Europe oppose.

"When somebody doesn't want to do anything, it's always easy to blame the victim, (to say) these guys are bozos," he said in an interview.

And, he said, they "don't like the fact that we can operate in Washington, that we can get political support in Washington."

Most of Chalabi's support is from some members of Congress, some White House officials and civilians in the Defense Department.

Chalabi also has a reputation for bravado.

Longtime CIA operative Robert Baer says that when Chalabi bragged in a meeting with two Iranian intelligence officers in 1995 that the United States had decided to assassinate Saddam - which would violate a presidential order against assassinations - word got back to Washington.

Baer says in a new autobiography, "See No Evil," that he was then questioned by FBI agents. "I knew Ahmad Chalabi well," he wrote. "I had been in northern Iraq when the meeting took place, and I knew beyond a shadow of a doubt that Chalabi had invented this story from scratch."

Baer said in an interview that he held no grudges against Chalabi: "That's what I expected him to be doing. That's how the game is played in that part of the world."

Baer said the United States let Chalabi down and that Chalabi did as well as he could with few resources. "He played an amazing game of bridge, without a lot of trump cards."

Warren Marik, a retired CIA officer with experience in northern Iraq, says the U.S. government deserves much of the blame for the state of the INC.

Washington lost interest in efforts to overthrow Saddam for years after the 1996 debacle, Marik said. "They pretty much let it all fall apart," he said. "Chalabi doesn't fall apart."

Marik said that with sufficient backing, the INC could be a significant U.S. asset in Iraq.

While the group will never march to Baghdad on its own, Marik said, it could be "as serious as the northern alliance," the rebels who took Kabul and other cities in Afghanistan from the Taliban regime, assisted by massive U.S. airstrikes.

"They're cheap. They're smart. They're not crazies," he said.

Congress authorized $97 million for the Iraqi opposition in 1998, but the Clinton and Bush administrations so far have limited assistance to the INC to "nonlethal" military training. The money is distributed through the Pentagon.

Doubts persists about the INC's ability to use U.S. taxpayers' dollars.

Chalabi, who lives in London, fled Jordan in 1989 after his Petra Bank collapsed and was convicted in absentia three years later for embezzlement. Chalabi said he did nothing wrong and that the prosecution was politically motivated.

Earlier this year, the State Department threatened to cut off the INC's funding for information programs and other nonmilitary activities after an audit turned up expenditures that were deemed questionable or were unaccounted for.

The inspector general's audit of $4.3 million in grants mostly criticized the group's accounting and payroll procedures. But it also found questionable expenses, including $2,070 for a gym membership, $5,541 for legal fees related to a rental dispute and other money used for first-class plane tickets.

The audit also suggests the INC may have used taxpayers' money to lobby in Washington, which is illegal.

In a section that is partly blacked out, the public version of the audit cites a person paid "in excess of the budgeted amount" and suggests the unnamed person had a relationship with the Iraq Liberation Action Committee, a nonprofit group that uses private donations to pay for lobbying.

"We could not ascertain whether any violations of the general restrictions on lobbying occurred, because INCSF (the INC Support Foundation) lacked a transparent agreement that documented" the person's duties, the audit says.

The department restored the INC's funding Jan. 30, after the group presented a plan to correct the problems.

Chalabi said the INC had been vindicated.

"They questioned those!" he said during a brief tour of the townhouse that serves as the INC's Washington office, pointing to a washing machine and dryer that cost $696. They are needed, he said, to clean the uniforms of personnel who receive nonlethal military training.

Some U.S. officials are advocating a different tack to undermine Saddam, using Iraqi military officers who have defected and appealing to those still serving the Iraqi leader. But Chalabi seems confident the INC will be around for a while - unlike Saddam.

"We're supposed to have gone away," said Chalabi, dressed in a smart blue suit. "But we haven't gone away."

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