Iraqi National Congress faces growing number of investigations

Knight Ridder NewspapersFebruary 27, 2004 

WASHINGTON — The Iraqi National Congress, long championed by officials at the White House, Pentagon and on Capitol Hill, is facing a growing number of investigations into its provision of bogus intelligence on Iraq and whether some of its members may have tried to cash in on the fall of Saddam Hussein.

Democrats in the House of Representatives have asked the Defense Intelligence Agency to turn over raw intelligence supplied by the Iraqi exile group. They plan to review it for its accuracy and reliability, according to officials in the Bush administration and on Capitol Hill.

The move follows a recent decision by the Senate Intelligence Committee to expand its probe of prewar intelligence on Saddam to include the INC and other groups that played important roles in President Bush's decision to invade Iraq last March.

Democrats on the House intelligence panel were angered by reports that the DIA is continuing to pay the Iraqi group $3 million to $4 million a year for information, despite findings that show most of the group's earlier information on Saddam's weapons of mass destruction and ties to terrorism was false.

The continuing payments were first reported on Feb. 22 by Knight Ridder.

The INC's leader, Ahmad Chalabi, has had powerful patrons in the offices of Vice President Dick Cheney and Defense Secretary Donald H. Rumsfeld, as well as on both sides of the aisle in the U.S. Senate.

But three senior administration officials said the mood in Washington toward Chalabi has turned sharply cooler as a result of the revelations about prewar intelligence supplied by Iraqi defectors made available by his group.

In addition, several contracts for rebuilding Iraq that were won by firms with business or family ties to Chalabi are under intense scrutiny.

No criminal wrongdoing has been charged as a result of any of the probes.

One controversial contract for $327 million to supply equipment to the Iraqi armed forces was suspended by the U.S. Army this week following protests from the losing bidder.

A defense official said the DIA, the military's principal intelligence arm which is paying the INC to collect information on Iraq, isn't conducting any review of the INC's use of U.S. taxpayers' funds.

The senior officials said the White House's mood toward the INC changed markedly after Chalabi told a British newspaper on Feb. 18 that it didn't matter whether the group's prewar information was correct because its goal of ousting Saddam has been achieved.

Chalabi was quoted by the Daily Telegraph as saying: "As far as we're concerned we've been entirely successful. That tyrant Saddam is gone and the Americans are in Baghdad. What was said before is not important."

In a Feb. 20 letter to the newspaper's editor, Chalabi claimed he was misquoted.

The article "implies that I admitted to disseminating false information, this is absolutely untrue," Chalabi wrote. "For the record, the INC never `coached' Iraqi defectors nor did we ever knowingly pass on false information."

Several officials said Bush was angered by Chalabi's comments and determined to find out whether the INC or anyone with ties to it is seeking personal gain from the war in Iraq.

"His (Chalabi's) time is rapidly coming," said one senior official.

He and others spoke on condition of anonymity because they aren't authorized to speak for the administration and because of the political sensitivities involved.

A copy of the letter was supplied by former assistant defense secretary Richard Perle, a long-time Chalabi friend and booster.

The INC's Washington spokesman, Francis Brooke, was in Baghdad and couldn't be reached for comment.

The $327 million contract to equip the Iraqi armed forces was awarded to Nour USA, a Virginia firm incorporated last May.

Among Nour's management is A. Huda Farouki, a businessman with close ties to Chalabi.

The contract was suspended following protests by a Polish arms-trading firm that bid unsuccessfully for the work. The firm charged Nour submitted an unrealistically low bid and had insufficient experience.

The New York newspaper Newsday reported this week that Nour also bankrolled another firm, Erinys, which won an $80 million contract to provide security for Iraq's oil sector.

A U.S. military official engaged in Iraq policy and deeply critical of the INC and its leader said, "Chalabi's run is about over, and it's about time.

"A lot of the information they provided was suspect from the start—some of it was almost laughably false—but it got into the bloodstream anyway, and the minute he and his people got to Baghdad, we started hearing horror stories about them taking over other peoples' property—houses, cars and so on," the official said.

"Now we're looking to see whether they've stuck their noses into the (postwar reconstruction) contracting process, too," he said.

Chalabi lost a key Washington ally this week in Perle, who resigned from the Defense Policy Board, an influential committee that advises Rumsfeld. In his resignation letter, Perle said he didn't want his views to be misconstrued for Bush administration policy during the election season.

At a Washington event Friday, and in a later telephone interview, Perle denied reports that the Bush administration had asked him to resign.

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(c) 2004, Knight Ridder/Tribune Information Services.

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