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Arrest warrants issued for Chalabi, nephew

BAGHDAD, Iraq—An Iraqi judge has issued an arrest warrant for Ahmad Chalabi, the one-time Iraqi exile long favored by the Pentagon and Vice President Dick Cheney, accusing him of counterfeiting Iraqi currency, it was learned Sunday.

The judge in Baghdad simultaneously issued a warrant for Chalabi's nephew, Salem Chalabi, on murder charges.

The charges are the latest—and perhaps most serious—fall from grace for Chalabi, whose Iraqi National Congress received more than $40 million in U.S. government funds and who sat near first lady Laura Bush during President Bush's State of the Union address in January.

Chalabi also was accused by senior U.S. officials in May of leaking to Iran highly classified information showing that U.S. intelligence was breaking Iran's codes.

Chalabi denied the latest charges and said he was returning to Baghdad to defend himself.

"I'm not going to stand still while these charges are out there," Chalabi, who was in Iran, told CNN. He called the allegations "political."

A Chalabi spokesman in Baghdad, Haider al-Moussawi, said both Chalabis were out of the country and expect to be arrested when they return.

The Bush administration was aware of the warrants in advance, but officials said the United States played no role in the matter. The warrants were issued Saturday by Iraqi Judge Zuhair al-Maliky.

"Clearly, this is a matter for the Iraqi authorities to resolve," White House spokeswoman Suzy DeFrancis said. "And they're taking action."

But several current and U.S. officials expressed no surprise at the latest developments surrounding Chalabi, a charismatic Shiite Muslim who frequently has been trailed by allegations of financial irregularities.

The Bush administration withdrew financial and diplomatic backing for Chalabi and his organization this spring, although he retains support from some civilian Defense Department officials, among Cheney's staff and from prominent neo-conservatives outside government.

Before the split, the INC received millions of dollars from the State Department and then the Defense Intelligence Agency. Much of it was for intelligence on former Iraqi President Saddam Hussein's weapons of mass destruction and terrorist ties that turned out to be false or fabricated.

The warrant issued by al-Maliky charges Chalabi with counterfeiting old Iraqi dinars, which carried Saddam's image and could be exchanged for new dinars issued since the dictator's fall in April 2003.

The charges stem from a May raid by Iraqi authorities of Chalabi's Baghdad residence, where counterfeit old dinars were allegedly found mixed in with stacks of legitimate ones.

Spokesman al-Moussawi said that in the raid U.S. agents found 3,000 counterfeit Iraqi dinars in 250-dinar denominations.

At the time, Chalabi was a member of the U.S.-appointed Iraqi Governing Council, which dissolved when Iraq regained full sovereignty on June 28.

The May raid also took place at al-Maliky's orders.

The charges against Salem Chalabi, who has been overseeing the war crimes tribunal against Saddam, involve the May killing of a top Iraqi Finance Ministry official who reportedly was investigating the Chalabis' real estate holdings.

Salem Chalabi is alleged to have threatened the man, Haithem Fadhil, two days before he was killed.

It was not immediately clear how the developments would affect the prospects of prosecuting Saddam.

Salem Chalabi denied any involvement in Fadhil's death, in a recent interview with the Los Angeles Times.

"It enrages me that someone makes these allegations," he was quoted as saying. "I've never met the person in question."

"Salem never threatened a fly," said Francis Brooke, Ahmad Chalabi's spokesman and the top INC representative in Washington, on Sunday.

Waeil Abdel-Latif, one of Iraq's ministers of state and a judge, said the accusations seem out of character for Salem Chalabi, a soft-spoken, dough-faced man who wears suits that do not fit nearly so well as those of his uncle.

"Salem would never do anything like this," he said. "Some political parties in Iraq want to take others down, or even kill people, and this is how politics work in Iraq these days."

Brooke and other Chalabi supporters portray the warrants and the May raid as a politically motivated crusade by al-Maliky, chief investigative judge of Iraq's Central Criminal Court. They note he was appointed by L. Paul Bremer, the U.S. administrator in Baghdad until June 28.

Al-Maliky's powers are more akin to those of a district attorney than a judge under the U.S. system, Brooke said.

"We would like to see this judge recuse himself," he said. "If the charges are substantiated and valid, they should be so to another judge."

Ahmad Chalabi has been vacationing in the mountains in Iran, Brooke said.

Chalabi and the INC were a major force behind the Iraq war, waging an intense and ultimately successful lobbying campaign to make the ousting of Saddam formal U.S. policy. They produced Iraqi defectors who told U.S. intelligence officials and the news media of the threat allegedly posed by Saddam.

But Chalabi, a mathematician whose well-placed family fled Iraq in 1958, also has been dogged by charges of financial wrongdoing.

The CIA cut off its relationship with him in the 1990s, after questions were raised about how the INC spent millions in CIA-provided funds.

Chalabi was convicted in absentia in Jordan in 1992 on fraud and embezzlement charges stemming from the collapse of his Bank of Petra three years earlier. Chalabi has denied those charges, saying they were politically motivated by the Jordanian monarchy, which wanted to ingratiate itself with Saddam.

At the time of the May raid on his house and offices, a British official said the action was targeting up to 15 people on charges of "fraud, kidnapping and associated matters."

Since his falling out with the Americans, Chalabi has gone to great lengths to recast himself as a Shiite countryman, shuttling to Najaf to help broker the peace deal with radical cleric Muqtada al-Sadr in June and speaking out against Iraq's interim government.


(Strobel reported from Washington. Lasseter is in Baghdad.)


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

ARCHIVE PHOTOS on KRT Direct (from KRT Photo Service, 202-383-6099): Ahmad Chalabi