Latest News

Chalabi returns to Iraq to fight accusations, INC says

BAGHDAD, Iraq—Ahmad Chalabi, once the Pentagon's favorite to lead a post-Saddam Hussein Iraq, fought back Wednesday on two fronts to salvage a political future now tarnished by allegations ranging from dealing in counterfeit Iraqi currency to leaking U.S. secrets to Iran.

In Baghdad, officials of Chalabi's Iraqi National Congress announced that he had returned to Iraq from Iran to clear his name of charges that he counterfeited old Iraqi dinars and used them to buy new dinars issued after Saddam's ouster. But Chalabi didn't appear at INC headquarters as expected, and INC officials wouldn't say where in Iraq he was.

In Washington, U.S. lawyers for Chalabi filed a federal court lawsuit that accused the Jordanian government of illegally seizing Chalabi's bank in 1989 and framing him on embezzlement charges to stop him from exposing illegal arms sales to Saddam.

The smear campaign continued into this year, the suit says, when Jordanian officials enlisted unnamed CIA officials last spring to spread to U.S. reporters "the knowingly false story" that Chalabi had told Iran that the United States was monitoring its secret communications.

"I know with all my heart that no one will ever prove in a fair and public court that my father is a counterfeiter, a bank embezzler or a traitor," Chalabi's daughter, Tamara, declared at a news conference in Washington announcing the lawsuit.

A Jordanian diplomat and a CIA spokeswoman separately declined to comment on the lawsuit, saying they couldn't talk about pending litigation.

The lawsuit and his return to Baghdad underscored Chalabi's determination to remain a player in Iraqi politics despite having lost favor with the United States and with little support in the U.S.-backed interim government. On Thursday, the interim government gave the INC 24 hours to vacate its Baghdad headquarters, saying it needed the building, known as the Chinese House and formerly used by Saddam's regime.

Chalabi, the U.S.-educated scion of a wealthy business family that fled Iraq in the 1950s, for years opposed Saddam from exile, winning millions of dollars in U.S. support and forging close ties with Vice President Dick Cheney and pro-invasion senior Pentagon officials who favored Chalabi as Saddam's successor.

But throughout it all he's been a controversial figure with allegations of corruption, shady business practices and espionage.

He was named to the U.S.-appointed Iraqi Governing Council after Saddam's fall, but he was excluded from the interim government that took power in June amid disclosures that Iraqi exiles supplied by his organization exaggerated and fabricated information about Iraq's illegal weapons and ties to terrorism.

He also began criticizing the U.S. occupation of Iraq, and U.S. officials found Chalabi enjoyed little popular support among Iraqis. Then came the allegation that he had leaked U.S. secrets to Iran. Finally, a U.S.-appointed Iraqi judge issued a warrant last weekend for his arrest on the counterfeiting charges.

The judge also issued a warrant for the arrest of Chalabi's nephew, Salem, on murder charges. Both Chalabis denied the charges and said they would return to Iraq to face them. It was unclear Wednesday when Salem would return, however.

Mithral al Alusi, a senior INC official, said Ahmad Chalabi returned to Iraq from an economic conference in Iran on Wednesday between 4 and 5 p.m. local time.

Chalabi, however, didn't appear at his headquarters, where a crowd of journalists and supporters waited, because of what al Alusi said were concerns for his safety.

It was unclear when the interim Iraqi government might arrest Chalabi. The judge who issued the warrant, Zuhair al Maliky, said the timing of Chalabi's arrest would be up to the Iraqi police.

Chalabi and the INC have disputed the arrest warrant's legality, asserting that it's tainted because it was issued by a judge who has a political agenda and who was appointed during the American-led occupation. However, al Alusi said Chalabi wouldn't physically fight any effort to arrest him.

Al Alusi said the INC had no intention of obeying the government's eviction order, though, adding that the order was another attempt to undermine Chalabi.

Chalabi's U.S. lawsuit named as defendants the Jordanian government, the Jordanian Central Bank, former Central Bank governor Mohammed Saeed el Nabulsi and former Prime Minister Mudhar Badran.

It called Saddam "a co-schemer and co-conspirator," but it didn't list him as a defendant.

John Markham, a former U.S. prosecutor and one of Chalabi's attorneys, said the lawsuit was based on evidence recovered after Saddam's ouster. He said the suit was filed in the United States because Jordan's 1989 seizure of Chalabi's Amman-based Petra Bank led to the collapse of a U.S. subsidiary.

The lawsuit contends that senior Jordanian officials, in league with Saddam, engineered Petra's collapse and Chalabi's subsequent conviction in absentia on embezzlement charges because they were enraged by his charges that Jordan was cooperating with Saddam by returning Iraqi dissidents to Iraq to face torture and execution.

Jordanian officials also sought to discredit Chalabi because he was speaking publicly about an alleged scheme in which they profited by secretly purchasing weapons for Saddam in violation of a U.N. arms embargo, the lawsuit claims.

The lawsuit says Chalabi fled Jordan rather than fight the embezzlement charges after he learned Jordanian officials planned to turn him over to Iraq.


(Hannah reported from Baghdad; Landay reported from Washington.)


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

PHOTOS (from KRT Photo Service, 202-383-6099): CHALABI


Related stories from McClatchy DC