The Long Knives Come Out For Chalabi

by Jeff Elliott

Laura Bush applauds her special guest, Dr. Adnan Pachachi, President of the Iraqi Governing Council, during the State of the Union Address, Jan. 20, 2004. Ahmad Chalabi was seated directly behind the President's wife

What events led to Ahmad Chalabi's sudden fall from grace? There are several possibilities:

• Thrown Overboard To Make Room For UN   From the first days of the invasion, the Iraq War has stubbornly refused to follow the script authored by the Bush Administration, where cheering Iraqis were supposed welcome Americans as liberators. That plot was probably hatched in June, 2001, when neo-con Richard Perle introduced Chalabi to Dick Cheney at a Colorado retreat for world leaders and the two old Saddam-haters conspired for hours. Now three years and one failed occupation later, the White House is desperate in its search for a happy ending before the November election.

  Gone are the old plans for a puppet government headed by Chalabi and his cronies in the Iraq National Congress (INC). The most hopeful exit strategy now relies on throwing the mess into the United Nations' lap so they can take the blame for whatever happens in coming months. But UN envoy Lakhdar Brahimi is hardly about to invite Chalabi to take any sort of role in an interim government; more likely will be an investigation into some of the shady dealings by members of Chalabi's gang that began shortly after the invasion. Nor has Chalabi endeared himself by claiming to have proof of fraud in the UN-run "oil for food" program -- more about this below -- or by trying to undermine and discredit Brahimi as an out- of- touch bureaucrat (and a Sunni Muslim, to boot).

  Thus even if Chalabi didn't have his other baggage, Bush would still have major incentives to dump him and grease the transition for a UN handover.

• I, Chalabi, Superspy   Even Chalabi foes were surprised when charges were made that he passed American secrets to Iran. In the June 7th issue of Newsweek, it is reported that the information included "extremely sensitive" and "highly classified" details which could jeopardize U.S. intelligence sources and even "get people killed." The secrets reportedly included telling Iran that Washington had cracked the code Iran used to protect messages from its intellegence operations inside Iraq, as well as details about how the U.S. spies on Iran.

  Besides Chalabi, the only other name mentioned as a suspect is the INC intelligence chief, Aras Karim Habib, who fled Iraq before an arrest warrant could be served and is reported to be in Iran. Habib ran Chalabi's 'Information Collection Program', which was Washington's justification for paying the INC $340,000 a month. Many in Washington now believe Terhan was feeding the INC exaggerated or false information about Saddam's WMD programs that they in turn passed to the U.S.

  The most explosive aspect of the spy story: Where did Chalabi/Habib get the intelligence to leak? The FBI has launched a full investigation, but there are reportedly only a few possible suspects: the offices of Wolfowitz, former Undersecretary of Defense for Policy Douglas Feith, and Cheney.

• The Thief Who Would Be Whistleblower   The strangest explanation of Chalabi's fall has the U.S. and UN conspiring against him. Why? Because the INC was investigating charges of corruption -- although presumably not its own theft, such as reportedly skimming $22 million from the Iraqi Treasury last year -- and about to blow the whistle on schemes that led directly to the doors of U.S. chief of the Coalition Provisional Authority, L. Paul Bremer and UN Secretary-General Kofi Annan.

  INC hired international auditing firm KPMG to look at the books for the Development Fund of Iraq, which controls about $6 billion in funds from Iraq's oil revenues, assets seized after the invasion, and bank accounts left unplundered by Saddam. According to the INC, there is no oversight on how this money is spent by Bremer's office, and money supposed to be spent on reconstruction is instead being pocketed. The audit by KPMG is due in October.

  Chalabi has also launched an investigation into graft in the Saddam-era "oil-for-food" program, charging that billions were stolen from that UN-administered humanitarian program (LINK). The UN has its own probe, and has been fighting to get documents from Chalabi for months -- it is quite likely that the May 20 raid on his offices was to seize those papers. It is also possible that the computers taken by authorities will link Chalabi with efforts last year to prove corruption in the program via forged documents. Since the early 1990s, the INC had been operating a sophisticated forgery operation within Iraq to discredit the Saddam regime.

• And Then There Were None   'Get me Wolfowitz!'' Chalabi reportedly demanded as Iraqi police ransacked his home and offices. But by that time, Deputy Defense Secretary Paul Wolfowitz wasn't returning his calls. And neither were any of his other former pals in Washington. A senior INC member told Knight-Ridder that Chalabi hasn't spoken to Cheney since before the invasion began last March. Among the lonely few rising to his defense were neo-con die-hards Richard Perle and James Woolsey, who met May 22 with Condoleezza Rice to complain that the CIA had unjustly "smeared" Chalabi.

  Now alone in Iraq's briar patch, Chalabi is working overtime to reinvent himself as a Shi'ite nationalist. Without irony, he recently called for the U.S. to leave Iraq pronto and "let my people go." Chalabi also recently took part in a demonstration in support of cleric Moqtada al-Sadr. "He'll become an imam if he has to!" a Jordanian who knew Chalabi told the New Yorker.

Conspiracy fans speculate that the office raid was a sham -- that the soldiers were roughing up the neo-con's chosen son just to give him some street credentials before the January elections because no candidate will win on a "Best buddies with Bush" platform. His simultaneous 11th-hour conversion to religious patriotism aids that theory. Will Ahmad be Washington's dark horse in the race? Probably not, what with the very serious charges of spying for Iran over his head. But with the White House strategy for Iraq shifting daily, anything's possible.

In the end, Chalabi's fall from grace was probably caused by all the above factors, combined with a building resentment against the man. Jerry Bremer, for example, had reason to loathe him not only for suggesting that Bremer was mismanaging a $6 billion fund, but because it was Chalabi's advice to 'de-Ba'athize' the government at once, leading Bremer to sack the entire Iraqi army, considered the worst mistake of the occupation.

And with Iraq looking more like a powder keg, it was only a matter of time before a vengeful Bush Administration traced its woes back to the man who lit the fuse. "Chalabi was the crutch the neo-cons leaned on to justify their intervention," General Anthony Zinni, former commander of CENTCOM told the New Yorker. "He twisted the intelligence that they based it on, and provided a picture so rosy and unrealistic they thought it would be easy."