Iraqis Ordering Chalabi Arrest; He Vows Fight

August 10, 2004
By JOHN F. BURNS and DEXTER FILKINS

BAGHDAD, Iraq, Aug. 8 - Ahmad Chalabi, the exile leader who returned to Iraq last year hoping to run the country with American support, was ordered arrested on counterfeiting charges, Iraqi officials said Sunday night.

Mr. Chalabi, whose fortunes fell into eclipse during the American occupation, was traveling in neighboring Iran and could not be reached for comment. In a television interview, he rejected the charges, calling them politically motivated, and vowed to return to Iraq to fight for his name.

At the same time, Mr. Chalabi's nephew, Salem Chalabi, was also ordered arrested on a separate charge relating to the murder of an Iraqi official. The younger Mr. Chalabi is spearheading the prosecution of Saddam Hussein. He was on a visit to London, and denied the charges against him.

Francis Brooke, a Washington adviser to Mr. Chalabi, said the charges against both men were categorically untrue and said both would return to Iraq to defend themselves. He said that the elder Mr. Chalabi would leave a vacation cabin in the mountains outside Tehran immediately and that the younger man would return to Iraq later from his home in London. Mr. Brooke assailed the magistrate who issued the charges, calling him an unqualified political appointee of L. Paul Bremer III, the former chief administrator of Iraq.

"I see him, personally, as acting as an agent of the U.S. government," Mr. Brooke said of the magistrate, Zuhair al-Maliky.

Details were sketchy on Sunday night, but Iraqi officials said they suspected that Mr. Chalabi had been counterfeiting old Iraqi dinar notes used during the reign of Saddam Hussien and exchanging them for newly minted notes, which came into circulation earlier this year.

The charges against the younger Chalabi, Salem, appear more serious, alleging his involvement in the killing of Haithem Fadhil, a director general of the Iraqi Finance Ministry, in June.

"They should be arrested and then questioned,'' Judge Maliky told The Associated Press. "If there is enough evidence, they will be sent to trial.''

If tried and convicted, Salem Chalabi, 41, could face the death penalty, the judge said. Capital punishment was restored by Iraqi officials on Sunday. His uncle, if tried and convicted, would face a sentence to be determined by the judges. One Iraqi newspaper, Al Ghad, reported that the case against the senior Mr. Chalabi was initiated by a complaint by the central bank, and that the other case followed a suit lodged by an individual who was not identified. The newspaper said Mr. Fadhil had been auditing the Chalabi family's financial holdings and real estate in Iraq.

The criminal charges against the senior Mr. Chalabi marked a personal nadir; as recently as six months ago he maintained the status of being the Bush administration's favored leader in Iraq. Pentagon officials favored him and once saw him as a likely successor to Mr. Hussein.

The relationship between the administration and Mr. Chalabi deteriorated markedly in recent months, as prewar intelligence provided by him about the military abilities of Mr. Hussein's government and its relationship to the terrorists of Al Qaeda was largely discredited.

But the charges also point to the first signs of full-scale political strife in Iraq.

The man presiding over the new government, Ayad Allawi, is a longtime rival of Mr. Chalabi in Iraq and also within the corridors of the American government. The move to arrest the two Chalabis, whether justified or not, will no doubt give rise to fears that Dr. Allawi, the interim prime minister ahead of elections scheduled for next year, is carrying out a political vendetta.

Mr. Chalabi's first fall came in May, when the Iraqi police, backed by American forces, raided his home and headquarters in Baghdad. American officials said later that they believed that he might have passed classified American information to Iranian agents.

While Dr. Allawi emerged as the new American ally here last June, Mr. Chalabi and his group, the Iraqi National Congress, were all but excluded from the new government.

Judge Maliky is the country's top investigative judge and a political maverick who has not shied from taking on some of the country's most powerful leaders.

The counterfeiting charge against Mr. Chalabi is not the first accusation of financial wrongdoing. In 1991, a Jordanian court convicted him in absentia for bank fraud and sentenced him to 22 years in jail. Mr. Chalabi has said the fraud prosecution was backed by Mr. Hussein.

In Washington, the Bush administration said it had no comment on the charges against the Chalabis. "This is a matter for the Iraqi authorities to resolve, and they are taking steps to do so," said a White House spokeswoman, Suzy DeFrancis.

Mr. Chalabi and the Bush administration also fell out on the question of how drastically former members of Mr. Hussein's Baath Party should be purged from the new Iraqi government. Mr. Chalabi pushed for a near total ban, but as American officials tried to rebuild a functioning Iraqi state, they decided on a more permissive stratregy.

With both men out of the country on Sunday, the warrants against them seemed issued with a view toward discouraging them from returning, and thus from playing any further role, at least from inside Iraq, in the political rivalries that are sharpening in the majority Shiite population as elections scheduled before the end of January draw nearer.

Mr. Chalabi has continued to maneuver for a possible appointment as prime minister after the elections, aligning himself with a powerful Shiite religious group, the Supreme Council for the Islamic Revolution in Iraq, that could emerge as a crucial power-broker after the voting.

Dexter Filkins reported from Istanbul for this article and Patrick Healy contributed reporting from New York.

Copyright 2004 The New York Times Company