Special Report

When Quislings Go Native

The rise and fall of Ahmed Chalabi, who duped some of the best and the brightest.

By 5.25.04

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As Washington's occupation of Iraq grows ever messier, the pernicious role of Ahmed Chalabi, head of the Iraqi National Congress, becomes ever starker. Not just the latest allegations of blackmail, corruption, and espionage. More fundamental and telling remains his provision of so-called intelligence on Saddam Hussein's Iraq, which proved to be largely erroneous even though it helped mislead America into war. Chalabi is "one of the mistakes" made by the Bush administration in post-war Iraq, observes Dr. Naser J. al-Sane, an influential Kuwaiti parliamentarian. Yet Washington originally planned to install Chalabi to run occupied Iraq and until recently considered turning control of the soon-to-be sovereign interim Iraqi government over to him.

Despite the recent upsurge of violence in Iraq, the Bush administration remains committed to returning national sovereignty to Iraqis on June 30. But to whom? Plans for a government chosen through caucuses went aglimmering as a result of opposition from the majority Shiite community.

The Coalition Provisional Authority then shifted back to reliance on an expanded Iraqi Governing Council, appointed by the U.S. Next Washington considered choosing its own prime minister, with Chalabi leading the list of candidates. Now Washington appears to be ready to accept an interim government chosen by the United Nations, principally U.N. envoy Lakhdar Brahimi. The latter is no friend of Chalabi, who has described Brahimi as "an Algerian with an Arab nationalist agenda."

Last week's joint Iraqi-U.S. raid on Chalabi's home and office, carried out under authority of an Iraqi judicial warrant, reduces his chances even further. One U.S. official told Newsweek: "This is a wakeup call to the INC that you're not above the law." Washington also terminated funding for the INC last week. Chalabi terms his relationship with the coalition authority as "non-existent."

IF THE WAR AND OCCUPATION belong to anyone, it is Ahmed Chalabi. He left Iraq in 1957 and for a time focused on business -- not entirely successfully. He was charged with bank fraud for allegedly embezzling $30 million from his institution in Jordan. He denied the charges but fled rather than stand trial; he was convicted in absentia in 1992.

Nevertheless, he became a leading Iraqi exile voice as head of the London-based INC, established in 1992 with Washington's aid -- almost $40 million over the years from both the CIA and State Department. Most important, he forged close ties with a number of influential American neoconservatives, most notably Richard Perle, Paul Wolfowitz, Deputy Defense Secretary, and Douglas Feith, Undersecretary of Defense. The Pentagon relied on Chalabi for intelligence in the build-up to war and flew him, plus 700 retainers, into Iraq after the fall of Baghdad, apparently ready to place the nascent Iraqi government into his hands.

Some war supporters charge that the Defense Department was blocked by State in its plan to turn Chalabi into a nationalist hero by giving the INC a leading role in Iraq's liberation. This strategy always seemed unrealistic, however, since he still would have been riding on American shoulders. Iraqis were never likely to accept him as the leading figure in Iraq's reconstruction.

Chalabi ended up as but one of 25 members of the IGC. Nevertheless, he became perhaps the most influential member, skillfully accumulating a host of important positions. Writes columnist Fred Kaplan, Chalabi "is head of the economics and finance committees, which oversee the ministries of oil, finance, and trade, as well as the central bank and several private banks. He also runs the De-Baathification Commission," which controls employment in the Iraqi government to-be. He placed numerous allies in key bureaucratic spots, including his nephew as trade minister, who later moved to the defense ministry. Chalabi was the man who would be king.

Still, that was never going to be an easy task. Chalabi represents no domestic constituency and is widely distrusted by Iraqis; one poll put him behind even Saddam Hussein. His colleagues had little more confidence in him. Power would come only at the point of an American gun, or in alliance with influential domestic interests.

The former was long his preferred modus operandi, as Chalabi posed as an ally of the U.S. He once spoke of the need to "safeguard minority rights" and develop "a strategy to deal with the Shias." He advocated a federated state and cultivated the Kurds, visiting their territory even before Hussein's ouster. And he backed Washington's plan for a government chosen by caucus.

That was then, however. This is now.

RECENTLY CHALABI HAS BEEN PURSUING the second path to power. Although he described himself as "America's best friend in Iraq," he recently has devoted increasing attention to leading Shiite leaders, including Ayatollah Ali al-Sistani, whose pronouncements repeatedly forced the CPA to back down, and even militant cleric Moktada al-Sadr, whose followers are now in open revolt against the U.S. During the drafting process for an interim Iraqi constitution, Chalabi pushed to increase the role of Islam.

Indeed, another of Chalabi's nephews helped draft the constitution and walked out of the proceedings to protest the decision dropping a provision basing family life on religious law. Then Chalabi joined four other Shiite representatives in refusing to sign the temporary constitution. His objection? Giving Kurds veto power over national laws. With two-thirds of the population, Shiites believe it is their turn to rule.

Moreover, of late he has been demanding a quick turnover of power to an Iraqi government. After the police raid, he declared: "My message is let my people go, let my people be free. We are grateful to President Bush for liberating Iraq, but it is time for the Iraqi people to run their affairs." One Iraqi told author Andrew Cockburn that Chalabi's "dream has always been to be a sectarian Shia leader. Not in the religious sense, but as a political leader." Some critics theorize that he has been organizing Shiite forces to ensure that the CPA turnover of power to a U.N.-chosen technocratic government fails.

Despite U.S. disquiet with Iran, Chalabi recently visited President Mohammad Khatami. Indeed, Chalabi has been a regular in Tehran. Observes an analysis by the business forecasting firm Stratfor, "Chalabi has had and continues to have excellent relations with Iran, as well as with leading Shia in Iraq."

Newsweek reported that some U.S. officials believe that Chalabi has turned sensitive information over to Tehran, material that could "get people killed," according to one source. David Frum, among others, has defended Chalabi from this admittedly amorphous charge. But Newsday cites American officials who believe the INC Information Collection Program, paid for by America, passed along classified U.S. documents, which "kept the Iranians informed about what we were doing." Another claim reported by Newsday is that the INC reflected Iranian disinformation back at Washington, providing "information to provoke the United States into getting rid of Saddam Hussein." Some sources suggest that last week's startling raid was animated by these claims.

Even if Chalabi did not stretch cooperation to include espionage, his Iranian connection bolsters the perception that Chalabi always has put his interest before that of the U.S. "He was willing to ally with anyone to get where he is now, whether it was the neocons, the Israelis or the Iranians," said Robert Baer, a former CIA case officer.

DURING THE DISASTROUS EXPLOSION of violence in Iraq in early April when the Marines moved on the city of Fallujah and al-Sadr's militia seized control of several cities, Chalabi said nothing, failing to back U.S. military action. He finally opined that "Najaf must not be touched," which would in effect turn the city into a sanctuary for al-Sadr. Chalabi renewed his criticism of U.S. military operations in Najaf and Karbala in mid-May. When Paul Bremer decided to reverse de-Baathification, and rely on generals from the defeated regime to help maintain order in Fallujah, Chalabi denounced the move as akin to "allowing Nazis" into the post-World War II German government.

Control of Saddam Hussein's files gave Chalabi another advantage. The U.S. may have conquered Baghdad, but the INC ended up in charge of 60 tons of Baath party materials. The value of those documents, especially for blackmail purposes, is inestimable. Indeed, a Pentagon official told the Washington Times that allegations that Chalabi was using this information to blackmail people involved in the corrupt Iraqi oil-for-food program led to the raid. And Newsweek reports that the INC exposed the Baath Party connection of a Ministry of Science and Technology official who refused to approve an over-priced contract advanced by the INC.

Money also has helped fuel Chalabi's ambitions. Whitley Bruner, a CIA agent who worked with Chalabi in the early 1990s, notes that Chalabi has always had "to spend money to gain loyalty -- to rent loyalty."

Only last week did Washington cut off its generous contributions, an estimated $4 million annually (which Chalabi defended as "a very small program in terms of cost"). More important, Iraq has become his bank. Chalabi dispenses significant patronage.

Columnist Arnaud de Borchgrave writes that Chalabi has "a say in which companies get the nod for some of the $18.4 billion earmarked for reconstruction." And, claims de Borchgrave, a generous commission is reportedly required. One unnamed U.S. business executive said: "The commission was high, even by Middle East standards." No wonder that Chas Freeman has characterized the Iraqi view of the Iraqi Governing Council as "Ahmed Chalabi and the Twenty Thieves." Indeed, allegations of financial impropriety also may have contributed to the search of Chalabi's home and offices. Sabah Nouri, chosen by Chalabi to be the Finance Ministry's top anti-corruption official, was recently arrested for embezzlement and other financial improprieties.

So far, despite the large cloud of smoke surrounding Chalabi -- the Iraqi police sought to arrest 15 aides and other INC members -- the size of the fires of corruption and espionage and his role in setting them remain unclear. Incontrovertible, however, is the fact that Chalabi always has been his, not America's, agent, irrespective of truth and consequences. For instance, the INC funneled information, which turned out to be incorrect, to U.N. weapons inspectors in the 1990s. At least they sought confirmation.

American officials were much more credulous. Although the CIA severed ties with the INC in 1995 (the INC has complained of an agency "smear campaign" against it), the allegedly hard-headed neoconservatives were far more gullible. Much of the alleged intelligence backing claims that Iraq possessed significant WMD came from INC informants. For example, charges involving "mobile bio-weapons labs" were offered to an alleged defector, a brother of a top INC official, who spoke with the INC, not the U.S. government. These charges were false. Indeed, while running the administration's post-war WMD inspection program, David Kay reviewed the defector's claims and concluded: "He was wrong about so much. Physical descriptions he gave for buildings and sites simply didn't match reality. Things started to fall apart."

Another INC-provided defector did speak with American officials. Coached by the INC, he apparently convinced political appointees in the Bush administration, even though the Defense Intelligence Agency pegged him as a likely liar.

The INC also helpfully disseminated its erroneous claims to the international media, with predictably ill effect. Report Jonathan Landay and Tish Wells of Knight Ridder Newspapers, "The assertions in the articles reinforced President Bush's claims that Saddam Hussein should be ousted because he was in league with Osama bin Laden, was developing nuclear weapons and was hiding biological and chemical weapons."

Chalabi and company also assured Washington that the occupation as well as the war would be a cakewalk. The U.S. would be welcomed as liberators. Chalabi's soldiers would keep the peace. American forces could quickly go home.

PERHAPS CHALABI ACTUALLY knew little about the country which he hoped to liberate. After all, he'd been gone for nearly 50 years.

Or Chalabi said whatever he thought was necessary to win America's involvement. Alas, whether, like the Bush administration on WMD, the INC was simply careless and prone to say what it wanted to believe, or was engaged in intentional misrepresentation, doesn't matter much now.

Entifadh Qanbar, the INC's Director of Communications, denounces the charges against his organization as "a sustained smear campaign." After the police raid, Chalabi blamed the CIA for targeting his security chief for arrest: "The CIA has a very big grudge against him." Another INC official, Haider Musawi, said the raid was "a political game," and contended that unnamed critics "have been waging a smear campaign against Chalabi and the INC for some time."

However, in February Chalabi essentially admitted that he had misled the Bush administration, not that the administration ever seemed much concern about resisting being misled. In an interview with Britain's Daily Telegraph, Chalabi declared: "We are heroes in error. 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."

Actually, it is. But then, Chalabi blames the people he was misleading: "Intelligence people are supposed to do a better job for their country, and their government did not do such a good job." In fact, he adds, "So why did the CIA believe [the defectors] so much?"

Chalabi's smugness pales in comparison to the possible illegality of the INC's activities. The General Accounting Office has opened an investigation into whether the INC violated U.S. law by using tax monies to push Washington to go to war. The INC grants prohibited activities "associated with, or that could appear to be associated with, attempting to influence the policies of the United States Government or Congress."

Yet that was Chalabi's central goal. Bruner observes: "His primary focus was to drag us into a war that Clinton didn't want to fight." Not surprisingly, in Bruner's view Chalabi "couldn't be trusted."

But then, legal norms never much constrained Chalabi. Set aside the bank charges. Three years ago the State Department found that hundreds of thousands of expenditures were inadequately documented or simply undocumented. So Chalabi as an intelligence asset was transferred to the Defense Intelligence Agency. As a result, complained one unnamed former intelligence officer to Newsweek, the Pentagon was "getting rolled like everyone else."

Yet after the war the DIA continued to pay the INC $340,000 a month for "intelligence collection." Although the New York Times reported that internal reviews by the DIA and the National Intelligence Council had concluded that the INC provided little information of value, the administration defended the continuing payments. Supposedly the U.S. received more useful information of late. Of course, since much of what the INC previously provided was false, this was not a difficult standard to meet. One official told the Los Angeles Times: "A huge amount of what was collected hasn't panned out. Some of it has turned out to have been either wrong or fabricated." Ken Pollack, a war supporter who once served in the CIA, notes that "Chalabi had a track record. We knew that this guy was not telling us the truth, the whole truth, and nothing but the truth." Finally, in mid-May the administration announced that it planned to kill the payments on June 30, only to cut them off last week.

THE BUSH ADMINISTRATION WILDLY overstated the case for conquering Iraq and dramatically underestimated the difficulties that it would face in administering a conquered Iraq. No small blame goes to Chalabi. Observes Financial Times columnist John Dizard in a long expose in Salon, some neoconservatives "must be ruing the day they met Ahmed Chalabi, who told them the fairy tales they wanted to hear." In fact, all Americans should be ruing that day.

Chalabi still has his defenders, such as Richard Perle, who criticizes the CIA and State Department: "It is far from obvious how we advance American interests by acting against someone who shares our values and is highly effective." Danielle Pletka of the American Enterprise Institute suggests that the raid was "political manipulation in order to disable somebody who has been a thorn in the side of the CPA." Perle even theorizes that Chalabi could emerge from the episode "with great influence" and that "the crude nature of this action will actually have the reverse effect, and bolster Ahmed." Chalabi himself insists: "I am not marginalized."

Yet Chalabi's new-found independence cannot disguise the fact that he has always been a creature of Washington, not Iraq. As IGC president Sheik Ghazi Marshal Ajil al-Yawar observed, Chalabi and others "think they are entitled to a role because they believe they overthrew Saddam Hussein. It was the United States that overthrew Saddam while we were eating TV dinners." Alas, despite all of the money and trust invested in Ahmed Chalabi, he is, as Naser Al-Sane observed, one of America's biggest mistakes in Iraq.

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About the Author
Doug Bandow is a senior fellow at the Cato Institute. A former Special Assistant to President Ronald Reagan, he is the author and editor of several books, including The Politics of Plunder: Misgovernment in Washington (Transaction).