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Chalabi's relationship with key figures in the Bush administration has been noted often, and his supporters are said to include Defense Secretary Donald Rumsfeld, Vice President Dick Cheney, and especially Deputy Defense Secretary Paul D. Wolfowitz. Less cozy are his dealings with the CIA, and especially the State Department, both of which oppose any real leadership position in post-war Iraq for Chalabi and the exile groups he represents. This disapproval, along with international calls (including British) to broaden administration of the country beyond the exile groups, may explain the White House's distance from the INC as the details about post-war plans start to trickle out.
Chalabi told CBS's 60 Minutes last Sunday, "I'm not a candidate for any position in Iraq, and I don't seek an office. I think my role ends with the liberation of the country." Whether he has flown to Nasiriyah for a vacation remains a question. The State Department will say only that "Chalabi is a private citizen," and can do as he pleases.
But U.S. government sources told the Voice that Chalabi is still very much a Wolfowitz favorite, and that it is hard to imagine he'll be sidelined in any new government. Recent reports suggest that Chalabi may have found a post as an adviser to the post-war finance ministry, seemingly a useful place for the MIT and University of Chicago-educated mathematician, whose business experience includes starting what was, at one time, Jordan's second largest bank.
But it is precisely this business experience, and Chalabi's indictment in 1992 for embezzlement and fraud (among other charges), that worry many in the Jordanian financial community who have had dealings with him. The details of this story are of, course, in dispute, with Chalabi saying charges brought against him in the wake of his Petra Bank's collapse in 1989 were "political," and were due in part to his opposition to Saddam Hussein, who Chalabi says put pressure on Jordan's King Hussein to close Petra Bank and indict him and his associates. But Jordanians willing to talk about the scandal, like Mohammed Said Nabulsi, who, as former head of Jordan's Central Bank, had to clean up Chalabi's financial mess, say it was a mess purely of Chalabi's making. At best, these men say, he was grossly negligent, at a tremendous cost not only to the Jordanian economy, but to thousands of shareholders in Petra Bank, and at worst, in the words of Nabulsi, he "was a crook who absolutely cooked the books to hide his crimes."
A spokesman for Chalabi could not be reached by press time.
"I knew Chalabi socially, and usually saw him at some third person's dinner parties," says Jordan's former deputy prime minister, Jawad Al-Anani. Al-Anani frequently refers to Chalabi as a kind of genius, a man who would pepper political dinner talk with discussions of mathematical principles. In a phone interview with the Voice, Al-Anani's recollections of the scandal fall somewhere between the strong opinions held by Chalabi's enemies and supporters, and he seems unconvinced that Chalabi is the crook many here in Jordan have made him out to be.
Despite this, he says, at the time Chalabi was running the bank, the two didn't really get along. "He was a political animal, a man who would try and influence government policy in ways that were sometimes . . . immature," says Al-Anani.
Chalabi was so well connected, says Fahad Al-Fanak, a columnist for the Jordanian daily Al-Ra'i, that he finds Chalabi's claims to have been the victim of a political conspiracy hard to swallow. "If politics was at work in this case," he says, "it only worked in Chalabi's favor."
In 1988, Jordan was in the midst of a severe financial crisis, running chronic budget deficits and defaulting on its external loans. The value of the dinar had plunged, and as a result, banks in Jordan were asked to deposit 30 percent of their foreign exchange holdings with the Central Bank. Of all the banks in Jordan, according to Nabulsi, only Chalabi's Petra Bank was unable to comply.
"So Chalabi tried to buy dollars to cover himself, running around feverishly to meet the demand for foreign exchange," says Al-Anani. "He used to sell dollars in the market in a show of bravado." A new government came to power in 1989, and by then, Petra Bank's difficulties were totally exposed. The bank was closed, and though the depositors were paid off, several thousand shareholders lost millions. Chalabi fled the country, allegedly in the trunk of a friend's car.
"I can't tell you how much he embezzled, he and his brothers," says Nabulsi. "It was not a mistake. He doesn't make mistakes." Nabulsi admits that investigations into the bank's finances, and Chalabi's improprieties, were never able to determine how much, if any, he stole, and how much he simply lost. Nonetheless, the damage to Jordan was done. "The impact was much, much greater than the Enron case," says Nabulsi. Half a billion dollars was lost, some 10 percent, he says, of Jordan's gross national product at the time. To the charges that the case against Chalabi was political, Nabulsi says simply, "It is like Enron telling the government that Bush was out to get them."
The Petra Bank scandal is not the only black mark on Chalabi's résumé. In January of last year, the State Department suspended funding to the INC, citing "financial management and internal control weaknesses." While the move may highlight State's discomfort with Chalabi's group, it is hardly an isolated accusation. Laith Kubba, a former INC spokesperson, told the Financial Times in December that in the early 1990s, when the group was receiving up to $325,000 a month from the CIA, there was "zero transparency about the INC's finances."
Some have suggested that if the Jordanian government hadn't closed down Petra Bank, Ahmed Chalabi would perhaps have been able to make good on the bank's losses, that he simply had many pots cooking at once, and that the government's intervention screwed up his grand design. Jawad Al-Anani isn't sure.
"I distinguish between a criminal act and bad judgment," he says. "I found that he was ambitious. He built a huge structure, a stalagmite configuration of companies, if you will. I was inclined to believe he did not have a sinister plan to cause the economy to collapse.
"Still," he continues, "the whole thing left people in deep financial trouble. The man was plowing in other people's lands, and no one was stopping him."
Al-Anani believes that if the rumors that Chalabi will be assisting with Iraq's finances are true, it's not necessarily terrible news. "If he has a good team, people who are concerned with the nitty-gritty, he'll be alright," he says. "He's a strategist, and he has a good mind, but he is bad with the nitty-gritty."
Nabulsi thinks this view is generous. "Listen, it's not my problem anymore," he says. "I think he won't be able to walk in the Iraqi street," says the former Central Bank chief. "Iraqis know about him. They know everything."
Al-Fanak agrees. "Responsible people know about him, but I think the Americans deserve him. It's good for everyone to see the thief representing American foreign policy."