Iraq The Chalabi Controversy: Inside The Takedown

The White House meeting in late April opened with the presentation of a seven-page, single-spaced memo titled "Marginalizing Chalabi." Drafted by the National Security Council (NSC), the document detailed three options for sidelining the controversial Iraqi political figure Ahmad Chalabi--methods ranging from gently pushing him offstage to cutting off U.S. funds for his intelligence-gathering operation. Once a Pentagon favorite to lead Iraq, Chalabi had been criticizing Washington for dragging out the transfer of power to Iraqis. It was time for Chalabi to go.

The April memo marked the beginning of the White House's strategy to cut its ties to Chalabi--a campaign that reached its climax late last month when Iraqi police, backed by U.S. forces, raided the former exile's house and office in Baghdad. But that move hardly came out of the blue. New details of the relationship between the U.S. and Chalabi, provided to TIME by senior Administration and intelligence officials, reveal that after a decade of lobbying Washington, Chalabi began to lose his footing early this year after he ran afoul of President Bush and L. Paul Bremer, the U.S. administrator in Iraq.

The extent of Chalabi's alleged malfeasance is still being unearthed. Senior Administration officials tell TIME that the U.S. is investigating whether Chalabi revealed to the Iranians highly sensitive information about how the U.S. gathers intelligence in the region. Other U.S. officials told TIME that the FBI has begun reviewing logs and other data that might turn up clues as to when sensitive information was divulged; the feds are also interviewing and giving lie-detector tests to U.S. officials in Iraq who may have had access to the information.

The White House has been steadily losing patience with its former client. The beginning of the end came in February when Chalabi was quoted in a London Daily Telegraph article saying that even if the intelligence about Saddam Hussein's weapons programs that Chalabi passed to the U.S. before the war was faulty, it was "not important," compared to the end result of toppling Saddam. "We were heroes in error," he said in the article. Chalabi insists he was misquoted, but the damage was done. "That set the President off," a senior Administration official told TIME. The general feeling among top officials was "We gotta do something about this guy."

The NSC office of Iraqi expert Robert Blackwill was commissioned to draft a plan to cut its ties to Chalabi. Blackwill's recommendations for "marginalizing Chalabi" were endorsed by State Department and CIA officials, who have long criticized intelligence provided by Chalabi.