Iraq The Chalabi Controversy: Inside The Takedown

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The Iraqi had also fallen out with Ambassador Bremer. In early spring an Iraqi judge issued a search warrant in an investigation into alleged theft of property and government vehicles by members of Chalabi's Iraqi National Congress (I.N.C.). Bremer wanted to make an example of the I.N.C. and prove that no political party is above the law, but the search was stymied: according to a senior U.S. official, the police couldn't get into the I.N.C. offices the first time they went. Defense Intelligence Agency (DIA) officials who were working in a Pentagon-funded intelligence program attached to Chalabi's group stopped the officers at the door, arguing that the sensitive intelligence inside needed to be protected. But on May 13, after the Administration decided to cut off the $335,000 monthly subsidy to the I.N.C., the DIA agents vacated the I.N.C. offices. Administration officials say Bremer sent the police back a week later, backed by U.S. soldiers. Bremer has denied prior knowledge of the raid, but sources say he authorized it. Bremer didn't inform the White House or the Pentagon of the timing of the move, an official says, but Chalabi had few allies left in Washington willing to defend him. "Nobody can protect anyone anymore," says a Pentagon official.

It was the CIA that was responsible for launching the separate leaks probe, which Chalabi's backers see as just the latest in a long series of attempts by the agency to undermine him. Richard Perle, a Bush defense adviser who has met with White House officials to plead Chalabi's case, says, "The CIA has disliked Chalabi for a long time and has concocted a case against him." Chalabi has described the accusation that he gave intelligence to Iran as "nonsense."

If Chalabi did betray U.S. secrets to Iran, it appears he was playing a brazen double game. U.S. commanders in Iraq have said the information Chalabi's organization has passed on to the U.S. since the war began has been helpful. According to a March assessment by a high-ranking military intelligence officer reviewed by TIME, the I.N.C. provided about 50 reports a month last year of "actionable" intelligence, which, among other things, led to the arrest of former leaders of Saddam's regime. The officer stated that the I.N.C. was "directly responsible for saving the lives of numerous" U.S. troops. For his part, Chalabi is attempting to turn the U.S.'s campaign to "marginalize" him into a political coup, telling any Iraqi who will listen that he is clearly no U.S. stooge. Says a senior White House official: "We expect Chalabi to be very politically active on the ground there." That may be the only thing you can count on from Ahmad Chalabi.

--With reporting by Matthew Cooper, Michael Duffy, Viveca Novak and Elaine Shannon/Washington; Scott MacLeod/Cairo; Vivienne Walt/Baghdad; Hassan Fattah/Amman