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[casi] Mr. Crook rules Iraq!

This is the man Rumsfeld and Wolfowitz want to make
Iraq's new ruler...

How can a man who steals money from his own bank be
entrusted with a country's wealth??



Financial scandal claims hang over leader in waiting

Pentagon's choice to succeed Saddam was found guilty
over $200m bank losses

David Leigh and Brian Whitaker
Monday April 14, 2003
The Guardian

Every day since he was secretly spirited into Iraq by
the US military just over a week ago, Ahmad Chalabi,
the man favoured by the Pentagon to succeed Saddam
Hussein, has been holding court with local dignitaries
in Nassiriya.
But allegations of financial impropriety linger over
Mr Chalabi, head of the Iraqi National Congress, the
most important of which concern a $200m (127m)
banking scandal in Jordan.

In 1992, Mr Chalabi was tried in his absence and
sentenced by a Jordanian court to 22 years' jail on 31
charges of embezzlement, theft, misuse of depositor
funds and currency speculation.

Mr Chalabi has always maintained the charges were
politically motivated. The exact nature of the charges
surrounding the collapse of his Petra Bank in Jordan
was known only to a few people, but details have now
been obtained by the Guardian.

Reports compiled at the time by investigators in
London and Jordan, including investigations by the
accountants Arthur Andersen, describe how millions of
dollars of depositors' money was transferred to other
parts of the Chalabi family empire in Switzerland,
Lebanon and London, and not repaid.

>From relatively modest beginnings when he co-founded
Petra Bank in 1977, Mr Chalabi became one of the most
powerful and influential businessmen in Jordan. He
even acquired the licence from the US to issue Visa
cards in Jordan and became well connected in the royal

London banking sources say Mr Chalabi's financial
empire originally thrived thanks to support from Crown
Prince Hassan of Jordan, which enabled Petra to open a
string of branches for the first time in the
Israeli-occupied West Bank.


Petra also acquired a reputation for currency exchange
manipulation. The board minutes, subsequently seized
by investigators, recorded a boast by Mr Chalabi that
there were no problems in circumventing Jordan's
restrictive exchange controls.

One London banking source said: "He boasted that there
was nothing to worry about. He said he had just
transferred $20,000 for the wife of a top member of
the [Jordanian] regime so she could buy underwear."

Members of Mr Chalabi's family also ran a gold dealing
company, SCF, in London; an investment company,
Socofi, in Geneva; and another bank, Mebco, in Geneva
and Beirut, as well as a Washington arm, Petra
International. The documents record that Mr Chalabi's
interests also included companies in Jordan - Al Rimal
and Abhara.

By the time of its crash, Petra was the third-largest
bank in Jordan, and the poverty stricken Jordanian
government was forced to pay out $200m to depositors
who would otherwise have lost their savings, and to
avert a possible collapse of the country's entire
banking system.

Mr Chalabi left the country and subsequently
re-emerged living in style in a London apartment off
Park Lane.

The trigger for the bank's failure, according to
documents seen by the Guardian, was a decision by the
central bank governor, Mohammed Said Nabulsi, to
enforce regulations on liquidity ratios, and to
tighten up on the outflow of foreign exchange from

Mr Nabulsi ordered banks to deposit 30% of their
foreign exchange holdings with the central bank as
part of his efforts to prop up the currency. Petra,
apparently alone among the 20 banks asked to make
these deposits, was unable to comply.

The central bank then replaced Petra's board of
directors and investigations began. Two weeks later,
in August 1989, Mr Chalabi left Jordan.

The report by Arthur Andersen subsequently found that
the bank's assets had been overstated by $200m. In
three main areas, there were huge bad debts (about
$80m); "unsupported foreign currency balances at
counter-party banks" (about $20m); and money
purportedly due to the bank which could not be found
(about $60m).

Many of the bank's bad loans were to Chalabi-linked
companies. The Swiss and Lebanese firms, Mebco and
Socofi, were subsequently put into liquidation too.

A much more detailed 500-page Technical Committee
Report was subsequently compiled in Arabic on behalf
of the Jordanian military attorney-general, and
completed on June 10 1990.

It accused Mr Chalabi of being the man directly
responsible for "fictitious deposits and entries to
make the income ... appear larger; losses on shares
and investments; bad debts ... to Abhara company and
Al Rimal company".

The technical report contains 106 "chapters", each
dealing with different specific irregularities or
irregular activities. In most of these, Mr Chalabi is
clearly named as the person on whose authority the
irregular transactions were carried out.

As Mr Chalabi was eventually tried in a military state
security court, he cannot be extradited, though if he
became Iraqi leader he would be unable to visit

Mr Chalabi has recently told the press that the late
King Hussein of Jordan twice offered him unconditional
royal pardons, but he turned them down because he did
not believe he had done anything wrong.

Although he has support in the Pentagon, Mr Chalabi is
regarded with suspicion by the CIA and the US state
department. Last week he announced plans for a meeting
of prominent Iraqis in Nassiriya but the state
department objected, describing it as Mr Chalabi's

The meeting will go ahead tomorrow but under US
auspices and probably without Mr Chalabi.

"I will send a representative to this meeting," he
said in an interview on Breakfast With Frost on BBC1
yesterday. "There will be no decisions taken."

Media silence

Despite this controversy in Mr Chalabi's past, there
has been a marked reluctance to dwell on it in
sections of the British media.

The Daily Telegraph, owned by Conrad Black, who has on
one of his boards the prominent Pentagon hawk and
Chalabi supporter Richard Perle, published a
flattering profile of Mr Chalabi last year,
characterising him as "the de Gaulle of Iraq". The
article did not refer to his conviction or the
collapse of Petra Bank at all.

The London Evening Standard last week quoted Mr
Chalabi's claim that the bank crash had been caused by
intrigue between Saddam and Jordanian officials, and
added: "But even the doubters admit his intellect -
his knowledge of ... medieval Japanese history is

Mr Chalabi could not be contacted for comment
yesterday. An aide said he was meeting tribal leaders.

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