- just how thick is the bush administration?

The Chalabi Chronicles
A Tale of When It All Goes Wrong
by Joe Duarte
www.joe-duarte.com
May 24, 2004

Editor’s note: On May 20, 2004, the major networks began to publicize the story of how the Iraqi National Council and its leaders Ahmad Chalabi may have perpetrated the greatest hoax of the last 50 years, and led the United States to enter what history may show to have been the most error plagued war of modern times.

What followed can only be described as a feeding frenzy.

What makes the rash of publicity and the eventual scandal more noticeable is that it was not a new story at all. It was just a story that was ignored by the mainstream media, obsessed with the Iraqi prisoner story and the Hollywood angles on the ins and outs of the White House and Congress.

The fact is that just as the mainstream media missed the Iraqi prisoner story, so did they miss the Ahmad Chalabi story completely, only to discover it when it seemed, for lack of a better word, convenient to give it airing.

The Chalabi story was actually broken on February 17 by New York Times columnist Maureen Dowd, who ironically, is a well-known mainstream scribe.

Since then, up until the “break” in late May, to the best of our knowledge only UPI’s Arnaud de Borchgrave, Stratfor.com, and Dr. Joe Duarte have given this story its due and provided continuous in-depth coverage and analysis.

Below are selected excerpts from Dr. Joe Duarte’s daily Market I.Q. column, where the Ahmad Chalabi debacle was fully exposed and documented beginning on February 17, 2004 .

This story is still alive, and will be continuously chronicled by Dr. Duarte.

Dr. Joe Duarte is a non-partisan analyst of geopolitics and their effects on the financial markets with special emphasis on biotechnology, energy, and technology stocks. His daily market commentary, Dr. Joe Duarte’s Market I.Q., the Internet’s leading Intelligence Digest appears daily at www.joe-duarte.com.


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The Thief Of Baghdad
February 17, 2004 by Dr. Joe Duarte

“Swept up in big dreams, the foreign policy dream team became dupes in Ahmad Chalabi's big con.”

Amidst the rising violence in Iraq, in an interesting editorial, titled “The Thief of Baghdad,” the New York Times may have opened up a whole new can of worms.

According to New York Times columnist Maureen Dowd, not known for her support of President Bush, Ahmad Chalabi, head of the Iraqi National Congress, “hoodwinked his pals Dick Cheney, Paul Wolfowitz and Richard Perle into believing Iraq would be a flowery cakewalk to democracy.”

Dowd’s interesting column, not clearly citing any sources for the information, other than a slight nod about Dick Cheney’s past to James Mann’s book "The Rise of the Vulcans: The History of Bush's War Cabinet," describes a highly intricate web of deceit, allegedly perpetrated on the U.S. government by Mr. Chalabi.

Dowd describes Chalabi as “a smooth-talking and wealthy young Iraqi M.I.T. graduate,” with a dubious past, which includes, according to Dowd, “a small matter of embezzlement from his own bank.” Dowd notes that “Jordanian officials have said that the crime (allegedly perpetrated by Chalabi) rocked their economy and that they paid $300 million to depositors to cover the bank's losses. By the time Mr. Chalabi was convicted and received a sentence of 22 years of hard labor, he was a fugitive in London.”

The article then describes a situation long in the making, in which “the names Cheney and Chalabi are entwined in bold relief.” She continued by saying that “during the early 90's, when Mr. Cheney was a fellow at the American Enterprise Institute, Mr. Chalabi was in a full courtship press with Washington's conservative and journalistic elites. He saw them as a springboard for his triumphant return to Iraq. After 9/11, his passionate desire to take out Saddam coincided with that of conservatives. All they needed for their belli was a casus, so Mr. Chalabi obligingly conned the neocons.”

She then connects Chalabi to the WMD failure by saying: “The C.I.A. was stung to find out its analysts had mistakenly thought that Iraq weapons information had been confirmed by multiple sources, when it came from only a single source; that analysts had relied on a fabricating Iraqi defector and spin material from Iraqi exiles; and that this blather made its way into documents and speeches used by the Bush administration to justify war. George Tenet ordered a major change in procedure last week, removing barricades so that analysts can know more about the identities of clandestine agents' sources, and their possible motives.”

Dowd then turned on the heavy artillery by saying: “Americans paid Ahmad Chalabi to gull them into a war that is costing them a billion a week — and a precious human cost. Cops dealing with their snitches check out the information better than the Bush administration did. Mr. Chalabi's séances swayed the political set, the intelligence set and the journalistic set. In an effect Senator Bob Graham dubs ["incestuous amplification,"] the bogus stories spewed by Iraqi exiles and defectors ricocheted through an echo chamber of government and media, making it sound as if multiple, reliable sources were corroborating the same story. Rather, one self-interested source was replicating like computer spam.”

Her conclusion: “incestuous amplification could not have drowned out reality if Bush officials had not glommed onto the Chalabi flummery for their own reasons — to feed their fantasies about refashioning America's power, psyche and military, and making over the Middle East in our image.”

What makes this editorial most interesting is the fact, that it is so plausible. One of the reasons cited in the past for the failure of the Iraqi Governing Council, have been the charges of nepotism and outright illegal tactics allegedly used by the council for doling out contracts. Major news sources have in the past reported on the questionable practices used by the council to choose contractors for a wireless telecom network in Baghdad.

That Chalabi, or others, may have used less than true “intelligence,” and that people in the administration used the information to their advantage would not be out of the conceivable reign.

More to the point though is this. Does Dowd’s column hurt Cheney and colleagues by making them look stupid? Or does it take them off the hook?


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Baghdad Divorce. Baghdad Marriage Of Convenience. Baghdad Confusion.
April 26, 2004 by Dr. Joe Duarte

Ahmed Chalabi’s worst nightmare may be unfolding.

The New York Times reported over the weekend that: “The American administration here said Thursday that it was loosening a policy aimed at purging the Iraqi government of members of the former governing Baath Party. The change is a major policy rollback by the White House and represents a sharp split with the American-appointed Iraqi Governing Council. The Americans are breaking in particular with Ahmed Chalabi, the former exile who is now the council member in charge of the purges.”

According to Stratfor.com, Chalabi “criticized (the) April 23 a change to U.S. policy that could allow members of the former Baathist regime to be part of the new Iraqi government.” Stratfor wrote that Chalabi “compared the policy shift as tantamount to putting Nazis back in charge of Germany after WWII.”

But the U.S. sees “the softened policy on de-Baathification” as one that “will allow the quick return to the government payroll of former Baath Party members ["who were Baathists in name only."] Many Iraqis — teachers, engineers, bureaucrats and others — say they became members only to advance their careers.”

The New York Times reported on 4-24 that the U.S. policy shift “comes as a blow to Mr. Chalabi, who built close ties to the Pentagon during his exile. He heads a Governing Council committee that revises and carries out the policy. In mid-January, he announced new restrictions that barred top-level Baathists from any chance of re-entering the government. Occupation authority officials praised the change as a step toward ["reconciliation."]”

The Times also notes that the U.S. has been looking into the matter for some time, at least superficially coincident with the release of columns by Dowd, and others, as “last month, Mr. Bremer said he had warned Mr. Chalabi that his de-Baathification efforts were going too far. ["I've told him that they've got to stop this overzealous approach if we're going to allow this to continue,"] Mr. Bremer said to reporters. He estimated that of the 2 million former members of the Baath Party, about 15,000 to 20,000 were affected by his May order. But more were pushed out of their jobs in ["spontaneous"] purges throughout the provinces, he said. In January, Mr. Chalabi said at least 28,000 former Baathists had already been purged and at least that many more would be dismissed.

The change in policy shows increasing pragmatism on the part of the U.S. According to Stratfor.com: “A number of prewar U.S. assumptions are quickly coming unraveled. In sketching out the post-Saddam Hussein occupation, U.S. military and civilian planners envisioned a relatively secure Iraq and a population grateful to -- or at least tolerant of -- coalition forces. They expected Iraqi security -- which they expected to be up and running shortly after Hussein fell -- to be reliable. These assumptions have proven false, or at least overly optimistic.

Stratfor added that “the United States must choose carefully whose military career it resurrects -- which is why the first three senior generals chosen to run Iraq's new defense force are a Sunni, a Shi'i and a Kurd. Placing high-ranking Baath officials throughout the defense structure will be a slow, deliberate process. Coalition leaders have to build trust with their former enemies and allow them to build trust among their rank and file. This will take years.”

And of course, as has been the case in Iraq from the very early going, the U.S. has had to settle for what it can get, not what it wants. Stratfor also reported that the trio of initial officers added to the roster are controversial in their own way: “these officials are not necessarily ideal. With the exception of Kurdish Senior Military Adviser Gen. Babekr al-Zibari, most former Baathists have little respect for the new coalition appointees. Sunni Gen. Khaled Hatem Saleh al-Hashimi, the new chief of staff, never graduated from the Army Staff College and is unpopular within the Iraqi military community. Shiite Lt. Gen. Daham al-Assal was forced to leave the old army following allegations of theft. Stratfor sources suggest the coalition approached the best officers in the old army, but they refused.”

The whole situation is a sign that the U.S. is desperate for a solution in Iraq, as it faces the possibility of a bloody attack on the cities of Najaf and Fallujah and the potential watershed situation that could follow such a set of battles.

The timing of the policy shift is also quite telling, as numerous reports have made it clear that the hand of Iran’s intelligence community and the Iranian Republican Guard have for years been setting up outposts in Iraq, and have been influential in the recent wave of anti-Americanism that has unfolded, as the June 30 governmental handoff nears.

To be sure, no one doubts that the U.S. could crush both cities in a matter of hours of indiscriminate bombings and cruise missile attacks. But, the political and strategic repercussions of the inevitable slaughter of civilians as well as jihadhists and dissidents could not just affect international opinion and bring about political isolation to the U.S., but may also affect the presidential election.

For those who believe that Ahmed Chalabi sold the U.S. a bill of goods which led to the now in effect difficulties of the post war occupation in Iraq, the latest twist in White House policy for Iraq may seem as just desserts.

According to multiple sources, most notably the New York Times’ scalpel wielding columnist Maureen Dowd, Mr. Chalabi conned the White House, and especially Vice President Cheney into believing that a U.S. invasion of Iraq would be met with rose petal covered avenues to welcome the troops.

In previously chronicled columns in this space, February 17, and April 6 2004, (see our column archive) we have described the highly plausible rationale substantiating the possibility that indeed Mr. Chalabi, favoring his own agenda, and perhaps serving as a conduit between Iran and Baghdad’s power hungry Shia elite indeed did influence bad decisions made by the White House that are largely responsible for the current state of affairs in Iraq.

In our opinion, the United States’ distancing itself from the Iraqi Governing Council, is a signal that the White House is acknowledging that the reports about Chalabi and the Iranian involvement in Iraq are true.

Once again, the old ghost of faulty intelligence has come back to haunt Mr. Bush.

And once again, success or failure in Iraq, much to the chagrin of all involved will only be known in years.

Perhaps, this final thought from Stratfor can be applied to most of the post Saddam society in Iraq: “Former Baathist officers will step back into military leadership to immediately face a systemic problem: There is no viable, centralized command and control structure within the armed forces. This is in part due to the creation of numerous local police forces after the initial invasion and confusion within the CPA over the responsibilities of the army, the police and the Civil Defense Corps.”


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Chalabi The Double Agent
May 3, 2004 by Dr. Joe Duarte

Ahmed Chalabi may go down in history as the most famous double agent since Mata Hari. Citing White House sources Newsweek reported that “White House advisers were concerned that Chalabi was ["playing footsie"] with the Iranians.”

According to a Newsweek/MSBNC.com report over the weekend: “NEWSWEEK has learned that top Bush administration officials have been briefed on intelligence indicating that Chalabi and some of his top aides have supplied Iran with ["sensitive"] information on the American occupation in Iraq. U.S. officials say that electronic intercepts of discussions between Iranian leaders indicate that Chalabi and his entourage told Iranian contacts about American political plans in Iraq. There are also indications that Chalabi has provided details of U.S. security operations. According to one U.S. government source, some of the information Chalabi turned over to Iran could ["get people killed."] (A Chalabi aide calls the allegations ["absolutely false."]

Chalabi makes no secret of his relationship to Iran. Newsweek reported that “Chalabi's Iraqi National Congress maintained a $36,000-a-month branch office in Tehran—funded by U.S. taxpayers. INC representatives, including Chalabi himself, paid regular visits to the Iranian capital. Since the war, Chalabi's contacts with Iran may have intensified: a Chalabi aide says that since December, he has met with most of Iran's top leaders, including supreme religious leader Ayatollah Ali Khamenei and his top national-security aide, Hassan Rowhani. ["Iran is Iraq's neighbor, and it is in Iraq's interest to have a good relationship with Iran,"] Chalabi's aide says.

Chalabi, whose exploits as the likely purveyor of the intelligence used by the White House on Saddam’s WMD cache, which have yet to be found, and were used as the reason for the war in Iraq, was exposed by New York Times columnist Maureen Dowd, as the controversial figure several weeks ago.

Yet, despite significant, and yet unproven, allegations to the contrary, some in the Pentagon still defend Chalabi. Newsweek noted that “Chalabi still has loyal defenders among some neoconservatives in the Pentagon. They say Chalabi has provided information that saved American lives. ["Rushing to judgment and cutting off this relationship could have unintended consequences,"] says one Pentagon official, who did not respond to questions about Chalabi's dealings with Tehran. Each month the Pentagon still pays his group a $340,000 stipend, drawn from secret intelligence funds, for ["information collection."]

We have detailed the situation in this column on several occasions, as it has gotten stickier, and worse for the Bush team, especially Vice President Cheney, who was described as one of Chalabi’s closest contacts and supporters inside the White House.

On April 8, 2004, in a column titled “Chalabi’s Double Dip,” based on a UPI report, we noted the following: “Chalabi has been double dipping, by receiving money from both the U.S. and Iran, and may have promised both sides that he would deliver a government to their liking in Iraq.”

In that report, we also noted [“UPI reports that Iran may have been spending up to $70 million per month, to support the infrastructure and institutions necessary to bring about the Islamic republic of their dreams to Iraq.]

UPI noted the following: [“A former Iranian intelligence officer identified only as Hajj Saeedi told the London-based Al-Sharq al-Aswat newspaper in an interview published Saturday that before the latest uprising Iran had successfully infiltrated hundreds of agents from its religious movement, the Pasdaran, into Iraq through Kurdish areas. Saeedi also claimed that Iran was subsidizing underground operations in Iraq ["to the tune of $70 million a month,"] the paper said.”

On 4-7, we reported, based on Washington Times, and Debka.com reports that: “according to U.S. military sources, Iraqi radical cleric) Sadr was also ["being aided directly by Iran's Revolutionary Guard."]

On 4-8 we reported: “It is also known, or widely rumored that: [“Tehran has been working closely with Grand Ayatollah Ali Sistani, the Iranian-born religious leader of Iraq's Shiites, who comprise 65 percent of the total population.” ]

His motives? No one really knows. And to be sure, there is no absolute proof that Chalabi is a double agent, or even an opportunist. But the information available, from multiple sources, suggests that Chalabi envisions himself as the Prime Minister of Iraq, once the June 30, hand over of power occurs.

Conclusion

The war in Iraq was a success. But the occupation has been a total failure. The United States has repeatedly shown that its intelligence is faulty, especially when engaging in diplomacy, as little discretion, or cultural knowledge has been displayed.

At each turn, the dissidents seem to know what’s coming before it gets there, and are able to either ambush, or deter any kind of sustainable military advantage.

Chalabi is a Shiite. Iran is a Shiite theocracy. Ayatollah al-Sistani, is a Shiite. Al-Sadr, the rebel cleric is a Shiite. Shiites are the majority in Iraq and Iran, but the minority amongst most of the Muslims in the world.

Sherlock Holmes once said, “when the impossible is removed, whatever is left is the truth, no matter how improbable.”

Based on this round of evidence, Iran’s involvement in the Iraq situation seems to be deeply imbedded in the conflict, a fact that has yet to be addressed by the White House.


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The Road Out Of Iraq Is Through Tehran
May 5, 2004 by Dr. Joe Duarte

The Bush administration is learning something rather unpleasant about Iraq. The way out is likely through Tehran. And that sets up a significant set of very negative logistics for the future.

According to a report on Stratfor.com, citing an Iranian newspaper, negotiations between Shiite cleric Al-Sadr, and the United States are under way, and are being mediated by “representatives dispatched by Qom-based Grand Ayatollah Kazem Hossein Haeri.” The interesting twist, is that according to Stratfor, al-Sadr, is Haeri’s protégé.

The net effect would be three fold in the short term. First, Stratfor notes that the “Iran Daily report suggests Haeri might be engineering a deal that would require the Mehdi Army to stand down and relinquish control to the CPA, allowing the United States to avoid a potentially explosive situation.” Second, Stratfor reports that “Haeri is asking the CPA not to try al-Sadr for the April 2003 murder of Grand Ayatollah Abdul Qasim al-Khoei until after the transitional government takes office July 1.”

And third“ “negotiators representing al-Sadr are lobbying for the Mehdi Army to be recognized as a legitimate political party so it can compete in future elections. The negotiators say if the CPA accepts these demands, al-Sadr will order his men to stand down.”

What the U.S. is asking, in addition to the standing down of the Mehdi Army, is not mentioned. But it would make sense that some kind of retribution, such as the naming, and identifying, or even eliminating of the foreign jihadists involved in much of the mayhem in Iraq, or perhaps even exchange of intelligence about Al-Qaeda.

Another interesting omission from the report, is the fact that Ahmed Chalabi’s name is nowhere to be seen, as a factor.

Stratfor concludes that “Tehran is very interested in stabilizing the situation in Iraq -- quickly -- and Washington has no qualms with Iran's involvement in taming al-Sadr. The more important issue is whether these talks will lead to an agreement, and what the terms would be. If and when a deal is reached, the United States will be able to boast to its allies that it has defused an explosive situation. Tehran again will be able to bring home its importance to the Bush administration, demonstrating its unique ability to exercise influence among Shia of all stripes.”

And while, it is possible that if this is a successful set of negotiations, the United States will be able to spin it positively, the long term success of the venture is dubious. As long as the Shiite majority in Iraq is in charge, the United States and Iran are too far apart ideologically. In fact, if this is first step toward the U.S. withdrawing from Iraq, face intact, one thing will remain clear.

Bottom line? If the U.S. makes a deal with al-Sadr, it will send one message loud and clear. It would essentially legitimize al-Sadr’s standing as a major political figure in Iraq, with Iran and the U.S.’s blessing.

In effect, it would signal that the United States has just christened the newest Islamic theocracy in the World.

Only time would tell if that is a good thing or otherwise. But, we think that it would not be a very long time before the World found out what the results would be.


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End of the Line For Chalabi
May 18, 2004 by Dr. Joe Duarte

Another sign that things are changing in Iraq, the U.S. has stopped making payments to Ahmed Chalabi. According to the New York Times: “The United States government has decided to halt monthly $335,000 payments to the Iraqi National Congress, the group headed by Ahmad Chalabi, an official with the group said on Monday. Mr. Chalabi, a longtime exile leader and now a member of the Iraqi Governing Council, played a crucial role in persuading the administration that Saddam Hussein had to be removed from power. But he has since become a lightning rod for critics of the Bush administration, who say the United States relied on him too heavily for prewar intelligence that has since proved faulty.”

The Times added: “Mr. Chalabi's group has received at least $27 million in United States financing in the past four years, the Iraqi National Congress official said. This includes $335,000 a month as part of a classified program through the Defense Intelligence Agency, since the summer of 2002, to help gather intelligence in Iraq. The official said his group had been told that financing will cease June 30, when occupation authorities are scheduled to turn over sovereignty to Iraqis.”

We were among the few services that gave air time to the New York Times’ Maureen Dowd and the Washington Time’s Arnaud de Borchgrave’s expose’ of how Chalabi’s information was a key part in the miscalculations of the Pentagon and the Bush administration’s handling of the post war occupation in Iraq.

Dowd gets the credit in our book for breaking the story. In a riveting piece called “The Thief of Baghdad” Dowd described how Chalabi allegedly conned Vice President Dick Cheney into believing that Saddam Hussein had weapons of mass destruction. In several articles that followed, Stratfor.com, and Arnaud de Borchgrave picked up the story, and fleshed it out, with each new revelation making the whole story more plausible.

In our opinion, the fact that the Pentagon is cutting Chalabi’s funding off, and that as we note below, his “friends” are deserting him, is clear proof that Dowd’s story held water, and that history may show, that indeed, it might have been one of those subtle turning points in an otherwise unfortunate set of events that led to the war in Iraq and the horrific occupation.

It seems fitting that one day prior to the Times story about the end of Chalabi’s run with the Pentagon that de Borchgrave wrote what may turn out to be the story’s epitaph.

According to de Borchgrave’s 5-17 column, “In October 1998, Donald Rumsfeld, Paul Wolfowitz, Richard Perle and Douglas Feith together signed an ["open letter"] to President Clinton, in which they listed nine policy steps that were in ["the vital national interest."] The very first step was ["Recognize a provisional government in Iraq based on the principles and leaders of the Iraqi National Congress (INC) that is representative of all the peoples of Iraq."]

De Borchgrave continued: “In October 1999, Congress passed, and President Clinton signed, the ["Iraqi Liberation Act,"] which provided funding - and Uncle Sam's stamp of good geopolitical housekeeping - for Ahmad Chalabi's INC, as well as five other exile groups.”

“Until recently, Mr. Chalabi was still the darling of the Pentagon's neocons. No one had played a more important role in convincing Washington's powers that be of 25 million Iraqis impatiently waiting to embrace their American liberators. But the ranks of Mr. Chalabi's once diehard Washington supporters are beginning to dwindle. His pledges to recognize Israel and to rebuild the Mosul-to-Haifa pipeline as a new democratic Iraq emerged on the world scene evaporated as his own political fortunes headed south.”

Perhaps this is as good a summary statement of Mr. Chalabi’s current status, according to de Borchgrave: :Struggling to make a comeback, Mr. Chalabi switched his geopolitical affections to Tehran and to Grand Ayatollah Ali Sistani, Iraq's supreme Shi'ite leader. The perceived betrayal split the neocon camp in two. Marc Zell, a Jerusalem attorney and former law partner of Douglas Feith, and a friend of Mr. Chalabi, is now quoted as telling John Dizard: ["Chalabi is a treacherous, spineless turncoat. He had one set of friends before he returned to Iraq and now he's got another."]

Whether the end of Chalabi’s affiliation with the U.S. is little more than a bittersweet farewell or another sign of a U.S. exit strategy from Iraq remains to be seen.

One thing is certain though, Mr. Chalabi can’t be sleeping too well these days.


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An ILL Wind Is Blowing For A Bush Re-election.
May 20, 2004 by Dr. Joe Duarte

The Bush exit strategy from Iraq continues to unfold. According to Reuters: “President Bush plans to lay out a strategy next week for transferring sovereignty to Iraqis in a bid to stem eroding support at home and abroad for his Iraq policies, officials said Wednesday.” The report added that much “progress” toward the transfer of power has been made in the past two weeks and that “Bush said he expected decisions to be made in the next two weeks on who will become the new Iraqi prime minister and president and assume the two positions of deputy president.”

Indeed, as the president has little choice but to push toward the handoff of power, the White House may we worse off on its prospects for re-election than it thinks.

And even though there are still months to go before the election, one source inside the beltway, with a good record on this issue told us something interesting and quite ahead of the curve recently.

According to the buzz this source is getting from Congressmen and Senators reporting back from discussions with “voters across the country,” there are now growing indications that “the American people have got it in their heads now that (President Bush) lacks the competence to run the country, much less to keep them safe.”

This well informed source further told us that “these officials from both parties have very sensitive antennae and often offer the earliest take on changes in public attitude.” It seems that “even in places like Texas (where the source thinks that it will not make a difference) and the northern tier of Florida (where the source thinks that it will), you find people who voted for Bush in 2000 but won't in 2004.”

What makes this take interesting is that up to now, the conventional wisdom, and the polls are telling us that Bush’s base is safe.

We ourselves in the last few months, when Bush had his post Democratic primary swoon, talked with well placed sources, and reported that there was a great deal of dissatisfaction with the president at that time. But soon thereafter, the Bush campaign began its negative attack campaign on Kerry, and things stabilized. The discouraged conservatives also quieted down at that time.

This then is new information which seems to correlate with Bush’s new swoon in the polls after the Iraqi prison scandal.

Even the Rasmussen poll is now showing doubts in Bush’s electability. Its 5-19 daily poll showed that the president had taken the lead with a 45 to 43% over Kerry. But Rasmussen’s take was rather subdued: “The latest Rasmussen Reports Presidential Tracking Poll shows President George W. Bush with 45% of the vote and Senator John F. Kerry earning 43%.“ This is where it gets interesting, as Rasmussen, whose interpretation of the daily polls has been that the election is a toss up writes: “Still, Kerry has been ahead or tied on fourteen of the last seventeen days. It will take several days to determine whether this latest bounce for Bush is real or just statistical noise.”

It also follows the recent pullback in rhetoric from the White House and the clear new message emanating from Pennsylvania Avenue, that the U.S. is looking to get out of Iraq, sooner rather than later.

The conservative dissatisfaction may also stem from the fact that not only did Secretary of State Powell admit over the weekend on “Meet the Press” that the U.S. went into Iraq based on bad intelligence, but also on the fact that a leading proponent of the Iraq war, publicly capitulated in front of Congress on 5-18. According to the Washington Post, Wolfowitz “acknowledged miscalculating that Iraqis would tolerate a long occupation.,” and that “a central flaw in planning, was the premise that U.S. forces would be creating a peace, not fighting a war, after the ouster of Saddam Hussein.”

Stratfor.com, in its 5-20 Geopolitical diary noted that Wolfowitz’ admission that the U.S. made mistakes in the war “is an extraordinarily important statement.” Stratfor continued by saying that “Wolfowitz is one of the key American strategists. Until Wolfowitz -- and by implication Rumsfeld -- publicly acknowledged their miscalculation of the regime's resilience, there was no possibility of a serious adjustment of strategy.”

In effect, Wolfowitz’ statements are a clear signal that in the eyes of the United States, Iraq is now a whole new ball game. “There is no valid forecast at this point. In the world of strategy, the lack of a forecast on something as basic as troop levels means there must be a comprehensive review. No one can argue any longer that what the United States is doing is working. That opens the door to the inevitable strategic re-evaluation.”

Wolfowitz’s admissions coincided with reports of the U.S. break between Ahmed Chalabi, and the murder of Iraqi National Council Head Izzedin Salim.

Perhaps the most interesting of all the reports relative to Iraq is the mobilization of brigade of troops from South Korea to Iraq . This suggests to us that before the U.S. hands power over to Iraq, on June 30th, at least ceremoniously, there is a hope at the Pentagon that the injection of perhaps more seasoned troops from South Korea will help in what looks like a last minute bit of very aggressive action from the U.S.

Only one thing is clear at this point, the White House, is hurting. And in its own, less than straight forward way, the bloodied Bush team is clearing the decks for something that it hopes will be big and dramatic enough to tip the scales of the election back toward the steadily slipping president.

To paraphrase Winston Churchill: “The United States will always do the right thing, once all the other alternatives are exhausted.”

The White House is likely hoping that it hasn’t exhausted “all the other alternatives” too late in the cycle.

We suspect that the month of June is going to provide a set of major developments on and off the battlefield, and inside and outside the beltway.


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Chalabi Arrests Signals New White House Approach
May 21, 2004 by Dr. Joe Duarte

Ahmed Chalabi started his day all wrong on 5-20. The U.S., accompanied by Iraqi police raided Chalabi’s Baghdad home and the office and headquarters of the Iraqi National Council. According to wire reports, a large SUV pulled up along with the raiding party and began to cart away boxes full of documents. Several sources reported that property was damaged and Chalabi waived a portrait of himself during a press conference in which the glass had been allegedly shattered by the raiding party.

So, it seems begins the end of the man described by New York Times columnist Maureen Dowd, as “The Thief Of Baghdad.” Frequent readers are familiar with Chalabi’s role in the U.S. war in Iraq, as he has been accused of providing false intelligence to the U.S., and collecting $27-33 million dollars for his troubles since 1992. His over $300,000 a month stipend from the CIA was announced to be cut off a few days ago.

To be sure Chalabi’s troubles were well advertised. As we noted in the last few days, the clearest signs that the U.S. is embarking on a new modus operandi in Iraq, that we can best summarize as an “exit strategy,” came over the weekend, when Secretary of State Powell, on “Meet The Press,” indirectly acknowledged that the information provided by Chalabi to the CIA about Saddam’s WMD program had been false. This was followed by the admission of Assistant Secretary of Defense Wolfowitz before Congress, earlier this week, that the U.S. had made multiple errors in its assumptions about, and the prosecution of the war in Iraq and the subsequent occupation.

Funny how suddenly everyone wants to get in on the Chalabi story. We are pleased that our subscribers had access to this information months before the main event came to a head, as this story may well be the beginning of where the Bush administration goes.

Fox News and CBS News, on 5-20, “reported that the U.S. has evidence Chalabi has been passing highly classified U.S. intelligence to Iran, citing senior U.S. officials. CBS said the ["rock solid"] evidence was said to show that Chalabi himself gave Iranian intelligence officers information so closely guarded that if revealed it could ["get Americans killed."]

In fact, this is not a new story at all. And credit should be given where credit is due. The story was broken by New York Times columnist Maureen Dowd, in February, when she penned the lines: “Swept up in big dreams, the foreign policy dream team became dupes in Ahmad Chalabi's big con.”

In her column Dowd described Chalabi’s dubious past, his shady deals and a story of “embezzlement” involving a Jordanian bank, his “cozying up” to Vice President Cheney, and Chalabi’s delivering of false information to the CIA. According to Dowd’s February column: “The C.I.A. was stung to find out its analysts had mistakenly thought that Iraq weapons information had been confirmed by multiple sources, when it came from only a single source; that analysts had relied on a fabricating Iraqi defector and spin material from Iraqi exiles; and that this blather made its way into documents and speeches used by the Bush administration to justify war.”

We followed this story closely from its inception and here are some highlights of our coverage.

On May 3rd, we wrote: (“Ahmed Chalabi may go down in history as the most famous double agent since Mata Hari. Citing White House sources Newsweek reported that “White House advisers were concerned that Chalabi was ["playing footsie"] with the Iranians.” According to a Newsweek/MSBNC.com report over the weekend: “NEWSWEEK has learned that top Bush administration officials have been briefed on intelligence indicating that Chalabi and some of his top aides have supplied Iran with ["sensitive"] information on the American occupation in Iraq. U.S. officials say that electronic intercepts of discussions between Iranian leaders indicate that Chalabi and his entourage told Iranian contacts about American political plans in Iraq . There are also indications that Chalabi has provided details of U.S. security operations. According to one U.S. government source, some of the information Chalabi turned over to Iran could ["get people killed."] (A Chalabi aide calls the allegations ["absolutely false."]”)

In that same article, on May 3rd, we wrote: “On April 8, 2004, in a column titled [“Chalabi’s Double Dip,”] based on a UPI report, we noted the following: [“Chalabi has been double dipping, by receiving money from both the U.S. and Iran, and may have promised both sides that he would deliver a government to their liking in Iraq.”] In that report, we also noted [“UPI reports that Iran may have been spending up to $70 million per month, to support the infrastructure and institutions necessary to bring about the Islamic republic of their dreams to Iraq.] UPI noted the following: [“A former Iranian intelligence officer identified only as Hajj Saeedi told the London-based Al-Sharq al-Aswat newspaper in an interview published Saturday that before the latest uprising Iran had successfully infiltrated hundreds of agents from its religious movement, the Pasdaran, into Iraq through Kurdish areas. Saeedi also claimed that Iran was subsidizing underground operations in Iraq ["to the tune of $70 million a month,"] the paper said.”

On April 26th, we wrote: “Ahmed Chalabi’s worst nightmare may be unfolding. The New York Times reported over the weekend that: “The American administration here said Thursday that it was loosening a policy aimed at purging the Iraqi government of members of the former governing Baath Party. The change is a major policy rollback by the White House and represents a sharp split with the American-appointed Iraqi Governing Council. The Americans are breaking in particular with Ahmed Chalabi, the former exile who is now the council member in charge of the purges.”

Our conclusion on April 26th was: “In our opinion, the United States’ distancing itself from the Iraqi Governing Council, is a signal that the White House is acknowledging that the reports about Chalabi and the Iranian involvement in Iraq are true. Once again, the old ghost of faulty intelligence has come back to haunt Mr. Bush.”

And on 5-17, we concluded that “One thing is certain though, Mr. Chalabi can’t be sleeping too well these days.”

Thus, what’s most important here is to determine whether Chalabi’s apparent downfall will be the beginning of a U.S. crackdown, and what, if any, effect such a set of developments could have on the imploding Bush re-election bid.

Stratfor.com concludes that the Chalabi raid is “house cleaning,” by the Bush administration. Stratfor suggests that since Bush doesn’t want to fire anybody in his cabinet until after the election, he is in effect using Chalabi as a scapegoat.

But, there may be more to the story than just Bush cleaning house. According to Forbes.com: “Senior congressional staffers, policy analysts and lobbyists are all pointing to mounting evidence that ["utter chaos is reigning"] in Baghdad over investigations into the Iraq oil-for-food program scandal, especially in the wake of today's raid by Iraqi police and U.S. forces on the home of Iraqi Governing Council member Ahmad al-Chalabi.”

Forbes, citing Chalabi’s own remarks, reported that some of the files taken by the U.S. in the raid were part of the Iraq food-for-oil program that was being “probed” by Chalabi as a member of the Iraqi Governing Council.

According to Forbes, U.S. accounting giant KMPG, was in the process of auditing the food-for-oil program on behalf of the “Iraqi Ministry of Oil, the Central Bank of Iraq, the Finance and the Trade Ministry and the State Oil Marketing Association.”

Thus, the raid can actually delay and confuse the entire probe, which could easily lead to the implication of several foreign governments, high level functionaries, oil company executives, and even U.N. Secretary General Kofi Annan. The food-for-oil program was run by a French bank, and according to reports was of greatest benefit to Russian and French oil interests.

Perhaps the most interesting aspect of the raid is what it may uncover. According to UPI’s Arnaud de Borchgrave, “Chalabi makes many prominent Americans, European and Arabs uneasy because they don't know what several tons of Mukhabarat documents seized by INC will reveal about their secret dealings with Saddam. Rumor has it they contain names of all the foreigners who were rewarded by Saddam for services as ["agents of influence."] These reportedly also include the names of Qatar-based al-Jazeera reporters who were working for Iraqi intelligence.”

It will be interesting to see what the White House begins to leak out in the next few days to weeks in order to discredit its opposition on the war as the Bush team pulls out all the stops in order to get re-elected.

That there will be major news leaked is not the question. How soon, how detailed, how devastating, and how effective the revelations will be, in our opinion, will be the better questions to ask.

It’s still a long time until November.


© 2004 Dr. Joe Duarte
Dr. Duarte's Bio and Archive

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