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Fresh bank scandals hit Iraq's leader in waiting

The Sydney Morning Herald at, April 18, 2003


Fresh information has emerged of banking scandals involving the family of the Pentagon's preferred candidate to shape post-war Iraq, Ahmad Chalabi.

Dr Chalabi's brother, Jawad, confirmed that he and another brother, Hazem, had been convicted by the Swiss authorities of false accounting in connection with the collapse of Socofi, an investment firm in Dr Chalabi's widespread financial empire.

He also confirmed that a Genevan bank linked to Mr Chalabi, Mebco, had its banking licence withdrawn by the Swiss federal banking commission in April 1989, and also collapsed.

Jawad Chalabi was responding to reports in the Swiss press that authorities there had accused Chalabi-linked finance firms of lending millions of pounds to companies controlled by the Chalabi family, including Ahmad Chalabi himself. Firms named included Associated Software, and Middle East and Trading Investment.

Jawad Chalabi insisted on Wednesday there was "collateral for everything" in loans made to Chalabi-controlled firms.

He said Swiss business rivals had moved against Mebco, while the collapse of Socofi was the fault of the investment company's manager, who had since died. He and his brother had admitted to the Swiss charges only because it would have been too expensive to appeal. The two brothers were given six-month suspended prison sentences in Switzerland in September 2000.

The accusations are similar to those levelled by banking investigators following the collapse of Ahmad Chalabi's Petra Bank in Jordan, which was closed down by the Jordanian authorities four months after the same fate befell Mebco in Switzerland.

Jawad Chalabi also said that Ahmad had been the victim of political intrigue in Jordan, and had not received a fair trial by a military court, which sentenced him to 22 years' jail in his absence for fraud and embezzlement over Petra Bank's collapse.

"King Hussein only ordered the prosecution after my brother appeared on 60 Minutes in the US and accused the king of taking bribes to sell arms to Iraq."

Ahmad Chalabi is head of the Iraqi National Congress and has long been favoured by the Pentagon as a possible leader for Iraq.

He returned to Baghdad on Wednesday, his first visit to the city since the overthrow of the monarchy in 1958.

"Our plans are to establish ourselves here, to set up an office and begin the work towards reconstructing democracy and civil society in Iraq," said Zaab Sethna, who travelled with Dr Chalabi in the motorcade from the southern town of Nasiriyah.

"His first plan is to go see his old home, and then start building democracy in Iraq."

Dr Chalabi was the first major exiled politician to reach Baghdad since the collapse of Saddam Hussein's government last week.

Mr Sethna said Mr Chalabi would soon start meeting Iraqis, including community leaders, religious leaders and businessmen. He would coordinate his activities with Jay Garner, the retired US general leading the drive to rebuild Iraq.

Asked how long Mr Chalabi would stay in Iraq, Mr Sethna said: "What he has said is, 'I have come home to stay."'

The Guardian, Reuters



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