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Iraq Transition

Iraqi minister: Chalabi will be arrested

One-time U.S. confidant to face bank fraud charges in Jordan

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Ahmed Chalabi

BAGHDAD, Iraq (CNN) -- Iraq's interim defense minister said former Iraq exile leader Ahmed Chalabi will be arrested Saturday and handed over to Interpol to face bank fraud charges in Jordan.

Saturday is both the final day of the Muslim pilgrimage, or hajj, to Mecca and the end of Eid al-Adha, or Feast of Sacrifice.

As the exiled political leader of the Iraqi National Congress, Chalabi was a key U.S. ally leading up to the invasion of Iraq in March 2003.

"Chalabi is someone who has hurt his people," Defense Minister Hazem Sha'alan said on the Arab satellite network Al-Jazeera.

"He robbed 1,500 families of their daily bread by bankrupting Bank Petra."

Chalabi founded the bank in the late 1970s, and was convicted and sentenced in absentia for bank fraud by a Jordanian military court in 1992 -- a prosecution he insists was politically motivated.

Chalabi blames Jordan for smearing him because he exposed the country's weapons-dealing with Iraqi dictator Saddam Hussein.

In his comments to Al-Jazeera, Sha'alan accused Chalabi of defaming him and the ministry, but didn't elaborate.

Sha'alan also blamed Chalabi for dismantling the Iraqi army and police forces after the U.S.-led invasion. In a separate interview with the Arab network Al-Arabiya, Sha'alan also blamed the United States for dismantling the Iraqi army.

Chalabi was a champion of the post-war program that sought to keep anyone associated with Saddam's Baathist regime from positions of authority in post-Saddam Iraq.

In May 2004, Chalabi fell out of favor with U.S. officials as as the pre-war intelligence Chalabi supplied about Saddam's weapons of mass destruction failed to pan out.

That month, American troops and Iraqi police searched his home and office, and U.S. officials accused him of passing closely held American secrets to Iran -- allegations he denied.

Before his fall from favor, the exiled leader and his organization received millions of U.S. tax dollars in the hope the group could help topple Saddam's regime. Chalabi returned to Iraq on an American aircraft after Saddam was deposed.

Once home, Chalabi was appointed to the Iraqi Governing Council and put in charge of finances.

He tried to establish a political base in the country but has struggled to gain a foothold, with many Iraqis distrusting him because of his many years in exile and close ties to the United States.

Chalabi, as a U.S.-educated exile, lived abroad for more than four decades before returning to Iraq.

In September, he escaped injury south of Baghdad when two carloads of gunmen opened fire on his convoy, an aide said. Chalabi's bodyguards returned fire, but the gunmen escaped.

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