Jordan's King Abdullah fueled the U.S. move against Iraqi leader Ahmed Chalabi by providing bombshell intelligence that his group was spying for Iran, The Post has learned.
An explosive dossier that the Jordanian monarch recently brought with him to White House sessions with President Bush detailed Mafia-style extortion rackets and secret information on U.S. military operations being passed to Iran, diplomats said.
That new information led to the Bush administration's decision to stop its $340,000-a-month payments to Chalabi's Iraqi National Congress and back an aggressive Iraqi criminal probe into his activities.
The file was compiled by Jordan's intelligence service, which has had an interest in Chalabi since the 1990s, when the Iraqi exile leader was convicted in absentia for embezzling millions of dollars.
The scandal stemmed from the collapse of the Bank of Petra, which Chalabi controlled, the diplomatic officials said.
Just months ago, Chalabi had been favored by Bush administration hard-liners as the next leader of Iraq and sat behind First Lady Laura Bush at the State of the Union Address in January.
The Pentagon airlifted Chalabi and members of the INC into Iraq the day after Saddam Hussein fell and gave them prominent roles in the new governing council, in charge of the Finance Ministry and ridding Iraqi government agencies of Saddam's Ba'ath Party.
But the U.S. already felt burned by the INC's involvement in passing on questionable pre-war intelligence on Saddam's weapons of mass destruction.
On Thursday, the relationship came to a bitter end as Iraqi police, backed by U.S. troops and FBI agents, raided Chalabi's palatial Baghdad home and issued arrest warrants for 15 members of the INC.
Officially, the raid was described as part of an Iraqi probe, launched by the Central Criminal Court of Iraq.
Among the charges being pursued is that INC members on the government's "de-Ba'athification committee" instead ran a scheme in which they demanded payoffs from ex-Ba'ath Party members. In return, those Ba'athists were allowed to avoid arrest or to stay off lists the INC was preparing of people banned from jobs in the new Iraqi government, sources said.
Chalabi aides running the new government's Finance Ministry are also accused of ripping off $22 million from the Iraqi Treasury when Iraq issued new currency late last year, U.S. officials said.
King Abdullah's dossier provided critical confirmation of U.S intelligence gathered elsewhere that the INC was playing a double game with Ba'athists and that Chalabi and his security chief were passing sensitive information to Iran.
That was when the Bush administration decided to break all ties with Chalabi, sources said.
Chalabi accused the United States of trying to intimidate him at a time when he is speaking out against the U.S. occupation and threatening to go public with bombshell files on the U.N. oil-for-food scandal.
Yesterday, he called an emergency meeting of the Governing Council seeking to get official condemnation of the raid.