Coded Cable In 1995 Used Chalabi's Name

By Walter Pincus and Bradley Graham

Ahmed Chalabi, the Iraqi politician suspected by U.S. authorities of having told Iran this spring that its secret communications code had been broken, was involved in an intercept episode nine years ago, according to senior administration officials.

Officials yesterday recounted an incident in early 1995 when Chalabi's name turned up in an encrypted Iranian cable reporting a purported CIA-backed plan to assassinate Saddam Hussein, then Iraq's president. The message was intercepted by U.S. intelligence and caused a major political stir in Washington.

Similarly, it was an intercept several weeks ago of another Iranian message -- this one from an agent in Baghdad to his superiors in Tehran saying Chalabi had told him that U.S. intelligence was able to read Iran's secret cables -- that has triggered a major counterintelligence probe and concern about Washington's future ability to monitor Iranian developments.

A U.S. law enforcement source said yesterday that FBI investigators, trying to determine the source of the leak, had interviewed at least one Defense Department employee in Baghdad and had administered a polygraph test. More tests were planned, some involving officials at the Pentagon, said the source who demanded anonymity because the investigation is secret. But several senior defense officials said yesterday that they knew of no one at the Pentagon who had yet been approached by investigators.

FBI spokeswoman Debbie Weierman said the investigation is still at its early stage. Noting that Chalabi is a British citizen, she said law enforcement officials are trying to determine "to what extent he is covered by U.S. law barring disclosure of U.S. classified information."

Chalabi, whose exile group -- the Iraqi National Congress -- has received more than $40 million in U.S. payments over the years, has denied that he disclosed secrets to Iran and demanded that the Bush administration investigate the source of the leak about the investigation of him.

The 1995 incident arose at a time when Chalabi was in northern Iraq, working with CIA backing against Hussein. The CIA case officer working with Chalabi at the time was Robert Baer.

Exactly who came up with the assassination idea is subject to some dispute. One U.S. official interviewed yesterday, who was familiar with the event, credited Baer with pushing the plan.

Baer has denied this. In his book "See No Evil: the True Story of a Ground Soldier in the CIA's War on Terrorism," published in 2001, he wrote that the plot to kill Hussein was phony, concocted by Chalabi in hopes of enticing Iranian support for his Iraqi opposition efforts.

To prove to the Iranians he had Washington's support to go after Hussein, Chalabi forged a letter on U.S. National Security Council stationery that asked him to contact the Iranian government for help, Baer wrote. The letter said Washington had dispatched to northern Iraq an "NSC team" headed by Robert Pope, a fictitious name.

In a meeting with Iranian intelligence officers, Chalabi left the letter on his desk while he took a phone call in another room, knowing the Iranians would read it, Baer wrote.

What happened next has not been previously reported.

The Iranian intelligence officers sent an encrypted message to Tehran about Chalabi's supposed plot, officials said yesterday. The United States intercepted the transmission. U.S. intelligence had broken Iran's secret communications codes during that period as well.

The contents of the 1995 intercept became the basis of a report that circulated fairly widely in Washington intelligence and law enforcement circles, an official recalled. The result was not only deep distrust within the CIA for Chalabi but also an FBI investigation of Baer.

The concern of investigators, as Baer recounted in his book, was that he was in violation of presidential orders and U.S. law that prohibited assassinations. Baer passed a polygraph test, but it would be almost a year before he and his team were cleared. Nevertheless, Baer's career was damaged and never recovered.

Shortly after the intercept, Chalabi's militia forces and Kurdish fighters went ahead with an attempted coup, launching a three-city strike against Hussein's troops. But the offensive quickly foundered.

The White House, having warned Chalabi not to proceed because Iraqi intelligence had learned of the operation, declined to provide air power to help him. Hussein's troops crushed the attackers, leaving the CIA angry that it had funded such a fiasco and infuriating top officials in the Clinton administration.

Taken together, the intercept and the foiled revolt marked a turning point in the CIA's relationship with Chalabi, an official said. The events explain to a large extent why the CIA later cut Chalabi off from funding and refused to administer money appropriated for his organization in the late 1990s that was aimed at bringing about Hussein's fall. CIA authorities knew the funds were headed for Chalabi, and they would not work with him any further, the official said.

For many years, Chalabi has made no secret of his contacts with leaders in Iran. He has described his ties as purely expedient, reflecting Iran's strategic significance in the region.

One of Chalabi's top lieutenants, Aras Karim Habib, who served as the Iraqi National Congress's intelligence chief, has long been considered by the CIA as a paid agent for Iranian intelligence, according to senior intelligence officials. He has denied that allegation.

Chalabi's attorney, John J.E. Markham II, said yesterday that his client has denied passing sensitive or classified information to the Iranians and is more than willing to tell that to anyone in the U.S. government. "We have not been contacted by anyone from the Department of Justice, the FBI or the CIA," he said.