Iraq says Chalabi faces arrest soon

BAGHDAD -- Authorities will arrest prominent politician Ahmad Chalabi after the current Islamic religious holiday for allegedly defaming the Defense Ministry, the defense minister said yesterday.

Legal proceedings against Chalabi are to begin after the Eid al-Adha holiday ends tomorrow, Defense Minister Hazem Shaalan said.

Shaalan's statement followed allegations by Chalabi that the defense minister shifted hundreds of millions of dollars from the ministry. That has led to charges and countercharges by the two Shi'ite politicians, who are running for parliament on separate tickets in the Jan. 30 national elections.

Iraqi officials said $300 million was taken out of Iraq's Central Bank and flown to Lebanon earlier this month, The New York Times reported in today's editions. The money was to be used to buy tanks and other equipment for the Iraqi Army from international arms dealers, but precisely what the money was to be used for and who the suppliers are remain a mystery to Iraqis, the Times said.

The newspaper said the deal appears to have been arranged outside the American-designed financial controls intended to help Iraq legally import goods.

Shaalan said he would arrest Chalabi after the politician publicly accused Shaalan of sending money out of the country without accounting for it.

Chalabi could not be reached for comment.

Al-Jazeera television quoted Shaalan as saying Chalabi would be turned over to Interpol because of his 1992 conviction in absentia by a Jordanian court for embezzling funds from a Jordanian bank, which collapsed in 1989.

Chalabi, who founded the bank, has denied any wrongdoing and says the charges were fabricated because of his opposition to ousted dictator Saddam Hussein.

Chalabi fell out of favor with Washington last year after allegations that he passed intelligence information to Iran.