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Iraq Transition

Officials dispute report Chalabi faces arrest

Some describe defense minister's statement as 'electioneering'

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Ahmed Chalabi

BAGHDAD, Iraq (CNN) -- Top Iraqi officials disputed reports that former Iraqi exile leader Ahmed Chalabi would be arrested, a day after the interim defense minister said an apprehension was to happen soon.

Some Iraqi officials described Defense Minister Hazem Sha'alan's comment on Friday as "electioneering" before the critical January 30 vote, in which both he and Chalabi are contenders for the 275-member transitional national assembly.

Sha'alan told the the Arabic-language TV network Al-Jazeera that Chalabi would be handed over Sunday to Interpol, the international police agency, to face bank-fraud charges in Jordan.

The Iraqi Defense Ministry does not have the jurisdiction to issue arrest warrants, Iraqi officials told CNN. The Justice Ministry issues warrants and sends them to the Interior Ministry to be carried out.

The Justice Ministry said it has not received a request for a warrant against Chalabi, and the Iraqi Interior Ministry said it has not received such a warrant.

Chalabi, a Shiite who was exiled by Saddam Hussein's regime, founded Bank Petra in the late 1970s and was convicted and sentenced in absentia for bank fraud by a Jordanian military court in 1992 -- a prosecution he has insisted was politically motivated. The bank collapsed in 1989.

He has said Jordan generated a smear campaign against him because he exposed the country's weapons-dealing with Saddam.

As the leader of the exile Iraqi National Congress, Chalabi was a key U.S. ally and provided information that helped the United States build its case and plan for war. His organization received millions of U.S. tax dollars, and he appeared as a guest at Bush's 2004 State of the Union address.

After Saddam was deposed, Chalabi returned to Iraq on an American aircraft and was put in charge of government finances as a member of the Iraqi Governing Council.

He fell out of favor with U.S. officials as the intelligence he supplied about Saddam's alleged weapons of mass destruction failed to pan out. In May 2004, U.S. troops and Iraqi police searched his home and office in Baghdad, and U.S. officials accused him of passing closely held U.S. secrets to Iran -- an allegation he denied.

Sha'alan, speaking on Al-Jazeera, accused Chalabi of defaming him and the ministry, but didn't explain how. He also blamed Chalabi for the dismantlement of the Iraqi army and police forces after the U.S.-led invasion -- moves that were the decision of the U.S. military.

In a separate interview with the Arabic-language network al-Arabiya, Sha'alan also blamed the United States for dismantling the Iraqi army.

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

Chalabi discusses elections

On Friday -- before Sha'alan's remarks -- Chalabi talked to CNN's Christiane Amanpour about the upcoming elections.

Asked whether the Shiites, Iraq's majority, would set up an Iran-style Islamic republic if they win, he said that would not happen. The goal, he said, is to establish a pluralistic democracy.

The election will produce a "legitimate government," he said, even though many Sunni Iraqis may not vote, either because it's too dangerous for them or they want to boycott the election.

"The government is seeking a second mandate. On security, they have failed. On delivering basic services -- electricity, water -- they have failed. On delivering fuel to the people, they have failed. The price of gas in Baghdad now on the black market is higher than it is in Washington," he said.

If Shiites gain power, Chalabi said he expected the American presence in Iraq to be "regulated."

"They will not be in your face. They will not be present at street corners, they will not be compelled to shoot people," he said.

CNN's Ingrid Formanek contributed to this report

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