Coded Cable In 1995 Used Chalabi's Name

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.

Staff writers Steve Coll, Allan Lengel and Susan Schmidt contributed to this report.