U.S. Aids Raid on Home of Chalabi

The police and soldiers moved next to the INC offices, housed in a lavish Chinese-style mansion that was once a perk of the director of Hussein's intelligence agency. Several guards on duty said as many as 100 U.S. soldiers arrived.

By their account, six Iraqi police officers entered with an American dressed in civilian clothes and body armor. One of the guards said the American directed the Iraqi police, who they said kicked down doors and smashed a picture of Chalabi. Damaged picture frames, including one holding a photograph of Chalabi, were seen by a reporter in one of the ransacked offices.

Haider Ridha Mohammed, a guard on duty at the time, said he asked the police officer why he had tossed the framed photograph on the ground. Mohammed said the officer responded, "He's gone now, Ahmad Chalabi is finished."

A senior Iraqi police official, speaking on condition of anonymity for fear of losing his job, denied that the officers vandalized the offices in any way.

For several months, U.S. officials have been investigating people affiliated with the INC for possible ties to a scheme to defraud the Iraqi government during the transition to a new currency that took place from Oct. 15 last year to Jan. 15, according to a U.S. occupation authority official familiar with the case. The official said the raids were partly related to that investigation.

At the center of the inquiry is Nouri, whom Chalabi picked as the top anti-corruption official in the new Iraqi Finance Ministry. Chalabi heads the Governing Council's finance committee and has major influence in its staffing and operation.

When auditors early this year began counting the old Iraqi dinars brought in and the new Iraqi dinars given out in return, they discovered a shortfall of more than $22 million. Nouri, a German national, was arrested in April and faces 17 charges including extortion, fraud, embezzlement, theft of government property and abuse of authority. He is being held in a maximum security facility, according to three sources close to the investigation.

In recent weeks, several other Finance Ministry officials have been arrested as part of the investigation. A U.S. official familiar with the case said, "We are cracking down on corruption regardless of names involved."

Staff writer Ariana Eunjung Cha in Washington and correspondent Sewell Chan and special correspondents Huda Ahmed Lazim and Bassam Sabti in Baghdad contributed to this report.