Chalabi Aides Suspected of Spying for Iran

Brooke said Habib, the INC's longtime intelligence chief, was the primary target of the investigation. A U.S. official in Washington said Habib was being investigated on suspicion of being a paid agent of the Iranian intelligence service and that the allegations stemmed from current activity with foreign governments.

According to Brooke, a former subcontractor on a CIA program in northern Iraq who has a 10-year association with Chalabi, Habib had been at odds with the CIA for a decade. When a CIA officer asked Habib in the mid-1990s to use an INC intelligence network in northern Iraq to gather intelligence against Iran, Habib "told him to stick it in his ear," Brooke said.

In October 2002, the Defense Intelligence Agency took over a State Department program that paid the INC $335,000 a month to gather intelligence. To qualify, Habib and other INC figures were required to take polygraph tests that focused almost entirely on his connections with foreign intelligence agencies.

"He passed," said Brooke. He said Habib acknowledged during the screening he had connections with intelligence services in Syria, Turkey, Saudi Arabia and Iran.

Brooke's account could not be independently verified.

While stirring anger among Iraqi political leaders, Chalabi's plight appears to have generated little fresh support among ordinary Iraqis who never embraced the longtime exile as a potential leader. A small protest gathered Friday in front of the Green Zone, as the compound housing occupation headquarters is known, to protest U.S. treatment of Chalabi and its failure to prevent the assassination Tuesday of the Governing Council's acting leader Izzedine Salim. But the demonstration dissipated quickly.

"It took them four years to discover he was a liar," said Ali Hashem Ali, 46, a mechanical engineer. "And it took us two days to discover he was a thief and a liar."

But Brooke said the fallout has had political benefits, particularly in galvanizing council support for Chalabi.

"This has been good for us," Brooke said. "We got what we wanted. Saddam Hussein is gone."

Staff writers Robin Wright and Thomas E. Ricks in Washington and staff writer Jackie Spinner and special correspondents Huda Ahmed Lazim and Naseer Nouri in Baghdad contributed to this report.