Chalabi falls from grace as US spy row erupts

Not long ago, he was the neo-conservatives' most favoured protégé, the smooth-tongued exile the Pentagon saw as future president of a liberated Iraq. But yesterday Ahmed Chalabi's fall from grace was complete, with the charge that he betrayed vital US secrets to Iran, a founder member of President George Bush's "axis of evil".

Not long ago, he was the neo-conservatives' most favoured protégé, the smooth-tongued exile the Pentagon saw as future president of a liberated Iraq. But yesterday Ahmed Chalabi's fall from grace was complete, with the charge that he betrayed vital US secrets to Iran, a founder member of President George Bush's "axis of evil".

US officials said the now-disgraced leader of the Iraqi National Council (INC) told the Iranians the US had cracked the secret signals code used by Tehran's intelligence service. He is said to have passed the crucial information to a senior Iranian intelligence officer in Baghdad six weeks ago.

Mr Chalabi denies the charge, but, as with every event that concerns him, nothing is quite clear. The FBI is investigating precisely what information the former exile leader had, and which US official told him the code had been cracked.

Civilian staff at the Pentagon, the focal point of previous support for Mr Chalabi in the Bush administration, are believed to be among those targeted. The number of people privy to so sensitive a secret would have been very small, one intelligence specialist said.

The New York Times, which said it had refrained from reporting the affair until yesterday at the request of the Bush administration, claims Mr Chalabi informed the Iranians he had been told about the code-break by one of "them" (a reference to an American) who had been drunk. Bizarrely, the Iranian officer passed the news to his superiors in Tehran in a message encrypted in the code the US had cracked. This suggests either the Iranian side could not believe the code was compromised, or that they wished to ditch Mr Chalabi.

How the US learnt to read the communications of Iran's intelligence is not known. It might have been a technical feat by the National Security Agency, the far larger US equivalent of GCHQ at Cheltenham. Less likely, the code could have been physically stolen from an Iranian embassy abroad.

Either way, there are few higher sins than to reveal such information to the enemy. Not the least of Kim Philby's services to the Soviet Union was the word he sent to Moscow in 1949 that American codebreakers had unlocked the code for its top-secret signals traffic from the US, the so-called "Venona de-crypts", which unmasked, among others, Donald Maclean and the Rosenberg spy ring.

More recently, Robert Hans-sen, the FBI spy, was jailed for life for delivering similar communications secrets to the Russians. Any US official found guilty of the drunken indiscretion to Mr Chalabi would probably be looking at a long stint behind bars.

Mr Chalabi says it is vital for Iraq to be on good terms with a large and powerful neighbour, with whom it shares a 600-mile border. He has met high government officials, notably President Mohammed Khatami, often in Tehran. But he insists he has never had access to US secrets, so could never have passed them to Iran. Rather, his supporters say, his difficulties stem from the vendetta long waged on him by the CIA and the State Department, who have long regarded Mr Chalabi, a prime conduit for the discredited reports about Saddam Hussein's alleged weapons of mass destruction, as a charlatan.

That view has prevailed at the White House, where President Bush disowned the former Pentagon favourite when he spoke to reporters on Tuesday. Yesterday, his national security adviser, Condoleezza Rice, said relations with Mr Chalabi had been "strained of late," probably the understatement of the month. Mr Chalabi's fortunes have collapsed. Last month, the Pentagon abruptly cut funding for the INC, and within days his offices in Baghdad were raided by Iraqi and US security forces.

Then, Aras Karim Habib, his intelligence chief, was suspected of spying for Iran. Now the finger of blame points at Mr Chalabi. If the charges are made formal, he could be tried for spying. Paradoxically, his bitter split with the US could give Mr Chalabi the credibility he has has lacked with the Iraqi people.