From this old article in Yediot Aharonot it looks like Chalabi played the Israelis for "suckers" as well. pl
"Saddam's "Successor" Made Secret Visit to Israel
Intelligence Correspondent, Yediot Aharonot
On Tuesday afternoon, in a dramatic interruption of the news, Al Jazeera broadcast a panicky item from Baghdad on the arrest of Ahmed Chalabi, president of the umbrella organization of Iraqi exiles. "Chalabi, the Pentagon favorite," the report said, "was arrested by American troops on charges of fraud and disturbing the civil administration."
The reaction in Israel was immediate. "We knew this moment would come," said senior intelligence officials, and didn't hide their sighs of relief. But the happiness was premature, and very quickly it turned out that the report of Chalabi's arrest was false. The Iraqi exile, who was flown to Baghdad to lead the Iraqis after Saddam's removal, was still relevant.
Three hours after the Al Jazeera report, the rival Abu Dhabi network broadcast an interview with Chalabi. "Documents from Iraqi intelligence show that the Al Jazeera reporters are agents of the previous regime," Chalabi claimed. He said that Saddam Hussein was alive and that he and the others with him were in possession of bomb belts. "Saddam will choose the most appropriate timing to carry out a large scale terror attack with many casualties."
Israeli intelligence did not fall off their chairs on hearing this. "This is Chalabi's way of drawing attention," sources said, "the Americans will soon understand whom they are dealing with." A Black Mercedes and Ties with Teheran
Ahmed Chalabi was born 56 years ago to an aristocratic Shiite family in Baghdad. He is a charismatic, secular, amazingly skillful and impatient, a computer, math and financial wizard. He left Iraq in 1956 when his family fled in fear of the regime, completed his studies at the prestigious MIT in the US and was among the founders of the Bank of Petra in Jordan, from where he fled after he was indicted for embezzlement. He was sentenced to 22 years imprisonment in absentia. Chalabi argued in his defense that this was an Iraqi conspiracy and over the years managed to forge connections to powerful people in the US. He heads the National Iraqi Congress, the umbrella organization of large opposition groups.
For many years mystery shrouded the reasons the Americans regarded Chalabi so warmly. This was explained by his charisma, his ability to impress and links to powerful people, but the real reason was never made public, until today. Chalabi, so it transpires, was pushed into the Americans' arms by Israeli intelligence.
Chalabi's Israeli link took place 13 years ago. KZ, a Defense Ministry official, revealed details of his first meeting with Chalabi in London this week. "Chalabi immediately projected Middle Eastern warmth. He is very intelligent and surprised me with his great knowledge about us. He knew each of the components of our political gallery, the ministers, the influential MKs, IDF Intelligence and Mossad heads. He also knew about Israel's open and covert relations in the Arab world. Our talk quickly got down to the future relations between Iraq and Jerusalem, after Saddam's fall. Even back then he insisted on drawing up a new political map of the Middle East and announced that Iraq would hoist the banner of democracy."
Chalabi told the Defense Ministry official, KZ, that in Baghdad he had attended the prestigious private school of "Madame Adel," a Jewish woman, and was closely acquainted with the Jewish community. "He was familiar with our customs. When he made his first visit to Israel, we took him on a tour of the Babylon Heritage Center and for meetings with Iraqi Jews. When he saw they retain their customs from Iraq, I saw it was hard for him to contain his emotion."
Maj. Gen. (reserves) Danny Rothschild, who headed the IDF Intelligence research branch, received Chalabi's telephone numbers in London in 1990 and went to meet him in secret. Only very rarely was IDF Intelligence able to make links to a senior Iraqi exile who displayed such great quantities of good will. They discussed Israel's efforts to get information on the fate of the IDF POWs and MIAs.
"Chalabi promised us that he could use his contacts in Teheran to check out the Ron Arad matter," Rothschild recounts. "I remember that Chalabi's son came to meet me at the airport and picked me up in his black, fancy Mercedes. The license plate said RPG 7. How did he maintain secrecy when he went around with such ostentatious signs? Gradually I realized that this was an important component in the image Chalabi was trying to project."
Rothschild and Chalabi met in the sumptuous office of the Iraqi exile in western London and spoke for long hours about the future of the region. Rothschild remembers that he wrote a classified report. The information on the Israeli MIAs and POWs, which Chalabi promised through his contacts in Teheran, never materialized, neither in Rothschild's next two meetings with Chalabi.
This did not prevent Israeli security officials from recommending Chalabi to the American administration and connecting him to senior advisers in the White House, the Pentagon and the CIA. As a result of the recommendations, James Woolsley, the former CIA director, gave him his patronage.
Open File on Petra
In 1992, Chalabi declared the establishment of the National Iraqi Congress in London and tried to enlist the American administration into preparing for an operation to topple Saddam. He gathered around him dozens of young people who had fled Iraq and persuaded them to work voluntarily for a "free Iraq." Israelis who visited the offices of the National Congress were shown the horrors of Saddam's regime and the organization's desire to take immediate revenge against Iraq.
At the same time, reports came in from Jordan, painting an entirely different picture of Chalabi. In 1989, after the Bank of Petra, the third largest in the kingdom, declared bankruptcy, Chalabi fled to Kurdistan in the back of a truck. USD 20 million, all of the bank's deposits, disappeared along with him. The Jordanians never forgave him. Last week, in three interviews by King Abdullah, he made it very clear: "The Petra file against Chalabi is still open." King Abdullah also had a sweeping message to the American administration: "I suggest you examine very carefully banks in Geneva, London and Beirut. Chalabi was not only involved in such affairs in Jordan. In all of these places charges were filed against him for financial wrongdoing."
Four weeks ago, when Chalabi showed up in Nassiriya in southern Iraq after 45 years in exile and promised a "new Iraq," a strong message was conveyed from Amman to the Bush administration. "If Chalabi, with your help, fulfills his dream, and is given a central role in Iraq, this will immediately cast a heavy shadow on Jordan-Iraq relations." The Jordanians also reminded the Americans that Jordan is the country closest to Iraq and any move taken on one side of the border will immediately effect, either positively or negatively, the other.
The Jordanian royal family also watched with concern the involvement of Israeli security officials in opening the gates of the Pentagon in Washington for Chalabi. The Jordanians even warned the CIA against this "crook with the charismatic smooth image." But the American espionage agencies had their own considerations. "Iraq is closed, Chalabi gives us important intelligence information from Baghdad," senior CIA officials said.
But not everyone in the top American echelons had the same reaction. Loud voices were heard in the White House and in the State Department over the years against building up Chalabi's status in the Pentagon. Here too, with a certain delay, the Mossad and the IDF Intelligence marked him as a " dangerous fraud." Former Mossad director Shabtai Shavit says: "I didn't bother getting acquainted with Chalabi;" while more recent former Mossad director Ephraim Halevy makes a face when Chalabi's name is mentioned. "This man has no chance," Halevy says, "It's a waste of time."
A senior security establishment official ("don't write my name, why should I get in trouble with Secretary Rumsfeld, who gets a report about every word we say here about a Iraq") is willing to reveal, "Despite the pressure put on us, I absolutely refused to meet Chalabi."
"Because I don't get involved with gangsters. People like him shouldn't be our friends."
Question: And if Chalabi is eventually the next leader of Iraq?
"I have been following him for years. Even if his dream comes true and he manages to get himself a role in Baghdad, he'll be murdered in a month. He won't survive. We shouldn't rely on him." Passport Not Stamped in Baghdad
The secret meetings in London led Chalabi to a string of discrete visits in Tel Aviv. "He came mainly to acquire an impression from up close who are the Israelis and what the State of Israel like," says KZ, who waited for Chalabi at the exit of the El Al plane at Ben-Gurion Airport, who made sure his passport was not stamped and who lodged him under a false name in a five-star Tel Aviv hotel.
The family file collected by intelligence agencies on Chalabi and his wife describe them as "exiles deluxe." The wife, Leila, is from a respected family in Lebanon, her father was the Lebanese foreign minister. Chalabi's daughter Tamara, a communications student, was also party to his father's activities.
"Chalabi did not make concrete requests of us," said a senior security establishment official. "Even after he was unable to get the administration's consent in to train Iraqi exiles in American army camps, he knew, with his honed senses, that Israeli fingerprints on him would be mark against him in Iraq."
Another senior security establishment source says: "Chalabi's and other Iraqi exiles' efforts to get close to us gave me the chills. I immediately remembered our entanglement with the Phalanges in Lebanon. The more we helped them, the greater their appetite grew, and in the end we were trampled."
In one of his visits to Israel, Chalabi was hosted in the office of the defense minister at the time, Yitzhak Mordechai. Chalabi, it turned out, had come to ask for Israeli aid in Congress in Washington, to persuade the administration of President Clinton to fund activity of the exiles' National Congress, to train hundreds of volunteers in army bases, prior to a strike to topple the Saddam regime. At the end of these efforts, with the help of his Israeli friends and the Jewish lobby in Washington, Chalabi managed to get USD four million. In Washington he met with then minister Natan Sharansky, former prime minister Binyamin Netanyahu, and impressed them with his plans for molding Iraq into a democratic country . . . This appeared in Yediot Aharonot on May 2, 2003"