Iraq: Financial Institutions and Mr Ahmed Chalabi (Hansard, 21 June 2004)

§ The Minister of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean)
My Lords, Ahmed Chalabi, as chairman of the Iraqi Governing Council's economic and finance committee, oversaw appointments to some of Iraq's key ministries and institutions. However, he had no role in appointing officials of the Iraqi interim government, which will assume full sovereignty on 30 June. These appointments were announced by Prime Minister-designate Iyad Allawi following 1008 recommendations from the United Nations Special Adviser, Lakhdar Brahimi, who conducted intensive and wide-ranging consultations to come up with individuals who would govern Iraq in a competent manner during the interim period.

§ Lord Hannay of Chiswick
My Lords, while thanking the Minister for that Answer, may I suggest that it is perhaps a little beside the main point? Are we satisfied that appointments made by Mr Chalabi during his period of office, and during which period we were jointly responsible for the governance of Iraq, are such as to be conducive to the future of Iraq? If not, are we taking steps to convey any information we have about the gentleman and anyone he may have appointed to the new government?

§ Baroness Symons of Vernham Dean
My Lords, it would be hard to say that we are entirely satisfied when one of the appointments made by Mr Chalabi was of someone who acted as the chief anti-corruption official in the finance ministry. He was subsequently arrested on charges of extortion, fraud, embezzlement and abuse of authority. So I imagine that that sort of appointment is causing the noble Lord some concern.
It is precisely in order to deal not so much with Mr Chalabi as an individual but to address the years of corruption in the Iraqi system that important steps have been taken to introduce proper regulatory frameworks in the form of laws for the central bank, for financial management and for public procurement, as well as ensuring that future appointments are made directly under the aegis of the Prime Minister-designate.

§ Lord Hurd of Westwell
My Lords, does not the noble Baroness agree that Mr Chalabi is still very much around and that this is the latest twist in a tangled story, including that of his telling the Pentagon what it wanted to hear about Iraq regardless of its accuracy? Pursuing the point made by the noble Lord, Lord Hannay, can the Minister ensure that the new Iraqi Government will have available all the information which we now have about Mr Chalabi's financial and intelligence activities so that, where necessary, they can make their own judgment about his reliability?

§ Baroness Symons of Vernham Dean
My Lords, it is very important to ensure that not only are there proper laws in place, as the noble Lord implied, but also that we do not encourage the Iraqi Government to go back to a system in which only one individual has complete oversight over financial institutions. There will be a role for the International Advisory and Monitoring Board, the IAMB, which was a matter of intense discussion earlier this year. There will also be a CPA inspector-general and an Iraqi board of supreme audit. In order to have those regulatory bodies in place, it is important that they are also able to undertake the role of looking at each other's position.
1009 The noble Lord is quite right to point out that this is a very tangled story and that there will be many different views on Mr Chalabi's role in it.

§ Lord Wright of Richmond
My Lords, can the Minister tell us whether, as members of the coalition authority in Iraq until the end of this month, we have received a request for extradition of Mr Chalabi from Jordan and, if so, what was our response?

§ Baroness Symons of Vernham Dean
My Lords, I am unaware of any request from the Jordanian Government for extradition. Mr Chalabi's conviction by the Jordanian court is a matter of public record and any further steps are for the Jordanian judicial authorities and the Government of Jordan, as well as for Mr Chalabi himself. But I do not think it right for me to comment any further on that case.

§ Lord Wallace of Saltaire
My Lords, given the amount of information that has been coming out about Mr Chalabi's various activities, some of it extremely confusing, can the Minister reassure us that among the various inquiries about intelligence sources in the run-up to the Iraq war now under way, we are looking particularly at how far credence was given to reports which now appear to have come from Mr Chalabi and his associates?

§ Baroness Symons of Vernham Dean
My Lords, it is important that we do not come to conclusions about Mr Chalabi's role on the basis of anecdotal evidence. There is a great deal of chit-chat around Mr Chalabi, some of which may be accurate, but some of which, I would suggest, may not. Mr Chalabi has been associated with a number of different issues, and the noble Lord referred to that of intelligence. The question of intelligence in the context of the United States and the basis on which it was given is for the US Government to assess. Our own intelligence effort before the conflict is a matter now under consideration by the noble Lord, Lord Butler, who I am sure will give us a very objective assessment.

§ Lord Campbell-Savours
My Lords, first, could there be a connection between the allegation that has recently surfaced in Washington about Ahmed Chalabi and his demands for a full inquiry into allegations of fraud in the management by the UN of the Oil for Food programme? Secondly, is there not a need to find a scapegoat for WMD intelligence failures? Finally, and most importantly, is the fact that since last November Mr Chalabi has called repeatedly—including in this House—for the withdrawal of US troops to garrison and the transfer of security in Iraq to a fully armed Iraqi security force. Is it not the simple truth that the Americans created Mr Ahmed Chalabi, and that now that they do not agree with him any more they want to destroy him?

§ Baroness Symons of Vernham Dean
My Lords, Mr Chalabi is a controversial, one might almost say a colourful, figure. It is absolutely true that Mr Chalabi 1010 is extremely concerned about fraud in relation to the United Nations Oil for Food programme. I discussed that with him myself when I was in Baghdad earlier this year.
My noble friend has adduced two other reasons why individuals may seek to discredit Mr Chalabi. It has equally been put to me that Mr Chalabi has his own reasons for trying to discredit others. Where the truth of the situation lies, I cannot tell. But I can fell noble Lords about Mr Chalabi's role in making sensitive appointments in the future. It will not be the role he has had hitherto.

§ Lord Howell of Guildford
My Lords, whatever the connections and appointments of Mr Chalabi may have been, and some do seem pretty curious, does not the Minister agree that the currency reforms, along with those of Iraq's financial institutions and banking structure, while they may have a long way to go, have been remarkably successful and very well managed? Is not that the kind of story about which we should hear more rather than endless negative reporting about the work of the coalition in Iraq?

§ Baroness Symons of Vernham Dean
My Lords, that is absolutely right, which is why I sought to stress my point about changes in the law and changes in the regulatory framework in Iraq. I am enormously grateful to the noble Lord for confirming my view that these are important reforms.