After all the damage done by Chalabi, who has virtually no constituency in Iraq, why does he have any influence at all? True, there is his sheer skill as a political fixer and influence peddler. He continues to wield power as chairman of the Accountability and Justice Commission (the new name for his old De-Baathification committee, set up soon after the US invasion). And as American officials have acknowledged, he has close ties with Iran and its Revolutionary Guard.
But according to several Iraqi businessmen and American officials, another key to Chalabi’s resurgent influence–one that has received far less attention from the news media–is his connection to Iraq’s banking sector. The man whose organization, the Iraqi National Congress, received tens of millions of US taxpayers dollars in the run up to the Iraq war–and who was convicted in a massive bank fraud case in Jordan–is believed to have immense influence over banking in Iraq today.
The first place to look for Chalabi’s touch is the Trade Bank of Iraq, which handles virtually all international purchases made by Iraq’s government. By 2008, it was a $10 billion operation. Though it is owned by the government of Iraq, it operates independently as a commercial bank. Ahmad Chalabi handpicked its president and CEO back in 2003, nominating his grandnephew, Hussein Al-Uzri, who had spent years in various Chalabi family businesses. Then-US viceroy Paul Bremer confirmed Chalabi’s choice, creating the Trade Bank with a stroke of his pen, and Al-Uzri has stayed tenaciously in place through the tenures of three prime ministers.
"If you got me a job," said one American banking official in an interview, "I’d be loyal. Wouldn’t you? I don’t think I need to point out to you how important family is in the Middle East."
Iraqis and American officials say it is widely believed that Chalabi has at least some influence over the bank. "You can infer control," the American official explained, acknowledging that such inferences do not amount to proof. Of course, it is possible that Chalabi maintains a hands-off stance, and avoids all talk about business with his grandnephew when they meet. But even if he does, businessmen are well aware of the connections. And the perception itself is important.
The man who runs TBI wields great influence over Iraq’s government ministries because the bank has a monopoly on issuing letters of credit for the government (except on military items). It is the only place to go for any Iraqi Ministry that needs to purchase goods overseas: wheat, generators, soap, fertilizer or medicines. That means the bank, if it so desired, could easily ask for political favors in exchange, bank experts and businesspeople say.
Unlike most banks that issue letters of credit, TBI requires that its customers–the various ministries in Iraq–deposit the entire value of the letter in the bank. That deposit stays there until the transaction finally goes through. So a huge chunk of Iraq’s oil revenue must pass through the bank.