By Luke Baker
BAGHDAD (Reuters) - U.S. troops raided a house used by Governing Council member Ahmad Chalabi and searched his party offices in Baghdad on Thursday, piling pressure on the former Pentagon (news - web sites) favorite now increasingly shunned by Washington.
Squads of soldiers, backed by Iraqi police, sealed off the neighborhood around the headquarters of the Iraqi National Congress (INC) and a nearby house used by Chalabi for meeting officials, removing computers, files and other equipment.
INC spokesman Haider Moussawi said the troops also wanted to arrest two party members but were told by Chalabi they were not present. Chalabi, who returned from exile after the fall of Saddam Hussein (news - web sites) as a potential future leader, was not detained.
"They have been putting political pressure on us for weeks. It's part of an attempted character assassination and it's politically motivated, but it won't work," Moussawi said.
"When someone stands up independently and puts his views firmly it appears the Americans don't like it, it scares them."
Moussawi said he did not know what the raid was related to, but called it a worrying development. "They think they can do whatever they want. They didn't even have a warrant."
U.S. officials said on Tuesday the Pentagon had cut off some $340,000 a month in funding to Chalabi's INC party, payments that were made in part for intelligence gathered by the INC.
Deputy Defense Secretary Paul Wolfowitz said the decision "was made in light of the process of transferring sovereignty to the Iraqi people."
"We felt it was no longer appropriate for us to continue funding in that fashion," he told a U.S. Senate hearing.
"There's been some very valuable intelligence that's been gathered through that process that's been very valuable for our forces. But we will seek to obtain that in the future throughnormal intelligence channels."
CONTROVERSIAL FIGURE
U.S. officials have said they had doubts about the intelligence the INC provided and about whether Chalabi was motivated chiefly by a desire for power.
An exile who lived abroad for more than four decades, Chalabi was convicted in absentia of bank fraud in 1992 by a military court in Jordan, where he had founded a bank that failed. He says the charges were politically motivated.
The Pentagon flew him into Iraq (news - web sites) with a group of followers after the U.S.-led invasion last year, giving him an opportunity to establish a political base.
But he has struggled to drum up support and surveys in Iraq have ranked him as one of the least-liked politicians.
Chalabi has many critics elsewhere in the U.S. government, notably at the CIA (news - web sites), which suspected his group may have been penetrated by Saddam's agents before the war and which questioned the intelligence information it provided.
The State Department also had its doubts and resented the Pentagon's support for Chalabi. State Department officials questioned whether he could emerge as a national leader.
In its prewar role, Chalabi's INC directed Iraqi defectors to the U.S. government to provide intelligence that critics now say was largely spun to prod the United States into taking action against Baghdad.
U.S. officials said in February an Iraqi who was the source for Washington's prewar claim that Iraq had mobile biological weapons labs had fabricated the allegation. The man was introduced to U.S. intelligence by Chalabi's group.
No stockpiles of banned or unconventional weapons have been found in Iraq.