AMMAN: Hailed by some in the Pentagon as a pro-American visionary and an emerging leader of the new Iraq, Ahmed Chalabi evokes quite a different response in Jordan, where he spent 12 years and left behind economic chaos, a court conviction on numerous financial charges — and a lengthy prison term he never served.

The Iraqi dissident’s sojourn here was a complex web of ambition, money and political intrigue. When he arrived in 1977, he dazzled and charmed his way into the highest echelons of Jordanian society, including the Hashemite Palace. He was considered a cultured financial innovator with an Eastern mind and Western outlook.

By the time he left, he was widely regarded as a crook who robbed a gullible nation and got away with it.

“There is one difference between him and (Osama) bin Laden,” observed Najib Farah, a shopkeeper here who says he lost $9,000 when Chalabi’s Petra Bank collapsed in 1989. “Bin Laden is an honest man and Chalabi is a thief.”

The failure of the Petra Bank in Amman cost this already poor country close to $1 billion, according to government officials, and nearly crippled its flagging economy. Stockholders lost their investments and some depositors are still waiting to be reimbursed.

Chalabi fled to Syria. A Jordanian court convicted him in absentia, sentencing him to 22 years hard labour for embezzlement, misuse of the nation’s funds and illegal currency speculation.

Chalabi later surfaced in London living near ritzy Park Lane. A few years later, he founded the Iraqi National Congress, exiles dedicated to the overthrow of Saddam Hussein.

Jordan’s political leaders have publicly questioned whether Chalabi should lead the homeland he left as a teen. Foreign Minister Marwan Muasher called him a “divisive character” lacking in credibility.

“Chalabi would be arrested if he were to come here today,” said Information Minister Mohammed Adwan of Jordan. “For us he is a convict, and until he clears his name in court he will remain so.”

Chalabi has always claimed that he was set up by Saddam, working in cahoots with the government here. The former banker says his dissident activities infuriated the Iraqi regime, which used its political and economic ties to the King Hussein to have Petra shut down.

Chalabi, who is now in Iraq, could not be reached for comment for this story. However, a close adviser, speaking from Baghdad, said Jordanian intelligence working with Iraq circulated pamphlets against Chalabi in 1989 claiming he was an agent of Israel. They also tried recruiting employees of Petra to inform on the Chalabi, he said.

Ahmed Chalabi was born to a wealthy and politically well- connected family that fled Iraq in 1958 when the Baath Party overthrew King Faisal II. Educated at Massachusetts Institute of Technology, Chalabi later received a doctorate in mathematics at the University of Chicago. In 1977, he came to Jordan to explore the idea of opening a bank.

Bassam Saket, an Oxford-educated economist who was secretary- general of the royal court and close friend to King Hussein and the monarch’s brother, then-Crown Prince Hassan, said Chalabi first sought him out about a business deal.

“Ahmed asked my family if we wanted to join forces with him to start a bank and we declined,” recalled Saket, who now heads the Jordanian Securities Commission.

Like others, Saket said he fell under the spell of the erudite Iraqi.

Chalabi built Petra Bank into the third-largest financial institution in Jordan. Using computers and other technology, he streamlined its operations, making Petra a model of modernization in the kingdom. It was the first bank in Jordan to use ATMs and process Visa cards. Unlike other local bankers who went home at 2 p.m, Chalabi rarely left the office before midnight.

Money flowed into Petra, included millions of dollars from Iraqi exiles, Jordanian officials said.

“He transferred a lot of the Iraqi money outside (Jordan),” said Mutaih Kabirit, who heads the Jordanian Money Changers Society and was a friend of Chalabi.

In 1987, regulators said they began seeing “smoke” over Petra Bank.

The institution was speculating on the troubled Jordanian dinar and received a warning from the country’s Central Bank to stop, according to Saket. At the same time, Petra deposits were being transferred to other financial institutions run by the Chalabi family in Beirut, Geneva and Washington.

“Some of our banks became hostage to Chalabi” as their money flowed overseas, Saket said.

By 1989, the nation was in trouble. The dinar, previously worth $3, had lost half its value. At one point Jordan had only enough money to fund one month of imports. Government salaries were in danger of going unpaid, Saket said.

Fearing a collapse, then-governor Central Bank Mohammed Nabulsi removed Chalabi and a committee was appointed to oversee the bank.

According to court documents obtained by the Los Angeles Times, millions of dollars were shuffled between Petra and the Chalabi family’s other financial institutions in the form of loans and deposits without collateral or guarantees of any kind. Phony bank accounts were created to cover bad debts and outright embezzlement, according to the court.

The bank was quickly besieged by creditors demanding payment and depositors withdrawing money. The Chalabi family’s overseas institutions were also shut down.

In Jordan, efforts to keep Petra afloat ultimately failed. The nation’s treasury, its people and foreign investors took the fall. The initial cost was listed as about $300 million, but now government officials say it was closer to $1 billion — a devastating loss in a relatively poor nation of 5.3 million people with a gross domestic product of about $8 billion.

On April 9, 1992, Chalabi was found guilty in State Security Court of 31 counts of embezzlement, sentenced to 22 years in prison and ordered to return more than $100 million.—Dawn/The LAT- WP News Service (c) The Los Angeles Times.