Chalabi wanted on counterfeiting charges

Warrants have been issued for the arrest of Ahmed Chalabi, once the Pentagon's choice as future Iraqi leader, and his nephew Salem Chalabi, the man organising the trial of Saddam Hussein, Iraq's top investigating judge confirmed last night.

Warrants have been issued for the arrest of Ahmed Chalabi, once the Pentagon's choice as future Iraqi leader, and his nephew Salem Chalabi, the man organising the trial of Saddam Hussein, Iraq's top investigating judge confirmed last night.

Salem Chalabi is wanted as a suspect for the murder of a finance ministry official last June while his uncle, the former leader of the exiled Iraqi National Congress, is facing charges of counterfeiting banknotes.

The move is a fresh blow to a dynasty with close former links to the Bush administration. Ahmed Chalabi, who was a key figure in the consultations carried out by Washington in the approach to the invasion of Iraq, suffered a major reverse earlier this year when he was accused by US intelligence agencies of spying for Iran.

Of the new charges, the most serious is that against his nephew, who holds a prestigious position as executive director of the Iraqi special tribunal, responsible for the forthcoming trial of Saddam Hussein and some of his closest henchmen.

The warrant for his arrest arises from an investigation into the killing of Haithem Fadhil, a senior finance ministry official, who is said to have investigated how Ahmed Chalabi's family and the Iraqi National Congress (INC) - his opposition party in exile during the Saddam years - had acquired houses, farms and former government offices after the fall of the dictator. The Sunday Times reported yesterday that witnesses had said that, before his death in a shooting at the door of his home, Mr Fadhil had told a friend and his wife that Salem Chalabi had warned him on 28 May that he would be killed if he handed his report to the US-led Coalition Provisional Authority. The paper said that Salem Chalabi, 41, had denied any involvement in the murder and claimed the allegations were an attempt to remove him from the tribunal trying Saddam.

Last night, Zuhair al-Maliky, the chief investigating judge of Iraq's central criminal court said of the two men: "They should be arrested and then questioned and then we will evaluate the evidence and then if there is enough evidence, they will be sent to trial." Judge Maliky claimed that, if convicted, Salem Chalabi could be liable for the death penalty, reimposed by the interim Iraqi government yesterday.

Earlier this year, the same judge ordered raids on the property of Ahmrd Chalabi during an investigation into accusations of murder, torture, fraud and theft against INC members.

A senior spokesman for the finance ministry, Hamid Kif'ai, said the charges against Salem Chalabi were "outrageous" and that he was "above suspicion" in this case.