It was inevitable in an Iraq where everything is coming full circle that U.S. officials once enamored with Ahmad Chalabi would be kicking down his doors and seizing his computers.

But it was more than just inevitable.

Last week's raid of Chalabi's ornate dwellings once the property of Saddam Hussein's feared Mukhabarat intelligence agency was the latest sign that America called it wrong on virtually every aspect of its Iraq adventure. And it did so thanks in no small part to the White House's stubborn belief in the pampered, prickly Chalabi, an Iraqi exile since age 13.

Why else would the Pentagon have flown the former London banker and his hand-picked (and U.S. taxpayer-supported) army of 900 loyalists into Nasiriyah before the smoke had even cleared on last year's Iraq invasion? Chalabi's armed gang was being given the green light to expand its reach and power.

Why else would Chalabi loyalists have been allowed to seize truckloads of secret Mukhabarat files in the early days after Saddam's fall, and then demand $350,000 a month from the Pentagon for the privilege of access to documents that weren't theirs to begin with? Chalabi reportedly has used some of the files to try to blackmail former Baath Party members.

Why else would Chalabi be named head of the coalition's "de-Baathification" efforts, giving him tremendous power to name winners and losers in the new Iraq? His virulent anti-Baathist feelings help explain some of the coalition's most misguided early moves, including the disbanding of the Iraqi army.

Why else would Chalabi reportedly have regained most of the property his family lost in 1958 when it fled Iraq, giving him control of a mini-empire of banking and other interests? He benefited more than most from coalition policies he championed that privatized most Iraqi assets other than oil.

Why else would Chala bi's family and friends find themselves blessed with significant position and prestige? One of his nephews is defense minis ter. Another runs the tribunal that will try Saddam for war crimes. The Iraqi security forces are without sufficient uniforms and equipment because the supply contract awarded to the low-ball bidder, a Virginia firm allegedly run by a Chalabi friend, had to be voided and rebid.

Why else would Chalabi still be pulling in U.S. taxpayer cash several years after an internal State Department audit found that his Iraqi National Congress couldn't adequately account for $2.1 million out of the first $4 million it collected more than half the total?

When the State Department stopped sending dollars last fall, after nearly $33 million in payouts, it said the group's accounting procedures had improved. Since then, the Pentagon has upped its monthly disbursements for intelligence to about $350,000 in part to secure access to those Mukhabarat files.

It's widely assumed that the payout is ending. Paul Wolfowitz, the No. 2 at the Pentagon, told Congress last week that "it was no longer appropriate for us to continue funding [for Chalabi's group] in that fashion," once Iraqis assume sovereignty in their own country July 1. But the way he phrased it made it sound like the money will just go "black," becoming part of the secret intelligence budget.

"There has been some very valuable intelligence that's been gathered through that process that's been very important for our forces," Wolfowitz one of Chalabi's fiercest champions testified to the Senate Foreign Relations Committee, "but we will seek to obtain that in the future through normal intelligence channels."

No matter that Chalabi's aides are now suspected of skimming as much as $22 million from last year's currency exchange of old Saddam dinars, along with car theft, extortion and possibly murder. Or that his pre-war intelligence plants may have intentionally misled U.S. officials lying not just about biowar labs but about the possibility that a Navy pilot downed during the first Gulf War might still be alive.

The cost of these mistakes and of the misplaced trust in Chalabi that underlies them dwarfs the millions in U.S. taxpayer money he's pocketed, conned or otherwise collected.

They could mean the future of Iraq because it's not just Chalabi. All of the old assumptions that guided U.S. occupation strategy are now being turned on their ear, with a revival of trust in some of the former Baathist types, with their secular outlook and professionalism, while Chalabi morphs into a possible enemy, encouraging sectarian strife in Iraq and suspected by some U.S. officials of sharing intelligence with Iran. Meanwhile, all of Iraq got the message last week that if Chalabi could be roughed up and invaded, anyone could.

The raid on Chalabi's home and office shocked and angered others on the U.S.-anointed Iraqi Governing Council. They understand it means America is done with one failed experiment in Iraqi governance, and ready to move on to whatever the U.N. envoy comes up with in his soon-to-be-released report. Unfortunately, it also underscores to most Iraqis that America still has no plan, no vision and no understanding of who really are its friends or potential allies in a nation it took over without knowing how to rule it.

Sullivan is The Plain Dealer's foreign-affairs columnist and an associate editor of the editorial pages.

©2004 cleveland.com.

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