Iraqi authorities have issued an arrest warrant for Iraqi politician Ahmad Chalabi on charges of counterfeiting. Earlier in the year, he was suspected of providing faulty intelligence to the U.S. administration and accused of passing secret information to Iran.

Ahmad Chalabi was a long-time opponent of Saddam Hussein. After the 1991 Gulf War, he set up and led an Iraqi opposition group from his home in exile in Britain.

Mr. Chalabi became a close ally of the U.S. administration. He often passed along intelligence about Iraq's weapons of mass destruction, which was used in part to justify the 2003 war in Iraq.

The U.S. Congress approved tens-of-millions of dollars to his opposition group, the Iraqi National Congress. After U.S. and coalition forces ousted Saddam Hussein, the Pentagon flew Mr. Chalabi back home, and U.S. tanks guarded his Baghdad headquarters. Mr. Chalabi joined the U.S.-appointed Interim Governing Council to help shape his country's political future.

But Ahmad Chalabi's political standing and his ties to Washington suddenly soured last May, when U.S. and Iraqi authorities began voicing their suspicions about his political and financial dealings.

At the time, Joseph Biden, the top ranking Democrat on the U.S. Senate's Foreign Relations Committee, said the close U.S. ties with Mr. Chalabi were hurting U.S. credibility in Iraq.

"I could never quite understand the incredible preoccupation of the administration with Mr. Chalabi," said Senator Biden. "And, I think that alliance has done us great damage, in terms of establishing legitimacy."

Mr. Chalabi was accused of misusing U.S. funds and providing misleading or faulty information about Iraq's weapons programs. He was also accused of passing information to Iran.

The Pentagon abruptly halted its monthly payments. His home was raided. An arrest warrant was issued. But Iraqi authorities postponed any action on the warrant while attention was focused on the July transfer of sovereignty.

Now, Ahmad Chalabi once again is facing criminal charges, this time on financial misdeeds.

"One case for counterfeiting, currency counterfeiting, an arrest warrant has been issued for Ahmad Chalabi based on complaints submitted by the Central Bank of Iraq," said Judge Zuhair al-Maliky.

Mr. Chalabi has denied the charges. He is currently on a business trip to Iran, and says he will return home to defend himself.

"The charges are outrageous and false. I deny them. They are not true. The judge who made them has a personal vendetta against me and my family," he said.

Charges of financial wrongdoing are not new to Mr. Chalabi. In 1992, the trained mathematician-turned banker was convicted in absentia in Jordan for bank fraud.

Mr. Chalabi also has denounced the latest charges against him as politically motivated. The judge has rejected Mr. Chalabi's allegations.

Allen Keiswetter of the Washington-based Middle East Institute says it is no secret that Ahmad Chalabi and Iraq's Prime Minister Iyad Allawi are bitter political rivals.

"There's always been a rivalry between these two. And, Ahmad Chalabi is a person who does have real political enemies. And, on the other hand, he is also a person who's had from time-to-time difficulties with the law," he said.

Mr. Keiswetter says it will be imperative for the court to handle the case with utmost care to avoid any appearance of political impropriety.

"If it is handled in a way that is perceived to be fair, that may actually strengthen the government," he commented.

The current legal problems and his on-again, off-again relationship with Washington may damage Mr. Chalabi's political aspirations.

Few Iraqis had heard of Ahmad Chalabi when he returned home last year after four decades living outside the country. Those who knew the name usually associated him with corruption and financial scandals.

Respondents to recent opinion polls have ranked him at the bottom of any list of trustworthy leaders.