The occupying authorities had intended to resolve property claims through arbitration. Last January Paul Bremer, Iraq's American administrator, ordered the Governing Council to establish the Iraq Property Claims Commission, and three months later coalition officials say the commission is two weeks away from starting to process claims. But Hisham Shibli, Iraq's justice minister, says that though commissions will be independent, they will not tackle expropriation by senior officials.
Many exile groups that make up Iraq's US-backed former opposition are descendants of the pre-1958 revolution gentry that was overthrown that year along with King Faisal II. The property question is seen by many as an attempt at the restoration of these old aristocratic families to their former places of prominence.
Mr Chalabi, the scion of a pre-1958 revolution aristocratic family, has used his militia to reclaim a defunct flour mill in a Baghdad district that used to belong to the Chalabis, along with what he says is his sister's home used by the Ba'ath party intelligence service.
In late February, the Council's de-Ba'athification Committee, which Mr Chalabi heads, ordered the confiscation of all property belonging to the senior 1,500 cadres of the former Ba'athist regimes and their relatives. The inventory is still under preparation.
Meanwhile, property prices in the Shia Muslim holy cities of Najaf and Karbala are said to have risen twice as fast as in Baghdad, as tens of thousands of refugees from Iran tentatively replant their roots.
Disputes over property ownership have fed an already tense political situation throughout Iraq. In an attempt to defuse the property dispute, Grand Ayatollah Ali al-Sistani, the country's highest-ranking Shia cleric, ruled that property confiscated by Ba'athists and still in public hands should be returned to its original owners.
The dispossession policy is really just a replay of the extraordinarily foolish decision to disband the old Iraqi army. The difference is that this one effectively questions every land title in the country and transfers its disposition to the least popular member of the IGC. That does not read to me as a policy that is likely to contribute to reconciliation or tranquillity in Iraq, especially when it is realised that the handover of sovereignty will leave this process beyond the control of the transitional government.