His con is up.

Can anyone still doubt Ahmad Chalabi's place among history's great con men? Last week's police raid on his Baghdad offices—following reports that he'd supplied U.S. intelligence secrets to Iran—signaled the collapse of his once-mighty power base in Washington.

But con men tend to thrive when their marks want to be conned. And President George W. Bush's national-security team was rife with the most gullible marks imaginable. As long as Chalabi's interests converged with the Bush team's interests, he was their man. Once it became clear that he was diddling others, too, including Iraqis and Iranians whose interests opposed ours, the game was up, the con exposed, the alliance shattered.

That's what happened last week. The only surprise is that it didn't happen months ago.

For over a decade, Chalabi's chief goal in life had been to get Saddam Hussein overthrown and replace him as the leader of Iraq. In 1992, shortly after the first Gulf War, which expelled Saddam from Kuwait but left him in power, Chalabi formed the Iraqi National Congress, which he built into the savviest of the several exile organizations. He briefly convinced the CIA that he could mount a coup, received tons of money to that end, but fell out of favor when the operation proved hollow. He then cultivated the rising neocons, who assumed key positions in the Bush administration.

Chalabi was a banker and a businessman who had spent his adulthood in America; he was multilingual, smooth in all currencies of power and influence. He targeted his pitch to his audience. To the neocons who had strong feelings for Israel (Richard Perle, Paul Wolfowitz, and Douglas Feith, in particular), he pledged, once in power, to open up friendly relations with Jerusalem and to build an Iraqi oil pipeline to Haifa. To more strictly pragmatic conservatives, he offered the appealing prospect of a westernized Iraq, which would alter the balance of power in the entire Middle East. To liberals and human-rights activists, he pointed to his support in the mid-'90s of the Kurdish rebels in northern Iraq. All in all, he seemed a dream come true: an Americanized Iraqi, a capitalist tribesman, a beacon of freedom, and a secular Shiite.

While cultivating these impressions, Chalabi was also, it now seems clear, working a different angle for the Iranians—particularly the intelligence service of the extremely anti-American Iranian Republican Guard. (For the full extent of this connection, read Andrew Cockburn's enlightening piece in Counterpunch.)

Things went swimmingly for Chalabi as long as his marks shared a common interest—to overthrow Saddam Hussein and install a friendly replacement. Chalabi's network of "defectors" supplied a stream of cooked intelligence to his American clients, telling them whatever they wanted to hear about Saddam's weapons of mass destruction and his alliances with al-Qaida. (Much later, after David Kay, the CIA's chief weapons inspector, declared that Iraq didn't have such weapons after all, Chalabi shrugged, telling one reporter: "We are heroes in error. As far as we're concerned we've been entirely successful. That tyrant Saddam is gone and the Americans are in Baghdad." The ends justified the means. His Washington allies agreed. Not till this month did Bush cut off the INC's $340,000-a-month paycheck.)

But once Saddam fell, Chalabi's game became more complicated. The plan had been for Chalabi to take power immediately; the Pentagon flew him and his "militia" into Baghdad for that purpose. Then it became clear that he had little political support in the real Iraq. Even so, the Pentagon helped him establish a base. The Coalition Provisional Authority, which reported to the Defense Department, installed him in the 25-member Governing Council, where he gained control of the finance ministry, the de-Baathification commission, and other positions of potential power over money, intelligence, and personnel. But Bush's failure to plan for the war's aftermath—a failure caused, in part, by a naive belief in Chalabi's fantasies—created a power vacuum. In that vacuum, the internal dynamics and conflicts of Iraq's own politics—which Saddam had suppressed for decades—began to explode. Rather than riding American tanks to the presidency, Chalabi had to carve his own path to power.

Before Saddam fell, Chalabi appeared to be a secular Shiite. (During a public forum last June at the Council on Foreign Relations, he referred to Iraq's Shiites as not "we," but "they.") Now, as power gravitated toward the Grand Ayatollah Sistani, Chalabi formed a pact with the most militant of Shiite sects, even leading a walkout when the Governing Council took up a measure to secularize family law.

Once a champion of the Kurds, Chalabi now fiercely opposed a U.S.-backed resolution that would give Kurds minority-rights' veto power over particular clauses of a new Iraqi constitution.