JUAN GONZALEZ: Only five months ago, Chalabi was a guest of honor sitting right behind Laura Bush at the State of Union Address of President Bush. What brought about this astonishing fall from grace of the man who helped provide the faked intelligence that justified last year’s war? That’s the question posed by veteran independent journalist and author, Andrew Cockburn in a new piece on counterpunch.org. He joins us on the line from Washington, D.C.

AMY GOODMAN: Welcome, Andrew.

ANDREW COCKBURN: Good morning.

AMY GOODMAN: Good to have you with us. Tell us what you think is going on with Ahmad Chalabi?

ANDREW COCKBURN: Well, Chalabi — the relations between Chalabi and his former pals in Washington have been deteriorating, not with his core group of supporters among the neoconservatives who actually continued to support him right up through yesterday, indeed, people like Richard Perle, but with the occupation in general, things have been going downhill. Part of the reason is that Chalabi has been — in order to get some political foothold in Iraq, has been showing himself more and more as an extreme Shia taking a sectarian position, denouncing the U.N., conducting a campaign against the U.N. in the form of the Oil-for-Food scandal, and just generally being a real thorn in their side. And I think they finally got fed up with him.

JUAN GONZALEZ: But now this is obviously a marked departure on his side from how he came into Iraq with U.S. forces. Could you go a little bit over some of Chalabi’s history. We have discussed it on Democracy Now! in the past, but going back to his financial scandals previously and his financial support by the United States government?

ANDREW COCKBURN: Sure. I mean, Chalabi sort of — his first public role — let me get the background. His family up until the 1958 revolution were the richest family in Iraq. They controlled enormous amounts of property and banks and so forth. They had done that by combining business and politics. They used political advantage to make money and use their money to gain more political advantage. Then, they’re driven out and they go to Lebanon. Then in the 1970’s, Ahmad starts this bank — the Petrol Bank in Jordan, which is very successful for a while. I would have love him to have been my bank manager, because he would lend money with no security to friends. In 1989, the bank went — effectively went bust. Ahmad fled the country, many say in the trunk of a friend’s car. He hates you to say that. When they looked at the books of the bank, it was a classic tale of fraud and embezzlement and greed, and the Jordanians convicted him in absentia, to 22 years in jail. But meanwhile, the C.I.A. had picked him up, and put him in charge of this thing they had invented called the Iraqi National Congress. This is right after the first first Gulf War. He stayed on the payroll one way or another up until last week. The thing about Chalabi is that he’s out for Ahmad Chalabi. He was loyal to the — he was never loyal to the Americans particularly, but he used the Americans. The Americans used him. He also use the Iranians and Iranians used him. He also used the Israelis and the oil companies and anyone else who had given him an advantage. He discovered, you know, he was — he’s a very shrewd and smart guy. He discovered in the late 1990’s really, is when he came to the realization that there was a tremendous appetite in the media for, quote, unquote, “intelligence about Iraq” and basically any vaguely coherent tale he wanted to spin would be equally lapped up by the likes of Judy Miller and the New York Times and many others. So, you know, he was fantastically useful in greasing the skids for war, but then once the war had happened, to get any sort of political credibility for himself in Iraq, he had to try and show that he wasn’t just an American stooge, which is what he has been trying to do.

JUAN GONZALEZ: But now, also, though we have the problem that— he has numerous people within the existing government now that are close to him? What is the United States going to do with these allies of Chalabi now that are still within the Provisional Authority’s government structure?

ANDREW COCKBURN: Precisely. He has laced— because he’s a very good networker, he has a lot of people who are beholden to him in what you call the fledgling Iraqi administration, the Minister of Finance, Kamil Gailani, is generally regarded as being his acolite. He was a former waiter in a Jordanian restaurant. The Minister of Oil, Ibrahim Bahr Al Uloum. The heads of the Central Bank, the leaders of some of the other important banks. In a very short space of time, he has managed to set up this network, political cum-business and financial network in Baghdad that’s going to be very hard to wrinkle out, assuming that anyone wants to do so.

AMY GOODMAN: Can you talk about accusations that he’s giving confidential U.S. information documents to Iran and his relationship with al-Sadr?

ANDREW COCKBURN: Well, on Iran, his relationship to Iran goes back a very long way. He has told friends in the past that he actually has a koran autographed very affectionately by Ayatollah Khomeini for services rendered during the Iran-Iraq war. And I know during that war, he, while he was a banker in Jordan, was recorded by U.S. diplomats and intelligence as a very useful source of information about what was going on on the Iranian side in the war. In the 1990’s, I mean Scott Ritter told me — the former U.N. inspector — that Chalabi boasted to him of his fantastic Iranian connections and offered to introduce the U.N. inspectors to the head of Iranian intelligence. Told him that the best intelligence actually came from the Iranians. And I found evidence that at least some of the fake intelligence that Chalabi was helping pass to intelligence people here and the U.N. inspectors came from Iran. A specifically case of a forged document that purported to show an Iraqi nuclear, program because of certain terms that were used in it, had to have been constructed in Iran. This goes back a long way. So it come as no surprise to me that he’s now accused of passing American secrets to Iran. The thing about Chalabi is that he will be an agent for anyone. He’s —- I’m sure he could find just as good evidence of him passing stuff—- helping the Israelis or the oil companies or the Turks or anyone. Because you know, Ahmad Chalabi is out for Ahmad Chalabi.

AMY GOODMAN: We are talking to Andrew Cockburn, he is co-author with his brother, Patrick Cockburn, of, “Out of the Ashes, the Resurrection of Saddam Hussein.” He is talking about Ahmad Chalabi, his latest piece “Ahmed Chalabi’s Failed Coup”. The U.S. heads a raid in Iraq to foil his plot. What do you see as his future right now?

ANDREW COCKBURN: Generally, people are disposed to write his political obituary now, which I think is a mistake. He has been carving out a position of himself as Mr. Shia, and you know, in a way this can only— way well do him some good. He is not that far from Muqtada al-Sadr — as a spokesman or would-be spokesman for the Shia masses. Several Iraqis that I have talked to say it’s not unlikely that if anything happens to Muqtada al-Sadr, that Chalabi will at least try to step into that breach. Be the spokesman for the disenfranchised Shia. Some of the things that he has been doing in last few months has been scary in terms of everyone is worried about Shia-Sunni conflict, the possibility of that, and obviously whoever’s letting off the suicide bombs in Shia — next to the Shia shrines, has been trying to foment that. Chalabi, or certainly at least his spokesmen, have been actually taking a sectarian line on threatening civil war against the Sunnis at various times after the bombings. I think we’ll see more of that. I wouldn’t say it’s certain, but now it’s possible that Chalabi can portray himself as the victims of the Americans and they raided his house and so on and so forth, that you will see more sort of sectarian rhetoric coming from him, which may resonate in Iraq. I mean, obviously, I hope it doesn’t, and it’s not — Iraq is not what the people say here, that close to civil war, but I think Chalabi will be doing its best to foment it.

AMY GOODMAN: Andrew Cockburn, thank you very much for joining us. Independent journalist is in Washington, D.C., his latest piece at counterpunch.org is called “The Truth About Ahmad Chalabi.”