In December 1996, Clinton administration officials decided to terminate the CIA's relationship with the INC and Chalabi. "There was a breakdown in trust and we never wanted to have anything to do with him anymore," CIA Director George Tenet told the Senate Intelligence Committee.
However, in 1998, with the congressional passage of the Iraq Liberation Act, the INC was again one of the exile organizations that qualified for U.S. funding. Starting in March 2000, the State Department agreed to grant an INC foundation almost $33 million for several programs, including more propaganda operations and collection of information about alleged war crimes committed by Hussein's regime.
By March 2001, with George W. Bush in office and already focusing on Iraq, the INC was given greater leeway to pursue its projects, including an Information Collection Program. The INC's blurred responsibilities on intelligence gathering and propaganda dissemination raised fresh concerns within the State Department. But Bush's National Security Council intervened against State's attempts to cut off funding.
The NSC shifted the INC operation to the control of the Defense Department, where neoconservatives wielded more influence. To little avail, CIA officials warned their counterparts at the Defense Intelligence Agency about suspicions that "the INC was penetrated by Iranian and possibly other intelligence services, and that the INC had its own agenda," the Senate report said.
"You've got a real bucket full of worms with the INC and we hope you're taking the appropriate steps," the CIA told the DIA.
But the CIA's warnings did little to stanch the flow of INC propaganda into America's politics and media. Besides flooding the U.S. intelligence community with waves of propaganda, the INC funneled a steady stream of "defectors" to U.S. news outlets eager for anti-Hussein scoops.
The "defectors" also made the rounds of Congress where members saw a political advantage in citing the INC's propaganda as a way to talk tough about the Middle East. In turn, conservative and neoconservative think tanks honed their reputations in Washington by staying at the cutting edge of the negative news about Hussein, with human rights groups ready to pile on, too, against the brutal Iraqi dictator.
The INC's information program served the institutional needs and biases of Official Washington. Saddam Hussein was a despised figure anyway, with no influential constituency that would challenge even the most outrageous accusations against him.
When Iraqi government officials were allowed onto American news programs, it was an opportunity for the interviewers to show their tough side, pounding the Iraqis with hostile questions and smirking at the Iraqi denials about WMDs and ties to al-Qaeda.
The rare journalist who tried to be evenhanded would have his or her professionalism questioned. An intelligence analyst who challenged the consensus view that Iraq possessed WMDs could expect to suffer career repercussions.
So, it was a win-win for "investigative journalists," macho pundits, members of Congress -- and George W. Bush. A war fever was sweeping the United States and the INC was doing all it could to spread the infection.
Again and again, the INC's "defectors" supplied primary or secondary intelligence on two key points, Iraq's supposed rebuilding of its unconventional weapons and its alleged training of non-Iraqi terrorists. Sometimes, these "defectors" would even enter the cloistered world of U.S. intelligence with entrees provided by former U.S. government officials.
For instance, ex-CIA Director James Woolsey referred at least a couple of these Iraqi sources to the Defense Intelligence Agency. Woolsey, who was affiliated with the Center for Strategic and International Studies and other neocon think tanks, had been one of the Reagan administration's favorite Democrats in the 1980s because he supported a hawkish foreign policy. After Bill Clinton won the White House, Woolsey parlayed his close ties to the neocons into an appointment as CIA director.
In early 1993, Clinton's foreign policy adviser Samuel "Sandy" Berger explained to one well-placed Democratic official that Woolsey was given the CIA job because the Clinton team felt it owed a favor to the neoconservative New Republic, which had lent Clinton some cachet with the insider crowd of Washington.
Amid that more relaxed post-Cold War mood, the Clinton team viewed the CIA directorship as a kind of a patronage plum that could be handed out as a favor to campaign supporters. But new international challenges soon emerged and Woolsey proved to be an ineffective leader of the intelligence community. After two years, he was replaced.