Chalabi's Reversal of Fortune

When Secretary of State Condoleezza Rice phoned Iraqi politician Ahmad Chalabi last week, sources in the U.S. government say she kicked off the conversation with the understatement of the year. "We haven't talked for a while," she said to the onetime Pentagon favorite, who by last year had become a pariah in the halls of Washington. Not so long ago the National Security Council presented the White House with a plan to discredit him titled "Marginalizing Chalabi." He was accused by unnamed intelligence officials of leaking U.S. secrets to Iran. His home in Baghdad was raided by the U.S.-run occupation authority, and his feelings were hurt when high-level Pentagon officials who had been in regular contact with him stopped calling when they visited Iraq.

But Washington has reversed course again now that Chalabi has wheeled and dealed himself into one of three Deputy Prime Minister positions in Iraq. The day after Rice dialed him, an Administration official says, Vice President Dick Cheney phoned to congratulate Chalabi (and placed a similar call to another Deputy Prime Minister). U.S. officials have taken no action in the probe into Chalabi's dealings with Iran. And they argue that he will play a vital role in Iraq's fledgling democracy after he brought together disparate Shi'ite parties to make the January elections a success. "He is the one who can make this work," says a U.S. official.

With the White House's recent change of heart, critics have re-emerged to question why the U.S. is hanging its hopes for Iraq on a man who was not only convicted in Jordan for bank fraud but who also allegedly provided discredited prewar intelligence on weapons of mass destruction and whose relationship with Iran remains murky. "I never understood why he was embraced so fervently in the first place," says James Steinberg, a foreign policy expert at the Brookings Institution. But as the White House reaches out to Chalabi, the real question is whether he will return the embrace. "There are only four or five in this town he will listen to now," says a government official in Washington who has worked closely with Chalabi. "He forgets nothing." --By Brian Bennett