In 1996, the CIA was trying to organize a serious attempt to overthrow Saddam using the INA, headed by a former Saddam hit man, Iyad Allawi who had broken with Saddam and walked in to work for MI-6 in the late 1970s. The Brits eventually brought him to the CIA in 1992. Allawi had assets inside Saddam's military but Chalabi betrayed the coup out of jealousy. The INA was the preferred CIA instrument, its intelligence was being checked out by technical means, and its success would have meant the end of Chalabi's funding.In fact, so famous is the burning of Chalabi in US intel circles, the very term "burn notice" has entered our common cultural lexicon and is the name of a USA Network action-comedy. Wikipedia even has an entry for burn notice and Chalabi is prominent amoung the examples.
In any case, Chalabi got caught fabricating information and the CIA cut him off. He merely went to the Pentagon and the checks kept coming because his fabricated intelligence on Iraq's WMD was so essential to selling the war, this from a man who had already failed four CIA polygraphs so that the agency had issued a "burn" notice on him by the late 1990s.
In 2004, Chalabi betrayed to Iran the fact the NSA was listening to mail belonging to Iran's Ministry of Intelligence and Security (MOIS). Milt Bearden called me in real distress the day the Iranian channel went off the air.
But Chalabi's real goal was to get rid of the Baathists in Iraq, and get rid of the army. In spite of promises we had made to senior Iraqi military, some of whom facilitated our entry into Iraq in 2003, Bremer, Wolfowitz and Chalabi broke all those promises and the Iraqis joined the insurgency.
The main difference, as Richard Sale points out above, is that after being "burned", top administration officials continued to parade Chalabi out in front of Congress, the UN and on ther Sunday pundit circuit in their coordinated efforts to sell, continue to justify and obfuscate the realities of the Iraq war. Verily, it is possible that there are those in the United States who still consider him an asset, even if clearly Chalabi is at best a war profiteer and a scumbag and at worst a spy for Iran (likely, all of the above).