INC represented the first major attempt by opponents of Saddam to join forces, bringing together Kurds, Sunni and Shi'ite Arabs (both Islamic fundamentalist and secular), as well as democrats, monarchists, nationalists and ex-military officers. In June 1992, nearly 200 delegates from dozens of opposition groups met in Vienna, along with Iraq's two main Kurdish militias, the rival Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK). In October 1992, major Shi'ite groups, including the SCIRI and al-Dawa, came into the coalition and INC held a pivotal meeting in Kurdish-controlled northern Iraq, choosing a Leadership Council and a 26-member executive council. The leaders included monarchist Sharif Ali bin al-Hussein that called for the return of a Constitutional Monarchy for Iraq, moderate Shi'ite Muslim cleric Muhammad Bahr al-Ulum; ex-Iraqi general Hasan Naqib; and Masud Barzani. Ahmed Chalabi, a secular Iraqi Shi'ite Muslim and mathematician by training, became head of the group.
INC's political platform promised "human rights and rule of law within a constitutional, democratic, and pluralistic Iraq"; preservation of Iraq's territorial integrity, and complete compliance with international law, including United Nations resolutions relating to Iraq.
Differences within INC eventually led to its virtual collapse. In May 1994, the two main Kurdish parties began fighting with each other over territory and other issues. As a result of the growing difficulties within INC, the United States began seeking out other opponents who could threaten the Iraqi regime, such as the Iraqi National Accord (INA), headed by Iyad Allawi. The rivalries between the Kurdish parties prompted the KDP to seek armed support from Saddam Hussein for its capture of the town of Arbil from rival PUK. Iraq took advantage of the request by launching a military strike in which 200 opposition members were executed and as many as 2,000 arrested. Six hundred fifty oppositionists (mostly INC) were evacuated and resettled in the United States under parole authority of the US Attorney General. INC played a central role in the truce negotiations between KDP and PUK.
INC was subsequently plagued by dissociation of many of its constituent groups from the INC umbrella, a cutoff of funds from its international backers (including the United States), and continued pressure from Iraqi intelligence services especially after a failed 1995 coup attempt. In 1998, however, the US Congress authorized $97 million in U.S. military aid for Iraqi opposition via the Iraq Liberation Act, intended primarily for INC. (Katzman, 1998).
In March 2002, Seymour M. Hersh reported in The New Yorker that "exile groups supported by the INC have been conducting sabotage operations inside Iraq, targeting oil refineries and other installations. The latest attack took place on January 23rd, an INC official told me, when missiles fired by what he termed 'indigenous dissidents' struck the large Baiji refinery complex, north of Baghdad, triggering a fire that blazed for more than twelve hours." However, Hersh added, "A dispute over Chalabi's potential usefulness preoccupies the bureaucracy, as the civilian leadership in The Pentagon continues to insist that only the INC can lead the opposition. At the same time, a former Administration official told me, 'Everybody but the Pentagon and the office of the Vice President wants to ditch the INC.' INC's critics note that Chalabi, despite years of effort and millions of dollars in American aid, is intensely unpopular today among many elements in Iraq. 'If Chalabi is the guy, there could be a civil war after Saddam's overthrow,' one former C.I.A. operative told me. A former high-level Pentagon official added, 'There are some things that a President can't order up, and an internal opposition is one.'" (Hersh, 2002).
Notwithstanding these concerns, Hersh reported that "INC supporters in and around the Administration, including Paul Wolfowitz and Richard Perle, believe, like Chalabi, that any show of force would immediately trigger a revolt against Saddam within Iraq, and that it would quickly expand." In December 2002, Robert Dreyfuss reported that the administration of George W. Bush actually preferred INC-supplied analyses of Iraq over analyses provided by long-standing analysts within the CIA. "Even as it prepares for war against Iraq, the Pentagon is already engaged on a second front: its war against the Central Intelligence Agency.," he wrote. "The Pentagon is bringing relentless pressure to bear on the agency to produce intelligence reports more supportive of war with Iraq. ... Morale inside the U.S. national-security apparatus is said to be low, with career staffers feeling intimidated and pressured to justify the push for war." Much of the pro-war faction's information came from INC, even though "most Iraq hands with long experience in dealing with that country's tumultuous politics consider the INC's intelligence-gathering abilities to be nearly nil. ... The Pentagon's critics are appalled that intelligence provided by the INC might shape U.S. decisions about going to war against Baghdad. At the CIA and at the State Department, Ahmed Chalabi, the INC's leader, is viewed as the ineffectual head of a self-inflated and corrupt organization skilled at lobbying and public relations, but not much else."
"The [INC's] intelligence isn't reliable at all," said Vincent Cannistraro, a former senior CIA official and counterterrorism expert. "Much of it is propaganda. Much of it is telling the Defense Department what they want to hear. And much of it is used to support Chalabi's own presidential ambitions. They make no distinction between intelligence and propaganda, using alleged informants and defectors who say what Chalabi wants them to say, [creating] cooked information that goes right into presidential and vice-presidential speeches." (Dreyfuss, December 2002). Chalabi received training in television presentation techniques from the Irish scriptwriter Eoghan Harris prior to the invasion of Iraq.
In February 2003, as the Bush administration neared the end of its preparations for war, an internal fight erupted over INC's plan to actually become the government of Iraq after the U.S. invasion. Chalabi wanted to "declare a provisional government when the war starts," a plan that "alienated some of Mr. Chalabi's most enthusiastic backers in the Pentagon and in Congress, who fear the announcement of a provisional government made up of exiles would split anti-Saddam sentiment inside Iraq." (Borger, et al., 2003) Eventually a governing council, including Chalabi was set up, but when it came time to chose an interim Prime Minister Ayad Allawi, head of rival Iraqi National Accord, was chosen.
In May 2004, the United States military raided the residences of Iraqi National Congress members now living in Iraq. It had been announced on May 18 that the Pentagon had stopped sending funding to INC, which had averaged about $340,000 per month for intelligence gathered by the organization. It is unclear what the military forces were seeking, although a spokesman for Ahmed Chalabi said Chalabi had been held at gunpoint and told to accept concessions then being put in place by the United States in preparation for a transfer of sovereignty on June 30, 2004. Chalabi had been a critic of the transfer, saying that the U.S. retained too much power.
In the lead up to the January 2005 Iraqi election INC joined the United Iraqi Alliance coalition of mainly Shi'ite groups as Chalabi reinvented himself as a sharp critic of the occupation, aligning himself with Muqtada al-Sadr. Chalabi was appointed as Deputy Prime Minister in the transitional government, and INC member Ali Allawi (the cousin of Iyad Allawi) became Minister of Finance.
In preparation for the December 2005 Iraqi election, INC broke with the United Iraqi Alliance and formed its own multi-ethnic coalition, the National Congress Coalition. It did not win any seats in the election.