Saruman betrayed the Council to enter the service of Mordor; he then betrayed Mordor to work to get the Ring for himself. Sauron was aware of this from a very early time, I think. However, Saruman was for the present in his service, at least in public, and so he used Saruman as much as he could. Ultimately Saruman would never have been any match for Sauron, unless he got hold of the Ring, as Gandalf makes clear in Book Three.
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"If you're referring to the incident with the dragon, I was barely involved. All I did was give your uncle a little nudge out of the door."
THE HOBBIT - IT'S COMING
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