WASHINGTON -- Despite the growing drumbeat to expand the war
on terrorism to Iraq, U.S. officials this week suspended key funding to the
leading Iraqi group opposing President Saddam Hussein because it has failed to
account for tens of millions of dollars in U.S. aid.
The Iraqi National
Congress, based in London, was formally notified Thursday that a new audit of
the group had revealed serious "financial management and internal control
weaknesses" in its handling of the U.S. funds, according to the State
Department.
Concerns about the Iraqi National Congress' use of U.S. aid
underscore the difficulty the Bush administration faces as it debates what to do
about Hussein's regime. Washington remains committed to ousting the Iraqi
president, but problems with the Iraqi group have slowed and complicated the
effort.
Besides questions about the use of aid managed by the State
Department, the INC has also failed to use most of the $97 million allocated to
it by Congress under the 1998 Iraqi Liberation Act in a dispute over tactics,
U.S. officials say. The organization has refused since September, for example,
to send members for training at the Pentagon, a cornerstone of the program. So
far, the organization has used less than $5 million of the fund, the officials
say.
The conflicts over money reflect a fundamental split between the
United States and the opposition group in its effort to change the regime in
Baghdad.
The Iraqi National Congress, led by Ahmad Chalabi, is pushing
hard for the United States to foot the bill for operations inside Iraq. The
United States instead believes the organization first must build a viable
operation and attract a wider following both inside Iraq and in the region. So
far, U.S. officials say, the group has failed to make significant progress on
these fronts.
"They want us to support programs that take them into Iraq,
and we don't want to do that yet," an administration official said. "The United
States is not ready to take that step because of the consequences."
U.S.
officials are concerned, for example, about what might happen even with a food
aid program operated by the group inside Iraq. The danger, the officials say, is
not only that Iraq might arrest INC operatives and put them on trial but that
the group might use the program to provoke an Iraqi response-- and perhaps force
U.S. military intervention.
"We need a group like the INC was supposed to
be-- an umbrella for the opposition with resources that people can turn to and
use," the administration official said. "We would like to see their (media)
operating out in the region building their case. We would like them to take
advantage of a lot of training that's available. But they're not doing it.
They're intent only on going back inside Iraq."
The organization has not
made serious headway in ousting Hussein since its leadership was forced to flee
in 1996, when the CIA-backed operation in northern Iraq collapsed because of
fighting among its factions and pressure from Iraqi troops.
Critics of
the opposition group within the administration express admiration for Chalabi's
commitment to overthrowing Hussein. But they are concerned about his domination
of the group-- to the exclusion of the six other members of the INC board, as
well as its broader membership.
Such differences over strategies led to
an open split between the United States and the organization in September, when
the previous State Department grant of $25 million expired.
When the
group submitted a request for a new set of programs costing $25 million, it
asked that $17 million of it be used on operations inside Iraq. The Bush
administration rebuffed that request and approved only $8 million in new grant
money.
The INC said it wanted all or nothing, according to U.S.
officials.
To show ongoing interest, the U.S. still provided $800,000 a
month to the Iraqi group-- until a recent report by the U.S. inspector general's
office instructed the State Department to "withhold or at least restrict future
funding to the INC" until the group implements improved accounting
methods.
Based on the new audit, the State Department cut funds for the
INC's Office of Mobilization and Coordination, which was set up to support
people in training at the Pentagon, U.S. officials said. But after the September
split on funding, the INC hasn't sent any new trainees.
"We repeatedly
asked the INC to send names and the Pentagon has left vacancies in its program,
but without trainees we can't continue to fund the office set up to support
them," said a source familiar with the issue.
The State Department also
cut funds for the INC's Information Collection program, which is largely a news
organization. Questions have been raised about the program's high costs,
especially since the audit found no time cards for employees or receipts for
expenditures, among other things, U.S. officials say.
There are also
growing questions about the use of U.S. funds by the INC's Liberty TV, which
broadcasts a 45-minute program into Iraq.
In one incident that raised
concerns, a Liberty TV executive claimed that he had a paid guard posted in
front of a coffee and tea room because he was convinced someone was trying to
poison them, according to U.S. officials.
The INC always accuses the
State Department of withholding funds because it doesn't support the INC cause,"
said Henri Barkey, a former State Department policy planning staffer now at
Lehigh University. "But unfortunately, it was actually the INC that came up
short every time in terms of providing accurate accounting and proper
documentation and not living up to deadlines."
Washington has paid for an
accountant, lawyer and grant writer to help straighten out the INC financial
problems. But deepening frustration with the group's shortcomings in handling
U.S. funds finally led to the decision this week to withhold funding for many of
the INC programs.
U.S. officials say there have been some improvements in
the group's operation. INC officials liked to fly first class on overseas trips,
preferably on British Airways. Under U.S. law, however, aid grantees must fly on
American carriers, in coach seats. The INC has begun to comply with these kinds
of basic rules, sources said.
U.S. officials say they are committed to
restoring the full $25-million grant from the State Department if the INC will
improve its management.
This month, it will still receive $500,000 from
the State Department.