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Chalabi's INC received at least $33 million -report
Updated: 2004-05-21 09:01

The United States paid Ahmad Chalabi's Iraqi National Congress at least $33 million since March 2000, according to a congressional report made public on Thursday.

The report by the Government Accounting Office, the investigative arm of the U.S. Congress, found $33 million in funds from the State Department and did not include any funds from the Pentagon or other U.S. agencies, a congressional source told Reuters.

The glass in a portrait of Iraqi Governing Council member Ahmed Chalabi is seen smashed after Iraqi police and US troops raided his head office in Baghdad, confiscating files and computers.  [AFP]
Chalabi, a member of the U.S.-appointed Iraqi Governing Council, was once hailed by many in the Bush administration as the likely next leader of a post-Saddam Iraq.

But he has taken a fall after increasingly clashing with Washington on issues like how much power would be handed over to Iraqis when the country regains sovereignty on July 1.

U.S. officials this week said the Pentagon stopped funding the INC -- it had been giving roughly $340,000 a month -- with the final payment in May. On Thursday, U.S. troops and Iraqi police raided Chalabi's home in Baghdad and the INC offices.

The GAO report chronicles the complex and difficult relationship from March 2000 to September 2003 between the INC and State, which like the CIA, has been deeply skeptical of Chalabi and his intentions.


However, he was a favorite of the Pentagon as well as with leading Republicans in Congress and the White House. Congress in 1998 passed the Iraqi Liberation Act, to support the ouster of Saddam Hussein and a transition to democracy in Iraq. Chalabi was a major advocate of that bill.

One year later, former U.S. President Bill Clinton designated the Iraqi National Congress to receive State Department funding for projects to provide the Iraqi people with "unbiased news" and update them on efforts to bring democracy to their country.

Money began flowing in 2000.

The projects included a new satellite television station called Liberty TV, a newspaper and what the GAO report called "information collection programs."

But State Department and the INC bickered incessantly during the 3-1/2 years covered by the report. This inability to work together meant the two "missed a chance to reach the Iraqi people at critical times prior to and during the March 2003 war in Iraq," the GAO concluded.

The $33 million was made available through 23 agreements that provided "short term funding at irregular intervals," the report said.

Sometimes, there were no agreements in effect, which meant funding was suspended. State would sometimes finance programs retroactively.

Liberty TV operated from August 2001 to May 2002, when policy disputes between State and the INC terminated the broadcasts.

"Attempts to restart Liberty TV failed due to a combination of factors including continued disagreements between (INC) and State over funding requirements for broadcasts, the rapidly changing conditions associated with the war in Iraq and (INC's) relocation of operations to Iraq in May 2003," the report said.

In May 2002, State stopped funding the INC's "information collection program," skeptical of the intelligence generated and the appropriateness of State's role, the report said.

Overall, State cited several reasons for its inability to sign long-term funding accords with the INC, including audits that questioned inadequate controls over cash transfers, allegations of fraud and the fact that the INC "resisted U.S. government policy prohibiting (its) operations inside Iraq," the report said.

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