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Accounting Questions Leads US to Suspend Most Iraqi Opposition Aid - 2002-01-07

The Bush administration says questions of financial accountability and not a policy change with regard to Iraq have prompted it to suspend most U.S. financial support for the opposition Iraqi National Congress, the INC.

Officials in Washington are not accusing the leadership of the Iraqi opposition group of any outright financial wrongdoing.

But they say that "weaknesses" in the way the group has accounted for U.S. funds have prompted the suspension of most assistance, and they warn there could be a complete funding shut-off at the end of the month without adequate bookkeeping reforms.

The Bush administration confirmed last Saturday it was withholding all but a bare minimum of funding for the London-based INC because of questions stemming from a State Department audit of the group's finances that began several months ago.

At a briefing in Washington, State Department spokesman Richard Boucher said a change in regime in Iraq remains a fundamental U.S. policy objective, and that the administration sees merits in the INC's programs despite the accounting conflict. "We've tried to continue to work with the group. We've tried to continue to provide funding for their programs," Mr. Boucher said. "We do believe they provide valuable programs and we've tried to support their operations, including with the half-million dollars that we're giving them now to sustain themselves through January 31 with the hope that by that time they'll have in place the adequate controls so we can go back to funding the actual programs."

The Congress authorized $97 million in U.S. support for the INC in 1998. But most of the money has not been handed over to the group because of differences over tactics in the effort to topple Saddam Hussein.

The United States has financed, among other things, informational activities by the group including a satellite television service aimed at Iraq. But the administration has opposed its proposals for direct action inside Iraq, with some officials here questioning its readiness for such operations.

Spokesman Boucher said the $500,000 being provided to the group will be enough to keep its offices open and staff in place until the end of the month, but said its programs including the TV service, will likely have to cease shortly thereafter if the accounting matter is not settled.