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Saturday, 5 January, 2002, 23:26 GMT
US suspends funds for Iraqi opposition
INC president Ahmed Chalabi
The group had rejected an $8m from the US offer as insufficient
The United States has suspended the funding it gives to an Iraqi opposition group, the Iraqi National Congress, because it failed to properly account for millions of dollars in US aid.


They want to appease Saddam and don't want to take him on as the head of a terrorist state

Sharif Ali bin al-Hussein
INC spokesman
US State Department official Gregg Sullivan said the group, which is based in London, did not have sufficient financial controls and was unable to account for the money it had been given.

However, he said that Washington still considered the INC as an important organisation in the American campaign against Iraqi President Saddam Hussein.

INC spokesman Sharif Ali bin al-Hussein said the suspension was premature and was engineered by officials in the US administration who did not want aggressive action against Iraq.

Saddam Hussein
The INC says it wants to instigate a rebellion against the Iraqi leader
"(They) want to appease Saddam. They want to contain him and keep him in his box and don't want to take Saddam on as the head of a terrorist state," Sharif Ali said.

He said the group had been given until 15 January to institute the financial controls and had told the State Department that that deadline would be met.

But correspondents said a six-month deadline had been set for the INC to sort out its affairs in June and that deadline had now passed.

'No wrongdoing'

But the US spokesman said the suspension was not policy-based, and no wrongdoing was found.

"The financial controls were insufficient and did not match requirements under US laws, Gregg Sullivan said.

The group has requested $25m from the US, with $17m of that to be used for operations inside Iraq.

The Bush administration approved about $8m in new grant money, prompting the opposition group to reject the offer.

Washington will restore the full $25m grant if the INC improves its management, US officials told the Los Angeles Times newspaper.

The LA Times reported that the INC had failed to use most of the $97m the group received from US Congress under the 1998 Iraqi Liberation Act, due to a dispute over tactics to employ against the Baghdad regime.

INC is headed by Ahmed Chalabi, a former Iraqi banker who fled Jordan in 1989, where he was later found guilty in absentia of 31 charges of embezzlement, theft, misuse of funds and other crimes.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Roger Hardy
"An INC official has told the BBC the action is politically motivated"
See also:

18 Dec 01 | Middle East
US builds support against Iraq
29 Nov 01 | Middle East
UN votes to overhaul Iraq sanctions
29 Aug 01 | Middle East
Iraq opposition to launch TV station
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