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SLUG: 2-285859 U-S / Iraq (L-Update)
DATE:
NOTE NUMBER:

DATE=1/30/02

TYPE=CORRESPONDENT REPORT

NUMBER=2-285859

TITLE=U-S / Iraq (L-Update)

BYLINE=David Gollust

DATELINE=State Department

CONTENT=

VOICED AT:

///EDS: UPDATES CR # 2-285844 WITH ADMINISTRATION AGREEMENT TO EXTEND FULL U-S FUNDING FOR I-N-C///

INTRO: The Iraqi opposition coalition, the Iraqi National Congress, is welcoming the sharp criticism by President Bush in his State-of-the-Union address, of the Saddam Hussein government in Baghdad. The administration meanwhile agreed to continue aiding the opposition group after an agreement over a dispute over the I-N-C's accounting practices. V-O-A's David Gollust reports from the State Department.

TEXT: Officials of the I-N-C are calling the Bush remarks very encouraging and say the speech augurs well for new cooperation with the United States aimed at ousting Saddam Hussein.

In his State-of-the-Union address, President Bush said states like Iraq, Iran and North Korea and terrorist allies constitute what he termed an "axis of evil" that is seeking weapons of mass destruction to threaten the peace of the world.

Mr. Bush, who said the U-S war against terror is only beginning, warned that his administration would not stand idly by and allow, as he put it, "the world's most dangerous regimes to threaten us with the world's most destructive weapons."

The President's remarks were welcomed by leaders of the I-N-C who held talks here with the State Department's third-ranking official, undersecretary for political affairs Mark Grossman.

In a talk with reporters afterward, I-N-C spokesman Sharif Ali said Mr. Grossman assured the group that regime change in Iraq is a U-S foreign policy priority:

//ALI ACTUALITY///

I think the message was very clear that as long as Saddam Hussein's regime supported terrorism -- either as weapons of mass destruction or as international terrorism that the United States would not tolerate that. And we regard that as a very good position for us, because it is the Iraq people themselves that suffer from the terror of Saddam Hussein and we look forward to greater and stronger cooperation with the United States on this.

///END ACT///

Officials of the I-N-C and the administration later announced at least an interim solution to a dispute over the Iraqi groups' accounting practices that had threatened a U-S aid cut-off.

State Department officials said the United States would provide the group with about two-and-half million dollars to fund its programs over the next three months -- with additional money to be contingent on accounting reforms by the I-N-C.

The interim agreement came on the eve of a threatened funding cutoff over the dispute, which began last year when U-S government auditors raised concerns about financial mismanagement by the London-based group.

At the beginning of this month, all but minimal operating support for the group was suspended and U-S officials said the I-N-C would have had to shut down altogether had Wednesday's agreement not been reached.

The United States has underwritten I-N-C satellite television broadcasts into Iraq, human rights activities and war crimes investigations. But it has thus far withheld funding for anti-Saddam military operations even though nearly 100-million dollars was approved by the U-S Congress for that purpose in 1997. (Signed)

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