WASHINGTON - The Department of Defense is continuing to pay millions of dollars for information from the former Iraqi opposition group that produced some of the exaggerated and fabricated intelligence President Bush used to argue his case for war.
The Pentagon has set aside between $3 million and $4 million this year for the Information Collection Program of the Iraqi National Congress, or INC, led by Ahmed Chalabi, said two senior U.S. officials and a U.S. defense official.
They spoke on condition of anonymity because intelligence programs are classified.
The continuing support for the INC comes amid seven separate investigations into pre-war intelligence that Iraq was hiding illicit weapons and had links to al-Qaida and other terrorist groups. A probe by the Senate Intelligence Committee is now examining the INC's role.
The decision not to shut off funding for the INC's information gathering effort could become another liability for Bush as the presidential campaign heats up and, furthermore suggests that some within the administration are intent on securing a key role for Chalabi in Iraq's political future.
Chalabi, who built close ties to officials in Vice President Cheney's office and among top Pentagon officials, is on the Iraqi Governing Council, a body of 25 Iraqis installed by the United States to help administer the country following the ouster of Saddam Hussein last April.
The former businessman, who lobbied for years for a U.S.-backed military effort to topple Saddam, is publicly committed to making peace with Israel and providing bases in the heart of the oil-rich Middle East for use by U.S. forces fighting the war on terrorism.
The INC's Information Collection Program started in 2001 and was "designed to collect, analyze and disseminate information" from inside Iraq, according to a letter the group sent in June 2002 to the staff of the Senate Appropriations Committee.
Some of the INC's information alleged that Saddam was rebuilding his nuclear weapons program, which was destroyed by U.N. inspectors after the 1991 Gulf War, and was stockpiling banned chemical and biological weapons, according to the letter.
The letter, a copy of which was obtained by Knight Ridder, said the information went directly to "U.S. government recipients" who included William Luti, a senior official in Secretary of Defense Donald H. Rumsfeld's office, and John Hannah, a top national security aide to Cheney.
The letter appeared to contradict denials made last year by top Pentagon officials that they were receiving intelligence on Iraq that bypassed established channels and vetting procedures.
The INC also supplied information from its collection program to leading news organizations in the United States, Europe and the Middle East, according to the letter to the Senate committee staff.
The State Department and the CIA, which soured on Chalabi in the 1990s, viewed the INC's information as highly unreliable because it was coming from a source with a strong self-interest in convincing the United States to topple Saddam.
The Defense Intelligence Agency (DIA) has concluded since the invasion that defectors turned over by the INC provided little worthwhile information, and that at least one of them, the source of an allegation that Saddam had mobile biological warfare laboratories, was a fabricator. A defense official said the INC did provide some valuable material on Saddam's military and security apparatus.
Even so, dubious INC-supplied information found its way into the Bush administration's arguments for war, which included charges that Saddam was concealing illicit arms stockpiles and was supporting al-Qaida.
No illicit weapons have yet been found, and senior U.S. officials say there is no compelling evidence that Saddam cooperated with al-Qaida to attack Americans.
The Information Collection Program is now overseen by the DIA, the Pentagon's main intelligence arm, which took over when the State Department decided to give it up in late 2002.
The defense official defended the current support of the INC effort, saying that it has been of some help to the CIA-led Iraq Survey Group, a team that is trying to determine what happened to Iraq's chemical, biological and nuclear weapons programs.
INC-supplied informants also have identified insurgents who have been waging a guerrilla war that has claimed the lives of more than 500 U.S. troops and hundreds of Iraqis, he said.
"To call all of it (INC intelligence) useless is too negative," said the defense official, who described the Information Collection Program as a "massive" undertaking.
"You never take anything at face value," he continued. "When the INC gives information, we absolutely pursue it. You never know what that golden nugget is going to be."
But a senior administration official questioned whether the United States should still be funding the program.
"A huge amount of what was collected hasn't panned out," he said. "Some of it has turned out to have been either wrong or fabricated."
The senior administration official also sought to justify the initial decision to support the program.
Prior to the invasion, U.S. intelligence agencies had no better human sources in Iraq, and had no choice but to rely on the INC, minority Kurdish guerrilla groups and other sources who claimed to have knowledge of Saddam's illegal arms programs, ties to terrorist groups and his military forces, he said.
"The evidence now suggests that at some points along the way, we may have been duped by people who wanted to encourage military action for their own reasons," he conceded.
Chalabi apparently is less concerned about the past
"We are heroes in error," Chalabi was quoted as saying recently in Baghdad by The Daily Telegraph of London. "As far as we're concerned we've been entirely successful. That tyrant Saddam is gone and the Americans are in Baghdad. What was said before is not important. The Bush administration is looking for a scapegoat. We're ready to fall on our swords if he wants."
In a related development, U.S. officials said that on top of the Pentagon funds, Chalabi's organization asked the State Department in August for $5 million in unspent financing that was approved by Congress before the war.
The $5 million has not been released, they said.
The request for the money follows the awarding to the INC of $3.1 million in April 2003 following the fall of Baghdad, according to a State Department statement.
State Department lawyers questioned the decision to turn over the $3.1 million, said a State Department official. But senior aides, anticipating an outcry from Chalabi's supporters in the administration and in Congress, opted to release the money, said the official, who spoke on condition of anonymity.
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