In 1999, INCSF was  established as a foundation to provide support to INC and to provide an  organizational structure for State’s funding of INC. A seven-member board  of directors (the INC Leadership Council) governed INCSF. In April and May 2003, INCSF began the  process of relocating its offices to Baghdad. Planned programming included  news, current affairs, and programs censored by the regime in Baghdad. State’s Funding Was Generally Provided on a Short-term Basis

Beginning in March 2000, State entered into a series of cooperative  agreements with INCSF that included funding totaling nearly $33 million as  of September 2003, but most of this funding came under agreements and  amendments provided at irregular intervals, involved some retroactive  funding, and were short-term and thus affected INCSF’s ability to  broadcast. About $5 million was earmarked for Liberty TV broadcasting activities,  which included hiring staff and establishing studio operations. Liberty TV  broadcasting actually began in August 2001. While emphasizing that it  was not prepared to fund INCSF activities inside Iraq, State did offer to  fund a series of activities, including publication of the newspaper, satellite  TV broadcasting, information collection analysis, and startup of radio  broadcasting using a transmitter based in Iran. Inability to Reach Long-term Agreements Centered on Concerns over Financial Management, Operations in Iraq, and Information Collection

Three main concerns affected State’s funding decisions for INCSF and  thwarted the parties’ ability to negotiate and conclude long-term funding  agreements:  concerns over INCSF’s financial management and  accountability based largely on the results of audits of INCSF; the desire of  INCSF to operate inside Iraq, which was inconsistent with U.S. policy; and  State’s increasing concerns about the appropriateness and merits of  funding INCSF’s information collection program. INCSF resisted this policy. State’s initial proposal for  the bridge grant caused great concern in INCSF for several reasons. On May 1, 2002, Liberty TV stopped  its broadcasting operations. At a meeting of top INCSF and State officials in late  May 2002, State officials said that the department would no longer fund the  information collection program. Third, and most important, INCSF was not willing to accept an  agreement without funding for the information collection program. However, Liberty TV did not become operational, primarily due to  disagreements between State and INCSF over the amount of the funding  provided and the time period of State’s commitment. State funding of  INCSF continued through September 2003 and funds were available for  television operations. According to an INCSF representative, INCSF  decided in May 2003 that it did not have a dependable offer from the  Department of State to resume Liberty TV broadcasts. State also said it believed our observation  that State and INCSF, through their inability to work together to restart  Liberty TV, missed a chance to reach the Iraqi people at critical times prior  to and during the war in Iraq lay outside the scope of our review. INCSF agreed that due to the inability of State and INCSF to work together  to restart Liberty TV, important opportunities to broadcast to the Iraqi  people were lost. Scope and Methodology

To document the history of State’s funding for INCSF programs and the  issues affecting its funding decisions, we reviewed State’s cooperative  agreement files.
Why GAO Did This Study

As part of the efforts by the United States to oust Saddam Hussein, a critical element of U.S. policy included funding the Iraqi National Congress as the lead Iraqi opposition coalition. In 1999, the Iraqi National Congress Support Foundation (INCSF) was established to provide an organizational structure for Department of State funding. From March 2000 until September 2003, the Department of State funded several INCSF programs, including television broadcasting. INCSF's broadcasting goals included broadcasts into Iraq focusing on providing the Iraqi people unbiased news and information and updating them on efforts to bring democracy to Iraq. GAO was asked to review (1) the history of the Department of State's funding of INCSF broadcasting activities and (2) the key issues affecting State's funding decisions.

What GAO Found

State's funding of INCSF programs totaled nearly $33 million for the period March 2000 through September 2003. This money was made available through 23 cooperative agreements and amendments that provided shortterm funding at irregular intervals. The funds were provided for several purposes, including establishing new satellite television capability (Liberty TV), newspaper publication, and information collection programs. About $10 million was earmarked for Liberty TV broadcasting activities, which included hiring staff, establishing studio operations, and actual broadcasting. There were several periods during which State did not have an agreement to fund INCSF's program, causing State to later fund INCSF activities retroactively. State's funding approach affected INCSF's ability to conduct television broadcast operations. Liberty TV broadcasted from August 2001 to May 2002, when funding shortages caused by funding and policy disputes between State and INCSF resulted in termination of broadcasting. Attempts to restart Liberty TV failed due to a combination of factors, including continued disagreements between INCSF and State over funding requirements for the broadcasts, the rapidly changing conditions associated with the war in Iraq, and INCSF's relocation of operations to Iraq in May 2003. INCSF repeatedly complained to State that the short-term nature of the funding agreements made it difficult to run an effective television broadcasting operation. State cited three reasons why it was unable to reach long-term funding agreements with INCSF: (1) State was concerned about INCSF's accountability for funds and operational costs, based largely on results of audits of INCSF, and remained concerned even after INCSF took steps to improve its accountability during late 2001 and 2002; (2) INCSF resisted U.S. government policy prohibiting INCSF operations inside Iraq; and (3) State questioned both the usefulness of INCSF's information collection program and whether it was appropriate for State to fund it. (In May 2002 State decided to drop its funding for the information collection program, effective August 2002.) Against this background and the sporadic funding arrangements that characterized the program, the process of proposal and counterproposal continued without producing agreements that could lead to restarting Liberty TV. Through their inability to work together to restart Liberty TV, State and INCSF missed a chance to reach the Iraqi people at critical times prior to and during the March 2003 war in Iraq.