July 22: This post has been corrected.

When news broke in the spring of 2007 that the Iraqi government was holding talks with local militias, Alhurra, the U.S.-funded television station, was quick to respond. That night, Alhurra's premier talk show from Baghdad, "In Iraq," invited four guests to discuss the issue: a professor, an expert in tribal affairs, a member of a U.S.-backed coalition of tribal leaders and Mishan Jabouri, whom the show identified as a member of the Iraqi parliament.

What "In Iraq" didn't tell its viewers was that Jabouri, interviewed by phone from Syria, was on the run from the U.S. military and the Iraqi police. Interpol had issued a "Wanted" poster for him and Iraq's parliament had stripped him of his diplomatic immunity because of his suspected ties to extremists.

Officials at Alhurra, the Arab-language station that has received nearly $500 million in U.S. taxpayer dollars, say that of all their broadcasts to the Middle East, they are most proud of their broadcasts to Iraq. But a close look at both the content and personnel suggests the problems in the Baghdad bureau and the effort to broadcast programming for Iraqis are as profound as those that afflict the rest of the network.

For one thing, the bureau tilts heavily toward Iran, according to former employees, U.S. government officials and academics who have watched the programs. The executive producer of the Iraq broadcasts, a former bureau chief and several other employees all lived in Tehran before joining Alhurra. State Department officials and U.S. diplomats in Baghdad have privately complained for years that Alhurra's Iraq broadcasts seem more interested in promoting the policies of the radical Shiite regime in Iran rather than those of the United States government.

In addition, Alhurra's Iraq stream appears to have violated the network's own rules against putting terrorists on the air when Jabouri was invited on. Ironically, given the Baghdad bureau's Shia and Iranian leanings, Jabouri is a Sunni and is personally aligned with Sunni insurgents.

Deirdre Kline, spokeswoman for Alhurra, declined to respond to any questions about Alhurra's broadcasts to Iraq.

A self-made millionaire who was once close to Saddam Hussein, Jabouri is accused by the U.S. government and Interpol of financing attacks on Iraq's oil pipelines and providing support to Sunni insurgents and Al-Qaida in Iraq. In Syria he set up his own regional television network which airs images of attacks on U.S. troops. According to the U.S. Treasury Department, Jabouri offered to use his station to broadcast coded messages through patriotic songs to the Sunni terrorist group Islamic Army of Iraq. In January, the Treasury Department sanctioned both Jabouri and his television station. Under U.S. pressure, Egypt stopped carrying Jabouri's television channel earlier this year.

"He was treated as a normal guest, when he was a wanted man," said Hamid Alkifaey, a former Iraqi politician and journalist who was hired in 2007 to take over Alhurra's Iraq operation. Alkifaey said he was upset when he saw Jabouri on the "In Iraq" broadcast the week Alkifaey started work.

"It was no secret that he was a terrorist," Alkifaey said in a series of interviews.

On the show, Jabouri and the other guests argued about whether government-sponsored dialogue could bring an end to the sectarian violence in the country and who was to blame for the bloodshed. But according to a translation of the broadcast, all four agreed it would be better if the Shiite militias and Sunni insurgents devoted their energies to killing Americans, instead of one another.

As an example, Jabouri said he was disappointed that a truck bomb had recently passed by a U.S. military checkpoint only to attack Iraqi security forces nearby.

Alhurra, the U.S. government-funded satellite station, was set up in 2004 to win "hearts and minds" in the Middle East at a time of sinking U.S. popularity.

The network was the subject of a joint investigation by ProPublica and CBS' "60 Minutes" which aired last month. That report and continuing stories by ProPublica and others have uncovered serious staff problems, financial mismanagement and deep concerns inside the U.S. government about Alhurra's content.

The station airs three separate Arabic-language broadcasts aimed at different audiences: one broadcasts across the Middle East, one reaches Arab audiences in Europe and the third has the format of a local, 24-hour news station just for Iraq. U.S. government officials cite the Iraq operation as a success.

"More than 50 percent of adult Iraqis tune in to Alhurra at least once a week," said James Glassman, the Undersecretary of State for Public Diplomacy who served until earlier this year as chair of the Broadcasting Board of Governors, which oversees Alhurra.

U.S. government polling shows Alhurra is the No. 4 network in Iraq. But that ranking reveals nothing about the content, the behind-the-scenes battles and the financial problems that have plagued the Iraqi broadcast.

Glassman and other members of the Board have said they exert editorial and financial controls over Alhurra, but interviews with current and former employees and an examination of government and internal records indicate there is little or no oversight of the Iraqi broadcasts. The network has never conducted an audit or inventory of the Baghdad bureau, which employs as many as 40 people.

Three people with direct knowledge of the operation said tens of thousands of dollars sent to the bureau cannot be accounted for and described financial records in disarray at Alhurra's headquarters in Springfield, Va. Alhurra used to send envelopes of petty cash to Baghdad each month but now uses wire transfers instead. The business manager, who approves all Baghdad expenses, has never visited the bureau.

Neither Alhurra's president, Brian Conniff, nor his news director Danny Nassif, has visited the Baghdad bureau or met many of the reporters and producers who were hired to present a positive view of U.S. efforts in the region. The only bureau chief the two top managers have met resigned last month. Saad Mohan, who served from May 2007 to June 2008 sent a resignation letter citing numerous examples of financial waste. He said that editors sitting in Springfield had demanded a pro-Iranian slant to the bureau's coverage.

Larry Register, a former CNN executive who ran Alhurra for eight turbulent months between November 2006 and June 2007, said names of "ghost" employees sometimes appeared on payroll lists and he was never sure how many people actually worked in the bureau.

"It was impossible to know. We tried to get explainers on what each person did. Once we started demanding some proof and told them we would only pay a certain number of people, some names began to drop from the list," Register said. Current employees said those problems continue to exist today and it is difficult to verify who actually works for the company in Iraq and where millions of dollars go each month.

Religious infighting inside the Iraq bureau and the Springfield studios between Sunni, Shiite and Kurdish staff has resulted in a fist-fight, firings and dramatic resignations. The U.S.-based executive producer for the Iraq broadcasts, a religious Shiite named Salem Mashkour, spent years in exile in Tehran and Beirut after fleeing Saddam Hussein's regime. Mashkour demoted employees who drink alcohol outside of work, according to Register and several former employees.

Alhurra Indifferent to Key U.S. Policy in Iraq

Alhurra went live on Valentine's Day 2004 as a budding insurgency was taking hold in Iraq and American officials were looking to counter the influence of Al Jazeera, the most widely watched Arab-language network.

Months later, the United States kicked off plans for Iraqi elections, a major initiative by the Bush administration to hasten democracy and stability more than a year after the U.S. invasion. But Alhurra, whose name means "The Free One," appeared disinterested.

In a series of e-mail exchanges between the State Department and the U.S. embassy in Baghdad, diplomats began questioning what Alhurra was up to.

Despite assurances from network executives that the station would "be fully involved in the electoral process, for some reason that has not translated into coverage and programs," U.S. Ambassador Christopher Ross wrote to colleagues at the State Department.

In an e-mail to Alberto Fernandez, the top diplomat for public diplomacy in the Middle East, and Robert Callahan, the spokesman for the U.S. ambassador in Baghdad, Ross worried that Iraqis did not fully understand the significance of the coming election season. "All too many Iraqis think the elections are simply a referendum for a new President." The United States needed a way to help educate the public, Ross wrote, and Alhurra wasn't helping.

When the election season ended, candidates who ran with the support of the White House had done poorly. American fingers that had pointed at Al Jazeera were now aiming at Alhurra.

Ayad Allawi, a secular Shiite with close ties to the CIA, had served as interim prime minister from July 2004 until April 2005. But his secular coalition won only 25 of 275 parliamentary seats in December 2005, losing badly to more religious, Iranian-backed Shiite candidates.

Alberto Fernandez told Karen Hughes, then Undersecretary of State for Public Diplomacy, in an e-mail marked "sensitive," that Alhurra's Baghdad bureau was stocked "with radical Shiite Islamists who favored their political brethren and discriminated against and intimidated members of other parties (including the secular alliance headed by former PM Allawi), especially during the Iraqi electoral season of December 2004 to December 2005."

Hughes did not respond to a request for comment.

A Question of Leadership

Mashkour, the executive producer of the Iraq broadcasts, worked in Tehran as a reporter and later covered politics and Islam in Beirut. In 2000, he wrote a flattering column about Hassan Nassrallah, the leader of Hezbollah, whom Mashkour called a hero.

Mashkour joined Alhurra at its inception in 2004. Two years later, inspectors from the Government Accountability Office asked to meet the executive producers at Alhurra. At the time, there were two: a producer for the Middle East broadcast and Mashkour, who oversaw the Iraq operation. But Mashkour never made it to the meeting. Instead, the GAO team was introduced to a more junior producer who posed, at the request of his bosses, as the executive producer, according to two people who attended the meeting.

"Salem doesn't speak English and no one wanted the GAO to know that the person in charge of presenting an American perspective to an Iraqi audience can't even read the morning headlines here," one person with knowledge of the meeting said. "You'd be hard pressed to find more than a handful on the Iraq stream who speaks English."

Aside from the language barrier, there were other issues with Mashkour that troubled managers.

"I had concerns over his editorial bent, that it was too much in favor of Shiites," Register said. The night Saddam Hussein was executed, Mashkour, who lives with his family in Virginia and hosts a talk show on the network, was joyous on air and danced in the studio.

Register said Mashkour's off-camera management style was problematic. "He had a good handle on the Shiite part of the story. He brought value as long as he wasn't in a managerial role." Register replaced Mashkour as the head of the Iraqi broadcasts but let him keep his talk shows, which aired in Iraq.

When Register was forced to resign in June 2007 after a string of missteps, news director Nassif reinstated Mashkour as executive producer.

But Mashkour has clashed badly with colleagues. In May, he got into a physical fight in Nassif's office with the Baghdad bureau chief, Saad Mohan, who was visiting Springfield. Mohan resigned shortly afterward.

Mohan was the fifth person to abruptly leave the Iraq broadcast in the last year, citing problems with Nassif and Mashkour.

“They only want radical people on air, people with a pro-Iranian agenda,” Mohan said last month.

In an interview two days after Mohan's resignation, Nassif said the Baghdad operation was going well.

When asked about the resignation, he shrugged and said Mohan had trouble with authority.

Reporter Robert Lewis contributed research to this story.