Javers begins: "It has been called the largest airborne transfer of currency in the history of the world. But finding out what happened to all the money involved has become one of the biggest financial mysteries of all time. By one account, the New York Fed shipped about $40 billion in cash between 2003 and 2008. In just the first two years, the shipments included more than 281 million individual bills weighing a total of 363 tons. But soon after the money arrived in the chaos of war-torn Baghdad, the paper trail documenting who controlled it all began to go cold."
A shipment of $2.4 billion in US currency sent from the Federal Reserve to Iraq arrives on pallets in 2004. (photo: US Congressional House Committee on Government Reform)
Fed's $40 Billion Iraqi Money Trail Goes Cold
26 October 11
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t has been called the largest airborne transfer of currency in the history of the world. But finding out what happened to all the money involved has become one of the biggest financial mysteries of all time.
Beginning in the very earliest days of the war in Iraq, the New York Federal Reserve shipped billions of dollars in physical cash to Baghdad to pay for the reopening of the government and restoration of basic services.
The money was packed onto pallets inside a heavily guarded New York Federal Reserve compound in East Rutherford, New Jersey, trucked to Andrews Air Force Base outside of Washington, and flown by military aircraft to Baghdad International Airport.
By one account, the New York Fed shipped about $40 billion in cash between 2003 and 2008. In just the first two years, the shipments included more than 281 million individual bills weighing a total of 363 tons. But soon after the money arrived in the chaos of war-torn Baghdad, the paper trail documenting who controlled it all began to go cold.
Since then, investigators have spent years trying to trace what happened to the enormous amount of money shipped in the frantic days of the occupation of Iraq. Although there have been hundreds of pages of reports, Congressional hearings, and inquiries from Washington to Baghdad, no one in Congress, a special inspector general's office, the Department of Defense or the Iraqi government itself can say with certainty what exactly happened to all of that money.
Much of it may have been spent on the things it was intended for - but billions of dollars may have simply been stolen. The thefts likely ranged from complicated contracting schemes to brazen appropriations of billions in cash still in their New York Fed plastic wrappers.
To find out what happened, a special inspector general for Iraq reconstruction has focused on the chain of custody - who was responsible for the money, minute by minute, as it made its way to Baghdad.
And although the money was handled by a variety of trained American officials and military officers in the first legs of its trip halfway around the world, CNBC has learned that something unusual happened on the Baghdad side of the transaction: Each of the money flights to Baghdad was met at the airport in Iraq by the same man.
The previously unknown Coalition Provisional Authority (CPA) official was tasked with picking up the bales of billions as they were unloaded from C-17s and arranging for them to get to the Central Bank of Iraq in downtown Baghdad. It was a perilous journey of about seven miles over a road the U.S. military called "Route Irish" through territory often controlled by insurgents. Travelers faced the threat of rocket propelled grenades, mortars, car bombs and IEDs.
Transit was so dangerous that returning American GI's often posted YouTube videos of their trips on Route Irish, just for the bragging rights of having been there.
The CPA official was a stocky, middle-aged naturalized American citizen of Lebanese descent who was born in Saudi Arabia. His first name is Basel. At his request, CNBC has agreed to withhold his last name from this story. Basel ferried cash in Baghdad for the CPA and the American embassy from 2003 until 2008 - all told handling, he said, about $40 billion in cash.
His job made him the very last American to see that money before it disappeared into the vaults at the Central Bank of Iraq. And it may have made him the only person in the history of the world to oversee the movement of $40 billion in a combat zone.
It doesn't seem that anyone in the US government planned ahead of time to put so much responsibility - and temptation - into the hands of just one man. Former Republican Connecticut Congressman Christopher Shays co-chaired the Commission on Wartime Contracting, digging into waste, fraud and abuse in Iraq. He has traveled to Iraq scores of times to oversee US efforts there. Shays did a double take when CNBC told him how much money Basel said he handled in Iraq.
"Wait, one person?" Shays asked. "One person received $40 billion?"
Asked what he thinks about that, Shays said, "It just blows you away."
The enormous undertaking of moving the billions began in the heavily guarded Federal Reserve compound on 100 Orchard Street in East Rutherford, NJ. There, carefully screened employees loaded pallets of cash into tractor-trailers for their journey down I-95 toward Washington, DC. The money came from an account held at the New York Fed called the "Development Fund for Iraq" which was made up of billions of dollars in Saddam Hussein's financial assets that had been frozen under various US and global sanctions regimes. They weren't taxpayer dollars, but the US government was responsible for making sure they got where they were going.
A typical pallet held 640 bundles, which the handlers called "bricks," with a thousand bills in each bundle. Each pallet weighed 1,500 pounds, and they were separated by color. Gold seals were used for $100 bills, brown seals held $50 bills, purple seals $20, and so on.
The operation was handled with the utmost secrecy - just imagine what could have happened if the mafia found out which trucks held the money. The chain of custody of the cash was rigorously documented as it left the custody of the New York Fed and was signed over to Air Force officers, who oversaw the loading of C-17 transport planes and flew with the bales of money on the long flight to Baghdad. When the cargo holds were unloaded in Baghdad, Basel was there. But his presence on the receiving end of the largest airborne currency transfer in history began almost entirely by accident.
As a fluent speaker of multiple Arabic dialects, Basel had come to Iraq as a civilian with the American military. Both he and his former boss say Basel was sitting in a waiting area in Saddam Hussein's palace in early 2003, waiting for his first assignment. While he was waiting, a US Treasury official burst into the room, looking for a translator.
"I have a situation here," the official said. Basel raised his hand to help.
Soon he found himself wrangling with a crew of Iraqi truck drivers who had been told to make a delivery to the Central Bank of Iraq. But the bank was closed for the night, and they did not understand the instructions their American overseers were trying to impart about where to store their trucks. Basel intervened, untangling the confusion.
Impressed, the Treasury official, David Nummy, recruited Basel on the spot. Nummy said he soon put Basel in charge of meeting the cash flights from Washington at Baghdad airport, largely because he found Basel to be trustworthy. "He proved himself to be very reliable," Nummy said of Basel in an interview with CNBC. "Very competent. Very committed and he performed a great service during the time that I was there."
"I'm not surprised that he turned out as good as he did," Nummy said. "I think its ... one of many examples we hear of people being in the right place at the right time and find their calling really by circumstance."
Basel said he brought two senior Iraqi government officials with him to the airport for each flight, and those people signed receipts presented by the Air Force officials for the money, witnessing each other's signature. It was for the government's protection - and his own. Basel wanted to be able to prove that he had turned over the money as promised. But in the chaos of war planning, no one seems to have thought about paperwork. Basel said the CPA didn't give him any forms or documents with which to record the transfer of the billions. So he wrote up his own, using Microsoft Word.
One document Basel showed CNBC was a one-page receipt of shipment for a billion-dollar delivery in April of 2006. Basel typed it up himself. It read, in part: "This is to testify that we, the undersigned, have received in our custody from [Basel's full name] ... the total amount of USD 1,000,000,000.00 (United States Dollars One Billion Only)." At the bottom were the hastily scrawled signatures of two officials of the Central Bank of Iraq.
"Its my neck on the line," Basel said. "I documented the hell out of this." With the Iraqi government signatures in place, the money was in legal custody of the government of Iraq from the instant it was unloaded from the C-17s. It was Basel's job to make sure it stayed that way, at least until it got to the vaults of the Central Bank of Iraq.
Though he said he had no formal security training, Basel demonstrated a flair for subterfuge. Knowing a successful heist of the cash would be a momentum-shifting bonanza for the growing Iraqi insurgency, Basel rolled out a variety of tricks to keep the insurgents from figuring out just how much cash was moving right past them. He didn't repeat the same configuration of trucks and cars to carry the money, so any watching insurgents or criminals wouldn't be able to pin down a pattern of which vehicles carried cash. On some of the most dangerous missions, he eschewed the bristling military security convoys that would be a sure sign that something important was being shipped.
He worked on scheduling the timing of the flights, so they wouldn't arrive in Baghdad at a dangerous moment. He hired scouts to park on overpasses and drive the route ahead of the convoy to report on suspicious activity. And he used jammers to block the cell phone signals of any insurgents who tried to call in details of the convoy's movement or trigger a bomb in the roadway.
On one billion-dollar run, Basel used garbage trucks to throw the insurgents off the trail. "I hired garbage trucks, and in the back of the garbage truck you had $1 billion dollars." Basel said. "And I was in the front with a gun pointed at the driver. I said to him, �don't try anything funny. If everything goes well, you'll make $1,000. If you make a move, I'll kill you right here and drive the rest of the way myself.'"
He said the drivers he hired were thrilled to get $1,000, and that none ever tried to steal a single bill. It helped, he said, that he never used the same driver twice.
And he was not averse to using force. "I am willing and able to engage any entity," said. "I will open fire first and ask questions later." He held a firm belief in overwhelming firepower. "If you want to mess with a .50 cal (machine gun), go ahead and be my guest. You will lose every time."
Basel's Baghdad job came with enormous risks. At one point, the insurgents placed a million-dollar bounty on his head. At another, the Iraqi government issued a warrant for his arrest. Basel laughs off both incidents, saying the bounty should have been higher, and that the arrest warrant was a political trap designed to damage his credibility.
He said through all that, he never lost a shipment. "My record shows, you give Basel $10 billion to deliver, and Basel delivers $10 billion plus $400," he said. "I delivered more money than I received." That was possible, he explained, because the U.S. military came to him with any cash they found during nighttime raids on insurgent hideouts. Figuring that money rightly belonged to the Iraqi government, Basel said he delivered it to the Central Bank along with the pallets of cash from the New York Fed.
Basel said he didn't steal any of the Baghdad billions, but he knows who stole at least some of it.
Asked whether he thinks any of the money he delivered was stolen or misappropriated, Basel said, "absolutely, without a doubt." But asked who stole it, he said, "I'm sure I have an idea, but I can't name names." That's because, he explained quietly, "I have a wife and family to worry about."
When CNBC showed up in front of the East Rutherford Operations Center of the New York Fed to record a video segment for this story, police officers working for the Fed shooed our camera crew off the driveway and onto a small strip of public land that abuts the facility. Later, when we returned to our cars in the parking lot of a nearby convenience store, three police cars - including an unmarked car - blocked our exit. A local police officer politely asked us who we were and why we were taking pictures of the Fed. Satisfied that we were who we said we were, he let us go.
Such high-alert security is understandable, given the huge amounts of currency processed at the sleek modern facility, which was opened in 1992. The accounts held there for the Iraqi government alone are enormous. Despite the $40 billion Basel said he has distributed to the Central Bank of Iraq over the years, the value of the accounts at the New York Fed haven't gone down - they've gone up.
That's because the government of Iraq continues to pour the proceeds of its newly refurbished oil industry into its accounts at the Fed in New York. In April, the Iraqi government informed the UN security council that it was going to open a new account at the Fed to replace the Development Fund for Iraq account that had been established years earlier. Baghdad will continue to operate a second account, called the "Oil Proceeds Receipts Account" that serves as a cash reserve for the Iraqi Central Bank, supporting the Iraqi currency.
The New York Fed is experienced at this sort of thing - it also holds billions in reserves for a slew of other countries around the world. The New York Fed's website explains that it offers custodial accounts for foreign government cash and "vault services" services for their gold. The Fed invests the money in "overnight repurchase agreements, or U.S. Treasury and agency securities. The Federal Reserve does not give investment advice."
Officials at the Fed declined to comment for this story, even to confirm the existence of Iraqi accounts it holds. But publicly, the Fed says that taken together, its gold holdings "constitute the world's largest concentration of monetary gold; the U.S. Treasury's depository at Fort Knox, Kentucky, is the second largest."
To this day, say several sources, the New York Fed is still rolling trucks filled with bills to Baghdad. According to one source familiar with the Central Bank of Iraq, the amounts are much smaller now than they were in the early days of the war.
Many people in Iraq like to hold dollars instead of dinars. And the Central Bank sells dollars for Iraqi dinars at a fixed exchange rate in auctions it holds on most business days. According to the Central Bank of Iraq, for example, on September 12th 2011, it sold $12.3 million in cash at auction.
As for Basel, his experiences in Iraq opened up huge new opportunities for him around the world. Before the war, he lived in a modest townhouse in suburban Centreville, VA, outside of Washington, DC. But Basel didn't return to the United States after his time in Baghdad. Instead, he set himself up as one of the world's leading experts in transporting cash in war zones, operating a business out of his new home of Dubai, in the United Arab Emirates, where we sat down with him for an interview.
Today, Basel says he is planning a trip to Sudan, and is negotiating for a contract to transport billions of dollars in cash into newly liberated Libya.
The man who escorted $40 billion says he still needs to earn a living.
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Russian phishing in US elections.
But by then, choking was a pattern and the way around
it was to have a Daniel Ellsburg equivalent to reveal the truth,
and there was no such person in government in 2016.
The Obama choking pattern became apparent in 2009:
with healthcare, taking single payer off the table without
a struggle, and
with Honduras, pretending a vicious military coup wasn't
a vicious military coup.
We're all still paying for both those chokes and so many more.
It's hard to know which is sadder and more damaging to
the country: people who believe in Obama or people who
believe in Trump.
Why is there not a single word about cross check in this article, which did swing many elections?
Why not a single word about riggin the Democrat primaries, which left us with two contemptible choices?
2. Because that's not what this article is about.
3. Because that's not what this article is about.
it was to have a Daniel Ellsburg equivalent to reveal the truth,
and there was no such person in government in 2016. "
Snowden was on the scene and so were very many other very significant leakers -- Manning, Kiriakou, etc. Obama chose to prosecute the hell out of these rather than listen to the truth they exposed and make changes in government.
I think the CIA pretty much ran Obama. He was a willing tool or as I've often called him "house negro" for the CIA. That he failed to do anything about this memo we are now just learning about is probably because:
1. the memo did not exist until now or was just more trivial chatter.
2. the CIA did not really care about the story back then when it was 99.9% certain Hillary would win.
3. the CIA did not tell him exactly what to do.
Nonetheless, Obama's administration is the origin of the New Cold War against Russia and China. He's responsible for the pivot to Asia, the coup in Ukraine, the continued encirclement of Russia, the creation of ISIS as a proxy army, the renovation of the US nuclear arsenal as a preparation for war with Russia and China. All of these were CIA instructions he did act on. He was doing a lot. And this minor story was way down on the list of importance -- back then. Now it is high up for the mass media, which is taking CIA orders.
There is a difference between spying and cyber-warfare. There is ample evidence Russia spied on our election process. We spy on theirs. That's normal. There is, to date, no public evidence that they acted on the intelligence they gained. Russian interference in the election is still mere supposition and accusation.
The only reason we survived the Great Depression was that FDR became a benevolent dictator. He just did what was necessary, whether Congress or the Supreme Court liked it or not.
Sadly, there is no new FDR on the horizon.
Could it have been "fake intelligence", like Tony Blair's intel of Saddam's WMDs? Could it have been a Russian plant, given to a blown source, to discredit U.S. intelligence? Many people around the world are shocked that this "investigation" is continuing, with no end in sight, while real, significant problems are NOT being addressed! Could it have just been made up by John Brennan, who along with Obama, is deeply suspicious of Putin, but not of "our" Saudi allies who have been arming and funding Al Qaeda and ISIS?
This latest WaPo story, like all of its coverage of the "Russia-Putin elected Trump" story stinks to high heaven. Many RSN readers are rightly suspicious of it, but we keep getting more of it on RSN.
I'm not sure why!
Maybe even Obama smelled a rat and he ignored it.
RSN keeps posting this disinormation or fake news from the Wapo or NYT because it wants us to see first hand how bad mainstream news has become. The total dishonesty of the Wapo -- which is a CIA house organ -- and the rest of the MSM is a much bigger crisis in democracy than the silly story about Russian meddling in the US election.
Now these totally dishonest news organizations are creating "algorithms" in order to police all news. Here's a very good article on Consortium -
"Policing Truth Rebuild Trust"
https://consortiumnews.com/2017/06/24/policing-truth-to-restore-trust/
The Wapo's credibility is almost totally gone. Only the "true believers" still even read the Wapo. We should be grateful to Marc for sending to us these "smoking guns" of how the intelligence community has taken over the mainstream media, the Wapo most of all
Oh, it's a very tight race between WaPo and the NYT.
Republicans no longer work for Americans, instead for the Dirty Energy Koch Brothers, the Mercers, Sheldon Adelson et al.
What a tragic commentary on a Party that has had such eloquent statesmen in the past.
Let's work together as we move forward to restore Democracy...wit h a BIG 'D.'
When Ben Franklin said 'A Republic if you can keep it...' will we surrender?
Keep in mind that Deep State and their voices, CIA and Hillary, were scared to death of a renegade like Trump or Sanders becoming President. Sanders they took care of, but when they decided to abandon the Republicans in 2007 as unelectable, they failed to gain control of it last year and assumed their Hillary would win hands down. So what this article sounds like is a carefully worked out justification of their incompetence. That's what the CIA always does with their failures. They still think they won in Iraq & Libya.
It all boils down to he says, she says. For all of the citations, there's still not anything that's clear and factual except that the parties involved don't like Putin - as if that's news.
But those of us who would like to see some actual evidence, this smells. Is Obama stupid? I really really doubt it. So maybe when you are basically a neoliberal, appealing to bipartisanship when you know there isn't any to be had is the perfect cover for getting just what you (or your backers) want: not much social progress, carte blanche on the military front, and a lot of regressive social stuff you can blame on the GOP in your tearful memoirs.
No sale here, Charles. Still inclined to think we are being misdirected from the provable election fraud: the 2016 Democratic primaries.
The kind of "evidence" that reputable skeptics acknowledge as "evidence" from non-anonymous experts in the field, such as, William Binney, for instance; Ray McGovern is a good source for perspective; reporting from actual journalists like Robert Parry, Seymour Hersh who do not blur the line between evidence and speculation and whose "facts" are honestly vetted, corroborated, and reliable.
If the FBI, etc., subpoenas the DNC servers that the DNC alleges were hacked and those servers are investigated for actual evidence of "hacking"; while at the same time speaking to the Wikileaks disclosures that the US government has developed technology to mask or disguise evidence of their own hacking and misdirection capabilities.
If "evidence" of "collusion" between Donald Trump and Putin are presented, as "collusion" is the supposed basis for the Russia hysteria.
Maybe if solutions to the crisis -- such as, return to paper balloting, same-day registration, voting holiday, etc. -- are championed, along with responsible investigations.
How about, if, rather than blaming Russians, evidence free, US institutions and agencies consider and investigate the usual suspects in election fraud, American neo-cons and liberal interventionist s, and get to the bottom of our own home grown and institutional interferences?
This would be a good start.
.
The information that the American people have the absolute right to know is the massive voter fraud of electronic voting machines and voting tabulation manipulation, striping and flipping voters - - look it up - - and media minuplation and propaganda and horse race election coverage while refusing to cover issues and anything far from the center right, none of which has anything to do with Russia but is pure born and bred USA dulopathy party controlled.
Bad decisions have long term effects. This one might have cost us what remains of a republic. In the end it will not only be the ferocity of the emboldened right that will win the day, it will be the capitulations of the corporate democrats that will have cost us dearly.
If only we could convince Bernie and Elizabeth to ditch the Democratic Party and start a new, Progressive Party..... Neoliberalism is the policy of the Moderate Republicans who hijacked the Democratic Party when they were ejected from the GOP. Read "Listen Liberal" by Thomas Frank, and it all becomes clear.
The remarkable thing is that Sanders could save the DP, bringing them millions of young voters and a new funding opportunity, but they are either too stupid or too corrupt to accept the offer. They treat him terribly and may just drive him to do what many of us have wanted -- starting a new and populist party.
Many of us have been asking Sanders to lead his revolution to a new party but instead he's been working like a dog to save the DP's bacon -- all while they treat him like dirt.
It may very well be the Democrats who push him into it, sealing their own fate, quintessentiall y tragic figures, the DP once again snatching disaster from the jaws of victory.
If Bernie were to leave, there might be a minority of DPers who leave for him, maybe as much as 20%, but the majority would, I believe, come from the plurality of Independents and the pool of those who have dropped out of the system.
Wouldn't that be something?
He was effectively recruited to be the first black president by a billionheiress from Chicago's Gold Coast who as far as I know had no record of championing the African American cause. And while part of the country was "ready" for a black president, part of it was definitely not, as the SPLC could have predicted. From his first day in office he was subjected to a firestorm of racist "humor" on the internet (a Tea Party friend who does not think he is a racist sent me plenty of it), and the Secret Service reported far more threats on his life than any previous president.
But on the particular point of whatever the Russian government did or didn't do, I agree with Anonymot and markovchhaney. As I said many times in these pages last year, powerful interests we cannot see, and a few we can, are engaged in a war of propaganda and dirty tricks, an opaque and mind-bogglingly complex version of Antonio Prohias's "Spy vs Spy" for extremely high stakes. The one thing of which we can be reasonably certain is that NO ONE is consistently telling the truth.
cowardice? of the Democratic party since 2000. We all know that Al
Gore won the election in 2000, before the Supreme Court ever entered the picture. Just the number of ballots that ended up in the swamps or any trash receptacle would have changed the results. And then 2004 happened, with the Republicans messing around with the voting machines in Ohio. And since that time, the 2016 election, along with Jon Ossoff's election in Georgia are, at minimum, in doubt. And certainly Obama knew about voter suppression in Republican states, and crosscheck as well as purging of legal voters from voting lists, and more, when he learned of Russia's perfidy. So the president's hesitation was beyond acceptable.
But why now? The voter suppression efforts are only getting worse, to the point that we cannot plan on any victorious elections until something is done, and nothing is being done. Political leaders must be the ones to start speaking up, and then ordinary voters will join in. But they have to start the process. Please, and another please, Democratic
senators, representatives , reporters, talk show hosts, anyone with a voice, stop with this 'keep you mouth shut' MO and say something. That is, unless you really don't give a damn. Yes, there will be an enormous reaction by the Republicans, but the suppression is their reaction to our cowardliness. There is no sense to continuing this way.