Federal Reserve Shipped Billions to Iraq Which Were Then Stolen

… Involved in Other Unsavory Activities – Published on Global Research.ca, by Washington’s Blog, June 23, 2011.

CNBC reports today:

  • The New York Fed is refusing to tell investigators how many billions of dollars it shipped to Iraq during the early days of the US invasion there, the special inspector general for Iraq reconstruction told CNBC Tuesday.
  • The Fed’s lack of disclosure is making it difficult for the inspector general to follow the paper trail of billions of dollars that went missing in the chaotic rush to finance the Iraq occupation, and to determine how much of that money was stolen.
  • The New York Fed will not reveal details, the inspector general said, because the money initially came from an account at the Fed that was held on behalf of the people of Iraq and financed by cash from the Oil-for-Food program. Without authorization from the account holder, the Iraqi government itself, the inspector general’s office was told it can’t receive information about the account. 
  • The problem is that critics of the Iraqi government believe highly placed officials there are among the people who may have made off with the money in the first place.

As I noted last year:

In July 2009, Congressman Henry Waxman stated:

  • In a 13 month period from May 2003 to June 2004, the Federal Reserve sent nearly $12 billion in cash, mainly in $100 bills from the United States to Iraq. To do that, the Federal Reserve Bank in New York had to pack 281 million individual bills … onto wooden pallets to be shipped to Iraq. The cash weighed more than 363 tons and was loaded onto C-130 cargo planes to be flown into Baghdad… //

Al Jazeera noted:

Sunday that the figure might actually be much higher:

  • [An] Iraqi parliament speaker, has told Al Jazeera that the amount of Iraqi money unaccounted for by the US is $18.7bn – three times more than the reported $6.6bn.
  • Just before departing for a visit to the US, al-Nujaifi said that he has received a report this week based on information from US and Iraqi auditors that the amount of money withdrawn from a fund from Iraqi oil proceeds, but unaccounted for, is much more than the $6.6bn reported missing last week.
  • “There is a lot of money missing during the first American administration of Iraqi money in the first year of occupation.
  • “Iraq’s development fund has lost around $18bn of Iraqi money in these operations – their location is unknown. Also missing are the documents of expenditure.
  • “I think it will be discussed soon. There should be an answer to where has Iraqi money gone.”
  • The Bush administration flew in a total of $20bn in cash into the country in 2004. This was money that had come from Iraqi oil sales, surplus funds from the UN oil-for-food programme and seized Iraqi assets.
  • Officials in Iraq were supposed to give out the money to Iraqi ministries and US contractors, intended for the reconstruction of the country.
  • ***
    The US has audited the money three times, but has still not been able to say exactly where it went.
    ***
  • “There is going to be a fairly wide net cast – some of them [involved in mishandling of this money] are thought to be US officials, but many here believe that it is the Iraqis who have filled their pockets.
  • “Safeguarding the money was up to the Americans … after the invasion, provisional authority here was run by the American military.

The Los Angeles Times reported on June 13th:

  • For the first time, federal auditors are suggesting that some or all of the cash may have been stolen, not just mislaid in an accounting error. Stuart Bowen, special inspector general for Iraq reconstruction, an office created by Congress, said the missing $6.6 billion may be “the largest theft of funds in national history.”
    ***
    Theft of such a staggering sum might seem unlikely, but U.S. officials aren’t ruling it out. Some U.S. contractors were accused of siphoning off tens of millions in kickbacks and graft during the post-invasion period, especially in its chaotic early days. But Iraqi officials were viewed as prime offenders.

The Federal Reserve has been involved in other unsavory activities as well, such as loaning billions to Gaddaffi and covering up
the source of funding for the Watergate burglars.

Geithner’s New York Fed also pushed to keep pay AIG’s CDS counterparties at full value, and then to keep the deal secret. (full long text).

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