(as of May 5th I added the Revaluation hint page as it has some wording that eludes to the fact that the RV may have taken place already and is just not announced yet, you find those words in red)
(a new page was created today May 2nd Exchange Rate Increase)
(notice, as of April 30th, news about the three zeros was updated)
On "Iraq Information II," are the mp3's of Governor Shabibi's recent speech he gave to the Chamber in Washington DC On April 19th and also a link to a must hear, conference call in association with his speech.
VERY IMPORTANT On the following pages, "Arab News about the 3 zeros LAST PARAGRAPH OF THE LAST ARTICLE TALKS ABOUT INCREASING THE VALUE TO THE EIGHTIES RATE, AND THE 8TH ARTICLE FROM THE TOP TELLS YOU THE OLD EIGHTIES RATE TOWARD THE BOTTOM OF THE ARTICLE. Be warned the Arabic to English Google translations are lousy, but, it shows the wording for evidence of the revaluation of the Iraqi Dinar. I have highlighted some of the obvious signs in RED.
Oanda information on the Iraqi Dinar...
The new Iraqi Dinar was released on October 15, 2003. It replaced all "old" Dinar and "Swiss" Dinar banknotes, which as of January 15th 2004 were no longer legal tender.
The conversion rates for the new Iraqi dinars were as follows:
- one "old" Dinar was exchanged for one new Iraqi Dinar
- one unit of the "Swiss" Dinar (used throughout Iraq until the early 1990's, and still used in some northern areas of Iraq) was exchanged for 150 new Iraqi Dinars.
|
The new Iraqi Dinar banknotes look similar to the former national ("Swiss") Dinar notes, but have more security features to guard against counterfeiting, are more durable so will suffer less "wear and tear," and have many more denominations.
The new currency is convertible into non-Iraqi currencies, including the US dollar, at the prevailing market rate. |
|
 |
To see pictures of the banknotes of Iraq, go to fxGallery.
I am now going to try to journalize my experience with this opportunity.
The middle of January of this year, my brother contacted me and told me about the Iraqi Dinar. Since his reputation for Network Marketing, Multi-Level-Marketing and other investment scams were deep and wide, I had little reason to believe him. I had fallen prey to one such scam he was into about 3 years prior, and that was my only experience of loosing money in a scam. I always told my friends and anyone who would ask that, I figured if God wanted me to be rich, I'd have been born into a rich family.
My brother was a little insistent on giving me the information and I as always was resistant as usual to believe him. However, I am different than most people and I will listen to my siblings and others about certain things just to be a friend. It took me a few days before I decided to give it a chance and then as always, I had to do the most meticulous research on it as I always do on anything I want to know about, do, or teach about. After spending several days investigating just the reason why this wouldn't be an outright scam, I finally reached a decision to actually pray about it.
After a few more days of praying about it, I stumbled if you could call it that, into some information that changed my outlook on a certain parameter of my past life that had bugged me for a long time. This did not directly have to do with making an investment, but it had to do with the mystery behind how I ended up in Hong Kong. Shortly there after, I had decided it could easily tie into this, as part of God's plan. After continuing to pray about it, I decided to do some more investigating on how this investment could culminate into what everyone seemed to be forcasting it to do.
About that same time, I felt like the Lord was reminding me what I had once heard in a daily CBN 700 Club message that Pat Robertson was prophecying about, that there was going to come a time when there would be a transfer of wealth from one part of the worlds community, to the Christian community. One of the things he said was you would have to be in the position for it to happen. I used to ask God about that, because the only way I knew you could make money was by working for it honestly. I really had to ponder this for sometime. I never stopped giving up on getting as much information as I could. I did historical exchange rate investigations. I was able to go to the International Monetary Funds website and read documents. I was able to read documents on the GCC CU which is an Arab currency union that has been in the making for several years. I was able to go to the Department of Treasuries website of the US of course and read documents that interested me. I was able to go to the World Banks website and investigate.
In essence, I felt I had not left one rock unturned. I began to feel that this could actually happen and mostly I felt that it was something I should take more seriously. All this time I really did feel a tugging in my spirit from the Lord. That being said, I had not decided to take the plung and buy some Dinar until about January 29th of this year. Since then, I have seen countless rumors and nothing has culminated into the actual revaluation yet.
This is how it is suppossed to work. Just like the forex trader market, you buy the country of choice currency. Their countries currency will either go up and appreciate, or go down and depreciate. On the forex market anyone can become a trader and you get a service provider of your choice, and usually they will provide you with a demo account and you can trade momopoloy money (fake trades) until you feel confident enough to invest real money into it. There are a number of different parameters either required, or used, according to your choice in providers, your trading appetite, and the market. You trade, and when you make money its good, when you loose money it's bad, and all the the excess money made or lost are called pips, which represent a dollar or partial dollar.
Now, (1) Iraqi Dinar was rumored to be worth 3.22 US dollars back when Saddam was in power. In my research I found out though that the International Monetary Fund, which I will refer to as the IMF from now on, only recognized it at around 2.72 USD. This is stil very valuable then, compared to 1 US dollar which I will refer to as USD from now on.
So, when Saddam invaded Kuwait back in the early 1990's, Kuwaits dollar value dropped from about 1 KWD to 3.40 USD down to a way lower value in country, but according to sources, not out of country. Regardless, some people made a killing when it went back to it's original status.
Below is one such story.
This excerpt was taken from a website at: http://www.investorsiraq.com/showthread.php?47362-20-year-history-of-Kuwaiti-Exchange-Rate
(the following text punctuation has been corrected and capital letters added where needed for use on this website!)
This is why I got into this. A friend of mine call's me and say's, go buy the new Iraqi dinar. You want to know how I made all my money, I bought the KWD when it was low 10 to 1. He said he bought 70,000.00 KWD at this time. He said it took 2 years to get back to 3.00 and he cashed in. He turned $70,000 into 21 millon dollars. At the time, when he bought in, he worked for a bank. I can not prove any of this, but I can say, he has one big house and several new cars and several new Harley's. Oh and another house on a island some where. So, I bought the Iraq dinar in 2004. He told me at the time he thought it would revalue in 3/ 2005 after the elections and when they have formed there gov. When I talk to him now, he say's they still have not formed there gov. and until this happens, it wont happen. He say's to be patience it will happen.
From March 18, 1975 to January 4, 2003 the dinar was pegged to a weighted currency basket. From January 5, 2003 until May 20, 2007, the pegging was switched to 1 U.S. dollar = 0.29963 dinar with margins of ±3.5%.[2] The central rate translates to approximately 1 dinar = 3.33745 dollars. From June 16, 2007, the Kuwaiti dinar was re-pegged to a basket of currencies,[3] and is now worth about US$3.45 (€2.37). It is the world's highest-valued currency unit.
When Iraq invaded Kuwait in 1990, the Iraqi dinar replaced the Kuwaiti dinar as the currency and large quantities of banknotes were stolen by the invading forces. After liberation, the Kuwaiti dinar was restored as the country's currency and a new banknote series was introduced, allowing the previous notes, including those stolen, to be demonetized.
At the present time the Iraqi Dinar is at a rate of 1,170 IQD to 1 USD. It has not fluctuated much within the last year. When Iraq revalues it Dinar, it is been echoed in circles that they will try to bring it back at the 1990's level, plus inflationary increases, so possibly 3.22 to 3.72 as an example. So then 3.22 to 3.72 USD to 1 IQD as an example. This would put the Iraqi Dinar at an equitable level with their fellow oil suppliers like Kuwait who's currency fluctuates around 3.50 to 3.64 USD to (1) KWD on a regular basis.
After being in this investment for another month, I found out that not only would Iraq eventually try to get into the GCC CU, but that it had formally been invited into, but was not a full participating member of the World Trade Organization. However, they have been working on being a fully participating member, but in order to do that they would have to have a market based economy. (Another wards, a valued tradable currency) Now, I doubted this for myself and in fact tried to do the research on the WTO website to see what the qualifications were to be in the WTO. I found the right document and it didn't say anything about the valued tradable currency.
It wasn't until a couple of weeks later that I saw a news article that actually stated that that was the agreement that Iraq had to make with the WTO. This is the original post of the notice about Iraq joining the WTO in 2007.
This article also lays out the requirements for Iraq in paragraph three and lines 5 & 6. I have underlined them.
Posted on 13 April 2010. Tags: WTO 
“Iraq needs a new study for its economic system to be a member in the World Trade Organization (WTO),” an official in the Iraqi Finance Ministry said today.
”The Iraqi committee gave its final results about the Iraqi acquisition of the membership in the World Trade,” The Economic Advisor in the Finance Ministry, Abdul Alim Kadhim, told The Independent National News Agency of Kurdistan (AK news)
“The Committee called for reducing the difference between the U.S. dollar and the Iraqi dinar, activate the role of the private sector, open the world markets in Iraq with customs on imported goods that commensurate with the economic laws applied in the country,” he added
The Iraqi team to annex Iraq to the WTO was formed on December 13, 2004, and it presented a memorandum to join the organization on September 16, 2005. Iraq became an observer in the WTO on January 24, 2007, and the meetings of the first round of the Working Group began in 2007, followed by a second round in 2008, and the third and last round was in 2009.
”The organization called Iraq to pay half of its debts, in order to be a member in the WTO which will improve the economic and commercial situation in the country,” Kadhim pointed out.
He stressed on the need of improving the Iraqi economy according to modern economic frameworks found at the present time among the economically developed countries.
The World Trade Organization WTO was formed according to Bretton Woods convection at the end of 1944 in the United States, accompanied by the formation of the International Monetary Fund and the World Bank.
It includes approximately 150 countries and has several functions that aim to remove the distortions found in the trade patterns between the States and the establishment of multilateral trading system more stable and more opened and has the ability to predict, in addition to addressing the customs and non customs barriers, as well as addressing the communication problems, building services, and address the matters pertaining to the international investment, and resolve the international trade disputes.
It also aims to expand the exchange of goods through the reduction of customs and opening world markets for goods and services (except oil).
Remember, Iraq has untapped oil reserves just waiting to be tapped. They're rumored to be the second richest country in the middle east.
Here's a quote from a website http://usiraq.procon.org/view.answers.php?questionID=946
Stephen Moore, MA, President of Club for Growth, and Tom Feeney, JD (R-FL), wrote in a Sep. 26, 2003 National Review article titled "War & Peace":
"In the run-up to the war in Iraq, administration officials had consistently argued that Iraq's oil revenues would pay for the costs of reconstruction. That financing plan, which draws from the assets of Iraq to pay for their own economic rehabilitation, seems no less sensible today than it was six months ago. Iraq is not a poor country — at least not for long. It is a resource-rich country, with the highest levels of oil reserves of any nation in the world other than Saudi Arabia. With an estimated 100 billion barrels of known reserves, and probably much more than that is technologically recoverable from these rich desert fields, the discounted present value of the oilfields could easily approach $1 trillion."
Sep. 26, 2003 - Stephen Moore, MA 
Tom Feeney, JD
Another quote by a Yale University Professor from the above pdf link.
Iraq contains 112 billion barrels of proven oil reserves, the second largest in the world (behind Saudi Arabia) along with roughly 220 billion barrels of probable and possible resources. Iraq’s true resource potential may be far greater than this, however, as the country is relatively unexplored due to years of war and sanctions. Deep oil-bearing formations located mainly in the vast Western Desert region, for instance, could yield large additional oil resources, but have not been explored.5
Here's a couple of excerpts from the WTO website at
The WTO in global economic policy-making http://www.wto.org/english/thewto_e/whatis_e/tif_e/org5_e.htm#cooperation
An important aspect of the WTO’s mandate is to cooperate with the International Monetary Fund, the World Bank and other multilateral institutions to achieve greater coherence in global economic policy-making. A separate Ministerial Declaration was adopted at the Marrakesh Ministerial Meeting in April 1994 to underscore this objective.
The declaration envisages an increased contribution by the WTO to achieving greater coherence in global economic policy-making. It recognizes that different aspects of economic policy are linked, and it calls on the WTO to develop its cooperation with the international organizations responsible for monetary and financial matters — the World Bank and the International Monetary Fund.
The declaration also recognizes the contribution that trade liberalization makes to the growth and development of national economies. It says this is an increasingly important component in the success of the economic adjustment programmes which many WTO members are undertaking, even though it may often involve significant social costs during the transition.
And this one at http://www.wto.org/english/thewto_e/whatis_e/tif_e/org5_e.htm
Developing countries make up about three quarters of the total WTO membership. Together with countries currently in the process of “transition” to market-based economies, they play an increasingly important role in the WTO.
Therefore, much attention is paid to the special needs and problems of developing and transition economies. The WTO Secretariat’s Training and Technical Cooperation Institute organizes a number of programmes to explain how the system works and to help train government officials and negotiators. Some of the events are in Geneva, others are held in the countries concerned. A number of the programmes are organized jointly with other international organizations. Some take the form of training courses. In other cases individual assistance might be offered.
The subjects can be anything from help in dealing with negotiations to join the WTO and implementing WTO commitments to guidance in participating effectively in multilateral negotiations. Developing countries, especially the least-developed among them, are helped with trade and tariff data relating to their own export interests and to their participation in WTO bodies.
There was and is so many hurdles for Iraq to jump thorugh and this is one of them according to sources!
Iraq had to write a "Letter of Intent" to the IMF as such... here is just a short excerpt from a vast paged letter to the IMF from Iraq.
Iraq: Letter of Intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding
March 3, 2011
The following item is a Letter of Intent of the government of Iraq, which describes the policies that Iraq intends to implement in the context of its request for financial support from the IMF. The document, which is the property of Iraq, is being made available on the IMF website.
Financial Sector
12. Financial intermediation is at a very low level in Iraq. A functioning banking sector is essential for the development of a strong private sector. We have begun to embark on our banking sector reform strategy: A critical step will be to complete the financial restructuring of the two largest stateowned banks, Rafidain and Rasheed, based on their completed financial and operational audits. In this regard, we formed a Bank Reconciliation Unit that comprises technical level staff from the banks, the CBI and the Ministry of Finance, and with the assistance of Ernst and Young (who were the agents of the Ministry of Finance in the external debt restructuring process) to: (i) deal with all legacy external liabilities taking into account the government’s actions in the context of Iraq’s external debt restructuring (ii) indentify and propose to write-off non-performing loans to defunct state-owned enterprises; (iii) propose a course of action for other remaining unreconciled accounts; and (iv) after the balance sheets have been cleaned up, revalue the remaining foreign currency denominated balance sheet items.
Always look at dates of documents provided for the evidence!
Web URL for the below article... http://www.chamberpost.com/2011/04/modernizing-iraqs-banking-system/
Apr 19 11
Modernizing Iraq’s Banking System
by Lionel Johnson
Today the U.S. Chamber’s Iraq Business Initiative hosted Dr. Sinan Al-Shabibi, Iraq’s central bank governor for a briefing at which he discussed Iraq’s fiscal and economic stability and progress that has been made to strengthen the country’s financial sector since 2003.
While stability in Iraq and the broader Middle East region is generally discussed in the context of politics and security, Dr. Shabibi instead underscored the important work of Iraq’s central bank to shore up stability through financial reform and modernization.
Dr. Shabibi emphasized that while it is not the role of the central bank to finance individual projects, it is committed to ensuring an environment conducive to foreign direct investment through a stable currency and competitive, market based exchange rates. He stressed the imperative of foreign investment from the private sector driving Iraq’s critical reconstruction and development.
The U.S. Chamber’s Iraq Business Initiative looks forward to working with Dr. Shabibi in the weeks, months, and years to come. We thank him for taking time out of his busy schedule to meet with us here today.
(you can find the 3 mp3's and mostly transcribed dialogue to Shabibi's speech on the page labeled Iraq Information II here --> Iraq Information II at the bottom of the page).
In Governor Shabibi's speech he addresses issues concerning trying to get investors into Iraq. His speech is not prepared and so he stumbles around in his words quite often and ends up mentioning the word inflation 21 times in the first 30 minutes of the speech, and the words exchange rate 17 times in the first 30 minutes of his speech. Then he's asked point blank about the revalue with this question:
First question: With respect to the ongoing need for stability in Iraq, and the exchange rate, would you not call this a direct need for a potential revaluation to reduce domestic and foreign investment in Iraq, and in regards to that, how far do you believe we are from a revaluation of the Iraqi currency?
This catches Dr. Shabibi right off guard and after a moments of hesitation, his first few words are this:
Shabibi: AH… we collect questions and we respond to them one by (mumbling) ok we respond, well thank you very much for this question and ah… ah… (long hesitation) of all the things I know of this I can not tell you, (laugh) but the thing is, No I think that the question is all, you can not have an economist saying without, chance are it depends, so the question here is actually a revaluation with ah… which really is going to depend on, on to what extent we are, don’t continue ah… let us say, controlling inflation, ... (Talk about incoherent mumbo jumbo!) his answer continues for several minutes yet with no real conclusion.
Then the second question is asked to him about the removal of the three zeros:
Question two: Thank you governor this may be the same question so I can understand if you can’t answer it but, I’ve heard a report that, Oh, my name is Bob Kelly, I’m an investor in Iraq, the Summit Hotel in the international zone, with the Opec financing, but I’ve heard a report in the last couple of days that Iraq is about to cut three zeros off the currency and that they call that redenomination, that may be the same question that you just received but I wondered if you had any information on that?
**Here is a partial excerpt of what he said more toward the end of answering this question from his very mumbo jumbo answer to it, but this really is an answer to the first question in disguise....
So, ah… the only way to combat all of these things at the time is increase the denomination of three zeros. I think, I think ah… to bring back the Iraqi Dinar, were actually the three zeros are removed, and of course you have to, this will have gone hand in hand with monitoring of the exchange rate and all these things and, and you will see I think now it is, it is probably ah… we are, we are studying, not studying, we haven’t decided actually when to remove that, remove these three zeros it’s very soon, but of course, this requires not only the central bank activity, this requires, because I mean something you have to make a lot of propaganda, (and on and on he goes!) until he concludes with no other real conclusion, except he has alluded to the fact they are removing the three zeros, and it will be very soon. How do you remove three zeros without causing public outcry for devaluing their money? you increase the currency value?
Recently, there have been several news articles about Iraq removing the three zeros from their currency. Here's one of those articles.
Pay attention to the date of this article as it is one day before Shabibi shows up in Washington DC., at the Chamber of Commerce to give his speech which is in the above article with the photo of him in it.
Iraq Ctrl Bk Studies Procedure To Remove 3 Zeros From Dinar-Report
Monday, Apr 18, 2011
BEIRUT (Zawya Dow Jones)--The Central Bank of Iraq, or CBI, is preparing a law to remove three zeros from the Iraqi dinar but the final decision lies with the country's parliament, pan-Arab Al Hayat daily reports Monday.
The central bank has to submit this law to the council of ministers, and then to the parliament which will decide whether there is a need to take such a decision, Mothahhar Saleh, CBI's advisor, told the paper.
The central bank is dealing with this matter very cautiously because any rush to implement such move may cause economic problems, he added.
The Iraqi ministry of finance said in February that the deletion of zeros from the local currency will help free the Iraqi economy from constrictions and will enhance the value of the Iraqi dinar, the daily reports.
Newspaper website: http://international.daralhayat.com/internationalarticle/256567
If your interested in the Department of Treasury's report on the re-construction of Iraq. The below link is a detailed (and long) report on what has been done and what there was to do starting in 2003.
http://www.treasury.gov/press-center/press-releases/Pages/js452.aspx
I am pasting some more pertinent info. here to show that the US invasion of Iraq was planned well enough so the economy wouldn't crash in Iraq.
A Plan To Pay Workers and Pensioners
A mechanism for making emergency payments was quickly established on the ground, so that payments could commence for dock workers, rail workers, power plant workers, and others. At the same time, upon arriving in Iraq, our advisors conducted an assessment of the existing payroll system for salaries and pensions and found that adequate, functional procedures already existed. While this system will have to be updated over time, it provides the basic infrastructure for making salary and pension payments.
Despite tremendous logistical challenges, the system of payments has been a success. To date, over 1.5 million pensioners, civil servants, and workers crucial to the functioning of essential public services have received payments. Our advisors have played a key role, working closely with counterparts from the Defense Department and other agencies, in extending this initial financial life-line to the Iraqi people.
Establishing a Stable Currency
One of the most important objectives in the near-term is to promote the establishment of a stable, unified national currency. A currency that has the full faith and confidence of the Iraqi people, and which can be used as a store of value, is a prerequisite for establishing a vibrant economy.
The pre-existing currency situation in Iraq makes this a complex and difficult task. Iraq has not had a stable currency for some time; several currencies circulate widely in Iraq, including the Iraqi (or �Saddam�) dinar in central and southern Iraq, the Old Iraqi (or �Swiss�) dinar in the northern part of the country, and the U.S. dollar. The Saddam dinar has fallen dramatically in value over the past dozen years due to the policies of the Saddam Hussein regime. One dollar used to purchase only a third of a Saddam dinar under the official exchange rate; now, it will purchase about 1,200 dinars in the market.
One of our primary concerns was that the conflict and its aftermath would result in a massive depreciation of the Saddam dinar and hyperinflation. There were concerns about losing control over large warehouses of Saddam dinar notes and currency printing facilities.
And with the fall of the regime, there was the risk that the currency would cease to serve as an accepted means of exchange.
For these reasons, early action was taken to secure currency stocks and currency-printing facilities and stop the printing of the Saddam dinar. The military made public announcements that existing currencies in Iraq would continue to be accepted as means of payment. These measures helped stabilize the Saddam dinar and avert a monetary crisis. In fact, the Saddam dinar has actually strengthened in recent weeks�from a low of about 5,000 dinars per U.S. dollar during the conflict to approximately 1,200 per dollar today.
This achievement notwithstanding, a stable, unified currency system is essential for Iraq�s long-run economic prospects. Several options exist for currency reform, including the introduction of a new currency or the replacement of Saddam dinars with Old Iraqi dinars. We stand ready to assist in the implementation of whichever option the people of Iraq choose through a representative, elected Iraqi government.
There was no way the US was going to let Iraq's economy fail during the invasion, here is a news article that came out several years later after it finally surfaced about what happened.
Ask your self this, why all this? If I can find the evidence I will, but it is said that George W. Bush said that before the war was over, Iraq would pay for all of it! So now we have a sure revaluation of the Iraqi Dinar and the US is said to hold trillions of it and that they also have made a deal with Iraq that a majority of that cash would be redeemed with Oil at $38.00 a barrel in trade.
The missing $6.6bn in Iraq reconstruction funds
18/06/2011 10:41
By Joel Wing of Musings On Iraq
Recent
headlines have been filled with stories of $6.6 billion missing from
Iraq’s reconstruction funds. Many reports have been focusing upon the
money going into the pockets of corrupt officials.
While that likely did happen with some of the funds, the vast majority
probably disappeared through poor bookkeeping, which was a hallmark of
the early years of the U.S. occupation of Iraq.
The Special Inspector General for Iraq Reconstruction’s April 2011 “Quarterly Report to the United States Congress,”
reported that $6.6 billion was missing from the Development Fund for
Iraq (DIF). In mid-June, the Special Inspector General Stuart Bowen,
began talking to the media about the case.
In May 2003, the Development Fund for Iraq
(DFI) was created by United Nations Resolution 1483. The Fund collected
the majority of Iraq’s petroleum revenues, which were being held at the
Federal Reserve Bank of New York under the Oil for Food Program that
was created in 1995. The DFI was put at the disposal of the Coalition
Provisional Authority (CPA), and was used to pay the salaries and
pensions of Iraqi government workers, and for reconstruction projects.
During the CPA era, the United States began flying in stacks of $100 bills from the Federal Reserve Bank to Baghdad on C-130 transport planes. From May 2003 to May 2004 21 flights delivered $12 billion in cash to Iraq.
The money was haphazardly delivered to Iraq’s ministries, and then used
for development plans. The Bush administration had no infrastructure or
bureaucracy in place to handle what became the largest reconstruction
project in American history, and therefore had to deal with the task on
an ad hoc basis with little to no oversight.
When the CPA ended
its mandate in mid-2004 was when the missing $6.6 billion was first
noticed. On June 28, 2004, just as the CPA was finishing up its work in
Iraq, it issued a document, which said that it had $6.6 billion
remaining from the DFI. $4 billion was in outstanding commitments, and
$2.6 billion was on hand assets. The money was then supposed to be
transferred to the Pentagon. On July 11, a Defense Department
comptroller sent an email from Baghdad that the $6.6 billion was still
on the books.
There are no records of the money being
transferred to Defense however. The Pentagon comptroller who took charge
of the DFI in July 2004 said he never received the six billion. Since
then, Defense has claimed that it could find the money if given enough
time, but it so far has failed to do so.
If the missing money
wasn’t bad enough, in June 2011 Stuart Bowen gave an interview with the
Los Angeles Times. The Times reported that auditors thought that some of
the money could have been stolen, and that Iraqi officials were the
prime suspects. That set off a flurry of news stories that $6.6 billion
went missing because of corruption. Bowen then tried to clarify the issue,
by saying that he only answered a hypothetical question about the funds
being stolen by the Los Angeles Times reporter, but it was largely too
late. The media ran with the first account, which largely shaped public
opinion about the matter despite what Bowen said later on.
While
greedy contractors or U.S. or Iraqi officials could have taken some of
the money, the vast majority of the $6.6 billion probably disappeared
due to the horrible record keeping that was the norm with the CPA and
Pentagon at the time. As the Special Inspector General has been noting
for the past several years, the United States was not ready to manage
the rebuilding of Iraq. There was a total lack of coordination and
planning within the Bush White House before the invasion, and when the
CPA was created after the overthrow of Saddam Hussein the problems did
not end.
The new American administration dished out a huge
amount of money in a very short period of time in cash to deal with one
crisis after another, with very little bookkeeping or oversight. When
the CPA ended and the U.S. military took over control of Iraq, these
issues continued. It should be no surprise then that such a large amount
of money should turn up unaccounted for. In fact, a large amount was
probably spent in Iraq keeping the government running, but its exact
destination will likely never be known because of the dearth of paper
work at the time.
With an MA in International Relations, Joel Wing has been researching and writing
about Iraq since 2002. His acclaimed blog, Musings on Iraq, is
currently listed by the New York Times and the World Politics Review. In
addition, Mr. Wing’s work has been cited by the Center for Strategic
and International Studies, the Guardian and the Washington Independent.
How the US sent $12bn in cash to Iraq. And watched it vanish
Special flights brought in tonnes of banknotes which disappeared into the war zone
An armed guard poses beside pallets of $100 bills in Baghdad. Almost $12bn in cash was spent by the US-led authority
The US flew nearly $12bn in shrink-wrapped $100 bills into Iraq, then distributed the cash with no proper control over who was receiving it and how it was being spent.
The staggering scale of the biggest transfer of cash in the history of the Federal Reserve has been graphically laid bare by a US congressional committee.
In the year after the invasion of Iraq in 2003 nearly 281 million notes, weighing 363 tonnes, were sent from New York to Baghdad for disbursement to Iraqi ministries and US contractors. Using C-130 planes, the deliveries took place once or twice a month with the biggest of $2,401,600,000 on June 22 2004, six days before the handover.
Details of the shipments have emerged in a memorandum prepared for the meeting of the House committee on oversight and government reform which is examining Iraqi reconstruction. Its chairman, Henry Waxman, a fierce critic of the war, said the way the cash had been handled was mind-boggling. "The numbers are so large that it doesn't seem possible that they're true. Who in their right mind would send 363 tonnes of cash into a war zone?"
The memorandum details the casual manner in which the US-led Coalition Provisional Authority disbursed the money, which came from Iraqi oil sales, surplus funds from the UN oil-for-food programme and seized Iraqi assets.
"One CPA official described an environment awash in $100 bills," the memorandum says. "One contractor received a $2m payment in a duffel bag stuffed with shrink-wrapped bundles of currency. Auditors discovered that the key to a vault was kept in an unsecured backpack.
"They also found that $774,300 in cash had been stolen from one division's vault. Cash payments were made from the back of a pickup truck, and cash was stored in unguarded sacks in Iraqi ministry offices. One official was given $6.75m in cash, and was ordered to spend it in one week before the interim Iraqi government took control of Iraqi funds."
The minutes from a May 2004 CPA meeting reveal "a single disbursement of $500m in security funding labelled merely 'TBD', meaning 'to be determined'."
The memorandum concludes: "Many of the funds appear to have been lost to corruption and waste ... thousands of 'ghost employees' were receiving pay cheques from Iraqi ministries under the CPA's control. Some of the funds could have enriched both criminals and insurgents fighting the United States."
According to Stuart Bowen, the special inspector general for Iraq reconstruction, the $8.8bn funds to Iraqi ministries were disbursed "without assurance the monies were properly used or accounted for". But, according to the memorandum, "he now believes that the lack of accountability and transparency extended to the entire $20bn expended by the CPA".
To oversee the expenditure the CPA was supposed to appoint an independent certified public accounting firm. "Instead the CPA hired an obscure consulting firm called North Star Consultants Inc. The firm was so small that it reportedly operates out of a private home in San Diego." Mr Bowen found that the company "did not perform a review of internal controls as required by the contract".
However, evidence before the committee suggests that senior American officials were unconcerned about the situation because the billions were not US taxpayers' money. Paul Bremer, the head of the CPA, reminded the committee that "the subject of today's hearing is the CPA's use and accounting for funds belonging to the Iraqi people held in the so-called Development Fund for Iraq. These are not appropriated American funds. They are Iraqi funds. I believe the CPA discharged its responsibilities to manage these Iraqi funds on behalf of the Iraqi people."
Bremer's financial adviser, retired Admiral David Oliver, is even more direct. The memorandum quotes an interview with the BBC World Service. Asked what had happened to the $8.8bn he replied: "I have no idea. I can't tell you whether or not the money went to the right things or didn't - nor do I actually think it's important."
Q: "But the fact is billions of dollars have disappeared without trace."
Oliver: "Of their money. Billions of dollars of their money, yeah I understand. I'm saying what difference does it make?"
Mr Bremer, whose disbanding of the Iraqi armed forces and de-Ba'athification programme have been blamed as contributing to the present chaos, told the committee: "I acknowledge that I made mistakes and that with the benefit of hindsight, I would have made some decisions differently. Our top priority was to get the economy moving again. The first step was to get money into the hands of the Iraqi people as quickly as possible."
Millions of civil service families had not received salaries or pensions for months and there was no effective banking system. "It was not a perfect solution," he said. "Delay might well have exacerbated the nascent insurgency and thereby increased the danger to Americans."
