View Full Version : $2.4 billion in $100 bills sent to Baghdad

06-28-2005, 07:59 AM
T. Christian Miller, Los Angeles Times
June 22, 2005 CASH0622

WASHINGTON, D.C. -- It weighed 28 tons and took up as much room as 74 washing machines. It was $2.4 billion in $100 bills, and Baghdad needed it as soon as possible.

The initial request from U.S. officials in charge of Iraq required the Federal Reserve Bank of New York to decide whether it could open its vault on a Sunday.

Then, when the shipment date changed, officials had to scramble to line up U.S. Air Force C-130 cargo planes to hold the money. They did, and the $2,401,600,000 was safely delivered to Baghdad on June 22, 2004. It was the largest one-time cash transfer in the history of the New York Fed.

Disclosure of the frantic transfer in the final days of U.S. control over Iraq came during a daylong hearing on Tuesday that revealed growing worry from Congress over U.S. oversight of spending in Iraq.

Both Republicans and Democrats appeared taken aback by the sheer volume of cash sent to Iraq: nearly $12 billion over the course of the U.S. occupation from March 2003 until June 2004, according to a report by Rep. Henry Waxman, D-Calif., who had reviewed e-mails and documents subpoenaed from the bank.

The cash -- generated mostly from oil revenues -- represented Iraqi funds that had been held in trust by the Federal Reserve under the terms of a U.N. resolution.

The June 2004 money transfer was needed to run the country as the interim Iraqi government took over from the U.S.-led Coalition Provisional Authority, officials said.

Rep. Christopher Shays, R-Conn., chairman of the Government Reform Committee's national security subcommittee, on Tuesday criticized the Pentagon's handling of the money, known as the Development Fund for Iraq.

"It's very clear that ... we didn't have systems in place to account [for the funds]," Shays said. "It doesn't mean they weren't spent well but, given my sense of human temptation, I suspect some of it was, frankly, taken."

Those fears were echoed by Democrats on the panel, who also criticized Halliburton Corp., the oil services company once run by Vice President Dick Cheney. Democrats repeatedly have questioned the use of the Iraqi funds to pay Halliburton, pointing to Pentagon audits that found the company might have overcharged as much as $200 million for fuel and other purchases.

Defense Department officials at Tuesday's hearing -- while acknowledging "weaknesses" in the system -- said that much of the money had been handed over to Iraqi officials, who then spent it on governmental expenses, such as worker salaries. Previous audits by Stuart Bowen, the special inspector general for Iraq reconstruction, found that more than $8.8 billion in such funds could not be properly accounted for.

"There were observable results of what that money was spent on," said Joseph Benkert, deputy director for the Pentagon's Iraq reconstruction office. "Salaries for hundreds of thousands of government employees were paid. ...Government ministries operated. We know that they operated. Various projects were done on behalf of those ministers, and we know what those projects are."

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06-29-2005, 12:59 PM
We sent 4.5 billion to Columbia for the war on drugs. Uraguay took up the slack,and today production of the leaf is up 2% over what it was when we blew the 4.5 billion.