Billions Over Baghdad: The Spoils of War

Donald L. Barlett and James B. Steele, Billions Over Baghdad: The Spoils of War. Vanity Fair, October 2007. “Between April 2003 and June 2004, $12 billion in U.S. currency–much of it belonging to the Iraqi people–was shipped from the Federal Reserve to Baghdad where it was dispensed by the Coalition Provisional Authority. Some of the cash went to pay for projects and keep ministries afloat, but, incredibly, at least $9 billion has gone missing, unaccounted for, in a frenzy of mismanagement and greed. Following a trail that leads from a safe in one of Saddam’s palaces to a house near San Diego, to a P.O. box in the Bahamas, the authors discover just how little anyone cared about how the money was handled.”

Excerpt from story:

On Tuesday, June 22, 2004, a tractor-trailer truck turned off Route 17 onto Orchard Street [in East Rutherford, New Jersey], stopped at a guard station for clearance, and then entered the EROC [acronym for the East Rutherford Operations Center of the Federal Reserve Bank of New York] compound. What happened next would have been the stuff of routine—procedures followed countless times. Inside an immense three-story cavern known as the currency vault, the truck’s next cargo was made ready for shipment. With storage space to rival a Wal-Mart’s, the currency vault can reportedly hold upwards of $60 billion in cash. Human beings don’t perform many functions inside the vault, and few are allowed in; a robotic system, immune to human temptation, handles everything. On that Tuesday in June the machines were especially busy. Though accustomed to receiving and shipping large quantities of cash, the vault had never before processed a single order of this magnitude: $2.4 billion in $100 bills.

Under the watchful eye of bank employees in a glass-enclosed control room, and under the even steadier gaze of a video surveillance system, pallets of shrink-wrapped bills were lifted out of currency bays by unmanned “storage and retrieval vehicles” and loaded onto conveyors that transported the 24 million bills, sorted into “bricks,” to the waiting trailer. No human being would have touched this cargo, which is how the Fed wants it: the bank aims to “minimize the handling of currency by eroc employees and create an audit trail of all currency movement from initial receipt through final disposition.”

Forty pallets of cash, weighing 30 tons, were loaded that day. The tractor-trailer turned back onto Route 17 and after three miles merged onto a southbound lane of the New Jersey Turnpike, looking like any other big rig on a busy highway. Hours later the truck arrived at Andrews Air Force Base, near Washington, D.C. There the seals on the truck were broken, and the cash was off-loaded and counted by Treasury Department personnel. The money was transferred to a C-130 transport plane. The next day, it arrived in Baghdad….