On March 19, 2003 – just hours before American bombers unleashed their “shock and awe” raids over Baghdad – three unmarked Iraqi military trucks pulled up at the heavily guarded compound of the Iraqi National Bank in the capital. Uniformed officers leaped out, marched into the bank and presented written orders signed by Saddam Hussein for the bank’s directors to hand over $920 million and 90 million euros in cash, worth in all the nifty sum of $1 billion.
The Great Bank Heist made The New York Times. But some of the more revealing details have only now begun to emerge. For instance, Saddam handwrote his cash demand on a plain sheet of paper and signed it in pencil. That sheet was among the documents US forces found in the deposed ruler’s spider hole, when they captured him on December 12.
The stack of paper found with him shed no light on the whereabouts of the ousted ruler’s weapons of mass destruction. But, once the simple codes were cracked, some of the documents revealed a great deal about the money he had socked away and the recipients of powers of attorney to ensure him access to the cash.
Other documents in the pile, according to DEBKA-Net-Weekly’s intelligence sources, lifted the lid off the clandestine workings of the deep-hush 14th Directorate – Office of Special Operations – of the Dawairat al Mukhabarat al-Amah, or Department of General Intelligence.
The 14th Directorate, known also as N-14, was responsible for running agents on clandestine and sensitive special operations outside the country – particularly assassinations. Its main training facility was located at Salman Pak, 12 miles (19 km) southeast of Baghdad and was one of the most important and largest in the Mukhabarat. N-14 orchestrated the failed assassination of former President George Bush during a visit to Kuwait in April 1993 and the 1994 assassination of the Iraqi dissident Talib Al Suheil in Beirut. Joint operations were sometimes staged with the Iranian opposition group Mujahideen Khalq, with selected officers drilled for specific “black operations”.
Agents of the 14th Directorate invested long hours in acquiring language and orientation skills for blending into the countries of their missions.
The invasion of Iraq necessitated an overhaul in the 14th Directorate’s functions. The captured documents show them in their new capacity as guardians of the deposed dictator’s fortune, trustees for his worldwide financial and business empire with responsibility for remitting profits as per preset directives. These professional killers call now on their thorough training to pose “behind enemy lines” in smart suits as non-Iraqi businessmen living under the false identities registered in their Saudi, US, British, Syrian or Egyptian passports.
One such Syrian businessman recently turned up at the national bank of Syria with a power of attorney note for $1.1billion of Iraqi funds on deposit there. The note, passed on to the Americans, proved to have been written with the “Saddam pencil.” But the “Syrian businessman”, presumed until then to divide his time between Frankfurt, Munich, Geneva and Damascus, had disappeared.
When asked by chief US administrator in Iraq, Paul Bremer, and other top US officials to hand over the cash looted from Iraq, Syria balked, saying in a politely worded message: “Saddam is in your custody. We are transferring to you a copy of the power of attorney he gave to the ‘Syrian businessman’, whom we do not know. If you can show us a more recent power of attorney from Saddam Hussein, we can compare signatures and act on your prisoner’s instructions. Without the right documentation, we cannot help you.”
Before converting the old currency with Saddam’s portrait to new dinar notes, Bremer and US experts studied statistics from Iraqi banks and leading banking institutions around the world to try and calculate how much was involved. The figure they came up with was four trillion dinars ($2.85 billion).
Their estimate was far too modest. The amount Iraqis rushed to trade in had soared to 6.3 trillion dinars, the equivalent of $4.5 billion, by the January 15 deadline for handing in old notes for new. It then turned out that around 40 percent of the cash in circulation in Iraq was in the hands of pro-Saddam elements, specifically N-14 operatives.
According to DEBKA-Net-Weekly’s sources in Baghdad, US and Iraqi economic planners took it for granted that the excess funds were black market banknotes ordinary Iraqis had squirreled away under their mattresses.
They were wrong. No one in the country had believed the Saddam currency. They put their trust in foreign cash – euros, yens and Australian dollars for preference. This discovery was made as post-war Iraqis turned into big spenders and it came from an unexpected source: American and Japanese carmakers who are enjoying boom sales in the newly-liberated country. Since early May, the keys of more than a million new vehicles, worth more than $5 billion, have been handed to eager customers in the main cities of Baghdad, Kirkuk, Mosul, Najaf and Karbala. These purchases rarely go through the banks; most are made in foreign cash on the nail. American and Japanese carmakers barely keep pace with the apparently inexhaustible demand for shiny new vehicles. Dealerships and showrooms are opening in the cities at a brisk rate.
Over the past two months, the dinar has strengthened sharply, gaining more than
30 percent against the dollar as the exchange rate has gone from more than 2,000 to around 1,400.
A senior Iraqi banking official explained the newfound affluence up and down Iraq to DEBKA-Net-Weekly: “The provisional government is committed for the time being to feeding 25 million Iraqis gratis. Saddam’s system of food stamps and virtually free water and fuel goes on uninterrupted by the war. The only thing that has changed is the standard of services and the diversity of consumer products available. This situation clearly cannot go on much longer if the economy is to be rebuilt on a healthy footing.”
However, an even more damaging malaise needs to be addressed. According to DEBKA-Net-Weekly’s sources, Bremer’s team has concluded that a stable economy and realistic Iraqi exchange rate will remain elusive as long as Saddam’s agents maintain their iron grip on the cash in circulation and the captured dictator continues to control vast investment capital overseas. At the same time, ordinary Iraqis continued to hoard black market foreign currency.
Even if a sovereign government is installed in Baghdad without hitch and a general election goes smoothly, the new regime will have little control over the economy.
DEBKA-Net-Weekly’s intelligence sources have obtained more information expanding on this week’s report in DEBKAfile regarding Saddam Hussein’s private currency printing enterprise.
It now appears that rather than running a private mint, Saddam, his sons and the commander of the 14th Directorate enjoyed free access to a sealed annex of the national mint and creamed off supplies for the slush funds of the presidential bureau and secret service chiefs. These sums were never officially recorded or counted in determining Iraq’s gross domestic product. No one but Saddam knows exactly how much was run off in the sealed annex or its destinations. The result was the creation of two Iraqi economies – one official, the other black.
Financial experts assume that most of the illegal notes left the country to be invested in overseas business operations or deposited in secret accounts. Today, 15 percent to 20 percent of the profits are estimated as returning to Iraq to defray the costs of running a guerrilla war against the US-led coalition.
No one knows in which projects Saddam’s stash is invested, the size of the profits generated or the amounts N-14 operatives are redirecting to guerrilla operations. It could take years to trace these funds and their movements. But the fighting groups loyal to the deposed dictator are clearly in command of an almost unlimited war chest to oil their operations.
However, five key people are suspected by US investigators of holding short cuts to this information, according to DEBKA-Net-Weekly‘s intelligence sources – three in Syria and two in Lebanon. The members of this tight group handled money transfers on behalf of the fugitive Iraqi regime leaders and are the only people who know the identities of the 14th Directorate operatives overseeing Saddam’s financial empire.
They are Syrian defense minister Mustafa Tlas, his son Faris Tlas – who was also personally involved in hiding Iraq’s weapons of mass destruction – Baghdi Hanif, son of the the late general Adnan Hanif who was commander of the presidential guard under Bashar’s father, Hafez Assad, Lebanese president Emil Lahoud’s son and Tawil Arselan, a Lebanese Druse leader. The three Syrians rose to eminence as powers in the land mainly by acting as Saddam Hussein’s facilitators in his illegal oil, weapons and cash transactions. Since the Iraqi ruler was overthrown, the trio of strongmen controls the pumping of cash, fighters and arms in the opposite direction – from Syria into Iraq, to support the anti-American guerrilla war.
The flurry around Saddam’s deposits in Syria and the discovery of the power of attorney in the hands of a “Syrian businessman” have prompted Saddam’s eldest daughter Raghed Kamal to change her plans. On January 16, DEBKA-Net-Weekly 141 reported her request to relocate from Amman to Paris and re-establish the Iraqi Baath party. Now Saddam’s daughter has applied for permission to move to Damascus instead of the French capital.
Neither Jordan’s King Abdullah nor Syrian president Bashar Assad, who turned down a previous request, has so far given her an answer.