Wednesday, February 24, 2010

More on the Federal Reserve Cover-Up of Saddam Hussein Payoffs

Thanks to an anonymous commenter at my earlier post, Fed Chairman Bernanke Should Apologize to Ron Paul,, we now have more evidence of the Federal Reserve cover-up of who paid off Saddam Hussein with crisp new Federal Reserve notes.

Here's what NYT wrote in 2004:
It has been exactly one month since President Bush announced the capture of Saddam Hussein. American officials interrogating Mr. Hussein are obviously interested in what he knows about illegal weapons programs in Iraq, human rights violations and other crimes. Whether he will cooperate remains to be seen.

But there is another line of questioning officials might pursue -- one that depends less on the cooperation of Mr. Hussein than on the assistance of the United States Federal Reserve Bank. Among Mr. Hussein's possessions when he was captured was three-quarters of a million dollars in United States currency in crisp new bills. Whence came the gentleman's stash?

Answering this question would help our understanding of terrorist financial networks. And if the cash is sequentially numbered, as is likely, then the question could be easily answered.
All United States currency is printed by the United States Mint, to the order of one of the 12 banks of the Federal Reserve system. It comes into circulation through a bank that has an account at the Fed for which it was printed. The Fed deducts the face value of the bills from that account, and an armored car takes them to their new owner.

That regional Federal Reserve Bank keeps a record that identifies the purchasing bank. And the purchaser knows how it disposed of the bills. When they are found all together, it means that the bank that bought the bills did not feed them out from the teller window or the cash machine, but delivered them to a single customer.

And the bank knows who that customer was. Between, say, Philadelphia and Iraq, there is no doubt a chain, perhaps involving banks in the Cayman or Channel Islands, in Abu Dhabi or Dubai. Still, each bank in the chain can give the name of the customer to which it gave these bills.
Although Saddam Hussein's government had many sanctions against it, it may well be that no laws were broken in the passage of the Federal Reserve notes from the mint to Tikrit. But it would be interesting to know which banks were collaborators in getting that cash to the tyrant of Iraq.

Unfortunately, the search for these witting or unwitting collaborators cannot even get started, because the Federal Reserve Board will not permit regional banks to reveal the identity of the purchasers of large blocks of United States currency. There is no law that prohibits such disclosure; it's simply a Fed policy.
And, this from J. Bradley Jansen at Huffington Post:
While the reporting of the exchange does seem "bizarre," the Congress would have been better served if the Fed chairman had simply addressed the facts. Professor Bob Auerbach of the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin (and an economist at the House Financial Services Committee for eleven years assisting in oversight of the Federal Reserve) brought these issues to light in a book published by a university press:

In Deception and Abuse at the Fed, Robert Auerbach, a former banking committee investigator, recounts major instances of Fed mismanagement and abuse of power that were exposed by Rep. Gonzalez, including:

Blocking Congress and the public from holding powerful Fed officials accountable by falsely declaring--for 17 years--it had no transcripts of its meetings;

Manipulating the stock and bond markets in 1994 under cover of a preemptive strike against inflation;

Allowing 5.5 billion to be sent to Saddam Hussein from a small Atlanta branch of a foreign bank--the result of faulty bank examination practices by the Fed;

Stonewalling Congressional investigations and misleading the Washington Post about the6,300 found on the Watergate burglars
Bernanke, ostentatiously a student of the Fed before heading it, does the Congress and the public a disservice by disrespecting Congress with flippant, ignorant responses. Kudos to Chairman Frank for saying we need to followup on Dr. Paul's issues.


  1. Words I never ever thought I would see written by Wenzel: "Kudos to Chairman Frank"

    Naivete' thy name is Wenzel.

  2. @Efinancial

    You are right that it is not something Wenzel would write.

    Ah, that's not Wenzel, it's a quote from Bradley Jansen