New York Fed Refuses To Disclose Data On "The Largest Theft Of Funds In National History" Which Could Be Three Times Larger Than Expected

Tyler Durden's picture

A week ago we reported on the case of the "The Largest Theft Of Funds In National History" or the missing $6.6 billion in Iraq war reconstruction funding, which was literally composed of "shrink-wrapped bricks of $100 bills", which was part of a $20 billion total in "Marshall Plan" investment meant to stimulate the post-war economy. When discussing this so far undisclosed cash loss, "Stuart Bowen, special inspector general for Iraq reconstruction, an office created by Congress, said the missing $6.6 billion may be "the largest theft of funds in national history." Two new developments have emerged in this fascinating story. The first, as CNBCs Eamon Javers reports is that "The New York Fed is refusing to tell investigators how many billions of dollars it shipped to Iraq during the early days of the US invasion there." Javers adds: "The Fed's lack of disclosure is making it difficult for the inspector general to follow the paper trail of billions of dollars that went missing in the chaotic rush to finance the Iraq occupation, and to determine how much of that money was stolen." Well, for what it's worth, we may have an estimate of this largest war theft ever: talking to Al Jazeera, "Osama al-Nujaifi, the Iraqi parliament speaker, has told Al Jazeera that the amount of Iraqi money unaccounted for by the US is $18.7bn - three times more than the reported $6.6bn." If indeed the total theft amounts to virtually the entire amount of reconstruction spending that could possibly explain why the Fed is so coy in discussing this issue. Alas, just like the Fed's multitrillion bailout of the financial system, it is unlikely it will be able to keep the topic from reemerging, and that very soon - al-Nujaifi adds: "There is a lot of money missing during the first American administration of Iraqi money in the first year of occupation. "Iraq's development fund has lost around $18bn of Iraqi money in these operations - their location is unknown. Also missing are the documents of expenditure. "I think it will be discussed soon. There should be an answer to where has Iraqi money gone." Who will be the next Mark Pittman to sue the New York Fed to get the required information on how much cash the FRBNY was complicit in "disappearing" - we can't wait to find out.

From Al-Jazeera:

The Bush administration flew in a total of $20bn in cash into the country in 2004. This was money that had come from Iraqi oil sales, surplus funds from the UN oil-for-food programme and seized Iraqi assets.

Officials in Iraq were supposed to give out the money to Iraqi ministries and US contractors, intended for the reconstruction of the country.

The Los Angeles Times reported last week that Iraqi officials argue that the US government was supposed to safeguard the stash under a 2004 legal agreement it signed with Iraq, hence making Washington responsible for the cash that has disappeared.

Pentagon officials have contended for the last six years that they could account for the money if given enough time to track down the records.

The US has audited the money three times, but has still not been able to say exactly where it went.

Al Jazeera's Iraq correspondent, Jane Arraf, reporting from Baghdad, said: "It's an absolutely astonishing figure - this goes back to 2003 and 2004.

"There is going to be a fairly wide net cast - some of them [involved in mishandling of this money] are thought to be US officials, but many here believe that it is the Iraqis who have filled their pockets.

"Safeguarding the money was up to the Americans ... after the invasion, provisional authority here was run by the American military.

"Piles and piles of shrink-wrapped US dollars came here, but the cash coming in is not the important part - it is what happened to it after [it got here].

"There are no documents to indicate who got it, where it was spent and what was ever built from it."

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LeBalance's picture

"I am shocked, shocked I say, to find that Theft is taking place in the Banking industry."


Republi-Ken's picture

Shocked... That Republicans

Who Always Brag Of how great they manage big corporations

are so blatantly incompetent with US Taxpayer money... not their own money.

Maybe it's that Hate Big Gov Neurosis that Republicans are born with.

...Like they can't help themsleves but to screw up running Big Gov.

Or was it just BUSH - CHENEY? 

NotApplicable's picture

How about you give your ignorant lefty-righty divide and conquer tactics a rest here?

BTW, I didn't junk you because I want everyone to see just how determined you are to look like an ass.

Marty Rothbard's picture

Oh yes, those two haters of big government, Bush and Cheney, who started two wars (the health of the state),  enhanced the drug war,  expanded middle class welfare by originating, and pushing the medicare drug benefit through congress, denied the right of habeus corpus to American citizens, illegaly spied on every American with a telephone, or email address, had their lawyers make up the fantasy of the unitary executive, issued uncounted secret executive orders, originated, and pushed the patriot act through the congress, tortured POWs, pushed through the first banking and auto company bailouts, by threatening congress with martial law, and anounced that we were all Kenesians.   If Barry boy gets a second term, and tries real hard, he might, I say might, exceed Bush in his government enlarging efforts.  B&C didn't screw up running big government, they ran big government perfectly.

   What planet are you living on?  Haven't you been paying attention?  Nobody loves government more than national socialists, uhh I mean Neocons.   I'm a Republican, a Ron Paul Republican, I'm proud to say, and I hate the hell out of big government.  It's not a inborn neurosis, but a reasoned position, reached by years of observation, of government on all levels, and the study of the Austrian school of economics.  The people with mental health problems are the ones who have, not neuroses, but a full blow psychotic delusion, that government action is the answer to personal, and societal problems, after government has tried, failed, and actually made said problems worse, again and again.

   Maybe I misread your sarcasm, for serious belief.  For your sake, I certainly hope so.

Ura Bonehead's picture

Shocked... That Republicans...


Then as a Democrats I'm sure you'll be able to find the missing money as I've never seen a Democrat who couldn't find and spend every last dime of everyone else's money.

Armando Javier Finkeltein of the Boise Finkelsteins's picture

Not many other people are shocked.

karzai_luver's picture

a criminal doesn't give a shit about red/blue - JUST THE GREEN er GOLD will do.

They steal from all -- the only question is where is the greatest opportunity at the time.

For some reason today I hark back to the days of Charlie Finley and Harvey the rabbit who would bring a fresh supply out of a hole at home plate.




sgt_doom's picture

So according to the Special Inspector General for Iraqi Reconstruction Funds' (SIGIR) report I read awhile back, there's $8.7 billion unaccounted for (I assuming that doesn't include that $6 billion or so missing??).

Now, that was interesting (aside for all the officer busts also detailed in that report --- definitely not any "Army of One" when it comes to thievery and embezzling) because the Iraqi oil revenues went into accounts, first of the Iraqi Trade Bank, supposedly these oil-reconstruction accounts being managed by JPMorgan Chase and their managing director, Daniel Zelikow, then on to the Federal Reserve Bank of NY's account, where Timothy Geithner was then chairman.

Also, on hand at that time, was Reuben Jeffery II, special assistant to that viceroy, Bremer, and old Reuben would eventually end up as the CEO of Rockefeller Financial Services (FYI: JPMorgan Chase = Rockefeller family interests, Rockefeller Financial Services = Rockefeller family interests, Geithner = Rocky's boy, etc., etc.).

Now, it is interesting as well that Daniel Zelikow, MD over at JPMC, was an old college roomie with Timothy Geithner, and that Timothy would later stay at Daniel's luxurious condo in D.C. when Geithner was appointed to head Treasury (or, alternatively, one could start singing, "It's a small world after's a small world after all...."), but sgt_doom can't carry a tune, dammit!!!

Later, we would witness Philip Merrill's rather peculiar suicide, and James McDonald's conveniently timed suicide, and of course, Benazir Bhutto's most unfortunate murder (which may have nothing to do with the above, but she was involved with the "food-for-oil" scandals, and that food-for-oil monies were rolled into the oil-reconstruction accounts at the Trade Bank, and late the FRBNY's account).

So Timmy's at the Treasury, with all those Goldman Sachs alumnus, or alumnis, and Daniel's at Goldman Sachs, and Reuben's over at Rockefeller Financial Services.  All sounding pretty tidy, now?

One might even infer a continuous series of heists going here --- and please, no retorts about the DoD's missing $2.3 trillion -- that was a large group heist, while this is a much smaller and targeted heist.

Anyone have the details on that unaccounted for $16.7 billion from Afghanistan?  (And why always that $.7 thingy????)

Where's that super T-man, B.G. Jayne, when we direly need him?????  Does not the Treasury have any more top T-men such as he?????

Spastica Rex's picture

Just the cost of doing business.

Dear America,

Fuck off.

Yours sincerely,

your masters

IBelieveInMagic's picture

Put it down to fog of war. Shit happens.

They should look in sofa cushions.


mudduck's picture

They should look in Cheney's basement, right beside the shrink wrapped ex-hunting compadres.

The Profit Prophet's picture

I'm thinking it's in Goldman's vault.

T.E.I.N. everyone!

Dick Darlington's picture

End the FED before it ends us.

Raymond Reason's picture

Money always leaves a trail, even cash.  That's why the Fed is the perfect cover.  Its like crossing stream. 

Manthong's picture

Incredible. The present government of the United States of America operates in blatant violation of the Constitution and has proven time and time again that it is too irresponsible to be allowed to manage the country’s finances.

NotApplicable's picture

And this is surprising how, exactly? Why would you expect the mafia to act any differently?

Geithner was knee-deep in all of this, yet he has full immunity for his actions, because as we all know, he was just doing his job.

All wars are premeditated and promoted just for this sort of wealth transfer (and the further securing of power that it allows).

Marty Rothbard's picture

Full immunity?  Just doing his job?  You need to review a little history.  The Nuremburg trials.  That excuse didn't save those national socialists, it won't save these.

TheMerryPrankster's picture

It also gives you a chance to wipe out the other big families and take their resources, loot, and connections. Plus you give all the patriots and nationalists a reach around and make sure their patriotic penises are at full attention as they beat their chests with nationalist pride. USA, USA, USA, - like a football game except the stakes are higher and you kill the other team.

War is the best racket in the world, thats why it will never go away.

FunkyMonkeyBoy's picture

Er, what about the $2.3 trillion 'missing' that Rumsfeld disclosed the day before September 11th?


Problem Is's picture

Simple accounting entry:

US Criminal "Defense" Contractor Assets
(GE, Haliburton et al):

$2.3 Trillion

US Taxpayer Liabilities:
$2.3 Trillion

Dr. Richard Head's picture

I am going to try giving the "accounting error" excuse with my "owed" income taxes.

johnnymustardseed's picture

Exactly.... War what is it good for???? Cheney and his buddies at Haliburton

Mr Lennon Hendrix's picture

It's all Bush's fault!  Oh wait....

Hephasteus's picture

It all started with the 60's. JFK assassination. CIA pentagon takeover. It's just been continueing. Problem is when the world becomes a debasement machine instead of a purification machine it debases faster and faster. END.

johnQpublic's picture

i thought it was 3.2 trillion....


however the bailout and resultant stimulus is still a much larger theft

not to mention the emptying of social security fund over the years

i wonder how much the IMF and world bank have effectively pilfered over the years

Problem Is's picture

"i thought it was 3.2 trillion..."

Oooopppppsss.... Just a little accounting error...

Let me make an adjusting entry to that thar journal...

Rick64's picture

3.3 Trillion actually. Fiscal year 1999- 2.3 T missing, fiscal year 2000 1.1 T missing.

 Watch at 1:30

friendly manitoba's picture

i doubt that it is missing  - i always  thought they under estimated the costs of these wars ...   if it costs a billion dollars to have a g8  meeting in toronto   - several ten year wars  could easily cost $5 trillion  - sad  

does anyone else find tylers math questions a bit much ?  44 minus  __  = 73 ?


TheMerryPrankster's picture

None of these wars are funded, if you paid the least bit of attention for the last decade, you'd know the entire war costs are borrowed and add to the national debt but are kept off the books for official accounting.

Hence there is no way a single penny was used to fund any war efforts.

The people who are supposed to know, know where the money went. The families are very strict in their accounting. Just because nobody "officially knows" doesn't mean nobody knows.

sgt_doom's picture

I believe that's called "public funds for private use" account.

Been active for quite awhile, chum...

Madcow's picture

where's Oprah ? 


Financial Newbie's picture

Lose $18.7bn?

No worries, I'm sure the Fed will print some more...



Problem Is's picture

Sure, The Bernank says:

"The only cost associated with $18.7 Billion is... some paper and a couple of Bernanke Buck Green ink cartridges..."

Caviar Emptor's picture

Well there was a whole shadow armed services err brown shirts errr excuse me Private Military Companies to fund:

Blackwater, Titan Corp, AirScan, Boughton Protection Services, Pathfinder Security, DynCorp, ITT Corp, JaneGroup,Northbridge Services, Xeros Services, Versar Inc, Zapata Engineering, CACI, Aegis Defense Services, Red Star Aviation, Obelisk INternational, SCG International Risk, Omega Security Solutions, AQMI Strategy, plus Iraqi paramilitaries and politicians to be bribed. 

A few trillion seems to me to be downright low budget and skimpy

Stuck on Zero's picture

This amount is trifling.  Here is CBS News coverage of Donald Rumsfeld's Pentagon speech on September 10, 2001 in which he declared that trillions were missing from the Pentagon:

Much more here:



swissaustrian's picture

Of course, the timing of the announcement was perfect.

One day later nobody would care about it...

alien-IQ's picture

isn't it amazing how that story just vanished?

Caviar Emptor's picture


But there was a boom in private military services shortly after!

Almost Solvent's picture

The disappearing story I am more interested in was:




That was 24/7 coverage the entire summer long and then BAM! 9/11. Shortly after that they found her body and ... OOOPS! the killer wasn't the Congressman! It was the professor, in the lounge, with the noose.

Badabing's picture

How about two Jap business men cross border from Italy into Switzerland with US bonds, and lots of them!

writingsonthewall's picture

It would be amazing if it were China, or Stalinist Russia, or maybe Syria - but are you really surprised that the media drop stories which the Gubbermint doesn't want you to know about?

What about the Nebraska power plant? - awfully quiet considering it's under water.


If you don't like it - go live in China - where at least Twitter can tell you the news - unlike the USA where people get arrested for filming the police recklessly and excessively shooting a car to pieces.


Alice is through the looking glass - how long before the country wakes up?


For evil to prevail - all it takes is for good men to do nothing.

bonddude's picture

Don't you remember when Bremmer had containers full of cash flown over early in the conflict?

Old news. Al Sadr is flush for protecting from holdout bathists. That red headed guy Saddam's

cousin was never caught. We need to leave Iraq. We're gonna need boots for Lybia (light,

sweetest). O will announce draw down in opium land today, right? Doomed