The more things change the more...
Iraqi Currency Exchange Comes Up Millions Short
Cashiers Held Responsible for Missing Funds
By Ariana Eunjung Cha and Omar Fekeiki
For the past month, Nadhima Hussein and 12 other women have been locked inside a dark, fly-infested room at a police station here. The Iraqi Finance Ministry says Hussein, a bank manager, owes them millions of dollars to compensate for counterfeit or missing money her branch accepted during the currency exchange that ended in mid-January. She says she did nothing wrong.
The cash swap, designed to erase the image of former president Saddam Hussein from Iraqi bills, was among the most visible projects of the U.S.-led reconstruction, and, on the surface, things appeared to go smoothly. The transport trucks were not hijacked, the banks were not held up. The exchange, which took place between Oct. 15 and Jan. 15, was credited with helping to stabilize the economy.
But a Finance Ministry audit that began a few weeks ago turned up a surprise: The amount of new money given out exceeded the old money taken in by more than $22 million. The ministry has accused bank employees, almost all of whom are women who work as cashiers for state-owned banks, of stealing the money for themselves or for organized crime groups. It has sent out notices to hundreds of them, demanding that they repay the money or be put in jail.
The accused say others had access to the money after it had been counted and that the new government, in a rush to judgment, is acting just like the old government, putting the blame for its own mistakes or corruption on rank-and-file workers. In demonstrations this month, hundreds of people have called for the release of the cashiers, who are believed to be the largest group of women to be detained since Hussein was toppled in a U.S.-led invasion last year.
"They took these women as a sacrifice, so that their colleagues will be frightened to pay the money back and that their problem of the shortage will be solved," said Falih Maktuf, a lawyer who has volunteered to represent the women without pay.
Suspects who maintain their innocence are eligible for release on bail, but few can afford it. Maktuf has asked that the women who remain in custody be released without bail pending trial. They will be tried by a special judge with expertise in economic crimes.
Law is still a fluid concept in the new Iraq. On Monday, the Iraqi Governing Council approved an interim constitution with a bill of rights, but it is a legal framework that does not address the nitty-gritty of crime and punishment. Committees are drafting new foreign exchange laws and guidelines for the role of regulatory bodies. In the meantime, most of the laws in effect during Hussein's rule are still being followed.
The banking scandal is one of several examples of alleged government corruption in postwar Iraq that have hampered reconstruction efforts. The Oil Ministry spent months waiting for spare parts for pumping stations and then discovered forged records showing the equipment had been paid for but never shipped from Amman, Jordan. The Interior Ministry has fired border police who took bribes to let people enter the country from Iran without proper identification. Officials at Iraq's five ports have disciplined workers for stealing from humanitarian aid shipments.
The Governing Council and the U.S.-led occupation authority began a crackdown on corruption a few weeks ago, creating commissions with independent authority to investigate possible crimes in government ministries. A new law governing the operations of the Central Bank authorizes the creation of a financial services tribunal, which will determine the fate of the cashiers.
"In the past, employees did not have any respect for laws. We want to teach people this respect," said Sabah Nouri, head of the Finance Ministry's bank audit committee.
One cashier has confessed to accepting counterfeit old dinars and exchanging them for new ones because she pitied the old man who brought them to the bank. Another said she inserted some white papers in place of old bills and paid herself in new Iraqi dinars. But the rest of the accused say they are innocent and that either someone else tampered with the money, they made an honest mistake in counting the money or they unknowingly accepted counterfeit currency.
Their attorneys said the women were arrested because they were easy targets. Samir Adel, the head of the Worker-Communist Party of Iraq, accused the new Iraqi ministries of using "the same old Baathist ways."
"They don't have evidence," he said, "but they imprison people."
Nadhima Hussein was summoned to the Finance Ministry in February for what she was told was urgent business. There, she recalled, a government representative took her to a back room, laid out several bricks of forged money and told her they had come from the bank she manages -- a branch of Rafidain Bank in Nasiriyah, about 200 miles south of Baghdad. Hussein, 35, said she was called a thief and told to immediately repay $6.9 million.
"This is fiction," she said she replied. She told them she knew nothing about the fake money and therefore could not return it. A few hours later, she was in jail.
The currency exchange followed months of planning by experts from the U.S. Treasury Department and other foreign government agencies. Occupation officials hoped to get rid of dinars with Hussein's portrait and replace them with bills carrying images of Iraq's history.
They devised an elaborate system for security. They flew the new money in on jumbo jets direct from the printers, paid for four armed escort vehicles for each truck carrying the money, and asked U.S.-led military forces to guard storage facilities.
At each bank, a cashier counted and inspected old money, then dipped it in red ink so it couldn't be used again. With a rubber band, the cashier attached to the brick of money a credit card-sized piece of paper with her name on it. The money was sewn up in a bag, put on a truck and taken to be burned.
But between the point where the cashiers signed off on their work and the time the money was destroyed, several other people handled the money, according to a description of the process by occupation officials.
Representatives from the Worker-Communist Party of Iraq, Women's Freedom Organization and other workers' rights groups who have reviewed procedures for the cash exchange also said there were several vulnerable points. Maktuf, the attorney, said the manager and other bank employees had access to the old cash before it was destroyed. Drivers who took the old cash to warehouses for eventual destruction -- and the Central Bank employees who accompanied each driver -- also could have tampered with the money, he said. Because the ink used to mark the obsolete bills could be washed away with special chemicals, he added, the old bills were not worthless.
But Nouri, of the Finance Ministry, said he believed it was impossible that anyone but the cashiers could have inserted forged bills or taken some of the money.
Iraqi Police Col. Wahda Nasrrat, head of the new economic crimes section, said he expected more arrests but that people other than the cashiers may be involved in the forgeries and stealing. The system that was used to transport the money "is not a good system and can be broken," Nasrrat said.
Hussein now shares a large, drafty room with a group of other suspects. They sleep on the concrete floor on piles of blankets and spend their time sharing stories about their families and crying. Among Hussein's roommates is Zainab Jabbar, 35, a cashier at a Rasheed Bank branch near the Shaab Stadium in Baghdad. Jabbar has been asked to pay $40,000. With her salary of about $180 a month, she calculated, it would take her 19 years to repay.
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