Alan Greenspan vs. Naomi Klein on the Iraq War

Illustration by John Blackford. By Peter van Agtmael/Polaris (desert), Konstantin Inozemtsev/Alamy (money).

FLASHBACK
September 24, 2007
Excerpt:

AMY GOODMAN: I wanted to go back to Iraq and ask you about, well, a piece by Jim Steele and Don Barlett that came out in Vanity Fair, where they’re talking about the billions lost in Iraq. And they begin their piece by saying, “Between April 2003 and June 2004, [$12 billion] in US 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.”

Alan Greenspan, when you were head of the Federal Reserve, how much knowledge do you have of this? And did you investigate this? Were you aware of this at the time?

ALAN GREENSPAN: Well, let me say that what we were involved in was essentially endeavoring to create a viable currency for the central bank of Iraq. And what we did do was—I think very successfully—create what is a viable financial system, even under the circumstances that currently exist. There was, as far as I can judge, a huge drain of the resources into areas which nobody to this day can understand or follow. It had nothing to do with the central bank. In our relationships with them, we were merely acting as an intermediary to assist them in creating a system, which they now have, which is working reasonably well, despite all of the problems that are going on. The issue which you are referring to had nothing to do with the Federal Reserve in any of our relationships with the central bank.

AMY GOODMAN: Well, they are talking about, in one day, for example, the East Rutherford operation center of the Federal Reserve Bank of New York, 100 Orchard Street in East Rutherford, a tractor-trailer truck pulling up, and 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. But ultimately, again, $9 billion of $12 billion gone missing in Iraq.

ALAN GREENSPAN: I am not familiar with any such evidence. And it was certainly not brought to my attention. I, frankly, find it very unlikely that those orders of magnitude were involved in any of the numbers that we were dealing with. You have to make certain that—there’s been a lot of confusion about losses, and people have used the dinar, the basic currency unit of Iraq, and assumed they were American dollars. And, of course, that gives you a highly distorted view. There’s been, I’ve seen, several reports fairly recently in which that sort of mistake was being made. But what I can tell you is that no such numbers of any order of magnitude of the type you are discussing came to the attention of the Federal Reserve.

AMY GOODMAN: This is based on that award-winning article in Vanity Fair, or the team who have won—
ALAN GREENSPAN: Let me put it this way, award-winning doesn’t necessarily—
AMY GOODMAN: Well, no, no. I mean Don Barlett and Jim Steele, Pulitzer Prize-winning journalists. I’m sure you know their work. But Naomi Klein?

NAOMI KLEIN: Well, I would just add that it’s quite surprising, actually, that Mr. Greenspan is unaware of this scandal around Iraq’s missing billions, because Paul Bremer had to testify before Congress and was asked directly about those missing billions. It’s been the subject of very high-level investigations. There is a huge paper trail around it. So this is hardly a secret, and it’s hardly just a matter that’s confined to Vanity Fair.

Please see:

http://www.vanityfair.com/politics/features/2007/10/iraq_billions200710