The $40 Billion Iraqi Money Trail

It has been called the largest airborne transfer of currency in the history of the world. But finding out what happened to all the money involved has become one of the biggest financial mysteries of all time.

Beginning in the very earliest days of the war in Iraq, the New York Federal Reserve shipped billions of dollars in physical cash to Baghdad to pay for the reopening of the government and restoration of basic services.

By one account, the New York Fed shipped about $40 billion in cash between 2003 and 2008. In just the first two years, the shipments included more than 281 million individual bills weighing a total of 363 tons. Soon after the money arrived in the chaos of war-torn Baghdad, however, the paper trail documenting who controlled the cash began to go cold.

The following are photos obtained by CNBC that document some of these shipments and show how the money was handled. Click ahead for the photos. Read the full story here.
By Eamon Javers
Posted 26 October 2011

American troops observe the unloading of cash from a C-17 at Baghdad International Airport. The money was packed onto pallets inside a heavily guarded New York Federal Reserve compound in East Rutherford, N.J., trucked to Andrews Air Force Base outside of Washington, and flown by military aircraft to Baghdad International Airport.

Pallets of cash are unloaded at Baghdad International Airport. The blue wrapping comes from the New York Federal Reserve. A typical pallet held 640 bundles, which the handlers called “bricks,” with a thousand bills in each bundle. Each pallet weighed 1,500 pounds, and they were separated by color. Gold seals were used for $100 bills, brown seals held $50 bills, purple seals $20, and so on.

The money was counted at each step of the way—every time pallets moved, someone was responsible for counting the "bricks" of currency to make sure none had been stolen. The chain of custody of the cash was rigorously documented as it left the custody of the New York Fed and was signed over to Air Force officers, who oversaw the loading of C-17 transport planes and flew with the bales of money on the long flight to Baghdad.

On one mission, a truck carrying cash broke down on the way to the Central Bank of Iraq. Here, Iraqis transfer the cash to another vehicle during a dangerous moment on the open road. The route was a perilous journey of about seven miles over a road the U.S. military called “Route Irish” through territory often controlled by insurgents. Travelers faced the threat of rocket-propelled grenades, mortars, car bombs, and improvised explosive devices (IEDs).

Iraqis unload cash from a convoy vehicle at a regional Iraqi bank. A previously unknown Coalition Provisional Authority (CPA) official was tasked with picking up the bales of billions as they were unloaded from C-17s and arranging for them to get to the Central Bank of Iraq in downtown Baghdad.

The CPA's cash courier, whose first name is Basel, says he loaded $1 billion in cash into the back of this garbage truck to throw off any insurgents who were watching the convoys. None of them would have thought so much cash would be inside this truck.

American soldiers pose in front of roughly $3 billion in cash inside the vault of the Central Bank of Iraq.

American troops in a CH47 Chinook helicopter embark on a mission to fly $1.4 billion in cash to the city of Erbil.

US soldiers help load a convoy vehicle with cash. Transit along Route Irish was so dangerous that returning American GI’s often posted YouTube videos of their trips, just for the bragging rights of having been there. Not only was Route Irish an exceptionally dangerous thoroughfare, but transporting billions of dollars in cash considerably adds to the risks involved.

Damage from a car bomb attack on a convoy hauling new Iraqi dinars on Route Irish, which in the mid-2000s was said to be the most dangerous road in the world.

A U.S. Air Force currency delivery arrives, pictured left are pallates that held the cash. A CNBC investigation into the events found that when the currency arrived in Iraq, the cash was always received by one man, who was responsible for its transport to Iraq’s central bank.

Counting pallets still inside U.S. military transport to ensure that all the currency that left Andrews Air Force Base arrived in Baghdad.

Weapons used by armed guards on the billion dollar convoys. Shown here are a Heckler & Koch MP5, three AK-47s, an M4 carbine, a Santa Barbara 30-06 an FN .223, and two Glock 19 side arms, as well as a SIG P228.

As investigators rush to determine what happened to the money, CNBC tracked down the last American official responsible for delivering the cash before it disappeared inside the vaults of the Central Bank of Iraq.

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