Tuesday, January 13, 2015

Breitling Report: Tuesday, Jan 13, 2015

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Project will lead to reducing the rate of the national currency in circulation from four billion to one billion notes

Project will lead to reducing the rate of the national currency in circulation from four billion to one billion notes

Posted by  on Aug 18, 2014 | Leave a Comment
A member of the Finance Committee MP / coalition of Kurdish blocs / Dler capable, that the relative improvement of the value of the Iraqi dinar against the dollar during the current period, making some states want to deal with it. He is capable of: that the Iraqi dinar is improving day after day, thanks to the new monetary policy pursued by the central bank, prompting some countries such as India and neighboring countries wishing to deal in the business processes. He pointed out that the increase in the confidence of the world in Iraqi dinar will make it difficult international currency, likely that the coming weeks will see an improvement over the value of the dinar against the dollar, and this will enhance the confidence of the world with it. India has approached the Iraqi government the adoption of dealing in local currencies in the process of commercial exchanges of the two countries instead of the dollar and currencies in order to support the Indian and Iraqi forces. The Finance Committee has confirmed that 2014 will see the deletion of zeros from the Iraqi currency, are described: The deleted will be in coordination with the Central Bank. The committee member said Abdul-Hussein al-Yasiri in a press statement: The process of deletion of zeros from the national currency will begin during 2014, through an agreement with the central bank, noting: This project will lead to reducing the rate of the national currency in circulation from four billion to one billion. Added: The value will be reduced to the size of the quarter, and this will enhance the value and easy to transport, pointing out that fraud or manipulation of currency cash, it will be very difficult. The CBI identified earlier in the beginning of this year will see the implementation of the project to delete the three zeroes from the national currency, but the Iraqi government has demanded the bank to wait to apply the project, fearing the emergence of counterfeit currency during the switching process.

The Exchange Rate: Justifications for exchange-rate adjustment

The Exchange Rate of Foreign Currency in Economic Feasibility Studies
Below are the central controls related to the exchange rate of the foreign currency to convert the project inputs and outputs from foreign currency to its equivalent in the local currency, and that is by calculating the net discounted present value standard and the internal return on investments in economic analysis that governs investment projects that costs excess one million dinars.

Estimate the shadow price of foreign currency:

1.      It is necessary to put central controls to amend the official exchange rate * to reflect the shadow price of the foreign currency, and that is considered one of the necessary  requirements to implement  the net discounted present value standard and the internal return rate on investment in the economic calculation stated in the instructions, paragraph nine.
The central controls for adjusting market prices distinguished a group of outputs and inputs traded internationally, where the projects production or usage of them is reflected on the abundance of foreign currency in the economy and thus project outputs or inputs used of such are considered purely foreign currency outputs or inputs.

What is meant by exchange rate: the number of units of foreign currency, expressed in dollar per one dinar.
In particular the following outputs and inputs of foreign currency were distinguished:
  • Export-outputs.
  • Outputs marketed locally that substitute imports.
  • Imported inputs.
  • Inputs produced locally that usually go to exports.
  • Foreign labor.
According to the pricing rules the value of the output and input (traded) is calculated using export prices (FOB) and import prices (CIF), according to what is listed in the pricing rules.
In other words the pricing rules calculate what the project produces from foreign currency (quantity of exports multiplied by the export price (FOB) in foreign currency or the quantity of substitute imports multiplied by the import price (CIF) in foreign currency, as well as what the project uses from foreign currency and imported inputs multiplied by the import price (CIF) in foreign currency …. etc.).
In a later step, project outputs and inputs must be converted from the foreign currency to its equivalent in local currency (dinars) by using a specific exchange rate for the foreign currency.

2.      Justifications for exchange-rate adjustment: there are a number of important and powerful arguments which support the view that the official exchange rate reduces the real value of foreign currency for purposes of calculating the  economic national profitability for investment projects and hence for the purposes of investment planning. It is demonstrated in this context to call for assessing the dinar for less than (3.208) dollar (official exchange rate) when assessing project outputs and inputs of traded goods of exports, substitute imports and imports… etc.

The justifications to call for the use of an exchange rate that is lower than the official exchange rate are:

  • The use of an exchange rate that is lower than the official rate is the appropriate action at the investment planning level to translate the country’s economic strategy aiming at stimulating central investments in the sectors that encourage the development of non-oil exports, as well as sectors that encourage the expansion of domestic production base in order to reduce imports and compensate it with local commodities. This helps to reduce reliance on foreign exchange earnings from crude oil exports and increases the share of non-oil sectors in the local production.

  • The application of the amended exchange rate on project imported inputs will assist in directing investments away from aggregated sectors dependent on imported inputs and the preference of those sectors that rely on locally produced inputs.

  • The use of the amended exchange rate helps to correct the balance in favor of the traded goods sectors compared to non-traded goods.

  • The real exchange rate has declined rapidly since the early seventies, through rapid rise of the level of prices and local costs which led by the steadiness of the official exchange rate to change in prices and actual local rate costs that gave an advantage for imported goods at the expense of locally produced goods, meaning that it led to deterioration of the competitiveness of alternative replacement goods and export commodities.

  • This action shows that the official exchange rate overestimates the value of the dinar, compared to the foreign currency and from the promoting goods substituting imports and export commodities point of view of.

And in support to this view is the state’s utilization and in a broad approach to the customs and quantitative protection policies especially for consumer goods, as well as export subsidies that exports have through an amended export exchange rate.

3.      Estimate the amended exchange rate of the Iraqi dinar to be used in technical and economical feasibility studies and for (1.134) dollar per dinar. This price should be approved for 3 years until re-appreciation by the competent authorities.

HUGH TANT EXECUTIVE SUMMARY Interviewed by: Mark Gribbin Initial interview date: October 22, 2004 Copyright 2004 ADST

United States Institute of Peace
Association for Diplomatic Studies and Training
Iraq Experience Project
Interviewed by: Mark Gribbin
Initial interview date: October 22, 2004
Copyright 2004 ADST

Brigadier General Hugh Tant, retired, is a career army officer who has
extensive experience in financial management. Most recently, he spent five-an-ahalf
years in charge of two-thirds ($44 billion) of the Army's budget. He
volunteered to lead the currency exchange program in Iraq. He was stationed in
Iraq from September 2003 to January 2004. The currency exchange program ran
from October 15 2003 to January 15 2003.
Currency exchange was necessary for five reasons; (1) two currencies
were in circulation, the old Swiss dinar in the north and the Saddam dinar in the
rest of the country; (2) inadequate numbers of denominations existed, the Swiss
dinar came in 3 denominations and the Saddam came in only two denominations;
(3) the currency was poorly made and easily counterfeited; (4) the Saddam dinar
had been devalued and the public had little trust in it; (5) the presence of Saddam
on the currency was inappropriate.
Tant details the logistical challenges his team faced, including (1)
redesigning the currency; (2) printing new bills; (3) transporting new currency
into Iraq and around the country; (4) public awareness initiatives to inform the
public of the exchange program; (5) the physical exchange of currency conducted
at hundreds of banks nationwide (old Saddam and Swiss dinars for new dinars);
(6) counterfeit spotting; (7) accountability mechanisms; and (8) disposal of old
Tant’s team worked closely with the Central Bank of Iraq, who staffed and
ran all operations except for transport and security. Central Bank staff rode along
in convoys, signed for exchanges of old and new currency, oversaw exchanges,
ran accountability checks, and supervised disposal. Staff at local banks actually
conducted currency exchanges.
Security for the program was provided by several sources. Tant’s team had
a 700-man security detail on contract from Global Risk Strategies. This force was
responsible for protecting the convoys that carried new currency to (and old
currency from) the 243 banks involved in the exchange. As needed, the coalition
military provided additional support for the convoys. Banks were protected by
coalition and contract security during the exchanges and by indigenous Iraqi
forces at night.
Security was an issue during the exchange, with most difficulties

encountered in the Sunni Triangle. There were also a few problems in Najaf, but
these were not major. The flexibility of the exchange operation allowed for the
program to avoid flare-ups of violence.
Tant’s rank and connections allowed him all the support he needed. He
comments on the high quality of his contract forces, the coalition military, the
CPA (especially Ambassador Bremer), and the Iraqi Central Bank leadership and
staff. His one complaint was that the contractor for “life support” (food, lodgings,
etc.) did a poor job.

United States Institute of Peace
Association for Diplomatic Studies and Training
Iraq Experience Project
Interviewed by: Mark Gribbin
Initial interview date: October 22, 2004
Copyright 2004 ADST

Q: Today is October the 22nd. This is Mark Gribbin. This is an interview with Brigadier
General Hugh Tant. General Tant, to start off, could tell me a little bit about your
background, your experience that led you on the road to Iraq?
TANT: My name's Hugh Tant, and I spent over 30 years in the United States Army after
graduating from the Citadel Military College of South Carolina, and served in various
positions, including the Airborne Infantry and in many financial management positions,
culminating in serving in the Pentagon my last 5.5 years, where I was in charge of twothirds
of the Army's budget, about $44 billion. I briefed the Hill – the staffers and
congressmen – about our justification of the budget and requirements for the budget. I
also provided review and analysis of the budget. This was necessary to ensure that our
army was funded to the level necessary to ensure success on the battlefield and to win our
nation's wars.
That was the kind of money that I was responsible for – the Army’s operation and
maintenance appropriation. We use that money to train and recruit the troops, to fix our
equipment, repair our buildings, and essentially make sure the troops are ready to go to
After holding that position, I retired on the 1st of October, 2001and returned to my home
area of Mount Pleasant, South Carolina, where I became a banker. And about four
months after I was a banker, I got the call to volunteer in Iraq.
Q: When did you go to Iraq?
TANT: I went to Iraq on 9/11, 2003. I came home January20-something, 2004.
The purpose of me going there was to serve as the director of the Iraqi Currency
Exchange. Ambassador Bremer needed a person with leadership skills to change out the
currency in Iraq, someone who knew how to get things done with large amounts of
money. So I served as the director of the Iraqi currency exchange, working closely with
the Central Bank of Iraq, and I had about 700 former soldiers that reported to me, and we
conducted the mission.
Q: When you arrived on the ground, what sort of shape was the Central Bank in? I
understand that under the previous regime, it was just riddled with corruption.
TANT: Well, during the war, most of the banks in Iraq were broken into and robbed by
the population there, and destroyed, as was the Central Bank of Iraq. They even took
RPGs and tried to fire and break into the vaults down there. Of course I understand that
some of the culprits who tried to do that lost their lives.
Q: Poetic justice.
TANT: They were in too close to the proximity of the explosion. Of course, there was
flooding in the Central Bank of Iraq, and it was just a total mess.
They had some pretty good leaders there. Ahmed Mohammad al-Jabouri, who is the
deputy, as well as Haji Fallah, who was another deputy governor of the Central Bank of
Iraq. They were the two deputies. They essentially worked for Sinan al-Shabibi, who is
the governor of the Central Bank of Iraq. He was newly designated in that position. He
and the other two fellows had worked there for some time – really good people. Under
their leadership, things started happening, improvements were made for the Central Bank
of Iraq, and it became functional.
Q: What was the nature of the Iraqi banking system? Did the Central Bank have
branches throughout the country? Could you explain how the banking system worked?
TANT: You had the Central Bank which answered, of course, to Saddam. And
whenever he directed, they had to print more money, which was a negative inflationary
monetary policy. That was one of the reasons why the currency had to be replaced. There
were banks – to get back specifically to your question – there were banks throughout
Iraq. Rafidain and Rashid, they owned and operated several hundred state banks. Their
headquarters were collocated on the same compound in Baghdad where the Central Bank
of Iraq is located. This allowed for very close coordination.
But they owned/operated some 80, 90 percent of the banks throughout Iraq. Then there
were some private banks that had branches throughout Iraq as well.
Q: What exactly were Rafidain and Rashid?
TANT: They were the two state banks. Most of the banks – a great, great majority of the
banks – fell under their control.
Q: How strong were the state banks' ties to the regime?
TANT: I imagine they were very strongly tied to the regime. They were at the beck and
call of Saddam and did anything the regime demanded. They had to. As a result of that,
the currency was just devalued in an enormous way. We found that they had two
currencies over there, and when you're trying to unify a country, you need to have one
currency. That was another one of the reasons why we had to change out the currency.
Q: They had two currencies?
TANT: Yes. The original currency of the country was called the Swiss dinar. The
Kurdish area up in the north is where they used that: north of the no-fly zone line. They
mainly continued to operate in the Swiss dinar, the original currency.That currency was
not replaced, recycled, if you will, and it had a lot more value than the Saddam dinar.
There were some negotiations that went on about how to exchange this currency, and at
what rate, for the new dinar. The rate ended up being 150 to one. In other words, in the
Kurdish area, when they turned in Swiss dinars to one of the operating banks used during
the exchange (and there were about 243 banks used during the exchange), they would get
150 of the new dinar for one of the Swiss dinar. The Swiss dinar basically had three
But, in the great majority of the country, they had the Saddam dinar with Saddam's face
on it. There were basically only two denominations of that: there was a 10,000-dinar
note, which was worth about $5, and there was a 250-dinar note, which was worth about
12.5 cents, 12 cents. The reason its value had dropped so low was because of Saddam’s
inflationary monetary policy. In comparison, back in the '80s, before the Saddam dinar
came about, the rate of exchange was about $3 to one dinar. But because of Saddam
there was now a total upside-down situation where one dollar was worth about 2,300
Q: Wow, that's incredible inflation.
TANT: Incredible inflation. That was another reason that we had to change out the
currency. What we needed, and Ambassador Bremer recognized this early on, was a
single, stable, secure, convenient, and meaningful currency for the people. They needed
a single currency, mainly for the reason that I described earlier, in that when you're
unifying a country, you don't want to have two currencies in it. That doesn't make any
sense. And you need a secure currency, because Saddam's currency was so highly
The Saddam dinar was made on cheap paper and didn't have many protective measures,
so it was easily and widely counterfeited. As a matter of fact, the Secret Service lady
who briefed me right before I went to the airport on 9/11/2003 said “You're going to the
counterfeit capital of the world, where nearly two to three notes of 1,000 are considered
counterfeit.” She provided me with a nice package of how to identify counterfeit
currency. It had beautiful color pictures of what counterfeit Iraqi dinar looked like under
ultraviolet light (We provided ultraviolet lights to all of the banks who participated in the
exchange program).
So looking at the situation, you needed a single currency, you needed a secure currency,
you needed a stable currency. The currency was not stable because it had such a wide
change in value over a relatively short period of time. I mean, there was drastic change.
For a people that want to reestablish their economy, a good, stable currency is an
absolutely critical first step. It’s a foundation step towards building a new economy.
On the 7th of July 2003, Ambassador Bremer announced that there would be a currency
exchange conducted from the October 15th 2003 to January 15 2004. The exchange
would be nationwide, and that's what we did.
Another component is that you need a convenient currency. As I mentioned, Saddam's
currency was basically two denominations, the equivalent of a 12-cent note and a $5 note.
You can just imagine how difficult that is for a shopkeeper or a shopper to deal with that.
Q: It was literally printed only in those two denominations? There were no other
TANT: Yes.
Q: That's incredible.
TANT: Now, with the new dinar, we have six denominations for the people. I understand
that they're going to reestablish some coinage and perhaps two additional denominations,
giving them a total of eight denominations plus coinage to continue progressing the
currency situation.
But, of course, my team and I, we dealt in the six new denominations. I can send you
pictures of that and descriptive information of each of the notes NOTE: These materials
have been supplied by General Tant as a supplemental to the interview.
Now the other thing is, you needed to have a currency that was meaningful to the people.
It was important to take Saddam's face off the currency and replace it with meaningful
characters, persons and places that were had historical and cultural significance to Iraqis.
There were discussions with the Central Bank of Iraq and leaders in the Kurdish area, and
all of them decided that they would like to basically use the characters that were on the
Swiss dinar (the original currency of the country), but change the denominations.
And so that's what we did. We contacted a British company called De La Rue. This
company was almost 200 years old and had produced currency for over 150 nations.
They were the masters in anti-counterfeiting techniques and using high-quality paper.
The cost to produce the currency was approximately six cents per note, which allowed for
a very high-quality paper. All of the currencies, the six denominations, are different
colors and different sizes, based on their denomination. That also helps prevent
counterfeiting. The currency has metallic threads and metallic strips. It has a watermark,
where you hold the currency up to a light and you an see a white Arabian stallion. And,
when you rub your thumb across the face or the back of the currency, the numbers and
letters are raised. It's not just flat like on cheap paper.
It's wonderful now, the characters they now have on there. For example, on the back of
the 25,000-dinar note, which is the largest denomination, is a portrait of Hamurabi. In
1700 BC, 3700 years ago, he issued the first code of laws. He is a famous character in
world history. On the front of the 10,000-dinar note, there's a gentleman with his turban
on, and he was born in 965 in Basrah, in southeastern Iraq. He was an absolute genius.
He published over 200 volumes on math and science. He published seven volumes on
how the eye operates, and this was in the Middle Ages! He was designated the father of
ophthalmology or something like that. That might not have been the exact title for him,
but he was credited with being the first scientist to actually determine how the eye works
with reflective light off of an object back into the eye.
Q: That's incredible.
TANT: He also developed analytical geometry, tying geometry and algebra together. He
was quite a genius, and so he's on the face of the 10,000-dinar note. There are all kinds
of images of Iraqi culture on the notes: minarets, a grain elevator, the University of
Baghdad, and even an ancient gold dinar on the front of one of the notes.
“Dinar” is derived from Greek and Latin, perhaps from “denarius” or “denari” (I don't
know my Greek and Latin as well as I should). In both cases it means “money”. Many
other countries in that part of the world use dinar as the word to describe their currency.
Q: The British company that did the printing, how did you guys decide on them? I'm not
sure how big the money-printing world is. How was that decision made?
TANT: The Central Bank of Iraq, again, we worked very closely with them and
throughout the entire effort, we wanted to put an Iraqi face on this entire effort. We were
doing it for them in all instances, and we were not trying to force anything on anybody.
It was mainly to help the Iraqi people and help the Central Bank of Iraq. They did not
have the capability to transport and secure the currency to the 243 banks throughout Iraq
(these were the banks we used for the exchange), so we did that. But we did that task with
them, and we had one of their bank representatives on every one of the convoys. We
performed about 1,000 convoys throughout the entire exchange period.
Q: Convoys to the 243 banks scattered throughout the country?
TANT: Yes. Iraq is a little bit larger than California, and so there was a lot of driving by
our security and logistics teams. They normally traveled in 35-man armed convoys, and
we had about six to eight trucks. The trucks went out to the banks to carry the new
currency in. After it was exchanged, they carried the old currency out.
We also liaised with the active duty units, the military units, in whose areas we would
travel. We had several layers of communications, redundant communications, with them.
If we were to come under attack they would send out a quick reaction force to fly to our
Sometimes, when we were going through dangerous areas, they would provide us escorts
and supplement our 35-man armed guard teams. That was very helpful. The 82nd
Airborne, 101st Airborne, the 1st Armored Division, and the British division down in the
Basrah area, they were all very helpful, as well as the Poles and the Spanish units. They
would help make sure we had safe passage.
We were attacked 15 times directly over there. We had 11 people wounded, and there are
other stories.
Q: That is during the exchange?
TANT: During the exchange, yes.
Q: That seems like a pretty low number, though, considering all the money that you were
TANT: Yes, it was 1,000 convoys but only 15 attacks. It wasn't enormous in terms of us
being attacked, you're right.
Q: The people moving the currency, was that coalition forces, or were there also private
security contractors?
TANT: The people who helped us with some of the escorting business, on top of our
contractor security, were the active duty units. When we were going through a dangerous
area, they would often give us direct support, leading and following us through areas.
That was the coalition military’s role.
The 700 men we had on the Iraqi currency exchange team were contractors. Most were
former soldiers from several different countries. They were contracted by CPA.
Q: Right. I had spoken with a gentleman who was a security contractor. There were
groups like Blackwater doing that…
TANT: Yes. Our contractor for security and logistics was Global Risk Strategies.
Q: When you were carrying out the operation, what was the logistics train? First, you
had to work with the Iraqis to figure out what the currency would look like and how many
denominations were going to be printed. Then you had to find the printing company.
After that, how did you get all the new currency into your hands? Did the printers set up
shop in Iraq, or did you have to import the notes from their printing operations were?
TANT: Good questions. All of the currency was produced outside of Iraq, in Kenya, Sri
Lanka, Malta, Germany, Great Britain, and Spain. These various printers produced the
currency under the auspices of De La Rue. They were provided plates and a mission to
perform a certain portion of the currency. All of the currency was then taken into
England and flown into Baghdad from Manston.
The plan called for 27 747 loads of currency to be transported. It was about 90 tons of
currency that was flown in on these 747-type flights. Now, we actually did about 18, 19
of those. At that time, the DHL flight was shot down. That wasn't our flight, but it was...
Q: In the same period?
TANT: Yes, during that period. So Hanover Aviation, who we contracted with for the
flights of the money, didn't want to fly directly into Baghdad. They had to use a
circuitous route: they flew it into another country where it was offloaded, secured, and
put on smaller aircraft. And so it almost doubled the aircraft that we had to use to get the
entire 2,300-plus tons (almost 2,400 tons) of new currency into Iraq.
Q: But it went off all right? I mean, you were still able to meet your deadlines?
TANT: Oh, yes, we didn't miss a beat. We received the first shipment of currency on the
18th of September. Al-Jabouri, one of the Bank’s deputy governors, went to England and
flew in with it. I met him at the Baghdad International Airport with some of my team.
Our security force was all around, securing the area. The U.S. Air Force offloaded the
currency for us with big, heavy-duty forklifts. They put it onto the flatbeds that we had
arranged for and then we transported it to a secure hub inside the Baghdad International
area, where we secured our funds.
Q: Was that the Green Zone?
TANT: No. Not the Green Zone. We had three main distribution hubs. We had the main
hub in Baghdad, Baghdad International Airport. We had one in the north near Mosul,
where the 101st Airborne Division was. Then we had one down in the south, in Basrah,
where the British forces were located. These were all located near airports so we could
use the former Russian aircraft that we had to ship currency around the country.
We had two IL-76s and two Antonovs. An IL-76 is equivalent of like a C-141. The
Antonovs are equivalent of like a C-130 aircraft.
We used those aircraft to fly the necessary amounts of currency to the north and the
south. They would also fly the old currency back to Baghdad. We had approximately
300 troops – our contracted former soldiers, security and logistics teams – right there at
Baghdad International Airport. We had about 200 up near Mosul at Q-West, and we had
200 down in Basrah. And we had trucks at all three of those locations. So if you can just
imagine, we covered all of Iraq from those three main hubs.
We would fly new currency in and it would be taken out by trucks to the banks in their
particular area of responsibility. The collection of the old currency would then be
accomplished and driven back to that particular hub. Once a load of old currency was
driven back to, let's say the northern hub, it would be put on the aircraft and flown down
to our central hub at Baghdad International Airport.
It would then be called forward to a location in Baghdad where we had about 650
verifiers (predominantly Iraqi women) from the Central Bank of Iraq. They would verify
the currency to make sure it was properly accounted for. They would also check for
counterfeit currency in those. The old currency was transported in big sacks 80-or-90
pound sacks. There were just thousands and thousands and thousands of sacks that we
had to bring back.
There was also a training program that went on. A fellow named Larry Blume, out of
Treasury, was on my team. He went on what we called “the Road Show”. He had a few
people that went with him. They trained the bankers on how to exchange the money,
how to check for the counterfeit using the ultraviolet lights. We provided generators to
power operations. We provided Thuraya satellite phones for communication. To deface
the old currency as exchanged, we provided aprons and red dye.
When the currency came across to the teller, the first teller would verify the amount there
and check if it was counterfeit. A second teller, collocated with the first teller, would
double check it for counterfeit and to ensure accountability. A third teller would then take
it and dip one-third of the note into red dye. Then the currency was put into these sacks
and it was identified by the bank, the name of the teller, the date, and the amount of
money contained. This was done for each sack.
The ultimate accountability check was done by the 650 people back in Baghdad, working
for the Central Bank of Iraq. They could identify if there was any problem with any
particular teller or any particular bank. Luckily, we had any few problems. The tellers
and bank managers were paid incentive pay to work longer hours to get this thing done.
They were also given incentive pay for their accuracy – checking for counterfeit and not
including counterfeit in the sacks.
We had procedures to handle all of that. If there were any problem cases at any bank, we
had a chain of command, so to speak. For example, if a person came to the bank and
tried to exchange counterfeit, the teller would have to explain the problem. The teller
would explain that counterfeit money could not be exchanged, no new dinars would be
passed over, and that the counterfeit would not be returned. Instead, the customer would
get a receipt indicating they had handed over counterfeit currency. If the teller had
problems explaining this, or if the person wanted to talk to somebody at the bank other
than the teller, it was set up so that they could talk to the bank manager. If that didn't
satisfy the customer, then somebody from the Central Bank of Iraq would come. We
didn't have to execute that, but we still had the plan in place.
We also had to provide security for each of those banks to make sure that there was no
disruption of the exchange program. There were generally five to 20 people, depending
on size and location of the bank, that were there to secure it during operational hours.
There were also Iraqi security guards who spent the night in the banks. That provided us
the degree of protection that we thought was necessary to have as smooth an operation as
possible, and it worked.
Q: Another logistics question: you bring in the new bills and you exchange them with the
money that the bank had, as well as with persons who came in?
TANT: Yes, let me say it my way. Let me just take you through the whole flow. We
would bring the new currency into the Central Bank of Iraq, and let's say – we'll use the
northern hub, up near Mosul.
We would fly the currency estimated as necessary to meet those banks' requirements in
their area of responsibility. There were probably about 50 or 60 banks up there that we
delivered new currency to. When we delivered the new currency, those banks would sign
for it. They would sign for it with an Iraqi Central Bank of employee who went with us
on each of our convoys.
We kept the chain of currency custody in the hands of the Central Bank of Iraq the entire
time. None of my people ever signed for any currency. We had a good working
relationship with the Central Bank. An Iraqi bank manager would sign for the currency
from the Central Bank employee, and then he would conduct business. The population in
that community would come in with sacks of money, and they would exchange that
money with that particular bank. They would receive their new currency on the spot.
Now, we did publish exchange procedures prior to the exchange. That was done through
a very dynamic information operations campaign led by a lady named Karen Triggs out
of the UK, who was fantastic. Through multimedia we let the population know, “If you
have accounts with the bank, there's no need to draw your money out of that account and
turn right around and exchange it. There will be an automatic exchange for the new
currency based on the existing deposits.”
Q: You said earlier there was a 150 to one exchange rate for the Swiss dinar and the
new dinar?
TANT: Right.
Q: What was the exchange rate for the Saddam dinar, seeing as it had been so devalue?
TANT: One to one.
Q: One to one?
TANT: One to one. I have to tell you, I had two dynamic guys, one from the UK
Treasury named Jacob Nell and one from the Bank of England named Simon Gray.
These guys are absolute geniuses in banking and treasury operations, and they worked
closely with the Central Bank of Iraq on a regular basis, with all of the negotiations. We
would have request meetings. I'd go to the big meetings over there with all the heads of
the Rafidain, Rashid, and the Central Bank of Iraq. We would talk about deliveries,
requirements, and incentive pay. We would talk about all of these different issues to
ensure we had teamwork that worked.
Our motto throughout the operation was “Teamwork that Works.” We made that reality.
We also had a second motto, “Delivery Under Fire”, because of the attacks that we had
and the security situation in Iraq. We even minted our own coin.
I emailed a sergeant major I knew up in Korea. I said, “I need some coins, because I can't
present these great former soldiers and civilians that I worked with any sort of award.” I
saw this thing was going really well, and so we ordered these coins as a small token of
appreciation. And that's quite interesting, because now they have a touchstone that they
can go to. On the front it says "Teamwork that Works, Iraqi Currency Exchange" with a
picture of a date palm tree on the front. On the back side, it says “Delivery Under Fire,
Coalition Provisional Authority," and “Operation Iraqi Freedom.” It was done just to
give them something to remind them of the great job they did for the Iraqi people.
Q: You gave that to the Iraqi staff as well as Central Bank?
TANT: I gave them to Iraqi staff. I gave it to all 700 of our guys and the one lady, Karen
Triggs, who helped us. We also gave it to people like Ambassador Bremer and all who
supported us wholeheartedly throughout the operation. I even had the wonderful
opportunity to present the ICE (Iraqi Currency Exchange) coin to President George W.
Bush when he visited Charleston, South Carolina in early 2004. He said he knew all
about us and was proud of what we accomplished.
Q: That sounds like a good thing. That's the perfect memento for the mission.
TANT: Right. Yes.
Q: Back to the exchange operation: after the old currency had been sorted, double
checked, shipped, and sorted again in Baghdad, what happened to it? Was it then
disposed of?
TANT: Yes, good question. It was disposed of. After the 650 ladies verified the
currency, the Central Bank of Iraq released it to us. Still continuing with their liaison, it
would be taken to the incinerators. There were approximately 47 incinerators running
when we were at full capacity. The incinerators would be loaded with the old currency,
and ignited. On the third day, the incinerators would be cleaned out.
These incinerators looked something like shipping containers, the 20-foot-long containers
that you use to transport good on ships. They had been converted with smokestacks and
all that sort of stuff. Just a real nasty operation. The Iraqis did that. They actually did
the loading. We did the transporting and securing – mainly transporting – that had to
occur. Then they offloaded the pallets of old bills and set it on fire, supervised the
burning, and then cleaned out the incinerators. And then the process was repeated over
and over and over again.

Q: Of course you also had extra check, that if any money got blown away on the wind, it
was dyed red so it couldn't be converted again.
TANT: That's right.
Q: Now, the counterfeiting issue, you had mentioned earlier that there was an estimated
two to three fake notes per thousand?
TANT: Yes, that was according to the Secret Service.
Q: What was the rate that you discovered?
TANT: It was less than 1 percent.
Q: Less than 1 percent?
TANT: We would get these reports from the Central Bank of Iraq, and they had less than
1 percent. So that was much better than what we anticipated.
Q: You also mentioned that there was a vigorous public information campaign. Could
you tell me a little bit more about that?
TANT: Absolutely. Karen Triggs led it. We used multiple media outlets: newspapers,
television, and radio. We used handbills that were issued by the civil affairs soldiers on
the streets throughout the country. These were colorful handbills that illustrated the new
currency, and explained the program and how it would be run from 15 October to 15
We of course explained that they didn’t all have to show up on the 15th of October,
because there was going to be plenty of money to go around. There would be enough for
everybody to exchange their money, so don't think you have to rush to the bank. Words
to that effect were written in the Iraqi language, and it just reassured people that this was
going to be a very high-quality currency and it would be something that they would be
proud of, how it would have illustrations on it that were meaningful to their history and
And it was widely well received by the Iraqi people. I only saw one article where a guy
said, "I don't think we need to do this. We don't have to get rid of Saddam." He was a
guy up in Tikrit, if I remember correctly. That was Saddam’s hometown.
Q: I'm not surprised.
TANT: But all the other articles, and there were a lot of feedback-type articles from the
people, were glad about the new currency. So it was a wonderful thing. Now, some of
them wanted additional denominations, and my understanding here recently is that
Central Bank of Iraq is proceeding with achieving additional denominations. So they're
going to end up with something like eight denominations. There is also the coinage, and
that will be very helpful to people.
Q: Who's going to be printing this in the future? Are there are efforts underway to create
an indigenous printing capacity, or is that going to continue to be farmed out?
TANT: I don’t know for certain. We talked about that when I was over there, but they
did not yet have the capability to do it. I believe they're going to continue to use De La
Rue, at least in the near term. That's not to say that they wouldn't, in the future, develop
their own capability to print their own currency. But I don't know if that's going to
happen anytime soon.
Q: Looking back on your experience, what were the major lessons learned? Why was
this so successful?
TANT: Well, it was successful because we worked like the best team in town. We had
established a chain of command and we had meetings every day to get feedback and
plans for the next day.
We had to work hard and communicate with one another. In my main cell, I had a
wonderful guy, Colonel Wilkinson, retired from the British armed forces. He led my
security and logistics operation. He was just fantastic. My deputy, John Rooney from
Scotland, I couldn't have done it without him. There was also a fellow named John Dulle
from BearingPoint, an American consulting firm, who helped us. He and his team helped
with program management, doing things like arranging for flights, arranging schedules,
and keeping track of how much currency we had actually taken out of the hub and
transported. Essentially they were keeping daily track of everything we did to ensure
overall accountability.
We had to stay on this thing constantly. We had learned as leaders to go and meet with
the people who were doing the job to build spirit and keep the troops motivated. We did
all of those things: we worked like just one big family. We knew the importance of what
we were doing, we were proud of what we were doing, and we were very successful in
getting it done.
Every aspect of it was a success. Karen Triggs with her campaign, getting the word out to
the entire population. We were prepared to go to the desert to take care of some of the
Bedouin tribes! We got the word out to them where their nearest bank was. If they had
any problems, they knew how to contact us. We got the word out to everybody, and
everybody got their money exchanged. It just took a lot of energy and a lot of teamwork
to make it all happen.
Ambassador Bremer and the military gave us everything we asked for. There was no
hesitation. I mean, if we needed another aircraft, we got another aircraft. We just had a
great team effort.
Q: So both the military and the CPA gave you all of the support that you needed?
TANT: CPA gave us all the support we needed. The military definitely did as well.
They went above and beyond the call of duty for us. I was on the phone or e-mail
regularly with the commanding generals of the divisions. The U.S. Treasury Department
gave us tremendous support and advice. A man named Tom Simpson arrived when I was
there. He did an assessment of what he thought needed to be done. I used that to help me
get things done, to get my head clearly in the game.
Q: Do you have anything else to add about the support?
TANT: Well, I just would like to say the 700 former soldiers we had, the security
forcesthat were contracted to the currency exchange program, were terrific. They came
out of Fiji, Australia, New Zealand, Great Britain, good old USA, South Africa, Rhodesia
(now Zimbabwe), and Canada. We had a coalition amongst ourselves of former soldiers.
It was quite interesting.
Q: How were most of the foreign personnel brought into the project? Were they
recruited by CPA?
TANT: Through the contract with Global Risk Strategies. The security and logistics
force was predominantly from Global, and through their processes and means got the
Fijians, South Africans, Canadians, and etcetera.
Q: You were working with a number of different groups, everything from coalition
military to the CPA, as well as of course the different Iraqi organizations. Did you have
any coordination difficulties, or was it a pretty well-oiled machine?
TANT: No, it wasn’t, and that's why they brought me in. I was a recently retired
brigadier general, and I knew all the generals, like Rick Sanchez, the senior military guy
over there. He and I lived across the street from each other for a year at the Army War
College. I mean, if I needed anything, I'd just say, "Hey Rick, I need this," and it would
Q: Great.
TANT: Lieutenant General Sanchez, they don't get any better than him, and Dave
Petraeus up in 101st, and Ray Odierno pulled my bacon out of the fire in Samarra. We
were going into Samarra on – let me think – it was the 30th of November. The average
number of attacks per day were like 15 a day in August/September, and then they started
getting higher. There were about 35 attacks a day with IEDs (improvised explosive
devices) or mortars or rockets.
November was a tough time with these attacks. We'd been attacked and ambushed in the
Samarra area about four times previously. Major General Ray Odierno was the
commanding general of the 4th Infantry Division, and Samarra was his area of
responsibility. He provided us with an escort consisting of 10 tanks, four infantry fighting
vehicles, an Apache attack helicopter, an A-10 Air Force Warthog (close air support
aircraft), and we still got attacked.
We were delivering to two banks that day, (one on the west of the town and one on the
east), so I had two 35-man convoys,. We went in with that heavy escort from the 4th
Infantry Division, and sure enough, we still got attacked. There was about a 45-minute
gun battle that ensued. I understand that there were at least 46 of the enemy, terrorists and
former regime loyalist, who perished that day as a result. There were about six of us who
got wounded. One of my guys got wounded in the knee. He got shot through the knee.
He killed the guy that shot him, I understand. And then there were five of our U.S. troops
who got wounded that day.
But, in all of that, we still delivered the money and picked up the old money. So that was
delivery under fire, that was the second motto that we had. Teamwork that works and
delivery under fire. I'm just so proud of all of those troops. I mean, it was just the best of
the best. The cooperation with the military and the troops that were provided to me, I
couldn't ask for any better. It was an incredible experience.
Q: The people who were attacking you, were they part of the general insurgency, or
were these criminals just out to make a quick buck?
TANT: Oh, no, we never lost any money. When they attacked us, they never got to the
Q: I understand that, but I'm just saying, do you know who they were?
TANT: Yes, it was the same terrorists and former regime loyalists who have caused
problems in Samarra. The same kind that are in Fallujah. It's the same ilk. They're cut
from the same cloth. About 5 percent over there don't understand anything except to be
eliminated, and our guys are eliminating them as fast as they can. The coalition is
eliminating them as fast as they can. Ninety-five percent of the people over there are
fantastic people. They're just great people. But the 5 percent of them are causing all
these problems, and they just have to be destroyed.
Q: Were most of your problems with attacks in the Sunni Triangle area?
TANT: Oh, yes. Yes. The rest of the provinces and the governorates, they didn't cause
us hardly any problem. We had to stay at the ready all the time when we were in the
Sunni Triangle.
Q: How about in the south, when Moqtad al-Sadr’s militia was active?
TANT: Yes, every now and then, down in – what was it?
Q: Najaf?
TANT: Yes, Najaf. Occasionally, we'd have some problems down in Najaf, in that area.
But the military was on top of that. If there were serious problems, we just had to change
our mission and go somewhere else. We had that kind of flexibility. But for the most
part, we were on track with our missions every day. We did have to adjust every now
and then, and that's understandable, but we'd always go back and pick them up a couple
days later, make the delivery a couple days later. That didn't happen that often.
Q: As far as other security questions, you mentioned that you had your own security
force on the convoys and that you could always rely on coalition military to assist. There
were also coalition forces who helped protect the banks during the transfer. You also
mentioned, and this is what I'd like to get into, the Iraqi security teams that would protect
the bank at night. I was wondering what the role of groups like that was, what the
indigenous Iraqi security role was in your operations. For example, the police or other
security forces.
TANT: That's another good point you bring up. We discussed that, “Who was going to
secure the banks?” We wanted to put an Iraqi face on it, so the Iraqi police were
coordinated with and these Iraqi indigenous security people, like their ...
Q: Facilities protection, or something like that?
TANT: The facilities protection. They actually performed that mission. And they were
the main security of the banks themselves. They fell under the Ministry of the Interior.
Now, of course, all military units over there had areas of responsibility, and so they were
sensitive to things going on all the time in their area of responsibility. That's why we had
liaisons, because we had to communicate with the active military every time we were
going through an area. They knew we were coming and would be traveling to a bank in
their area. And so they would often provide us additional escorts, or at least they knew
we were there and ready to help us, should we need help.
Ray Odierno, Major General Ray Odierno, with the 4th Infantry Division, I told you about
his support during the 30th November attack in Samarra. On the 13th of December, about
two weeks later, that's when they pulled Saddam out of the hole. That was the same unit
that pulled Saddam out of the hole.
Q: The last thing I have to ask is just about the Iraqi banking system in general. We kind
of touched on this early on. How would you characterize it? Was it largely intact? Not
from a physical sense, but from ...
TANT: There had to be a lot of construction to get the flooding out of the vaults at the
Central Bank of Iraq, so there were a lot of things that had to go on. But those two
gentlemen, al-Jabouri and Haji Fallah… It was very apparent to me and others that their
employees highly respected these two individuals. They had good teamwork as well and
got things going again for the Central Bank of Iraq in short order. It was amazing what
happened there. Many of the branch banks required some renovation as there was
extreme looting that occurred after the fighting.
Now, we actually delivered over 2,300 tons of new currency, but we took out of over
circulation 13,000 tons.
Q: Oh, wow.
TANT: The original estimate was like 3,000 tons, and they realized that, no, there was a
lot more currency. So we had to expand our operation dramatically to accommodate that.
13,000 tons of old currency is a lot. One of my fellows figured it out, if you put the notes
end on end, it would go around the earth's circumference about 32 times.
Q: That's a lot of money. So these gentlemen, al-Jabouri and Haji Fallah were the
heads of the bank?
TANT: They were the deputy governors. The actual head is Dr. Sinan al-Shabibi. He
was an economist, a PhD, and they brought him in. Wonderful man.
Q: These gentlemen had worked for the Central Bank before?
TANT: Yes, Haji Fallah and al-Jabouri were at the bank, yes.
Q: There wasn't any problem with a Baathist element in the bank.
TANT: Nope, nope. They were vetted and good men.
Q: I'm not saying that they were Baathists, but was there a large Baathist presence in the
banking system that had to be vetted out?
TANT: Not that I'm aware of. I'm not aware of that.
Q: I think that is all the questions I have for you, sir. Do you have any final comments
that you'd like to add? Any lessons learned or any advice that you'd pass on for future
TANT: Well, for future operations, there needs to be one contractor that provides
security, logistics, and life support. We had to have a company provide life support, and
they were unacceptable. They provided us trucks that didn't work a lot of the time. They
didn't provide us the living quarters needed for those 700 troops in a timely manner. The
food was less than it should have been from time to time. I understand that they're under
investigation for falsifying contracts, and not just with our operation, but with other
security operations that they were involved with.
Q: Who was this?
TANT: That's a company called Custer Battles. They are under investigation. It hit the
news. We were just a piece of their pie, but in the future, it would have been much better
to have one contractor that provided not just the security and logistics, but also the life
support. To me that was the most critical lesson learned.
Q: All right. Just to clarify, you were based in Baghdad, but you traveled all throughout
the country, is that correct?
TANT: I personally lived in Baghdad at the Presidential Palace, where Ambassador
Bremer was, and I reported to him on a regular basis. Sometimes daily. I answered to
him. Fantastic leader. If our motto was “Teamwork that Works”, his motto should be
“Leadership that Works”, because he was absolutely the best leader for that situation.
And I experienced a lot of things I haven't told you about in terms of examples of
leadership and all over there, but Ambassador Bremer, he has my highest regard and so
does Lieutenant General Sanchez, for that matter. That was a dynamic duo, there.
Q: The funding for the currency exchange operation, was that funded out of DFI
(Development Fund for Iraq) funds?
TANT: As I understand it, yes. Overall, it was about a $200 million operation. The
largest portion of that was for the printing of the currency and the transportation of the
currency, and it was somewhere around – I'm giving you approximations – $60 or $70
million for the security force and life support.
Q: Right. But most of the transporting of the currency, at least in Iraq was done with the
military vehicles?
TANT: No. They were mostly not done with military vehicles. They were done mostly
with contractor-provided vehicles. They were just foreign-made trucks, and it was just
different sizes of trucks – big trucks, small trucks. They were not government vehicles
for the most part.
When the contractor failed to provide operationally sound trucks, or a sufficient quantity
of trucks, we had to call on the military to support us.
Q: These were locally contracted from, for example, an Iraqi contracting firm? A firm
would be contracted to help deliver?
TANT: That's right. We used a contractor who would sub-contract with foreign firms for
different requirements and services.
Q: Regional. The flights: did you charter flights to bring the money in from the various
TANT: Yes, we contracted through Hanover Aviation, which is a British firm, for the
747s which were hauling the new currency into Iraq. We used Global Risk Strategies for
the IL-76s, the former Russian aircraft, and for the Antonov aircraft. Those were used
inside of Iraq.
Q: OK, well, I promise that's the end of my questions. Do you have anything else you'd
like to add, sir?
TANT: No, I'll tell you what. That was great.