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Making, moving, guarding money a life-or-death struggle for one Iraqi

BAGHDAD, Iraq—Basil, a 39-year-old Palestinian-American known as "The Palace Money Man," has one of the most dangerous jobs in Iraq. He totes an AK-47 rifle and an MP5 machine gun to travel between two worlds that are connected by money.

On several tense rides every day, he sees the obstacles U.S. officials face in controlling the country's currency, one measure of a nation's stability and one of the most serious challenges to rebuilding Iraq.

Basil starts his days at Saddam Hussein's former Republican Palace, where American and British military officials give him two Humvee escorts and orders to deliver hundreds of millions of dollars in Iraqi dinars to Baghdad banks. The rest of his routine includes kissing Iraqi bank managers, visiting the ramshackle shop where Iraq's currency is printed and, above all, outsmarting the bandits who'll seize any chance to separate him from his cargo.

Basil said the cash he carries, which was seized from Saddam, stocks banks and pays public servants. He wouldn't allow his last name to be published for fear of kidnapping or assassination. Even some veteran U.S. military officers have declined to accompany him on his rounds, and he has a special permit to carry weapons.

American administrators have announced plans to introduce electronic checking, credit cards and other innovations to restore Iraqis' trust in banks linked to the former regime. But U.S. and Iraqi financial officers are thwarted daily by racketeers who control exchange rates, counterfeiters who flood the market with bogus bills and devious managers at the biggest banks, many of which are still covered with soot and scorch marks from the looters who broke into the vaults and made off with millions.

Counterfeit dinars using stolen paper, hand-typed serial numbers and scanned images are becoming harder to detect, and profiteers are buying up legitimate 250-dinar notes, the most commonly used currency, and holding them to create a shortage. That enables the owners of the unlicensed money-exchange kiosks on every other block in Baghdad to control the exchange rate, bilk residents and frustrate American financial officers.

But Basil's biggest problem is the bandits who lie in wait for armored trucks.

The most perilous stretch of his daily route takes him down the narrow alleys of al Rashid Street, Baghdad's oldest commercial district, to visit Faleh Dawod Salaman, the acting governor of the Central Bank of Iraq.

One recent day, Basil released the safeties on his weapons and rode down al Rashid Street with the door halfway open so he could make a fast escape. Every woman on a balcony, every man peering through a window, every street vendor was a potential killer.

With traffic at a standstill, Basil had no choice but to wait—exposed—until he entered the bank compound.

"Watch people on bikes," Basil ordered as two men on a motorcycle zipped dangerously close to his truck. "It's so easy to hit and run. Watch his hands! Watch his hands!"

The banks are only marginally safer than the streets.

One time, Basil said, a main pipe at the Central Bank broke after a gunfight between looters and 3 billion dinars were submerged in 3 feet of water. Some of the cash was transferred to another bank, where customers refused the mildewed bills. The rest was taken to the U.S. military base at Baghdad International Airport, and it baked for hours in an armored car on the tarmac.

"When we opened the truck, the smell was terrible," Basil said. "But at least the money was dry."

At the main branch of the Rafidain, Iraq's largest government bank, the vault-keeper's son was kidnapped recently. Basil alerted American authorities and Iraqi police; the 23-year-old man was returned unharmed four days later.

Most Iraqis, however, blame the war and more than a decade of United Nations economic sanctions, not the crooks, for the collapse of their currency, which traded at more than three to the U.S. dollar until the late 1980s.

"It took Saddam Hussein and his followers 35 years to spend this economy down," L. Paul Bremer, the U.S. civilian administrator for Iraq, said Saturday. "We're not going to fix it overnight."

But Iraqis are impatient. They say they're tired of seeing Saddam's face on their money every time they pay for taxis or buy groceries. Iraq's top financial managers have set an October deadline for a redesign of the dinar that would remove one of the last visible vestiges of the dictatorship.

One of Basil's most frequent stops is at Iraq's last remaining currency-printing house, on the outskirts of Baghdad. The building is a whirring, groaning cavern where rusty machines spit out 6 million crisp bank notes a day, each stamped with Saddam's mustachioed mug.

Security consists of 30 newly trained Iraqi guards and occasional night patrols by American forces, watching for the thieves who can easily hop the building's aged patchwork of barbed wire.

Inside, 600 sweltering workers whisper plans for demonstrations against a decision by American officials to print new dinars—sans Saddam—in London. If the employees walk out in protest, production could halt, worsening the shortage of some bank notes and prompting more civil unrest.

In April, looters stole production equipment, office furniture and even the air conditioners at the print shop, said Abdulghani R. Ibrahim, the director general of the operation. Employees took one look at the destruction and thought the shop would never reopen, he said. Their spirits rose when U.S. officials released emergency funds for ink, paper and new equipment. Within weeks, the printing press cranked back to life.

Then American officials announced they were shifting all money-printing to De La Rue, a London-based company that makes bank notes for more than 150 countries. The Iraqi workers, who still mix ink by hand and frequently are injured by the antiquated machinery, were furious. Last month, they picketed for new equipment that they hope will keep dinar production in Iraq.

Ibrahim said U.S. officials told him that De La Rue would oversee production only long enough to replace the old currency and satisfy the immediate need for more cash.

That's never been the plan, said a top spokesman for U.S. forces who agreed to speak only if his name wasn't used. The spokesman said providing new production lines for Baghdad simply "doesn't make economic sense." Printing in London, he said, would cut costs and reduce counterfeiting.

"Thirty years of printing here, and now they want to stop it and go to London? It's not fair," said Anwaar Majeed, the soft-spoken manager of the print shop, who wants a gun to protect herself and other female workers. "If my employees can use this primitive equipment, they can use any machine."

Basil promised to help Majeed obtain a weapons permit. In thanks, she offered him several sheets of newly printed dinars, marked in red as "specimen," just in case he tried to spend them.

Outside the print shop, Basil gave each U.S. soldier in his security detail a sheet of new money. The young Americans laughed at the souvenirs and slapped Basil on the back.


(c) 2003, Knight Ridder/Tribune Information Services.

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