Who's Looting Iraq? Bank Heist Nets 1/4 Billion

More than a quarter-billion dollars was stolen from a bank in Baghdad yesterday.

According to press reports, Iraqi officials claim that bank guards were involved in the heist, which netted $282 million in U.S. dollars.  The media notes that it's not clear why the currency was in the form of dollars, rather than Iraqi dinars: while it may not be unusual for banks to have large cash holdings on hand, it's unlikely that there's a demand for dollars in Baghdad that requires the ability to immediately disburse hundreds of millions of U.S. dollars at a moment's notice.

What's behind the heist, described as an inside job by Iraqi officials?  There's more below the fold.

Note that the bank, Dar Es Salaam bank, is described as "a private financial institution."  In fact, DES is owned by HSBC, the giant British-based multinational bank.  HSBC has a long and colorful history in its own right, having been repeatedly cited as a haven for money-laundering.  HSBC was fined in 2003 for doing business with Libya and Iran, despite sanctions imposed against those countries as state sponsors of terrorism.  Even after being sanctioned, in 2004, HSBC's conduct led a U.S. Senate subcommittee to issue a report slamming HSBC for its lax money-laundering safeguards.  Still, HSBC's misadventures continue:  just this summer, the U.S. Securities and Exchange Commission recently identified the bank as continuing to do business with terrorist states.

So: where did the missing money come from?  Was it part of the $9 billion "lost" from the days of Paul Bremer's Coalition Provisional Authority?  The billions more delivered in cash on C-130 aircraft and handed out like party favors?

Money also disappeared in truckloads and by helicopter. The CPA reportedly distributed funds to contractors in bags off the back of a truck. In one notorious incident in April 2004, $1.5 billion in cash that had just been delivered by three Blackhawk helicopters was handed over to a courier in Erbil, in the Kurdish region, never to be seen again. Afterwards, no one was able to recall the courier’s name or provide a good description of him.

No doubt with Iraq rolling in dollars from the Bush administration's various slush funds, the money had to be put somewhere -- and why not a subsidiary of the notoriously-loose HSBC?

More importantly, though: where is this money going?