Editore"s Note
Tilting at Windmills

Email Newsletter icon, E-mail Newsletter icon, Email List icon, E-mail List icon Sign up for Free News & Updates

May 23, 2007
By: Kevin Drum

SUPERNOTES REVISITED....As an update to last night's Supernote story, a reader directs me to a piece written by Klaus Bender in Frankfurter Allgemeine Sonntagszeitung last year. It turns out this is quite the fascinating little mystery. This in particular caught my eye:

Strangely, although the counterfeiters have mastered the technology of the infrared sensitive security inks used on the new Supernotes, the notes are produced in such way that automated currency test systems recognize them immediately as forgeries. In America, the Supernotes have little chance of going undetected.

In other words, the supersophisticated counterfeiters who produce this stuff could make absolutely untraceable notes if they wanted to, but they don't. They deliberately produce them in a way that can be tracked by no one except the U.S. government and other central banks. What's more, the notes are produced in such small quantities that it's actually a loss-making enterprise. The presses and inks cost more than the value of the bills produced. What could account for an operation like this? Bender offers a possible answer:

A rumor has circulated for years among representatives of the security printing industry and counterfeiting investigators that it is the American CIA that prints the Supernotes at a secret printing facility. It is in this facility, thought to be in a city north of Washington D.C., where the printing presses needed to produce the Supernotes is said to be located.

The CIA could use the Supernotes to fund covert operations in international crisis zones, and such funds would not be subject to any control by the American Congress.

Well, that's always the first answer to any unsolved mystery, isn't it? The CIA did it. Of course, sometimes it turns out that it's the final answer too.

Kevin Drum 3:35 PM Permalink | Trackbacks | Comments (76)

Bookmark and Share
 
Comments

You call this news? Hey, counterfeit bills are how the CIA rogues paid off the Mafiosos and Cuban ex-pats that assassinated JFK.

Posted by: alex on May 23, 2007 at 3:46 PM | PERMALINK

Sorry, that's just a conspiracy too far for me.

Think of how many people would have to be in on this conspiracy at the CIA, every one of whom would have to be engaged in an operation unquestionably illegal and rogue. What would happen when they underwent lie detector tests to maintain their own security clearances, for example?

Why not instead adopt a far simpler explanation: that the experts who claim that no one could produce these notes except for another government, and indeed only a few such governments, are just wrong?

Posted by: frankly0 on May 23, 2007 at 3:54 PM | PERMALINK

That is exactly what I suggested yesterday. It was just a hunch, but it seems logical to me. They have an unlimited budget and this is an investment to go to when they need cash. In addition, they are able to trace them to make sure, if they spend it with a particular group they can trace what is done with the cash.

Posted by: David Triche on May 23, 2007 at 3:55 PM | PERMALINK

Obviously the US government is making these super-notes, but it's the Treasury Dept., not the CIA.

The obvious explanation is that Treasury wants a bigger budget for creating ever more sophisticated "counterfeit proof" bills, and the only way to get that is to convince people that the current technology isn't good enough.

Posted by: alex on May 23, 2007 at 3:59 PM | PERMALINK

William of Ockam would be proud.

Posted by: IMU on May 23, 2007 at 4:00 PM | PERMALINK

In addition, they are able to trace them to make sure, if they spend it with a particular group they can trace what is done with the cash.

And every single one of these people could be thrown into prison for years if any single one of them ever admits or is caught engaged in this activity.

If you've got a team of, say, 4 or 5 people, maybe I could see this happen. But you're talking about facilities and a scope that might involve a hundred or more individuals, I'd guess, at least as it's been depicted by the experts. Who's going to take the chance in putting together such a project, and who is going to join it, being 100% confident that no one is going to spill the beans?

If, on the other hand, few people need to be involved, contrary to the experts, then why suppose that it must be a governmental agency in any case?

Posted by: frankly0 on May 23, 2007 at 4:02 PM | PERMALINK

Here are my best guesses as to who's behind this:

a) Magical elves.
b) The Illuminati.
c) The US government, but not as part of some nefarious plot. Rather, because the US is the only country that can track these things, they may be using these counterfeit bills to help trace money laundering around the world. Though how it would all work, I don't know.

Personally, I go with choice A.

Posted by: Sovay on May 23, 2007 at 4:13 PM | PERMALINK

What I found curious about the story was the assertion that the notes were deliberately printed in such a way that the automated methods of identification would catch them, however, the story did not elaborate on this detail. Does anyone know what was meant by that? Why shouldn't I assume that the counterfeiters didn't know how to fool the automated scanning devices?

Like Brecht, I suspect the Russians are behind it if it is a state agency that is the culprit. American currency is used the world over as medium of exchange, and Russia and the former Soviet Union have had a long history of doing so in the black markets.

Posted by: Yancey Ward on May 23, 2007 at 4:16 PM | PERMALINK

Are you sure this isn't just like the electric toonies with the red poppy centers? Odd, so it must be sinister?

If I were, say, the Treasury Dept or whoever prints our real money, and if I was changing our money around every few years and adding new security devices when I did, I can see where I might just want to run small batches with some security feature missing just to see who can detect them as phony and with what kinds of equipment, and where they get picked up.

If I were really clever I might even run them with different defects. Just, you know, so I'd know what's going on out there.

Posted by: Altoid on May 23, 2007 at 4:16 PM | PERMALINK

Actually, having given it a bit of thought, I do know how it might work.

Government agent, working undercover, gives a suitcase full of these counterfeit notes to, for example, a Colombian druglord or a terrorist. The US can then see where the money turns up.

The beauty of it is that nobody knows the US is creating and tracking this money, because they're convinced North Korea is doing it so Kim Jong Il can finance another Godzilla movie, hence, these banks and other businesses won't hesitate to report having received these bills.

Posted by: Sovay on May 23, 2007 at 4:20 PM | PERMALINK

Sorry, I can't really buy this conspiracy. As others have said, it would be almost impossible to keep secret given the number of people you would need, but more than that, it's soooooooooooo illegal.

I'm not talking the first half of the Bush Administration "it's illegal, but they can't get us as long as we control congress", or the second half of the Bush Administration "it's illegal, but if just stonewall they've got nothing on us." It's illegal in a way that not even Johnnie Cochran could get you out of if he were still alive. Even thinking that you could get away with this would be a bigger FU to the American people than I think even Bush is capable of.

Posted by: mmy on May 23, 2007 at 4:21 PM | PERMALINK

Sovay beat me to the punch.

If these bills start turning up in a city, they can say whoever was planted with them has some operational interest in that city.

Posted by: cld on May 23, 2007 at 4:24 PM | PERMALINK

The CIA is the only group that makes sense. It's clearly not a criminal, or they'd be mass producing untraceable currency. So either it's our government trying to avoid budgetary constraints, or it's someone else's. It's the only think that makes sense.

Posted by: soullite on May 23, 2007 at 4:25 PM | PERMALINK

And if there is some presidential directive or authorization they won't necessarily be illegal or counterfeit.

Posted by: cld on May 23, 2007 at 4:26 PM | PERMALINK

Yeah, I'd go with the CIA. Perfect way to fund covert operations that they don't want Congress to know about.

Posted by: es on May 23, 2007 at 4:36 PM | PERMALINK

Yeah, I'd go with the CIA. Perfect way to fund covert operations that they don't want Congress to know about.

Posted by: es on May 23, 2007 at 4:37 PM | PERMALINK

For those who think the CIA couldn't/wouldn't do this do you also think that the CIA hasn't been buying,transporting,selling,ect. drugs for 40-50 years. Yeah! Right! Illegal? Grow up!

Posted by: R.L. on May 23, 2007 at 4:42 PM | PERMALINK

You know what would be really neat would be if some kind of rfid tag could be planted on the security strip.

Posted by: cld on May 23, 2007 at 4:52 PM | PERMALINK

Sounds more like someone -- a state actor of some sort -- is playing around with something they think might be useful.

Could be -- as other notes -- the US Treasury department tracking money flows or checking to see how good banks are at sussing out bad bills.

Could be CIA using it to track what happens to cash payments they hand out.

Could be a foreign state checking out the exact same things.

Posted by: Morat on May 23, 2007 at 4:52 PM | PERMALINK

Covert ops?

AND a way to track who is spending the money, and on what. (ie. CIA agent "B" gets $100k in an aluminum briefcase, for his terror cell infiltration op. Hands off the money to terrorists, who use it to fund an airliner bombing. That we can track the flow of this money by IR signature is a plus. That the airliner is Cuban is maybe an even bigger plus, to people of a certain political persuasion. . . )

Posted by: osama_been_forgotten on May 23, 2007 at 4:57 PM | PERMALINK

"Think of how many people would have to be in on this conspiracy at the CIA, every one of whom would have to be engaged in an operation unquestionably illegal and rogue."

Oh brother, that's just absurd. If the government wants to keep something secret, the odds are it stays secret. For example, the British codebreaking efforts during World War II were highly classified (and some of the records are still sealed). Over 10,000 people worked on the Ultra project that broke the German Enigma code, and yet no outsider ahd any clue until the Brits declassified the files in the 1970's.

If 10,000 people can all keep their mouths shut for 30 years, I'd wager that a group of a 1,000 or 100 or 10 can keep a secret indefinitely.

Furthermore, how can you state with confidence the project is illegal and rogue? If the purpose is to track money laundering, then its quite possible the project is legal under current law and operates with congressional approval. I can't imagine the money laundering lobby has many champions on the Intelligence Committees.

The essential point is that the United States government has the sole and complete authority to print US currency, so how is the United States government printing US currency a crime? That's like arresting a man for breaking and entering into his own house.

Posted by: beowulf on May 23, 2007 at 5:03 PM | PERMALINK
What's more, the notes are produced in such small quantities that it's actually a loss-making enterprise.

Once again: no one has any idea what quantities the notes are made in. All they know is the number that have turned up in places where they can be detected.

If most of them spend a their lives outside of banks, and outside of the West, moving about in various less-formal cash economies—or are still stockpiled for a future release—their could be lots more than are suspected.

But, anyhow, the CIA isn't an unlikely source. Not just to spend the bills, but also to track them: they are hard to detect by the normal means, but easy to detect as soon as they show up in places using automated testing systems. So, if you could find away to feed them into the informal cash-based systems that we keep hearing about in the Islamic world that turn to fund terrorism, you look at where the bills you put in pop out, analyze the patterns, and use that as a component of your intelligence gathering.

Posted by: cmdicely on May 23, 2007 at 5:08 PM | PERMALINK

Why wouldn't the CIA just use the Treasury's own presses?

Posted by: Jon H on May 23, 2007 at 5:16 PM | PERMALINK

It's the Super Adventure Club(tm)!

Posted by: Trollhattan on May 23, 2007 at 5:17 PM | PERMALINK
The essential point is that the United States government has the sole and complete authority to print US currency, so how is the United States government printing US currency a crime?

The US Congress has that authority. The US executive doing it without authority from Congress is, if not actually criminal, at least exceeding its Constitutional power and usurping the prerogatives of the Congress.

Not that that is anything new from the executive.

Posted by: cmdicely on May 23, 2007 at 5:17 PM | PERMALINK

Furthermore, how can you state with confidence the project is illegal and rogue? If the purpose is to track money laundering, then its quite possible the project is legal under current law and operates with congressional approval. I can't imagine the money laundering lobby has many champions on the Intelligence Committees.

On a more basic level, is it even illegal to pass fake US currency OUTSIDE OF THE US? I doubt it.

Posted by: Disputo on May 23, 2007 at 5:17 PM | PERMALINK

The CIA could use the Supernotes to fund covert operations in international crisis zones, and such funds would not be subject to any control by the American Congress.

Better than dealing drugs or selling arms to our enemies to make an off-the-books buck.

Posted by: Disputo on May 23, 2007 at 5:20 PM | PERMALINK
On a more basic level, is it even illegal to pass fake US currency OUTSIDE OF THE US?

Yes, 18 USC § 470:

A person who, outside the United States, engages in the act of—
  1. making, dealing, or possessing any counterfeit obligation or other security of the United States; or
  2. making, dealing, or possessing any plate, stone, analog, digital, or electronic image, or other thing, or any part thereof, used to counterfeit such obligation or security,

if such act would constitute a violation of section 471, 473, or 474 if committed within the United States, shall be punished as is provided for the like offense within the United States.

Posted by: cmdicely on May 23, 2007 at 5:22 PM | PERMALINK

Why wouldn't the CIA just use the Treasury's own presses?

For the same reason that I don't urinate with someone else's penis.

Posted by: Disputo on May 23, 2007 at 5:22 PM | PERMALINK

Oh brother, that's just absurd. If the government wants to keep something secret, the odds are it stays secret.

This entirely misses the point. Kevin was describing a possible scenario in which some segment of the CIA was engaged in producing the notes ILLEGALLY -- to perform an end run around Congressional oversight even of the funding of a covert operation.

Again, if any single person ever admitted to this activity, or was caught in such an activity, then every person involved could easily be thrown in jail for decades, and be disgraced forever.

Obviously one can have a LEGAL and clearly moral activity, entirely sanctioned by the government, stay secret even when very large numbers of people were involved. These people are all subjected to security clearances; those clearances are reviewed periodically; etc., etc. No one involved need fear that they will be thrown in jail if anyone else breaks the silence.

What you need to come up with is a single truly ROGUE operation of substantial size that we have ever had in the US, or perhaps some other industrialized democracy.

Perhaps there is some way the CIA could have produced those notes legally, with the knowledge of the appropriate people in Congress and in the several administrations during which they have been produced. I highly doubt it. But that is a different question.

Posted by: frankly0 on May 23, 2007 at 5:31 PM | PERMALINK

Well, I think it's just the CIA going green (so to speak). We don't get all those greenhouse gases from flying all that coke in from Central America to Arkansas to finance their operations like they did in the '80's.

Also, what is the operational meaning of keeping stuff secret? The operational meaning is that the criminal conspirators die in their beds. It really doesn't matter if 60 or 70 percent of the American public believe that a criminal conspiracy occurred. Anyone with even a minor in physics who took a good look at the Zapruder film can see that JFK was hit in a cross fire. When Einstein realized that the laws of the conservation energy and momentum contained a paradox, he went with keeping momentum, leading to his Special Theory. This held good for 60 odd years until it was trumped by the Warren Commission.

The irony of the situation is that people who truly suffer from paranoid schizophrenia do invent countless conspiracy theories. But most of the important decisions affecting the entire earth are made by secret cabals. So what's a body to do?

Posted by: Pavo on May 23, 2007 at 5:31 PM | PERMALINK

The US executive doing it without authority from Congress is, if not actually criminal, at least exceeding its Constitutional power and usurping the prerogatives of the Congress.

But if it's fake it's not actually currency. They'll call it a covert operation. Undercover faux dough.

Posted by: cld on May 23, 2007 at 5:31 PM | PERMALINK

The CIA explanation does not hold up water. If the CIA would use the money outside of congress approval, AND operate at a loss, then:
wouldn't it be simple to just allocate the money you'd use to build a fake money mint to these operations?

Because that money has to be outside of congress approval too! Do you really picture the CIA going to congress asking for moneys to build a note printing operation so they can avoid congress's supervision? Does not add up, does it?

Posted by: cedichou on May 23, 2007 at 5:32 PM | PERMALINK
But if it's fake it's not actually currency.

Right. It's counterfeit currency. Which Congress, under its powers under the elastic clause applied to the currency power, prohibits the making, transportation, possession, or trading of quite strenuously.

Posted by: cmdicely on May 23, 2007 at 5:36 PM | PERMALINK

What you need to come up with is a single truly ROGUE operation of substantial size that we have ever had in the US, or perhaps some other industrialized democracy.

My gawd, man. Have you never heard of Iran Contra? That not only involved hundreds of US agents, but also the cooperation of several foreign gvmts.

That only fell apart because the ironically named Hassenfuss was shot down.

Posted by: Disputo on May 23, 2007 at 5:38 PM | PERMALINK
The CIA explanation does not hold up water. If the CIA would use the money outside of congress approval, AND operate at a loss, then: wouldn't it be simple to just allocate the money you'd use to build a fake money mint to these operations?

Not if you wanted to get free assistance from other entities with the ability to detect "supernotes" in gathering intelligence about where the money was going once you handed it off.

Posted by: cmdicely on May 23, 2007 at 5:38 PM | PERMALINK
Again, if any single person ever admitted to this activity, or was caught in such an activity, then every person involved could easily be thrown in jail for decades, and be disgraced forever.

Yeah, just like everyone involved in Iran-Contra was thrown in jail for decades and disgraced forever. "Could be", perhaps, in abstract theory. But where is the basis for rational expectation of serious consequences?

Posted by: cmdicely on May 23, 2007 at 5:42 PM | PERMALINK

Have you never heard of Iran Contra?

But the whole point of the Iran Contra investigation was that the operation WAS sanctioned by the government, namely by Ronald Reagan and company.

Supernotes, as best I can make out, have been around at least since the Clinton adminstration. If so, this project would have had to have been sanctioned by both the Clinton and Bush administrations, at least. How plausible is that?

Posted by: frankly0 on May 23, 2007 at 5:45 PM | PERMALINK

> What you need to come up with is a single
> truly ROGUE operation of substantial size
> that we have ever had in the US, or perhaps
> some other industrialized democracy.

The National Reconnaissance Office built an entire office building in downtown DC, occupied it, and rented out the balance right under Congress' nose for 10 years. That was a 15 story office building which is a bit harder to conceal than a printing press.

Similarly the NSA bought huge quantities of chipmaking equipment in the 1980s. Everyone in the industry knows that it was delivered to Fort Meade; no one ever found out what it was used for. Presumably so the NSA could make its own computers, but no one knows. That has been 20 years.

Cranky

Posted by: Cranky Observer on May 23, 2007 at 5:48 PM | PERMALINK

But the whole point of the Iran Contra investigation was that the operation WAS sanctioned by the government, namely by Ronald Reagan and company.

No. The whole pt of Iran-Contra was PRECISELY that it was against the law, the Boland Amendment, to be exact.

Posted by: Disputo on May 23, 2007 at 5:49 PM | PERMALINK
But the whole point of the Iran Contra investigation was that the operation WAS sanctioned by the government, namely by Ronald Reagan and company.

The whole point of the Iran-Contra investigation was that, while it was sanctioned by the executive branch, the executive branch did so in contravention of the law and in excess of its Constitutional power, which is exactly what would be implicated in a CIA counterfeiting operation.

Posted by: cmdicely on May 23, 2007 at 5:52 PM | PERMALINK

No. The whole pt of Iran-Contra was PRECISELY that it was against the law, the Boland Amendment, to be exact.

You miss the point. The people involved in Iran Contra generally believed that it was sanctioned all the way up to the WH. All the evidence says that it was so, and the Reagan himself in effect signed off on it. Some may have suspected that it was illegal nonetheless, but they probably considered that not to be their problem, but rather the responsibility of their higher ups.

If you could come up with a plausible case whereby that could be true for the supernotes operation, maybe you'd have an argument. Otherwise, no.

Posted by: frankly0 on May 23, 2007 at 5:55 PM | PERMALINK

Yet won't the President say he can waive such things with a national security finding since it's being used in 'law-enforcement capacity'?

Posted by: cld on May 23, 2007 at 6:01 PM | PERMALINK

If people can present a case that supernotes have been around only during the Bush years, and not during the Clinton years, then I might buy the idea that the Bush WH sanctioned a supernote operation.

My best interpretation of what I remember reading is that supernotes pre-existed Bush, but I could be wrong.

But if they go back to Clinton's day, I don't see how such an operation could exist in the CIA of that day.

Posted by: frankly0 on May 23, 2007 at 6:01 PM | PERMALINK

Great minds think alike.

I blogged the same story, and came to the the same conclusion at my blog (click link if you dare).

Posted by: Matthew Saroff on May 23, 2007 at 6:02 PM | PERMALINK

If you could come up with a plausible case whereby that could be true for the supernotes operation, maybe you'd have an argument. Otherwise, no.
Posted by: frankly0 on May 23, 2007 at 5:55 PM | PERMALINK

You haven't been asleep for the past 6 years, have you? Because nearly every aspect of Bush's presidency has relied on people doing what Bush says, legal or not, based on the notion that whatever the president orders them to do, is completely legal, by definition.

Posted by: osama_been_forgotten on May 23, 2007 at 6:03 PM | PERMALINK

Similarly the NSA bought huge quantities of chipmaking equipment in the 1980s. Everyone in the industry knows that it was delivered to Fort Meade; no one ever found out what it was used for.

It was to keep their LISP machines running after Symbolics went belly-up. Duh!

Posted by: ajb on May 23, 2007 at 6:03 PM | PERMALINK
If you could come up with a plausible case whereby that could be true for the supernotes operation, maybe you'd have an argument.

Are you arguing that the Clinton Administration could not have signed off on it, or that even if it had, the Administration that lives by the credo "the power to set aside the law is inherent in the President" would have had Constitutional qualms about continuing a questionable overstretch of executive power and would have ended it immediately.

Because neither of those arguments seems particularly convincing to me.

Posted by: cmdicely on May 23, 2007 at 6:04 PM | PERMALINK

Are you arguing that the Clinton Administration could not have signed off on it

Yes, I would argue that the Clinton Administration would NOT sign off on an operation of this nature that was clearly a highly illegal end-run around the Congress and God only knows how many other statutes.

If it's just Bush, though, well, I guess anything's possible.

Posted by: frankly0 on May 23, 2007 at 6:08 PM | PERMALINK

A cia fake money capability may well have existed for decades.

Posted by: cld on May 23, 2007 at 6:09 PM | PERMALINK

Youmean some people still believe our government is at all ethical?

Posted by: David Triche on May 23, 2007 at 6:10 PM | PERMALINK

Suppose the cia discovered some group was turning out really excellent counterfeit money and tracked down their location.

Would they not have seen this as an asset?

Posted by: cld on May 23, 2007 at 6:11 PM | PERMALINK

Uhh,

Just to mention it, the German daily "FAZ" newspaper (and its Sunday newspaper "Frankfurter Allgemeine Sonntagszeitung") is a conservative newspaper. Friendly to the USA and dedicated to a "free market" society. And not likely to accuse the USA of anything without some kind of proof.

That doesn´t mean of course that this article is right. As we all know, lots of newspaper articles in the last few years were wrong.

I´m simply saying that this German newspaper - to the best of my knowledge - doesn´t publish wild conspiracy theories against the USA just for the fun of it.

Posted by: Detlef on May 23, 2007 at 6:13 PM | PERMALINK

Yes, I would argue that the Clinton Administration would NOT sign off on an operation of this nature that was clearly a highly illegal end-run around the Congress and God only knows how many other statutes.

Yeah, and I bet you think Congress would have never gone to war where the US wasn't being directly attacked over clear Congressional opposition, too.

Look, I may think Clinton had much better intentions than Bush, and certainly better policy judgement, but he was hardly someone who had a whole lot of respect for the Constitutional prerogatives of the Congress.

Posted by: cmdicely on May 23, 2007 at 6:13 PM | PERMALINK

Look, I may think Clinton had much better intentions than Bush, and certainly better policy judgement, but he was hardly someone who had a whole lot of respect for the Constitutional prerogatives of the Congress.

I can't think of a single case in which Clinton signed off on ANYTHING remotely approaching the degree of illegality that the supernotes operation would involve.

Pursuing a "war" (or whatever term is used) that Congress didn't approve of hardly compares.

Posted by: frankly0 on May 23, 2007 at 6:19 PM | PERMALINK

Or maybe the supernotes are stockpiled somewhere.

Waiting for the day China calls the US on its debt. It will be a way to inflate the currency out of our account deficit.

Posted by: osama_been_forgotten on May 23, 2007 at 6:23 PM | PERMALINK
I can't think of a single case in which Clinton signed off on ANYTHING remotely approaching the degree of illegality that the supernotes operation would involve.

Pursuing a "war" (or whatever term is used) that Congress didn't approve of hardly compares.

What exact measure of "degree of illegality" are you using to compare, here?

Posted by: cmdicely on May 23, 2007 at 6:32 PM | PERMALINK

But the CIA could just use *real* money. It's not like auditing in the intelligence community has been incredibly tough since 2000, right?

Posted by: Alex on May 23, 2007 at 6:34 PM | PERMALINK

Thanks, Kevin, for taking another look at this story. As to whether the CIA can print US$100 bills, I would like to think that they have presses that can print anything: Russian rubles, Iranian passports, Chinese laundry tickets, etc. for their operational needs. In my post back in March on this subject http://chinamatters.blogspot.com/2007/03/funny-story-about-funny-money-debunking.html I speculate that the CIA might be running off Supernotes to reward assets off the books with "mattress money", but also disrupt terrorist networks. The funny money would be detectable a) so it wouldn't contaminate the US economy and b) so it would be identified and made worthless when the bad guys we passed it to tried to deposit it in the bank. Anyway, interesting story.
PS,why do the comments show the poster's email address, instead of the URL I'm trying to provide a link to? Little bass-ackward, isn't it?

Posted by: China Hand on May 23, 2007 at 7:02 PM | PERMALINK

Why wouldn't the CIA just use the Treasury's own presses?

For the same reason that I don't urinate with someone else's penis.

Lol, hilarious retort!

Posted by: D. on May 23, 2007 at 7:16 PM | PERMALINK

Of all the threads that I have read here, this one has been the most fun.

Posted by: MatthewRmarler on May 23, 2007 at 7:33 PM | PERMALINK

The article doesn't make clear that there's a distinct difference in technology/cost, level counterfeiting--number of notes, value of notes, types of notes, volume and amounts seized--the sources, and trends over the last decades; especially pre-1996 vs. post-1996 (NCD) notes.

For example, infrared and OVID inks the article discusses are only present in NCD notes (introduced in 1996 with the $100 note); they are distinctly different animals and the counterfeiting associated with them appears to have distinctly different patterns. $50M of those notes NCD have not been seized or taken out of circulation; as of early 2003 the Treasury put it in the "low millions".

Moreover, the amount seized so far does not represent the total potential return to the counterfeiters, so current costs vs. current returns are not a good indicator; there is obviously a learning curve and they appear to be ramping up on the new technologies as counterfeiting of the older notes declines (at least for $100 notes in foreign circulation).

It is very likely that there are several players involved, depending on type of note and which years, although the analysis is still at best rough; it's only been in the last 7-8 years that a significant effort has been made to collect and analyze the necessary data; see, e.g.:

As to CIA involvement, that seems incredulous for numerous reasons.

Posted by: has407 on May 23, 2007 at 8:10 PM | PERMALINK

the faz piece which drumb [sic] links to was written by klaus w. bender. bender published a book on "high security printing" in 2004 which he later updated in 2006 (for the english version) to include "rumors" regarding the cia.

however, quoting directly from the bender piece cited by drumb, "experts" apparently contend:


[O]nly $50 million worth of Supernotes have been confiscated in the 17 years of their existence. But Kim Jong-il couldn't even buy one of the printing presses he would need for less then $50 million.


Neither can counterfeit currency investigators in Europe confirm that the Supernotes come primarily from East Asia. In Europe, these counterfeit notes are routinely removed from circulation after automated inspection by banks. The Supernotes are thought to originate mostly in the Middle East, East Africa and also Russia.

while ...


A rumor has circulated for years among representatives of the security printing industry and counterfeiting investigators that it is the American CIA that prints the Supernotes at a secret printing facility. It is in this facility, thought to be in a city north of Washington D.C., where the printing presses needed to produce the Supernotes is said to be located.

drumb: north korea makes sense. cia makes sense. north korea must = cia.


Posted by: still drumb and drumber on May 23, 2007 at 8:22 PM | PERMALINK

and the fact remains treasury's investigation of "an international counterfeiting operation that stretches from a separatist enclave in this former Soviet republic to Maryland [i.e., north of washington d.c.] where fake $100 bills have been seized" is substantively supported by "American diplomats, U.S. court documents and a recent report to Congress."

those very same facts asserting "suspects in Israel, Russia, and the Republic of Georgia" are also consistent with the expert facts reported by faz/bender:


$20 million in the fake [$100] bills has been transported to Israel and the United States, according to investigators. The counterfeit $100 notes have also surfaced in Georgia and Russia, officials said.


"Since the c-21558 family's first detection in March 1999 the total counterfeit activity (passed and seized notes) has exceeded $23 million," according to the report. In 2005, the Secret Service detected $5.3 million from the Caucasus ring, up from $1.5 million in 2003, the report said.


[T]he Secret Service "is currently investigating a scheme with ties to suspects in Israel, Russia, and the Republic of Georgia to produce counterfeit U.S. currency. The U.S. Secret Service has reason to believe this family of counterfeit notes is being produced in the Caucasus region," as the mountainous area encompassing parts of southern Russia and Georgia is called. U.S. diplomats confirmed that the location was South Ossetia.

faz: "[O]nly $50 million worth of Supernotes have been confiscated in the 17 years of their existence ... thought to originate mostly in the Middle East, East Africa and also Russia."

wapo: "$20 million in the fake [$100] bills has been transported to Israel and the United States...Since the c-21558 family's first detection in March 1999 the total counterfeit activity (passed and seized notes) has exceeded $23 million...suspects in Israel, Russia, and the Republic of Georgia."

drumb: must be north korea. must be a cia conspiracy. must be anything but "the facts" submitted, reported or supported.

Posted by: still drumb and drumber on May 23, 2007 at 8:53 PM | PERMALINK

Think of how many people would have to be in on this conspiracy at the CIA, every one of whom would have to be engaged in an operation unquestionably illegal and rogue.

Does the phrase "NSA wiretapping, 2001-2004" mean anything to you?

Posted by: mattsteinglass on May 23, 2007 at 9:14 PM | PERMALINK

And, incidentally, would it be technically "illegal" for the CIA (which is a government agency) to print these notes, which are easily detectable as fakes in the US? What does the law on counterfeiting criminalize? It's obviously not illegal to run off black and white xeroxes of bills for use as party favors. If you're doing it in a way that deliberately makes them unusable in the US, and you have relevant authorization, mightn't there be a legal defense for this? What if it were the Secret Service doing it, which is a branch of Treasury?

Posted by: mattsteinglass on May 23, 2007 at 9:19 PM | PERMALINK

What's the point? The CIA is not subject to Congressional control anyway.

Posted by: focus on May 23, 2007 at 9:26 PM | PERMALINK

Please. Even in the most paranoid fantasies, the CIA conducting this type of operation is difficult to believe for several reasons, among the most obvious:

  • The amount of money involved is, all things considered, very nominal--a few tens-of-millions at most. It would be easier and less risky to get it from more conventional sources.
  • The probability of maintaining a tracking/sting operation using "marked" notes over several years is very low. The recipients and their proxies are quickly going to question why the funds they receive/distribute are rejected as counterfeit. Not letting that cat out of the bag would require coordination among many entities on a global scale.
In short, the idea of the CIA conducting such an operation solo, on any scale, for any length of time, and worth the risk, is incredulous.

Posted by: has407 on May 23, 2007 at 10:09 PM | PERMALINK

Further to has407: if I really wanted to counterfeit-- no matter who or what illicit operation I was-- why wouldn't it be the old notes that lack the special inks and markers?

Easier to do (reputedly) and completely negotiable, at least inside the US. Why fake the high-tech new bills in small quantities and with deliberately missing tell-tales if you're a legitimate counterfeitor?

I must be dumb, but it only makes sense to me as a tracking device.

Posted by: Altoid on May 23, 2007 at 10:18 PM | PERMALINK

I think it was either 9 foot alien reptiles or the Bush family - same thing.

Posted by: The Conservative Deflator on May 23, 2007 at 10:54 PM | PERMALINK

See-told you it was the CIA-or the damn Canadians.

Posted by: doug r on May 23, 2007 at 11:52 PM | PERMALINK
And, incidentally, would it be technically "illegal" for the CIA (which is a government agency) to print these notes, which are easily detectable as fakes in the US?

They aren't "easily detectable as fakes in the US". They are easily detectable as fakes by people with automatic currency verification systems. They are easily passed to merchants, individuals, etc., in the US, moreso than most conventional counterfeits.

Posted by: cmdicely on May 24, 2007 at 1:29 AM | PERMALINK

tracer experiment

people involved most likely believe operation is authorized and serves good purpose

Other article stated that there have been a large number of changes in the supernotes. One wonders whether defects that make the notes stand out to automated currency test systems have changed. That would be a good way to keep them untraceable to terrorists, criminals, and joe public.

Posted by: asdf on May 24, 2007 at 8:33 AM | PERMALINK

The CIA must also have automated readers. Sounds like they're trying to break down courier networks.

Posted by: B on May 24, 2007 at 8:39 AM | PERMALINK

We want tougher penialties on Bush and his administration of crooks.

Posted by: Al on May 24, 2007 at 4:34 PM | PERMALINK

But why would anyone go to so much trouble to trace notes that are already serially numbered? There are also some other methods (radioactive tracers..) that would be simpler, cheaper, and just...well...more plausible.

Posted by: Alex on May 25, 2007 at 4:57 AM | PERMALINK




 

 

Read Jonathan Rowe remembrance and articles
Email Newsletter icon, E-mail Newsletter icon, Email List icon, E-mail List icon Sign up for Free News & Updates

Advertise in WM



buy from Amazon and
support the Monthly