Spooked-up greenbacks?

Someone is counterfeiting American $100 bills.

Of course, crooks have been creating fake bucks ever since the government started to create real ones. But the $100 "supernotes" (or "superdollars") which keep turning up in cargo holds pass all the usual tests of authenticity:

The counterfeits were nearly flawless. They featured the same high-tech color-shifting ink as genuine American bills and were printed on paper with the same precise composition of fibers. The engraved images were, if anything, finer than those produced by the United States Bureau of Engraving and Printing. Only when subjected to sophisticated forensic analysis could the bills be confirmed as imitations.

The Treasury Department believes that the culprit is not a criminal or a syndicate -- but a state. To be specific: North Korea.

“The North Koreans have denied that they are engaged in the distribution and manufacture of counterfeits, but the evidence is overwhelming that they are,” Daniel Glaser, deputy assistant secretary for terrorist financing and financial crimes in the Treasury Department, told me recently. “There’s no question of North Korea’s involvement.”

Although previous suspects included Iran and Syria, North Korea has long stood at the center of official accusations, thanks to a defector's claims -- and to the discovery of supernotes in the luggage of North Korean diplomats. Some aver that dictator Kim Jong-Il could not keep his nation afloat without the phony notes. (Of course, defectors have often proven unreliable.)

But this spellbinding story in Germany's Frankfurter Allgemeine Sonntagszeitung suggests that the culprit may in fact be the American intelligence community.

(To read the rest, click "Permalink" below)

The FAS piece -- written by Klaus Bender, author of Moneymakers: The Secret World of Banknote Printing -- notes the astounding technical difficulties involved with such an operation.

The banknote paper used for the Supernotes is produced on a so-called Fourdrinier papermaking machine and consists of 75 percent cotton and 25 percent linen. Only the Americans make their currency in this manner.

On the Supernotes, neither super-thin polyester security film with the microprint "USA 100" nor the graduated watermarks are missing. For this, the counterfeiters would require at least one papermaking machine. In addition, a chemical and physical analysis of the paper proves that the cotton used in the Supernotes originated in America's Southern States. To be sure, this cotton is freely available on the open market.

That's just the beginning. The notes are printed using an intaglio press manufactured for the Federal Reserve by the German firm KBA Giori.

These special printing machines are not available on the open market. Even the resale of such a machine is reported to Interpol as a matter of routine.

The top-secret color-changing ink used on $100 bills is manufactured by a Swiss firm; other inks are produced in secret facilities in the United States.

Another peculiarity concerning dollar notes that emerged starting in 1996 is that every variation implemented by the Fed in the printing of the dollar has been immediately replicated by the counterfeiters. At present, no less than 19 different plates for the Supernotes have been identified, and they are absolutely perfect. Micro-printing sized at only 1/42,000 of an inch are hidden on the new notes, and under a magnifying glass the Supernotes show no deviation from the original. Where ever did the counterfeiters find such specialists?

After poking holes in the evidence against North Korea (which produces its own poor-quality notes on inferior equipment from the 1970s), the FAS piece segues into the realm of rumor. Fortunately, the speculation comes clearly labeled as such:

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.

This same "rumor" has now found its way into a McClatchy newspaper, the Kansas City Star:

Klaus Bender...said the phony $100 bill is “not a fake anymore. It’s an illegal parallel print of a genuine note.” He claims that the supernotes are of such high quality and are updated so frequently that they could be produced only by a U.S. government agency such as the CIA.

As unsubstantiated as the allegation is, there is a precedent. An expert on the CIA, journalist Tim Weiner, has written how the agency tried to undermine the Soviet Union’s economy by counterfeiting its currency.

I would also cite as a precedent the Nazis' notorious Operation Bernhard.

Here's an astounding detail: The superdollars contain a deliberate "tell" -- a giveaway.

Whoever is making them seemed to deliberately add minuscule extra strokes, as if trying to flag the phony bills, the Swiss noted. For example, at the very tip of the steeple of Philadelphia’s Independence Hall, the counterfeit bills have a line along the left vertical edge that is not on the real bills.

A detail of that sort would not occur by accident, especially not on bills which pass muster on a microscopic level.

American spooks have been known to engage in (or at least turn a blind eye toward) some very nefarious activities. Surely, though, there are limits? Surely the CIA would understand the damage these supernotes could inflict on the American economy?

I still would not discount the theory of a non-American state actor. Any culpable foreign service would have to be capable of...

1. Covertly acquiring the specialized intaglio printer.

2. Creating paper to spec, using cotton imported from the American south.

3. Maintaining agents-in-place within the facilities where the ink is manufactured. Other agents would need to have access to the plates for each new bill design, since the counterfeits automatically keep up with changes in the real notes.

Each reader must make an individual judgment as to which foreign nations -- if any -- could accomplish these tasks.

This DU poster adds a fascinating bit of speculation:

I was even wondering myself if the kid gloves treatment that was afforded to money launderer Thomas Kontogiannis who was tied into Duke Cunningham, Brent Wilkes, and the intelligence agencies might have known more about this than he ought to and that was why he was "allowed" to travel to Europe after being sentenced for his crimes here under the "guidance" of some unnamed governmental agency unbeknownst to the sentencing judge.