Solomon Hughes details the activities of one of the private firms which has made a great deal of money from the occupation of Iraq

DEEP Throat, the whistleblower who unravelled President Richard Nixon’s corruption, told journalists to expose the Watergate conspiracy by “following the money”. Literally following the money, in the shape of Iraq’s new currency, has enabled British firms to profit from the “war on terror”. In common with their better-known American counterparts, these companies have access to the highest levels of government as they try to make money from the military and authoritarian policies launched after the September 11 attacks on the United States.

In 2003, more than a million people protested outside Whitehall against the forthcoming attack on Iraq. Around the same time, a group of lobbyists from a firm called De La Rue was inside Whitehall trying to make money from the war before it had even started.

De La Rue is a security printer. The company is a part-owner of the National Lottery, but most of its work involves printing banknotes. On March 18 2003, two days before the invasion of Iraq, De La Rue executives met Foreign Office and Treasury officials and “made a sales pitch” to print Iraq’s currency after Saddam Hussein’s removal from power.

De La Rue went on to both win the contract and then employ Britain’s most senior official in Iraq. Its executives now appear to be using similar strategies to win work on Britain’s main “homeland security” policy.

Official papers show that the Foreign Office was receptive to De La Rue’s arguments. Whitehall mandarins wrote: “In post-war Iraq, the largest threat will probably come from [US/Swedish firm] Crane/Tumba”. The fact that officials discussing a looming war could describe an American firm as “the largest threat” shows that they regarded Iraq as a commercial battleground as well as a military one.

De La Rue won its Iraq battle. In July 2003, a meeting of the “Ad Hoc Ministerial Group on Iraq Rehabilitation” – a group including then Prime Minister Tony Blair, along with the then Foreign and Defence Secretaries – were told that persistent Foreign Office lobbying had paid off in a “positive policy move developed in consultation with us” . The Coalition Provisional Authority in Iraq commissioned new dinar notes “largely printed by the UK company De La Rue”. While the company insists that the size of the deal is confidential, according to official papers, there was a “$120-million contract to print the new Iraqi currency”.

Many of the post-war Iraq contracts awarded to Western firms were badly managed. Low electricity production, dirty water, jerry-building, poor accounting and plain corruption all marred the reconstruction effort. De La Rue, by contrast, made a success of printing the new banknotes. Iraq’s occupiers wanted a new currency to get Saddam’s face off the country’s banknotes and ensure that post-war Iraq wasn’t destabilised either by Baathists using stockpiles of Saddam dinars or criminals forging notes. As the Foreign Office noted before the war, Iraq’s Central Bank “prints on low-quality wood pulp paper (which reflects under UV light), with a watermark that can be forged by professionals with access to the same paper supply as the bank”.

There was one other crucial difference between the Baathist and allied approach to the dinar. Official papers show that, before the war, “Iraq has approached De La Rue frequently to attempt to source cotton watermark paper on which to print, but been declined”.

Saddam wanted De La Rue to help Iraq’s Central Bank print its own, more secure currency. Instead, under the occupation, the entire operation was outsourced from Baghdad to Basingstoke (where De La Rue has its offices).

De La Rue was paid from money raised by selling Iraqi oil. The $120 million it received came from the Development Fund for Iraq – an account filled with Iraqi oil money but administered by the occupiers.
The possibility of helping the Iraqis to print their own notes – through fresh supplies of high-quality paper or re-tooling the mint – was simply never considered. Instead De La Rue printed the banknotes in England and flew them to Iraq in 27 specially chartered 747 airplanes. While the contract swelled De La Rue’s coffers, it did little to rebuild Iraq as a sovereign nation. The new Iraqi government was weak, isolated and without independence from the occupiers. The fact that it couldn’t even print its own currency was part of this weakness.

One privatisation begat another. Not only was Iraq’s new money made in England, but the contract to distribute the cash was awarded to Western companies. Private contractors, including British firms such as Global Security, ferried the new notes around Iraq. The occupation may have removed Saddam’s likeness from Iraq’s banknotes, but the replacements were printed abroad and then shipped throughout the country by British firms employing Fijian and Nepalese mercenaries. The Iraqis’ involvement in their own money supply was kept to a minimum.

In June 2003 – one month before De La Rue was paid with Iraqi money to print Iraqi money – leading Foreign Office official Jeremy Greenstock was appointed as Tony Blair’s special envoy to Iraq. Greenstock became deputy to US viceroy Paul Bremer. Greenstock left the Coalition Provisional Authority in March 2004. He has since been a critic of some of the CPA’s failures, but judging by his career moves, did not regret all is decisions. In March 2005, Greenstock joined the board of De La Rue – the firm whose profits were bolstered by the Iraq occupation.

The “war on terror” involves both military adventures abroad and “homeland security” programmes. The new “anti-terrorist” bureaucracies, databases and systems have been a bonanza for American corporations. In Britain, the biggest business provided by the “war on terror” involves the proposed national identity card system.

After profiting from Iraq, De La Rue has now turned its corporate attention to this new business opportunity. The firm is lobbying for profitable ID card contracts and has again utilised people with links to the highest echelons of government. One such is David Landsman, De La Rue’s international affairs advisor and the firm’s main contact for “identity systems”. He has spoken at conferences promoting ID cards alongside Home Office minister Liam Byrne.

Normally, former civil servants must have their jobs inspected for potential conflicts of interest by the Advisory Committee on Business Appointments. However, this committee has not considered Landsman’s job, because he is actually still employed by the Government and works for De La Rue on secondment.
Landsman is not the only current Government employee on De La Rue’s books. Cabinet Office official Gill Rider also sits on De La Rue’s board. Rider is “director-general of leadership and people strategy” – effectively the civil service head of human resources – as well as a director of a firm looking for work on the ID card.

One special feature of the “war on terror” is that both the British and American states have seized new powers at home and abroad and then handed these powers over to commercial sub-contractors. Instead of policemen, soldiers or spies fighting the terrorists, private companies do much of the work.

During the Cold War, US President Dwight D Eisenhower warned of the “unwarranted influence” of the “military industrial complex”. He said: “The potential for the disastrous rise of misplaced power exists and will persist.” As the example of De La Rue demonstrates, the growing security-industrial complex shows every sign of building its own power to profit from and encourage the foreign interventions and authoritarian twitches of America and its allies

While ministers and their officials may have felt under pressure from anti-war demonstrators, that was counterbalanced by commercial lobbyists. Campaigners might argue that “homeland security” initiatives are both wasteful and illiberal, but ministers and officials can look forward to jobs with the firms that will run these schemes.

The business people of “War on Terror, Inc” encourage the bad policies behind the “war on terror”.
Solomon Hughes’ book War on Terror, Inc: Corporate Profiteering from the Politics of Fear was published by Verso earlier this year. He can be contacted at sol.hughes@btinternet.com