`Perfect' dollar forgeries flood Middle East

The Israeli and Iranian governments top the list of suspects behind the faultless $100 bills, writes Robert Fisk in Beirut

The Lebanese know how to spot a fake. Fake weapons, fake perfumes, fake diplomatic consuls, fake money. But the latest US $100 bills are as near perfect forgeries as they have seen, many of them accepted happily by Beirut's notoriously suspicious money changers.

"You have to understand something about counterfeit money," Ihsam Merih says as he thumbs through a pile of old notes in the Allied Business Bank just off Hamra Street. "All forgeries carry a deliberate mistake - they have something wrong on the face of the notes, put there deliberately by the forgers. The new notes don't have any mistakes."

Mr Merih, who after 18 years is the Allied Business Bank's chief cashier and counterfeit expert and teaches the company's trainee accountants, is believed never to have missed a forgery.

"Look here at this $100 note," he said handing me a good-looking bill with Independence Hall on the back, already cleared by Agence Baabda and at least one other trading house in Beirut. "What's wrong with it? The paper's good, printing fine - but look at the `O' of `United States Of America'. See the way it runs under the edge of the border of the note, the way the top of the `O' is obscured. It shouldn't be - the `O' should be complete at the top."

The bills, dated 1988 but probably forged in Lebanon in the following two years - the last two years of the civil war - are still arriving at the Allied Business Bank at the rate of one a month, often brought in from Cyprus or other Middle East states by Arab clients unaware that they are forged.

"According to the law in most countries in this area, counterfeiting currency carries the death penalty," Mr Merih says. "So we believe that the forgers deliberately make a mistake so that they can claim if they're caught that they weren't making a real forgery."

Another note comes out of the Allied Business files with a note saying "forgery" fastened to it. "What's wrong with that?" And again, I run my hands over the bill. It's too green, I tell Mr Merih.

"No, it's green enough, perhaps using the print `washed' from a small denomination bill like the $1 or $10. No, the mistake is on the back - the thickness of the clouds over the US Capitol." And sure enough, compared to the real $50 note that Mr Merih lays in front of me - where a stream of gentle summer clouds breeze above the pseudo-Greek dome of the Capitol - there is a near-tempest brewing over the building in the fake note. "Too much cloud, as if it was a storm."

The $50 bill is called a "50 per cent perfect" - it's a crude counterfeit - the $100 fake with the broken "O" a "75 per cent perfect". The "perfect" $100 forgery contains no deliberate mistakes - which is why Mr Merih and his colleagues suspect that it is being manufactured with the permission of a government.

"Anyone who makes a `perfect' dollar bill out here is going to get strung up if he's caught," another bank cashier said. "So the guys who're going to make a perfect note, without any mistakes, are working for a government who will protect them. So a government must be involved, the intelligence services, ministries, the lot."

A senior bank official in Lebanon believed that Iran or Israel might be responsible. "When you're producing this kind of high-tech stuff, it's got to have official backing," he said. "If you're spending this kind of money on a `perfect' forgery, it's for big business - for political parties, arms purchases, for paying militias."

He repeated a rumour believed by several other banking officials in Lebanon - that the "perfect" dollars might be coming off counterfeit presses and dollar plates taken into Afghanistan by the Soviet intelligence service during the Soviet occupation; Afghanistan is now divided among militias respectively funded by Saudi Arabia and Iran.

Suspicion of Israel goes back to the late 1980s when the "1988" notes turned up in the hands of pro-Israeli militiamen in southern Lebanon, apparently contained in their pay packets.

So many flooded the market at the time that all Lebanese government institutions in and just north of the Israeli occupation zone - banks, post offices and government departments - were ordered to refuse $100 bills, whether or not they were forgeries. The United Nations forces in southern Lebanon have refused to accept $100 bills for more than four years.

"The security thread is the reason why we are alarmed," the senior Lebanese bank official said of the new forgeries. "It's not easy to get the thread in. You put in the thread when you produce the note - it's not printed on, it's embedded in the paper. And it's a real security thread.

"We suspect they're being exported to a variety of places: to the US, to the former Soviet Union. Some people tell me they're produced in Israel but we have no way of knowing. I suspect the Afghans could be making them from Soviet plates - or so I'm told."

Other bank officials suspect Iran - Washington's favourite culprit, although it has produced no evidence to this effect - and suggest that Tehran has used fake currency bills to fund the Hizbollah, Hamas and other armed groups which are opposed to Israeli occupation.