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Welcome, 77 artists, 40 different points of Attica welcomes you by singing Erotokritos an epic romance written at 1713 by Vitsentzos Kornaros

Tuesday, August 4, 2015

Funny Money: CIA Counterfeiting in Poland

Communism was relegated to the dustbin of history for many reasons, foremost among them were its warped economic policies. In places like Poland during the 1960s, foreigners with access to hard currency could easily game the system and do pretty well. David Fischer recounts how Polish-American retirees lived like kings in Krakow, the way the embassy had to pay "bail" for one American with what turned out to be counterfeit zlotys made by the CIA, and how Western diplomats were able to travel abroad very cheaply. Read the entire account on ADST.org. You can read about Fischer's account of the mob and corruption in the Seychelles. Go here for his take on an undiplomatic U.S. ambassador to Nepal. FISCHER: [We] had a very interesting case. Two interesting cases. Most of the Americans living in Poland were retired Polish-Americans who'd come back to Poland to live on their social security, rail road pension or whatever. And indeed, Poland had made an effort to attract these people because they built houses for them which they sold for the grand sum of $25,000. They were very nice little houses. As a matter of fact, the Embassy ended up buying a couple of them. But we must have had on any given day, maybe eight or ten thousand Americans who received Social Security checks. Most famous of which was a guy who lived near Krakow. He was the beneficiary of three pensions: Social Security, railroad and one other one. He never personally came to pick up his checks. He had one of his two nineteen-year old mistresses come to the Embassy. One day I became so intrigued with this I said I have to go visit this guy. So I went down to this little Polish village where he lived. Indeed, he was living in a little Polish village where he had built a house. And he was living with these two absolutely fabulous girls. My first question was, "Why are you living in Poland?" He looked at these two girls and said, "So at my age, what would you do?" I had to agree that he had a point. We had another case. We had an American student who was arrested from Poland for attempting to cross the border illegally from Russia. He was innocent, but so be it. We worked out with the Prime Minister that we could get the guy sprung if we pony up a substantial bail. Now bail was unknown in Communist countries. This was indeed a straight cash-for-body swap. He was being held in a little rural jail in southeastern Poland in a town called Rzeszow. I went down with a buddy of mine, the other vice consul, who was in fact a CIA officer under very deep cover, and we had the money which we were going to hand over to this jailer to get this kid out. We arrived at that jail. There is the kid, the jailer, and a third party, from the Central Bank to receive the money. So my friend from the Agency popped open the suitcase and took out a package of 100,000 zlotys, brand new crisp bills, plopped them on the table. The guy form the Central Bank picked up a wad of it and said somewhat threateningly, "Where did you get this money?" We said we got it from the Embassy cashier. The guy from the Bank picks up the telephone and calls the Central Bank in Warsaw. He asked, "How much of ZQ note do we have in circulation?" It turns out 110,000 zlotys of this particular note was in circulation of which we had 100,000 in brand new crisp bills. He accepted the money and we got the kid out. Got him on an airplane and sent him back to the United States. Later I asked my colleague where the hell he had gotten the money. He said we've been printing this stuff in Switzerland for years and years. I guess this was some strange Agency operation to test whether or not it could pass counterfeit zlotys in Poland. And indeed we were paid out of the American Embassy. We exchanged our money at the CIA office, legally. We were told by the Ambassador and everyone else that the reason we were doing this was that this was PL-480 money, left over surplus money from sales of grain to Poland in the late '50s. In order to recirculate this money, we would be allowed to exchange our U.S. dollars at a favorable rate of exchange, less than the black market, but still two or three times the official rate. The legal exchange rate in those was twenty-five zlotys to the dollar. What we didn't know and what you didn't find out until the day you left Poland, was that every dollar that you had exchanged, fifty cents was set aside in an escrow account and returned to you because the exchange rate we were using was in fact eight times the legal exchange rate. And rather than have ostentatious spending, they gave us two or three times the exchange rate which was very generous. But everyone had a check when you left. I left the Embassy in Warsaw in 1968 after four years and I was handed by the administrative officer a letter that said do not open until you get out of Poland. I opened a letter and inside was a check for I think $8,000 dollars. Which was wonderful. It was the down payment on our first house. To this day I don't know if we were using Agency funny money, although we were always paid in new bills. Maybe this was an operation to weaken the Polish currency, although I don't know how you can make something which is worthless anyway somehow less valuable. The other thing we discovered in Poland, we could take these zlotys, which were in essence worthless pieces of paper, and go to Wagons-Lit Cook. Wagon-Lits, which was in those days the largest travel agency in Europe, had a travel office in Warsaw. And we discovered we could take this funny money we had purchased and buy vouchers good in dollars overseas. This meant that we were able to travel for 50% or less of actual cost. My wife and I took one very famous vacation. We spent three weeks in Greece with a child and with a nanny we brought with us in the most luxurious hotels we could find on the island of Rhodes, and came back to Warsaw with more money than when we'd left. That goose, that was truly a wonderful goose, that laid the golden egg, was killed by a political officer who went to Copenhagen with $10,000 of these funny vouchers. He stayed at the Hotel d'Angleterre, the best hotel in Copenhagen. The first question he asked the Concierge was, "I'm having some silver delivered from [high-end store] Georg Jensen. Can you pay this out of my hotel bill if I leave you this deposit?" So he managed to buy ten thousand dollars worth of Georg Jensen silver for about $2500. The inspectors came in and found out about it and that was the end of that arrangement. -- This feed and its contents are the property of The Huffington Post, and use is subject to our terms. 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