Mideast Counterfeiting May Hasten New U.S. Designs

Terrorists may be on the verge of claiming a new victim: the U.S. greenback.

Officials at the Bureau of Engraving and Printing said the agency is at work on new designs for U.S. currency amid reports that terrorist organizations may be flooding the world with counterfeit $100 bills.

The bogus-money problem has become so severe that many overseas banks are refusing to accept the $100 bills. A leading terrorist expert said the counterfeit dollars, being produced in the Middle East by terrorist groups linked to Iran and Syria, could cause serious economic problems especially for small nations that rely on the U.S. dollar.

While confirming work on a new design, Bureau of Engraving officials were reluctant Thursday to discuss what changes they will recommend that Treasury Secretary Lloyd Bentsen implement or to link the change to the increase of overseas counterfeiting.

Congressional sources said they had been told that the Treasury hopes to announce the proposed changes later this month and said the House Banking and Finance Committee is planning hearings on the issue.

Among the ideas said to be under consideration: Moving portraits to the side, implanting small holograms on the bills, printing on watermarked paper, using multicolored patterns that are difficult for copiers to reproduce and printing with multicolored inks--all steps other countries have adopted.

One of the most dramatic proposals has come from Robert Kupperman, an expert on terrorism. He has called for a two-tiered money system--new greenbacks for domestic use and new “redbacks”--dollars printed in red--for overseas use.

Coin World, a numismatic publication which this week disclosed the redesign effort, said it understood the new currency may closely resemble mock-ups made by the PBS program “Nova.” The “Nova” dollars included safety features used by many foreign countries including multicolor printing, a portrait to the side and watermarked paper.

The Treasury Department has been reluctant to make major changes in the dollar, leaving the United States with what a Secret Service spokeswoman described as “the most stable currency in the world, and the most easy to counterfeit.”

Two years ago the Bureau of Engraving introduced two major changes to high-valued currency: extremely small printing called “micro-printing” and a polyester thread that also contains tiny printing. Coin World said those efforts have failed to thwart the counterfeiters, and youngsters showed the publication how they could easily pull the polyester thread from the new currency.

Thomas A. Ferguson, the bureau’s research director, confirmed that the agency is close to making final recommendations as to how the new currency should look. But he rejected suggestions the terrorism concerns had prompted the redesign effort.

“I can tell you with conviction that we will not make any changes this year,” he said, noting that it would take longer, perhaps two years or more, to implement any changes.

Ferguson said the redesign effort had begun two years ago and “hasn’t changed in intensity because of any outside issues.”

Figures provided by the Secret Service and interviews with terrorism experts suggest increasing concern within the government over bogus dollars from abroad. In fiscal 1993, the agency said, there was five times as much counterfeit currency produced overseas ($120 million) as in the United States ($24 million).

Kupperman said a group of counterfeiters in Lebanon’s Bekaa Valley, directed by Iranian and Syrian intelligence agencies, are believed to have produced $1 billion worth of “the most nearly perfect $100 bills that the Secret Service has ever detected.”

The Secret Service declined to confirm on that claim, saying it could not comment on any ongoing investigation.