Government officials and diplomatic sources reacted with varying degrees of surprise and incredulity at the government’s public denial Tuesday of an Iraqi money laundering plot in Phnom Penh.
While a number of foreign and Cambodian officials confirmed they, too, had heard tales of Iraqi money circulating in the country, scant evidence had so far left the rumors of a major money laundering plot unsubstantiated.
An Interior Ministry official said the government’s outburst could create just the kind of public relations disaster it was intended to prevent during the crucial three-day Consultative Group meeting in Paris.
Information Ministry Secretary of State Khieu Kanharith said Wednesday he was surprised that government officials would release a statement regarding a rumor.
“I don’t want to judge [but] I don’t know why this information was released,” said Khieu Kanharith, who often serves as the government spokesman.
A US diplomat said Wednesday the Iraqi cash rumor is becoming something of a perennial in Cambodia, having emerged three times in the past two years.
“It’s an urban legend. It doesn’t pass the logic test,” said the diplomat, noting that the currency has little use outside Iraq.
Om Yentieng, a senior adviser to Prime Minister Hun Sen, and Council of Ministers spokesman Khieu Thavika said Tuesday the statement was designed to head off the slated publication of a story that containers of Iraqi dinar have arrived in Cambodia.
Neither Om Yentieng nor Khieu Thavika will name the newspaper they say is slated to publish the article claiming that the dinars, supposedly illegal proceeds of deals done by Thai officials buying UN-embargoed Iraqi oil, are being laundered here.
They said a Cambodian political party—they didn’t say which one—will be accused of helping to change the Iraqi dinar into other currencies.
The Thai embassy in Phnom Penh refused official comment on the allegations Wednesday. However, a diplomat at the embassy said Tuesday that he knew nothing about the rumors.
Om Yentieng and Khieu Thavika said the government felt it must denounce the rumor before it could adversely affect perceptions in Paris, where donors are deciding whether to grant Cambodia some $500 million in aid.
But despite the gravity of the rumors, Director General of National Police Hok Lundy said Tuesday he knows of no investigation into any Iraqi currency scam. While a number of foreign diplomats based in Phnom Penh confirmed they have heard rumors about the Iraqi dinar, only one said he had actually laid eyes on dinar, and that was in February.
A high-ranking Interior Ministry official said Wednesday that rumors have circulated over the past few months about the currency, but police inquiries failed to uncover evidence.
“We heard that someone was trying to change this money. But we don’t know how much or where it came from,” said the official, noting that a number of Iraqi nationals live in Cambodia and could have brought the dinars with them. He said the decision to denounce the rumor was a bad one, in that it brought more attention to the story than it deserved.
Khieu Kanharith also said the statement raised questions at the national television station TVK and the national radio stations, which broadcast government announcements daily. Journalists from both contacted him to confirm that the bizarre statement was in fact genuine.
“I don’t see the necessity or use of this press release….If you have a statement it must be very well founded. Not just a rumor,” Khieu Kanharith said.
Pen Siman, director of the Cambodian customs authority, called the whole idea “crazy’’ Tuesday, stating that it would be impossible for six containers of cash to enter Cambodia unnoticed.
(Additional reporting by Kay Kimsong and Seth Meixner)