December 22, 2007

Ron Paul Moves to Save Liberty Dollar (Sort of)

So, I've been rather busy and slow in covering recent developments related to federal government action against the Liberty Dollar. Some of you may have seen news coverage related to the seizure of the Liberty Dollar organization's assets. The news media mostly focused on the fact that the raid occurred when the office was full of Ron Paul dollars. The media coverage was pretty incomplete. Here is a more complete timeline of what has occurred to date:

  • 1998 NORFED (the National Organization for the Repeal of the Federal Reserve and the IRS) is founded, and begins offering "liberty dollars", a private voluntary barter currency backed by silver and/or gold.

  • 1999 to 2006 A wide variety of government (and quasi-government) officials from divisions including the secret service and the federal reserve publicly state that the Liberty Dollar is legal, when used as a voluntary barter currency, and not falsely passed off as government issue currency.

  • September 13, 2006 The US Mint issues a warning stating the the Liberty Dollar is illegal under 18 USC sect. 486, which states:
    Whoever, except as authorized by law, makes or utters or passes, or attempts to utter or pass, any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design, shall be fined under this title or imprisoned not more than five years, or both.

    NORFED insists, as legal opinions from a variety of sources, including that US government, had previously stated, that it's product, as a "private voluntary barter currency" is not "intended for use as current money," and therefore does not violate this law.

  • November 18, 2006 In response to a letter from a concerned constituent, Senator Bill Nelson of Florida writes to the US Mint requesting information on the warning against the Liberty Dollar. Edmund C. Moy, directory of the Mint, sends a response which says, among other things,
    Your constituent, and other concerned about NORFED's "Liberty Dolars" have also referred to statements by the Treasury Department, Bureau of Engraving and Printing, Federal Reserve, or United States Secret Service officials that the NORFED paper gold and silver certificates are not counterfeit Federal Reserve Notes and appear to be part of a barter system. The United States Mint, however, has tailored its information to the public on the use of NORFED's gold and silver medallions - not NORFED's paper gold and silver certificated.

  • December 2006 NORFED disbands, and is replaced by Liberty Services DBA, which will be focused on marketing the Liberty Dollar commercially, rather than on political activism.

  • March 20, 2007 Liberty Services files suit against the US Mint in federal district court, requesting a declaratory judgment on the legality of the Liberty Dollar and a permanent injunction against the government prohibiting it from claiming that the Liberty Dollar is illegal or counterfeit.

  • July 4, 2007 Liberty Services announces the availability of Ron Paul dollars in copper, silver, and gold (platinum dollars were later made available as well) in denominations ranging from $1 to $1,000, and promises to donate the proceeds to the Paul campaign, up to the maximum donation permitted by law.

  • November 7, 2007 After requesting and receiving two extension requests, the US Mint responds to the lawsuit with a motion to dismiss. The judge has not yet ruled on this motion.

  • November 15, 2007 The FBI and Secret Service raid Liberty Services headquarters (Evansville, IN) and Sunshine Silver Mines (Couer d'Alene, ID) and confiscate all Liberty Services property and all of the silver and gold which backs the paper and digital currency. The Affadavit of Probable Cause lists mail fraud and wire fraud in connection with the paper and digital certificates as well as money laundering. The court appears to have denied requests to search the private residence monetary architect Bernard von Nauthaus and other Liberty Dollar employees, and permission to confiscate von Nauthaus's car, and Liberty Dollar computers. The warrant specifies only "Liberty Dollar and/or Hawaii Dala Currency and/or precious metals of gold, silver, copper, platinum, or other substance." However, von Nauthaus claims that the entire contents of the Liberty Dollar offices, including computers, were confiscated anyway. The court also apparently rejects arguments that there is probable cause to believe that Liberty Services has violated sect. 486 or counterfeiting laws (at least, these are not specified in the warrant). Liberty Services announces its intention to file a "wrongful seizure" lawsuit on behalf of all the holders of digital or paper currency who are the legal owners of the preciouse metals held at Sunshine Silver Mines, and those who had ordered and paid for the Liberty Dollars and Ron Paul Dollars confiscated from Liberty Services. All Liberty Services assets, including the legal defense fund are frozen.

  • November 15 to November 27, 2007 Ron Paul $1 Copper Liberties sell for as much as $65, and $20 Silver Liberties for as much as $450 on eBay.

  • December 5, 2007 Liberty Services reorganizes as Liberty Dollar Numismatics, and begins selling "Arrest Dollars," imprinted with a pair of handcuffs, to raise money for legal defense.

  • December 13, 2007 Ron Paul introduces the Free Competition in Currency Act which repeals the sects. 486 and 489, which prohibit the production of private currencies. Paul argues that, as anti-counterfeiting provisions, these sections are redundant, and that they have been abused by prosecutors, especially in the Liberty Dollar case. The bill is referred to the judiciary committee. If your representative is on the judiciary committee, you should consider asking him or her to support this bill.

  • December 14, 2007 The FBI announces it's intention to immediately offer for auction all of the property seized from Liberty Services and Sunshine Silver Mines. The face value is, I believe, in the neighborhood of $3 million. Note that this means that the government is now selling the very product it is prosecuting Liberty Services for selling.

Now, Ron Paul's bill will not save the Liberty Dollar from charges of fraud, which apparently stem from the claim that the Liberty Dollar's assertion that it is "100% backed" by gold and silver is misleading in terms of the actual system. The actual system, is, of course, well documented on the Liberty Dollar's web-site, so it should be difficult to actually charge them with fraud. Unfortunately, my understanding is that if they are never charged at all, they are not eligible to be compensated for the confiscation. It is my understanding that they are compensated only if they are tried and acquitted (this is probably one of the reasons that von Nauthaus has been in constant contact with the FBI about when he can turn himself in). The upside is that the government is putting all of these Liberty Dollars back into circulation, so even if the organization is destroyed once and for all people will be able to continue bartering with their Liberty Dollars.

The timing of the raid is, of course, also rather suspicious, coming as it did after some seven years of government statements to the effect that the Liberty Dollar is legal. It coincides with (1) serious mismanagement of monetary policy by the federal government, (2) the presence of a lot of Ron Paul currency, and (3) a lawsuit in process against the government. There are already credible accusations against the Bush administration of various strong-arm tactics including selective prosecution being used to influence politics. I obviously don't know exactly what is going on in this incident, and I don't want to come off as a conspiracy theorist, but the whole thing looks awfully suspicious to me.

Posted by Kenny at December 22, 2007 1:03 PM
Trackbacks
TrackBack URL for this entry: http://blog.kennypearce.net/admin/mt-tb.cgi/385

Post a comment





Return to blog.kennypearce.net