By Patrick A. Heller
Beginning in 1974, the auditors of the U.S. government’s gold reserves held at Fort Knox, Ky., and at the U.S. Mint facilities in Denver, Colo., and West Point, N.Y. (which was named the West Point Bullion Depository from its opening in 1937 until it gained status as an official Mint in 1988), started a 10-year program to verify 100 percent of the gold reserves.
Under this program, 10 percent of reserves were to be audited each fiscal year, which ends on Sept. 30 for the U.S. government. As vaults were opened, the serial numbers of the bars were confirmed against inventory records and 2 percent of all the bars were melted and re-assayed to verify weight and purity.
Once this verification was complete, the bars were then placed in a vault on which a permanent seal would be affixed. The intention of this process was that it would no longer be necessary for the contents of any of the 42 vaults to be reopened so long as the permanent seal was intact.
In government documents from September 1984, it was reported that at least 97 percent of U.S. government gold reserves had been so audited and were in vaults on which permanent seals were placed.
As late as 2011, Eric M. Thorson from the Department of Treasury Office of the Inspector General testified to Congress that all of these permanent seals were still intact as of the fiscal year 2008, so that meant that all of the alleged gold reserves were in the custody of the U.S. government. His testimony implied that the other 3 percent of U.S. gold reserves had been audited and put in vaults with permanent seals sometime between 1993 and 2008.
Beginning in 2014, researcher Jan Nieuwenhuijs reviewed all of the U.S. government’s audit reports on gold reserves. He noticed that some details were not provided. So, he began contacting the U.S. Treasury, the Treasury Office of Inspector Treasury, U.S. Mint and National Archives for answers. At first, he received replies readily. From there he developed more particular questions, where eventually in 2016 all cooperation ceased. In one phone call with someone at the Inspector General office, the other person simply hung up in mid-conversation.
Since then, Nieuwenhuijs has gathered more documentation through Freedom of Information Act requests.
In one document he received, it was noted that subsequent re-audits of gold reserves at the Denver Mint of more than 4.1 million ounces were performed in October 1984 and more than 3.4 million ounces performed in October 1985. This should not have been necessary as 100 percent of the Denver Mint gold holdings had been audited, verified and had permanent seals placed on the vaults before then.
Researcher Nieuwenhuijs had obtained photocopies of all the permanent seals on 100 percent of the Denver Mint vaults, which had been completed by 1982. Therefore, re-audits should not have been needed. But, since these re-audits had been performed, the permanent seals were no longer valid documentation that the gold inventory was accurate.
The eye-opening revelation in the written text accompanying his 2011 Congressional testimony was that the later audits and re-audits were performed by the staff of the Denver Mint, not by the Treasury Office of Inspector General. In his oral testimony, Thorson had said, “From 1987 to 1992, the Mint continued to perform an annual inventory and verification of gold reserves in accordance with its own policies over those compartments that had not been placed under Official Joint Seal.”
A June 23, 2016, email from Richard K. Delmar of the Treasury Office of Inspector General to Nieuwenhuijs stated in part, “I can tell you that the reason that gold had to be reverified (in some cases) was because occasionally vault contents would have to be moved, and in each such case the bars would have to be recounted to assure full accountability.”
In Thorson’s 2011 Congressional testimony where he was asked about the need to audit gold reserves again, he replied, “… there is no movement. Those doors aren’t opened. There is nothing there that can happen. Because once those doors are sealed … it’s very obvious if those seals are ever broken. … There is no movement. Those doors are not opened.”
Yet it was Thorson’s department that had been involved with some of the re-audits since 1983. Therefore, he almost certainly had to be aware long before 2011, if he was competent at his job, about the re-audits and movement of U.S. gold reserves.
In Nieuwenhuijs’ further research, government documents confirm that most U.S. gold reserves have been re-audited since 1984, but not necessarily by independent auditors from the Office of Inspector General. If these reserves were meant to be left undisturbed, there would be no reason to break the permanent seals and move gold elsewhere.
The question today is whether a completely new audit of U.S. gold reserves needs to be done. In a tweet in January 2015, former U.S. Mint Director Edmund Moy (who served in that capacity from 2006-2011) stated, “IMO [in my opinion] there should be a comprehensive audit authorized by Congress.” Until a new audit is performed, the public cannot be certain that all the gold reserves claimed to be in the vaults of the U.S. government are really there.
Nieuwenhuijs’ latest research was published Dec. 17, 2019, by Voima Gold and is available at https://www.voimagold.com/insight/us-official-gold-reserves-auditor-caught-lying?fbclid=IwAR2WkOUpXrOSND9FekUnw_y0ECOSnLw1hcaOmQab4gRQ7a0lSbUPfxznQyA.
Patrick A. Heller was the American Numismatic Association 2018 Glenn Smedley Memorial Service Award, 2017 Exemplary Service Award 2012 Harry Forman National Dealer of the Year Award, and 2008 Presidential Award winner. Over the years, he has also been honored by the Numismatic Literary Guild (including twice in 2019), Professional Numismatists Guild, Industry Council for Tangible Assets, and the Michigan State Numismatic Society. He is the communications officer of Liberty Coin Service in Lansing, Michigan and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at www.libertycoinservice.com. Some of his radio commentaries titled “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 AM Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and become part of the audio and text archives posted at www.1320wils.com).