Scandal At The US Mint - Sourced non-American gold for decades

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United States Mint sourced non-American gold for decades, misled customers and auditors – Treasury investigation​


(Kitco News) – For decades, the United States Mint did not obtain, nor even request, any documentation confirming the origins of the gold they sourced from suppliers and refiners, all while promoting their most popular coins as minted from 100% newly-mined American gold, according to a recent report from the U.S. Treasury’s investigatory and auditing office.

The Treasury Department’s Office of the Inspector General (OIG) published the audit report OIG-24-027 on May 29, 2024. The report, entitled ‘Bill and Coin Manufacturing: The Mint Needs to Enhance Controls over Gold Acquisitions,’ was the result of nearly a year of investigation, and it uncovered serious lapses, failures, and misrepresentations in the 222-year-old institution’s gold procurement processes.

The OIG “conducts independent audits, investigations and reviews to help the Treasury Department accomplish its mission; improve its programs and operations; promote economy, efficiency and effectiveness; and prevent and detect fraud and abuse.”

But the report’s publication was delayed for over three years due in part to the refusal of the Mint’s senior management to accept its findings, and it took a shakeup at the very top of the institution before the OIG’s recommendations were accepted.

More:

www.kitco.com

United States Mint sourced non-American gold for decades, misled customers and auditors – Treasury investigation

The Kitco News Team brings you the latest news, videos, analysis and opinions regarding Precious Metals, Crypto, Mining, World Markets and Global Economy.
www.kitco.com www.kitco.com
 
Sal's take.............

HUGE Scandal At The US Mint! They LIED To Us For Decades!​


15:51
 
With all the insanity in the world and all the things we have to worry about, this one doesn't make my list in any way shape or form. They could source it from Russia or China or even North Korea for all I care. Once it's in my pocket, it's mine.
 
They are supposed to source the metal domestically and buy sufficient quantities to satisfy public demand. If that drives up the price, so be it. Let the market work.
 
Gold is gold, but pmbug is correct, by law. Now I believe silver can be traced on the molecular level to a particular area.
 
Gold is gold.

I'd rather see us importing gold - giving furreners FIAT for REAL MONEY - better that then melting down Fort Knox inventory.

And anyway, we don't have much of a domestic gold-mining industry left...or any mining industry. Not much domestic industry of any sort.

I'm for letting the free market work, too. Legal requirements on sourcing, independent of price, is not the free market.
 
The problem is the mint would use scarce local sources as an excuse for high premiums and lack of production.
 
This is likely related to the OIG report cited in the OP, but it's citing a different OIG publication:
During its most recent audit of the United States Mint’s processes and control over gold bullion acquisition for bullion and numismatic programs, the Treasury Department’s Office of Inspector General found “that the Mint cannot ensure most gold coins produced are minted from newly mined U.S. gold in compliance with the Gold Bullion Coin Act of 1985 and the Presidential $1 Coin Act of 2005.”

In its Semi-Annual Report to Congress — April 1, 2024-Sept. 30, 2024, OIG auditors noted the compliance issues were the result of “the Mint’s lack of documentation from its gold refiners certifying the amount of newly mined U.S. gold acquired. We also found it questionable whether the Mint’s methodology used to determine what constitutes newly mined U.S. gold is permissible under current U.S. law and that the Mint’s website represented certain gold coins as minted entirely from U.S. gold, which may mislead purchasers.”

While investigators determined in their probe that the bureau did not receive illicit gold and that the precious metal is responsibly sourced, “further engagement with its gold suppliers and refiners would enhance controls over the process.”

Mint officials overseeing bullion acquisition failed to request or secure any documentation from gold refiners concerning the origin of the gold or relating to supply chain issues, primarily relying on the gold refiners’ “adherence to the London Bullion Market Association’s Good Delivery List to ensure that gold acquired by the Mint is responsibly sourced.”

The Good Delivery List represents the list of gold and silver refiners whose products are acceptable to be traded on the London bullion market after undergoing stringent required qualifications.

OIG auditors explained that Mint management concurred with the department’s findings and supported implementation of procedures overseeing refiners by securing proper documentation that ensures compliance with U.S. law.

As part of the Mint’s review of its compliance regulations, “the Mint should publish its procedures for acquiring newly mined U.S. gold in the Federal Register” and “update its website for accuracy,” according to the OIG’s recommendations for compliance with Public Law 99-185 and Public Law 109-146.

The Treasury OIG’s Semi-Annual Report to Congress — April 1, 2024-Sept. 30, 2024, can be found in its entirety online at https://oig.treasury.gov/system/files/2024-12/September-2024-SAR-for-508-complaint-locked.pdf
Click to expand...

OIG report questions sources of gold used by Mint

Treasury's Office of the Inspector General reports concerns about provenance of the gold in planchets supplied to the U.S. Mint, which, by law, must be sourced from within the United States.
www.coinworld.com
 
giphy.webp
 
What is the rationale behind the provision that the gold must come out of US soil?
 
Never made sense to me, just another excuse to not mint coins...
 
Peter89 said:
What is the rationale behind the provision that the gold must come out of US soil?
Click to expand...

...
How Did the Gold Bullion Coin Act of 1985 Happen?

President Ronald Reagan introduced the Act based on several factors, including geopolitical issues, economic decline, and an opportunity to enter the gold market.

With the rise in popularity of the South African Gold Krugerrands, the country derived half of its foreign exchange earnings from these popular coins. At the time, the U.S. was its largest source of Krugerrand sales. Reagan ended up banning imports of Krugerrands in 1985 to oppose the country’s controversial apartheid. This created a notable absence of gold coins for U.S. customers to acquire. The Canadian Maple Leaf coins attempted to fill the gap from the Krugerrand ban and took their place in popularity by 1986.

Reagan decided it was time for the U.S. to enter the precious metals industry with a gold mint to give the people what they wanted: an American-made gold investment, job opportunities, and a chance to enter the world gold market.
...
Click to expand...

learn.apmex.com

What is the Gold Bullion Coin Act of 1985? | APMEX

History of the Gold Bullion Coin Act of 1985 and how it led to the production of the American Gold Eagle coin, which is now the world’s most popular coin.
learn.apmex.com learn.apmex.com
 
I really fail to see the practical difference.

If the Mint is barred from buying foreign-sourced gold, and thus, Mint gold products are priced higher than foreign bullion products...then, the (relatively few) purchasers can choose to hold foreign coins.

That's all I have. US bullion is pure gold; which makes it weaker and subject to defacement. I have a few one-ounce coins; but most of what I have are k-rands, with some Maple Leafs.

The foreign coins are alloys - k-rands have copper added; Canadian and others have silver added.

Others, feel free to correct me here. I'm not an expert; just going by what I'd been told by my metals shopkeeper. He wasn't pushing one form; in fact when he told me this, he was out of k-rands.
 
US Mint makes Buffalos 24k gold and Eagles which are alloyed with silver and copper (22k gold IIRC).
 
"an American-made gold investment, job opportunities, and a chance to enter the world gold market"
none of them requires the gold being sourced out of US soil.

If the US gov wants to promote gold mining in the USA there are other ways to do it other than forcing the US mint to use only US sourced gold, imo
 
I'm sure there is more to it, but that's what I could find after a few minutes of looking around. It could be as simple as, that provision was necessary to get support from some Reps in Congress to get the bill passed. I'm not entirely sure.
 
At one time. America was supposed to have gold bars that were .900 purity from all the confiscated gold coins FDR took. I assume that is what the Mint is using to make the commemorative $5 & $10 coins...I wonder what's left?
 
pmbug said:
US Mint makes Buffalos 24k gold and Eagles which are alloyed with silver and copper (22k gold IIRC).
Click to expand...
I might have been confusing my facts and sources.

Is it the Canadian stuff that is pure gold? I remember coming across a write-up, explaining the purpose of creating alloys - that pure gold is soft, subject to wear and even bending, on fractional coins. Since my tenth-ounce coins are for SHTF moments, I cared less about the packaging and moar about short-term durability. I have them in a tube, not an assay card, or whatever you'd call it when the vendor seals them in plastic, with a paper card with information.

I wound up with fractional k-rands - recognizable. One HOPES that bullion not-minted by FedGov mints, is not outlawed or confiscatorially taxed...but, now, hope is for children. We have insanity running the Western world.
 
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