This is an excellent article by Rob Gray from the Open Currency blog. Rob created AOCS from scratch and has done a wonderful job at building that resource. All of us here at DGCmagazine appreciate the hard work and risk that has gone into AOCS. We support their organization 100%.
Liberty Dollar’s arrogance ends in federal ‘guilty’ verdict
April 15, 2011 By Rob Gray
A title like that requires a LOT of explanation and background.
First, let me say that it does not please me to write (or publish) this article. I’m not an “I told you so” kinda guy, and I do not derive pleasure from seeing others struggle, fail, run into bad luck, or fall short of happiness in any capacity. In fact, I am concerned that my opinion may make the appeal for Bernard von Nothaus that much more difficult (not to mention a future trial). But as I monitor the wires and read the various opinion articles floating around the ‘net, I fear more for the fate of the honest money movement and our mission than the pioneer that helped bring it all together. In fact, I think it’s time that Bernard starts to take some responsibility for his actions.
I see daily stories about how the government is planning to use the Liberty Dollar trial to crack down on competing currencies. Obviously, as the Executive Director of the American Open Currency Standard, I took quite an interest in all of the events that transpired between the ’07 raid and now, and was VERY concerned about how the result would affect groups like us. Given the history between me and Bernard, I was surprised to see my name show up on the list of witnesses for the defense.
Second, kindly note that I had the fortune of learning about the Liberty Dollar because of the ’07 raid, and had a unique opportunity to implement from the very beginning solutions and modifications based on what I learned was the justification for the raid. I read and re-read the court docs and warrants to gain as much perspective on why the government was cracking down on the Liberty Dollar. When I joined the project as a Regional Currency Officer, I lobbied hard to see several components changed to avoid continued interference from the government. When it became clear that my suggestions fell on deaf ears, I left.
When I started the American Open Currency Standard, 3 basic principles were established to avoid trouble:
- create medallions that don’t look anything like coins produced by the government (past or present)
- do not denominate the coins in DOLLARS, or use phrases or symbols used on legal tender coins ($, “In God We Trust” or any variation thereof)
- do not suggest, condone or tolerate the spending or circulation of the medallions anywhere other than our own private MarketPlace, where business owners knowingly and willingly accept the barter tokens as a private form of trade
To date, the American Open Currency Standard, our partners, affiliates and supporters enjoy the freedom to carry on our trade with no issues. Now, that’s certainly not to say that they won’t kick in my door, take my property and leave me wondering what I did wrong. It’s also not to say that they won’t dream up some statute or code in the future, branding our version of honest money ‘illegal’ and dragging us through the mud in a similar fashion. I will never underestimate the federal government’s ability to get things done when they’re on a mission. So, I’m not arrogant to the point of delusion.
When Bernard’s guilty verdict was returned, I was half heart-broken and half pissed-off. Bernard knew that his trial meant a lot to me and the AOCS, and yet he failed to call on me as a witness. In fact, of his originally scheduled list of nearly a hundred expert witnesses, only a handful ended up testifying; some had schedule conflicts, while others, like myself, were not called upon to take the stand. Maybe Bernard thought our history and my opinion of his strategy would be more negative to his defense than positive, or maybe he thought the case was a sure win for him and it wasn’t necessary to drag it out any longer. Either way, I was disappointed to not have a chance to affect the outcome.
Within a day, my email and voicemail inboxes were flooded with requests to learn of my response to the verdict. And now that I’ve had ample time to collect my thoughts and develop an opinion, I’ve decided it important to share my insight to [hopefully] get the discussion back on track and maintain confidence in alternative and complementary currencies. And with that, here we go…
Liberty Dollar Trial (in a nutshell)…
Bernard von Nothaus was charged with counterfeiting, fraud, aiding and abetting and conspiracy. I do not believe at one point the prosecution was able to prove their case on any of the charges. I’ve been to court a few times, and I’ve experienced myself that the jury has a strange tendency of filling in the blanks themselves when it comes to connecting the courtroom drama with the charges. For me, it usually goes like this:
“Ladies and gentlemen of the jury, the prosecution charges me with violating section xxx.yy of the Texas Transportation Code. If I were the prosecutor, I would have actually read you what that section of the code says. On the other hand, the judge will not even allow me to enter that section of code as evidence, probably due to the fact that if you read the code, word for word, a reader would quickly reach a common conclusion that section xxx.yy does not apply under the present conditions.”
So even though the charge was made for counterfeiting, fraud, aiding and abetting and conspiracy, I see little or no reference to when, where or how the prosecution proved Bernard actually violated the “law”. There are a lot of components to a charge: proving the defendant is the person in question, proving that the defendant had a method and opportunity to commit the crime, and that he/she did so with willful intent. It’s a little more complicated than just “this is what we think the person did wrong, do you agree?” I don’t believe the prosecution proved their case.
Setting aside the issues of fraud, aiding and abetting and conspiracy, the majority of the case focused on counterfeiting as regarded by US Code Title 18 Section 486:
“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.” – USMint.gov Website
Most people think of counterfeiting as the act of making “fake” money. However, consider for a moment that it’s perfectly legal to create an exact replica of past or current coinage, so long as the word “COPY” or “REPLICA” is clearly marked on the duplicate. Many mints entire business operations revolve around the process of creating copies of US currency. While I’m certainly not suggesting it is ok to fire up your color ink-jet printer and make copies of twenty-dollar bills with the word “COPY” on it, the point is that 486/18 includes a requirement of intending or using the replication as “current money”.
Much of the trial focused evenly on two things:
- the design of the Liberty Dollar, which was accused of sharing many common elements with existing “current money”
- the circulation of the Liberty Dollar, which was accused of being intended to circulate alongside (and in competition of) “current money”
Although 486/18 doesn’t actually require the Liberty Dollar medallions to be similar to that of US coins to be in violation, it sounds like it must be used intentionally and specifically used as current money. And although US Code does not define “current money”, the government makes it clear that “current money”, “legal tender”, and “coin” are all common terms for government-issued “money”.
Is the Liberty Dollar design confusing? I think so. Is it possible that it can be mistaken for “current money”? Probably. Can something be done to prevent this? Yes, and that’s part of what the AOCS requires for participation.
But the problem is not that, and I think this is why the case turned out as it did. Take a look at the following video of Bernard on the Learning Channel, with a perfect opportunity to show Liberty Dollar to the world:
Pay close attention to the clip from 5:23 to 6:04. Set aside for a moment your desires of an accountable government, balanced budget, respect for individual rights and everything else you can’t stand about big (or any) government. Then, ask yourself if Bernard’s actions in those 2 scenes were done in a spirit of honesty, education or even maybe just a simple miscommunication. From my evaluation, it sure looked as if a Liberty Dollar was passed to an unsuspecting business manager that accepted it thinking it was something else.
Now, take in to consideration the face value of a Silver Liberty Dollar at the time of video’s release: $10. It’s safe to assume that the actual footage was filmed some time before the Learning Channel clip aired (January 8th, 2004). During the entire year of 2003, the price of silver NEVER passed $6 per ounce. I think it’s also safe to say that the clip was filmed some time in 2003, though I can’t know for sure. Now ask yourself this question: if you were handed a Silver Liberty Dollar, accidentally mistook it for “current money”, took it to the bank to deposit only to discover that it wasn’t “real money”, and then subsequently learned that it is worth worth less than 60% of what you expected…how would you feel? Would you be grateful that you had physical Silver in your hands, or would you be bummed that you can’t take it to the bank and use it to pay for your raw materials?
Unfortunately, it doesn’t stop there. Long after Bernard and I parted ways in early 2008 because of our philosophical and structural differences, and long after Bernard had an opportunity to consider my perspective on building a barter marketplace made exclusively of merchants that knowingly and willfully accept the private voluntary barter currency, Bernard gave an interview with Gary Franchi on the RealityReport. Take a look at the clip here:
Pay close attention around 25:00 in the interview (especially 25:50). Bragging that more Liberty Dollars are spent at WalMart than any other business is not a smart move. It’s highly unlikely that the employee accepting payment at the cash register is aware that the Liberty Dollar is a private currency that it is not legal tender and can not be deposited at the bank. With all this spending at WalMart, is it possible that someone has lost his or her job from this oversight? That doesn’t seem to encompass the spirit of our mission at all.
Barter is not illegal. Community Currencies are not illegal. Minting gold, silver or copper medallions is not illegal. But fraud is fraud. You can dress it up in as much patriotic cloaking and justification as you like, but the net result is still the same: deception is immoral, and the jurors in this trial decided that a crime was committed.
Bartering, community currencies and minting medallions were not on trial in this case. No precedent was set regarding these concepts. It remains the same as it did before the trial, and before the Liberty Dollar was created: perfectly legal and lawful in an environment where both parties participate willingly and knowingly. The outcome of the trial does not change the course of action for the American Open Currency Standard. In fact, it actually makes me feel better about what we’re doing and how we’re doing it. After studying the trial notes, it’s apparent to me that the government can not and will not attempt a case against the AOCS, at least not using the same arguments from the Liberty Dollar trial.
I will always be grateful of Bernard von NotHaus’ bravery in creating the Liberty Dollar and drawing so much attention to the issue of the nation’s money supply. Without him, there’s a good chance the AOCS wouldn’t exist and would have not accomplished so much in so little time.
“You can always tell who the pioneers are: they’re the ones with the arrows sticking out of their backs.”
However, I believe it’s critical that Bernard take responsibility for his actions, and not paint this as another example of big government crushing anything that looks like competition. We have enough examples of that already and don’t need to manufacture more. But, it is critical for us to hold each other accountable to the same standards that we expect our government to follow. There are a few bad apples in the freedom movement, and it is not appropriate to ignore immoral or unethical behavior simply to avoid drawing negative attention to our causes.
As I wrap up this article and evaluate if it reached its goal, I contemplate whether it’s best to stay quiet or to point out what I consider to be valuable insight to help frame what’s really at stake in the case of the Liberty Dollar. In the freedom movement, not one of us is perfect. Quite often we make mistakes, and every once in a while we infringe on the rights of others. In my philosophy, I do not believe deception or lying is a valid method to bring people to the truth. Was the Liberty Dollar created to deceive people into honest money? I don’t think so. I think that Bernard believes he is doing good for his country, and probably believes that helping put silver in merchants’ hands is valuable for all parties. Looking at the “price” of silver now, it’s quite certain that over time he is, in fact, probably right.
I believe, however, that there are many other ways to lead our country out of darkness. I’m all for creating fun and unique methods to help introduce our concepts and mission, like the Coin of the Realm project discussed in previous posts. People will always have a higher likelihood of discovering and choosing what’s right when it’s introduced through a positive and honest medium. Anything else is usually shallow, short-lived and followed closely by resentment and distrust.
In the meantime, I wish the best for Bernard and the other defendants in the case. I will work diligently to help others see the good they’ve done for the world to minimize the price they will have to pay. I welcome discussion on this topic, and if you’d like to debate my perspective just let me know where and when and I’ll be there.