Congressman Presses Secretary Yellen for Disclosure of U.S. Gold Activities
Washington, DC (June 10, 2021) – As foreign governments reportedly accumulate gold and de-dollarize their sovereign wealth funds, a Republican congressman is asking tough questions of the U.S. Treasury about its secretive gold activities.
Representative Alex Mooney (R-WV) – sponsor of the Gold Reserve Transparency Act of 2021 (H.R. 3526) to require the first true audit of America’s gold in decades – wrote to Treasury Secretary Janet Yellen this week requesting detailed information about the U.S. gold holdings delegated to the Federal Reserve and the International Monetary Fund and posed other questions.
From Rep. Mooney’s letter:
According to testimony in 2011 by Mr. Gary Engel, the Director of Financial Management and Assurance at the Government Accountability Office, about 5 percent of the U.S. gold holdings were stored at the time at the Federal Reserve Bank of New York. He also stated that this gold is not considered “audited” and that no assaying or inventorying of that gold had occurred since at least 1986.
At the current time, what amount of U.S. gold holdings is vaulted at the Federal Reserve Bank of New York (or by the Federal Reserve using other depositories)? Also, has this gold been recently audited, assayed, and/or inventoried? If so, please provide me with a copy of any relevant reports.
For what purpose(s) is United States gold bullion stored at the Federal Reserve?
According to testimony by Mr. Engel, the Federal Reserve Bank of New York holds gold for other nations as well. Is the U.S.-owned gold stored at the Federal Reserve held in a physically segregated manner from the holdings of other nations?
During the 2011 hearing, Rep. Luetkemeyer referenced a report that 261 million ounces in U.S.-owned gold is part of the IMF’s reserves. At present, how many ounces of U.S.-owned gold are in the possession of the IMF or pledged to the IMF – and where is that gold kept? Also, please describe the purpose and nature of this arrangement as well as what oversight procedures are in place.
How much U.S.-owned gold is in the possession of and/or used by the Exchange Stabilization Fund as part of its activities? What is the purpose and nature of the ESF’s gold activities?
Please provide details as to what U.S.-owned gold is currently pledged, swapped, leased, or otherwise encumbered – and for what purposes – including, but not limited to, arrangements involving the Bank for International Settlements (BIS), World Bank, IMF, and other financial institutions, foreign or domestic.
Mooney’s inquiry comes shortly after he introduced H.R. 3526 to require the Comptroller General to immediately conduct a full assay, inventory, and audit of the United States’ gold reserves and repeat the process every five years.
There is evidence the U.S. Treasury may have sold, swapped, leased, or otherwise placed encumbrances upon some of America’s gold over time.
However, federal government officials have strongly resisted disclosure of these activities for decades.
To address these concerns, H.R. 3526 also requires a full accounting of any and all sales, purchases, disbursements, or receipts, a full accounting of any and all encumbrances, including due to lease, swap, or similar transactions presently in existence or entered into in the past 15 years, and an analysis of the sufficiency of the measures taken to ensure the physical security of such reserves.
To fulfill its obligations under the Gold Reserve Transparency Act, Government Accountability Office auditors would gain access to any depository or other public or private depositories where reserves are kept as well as related records.
“People are rightly concerned about the state of America’s gold holdings,” said Jp Cortez, policy director at the Sound Money Defense League. “The lack of full transparency by the Federal Government has hobbled public confidence. The Gold Reserve Transparency Act will ensure our gold reserves are accounted for.”
The full text of the bill, which has been referred to the House Financial Services Committee, can be found here.