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later, the Plot Thickens for the Alternative Currency
By Cletus Nelson for EYE magazine, February 2000
Despite media claims that American Liberty
Currency—the silver-backed substitute for Federal Reserve
greenbacks—may be dubious, NORFED continues to fight for
your right to choose.
WHEN AN INDIANA-BASED PORTEST GROUP known as
the National Organization for the Repeal of the Federal Reserve
Act and the Internal Revenue Code (NORFED) kicked off a David
vs. Goliath campaign to compete with the seemingly omnipotent
powers of the Federal Reserve (EYE No. 21), it was not without
some trepidation. But despite fearing for the safety of his family,
Bernard von NotHaus—NORFED’s gregarious CEO—boldly
told Media Bypass this looming threat would not weaken his resolve
to end the oppressive reign of those who have "conspired
to enslave the American people with the tyranny of the income
tax and a dishonest money system." Now, over a year later,
after appearing in some half-dozen publications (including Utne
Reader), these monetary mavericks are determined to show jaded
critics that NORFED is no mere media phenomenon.
A fierce enemy of our nation’s often-criticized
Federal Reserve system, NORFED accuses the Fed of depreciating
our national currency by 98 percent in the last eight decades.
NORFED hopes to inject value back into the sagging dollar by offering
citizens their silver-backed American Liberty Currency (ALC),
which they have auspiciously renamed "The New American Dollar."
However, as these atavistic proponents of free
silver gain notoriety, they are also facing greater scrutiny.
Beginning last summer, citizen watchdog groups, cynical reporters,
and skeptical members of law enforcement started to question both
the legality of and the motivations behind the NORFED mission.
Whether these concerns are justified warrants a close examination
of the facts.
The first rumbling of discord was sounded last
August when a cautionary press release circulated from the press
office of the Washington Credit Union League (WCUL). Describing
purveyors of ALC as "con artists preying on people’s
fears about Y2K," the consortium of credit unions substantiated
this inflammatory contention by citing Secret Service Agent Joan
Reilly, who warned consumers that NORFED "appears to be in
violation of Title 18, Section 514 of the United States Code."
Although this official pronouncement sounds troubling, a cursory
examination of this statutory law throws this statement into doubt.
The measure, which went into effect in January 1998, prohibits
the production or distribution of any document professing to be
"an actual security or other financial instrument issued
under the authority of the United States." As NORFED has
never claimed to be operating under the aegis of the federal government,
the statute seems both misapplied and incongruous. This issue
was addressed last June by Hawaii attorney Paul J. Sulla Jr.,
who analyzed the legality of this new form of cash at NORFED’s
request. "I find that the Patriot (ALC) is not in violation
of any counterfeiting or similitude statutes of the United States,"
Sulla concluded in a lengthy legal opinion later published in
"It's not counterfeit
money," concurs Ron Legan, Special Agent in Charge (SAC)
of the Seattle, Wash., Secret Service field office. Having investigated
this regulatory matter closely, he concludes that the silver certificates
are well within the highly restrictive boundaries of American
monetary guidelines. "We determined there wasn’t a
federal currency violation," he explains. Although Legan
concedes to being "skeptical" of NORFED, he admits there
have been no "defrauds" or "complaints" filed
against the political organization. Despite giving the newly coined
cash a clean bill of health at the Treasury level, Legan believes
ALC may possibly fall within the purview of another federal regulatory
agency, such as the Securities and Exchange Commission (SEC).
Still, the existence of any possible parallel investigation remains
unclear at this time.
"Department of Justice policy precludes
me from commenting any further," states Harold Malkin. Executive
Assistant to the United States Attorney for the Western District
of Washington. Citing similar constraints, Janice Marich, who
represents the Washington State Consumer Protection Division,
is also unable to confirm or deny an existing probe of NORFED.
Thus, it cannot be ascertained whether or not there is an ongoing
government inquiry. However, five days after the WCUL press release
was issued, the Seattle Times openly raised charges of fraud.
"The group claims the certificates will
be redeemable through a nationwide network of redemption centers.
But as near as authorities can tell, no such centers exist,"
claims the anonymous writer of a short feature appearing in the
Times business section. To check the veracity of this damning
assertion, EYE telephoned four NORFED Liberty Associates in the
L.A. area to find out whether each center does in fact "exist."
Boris Isaacson of Burbank happily admits he
distributes and redeems ALC through his Debt Management Club and
is incredulous of the Times’ contention. "That’s
ridiculous," he snaps. Chalong Sirbibootr, owner of an auto
repair shop in Canoga Park, also refutes the assertion and avows
his status as operator of a NORFED Liberty Associate.
Both men appear pleased with their respective
ventures, as does Joseph Garbarini of Glendale. "I’m
really optimistic about it and hope more people use it,"
the entrepreneur commented.
A call to Westlake Village produced similar
results. "We definitely are a redemption center," answers
"Daisy," who gladly verifies that her employer, G. Edward
Griffin, disburses and exchanges the silver-backed Liberty bucks.
Griffin is no populist dilettante by any means.
The California author is known for his seminal volume, The Creature
From Jekyll Island: A Second Look at the Federal Reserve. This
provocative work, which provides a brutal dissection of the fractional
banking system, is frequently cited by foes of the Federal Reserve.
The writer’s involvement certainly lends credibility to
the NORFED venture. "By Jove, it just might work," he
has publicly asserted. Yet Griffin’s imprimatur and the
utter earth of any evidence of lawbreaking hasn’t stopped
watchdog groups, such as the anit-militia Southern Poverty Law
Center (SPLC), from regurgitating the WCUL allegations—a
development that has NORFED and its fervent supporters fuming.
"Its yellow journalism at its worst,"
remarks Bernard von NotHaus with frustration. In reference to
the Times piece, von NotHaus is equally succinct. "They damn
well knew we had redemption centers," he says.
According to the NORFED chief, distributors
of ALC redemption centers are also speaking out. "One redemption
center called the Special Agent [Joan Riley] and really read her
the riot act," he recalls. Adam Bashaw, a WCUL public relations
officer, is certainly stunned by the outrage his seemingly well-intentioned
press release provoked. "In addition to the sharply worded
e-mail letter to him and several newspapers and government agencies,
people have called and complained about the press release and
attempted to refute its content," reports The Credit Union
However, the negative exposure seems to be backfiring.
"It’s really affected business for the positive—this
has been tremendous," von NotHaus observes. The hard-working
economist says he was recently asked to discuss ALC with the camouflaged
attendees of the annual Soldier of Fortune convention in Las Vegas.
As he puts in 20-hour days traveling across the country promoting
this new mode of transaction, von NotHaus sees a bright future
ahead for NORFED, and adds, "We’re mushrooming with
about 200 redemption centers."
The numismatic expert also estimates some $200,000
has been converted into silver certificates as of September 1999,
with the number of businesses trading in NORFED currency on the
rise. While only a half-dozen firms were willing to accept ALC
last year, today over 50 companies will take Liberty bucks in
lieu of cash. In California, a newsstand, paint distributor, law
school, and chiropractor allow payment with the "New American
Dollar," and NORFED is planning a new web site titled "Winning
Stories" devoted to anecdotes by individuals successfully
transacting business with ALC. These developments have von NotHaus
convinced our once sacrosanct Federal Reserve Notes are approaching
their demise. "Everything has a birth cycle and a death cycle.
Everything dies. We may represent the future."
The new millennium may be the ultimate test
for the alternate cash. In von NotHaus’ book, Y2K Money:
Your Survival Currency (American Financial Press), ALC is described
as the final bulwark against the creation of a totalitarian dictatorship.
The handbook begins with a futuristic vignette describing a young
couple surviving under martial law, their every movement regulated
by government. Forced to "live where they want, eat if they
allow it, and walk to work like a slave and shut up," the
husband and wife find salvation through a small nest egg of Liberty
cash purchased before the technological storm. Empowered with
their discovery, the embattled couple resolves to assist the NORFED
cause and "pray to God that it is not too late to save the
Whether the American dream can be saved is uncertain
at this time. However, there is no denying that the advent of
electronic transfers, Internet transactions, ATM cards, and electronic
currency is pushing America’s venerated greenbacks on a
fast track toward obsolescence. The publicity NORFED is receiving—both
positive and negative—provides ample evidence that the concept
of carrying around alternate cash in the millennium has got more
than a few people listening.