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The Gold Anti-Trust Action Committee was organized in January 1999 to advocate and undertake litigation against illegal collusion to control the price and supply of certain financial securities, particularly securities involving gold. The committee has retained a prominent anti-trust law firm, Berger & Montague of Philadelphia, and is raising money for advocacy and litigation.
GATA seeks to disclose and publicize the huge speculative short positions in gold taken by financial institutions and bullion banks. GATA believes that 10,000 tons of gold or more have been sold short by these speculators, even as yearly mine supply of gold in 1998 was only 2,529 tons. When, through our lawsuit and otherwise, we are able to show how short in gold even one major financial institution really is, other institutions will buy gold in quantity, knowing the short position in gold is too large to close without causing a substantial rise in the price of gold. Then the gold collusion game will be over.
|4-2-2002|| GATA / REG HOWE LAWSUIT UPDATE|
By James Turk|
The Freemarket Gold & Money Report
The long-awaited ruling from Judge Lindsay
has arrived. All claims against the Bank for
International Settlements and the other
defendants in Reg Howe's lawsuit have been
When I received this news, my initial
reactions were dismay and disappointment, but
I was also surprised. The wrongdoing by the
Defendants appears so clear-cut, and the
evidence that has emerged to date so
compelling, I wondered how this case could
possibly be dismissed? But then I thought
more deeply about this dismissal and my own
understanding of the law.
If there is one thing I have learned in my
30-plus years of business experience, there
are right and wrong, and then there is the
law as it is written and interpreted in
America today. After all, if President
Clinton could claim innocence because of
"what the definition of 'is' is," who knows
what could be possible in a complex case like
As I started to read the judge's ruling, my
question was quickly answered. To put it in
non-legal terms because I am not an attorney,
the answer is that the defendants may be
guilty, but in the eyes of the court, the law
is the law. Or in other words, Reg Howe may
be right, but the judge denied him the
opportunity to pursue these claims. The
Reg, in the opinion of the judge, does not
have "standing." In other words, the case may
have merit, and Reg may have convinced the
judge of wrongdoing by the defendants.
Indeed, given that the judge did not say that
the factual allegations are insufficient to
bring a price-fixing case, one can reasonably
conclude that the judge believes Reg's case
has merit. But regrettably, Reg was unable to
persuade the judge that within the scope of
the law that he has "standing." In essence,
the judge said that Reg is the wrong person
to bring this case to trial.
The ruling from the judge began forthrightly
and candidly: "This case involves allegations
of 'an unholy alliance of high public
officials' and 'large bullion banks' to
manipulate the price of gold. The plaintiff,
Reginald H. Howe, asserts that various
combinations of the defendants committed two
interrelated sets of wrongful acts: first,
that all of the defendants conspired to
depress the price of gold; and second, that a
subset of the defendants conspired to set an
unfairly low price in the mandatory
redemption of shares of the Bank for
The judge then describes the aforementioned
"wrongful acts" as "factual allegations."
Having completed only the first paragraph of
a 38-page ruling, I could sense that I had an
interesting read ahead of me. And in fact my
interest perked up considerably in the next
section, entitled "background."
The judge began this section by stating: "The
facts set forth below are those alleged in
the complaint as well as uncontested matters
of public record, which have been adverted to
by the parties in their papers. Alternative
Energy Inc. v. St. Paul Fire & Marine Ins.
Co., 267 F.3d 30, 33 (1 st Cir. 2001) (noting
that a district court properly may consider
matters of public record in deciding 12(b)(6)
motions to dismiss). I must accept as true
the allegations in the complaint and construe
in the plaintiff's favor all reasonable
inferences from those allegations." Then
through another three pages he lays out in
detail key facts that Reg presented in his
As I read the ruling it became clear that the
judge was not dismissing the case because the
allegations were unfounded. Nor was the judge
saying that the factual allegations made by
Reg were insufficient. To the contrary. The
judge said nothing negative about the
allegations put forth by Reg. For that reason
one can reasonably conclude that there is
merit to Reg's argument that the defendants
committed "wrongful acts," and, perhaps more
importantly to the future of this case, that
the allegations presented by Reg are
sufficient for this case to allege price
fixing by the defendants.
Thus, I didn't have to wait long to answer my
question about how this case could possibly
be dismissed. It was not because the
defendants didn't manipulate the price of
gold. Rather, the case was dismissed for a
reason that I consider to be a technical
matter. The judge said Reg did not have
To explain this point, the judge states:
"There are many participants in the gold and
gold derivatives markets who could allege a
more direct injury than does the plaintiff.
For example, there are many gold mining
companies and private investors in gold (not
to mention those central banks with gold
reserves) that the plaintiff does not allege
to be involved in the conspiracy. All of
these persons or entities would be more
directly injured than the plaintiff by a
scheme of the kind he alleges."
In judge-speak, there are "more appropriate
plaintiffs" than Reg. And as if his point is
not sufficiently obvious, he says further:
"…it seems clear that there is sufficient
incentive for any of the many gold mining
companies or private investors in gold or
gold derivatives to bring suit."
Will the gold industry please stand up? In
this remarkable statement the judge is giving
us here an open invitation for a gold mining
company to take over Reg's complaint and his
allegations of price fixing.
Is there a gold mining company out there to
which Reg can pass the baton?
So the gist of the ruling came quickly, but
I'm glad that I continued reading the judge's
memorandum. There were some surprises,
unbelievable even to my jaded eyes.
For example, one surprise involved the
judge's statement as follows: "Thus when
there is no evidence that Congress intended
to subject federal government agencies,
officials, and instrumentalities to the
antitrust laws -- indeed, when all evidence
points in the opposite direction -- it is
inappropriate for a court to infer such an
The ghastly conclusion reached by the judge
of this reading of the law is: "For all the
reasons set forth above, I conclude that
Greenspan, McDonough, and the Secretary of
the Treasury in their official capacities are
not 'persons' within the meaning of the
antitrust laws. They enjoy the protection of
sovereign immunity." In other words, they are
above the law. You can sue them only if they
first allow you to sue them. Now where did
the Founding Fathers put that clause in the
The judge observes: "All of the relevant case
law, as discussed above, indicates that
government officials are not subject to the
Sherman Act, and both the Federal Reserve and
the ESF have statutory authority to trade in
And therefore to manipulate its price?
Interestingly, the judge never addresses that
Having read this far through the ruling, it
was becoming clear that the judge was
stretching to justify his conclusions. But
the most egregious statement was yet to come
in the tortured reasoning offered in the
following conclusion: "The 17 directors of
the BIS voted unanimously to adopt the
mandatory share redemption plan. Only two of
the directors, Greenspan and McDonough, are
defendants in this case. Given the votes of
the other directors, the share redemption
would have gone forward regardless of
Greenspan's and McDonough's votes."
Aside from the fact that some of the other
directors may have voted differently if
Greenspan and McDonough had not been able to
vote, the issue here is the simple matter of
right or wrong. Theft is not made right just
because a preponderant number of directors
self-proclaim it to be right.
I stopped reading here. I completed only 35
pages. Why go on? I got the picture.
Clearly, to my mind the judge was grasping
for reasons to throw the case out, and
frequently, his twisted logic defies reason.
A gold mining company has standing, but as a
shareholder of Freeport Gold's gold-
denominated preferred shares, Reg does not?
Then there's the comment that Greenspan and
McDonough are only two votes at the BIS, and
they would have been outvoted by the other
So Reg loses in court, but he still wins. Reg
wins because this ruling appears so contrived
in so many respects that even the most casual
observer who chooses to read it will readily
understand that this ruling says little about
justice but everything about power. In the
end, this ruling says that the defendants
Greenspan, Summers and McDonough are above
the law. Even the Stuart kings of Britain
yearned for such unbridled power. But this
privilege of sovereign immunity does not
extend to the other defendants, which brings
up another reason Reg wins.
Reg wins because the court did not say that
his allegations were insufficient. Thus, the
judge practically provides a map that
explains how this case can go forward.
First, the judge has in effect invited a
mining company to take up this case, because
he states that a mining company has
"standing" and would therefore be an
"appropriate plaintiff" under the law.
Second, and perhaps more importantly, the
judge did not say that the factual
allegations made by Reg are insufficient to
bring a price-fixing case. That opening left
by the judge -- which is big enough to drive
a Mack truck through -- must be making the
attorneys for JP Morgan Chase, Deutschebank,
Citibank, Goldman Sachs, and the BIS very
nervous indeed. None of these banks qualifies
for the privilege of sovereign immunity.
The upshot is that the judge is allowing this
case to go forward, but with a different
plaintiff, and provided further that
Greenspan, Summers, and McDonough are not
named as defendants. And it is not hard to
imagine what is necessary to make that event
There are only two ingredients needed to move
this case forward -- an attorney well versed
in price fixing, and a gold mining company.
Here is how I think we could expect to see
this scenario develop at a purely practical
It would require that the attorney works on
contingency, and the gold mining company
hires this attorney to bring suit. I would
expect that the attorney would require
payment only for out-of-pocket expenses, with
the balance of his remuneration coming on
contingency if he successfully litigates the
This case could even be a class-action suit
on behalf of all gold mining companies
injured by the price fixing of the named
bullion banks. The claims could easily run
into the billions, which would be more than
sufficient to attract some top attorneys
experienced in litigating price fixing cases.
There are some 10 million ounces of gold
mined in the United States each year, or some
45 million ounces over the last five years. I
can easily make -- and others can as well --
the case that gold should be at least $500
per ounce, based on historical valuations or
and other methodologies that measure gold's
value. For example, Frank Veneroso's work
shows that gold's equilibrium price is more
than $600 per ounce. But in fact the average
price during the past five years when the
alleged price fixing has occurred has been
only $288 per ounce. Even if we accept a
valuation of only $500 valuation, the
potential claims are huge.
Because of the price fixing, sales revenue of
the U.S. gold mining industry averaged $288
ounce instead of $500 per ounce. At $212
times 45 million ounces, revenue was $9.5
billion less than it would have been if there
was no price fixing. And this value shows
only the impact on the U.S. gold mining
industry. There may in fact be an opportunity
for non-U.S. gold mining companies to be
involved in a class-action suit, which
considerably expands the scope of the claim.
Using this same methodology, lost sales
revenue for the gold mining industry
worldwide during this five-year period
approaches $80 billion.
Just a fraction of that amount of money is
large enough to attract a first-class
attorney specializing in price fixing, and
willing to work on contingency. All we need
now is a U.S.-based gold mining company ready
to accept Judge Lindsay's invitation to
pursue Reg's allegations of price fixing.
OK, gold mining companies. Which of you will
James Turk is editor of The Freemarket Gold &
Money Report, the founder of GoldMoney.com, a
consultant to the Gold Anti-Trust Action
Committee, and the investigative reporter who
found and disclosed the bookkeeping records
of the U.S. Exchange Stabilization Fund's
intervention in the gold market. His e-mail
address is firstname.lastname@example.org.
|2-14-2002|| about GATA|
The following is an entry from my on-line Journal, dated 2-14-2002:|
GATA stands for the Gold Anti-Trust Action (Committee). I was up late last night, and thanks to several postings on the Gold-Eagle Forum, I caught their presentation on C-SPAN2. Man! These are extremely serious allegations: In a nutshell, the allegation is that there has been (and still is) a well orchastrated surreptitious policy to keep the gold price artificially low. They are supporting a lawsuit to this effect. Named as defendants are:
Bank for International Settlements
William J. McDonough
J.P. Morgan & Co. Inc.
Chase Manhattan Corp.
Goldman Sachs Group, Inc.
Deutsche Bank AG and
Lawrence H. Summers, Secretary of the Treasury.
Conspiracies get a bad name. Say the word, and people think you're a kook. But as Bill Murphy, head of GATA so eloquently pointed out last night, the 9/11 attacks were the result of a conspiracy. The Enron collapse was the result of a conspiracy.
These folks are starting to make noise, and they're gaining a following in Washington. It is best we keep our eye on them.
C-SPAN has just made available on the Internet the
broadcast of GATA's conference in Washington on
Tuesday. If your Internet browser has a media
player program, you should be able to watch and
listen. Go to this page:
About halfway down the page, you'll see this paragraph:
Gold Anti-Trust Action Committee: "The Gold Standard."
Tuesday, February 12, 2002 -- Washington, DC
Speakers: Catherine Austin Fitts, President, Solari and
former assistant secretary of housing; William Murphy III,
chair, GATA; Chris Powell, GATA secretary/treasurer.
Length: 1 hr. 50 min.
Click on "watch" next to that paragraph and, with luck,
you'll be able to watch and listen to the whole conference.
You can purchase from C-SPAN a videotape of the
conference by going here:
If you're interested, you probably should act quickly, since
C-SPAN doesn't keep this stuff around more than a week
Gold Anti-Trust Action Committee Inc.
I just lifted this from the Gold Eagle Forum
|2-14-2002|| HOW TO HELP|
GATA is doing an excellent job, but they need help getting the word out! They're being snubbed by most news organizations, and being ignored by those in power.
Chris Powell of GATA has written a sample letter to be sent to your senator/congressman. With some modification, this letter is also useful to send to the press. I urge you to copy it, paste it into an e-mail, and mail it to your local business reporters as well as your favorite national writers. A copy of the letter can be found here:
I encourage you to send it to Matt Drudge. If anyone should be covering this, it should be him: email@example.com
I want to enhance this page, and I ask for help from my faithful readers on the internet: I'd like to have a listing along the side of this page of all the major newspaper columnists, radio personalities - anyone in the media who is in a position to support this cause. So far, I've got one: Matt Drudge. I'd like a list of names & e-mail addresses which I will then post to this page, making it very easy for others to mail them with GATA's concerns. This will make it easy for others to help, and hopefully we can barrage these people until they finally take notice.
If you'd be willing to compile such a list, or if you'd just like to send me a few names & e-mails piecemeal, please contact me here:
This page is a work in progress! Together we can make the powers that be stand up and take notice, and listen to our concerns!
|Check out the 2002 predictions & other articles in the archives|