THE BULLION CRISIS OF 2008

“It still baffles me that we can’t make a planchet. . . . Isn’t this just pretty simple? This just really is confusing to me why this can’t be accomplished. . . . What would a businessman do about this? Would he always resort to going to Australia to do this? It just seems so bewildering that a problem that seems rather simple, that we couldn’t have had an easier solution for this.” *

It was July 20, 2010, and I was a witness in a congressional hearing. The powerful United States House of Representatives Committee on Financial Services Subcommittee on Domestic Monetary Policy and Technology was meeting. We were in room 2128 in the Rayburn House Office Building on Capitol Hill. The four of us on the first panel of witnesses represented all the executive branch’s key officials with direct responsibility over U.S. coins, currency, and anti-counterfeiting measures.

The Honorable Ron Paul (R-Tex.) was staring intently at me, waiting for my answer. At the time, he was the ranking member of the subcommittee. His gaze down at me was made all the more serious from his perch. He was sitting next to the subcommittee chair on the fourth and highest level of seating in the committee room.

What is the journey that one takes to be the focus of a congressional oversight hearing? For me, that journey had begun 29 months earlier.

It was February 2008. I was sitting in my office at the U.S. Mint headquarters building. We were near Chinatown at 801 9th Street, NW. I was director of the Mint, and my large office was in the southwest corner of the building. Standing in front of me was my number two, deputy director Andrew D. Brunhart.

The director is appointed by the president of the United States, by and with the advice and consent of the Senate, while the deputy director is a career civil servant. As director, I was responsible for leading the Mint and accountable to Congress for its performance. There was a traditional division of work: the director, as a political appointee, provided policy direction and had a small team of additional political appointees to help develop policy. The deputy director, as a career civil servant, implemented the policy by running the operations, which were staffed completely by fellow civil servants.

Andy and I were alone. It was his habit to give bad news to me straight, quickly, and privately.

“Sir, a spike in demand wiped out our inventory of silver bullion coins. It will take us awhile to make enough to meet demand. In the meantime, we will be in violation of the law,” he said.

Those words sent a bigger chill up my spine than was justified by the relatively mild temperatures of the winter we were having.

I asked what the immediate consequences were.

“Dan says there are no prescribed penalties for being in violation of the law. But he’s pretty clear about the urgency to get back in compliance.” Dan Shaver was the chief counsel to the U.S. Mint. “Cliff says that if Congress gets enough complaints from angry constituents, both Senate Banking and House Financial Services might have an oversight hearing to rake you over the coals.” No truer words had ever been said. (Cliff Northup was the Mint’s director of legislative affairs.)

“Well,” I asked Andy, “what’s the plan to keep me out of jail?”

To read the complete articles, see:
Mint in Crisis: The Inside Story of the Bullion Shortage of 2008, Part 1 (http://mintnewsblog.com/mint-in-crisis-the-inside-story-of-the-bullion-shortage-of-2008-part-1/)
Mint in Crisis: The Inside Story of the Bullion Shortage of 2008, Part 2 (http://mintnewsblog.com/mint-in-crisis-the-inside-story-of-the-bullion-shortage-of-2008-part-2/)
Mint in Crisis: The Inside Story of the Bullion Crisis of 2008, Part 3 (http://mintnewsblog.com/mint-in-crisis-the-inside-story-of-the-bullion-crisis-of-2008-part-3/)
Mint in Crisis: The Inside Story of the Bullion Crisis of 2008, Part 4 (http://mintnewsblog.com/14565-2/)

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