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Conservatives Hawk “Birch Gold” In Run-Up to Debt Ceiling Crisis

by Dave Troy

Jan 6, 2023 | Politics

PHOTO CREDIT: Gage Skidmore 
(Ben Shapiro, Candace Owens and Dan Bongino are among the many leading conservatives who have been hawking Birch Gold to their online followers.)

For the last several years, prominent conservatives including Dr. Ron Paul, Steve Bannon, and Ben Shapiro, have been promoting gold and gold-backed assets to their audiences. One company in particular, Birch Gold Group, has earned prominent public endorsements from all of these figures, with each of them participating in various cross-marketing activities.

Birch Gold is one of a number of smaller outlets pushing precious metals to conservative audiences. Where large, established firms like State Street offer “GLD,” a gold-backed exchange-traded fund (ETF) which is among the largest such funds in the world, Birch offers “physical gold” in the form of coins and other gold-based products.

One line of products called “goldbacks” resemble laminated 19th century banknotes, each themed around Nevada, New Hampshire, Utah, and Wyoming. The company’s website claims that they contain “micro-thin layers of 24 karat gold protected by layers of durable polymer.” Another Birch-affiliated company, BitIRA, offers Bitcoin-backed IRA products to similar audiences.

Birch Gold was founded in Los Angeles in 2003 by Iraqi-born Laith Paul Alsarraf. The company occupies offices in Burbank, across the street from Warner Brothers’ studio. The company’s name is an obvious nod to the John Birch Society, the group founded in 1958 by candy magnate Robert Welch and named after John Birch, a US soldier killed by Chinese communists at the close of World War II in 1945. Many Birchers claim Birch was “the first victim of World War III,” and the group has maintained a paranoid, staunchly anti-communist stance in the decades since.

Alsarraf, now 53, rose to prominence in the 1990’s with the rise of the online pornography industry, when his company, Cybernet Ventures, provided a payment and age-verification service called Adult Check. The San Fernando Valley, home to both Birch Gold and Cybernet, has historically been a stronghold of the pornography industry, as well as so-called “Russian Armenian” organized crime activity.

Mr. Alsarraf founded the company with a partner, Vartan “Marty” Sarkisov. Alsarraf and Sarkisov, an American of Armenian descent, co-founded multiple business ventures over the years. Forbes estimated Adult Check’s 2001 revenue at approximately $320 million. According to online records, the company was dissolved in late 2011.

Mr. Alsarraf, who appears to be the principal owner of Birch Gold per 2018 court records, has not sought the media spotlight in relation to his work with Birch Gold. Instead, the company is fronted by its spokesperson, the English-born Phillip Patrick, who claims to have been a private wealth manager at Citigroup in London, where he “saw the risks of government overreach and socialist policies first-hand.” Patrick joined Birch Gold in 2012 as a precious metals analyst, and has been a repeat guest on Bannon’s “War Room” podcast series, featuring warnings about inflation.

Bannon’s endorsement has been prominently featured on the Birch Gold website, most recently promoting a multi-volume report entitled “Stephen K. Bannon’s The End of the Dollar Empire.” The report, according to Bannon’s description in videos, discusses inflation and ongoing pressure on the dollar which may result from geopolitical challenges from Russia, China, and the BRICS bloc of nations (Brazil, Russia, India, China and South Africa).

Steve Bannon has had a longtime interest in gold and cryptocurrency products. In 2005, he worked with child film star Brock Pierce to develop Internet Gaming Entertainment, which sold a kind of “digital gold” product within the videogame World of Warcraft. Players in Asia would “mine” assets at low rates and then sell them to players in the West at higher prices — a process called “gold farming.” Bannon helped attract a $60 million investment in the firm from Goldman Sachs, his former employer.

John L. Thornton, the former CEO of Goldman Sachs and a close friend of Bannon’s, is now executive chairman of Barrick Gold, the second largest producer of gold in the world. A source familiar with the matter who wishes to remain anonymous said that Thornton played a significant role in the selection of Lt. Gen. Michael T. Flynn as National Security Adviser in 2017, an appointment which famously lasted only 22 days.

In addition to Mr. Bannon, Birch Gold counts a veritable “who’s who” of conservative and libertarian-right gold advocates among its endorsers, including Ben Shapiro (editor of the Daily Wire), Dan Bongino, Candace Owens, Ron Paul, Dinesh D’Souza, Michael Savage, Larry Elder, Jordan B. Peterson, Ben Carson, Matt Walsh, Hugh Hewitt, Mike Gallagher, Graham Allen, Jackson Hinkle, Kirk Cameron, and Lance Wallnau.

Wallnau is a prominent member of the New Apostolic Reformation, a dominionist Christian Nationalist movement that has been identified by many as playing a significant role in the January 6th insurrection. He authored an article for the Birch Gold website suggesting that the existence of gold was “proof” of intelligent design. Many also have ties to the Council for National Policy, which also played a role in organizing and executing the 2021 insurrection. The company also regularly promotes content featuring “gold celebrities” Peter Schiff, Jim Rickards, and Steve Forbes.

Karlo Vartan, an American of Armenian descent, currently serves as Chief Financial Officer of Birch Gold. From 2013-2015, Vartan served as CFO of MCW Energy (also based in the San Fernando Valley) a company which operates hydrocarbon extraction projects and distributed fuel to gas stations in Los Angeles. The company’s extraction efforts utilize tar sands located near Vernal, Utah, and have been the subject of controversy there. MCW Energy, which changed its name to Petroteq Energy in 2017, was founded by Aleksandr Blyumkin, a fuel distributor originally from Ukraine.

Vartan then worked in the aluminum industry, for recycler Real Industry (now Elah Holdings, Inc., after a 2018 bankruptcy). He then served as Director Of Information Technology & Cyber Security for Unity Aluminum, a division of Braidy Industries, in Ashland, Kentucky. The Braidy mill project became controversial due to its connections to Oleg Deripaska, the sanctioned Russian aluminum oligarch, who also has ties to Kentucky Senators Rand Paul and Mitch McConnell. After working with Unity Aluminum, Vartan joined Birch Gold in 2017.

The modern promotion of gold by conservatives stems back to Franklin Roosevelt’s departure from the Gold Standard in 1933, as previously reported in depth in The Washington Spectator (See: Paranoia on Parade). In more recent years, conservatives like Glenn Beck have famously featured ads for gold products on various television and radio programs. But the coalescence of conservative voices around Birch Gold raises questions about why this company, in particular, is so appealing to all of them.

Post from the Birch Gold Group on July 3, 2014. Image is of four smiling men in business suits holding each others hand with their arms raised. The caption reads, "Is the bloc of BRICS nations moving towards adopting the "anti-dollar alliance"?"

Part of the answer may lie in geopolitics. As far back as 2014, Birch began signaling the possibility of a shift towards gold from Russia, China, and BRICS countries. On July 3, 2014, the company posted an article with the title, “Is the bloc of BRICS nations moving towards adopting the “anti-dollar alliance”?

The same month, the company wrote a post titled “A Chinese Gold Standard?,” and in February 2015, they followed up with “Is Russia Moving to a Gold-Based Currency?” While such fear mongering is standard practice for companies pushing gold, the subsequent alignment of prominent conservatives with Birch suggests more coordinated activity.

As Congress prepares for a standoff around raising the debt ceiling, many prominent conservatives have signaled they will hold the possibility of default hostage to extract cuts to Social Security, Medicare, and further aid to Ukraine. Any prospect of default on US debt will result in a downgrading of the country’s credit rating; actual default would have devastating effects for the global economy and the dollar specifically. A “perfect storm” for gold bugs, this scenario would fulfill the long-held prophecy that a reckoning would someday come for the dollar.

Vladimir Putin has long been calling for the establishment of a BRICS-bloc currency for settlements between nations who may wish to operate outside of sanctions imposed by the US and Europe in the wake of the war in Ukraine.

Credit Suisse analyst Zoltan Pozsar has noted recently that Putin, in retaliation for the G7 countries instituting a $60 price cap on Russian oil, may attempt to sell oil at a rate of two barrels to one gram of gold, effectively undermining the dollar’s status as the world’s reserve currency. Pozsar has suggested such a move could increase the price of gold from $1,800 to as much as $3,600 per ounce. This idea has been echoed by Sergey Glazyev, an economist and Russian politician who has led the country’s effort to establish a BRICS-zone currency. The effort has been dubbed “Bretton Woods III” (referencing the 1944 conference that established the current global financial system, as well as Nixon’s subsequent abandonment of the gold standard in 1971), or “Golden Ruble 3.0.”

The plumbing to enable such interbank settlements is also coming into place. Project mBridge, a collaboration between the BIS Innovation Hub Hong Kong Centre, the Hong Kong Monetary Authority, the Bank of Thailand, the Digital Currency Institute of the People’s Bank of China and the Central Bank of the United Arab Emirates, will allow participating countries to perform settlements between each other while bypassing the SWIFT (Society for Worldwide Interbank Financial Telecommunications) payments transfer network, and any associated Western sanctions.

While the prospect of US debt default is widely considered to be all but impossible, such a scenario has long been a part of right-wing apocalyptic fantasy literature. Even as the kind of total collapse envisioned by dollar skeptics is unlikely to fully come to pass, there is significant danger in the idea that they may partner with Russia and China in pursuit of a strategy to bypass and undermine the dollar.  And there is increasing evidence that Saudi Arabia, the United Arab Emirates, and Israel may also go along with such an effort.

Mr. Alsarraf is also connected with many other companies, most based in Southern California, including one called Melody Memorial Animal Hospital. In the past, he was said to spend much of his time on a non-profit called Pooch Heaven, which helps rescue dogs at his 820-acre ranch outside Los Angeles. Other past entities, likely associated with Cybernet and AdultCheck, include “Sluts Cash, LLC” and “Cyberstrip Live, Inc.” Court records indicate that Mr. Alsarraf and his former wife Shirley Ann Alsarraf divorced in 2020. An amateur radio license, NW9Y, was issued to Alsarraf by the FCC in 2013, which he currently holds.

Regardless of the outcome of the debt ceiling standoff, conservatives will certainly continue to push gold, and increasingly cryptocurrency, well into the future. It is notable, for now, that one company, with its odd history and backstory seemingly out of line with conservative values, has captured the endorsement of so many on the Putin-aligned right.

The author would like to thank and acknowledge the many open-source researchers who contributed information to this story.

 

Dave Troy is an investigative journalist focused on exposing threats to democracy. Based in Baltimore, his background as a technologist with an interest in studying online extremism affords him a unique perspective. His work has appeared at MoMA in New York, and he is a fellow with New America Foundation’s Future Frontlines. Dave writes regularly about information warfare, history, and politics. He is the host of the podcast Dave Troy Presents, and speaks regularly at conferences on disinformation, extremism, and information warfare. Contact information is available at davetroy.com.

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