A conservative Washington lobbying firm that sold about 1,100 sets of silver and gold "Founding Fathers Coins" claiming they were endorsed by federal officials, withdrew the offer last spring and acknowledged that the claims were false and the coins were not legal tender.
"It was a comedy of misunderstandings . . . just one of those nightmares that can happen to you," said Howard J. Ruff, chairman of Free The Eagle, the lobbying group.
Ruff's organization, one of a number that supported Marine Lt. Col. Oliver L. North's efforts to help the Nicaraguan contras, but apparently did not give money to the contra-aid effort, offered sets of the commemorative medallions to its supporters at prices ranging from $199 to $747 each.
In colorful brochures that a former employee said were mailed to about 100,000 people, the medals were described as "coins" produced by Liberty Mint with the approval of former Supreme Court chief justice Warren E. Burger.
Burger, who headed the federal commission overseeing the 200th anniversary of the Constitution, was said to have selected the firm as "the official minter" for last year's celebrations.
Officials at the U.S. Mint, which produced its own set of gold and silver commemorative coins in cooperation with the bicentennial commission, complained to the Postal Service, according to records released earlier this month by the Postal Service. The Postal Service filed a complaint against Ruff and his lobbying organization, accusing each of violating postal laws by making false claims through the mail.
In December, a Postal Service adjudicatory official entered an order making final a consent decree in which Free The Eagle and Ruff agreed to cease coin sales. No penalty was assessed.
"They were all innocent mistakes," Ruff said in an interview Friday after one of his former employees, John C. Houston, released copies of postal records, which Houston had obtained under the Freedom of Information Act. Houston, an Arlington lawyer who said he was formerly vice president of Free The Eagle, said he was releasing the postal records "in the interest of good government."
"The people at Free The Eagle thought Liberty Mint was the authorized minter," Ruff said.
He said that he and his 32-year-old son, Larry Ruff, were the owners of Liberty Mint, a Provo, Utah, firm that produced the set of eight medals carrying portraits of early American leaders. Asked how he could have misunderstood his own firm's status, Ruff replied, "Everyone in my organization, including my son, felt my wrath on that."
". . . The point is some stupid mistakes were made by young, enthusiastic amateurs. It was the darnedest thing for me to straighten out," Howard Ruff said.
Free The Eagle, which has sold stamps, coins and old Czarist Russian bond certificates to raise money for lobbying, began to offer refunds last spring after hearing complaints about the offer, Ruff said. About 300 purchasers were given refunds, he said.
But Ruff said that his organization's troubles with the federal government may not be over. He said that Free The Eagle, a nonprofit organization, is being investigated by the Internal Revenue Service. He said that he did not know the precise nature of the IRS inquiry but assumed it is about whether the organization, which has 24 employees at offices in downtown Washington and Fairfax County, may have violated its tax-free status.
In a second brochure Ruff said he sent to purchasers of the set, he apologized for the first brochure. "I've made some impressive goofs, but this one beat all records. . . . Due to an incredible series of honest mistakes, miscommunications, and inaccurate assumptions, some of the things we said in good faith are not true."
Among the errors that Ruff conceded was describing Liberty Mint as an "authorized minting agent" and using Burger's picture. Ruff said Friday that he stood by his description of the medals as "coins," a description that the Postal Service disputed on the grounds that they are not money.
Ruff, a financial commentator and former stockbrocker who publishes a newsletter called Ruff Times and runs a political action committee called Ruff-PAC, said both the IRS investigation and the Postal Service investigation were initiated by complaints by disgruntled former employees.