Emails, Jenny LaCoste-Caputo, executive director of public affairs, University of Texas System, June 23-24, 2015
From: Selby, Gardner (CMG-Austin)
Sent: Monday, June 22, 2015 3:06 PM
Subject: Inquiry for a fact check
A reader asked us if Gov. Abbott got the claim below right:
"The law," Gov. Abbott's office said in a June 2015 press release, "will repatriate $1 billion of gold bullion from the Federal Reserve in New York to Texas."
Is this accurate? If so, who or what would you recommend we consult to confirm? If not, why not and what would be correct? Any key sources we should contact?
I would be happy to talk about this in a phone interview for our fact check. I'm trying to complete this soon.
g.
W. Gardner Selby
Reporter / News
Austin American-Statesman
PolitiFact Texas
11:59 a.m.
June 23, 2015
This information comes after conferring with UTIMCO CEO Bruce Zimmerman:
At one time over the past few years, UTIMCO did in fact have an investment of approximately $1 billion in gold bullion. As of today, the investment is closer to $650 million in gold bullion. UTIMCO also has investments in gold financial futures. We do not know what any other Texas-related investment fund may or may not own. Also, UTIMCO may buy or sell gold bullion or gold futures at any time so future ownership cannot be predicted.
Currently, the gold is held in storage in a value (depository) that is located in New York and is part of a bank, and therefore under the auspices of the Federal Reserve System but it is not owned or controlled directly by the Federal Reserve.
As to whether UTIMCO's gold bullion will be moved to Texas:
1) If the depository does indeed get created; and
2) If the created depository is a robust member of the COMEX (Chicago Mercantile Exchange) which facilitates and eases buying and selling of gold bullion by having it fully integrated with the gold financial futures marketplace; and
3) If, once created as a robust member of the COMEX, UTIMCO costs are equal to or less than what is now being paid; and
4) If UTIMCO owns any gold bullion at that time; then, yes, a move to the Texas depository will be seriously considered.
-----Original Message-----
From: Selby, Gardner (CMG-Austin)
Sent: Tuesday, June 23, 2015 4:23 PM
To: LaCoste-Caputo, Jenny
Subject: RE: Inquiry for a fact check
What is UTIMCO or the UT System or both paying for the current bullion deposits?
5:08 p.m.
Approximately 1/10 of 1% or about $650,000 per year on the approximately $650 million of physical gold holdings.
On Jun 23, 2015, at 5:11 PM, "Selby, Gardner (CMG-Austin)" wrote:
Earlier, Zimmerman said in part: " Currently, the gold is held in storage in a value (depository)..." Did he mean vault?
g.
From: LaCoste-Caputo, Jenny
Sent: Tuesday, June 23, 2015 8:11 PM
To: Selby, Gardner (CMG-Austin)
Subject: Re: Inquiry for a fact check
Yes, he meant vault.
On your other question from the Chronicle story, that appears correct. Here's Bruce's explanation:
The 5,610 bars number is correct. I am trying to verify the $108 storage cost per bar but I won’t be able to confirm that until tomorrow.
However, at today’s price of $1,179.01 an ounce, each bar (100 ounces) is worth $117,901. The $108 represents 9.16/100’s of 1% or “9.16 basis points” in investment jargon (that’s why I say less than 1/10 of 1% or 10 basis points cost to store when I am asked… I give myself a little cushion).
So $108 per bar times 5,610 bars equals $605,880 to be exact. And with a closing price of $1,179.01, the 5610 bars now total $661,424,610.
9:16 a.m.
June 24, 2015
The $108 cost per bar is correct. Also, potentially of note, the UT System Board of Regents would need to approve any change of gold custodian. So the likely scenario is that UTIMCO would make a recommendation for the Regents to consider.