Billions in U.S. Bonds Go Unclaimed

States, Treasury Dept. Battle in Court Over $16B in Lost, Forgotten Bonds Dating Back to WWII

(AP)  The federal government is facing a lawsuit over billions in unclaimed bonds that date back to the patriotic fundraising efforts of World War II, leading to a showdown between states who say they should be given the money and a Treasury Department that claims ownership.

World War II sparked an unprecedented bond buying campaign, spurred on by one of the largest advertising campaigns ever seen - a drive wrapped in dutiful pleas from celebrities, politicians and cartoon characters alike.

Most American families bought at least one bond at the time and many never cashed them in - thanks in part to a 40-year maturity in the bonds. And those same "Series E" war bonds continued to be sold by the federal government until 1980.

More than $16 billion worth of the bonds are unclaimed, either lost or forgotten about with the death of the original purchasers.

The state attorneys general suing the Treasury Department charge that the federal government made no effort to find those people. They want the money given to the states, who have a legal system in place for finding the owners of unclaimed funds.

"It's better for the millions of American who are the rightful owners to have it returned to the states, because the states will make a real effort to find them," said David Bishop, a partner at Kirby McInerney who is representing the states in the suit. "And if after searching for them they can't find them, the money can go to work in the communities where the bonds were purchased."

The Treasury Department counters that it indeed tries to find owners of the unclaimed bonds, and says it has a Web site where people can simply type in their Social Security number to see if they have one. And it points out that the money is not just laying around somewhere.

"One of the misunderstandings out there is that there is a lot of cash sitting somewhere in a drawer. Money from savings bonds was used to run the daily operating expenses of the government," said Joyce Harris, with the Bureau of the Public Debt. "These are obligations of the federal government, not the states. There is no pot of gold out there just waiting for someone to grab it."

The Treasury also points out that most of the unclaimed bonds are far more recent than the original World War II-era bonds. And overall, 99 percent of people claim their bonds.

And those who don't cash them often choose to do so for tax reasons, or perhaps out of a sense of patriotism, Harris said.

"Quite frankly, people are aware of the bonds," she said. "A majority, when you contact them, are aware of the bonds."

It's not like the states will get the money free of obligation ¡ about $55 million in the case of Montana.

The states would be obligated to pay bondholders no matter if it takes them decades - or longer - to show up. In the meantime, though, states usually earmark the interest earned on such unclaimed money for schools or other purposes.

Steve Bullock, the attorney general for Montana, said states - not the federal government - have legally been granted the right to deal with unclaimed money.

"First and foremost I think it is the right thing to do. I think it is money that should be with Montanans," Bullock said. "It's an important action to bring just to protect the state's interest.

The complaint was first filed in Federal court in New Jersey in 2004 with New Jersey and North Carolina as the plaintiffs. Montana, Kentucky, Oklahoma and Missouri later joined the case. All states would benefit if the lawsuit is successful.

The case will come down to constitutional arguments. Attorneys for the federal government are arguing the states don't have standing on what they see as a contract issue between the original purchasers and the Treasury Department.

The states expect arguments in the case to be made later this year on a motion from the federal government to dismiss the case.

[cash2009]

Another interesting perspective, read the comments on this:
http://blog.foundmoney.com/index.php/2009/10/19/the-fight-over-16-billion-dollars

Its like stealing the money from Veterans!

[deetiggress]

You need to go to the tools tab and go down to the check treasury hunt section and click on the start search button. It then opens a page that you can put in a ss#. Hope that helps.

[jtdev1]

I bet if you owed the government a penny they could find you...

but they owe you money and it's impossible to find you...

[45bizman]

Hi, I went to the "web site" you posted in your piece but could not
"simply type in their Social Security number to see if they have one" Did you check this web site? I could not locate anywhere "simply type in their Social Security number to see if they have one"

[Hhoblit]

Go to research on the page in the link. At the bottom of that page is a link to "Treasure Hunt." Again, it does not search all EE Series bonds from WWII, just since 1974, and only if they have matured, plus some other more recent bonds. This is very wrong, and we should write our Congresspeople.

[Hhoblit]

Note to writer of this article. When the treasury says you can search for unclaimed bonds using a social security number, you can only search for bonds issued after 1974, and then it appears only bonds that have already reached maturity. This does not help people looking to see if their grandfather's hid away bonds in some unknown place. This is very wrong. The government gives away TRILLIONS of other people's hard-earned money, yet when the rightful owner of an obligation comes forward after patriotically loaning the government money, they make it impossible to find. Give it to the states because I have used their systems, and they are wonderful. To jtdev1 who thinks this is over a penny, I really wonder about you. Did you not read the word "billion" in the article. These bonds are usually bought in denominations of $100, and people usually buy a subscription. So we are talking about thousands of dollars per person owed. If it were your Alzheimer's ridden grandmother who needs a little extra care at the end of her well-lived life, you wouldn't be so dismissive.

[elliesamericana]

When my elderly aunt died in 1979 we found many thousands of dollars in the form of these war bonds from WWII. I always wondered if we ever found them all. If the states were to take this over I think there is a better chance of us finding any unrecovered bonds.

[inketolstoy]

State governments fighting the federal government over who gets to steal their citizens' money. Ain't governement grand.

[mysticorca]

...Except in this case the citizens gave the money to the government. Willingly. And all they have to do to get it back is... ask for it.

the link is broken. oddly enough trying to go to the site and the link doesnt work.

it would help if the link on the page actually worked, so whats the big deal then, why is this so hard to find?

[jtdev1]

Oh My! A Penny! Lets fight over it...

This amazes me.... Everyone is fighting over money...