I think the claim that it is an illegitimate flag is a little over the top. I have seen American flags with gold fringes in churches and schools since the 1950s. In fact, I can't recall seeing one without the gold fringe in any protestant church in my lifetime.
Is the gold fringe not indicative of an “Admiralty Flag?”
Excerpt below from some flag site, seems legit. The gold fringe IS okay as a Presidential flag. (I can see it now: “Hey guys, how can we get this dork to look more presidential?” “I know, we could use one of those flags with the gold fringe!”
THERE ARE ABSOLUTELY NO PROVISIONS IN THE LAW FOR ADDING A FOURTH COLOR (YELLOW FRINGE) TO THE TITLE 4 U.S.C. 1,2 FLAG.
Title 4 U.S.C. 3 provides that anything put on the Title 4 U.S.C. 1,2 Flag (gold fringe) MUTILATES the Flag, and carries a one-year prison term. This is confirmed by the authority of title 36 U.S.C. 176 (G). The gold fringe is the fourth color and represents “color of law†, and, when placed on the title 4 U.S.C. 1,2 Flag, mutilates the Flag and suspends the organic Constitution for the United States of America, and establishes “color of lawâ€. (Refer to title 18 U.S.C. 242. See Black’s Law Dictionary).
As provided by title 36 U.S.C. 173, and Army Regulation 840-10, chapter 2-1(b), the Flag of the united States of America is defined and described in title 4 U.S.C. 1,2. Civilians must use the title 4 U.S.C. 1,2 Flag (see title 36 U.S.C. 173 and Army Regulation 840-10, chapter 2-7) and when military flags are displayed by Army Regulation 840-10, chapter 2 and title 36 U.S.C. 175.
THE ONLY AUTHORITY FOR A FRINGE ON THE FLAG IS IN THE ARMY REGULATIONS FOR THE NATIONAL (MILITARY) FLAGS ONLY.
The U.S. Attorney General has stated: “The placing of a gold fringe on the National flag, the dimensions of the flag, and the arrangement of the stars in the union are matters of detail not controlled by statute, but are within the discretion of the President as Commander-in-Chief of the Army and Navy. . . ancient custom sanctions the use of fringe on regimental colors and standards, but there seems to be no good reason or precedent for its use on other flags. . . the use of such a fringe is prescribed in current Army Regulations, No. 260-10.†(See 34 Ops. Atty. Gen. 483 & 485). The only statute or regulation, in the United States, prescribing a yellow fringed United States flag is Army Regulation No. 260-10, making it a military flag.
By army regulation 260-10, the gold fringe may be used only on regimental “colorsâ€, the President’s flag, for military courts martial, and the flags used at military recruiting centers.
“A military flag emblem of a nation, usually made of cloth and flown from a staff; FROM A MILITARY STANDPOINT flags are of two general classes…those flown from stationary masts over army posts, and those carried by troops in formation. The former are referred to by the general name of flags. The latter are called colors when carried by dismounted troops. COLORS AND STANDARDS are more nearly square than flags , and are made of silk, with a knotted FRINGE OF YELLOW ON THREE SIDES...USE OF A FLAG — THE MOST GENERAL AND APPROPRIATE USE OF THE FLAG IS AS A NATIONAL SYMBOL OF AUTHORITY AND POWER†(National Encyclopedia, Vol. 4)
The adornments on the top of the flag pole are for military use only. The gold eagle is for the use of the President of the United States only, and only in time of war. (Or when he is standing as Commander-in-Chief of the military, having declared Martial Law, and suspended the Constitution). The gold spear ball is for military recruiting centers only. The gold acorn is for military parades only. (Army Regulation 840-10, chapter 8).
Colors “A flag, ensign, or standard borne in an army or fleet.†(Webster’s, 1971).
Color An appearance, semblance, or simulacrum, as distinguished from that which is real. A prima facie or apparent right. Hence, a deceptive appearance; a plausible, assumed exterior, concealing a lack or reality; a disguise or pretext. (Black’s Law Dictionary, 6th Ed.)
Color of law The appearance or semblance, without the substance, of legal right. Misuse of power, possessed by virtue of state law and made possible only because wrongdoer is clothed with authority of state, is action taken under “color of state lawâ€.