Brian Wise of the US Consumer Coalition describes Operation Choke Point as, “One of the greatest abuses of power that the country has never heard of.” The Wall Street Journal is credited with first informing the public as far back as May 2013 of what has become for many a game changer.
“The Justice Department is targeting banks that service a broad range of what it considers questionable financial ventures, including online payday lenders. The government has issued subpoenas to banks and other companies that handle payments for an array of financial offerings, ramping up an investigation that has been under way for several months, according to Justice Department officials.” “Issuing subpoenas” and “ramping up investigation(s)” hardly seems like “one of the greatest abuses of power”, or does it?
Military strategists concern themselves with a choke point, a narrow passage through which troops need to pass, which slows their progress and increases their vulnerability. Commuters choke at the thought of a lane closure forcing traffic into fewer lanes than the stream of traffic requires. All businesses, regardless of their wares or services, must pass through one specific point – the banks and the payment processors. It is this reality that the Justice Department has quietly turned into a choke point over the past couple of years. What the government describes as an initiative to confront fraudulent activity serves as a way of closing “questionable businesses”.
Representative Darrell Issa (CA–49) exposes what the Justice Department considers questionable businesses during a congressional hearing, part of which can be seen at the link below. Among the questionable businesses4 attached to the subpoenas are:
- Ammunition Sales
- Coin Dealers
- Firearms Sales
- Fireworks Sales
- Home-Based Charities
- Life-Time Memberships
- Pharmaceutical Sales
- Tobacco Sales
So, there we have it. Nobody wants fraud. The government has investigatory powers and processes. Every business needs a bank. Banks are traditionally risk-adverse. So, the government investigation of the banks — complete with subpoenas and signatures — induces the banks to terminate some or all banking services with these questionable (or is that code for merely “objectionable”) clients. By closing customer accounts — customers accused of no wrongdoing and not even necessarily directly under an investigation for any possible infractions — banks (understandably perhaps) avoid any unwanted entanglements with the government. Never! Won’t happen! Not in America!
Kat O’Connor of TomKat Ammunition claims to be one of the victims of Operation Choke Point. “(I)n August (of 2014), as I was completing my company’s website, I tried to use PayPal to integrate online credit card purchases into my website’s shopping cart. When I called PayPal to see why I was not able to activate the Business Pro section of the process, I was told that they ‘could not offer that service due to [my] line of work’ and that I should contact my website’s domain provider to see if they could help find another type of service.” The article continues with O’Connor identifying other impediments faced in her search for similar services which “led to lost revenue and slower growth for the company and, if continued, could put us out of business.” O’Connor maintains, “We are not a fraudulent business, but clearly the Department of Justice is not going after only fraudulent businesses with Operation Choke Point, as they purport.”
“On January 29, 2015, the Federal Deposit Insurance Corporation issued a Financial Institution Letter that states ‘The Federal Deposit Insurance Corporation (FDIC) issued a Financial Institution Letter today encouraging supervised institutions to take a risk-based approach in assessing individual customer relationships, rather than declining to provide banking services to entire categories of customers without regard to the risks presented by an individual customer or the financial institution’s ability to manage the risk.’”
The Washington Times says this letter “effectively ends Operation Choke Point.” As reported by Forbes, “a change in the political landscape, many businesses threatening legal action and a congressman with a background in banking [forced] the bureaucracy to admit to misconduct and to stop financial attacks on legal businesses that the Obama administration deems to be politically incorrect.”
Whether Mark Twain or somebody else deserves credit for its authorship, the phrase is familiar to our ears. “The reports of my death has been greatly exaggerated.” This applies to the previous and premature obituary for Operation Choke Point. During the first half of March 2015 — a scant two months after its purported demise — the Department of Justice reported settlements with two more banks, settlements which resulted from Operation Choke Point investigations. “This case arose from our investigations into consumer fraud at banks, payment processors and fraudulent merchants, which have been dubbed Operation Choke Point,” said an unnamed Justice Department spokeswoman concerning one of the cases involving a bank in California. As of March (the writing of this article) the number of successful settlements for Operation Choke Point has increased from two to… three! How many businesses have been diminished or destroyed by this withdrawal of banking services, ones we will never hear about? Hawkins Guns of Wisconsin is one you can read about.
In mid–2014, the House of Representatives voted to defund Operation Choke Point, an unsuccessful measure. In March 2015, U.S. Rep. Blaine Luetkemeyer, (R-Mo.) reintroduced legislation to put an end to this effort. “Operation Choke Point is an organized attempt by the administration, the FDIC and the Department of Justice to bully and intimidate financial institutions so they won’t offer financial services to certain licensed, legally operating industries the government doesn’t like in an attempt to choke off those industries from our country’s banking system. The program has been in effect for a few years now, but it has gone into overdrive within the past year,” Luetkemeyer wrote.
“Pay attention, now! I am sending you out like sheep among wolves. So be as cunning as serpents and as innocent as doves.”
Jesus’ admonition to His disciples remains as relevant today as it was two thousand years ago. As the sons of Issachar were credited for “understanding the times” in which they lived and as ambassadors of the King who seek to represent Him in these days, we benefit by being aware, by paying attention and by staying alert. Operation Choke Point has political, constitutional even ministerial implications as we confirm our callings 2 Peter 1:10 and are equipped for the work of the ministry Ephesians 4:12. But that is another article for another time.
http://en.wikipedia.org/wiki/Operation_Choke_Point (citations omitted) ↩