‘I am appalled by the blatant intimidation, coercion, and bias employed by unelected government officials to play politics with the livelihood of Americans…’
(Michael Barnes, Liberty Headlines) Five years ago, the Obama administration launched a coordinated inter-agency initiative aimed at destroying legitimate, law-abiding businesses it didn’t like—not by force, per se, but through a clever backdoor policy of cutting off access to financial institutions, and thereby financially starving them out of existence.
That program was called “Operation Choke Point.”
It targeted businesses across 31 different industries, most notably firearms sellers, precious metals dealers, and payday lenders, and is now widely viewed as a corrupt abuse of power.
Last week, newly unsealed court documents revealed those abuses are even worse than previously thought.
The documents expose new evidence of partisan federal bureaucrats—at former Attorney General Eric Holder’s Department of Justice, the Federal Deposit Insurance Corporation and the Office of the Comptroller of Currency—harassing, intimidating and destroying legal businesses under President Obama.
In one case, FDIC officials pressured a bank into terminating ties with a legal business that the bank’s own risk assessment determined “pose[d] no significant risk to the financial institution, including financial, reputation, and legal risk.”
Another questionable practice involved administration officials using talking points when pressuring banks that included “mention[ing] pornography” as an example of the reputational risk banks would face for working with targeted businesses.
“Because associating the two gives ‘a good picture regarding the unsavory nature of the businesses at issue,’” partisan Obama administration officials were quoted saying.
Emails contained in the unsealed documents also show senior officials were, in their own words, “interest[ed] in trying to find a way to stop banks from facilitating payday lending.”
They found success in exploiting due-diligence regulations, meant to make sure banking fraud wasn’t occurring. But the more due diligence they required, the more they were able to pressure banks to break with payday lenders.
“When regulators formally or informally require a bank to engage in enhanced due diligence and scrutiny of a type of customer or activity, that raises the cost, to the bank, of servicing that customer or activity,” the documents said.
According to Rep. Blaine Luetkemeyer, a Missouri Republican and former community banker, the evidence of wrongdoing is astounding.
“As a former examiner, I find it appalling that senior government officials would not only allow but encourage this type of irresponsible behavior. The intimidation tactics and implicit bias employed by these unelected bureaucrats stands in direct opposition to the important missions of the agencies,” Luetkemeyer said Friday.
“It is also unfathomable that some of the bureaucrats named in these newly-released documents still have their jobs,” he added.
Operation Choke Point was created by the Obama–Holder Justice Department to “choke out” companies the administration deemed high risk, or in truth, politically objectionable.
The program forced banks to terminate relationships with a wide variety of entirely lawful and legitimate merchants—including but not limited to, firearm sellers, ammunition supply companies, gold and silver dealers, pawn shops, money transfer services, payday lenders and even fireworks companies.
In May 2014, just six months after the program was launched, the House Committee on Oversight and Government Reform determined that Holder’s Department of Justice lacked the legal authority to conduct Operation Choke Point—in others words, it was illegal.
The Oversight Committee said the intent of law cited by the DOJ as justification for the program “was to give the Department the tools to pursue civil penalties against entities that commit fraud against banks, not private companies doing legal business.”
But the Obama administration continued the program anyway, until Attorney General Jeff Sessions formally shut it down in August 2017, just months after President Donald Trump assumed office.
In December 2017, the House passed a near-unanimous bipartisan bill, 395-2, that would forever kill Operation Choke Point or anything like it, rather than rely on whim of future attorneys general. The bill was sponsored by Luetkemeyer, but it’s been stalled in the Senate ever since.
Luetkemeyer also has introduced the Financial Institution Consumer Protection Act, a bill that would end the DOJ, FDIC and the Office of the Comptroller of Currency’s ability to terminate partnerships between banks and businesses they oppose over ideological issues.
Luetkemeyer currently serves as chairman of the House Financial Institutions and Consumer Credit Subcommittee. Upon discovery of the new abuses revealed in the unsealed court documents, Luetkemeyer sent official letters to the chairman of the FDIC and the Comptroller of the Currency.
He urged them both to investigate and “take immediate and firm action” against any members of their staff who has abused their power in conjunction with Operation Choke Point.
“I hope Chairman McWilliams and Comptroller Otting will restore the integrity of their agencies by removing those who weaponized their authority to attack businesses that have done nothing wrong,” Luetkemeyer said in a Friday statement.
“I am appalled by the blatant intimidation, coercion, and bias employed by unelected government officials to play politics with the livelihood of Americans,” he said.
“We have a duty to ensure American businesses are never again subject to despicable abuses of power like Operation Choke Point,” he added.