DOJ's Operation Choke Point Takes Federal Intimidation to a Frightening Level

Whether it is the Environmental Protection Agency ‘s (EPA) ‘sue & settle’ or the Federal Communication Commission’s (FCC) proposed rules on ‘net neutrality’, it seems that the only way that this administration knows how to get things done is through increased regulation and power grabs. Now, Congress is taking aim at one of the more unsettling examples of this abuse of executive power being run through the Department of Justice (DOJ) with Operation Choke Point.

In 2013, the DOJ began the program known as Operation Choke Point as an expansion of an existing program born out of the financial crisis designed to tackle fraud in the financial services sector. However, few details were known before this year. But, back in January, Michael Patrick Leahy with Breitbart broke the story wide open and that’s when Congress and the press started to pay attention.  More importantly, more questions were asked:

According to the Wall Street Journal, the federal initiative now known as ‘Operation Choke Point’ is an outgrowth of the President’s Financial Fraud Task Force, established by President Obama by Executive Order in 2009. It also appears to have been kicked off in secret by the Department of Justice, FDIC, and the CFPB in early 2013 without the requisite statutory authority. Officials at the Department of Justice have withheld information about the program from Congress, though they have eagerly shared details with federal financial institution examiners authorized to supervise and discipline the nation’s banks and related financial institutions.

More information is being uncovered regarding Operation Choke Point and it isn’t pretty, in fact it’s disconcerting to anyone who is concerned with the types of targeted power that other federal agencies have been employing under the Obama administration. Taking into account all the news with the IRS scandal and what TPA has been discussing regarding the targeting of non-profits based on ideology, what DOJ appears to be doing with Operation Choke Point is on the same level of deviousness. William M. Isaac, the former chairman of the Federal Deposit Insurance Corporation gave a chilling summary of what this program has morphed into and why Americans should be scared of it, writing for The Hill this week:

Operation Choke Point is one of the most dangerous programs I have experienced in my 45 years of service as a bank regulator, bank attorney and consultant, and bank board member.  Operating without legal authority and guided by a political agenda, unelected officials at the DOJ are discouraging banks from providing basic banking services — deposit accounts, payments processing services, and payroll accounts – to lawful businesses simply because they don’t like them.  Bankers are being cowed into submission by an oppressive regulatory regime.

Anyone who has been paying even the slightest amount of attention should be able to do the math as to why this program needs to be stopped immediately. There is absolutely no justification for the selective targeting of legal businesses using federal agencies to do the dirty work simply because higher ups in the White House may not like the type of business being done. It is easy to look ahead to how Operation Choke Point could be copied by another agency to fit their agenda. Washington Post contributor Todd Zywicki recently laid out a very real and troubling scenario:

The ability to destroy legal industries through secret actions to deprive them of banking services has obvious political consequences. For example, it was reported last week that firearms shops are alleging that Operation Choke Point is being used to pressure banks into refusing to providing financial services.  There are also reports that porn stars (and here) have had their bank accounts terminated for “moral” reasons related to the “reputation risk” of banking individuals in the porn industry. IRS officials must already be salivating about ways to apply Operation Choke Point to tea party groups.

The good news is that Congress is finally taking notice of what is going on. This week, there are multiple hearings being held regarding Operation Choke Point and the House already took action a few months ago in terms of how the program is funded:

The House of Representatives passed an amendment Thursday to stop all federal funding to be used for the Department of Justice’s Operation Choke Point, an anti-fraud operation that was found to be cutting off legitimate businesses from their banking lines.

The question now becomes how much light can Congress shed on the secretive program, and what will they uncover? While some members of Congress are skeptical of the motives behind the criticisms of the program, some members understand that this is dangerous territory and federal agencies being used to selectively go after businesses based on some personal animus toward specific industries is unacceptable. Speaking at an event held by CATO last week Rep. Darrell Issa (R-Calif.), Chairman of the House Oversight and Government Reform Committee, told the audience this program is a slippery slope and should end:

“If you empower the government to pick winners and losers within a lawful enterprise, then there is no place to stop.”

The warnings from Rep. Issa ring true.  With the continued power grabs from agencies under this administration businesses are in real danger of being selectively targeted simply for reasons having to do with what regard they are held by those in the White House, legal or not. The Taxpayers Protection Alliance (TPA) is hopeful that more attention will be focused on this troubling program and that Congress will do their job and expose any wrongdoing by the DOJ that may have resulted in the loss of livelihood for law-abiding citizens. Former President Calvin Coolidge was known for saying very little, but when he said, “the chief business of the American people is business,” he was right, and TPA hopes that sentiment will carry the day and help put an end to Operation Choke Point.