Operation Choke Point Exposed in a Week of Hearings - American Commitment

By Keith Calder
A week of hearings came to an end this Thursday regarding Operation Choke Point, a Department of Justice scheme that presses banks to cut ties with businesses bureaucrats deem undesirable.
Since its inception in 2013 as a way to purportedly combat fraudulent business practices, Operation Choke Point has received praise from lawmakers on the left and stark criticism from lawmakers on the right, creating a partisan divide on the actual merits of the probe.
Republicans throughout the week made their case that instead of focusing on companies that break the law, the enforcement of Operation Choke Point has caused banks to cut ties with legal businesses within entire industries.
In order to prove that Operation Choke Point denies lines of credit to legitimate businesses, Republicans brought in top executives from major financial institutions, as well as representatives from judicial and economic regulatory agencies to testify. Business groups testified that more than 80 banks have terminated business with payday lenders alone fearing retribution from government officials. Guns and ammunition stores have also been cut off, strong evidence that this is motivated more by political animus against certain businesses than any legitimate law enforcement concerns.
Former FDIC chairman William Isaac offered this stinging critique:
“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.”

On Tuesday Rep. Patrick McHenry (R-N.C.) referred to the probe as a lengthy “government hit list” of high risk businesses to target, “an ideological crusade against industries profiled by the government through their abusive threat of launching federal investigations.”
Rep. Stephen Fincher (R-Tenn.) echoed the same sentiment, “It seems like this was political from day one.”
Across the aisle, Democratic fans of President Pen and Phone openly applauded the administration’s efforts to cut off businesses they dislike from banking services.
Rep. Maxine Waters (D-Calif.) urged the DOJ to be “as aggressive as you can possibly be.”
Rep. Al Green (D-Texas) claimed – ignoring the parade of witnesses offering compeling testimony – that Republicans are making indictments without “facts that have not been placed in evidence…we have not had empirical evidence.”
Stuart Delery, an assistant attorney general of the Justice Department’s Civil Division asserted the operation is investigating businesses based upon “specific conduct and evidence that consumers are being defrauded, not to target whole industries or businesses acting lawfully, and to follow the facts wherever they lead us.”
However, one of the administration’s key outside allies was much blunter about how this really works.
Lauren Saunders, managing attorney for the National Consumer Law Center, believes bureaucrats in the DOJ possess the unique ability to act as judge, jury, and executioner within the boundaries of Operation Choke Point—in other words no due process of law:
“I think if a bank has a merchant that has unauthorized returns that are through the roof, warnings from regulators who monitor illegal activity, I don’t think we need to wait for a trial to track down people around the globe that may be scamming people before the bank says ‘you know what I think there is fraud going on here and I’m not going to be a part of it.’”

Rep. Sean Duffy (R-Wis.) replied:
“I was a prosecutor and we would collect a lot of evidence and a lot of first hand statements and complaints, and if we just convicted people without a trail and said well look at all this information I’m not going to track down this defendant and give them due process; I’m not going to give them a trial; I mean what kind of government have we become if we don’t offer these protections to what we would all believe is a legitimate business until proven otherwise. When you have bureaucrats saying I’ve done an investigation, it’s not open, it can’t be reviewed by the Congress, can’t be accessed by the merchant, and I just found that you have committed fraud and we are going to cut off your ability to bank. Is that the right way we should do business in the American government? Because that’s what they’re doing.”

The unfortunate aspect of this exchange is that this is exactly what liberal activists inside the Obama administration want – the ability to sidestep Congress and our judicial system in order to target institutions, citizens, and businesses through behind-the-scenes intimidation tactics.
The fact that unelected officials are imposing their own restrictions on lawful businesses with no proof of fraud and no oversight is a dangerous precedent and a clear abuse of government power.
“You come in here and say fraudulent, fraudulent, fraudulent, and you haven’t proved it all,” Duffy observed.