Choking the Porn Money Chicken

Hmmm:

Despite being in good financial standing, adult film performers and others in the porn industry have had bank accounts abruptly terminated—and the U.S. Department of Justice (DOJ) may have had something to do with it.

Under “Operation Choke Point,” the DOJ and its allies are going after legal but subjectively undesirable business ventures by pressuring banks to terminate their bank accounts or refuse their business. The very premise is clearly chilling—the DOJ is coercing private businesses in an attempt to centrally engineer the American marketplace based on it’s own politically biased moral judgements. Targeted business categories so far have included payday lenders, ammunition sales, dating services, purveyors of drug paraphernalia, and online gambling sites.

Here are the details on Operation Choke Point:

The “chokepoint” in this operation is the nation’s payments infrastructure, the means by which merchants process nearly $5 trillion in consumer purchases in the U.S. each year. Federal law enforcers are targeting merchant categories like payday lenders, ammunition and tobacco sales, and telemarketers – but not merely by pursuing those merchants directly. Rather, Operation Chokepoint is flooding payments companies that provide processing service to those industries with subpoenas, civil investigative demands, and other burdensome and costly legal demands.

The theory behind this enforcement program has superficial logic: increase the legal and compliance costs of serving certain disfavored merchant categories, and payments companies will simply stop providing service to such merchants. And it’s working – payments companies across the country are cutting off service to categories of merchants that – although providing a legal service – are creating the potential for significant financial and reputational harm as law enforcement publicizes its activities. Thus far, payday lenders have been the most frequent target. Whatever the merits of payday lending – and there are valid arguments on both sides –it is legal in 36 states. And if payday lenders are today’s target– what category will be next and who makes that decision?

To anyone familiar with the way our thuggish government does business, this is not a surprise. When they can not get something outlawed — like payday lending or medical marijuana — they use the tools at their disposal to harass them to death. They threaten banks and financial services into not doing business with them. They pass onerous regulations. They launch inspections and raids to insure “compliance” with whatever regulations they’ve imposed. And they come down like a ton of bricks on anyone who has broken the rules to even a minor extent.

In this case, it appears that someone at the DoJ may have abused that power to go after an industry that is popular and legal. But … that’s what fucking happens when you give the government this kind of power. We shouldn’t be at all surprised that this power is being abused. We should be shocked if it isn’t abused every damned day. Think about it: through a campaign of subpoenas and legal demands, the DOJ can effectively impose massive fines on industries that have broken no laws. All that needs to happen is for someone in Washington to get a bug up their ass about an industry and they will be targeted for potentially millions in compliance costs.

Operation Choke Point needs to be ended immediately. It may turn out that this has nothing to do with Operation Choke Point. But the existence of a program like his is antithetical to the notion of rule of law. If the Obama Administration doesn’t like pay day lenders or porn sites, they can try to outlaw them through legislation (good luck with that). Allowing this kind of lawless harassment is simply wrong, no matter who is being targeted.

Update: To clarify something: the connection of this incident to Operation Choke Point is speculation at this point. It’s possible Chase is just engaging in some good old-fashioned slut shaming (in which case, fuck you, Chase). It’s also possible that the porn industry inadvertently triggered Operation Choke Point protocols since they are targeted at businesses that have high charge rejection rates and it’s likely a lot of porn users experience buyer’s remorse and try to reverse the charges (or that porn sites are a favored test bed for stolen credit cards).

Nevertheless, my criticisms stand. We have been here before. The reality that many drug dealers have lots of cash has been used to assume that anyone with lots of cash is a criminal and the cash can be taken without trial. The reality that some criminals structure bank deposits has been used to make structuring itself a crime, even when the money involved is legitimate.

The government is pressuring banks into shutting down accounts because they meet a profile of fraudulent business dealing. How is this anything more than an extension of the already abusive structuring laws?

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  1. Seattle Outcast

    In addition to being terminated, the same should apply to those that conceived the idea to begin with. Anyone that wants to abuse their power that much should be summarily fired.

    Or strung up from a lamp post…..

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  2. Seattle Outcast

    The thought occurred to me that since much of this industry has already started moving out of California due to some new laws being passed to harass the companies involved, the next step is to move across the border. Same company, same people, only now producing in Mexico or even further south, and all that money (bigger than Hollywood) leaving the country. It’s not like porn is ever going away, and the talent might start to include a lot more locals than normally seen.

    Just to make it fun, all of these people should open up accounts in the Cayman Islands….

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  3. Seattle Outcast

    This scandal is now breaking across the internet – expect to see a massive denial from the head criminal Holder and his fellow assclown Obama, followed by a congressional investigation where they stonewall again.

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