Tag: Operation Choke Point

Post-Memorial Day Quick Hits

My browers tabs are filling up faster than I can empty them. So here are some quick reads going into this week:


George Will has a great piece on the Presidential candidate we need. The problem is that we’ve had people run like that. They don’t get as far as someone promising the American people the world for free.


Bjorn Lomborg reminds us that Paul Ehrlich is a pathologically wrong doomsayer. We should continue to ignore anything he says.


More on Operation Chokepoint. Money quote:

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.

In principle, of course, the logic of Operation Choke Point could be extended to groups not currently targeted. Notably absent from the FDIC’s hit list, for example, are abortion clinics, radical environmental groups, or, well, marijuana shops, for that matter. Something similar was done to cut off credit-card payments to support the operation of WikiLeaks.

The larger legal and regulatory issue here is the expansive use of the vague and subjective standard of “reputation risk” to target these industries. In a letter to Janet Yellen, the chair of the Federal Reserve, last week, House Financial Services Committee Chairman Jeb Hensarling expressed concern over the growing use of “reputation risk” as a vehicle for attacking legal businesses. Is there any discernible principle as to why, for example, a payday lender or firearms dealer poses a “reputation risk” and an abortion provider does not?



The White House has either deliberately or mistakenly outed the CIA’s top officer in Kabul. I was virtually alone on this blog in supporting to pursuit of the Valerie Plame affair. This should be pursued with similar fervor.


One final thought. Over the weekend, we had a horrible mass killing in California by a 22-year-old. There was a lot at play here: clear mental issues and violent tendencies, social emotional and sexual isolation, an attitude of entitlement and narcissism. And it exploded in seven deaths.

I don’t know that this could have prevented. But I would like, just once, for the Left Wing in this country to not to bathe in the blood of the slain every time this happens. Mass shooting are thankfully rare, despite the mathematically-challenged efforts of rags like Mother Jones to convince us otherwise. They constitute a tiny portion of the violence in this country. This kid stabbed three people to death, tried to run over others with his car and then shot a few more. In doing so, he used small arms with low-capacity magazines purchased in compliance with California’s strict gun control laws. This isn’t about gun control. Nor is it about Men’s Right or Pick-Up Artists or whatever other group of men you want to demonize. This isn’t about finding some group you’ve never liked and pinning this on them. This is about a deranged adult with severe issues and an unrelenting anger against women (and men, for that matter) who did something unspeakably evil.

Just for once, could we wait maybe a few hours before people start grinding whatever political ax they want to grind? Men’s rights, pick-up artists, gun rights, sexual harassment, men who feel “entitled to sex … come on. There are a couple of hundred million gun owners in this country. There are millions of men who have some sort of resentment toward women (and virtually all have gone through some stage where they were bitter about their relation with the fair sex). There are tens of millions who are sexually, romantically or socially frustrated. There are tens of millions who have untreated mental health issues. You know how many of them went on a murder spree this weekend? One.

In a nation of 3000 million people, there are inevitably going to be people where the right alchemy of mental illness, resentment, anger and lack of empathy will come together to produce this sort of thing. Sometimes they are caught before they happen; sometimes they aren’t. Blaming groups of millions of people for the actions of one is just stupid.

Cut it the fuck out.

Choking the Porn Money Chicken


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?