Freedom Line Blog

On the even of today’s confirmation hearing for President Obama’s Attorney General nominee Loretta Lynch , the Center for Individual Freedom (“CFIF”) yesterday joined with a coalition of other prominent national organizations on a letter urging Senate Judiciary Committee Chairman Chuck Grassley to ask serious questions about the position of Ms. Lynch as it relates to “Operation Choke Point.”

Under the leadership of Attorney General Eric Holder, the U.S. Department of Justice has used the controversial program to intimidate, target and even shut down legitimate businesses (like gun shops and payday lenders) disliked by the Obama Administration.  Operation Choke Point, together with the IRS targeting scandal, serves as a prime example of how an unaccountable federal government can be abused to target out-of-favor legal businesses and individuals, and political enemies. 

The letter, which was organized by Taxpayers Protection Alliance, reads in part:

“The confirmation process is an important tool for the Senate in gauging where potential appointees stand on some of the most important issues they will be facing. … Ms. Lynch, like most Presidential nominees, has kept mostly quiet on some of the major issues she will be answering questions about once her confirmation process begins and that includes her views on Operation Choke Point.

“We hope that you will take this opportunity during the confirmation process to pose serious questions to Ms. Lynch about her views on Operation Choke Point and whether or not she will put an end to this harmful and destructive DOJ program and what her views are when it comes to the power of the federal government to use regulations to interfere with institutions and industries an administration may not like.”

To read the letter in its entirety, click here.

Already mired in myriad scandals – the IRS, our southern border, Benghazi, etc. – one would presume the Obama Administration reluctant to run a legally and ethically dubious program named “Operation Choke Point.”  Yet that’s exactly what this tone-deaf administration has done.

Fortunately, the House of Representatives is paying close attention, and holding several important hearings on the matter this week.

For those still unfamiliar, Operation Choke Point is a program initiated by Eric Holder’s Department of Justice to interrupt – or “choke” – access to private financial resources by entirely legal industries such as firearms sales, ammunition sales, coin dealers and others.  If the administration can successfully pressure financial services like banks and third-party payment processors to refuse to do business with those industries, they obviously cannot survive for very long.  All the while, none of the targeted industries have even been shown to have violated any laws.  Accordingly, it’s a prototypical Obama Administration effort to demonize and target legal business that it happens to dislike.

This week, however, two House committees will bring cleansing public sunlight to this rogue operation.  On Tuesday at 10:00 a.m., the House Financial Services Oversight & Investigations Subcommittee will hold a hearing entitled “The Department of Justice’s ‘Operation Choke Point,'” and at 2:00 p.m. the House Financial Services Financial Institution and Consumer Credit Subcommittee will hole its hearing entitled, “Examining Regulatory Relief Proposals for Community Financial Institutions, Part II.”  Then, on Thursday at 9:30 a.m., the House Judiciary Regulatory Reform, Commercial and Antitrust Law Subcommittee will hold its hearing entitled “Guilty Until Proven Innocent?  A Study of the Proprietary & Legal Authority for the Justice Department’s Operation Choke Point.”

As with other Justice Department and IRS campaigns, Operation Choke Point is characterized by abuse of due process, secrecy and dishonesty.  Thankfully, this week’s battery of House hearings will provide some much-needed public scrutiny, and hopefully help end this rogue scheme.

By now Americans are well familiar with the Obama Administration’s habit of circumventing laws and persecuting groups it disfavors.  The IRS.  Operation “Fast and Furious.”  Targeting journalists.  The EPA.  More recently, its release of five high-level terrorists from Guantanamo Bay without consulting Congress as required by statute.

Now, we can add “Operation Choke Point” to that dishonorable list.

As detailed by a new House Oversight and Government Reform Committee report, Operation Choke Point is an Obama Justice Department campaign to “choke out” perfectly legal businesses that the Administration simply finds politically objectionable.  “The goal of the initiative,” the House report notes, “is to deny these merchants access to the banking and payments networks that every business needs to survive”:

Over the past year, the Department of Justice has initiated a wide-ranging investigation of banks and payment processors, known informally as ‘Operation Choke Point.’  As of December 2013, the Department has issued over fifty subpoenas to banks and payment processors.  The ostensible goal of the investigation is to combat mass-market consumer fraud by foreclosing fraudsters’ access to payment systems.  However, there is evidence that the true goal of Operation Choke Point is to target industries deemed ‘high-risk’ or otherwise objectionable by the Administration.”

Those targeted industries include firearms and ammunition sellers, short-term lenders that help lower-income workers, and other legitimate businesses.  By threatening and pressuring banks and financial institutions through this operation, the Obama Administration hopes to pressure them to refuse to continue doing business with law-abiding targeted industries.  Although the Administration claims to be acting on the basis of federal statutes prohibiting consumer fraud, the House report notes that no fraud by the targeted businesses has been demonstrated, let alone proven by evidence in a court of law.

The House will continue to pursue the matter, but individual Americans can do their part by remaining vigilant on this issue, and by contacting their elected representatives in the House and Senate to demand action (contact information can be found quickly and easily on CFIF’s “Take Action” page here).