Proof of Authoritarianism: Operation Choke Point Revisited

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Posted: Oct 17, 2018 11:00 AM
Proof of Authoritarianism: Operation Choke Point Revisited

A lawsuit against federal banking regulators filed last Friday in Washington D.C. may appear at first blush to be a simple case of due process violation but, according to at least one legislator and a former ambassador, documents released in the case actually prove an Obama-era program, long thought to prevent some businesses disfavored by that administration from operating, was doing exactly that.

The documents were released as part of the Plaintiffs’ Motion for Summary Judgment in the lawsuit Advance America et al. v. Federal Deposit Insurance Corp. et al. in which three payday lenders allege that federal regulators were arbitrarily and unfairly trying to put them out of business by cutting — or choking — off their access to banking services.

To Congressman Blaine Luetkemeyer (MO-03),  Chairman of the Financial Institutions and Consumer Credit Subcommittee, the documents prove that Operation Choke Point was exactly what he and other conservative legislators always feared it was: a plan to put businesses that weren’t politically in line with the Obama administration out of business.

“Those documents in the [Advance America v. Federal Deposit Insurance Corp] case validated everything we thought at the time about Operation Choke Point,” Luetkemeyer told Townhall“That there were some business — often they were related to the sale of firearms — that were disfavored by the Obama administration, and they were arbitrarily denied their due process rights and kept from doing business by using the banking sector to choke them out of operation.”

Luetkemeyer, who has a background in banking and insurance who served as a banking regulator in Missouri early in his career, immediately penned two letters following release of the documents: one to Jelena McWilliams, Chairman of the FDIC, and one to Comptroller of Currency Joseph Otting.

He also released a statement:

“As a former examiner, I find it appalling that senior regulators would not only allow but encourage this type of irresponsible behavior. The intimidation tactics and implicit bias employed by these unelected bureaucrats stands in direct opposition to the important missions of the agencies,” said Chairman Luetkemeyer. “The abuse of power is truly astounding, but I hope that Chairman McWilliams and Comptroller Otting will do what their predecessors consistently declined to do and restore the integrity of their agencies.”

Luetkemeyer says that he believes there may be hearings associated with the release of the documents because it appears that there were some employees still left in agencies with regulatory power to enforce aspects of the Choke Point program, possibly after the Trump administration officially ended the program in 2017.

“These agencies are going to need to go in and clean house,” Luetkemeyer said. “You can’t do that in this country. If a business is operating legally, you cannot arbitrarily put them out of business because you don’t like them. If you don’t like the definition of what’s legal, then change it. But targeting businesses because they aren’t in line with your politics is not something we should do.”
 
Ambassador C. Boyden Gray, a founding partner of Boyden Gray & Associates which focuses on constitutional and regulatory issues (who also served as first as counsel to the Vice President George H.W. Bush during the Reagan administration and then as White House Counsel to President Bush) agrees that a thorough examination of what’s happening in federal agencies is in order in light of the document reveal.

“One thing we do know is that the size of the administrative state has become so large and so powerful that agencies are doing all kinds of things directly —  not just indirectly — to force action, and then intimidate and threaten more trouble if their desires aren’t met,” Gray told Townhall. “In this case, what you have is a stealth attempt to shut down businesses with no authority to do so. It’s easy enough to issue a warning, drop a hint, say something bad is going to happen to certain disfavored entities like these payday lenders to put these small borrowers out of business [with] no due process, no oversight, no jury if you will,  and no appellate judge to take an appeal.”

Gray says fortunately there is an attempt to  “track down” similar schemes and eradicate them, and speculates that the agencies  involved in these “totally illicit” activities were empowered because they expected Hillary Clinton to take the White House in 2016. Gray gives credit to the Trump administration, particularly White House attorney Don McGahn, for their efforts address the malfeasance.

“One of the great achievements of the Trump administration is to really clamp down on the worst of this,” Gray says. “The Trump team deserves a lot of credit for looking through all of this and trying to end what are ultimately authoritarian tactics.”