It is bad enough when the heavy hand of government uses its regulatory authority to stymie private industry, but these days, the federal government is going even further and using its enforcement authority to threaten an entire sector of our economy.
This week I’ll take a look at one such government action, one that is so nefarious, it requires a code name.
Such is the case involving Operation Choke Point.
This operation sounds like it’s out of a movie, but it is all too real.
Earlier this year I learned about this operation, in which the Federal Deposit Insurance Corporation loaned investigators to the Justice Department in a hostile attempt to take down nondepository lenders they believe have no moral right to exist.
Also involved in this operation, with the blessing of the Obama Administration, was the Consumer Financial Protection Bureau which operates independent of Congress and has extensively broad authority to persecute private industry.
In an effort to drive these legally-operating, licensed and regulated lenders out of business, banking regulators, in cahoots with the Justice Department, are placing so much regulatory pressure on financial institutions that nondepository lenders are eventually “choked-off” from the financial services they need to survive.
That was the very description given by a Justice Department official on Operation Choke Point.
Consider that for a moment: we aren’t talking about businesses that are breaking laws.
We are talking about businesses operating legally, yet our government believes it has the moral authority to try and shutter an entire portion of the private sector which is playing by the rules based on a moral assessment made by federal bureaucrats and political appointees.
This sets a very dangerous precedent that if the government doesn’t like your business, it will just apply enough regulatory pressure on the financial institution that serves you in order to force it to drop you as a client and make it impossible for you to function.
Even worse, in this circumstance we have an agency created to preserve and promote public confidence in the U.S. financial system working with a Justice Department which has at best a questionable reputation these days running a secret war against this industry that adds insult to injury.
It is chilling to think that another Justice Department secret operation known as Fast and Furious led to the release of hundreds of weapons to criminals in Mexico and ended with the death of a border agent and Mexican nationals.
If government bureaucrats object to nondepository lenders as they have in this case, what about other areas of the private sector economy?
Well, other “high risk” merchants and activities listed in a presentation given by Chief of the FDCI’s Cyber-Fraud and Financial Crimes Section Michael Benardo include, for now: ammunition sales; firearms and fireworks sales; tobacco sales; and pharmaceutical sales.
During a recent hearing of the Financial Services Committee, I questioned FDIC Acting General Counsel Richard Osterman vigorously about the agency’s involvement with Operation Choke Point and made it crystal clear the operation was a clear example of a government running out of control.
In my opinion, after reviewing a variety of documents and speaking with bankers firsthand, we now have not just a shadow banking system but also a shadow regulatory system, one that is undoubtedly being nurtured by the White House.
While I have been unsatisfied with the responses I’ve received on this matter from the FDIC and Justice Department, many of us in Congress are working to get to the bottom of this operation.
Both the Financial Services Committee and the House Oversight and Government Reform Committee are continuing to go through extensive documentation, most of which the Justice Department was ordered to produce by Congress, to hear firsthand accounts of regulatory pressure in an effort to bring the entire story of Operation Choke Point out in the open.
A government that is left unchecked results in tyranny, and as your elected representative, I cannot sit back and allow that to happen.
There continues to be a dangerous and disturbing trend: overreach, covert programs and blatant mistruths from an out of control executive branch.
Today it stems from Operation Choke Point, but we’ve seen it with the IRS scandal, the lies surrounding the Benghazi terror attacks, the aforementioned Fast and Furious program – all of which beg the question of what might come to light next.
I am committed to working with my colleagues to end these abuses of the people’s government.
We are in the process of connecting the dots and hope to soon have a full account of Operation Choke Point and the motives of the FDIC and Justice Department, as well as answers on what other federal agencies may be involved.
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For those without access to the Internet, I encourage you to call my offices in Jefferson City (573-635-7232) Washington, Mo. (636-239-2276), or Wentzville (636-327-7055) with your questions and concerns.
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