WHAT THE HELL IS GOING ON? HOW THE DOJ’S “OPERATION CHOKE POINT” HINDERS YOUR BUSINESS & BANKING NEEDS By Angelina Spencer, President Empowerment Enterprises, Ltd.

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(Washington DC)–A Wisconsin gun shop owner opens an account at his local credit union in Madison, Wis., only to close it one week later, due to what he claims is government overreach with “Operation Choke Point”.

Mike Schuetz, owner of Hawkins Guns LLC in Hawkins, Wis., asked the branch manager to explain why he had to close his account. She answered that the credit union was pressured by federal regulators.  Scheutz recorded the exchange, growing convinced he is another victim of Operation Choke Point (OCP), a U.S. Department of Justice initiative to reduce fraud to financial institutions. OCP pressures banks to close business from “risky sectors” under risk of audits, fines or potential criminal sanctions.

OCP aims to prevent fraudsters from accessing consumer bank accounts by choking off their access to payment systems and to deter terrorists from sending funds overseas. Unfortunately, its effects have been felt by banks, payment processors, small business owners and corporations, with many industry officials arguing that most of the businesses targeted for account closure are legitimate.

“They told me I had to close it because I was a high-risk industry and they were not able to service me,” Schuetz told CU Times. “The local manager had a clip board from which she read off of with certain industries listed.”

Schuetz claimed the document read to him mirrored a list of high-risk merchants put out by the FDIC, which include approximately 22 industries. The FDIC later removed the “risky business” list from its website and said banks misunderstood the intent.

Schuetz’ business is located in the Wisconsin district represented by Rep. Sean Duffy (R-Wis.), chairman of the House Financial Services Oversight and Investigations subcommittee. Schuetz brought the issue to Duffy’s attention, who says he is taking Operation Choke Point seriously.

Last month, FDIC Chairman Martin Gruenberg testified before a Congressional subcommittee regarding his agency’s role in Operation Choke Point, basically back pedaling. He claimed that bank’s across the U.S. “misunderstood” OCP’s intent. Yet in one of Schuetz’ recordings, the credit union’s regional manager says the closure of the gun owner’s accounts are because of FDIC examiners.

“They came in, looked at our books, looked at everything and said, ‘Here’s some accounts we feel like we’re going to regulate you on,’ and they kind of put the screws to us on what we could and couldn’t do type thing,” the manager said.

Although the FDIC has “withdrawn” its “risky business” list, it appears both government and institutions move slowly and many banks either aren’t getting the FDIC’ s NEW memo, are ignoring it or have received a new kind of memo:


“Jimmy & Don,

I received an email today…that NPC/Best Payment Services received a “Notice of Change, Clarification and Whole Credit Policy Requirements Matrix” from First Data…

The part of the notice that affects you is  “Adult Products/Services”  which has been added to previously stated Unqualified / Unacceptable merchants, and (your accounts) must be closed immediately…Both of you have been a very valuable customer of Tinadre for the past 20 years, processing many millions of dollars through the merchant accounts we have provided you and have never any problems with your merchant accounts. I hope we can get by these problems and spend another 20 years together.”

Very Nice…. I guess Wells Fargo didn’t get the Choke Point Memo retraction from DOJ. My credit card company, Best Pay, just noticed me here in Tampa that they use Wells Fargo, and that after 19 years of handling our merchant account we have been given a 30 day notice to close the account …They said sorry … Wells Fargo has changed their position on companies accepted and anything ‘Adult’ in nature falls into CHOKE POINT and is off limits,” said Don Kleinhans, owner of Odyssey 2001. “This is really beginning to piss me off.”

Kleinhans isn’t the only one getting angry with what many feel is government overreach. Pawn shops, casinos, payday lenders, coin dealers, adult clubs, ammunition factories, gun shops, shooting ranges, magazine publishing houses, tobacco businesses, food carts, political PAC’s and individuals working in the retail, restaurant and nightclub industry have also been hit.

Last week, people rallied in front Sun Trust Bank in Brooksville, Florida to protest the institutions decision to cancel the accounts of American Gun & Pawn. Steve Champion, the gun shop’s owner told Fox News he believes “Operation Choke Point” is to blame and he says it’s hurting legitimate, legal business. More protests in other areas are planned in both Washington, D.C. and across the U.S.

“We’re a legal business…and this is a federally insured bank, and they’re closing my account. Regardless if it’s for guns or for pawn, it’s still wrong…” Champion said.

Congress held hearings last month on Operation Choke Point.  A budget amendment proposed by Sen. Mike Crapo (R-Idaho) that would strip the Department of Justice’s Operation Choke Point program of its funding was adopted by the Senate Budget Committee on March 19, according to CQ Roll Call.

“The Department of Justice must not politicize its enforcement policies, and we must not let Operation Choke Point become an end run around the Second Amendment by threatening the financial security of gun and ammunition manufacturers,” Crapo said in an article in The Daily Signal released March 19. But what about the First Amendment too—and the 14th—and the 4th? Do Americans no longer have recourse in a justice system where the basic tenant is supposed to be “innocent until proven guilty”?

Additionally, U.S. Rep. Blaine Luetkemeyer has focused on ending Operation Choke Point through legislation and requests for investigations into the program by the DOJ and Federal Deposit Insurance Corporation. He spoke at ACA International’s Washington Insights Conference, April 15 in Washington, D.C. along with Randy Neugebauer (R-Texas) and Lacy Clay (D-Mo.)  about about their efforts on Capitol Hill to end OCP. Luetkemeyer, a member of the Small Business Committee, has proposed legislation to end Operation Choke Point and was among the members of Congress who recently signed a letter to federal financial regulatory agencies asking them to end their involvement with it. Neugebauer, chairman of the Subcommittee on Financial Institutions and Consumer Credit, also signed the letter.

Has your bank closed your accounts? Are your ATM transactions being questioned?

In this Republic’s epic struggle to maintain freedom, many Americans and our financial institutions are being unilaterally duped by Operation Choke Point as it rolls through banks all over the country.  Whether or not this initiative was rigged with bias and dishonesty, Americans, both liberal and conservative, lose. If our government fails to genuinely investigate issues of potential risk in the banking industry and instead, intimidates banks into closing accounts because of bureaucratic laziness, finger pointing,  or due to some misplaced morality check, it threatens the very fabric of our flag and freedom. Our vast and subtle foray into such overreach threatens a Republic built by and for the people. Yet, if we can unite and face regulators—and find the courage to ask questions—it may prove productive. America can survive a plot to plunder legitimate businesses but what it cannot survive is our indifference to the evidence and compliant acceptance that Operation Choke Point may have succeed as the consummate form of loosely veiled censorship.


Operation Choke Point  Timeline Gallery:
http://www.americanbanker.com/gallery/timeline-operation-choke-point-1066360-1.html

Join us at EXPO: http://www.theedexpo.com/attendee-info

To learn more: http://www.acainternational.org/governmentaffairs-house-financial-services-committee-leaders-call-on-federal-agencies-to-disavow-operation-choke-point-35723.aspx

About the author: Angelina Spencer
Government Relations and Political Advocacy through Media, Analytics and Research