On May 29, House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) released a staff report,
The Department of Justice's "Operation Choke Point": Illegally Choking Off Legitimate Businesses? The report concludes that the true goal of the operation is to "choke out" certain industries, including legal businesses like sellers of firearms and ammunition, which the current administration considers politically objectionable.
The report follows the Department of Justice's (DOJ's) launch last year of Operation Choke Point, a wide-ranging investigation into banks and payment processors (the middlemen between banks and merchants in financial transactions). DOJ claimed the operation was aimed at combating mass-market consumer fraud by shutting down access to the banking and payment systems that are necessary for fraudulent businesses to operate. The justification was an alleged higher "risk profile" for consumer fraud or potentially illegal activities associated with some merchants or activities
identified by the Federal Deposit Insurance Corporation (FDIC).
These "high risk" merchants are typically characterized by high rates of unauthorized transactions, consumer complaints, or evidence of state or federal regulatory or criminal actions against the business customer. However, with no explanation or justification, the FDIC's list of high-risk merchants and activities also lumped in ammunition and firearm sales (among other legal industries) with potentially exploitative or outright illegal enterprises. No one can reasonably suggest that firearms and ammunition sellers pose the same risks of fraud to banks and consumers as Ponzi schemes, cable-box descramblers, "get rich" products, online gambling, pyramid–type sales, debt consolidation scams, and similar schemes.
As NRA
recently reported, evidence has been mounting that banks and financial institutions have been responding to the threat or potential for government investigative action and penalties by refusing to do business with legitimate law-abiding companies in the firearm industry. These decisions, moreover, are apparently being made without regard to the specific company's credit, criminal or financial history. Rather, they're predicated on the implicit threat that a bank's business relationship with a listed "high risk" merchant could be enough to trigger a federal subpoena and resulting investigation and lawsuit.
Earlier this year, Chairman Issa and Subcommittee Chairman Jim Jordan requested that the Justice Department produce documents and communications related to Choke Point. Their resulting review of the 853 pages of internal documents provided in response concludes that "Operation Choke Point is an inappropriate exercise of the Department's legal authorities, and is being executed in a manner that unfairly harms legitimate merchants and individuals."
Other key findings of the report released this week include the following:
- DOJ acted without the requisite legal basis. In furtherance of Operation Choke Point, the Department of Justice "radically and inappropriately expanded its own authority." Operation Choke Point's investigatory basis purportedly rests on subpoenas issued under Section 951 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, or FIRREA. Yet this authority was intended to give the Department the tools to pursue civil penalties against entities that commit fraud affecting banks, not to investigate consumer fraud, much less private companies doing legal business.
- Despite assertions that the government's intended goal was limited to fraudulent activity, the report finds that DOJ targeted legitimate businesses. The desired effect was clearly to have legal merchants and legitimate businesses "choked off from the financial system." Operation Choke Point, according to the report, effectively transformed the FDIC "high risk" list "into an implicit threat of a federal investigation," a reaction the DOJ anticipated. The Justice Department was aware of the impact on legitimate businesses – that banks were dumping entire sectors of business deemed "high risk" by the government -- and "dismissed them." The proffered reasoning was that banks and "legitimate" businesses would sort it out, an expectation the report likened to claiming, "if one is not a witch, then they will sink rather than float."
- Rather than have offenders prosecuted on the basis of real and sufficient evidence in a court of law, DOJ misused its authority to "forcibly conscript banks to serve as the 'policemen and judges' of the commercial world."
- The report specifically cites the consequences of labeling firearms and ammunition sales as "high risk," resulting in law-abiding firearm merchants having existing bank accounts frozen or terminated. "The experience of firearms and ammunition merchants – an industry far removed from consumer finance fraud – calls into question the sincerity of the Department's statements" regarding the scope and goals of Operation Choke Point.
Read this and tell me who will make all these determinations? If you haven't done anything to be convicted of a crime why will some bureaucrat, policeman or other government apparatchik get to violate your Second Amendment rights. Think of the VA in charge.
If the government can deny funds to States because it doesn't toe the line then the government has too much money and power.
U.S. Rep. Mike Thompson (D-CA-5), chair of the House Gun Violence Prevention Task Force, has introduced what he is calling "the Promoting Healthy Minds for Safer Communities Act of 2014." In truth, the bill is largely composed of gun control measures that mirror and supplement acts being pursued in the states by the likes of Michael Bloomberg and his "Everytown" gun control cabal.
After a nod to more general mental health reform in its first two Titles, the bill gets down to gun control in Title III. There, it explicitly authorizes the Centers for Disease Control to study "gun violence," a code phrase for smearing the concept of firearm ownership generally. It also undermines protections placed in Obamacare to prevent physicians from inappropriately collecting information about lawful firearm ownership. Some opponents of these protections claimed they were unnecessary, asserting that the healthcare legislation had nothing to do with firearms. Yet Thompson's bill would authorize doctors to question "a patient about the ownership, possession, use, or storage of a firearm or ammunition in the home of such patient," whatever the patient's need for treatment.
Title IV of the bill would expand existing prohibited person categories under the federal Gun Control Act. Outpatient mental health treatment would become prohibiting in some circumstances. Misdemeanor prohibitions would also be expanded, including an entirely new prohibition related to "stalking convictions." As defined in the bill, such convictions would not require any finding of violence or even violent intent, nor would they be limited to offenses occurring between persons with preexisting relationships. An existing misdemeanor prohibition would also be expanded to capture a much larger class of people. These prohibitions, moreover, would apply not just to future outpatient "commitments" or convictions but to those that had occurred in the past. Thus, persons who have long been in lawful possession of firearms without problem or incident could suddenly find themselves subject to federal felony penalties for continued possession.
Another provision would limit states' eligibility for certain federal grants unless the state had certain types of gun control laws or procedures. One option would be for the state to authorize police to seize the firearms and ammunition of individuals who are deemed to pose an "elevated risk of harm," even if no other criminal or mental health proceedings are initiated. Such findings, according to the bill, could arise from a "history" of substance abuse or a determination that the person "lacks impulse control." Another option would be for the state to "temporarily" prohibit firearm possession by persons involuntarily hospitalized for at least 48 hours for mental health reasons, even if just for an evaluation that ultimately determines the person does not pose an elevated risk. Because the term "temporary" is not defined, however, it could conceivably mean anything short of permanent disarmament.
Still other provisions would undermine the relief-from-disabilities provisions of the NICS Improvement Amendments Act of 2007 (NIAA). For several years, states have been changing their laws to comply with the original provisions of that act. Those changes, however, would prove meaningless if the bill were enacted. Also unclear would be the status of persons who had undergone rights restoration under the original version of the NIAA but not under the greatly expanded procedures that would be mandated under Thompson's bill.
The NRA strongly opposes this unjustified incursion on Second Amendment rights. Not only is it unjustified and expansive in its prohibitions, it exploits and stigmatizes stereotypes of the mentally ill, most of whom do not pose an elevated risk of harm.
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