Originally published December 14 2014
Secret emails show Obama Administration targeted legal businesses with punitive financial tactics to drive them out of business
by J. D. Heyes
(NaturalNews) Top officials with the Federal Deposit Insurance Corporation, or FDIC, were looking to crack down on legal businesses that the Obama White House, or the officials themselves, believed to be morally objectionable, according to a new congressional report.
The 20-page report by the House Oversight and Government Reform Committee contained details about how the FDIC worked closely with the U.S. Department of Justice to implement "Operation Choke Point," which was a largely secretive program that sought to cut off financial livelihoods of businesses and other industries which the administration simply does not like, such as payday lenders.
The FDIC is the lead agency responsible for the regulation and auditing of some 4,500 U.S. banks.
Investigators uncovered emails indicating that regulatory officials had schemed in order to influence decisions by some banks to stop doing business with certain firms and shops deemed "reputational risks," ensuring that banks "get the message" about companies and even products that regulators and the administration do not like. The regulators pressed banks to cut off credit to such firms or close their accounts outright, which then effectively drove them out of business.
"It's appalling"
As reported by The Daily Signal:
The House panel's investigation, led by Rep. Darrell Issa, R-Calif., and Rep. Jim Jordan, R-Ohio, cites confidential briefing documents that show senior Justice Department officials informing Attorney General Eric Holder that, as a consequence of Operation Choke Point, banks are "exiting" lines of business deemed "high risk'" by regulators.
"It's appalling that our government is working around the law to vindictively attack businesses they find objectionable," Issa, the committee's chairman, said in a press release.
As listed in the report, here are some of the committee's "key findings":
-- The Federal Deposit Insurance Corporation, the primary federal regulator of over 4,500 banks, targeted legal industries. FDIC equated legitimate and regulated activities such as coin dealers and firearms and ammunition sales with inherently pernicious or patently illegal activities such as Ponzi schemes, debt consolidation scams, and drug paraphernalia.
-- Documents produced to the Committee reveal that senior FDIC policymakers oppose payday lending on personal grounds, and attempted to use FDIC's supervisory authority to prohibit the practice. Personal animus towards payday lending is apparent throughout the documents produced to the Committee. Emails reveal that FDIC's senior-most bank examiners "literally cannot stand payday," and effectively ordered banks to terminate all relationships with the industry.
-- In a particularly egregious example, a senior official in the Division of Depositor and Consumer Protection insisted that FDIC Chairman Martin Gruenberg's letters to Congress and talking points always mention pornography when discussing payday lenders and other industries, in an effort to convey a "good picture regarding the unsavory nature of the businesses at issue."
The committee also said in its report that it suspects that FDIC officials may also have "misled Congress" about the agency's partnership in Choke Point with the Justice Department.
"Internal FDIC documents confirm that Operation Choke Point is an extraordinary abuse of government power," Issa continued. "In the most egregious cases, federal bureaucrats injected personal moral judgments into the regulatory process. Such practices are totally inconsistent with basic principles of good government, transparency and the rule of law."
FDIC clearly lied
One of the emails, from Thomas Dujenski, the FDIC's Atlanta regional director, to Mark Pearce, director of the Division of Depositor and Consumer Protection, really caught the eye of investigators.
"I have never said this to you (but I am sincerely passionate about this)... but I literally cannot stand the pay day lending industry... I had extensive involvement with this group of lenders and was instrumental in drafting guidance on stopping abuses," Dujenski wrote.
In addition to payday lenders, other companies and industries have complained that Choke Point was directed at them, too, because they were politically or ideologically unpalatable to the Obama Administration, such as gun shops and ammunition sellers, tobacco sellers, home-based charities, short-term lenders and coin dealers.
See all of the questionable emails here.
Rep. Blaine Luetkemeyer, R-Mo., is leading a legislative effort in Congress to end Choke Point.
"After reviewing the FDIC report... I can confirm that our worst fears have been validated," Luetkemeyer told the St. Louis Post-Dispatch. "The report clearly shows that senior members of the FDIC lied to me, to congressional staff, to other members of Congress, and in testimony to several House Committees."
Sources:
http://dailysignal.com
http://oversight.house.gov[PDF]
http://www.stltoday.com
http://www.stltoday.com
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