Department of Justice “Operation Choke Point” May Be Behind Adult Entertainer Bank Account Closures
Last week I reported on banks closing accounts in good standing that belong to a number of adult entertainers and other “sex workers,” including the CEO of a condom company aimed at women. Also mentioned in the first line of that report was Matt Taibbi’s new book The Divide that examines the relationships between Attorney General Eric Holder’s Department of Justice and the world of corporate high-finance. However, the collusion between these two groups might be even deeper than reported in the book.
According to VICE News, the banks may actually be acting on instructions from the DoJ as part of “Operation Choke Point,” a plan to cut about “30 separate industries” off from banking services. Essentially, the DoJ is financially “choking” these businesses which it deems undesirable.
Along with adult entertainers, Op. Choke Point targets payday lenders, “paraphernalia” sellers, and ammunition sellers, amongst others. Again, the DoJ and banks are relatively cozy; even the highest penalties these companies pay are only a fraction of their profits. Still, these titans of finance have to pick their battles with the department. Thus cutting off certain industries is a feather in the cap for the DoJ, which helps out the bankers when the next seemingly-inevitable financial fraud scandal comes to light.
Former chairman of the FDIC wrote last week for American Banker saying that Op. Choke Point has exceeded its original mandate—to target payday lenders who disburse funds in states where such loans are illegal—and is “a direct assault on the democratic system and the free-market economy….”
According to The Guardian California Rep. Darryl Issa is demanding answers from the DoJ about Op. Choke Point. However, he is probably pursuing this investigation more because of his openly contentious relationship with Holder than out of any greater sense of duty. Still, Op. Choke Point is a troubling program that begs for the attention of the press and Congress.
Photo by Sabine Mondestin via Flickr Creative Commons