The Corner

Operation Chokepoint: Creeping into Unconstitutionality?

Operation Chokepoint is part of the administration’s Obamaloans strategy to wipe out the small dollar lending industry that I wrote about in January. Briefly, this initiative aims at putting pressure on banks (what in other circumstances would be called “leaning on” them) to stop doing business with third-party payment processors who enable the industry to process payments. It does this by increasing oversight requirements to such levels that it becomes unprofitable for the banks to work with them. However, it has always been intended to have a wider reach. According to the administration’s own guidance, the list of disapproved industries it is targeting for supervision include not just payday loans and credit-repair services, but also firearms/fireworks sales, ammunition sales, “As Seen on TV” products, gambling, home-based charities, pornography, online pharmaceuticals, and sweepstakes.

It’s the inclusion of pornography on that list that could be the Operation’s Achilles heel. As my colleague Hans Bader notes, certain porn stars have had their bank accounts closed. That means they might have been targeted because of their protected First Amendment, erm, activities. Moreover, targeting firearms sales has Second Amendment ramifications. Hans summarizes:

I wonder how the Justice Department claims to reconcile these chilling investigations with the First or Second Amendments. The First Amendment can be violated by deliberately burdensome investigations, even in the civil context, when the investigation is aimed at a category of speech or speakers, see, e.g., White v. Lee, 227 F.3d 1214 (9th Cir. 2000) (unduly prolonged federal fair-housing investigation violated First Amendment). Indeed, it can violate the First Amendment so clearly that individual federal officials lose their qualified immunity and can be sued individually for damages, as the Ninth Circuit ruled in the White v. Lee decision. And as UCLA Law Professor Eugene Volokh and firearms law expert David Kopel have noted, restrictions can violate the Second Amendment even when they are aimed at sellers, rather than purchasers, of firearms. See, e.g., Kole v. Norridge (2013). So there are serious constitutional issues at stake here. Yet I see little legal commentary on the subject so far.

Even if the porn industry had a statistically greater incidence of financial shenanigans than a representative cross-section of the country as a whole, that would not justify the government or financial regulators in suppressing it. (See Forsyth County v. Nationalist Movement, 505 U.S. 123, 134 (1992) (security fee based on actual cost of providing security for demonstration violated the First Amendment, even though it was not based on government hostility to the speech as such, where it was effectively linked to the category of speech and its controversial nature); Alexander v. United States, 509 U.S. 544 (1993) (Kennedy, J., dissenting) (arguing for four justices that neutral application of forfeiture provisions after obscenity conviction could nevertheless violate the First Amendment, even though obscenity is unprotected by the First Amendment); NAACP v. Claiborne Hardware Co., 458 U. S. 886 (1982) (tort of tortious interference with contract could not be applied to otherwise-protected speech, even if the speech had the same negative effect on commerce as activity unprotected by the First Amendment, and the application of the law was in a sense neutral between speech and conduct)).

Operation Chokepoint is at last beginning to draw the attention of lawmakers. This week, Senator Cruz included it in his list of “lawless” acts by the administration. The Left, so far, has been silent.

Most Popular

Elections

Put Up or Shut Up on These Accusations, Hillary

Look, one 2016 candidate being prone to wild and baseless accusations is enough. Appearing on Obama campaign manager David Plouffe’s podcast, Hillary Clinton suggested that 2016 Green Party candidate Jill Stein was a “Russian asset,” that Republicans and Russians were promoting the Green Party, and ... Read More
National Review

Farewell

Today is my last day at National Review. It's an incredibly bittersweet moment. While I've only worked full-time since May, 2015, I've contributed posts and pieces for over fifteen years. NR was the first national platform to publish my work, and now -- thousands of posts and more than a million words later -- I ... Read More
White House

The Impeachment Defense That Doesn’t Work

If we’ve learned anything from the last couple of weeks, it’s that the “perfect phone call” defense of Trump and Ukraine doesn’t work. As Andy and I discussed on his podcast this week, the “perfect” defense allows the Democrats to score easy points by establishing that people in the administration ... Read More
Politics & Policy

Elizabeth Warren Is Not Honest

If you want to run for office, political consultants will hammer away at one point: Tell stories. People respond to stories. We’ve been a story-telling species since our fur-clad ancestors gathered around campfires. Don’t cite statistics. No one can remember statistics. Make it human. Make it relatable. ... Read More
Elections

Democrats Think They Can Win without You

A  few days ago, Ericka Anderson, an old friend of National Review, popped up in the pages of the New York Times lamenting that “the Democratic presidential field neglects abundant pools of potential Democrat converts, leaving persuadable audiences — like independents and Trump-averse, anti-abortion ... Read More
PC Culture

Defiant Dave Chappelle

When Dave Chappelle’s Netflix special Sticks & Stones came out in August, the overwhelming response from critics was that it was offensive, unacceptable garbage. Inkoo Kang of Slate declared that Chappelle’s “jokes make you wince.” Garrett Martin, in the online magazine Paste, maintained that the ... Read More
Economy & Business

Andrew Yang, Snake Oil Salesman

Andrew Yang, the tech entrepreneur and gadfly, has definitely cleared the bar for a successful cause candidate. Not only has he exceeded expectations for his polling and fundraising, not only has he developed a cult following, not only has he got people talking about his signature idea, the universal basic ... Read More