Operation Choke Point

[Bramblethorn]

This seems relevant to those of us who earn income selling erotica:

https://tacit.livejournal.com/609357.html

Short version: Franklin Veaux is a game designer who sells a sex game on his website. For 13 years he took credit card payments through BPS, a merchant account provider, until BPS told him they were terminating his account for unspecified "risk reasons". When he tried to find a replacement provider he was knocked back again for the same nebulous "risk reasons":

I'm not the only one this has happened to. Indeed, it's happened to lots and lots of people. The same pattern, across different businesses and different merchant account providers: A business receives a sudden notification that their merchant account (or in some cases, their business checking account) is being terminated. When they ask why, no answer beyond "risk reasons" is forthcoming. Porn performers, payday loan services, dating sites, fireworks sellers, porn producers, travel clubs...it's a very specific list of folks who are having this problem. And, not surprisingly, there's a reason for it.

The reason is the Department of Justice, which for the past couple of years has undertaken a project they call Operation Choke Point.

The goal of Operation Choke Point is to pressure businesses in morally objectionable fields out of business, by leaning on the banks that provide services to those businesses. If you can't get banking or credit card services, the reasoning goes, you can't stay in business. So the DoJ is approaching commercial banks, telling them to close accounts for individuals and businesses in "objectionable" industries.

It should be noted that the businesses being targeted are not breaking the law. Lawful businesses and individuals are losing access to lawful services because the government objects to them on moral grounds.

The banks being pressured to close accounts are reticent about talking about it; however, one business owner, whose instincts were in the right place, apparently managed to get a recording of a phone call in which his merchant account processor (EFT) told him they were pressured by the government to close the account. His recording has made it to a Congressional hearing looking into the program. (Some banks have reported being told that they would be investigated for racketeering if they failed to close accounts belonging to targeted businesses, despite the fact that the targeted businesses are acting lawfully.)

 

[sr71plt]

Diversify. One of my publishers has several imprints, including one on dog breeding (the publisher is a dog breeder and international dog show judge among other things) and one on mainstream works. That he has an erotica one also gets lost under an umbrella title attached to the dog breeding. With it all going under that for financial reporting, there's no problem in disclosure at his or my end. The accounting comes out under the umbrella imprint name. All of my writing and publishing gets reported under my licensed editorial services business.

 

[Handley_Page]

" The goal of Operation Choke Point is to pressure businesses in morally objectionable fields out of business, by leaning on the banks that provide services to those businesses. "

I have always been fascinated by this sort of nonsense.
Just who defined what as morally objectionable ? And why ?

 

[Zeb_Carter]

" The goal of Operation Choke Point is to pressure businesses in morally objectionable fields out of business, by leaning on the banks that provide services to those businesses. "

I have always been fascinated by this sort of nonsense.
Just who defined what as morally objectionable ? And why ?

Politicians...namely Eric Holder. After all at the time Operation Choke Point was put into effect, he was the top cop of the country.

 

[LadyVer]

Interesting.

 

[rjordan]

Oh Lord. Here we go again. This is older, but in the same vein as Jade Helm 15. Someone on the right runs around with their hair on fire, and the echo machine spreads it to the four corners of the country.

Spend a few minutes on google. The stated reason for Operation Choke Point is to help identify money laundering and other fraudulent and predatory financial operations like payday lenders. It was not designed, nor does it require going after "morally objectional fields." Banks are under NO obligation to close accounts on particular fields. They ARE required to "know their customers" and search for suspicious ILLEGAL activity.

The closing of adult entertainer accounts was extrapolated by that journalistic stalwart Perez Hilton who basically made it up. Then the Dead Breitbart.com site picked it up and spread it everywhere. The Washington Times, aka Moonie Times because it was founded by the head of the Moonie church, further spread the joy.

Then, of course, the Ringleader of the Winger Clown Circus, Rep. Darrel Issa picked it up and expanded it to the national level.

This is not an Eric Holder operation to take away your porn. MOST of this started with the 2001 Patriot Act to look for money laundering that benefits terrorist organizations. Most of the domestic intel programs originated with the Bush/Cheney Administration, and like all big programs, they just carry on with the next administration.

But draw your own conclusions. Why don't people check these things out for themselves and consider the source? It does no good to run around screaming with your hair on fire. Check the sources. Check the data. Grab a fire extinguisher.

rj

 

[Handley_Page]

Spend a few minutes on google. The stated reason for Operation Choke Point is to help identify money laundering and other fraudulent and predatory financial operations like payday lenders. It was not designed, nor does it require going after "morally objectional fields." Banks are under NO obligation to close accounts on particular fields. They ARE required to "know their customers" and search for suspicious ILLEGAL activity.
The closing of adult entertainer accounts was extrapolated by that journalistic stalwart Perez Hilton who basically made it up.
Check the data. Grab a fire extinguisher.

I understand your point.
However:
The goal of Operation Choke Point is to pressure businesses in morally objectionable fields out of business, by leaning on the banks that provide services to those businesses. If you can't get banking or credit card services, the reasoning goes, you can't stay in business.

In the Uk, there has been a great deal of stupidity and arguement about our "Health & Safety" legislation, resulting in such daft things as banning 'conkers' in the playground of schools (might injure a kid), or ordinary folk doing simple things; like changing an office lightbulb (might injure themselves, and similar extremes.
Mostly it comes down to "liability". A 'professional' is supposed to have the necessary Insureance cover for such problems, so we'll leave the job to them.
And thus the costs rise.

My point in mentioning this daft situation is to indicate that once a ball of some size is released, it will affect everyone, sooner or later. If the Bank feels that their reputation will suffer because a business entrepreneur of erotica is now declared "morally objectionable" then it behoves said businessman to go bang on the Chairman's desk and sort it our.
The term should be legally defined, like everything else in the State, perhaps?.

Without a bit of protest from the ordinary citizen, such stupidity can only be fostered.

 

[rjordan]

I understand your point.
However:
The goal of Operation Choke Point is to pressure businesses in morally objectionable fields out of business, by leaning on the banks that provide services to those businesses. If you can't get banking or credit card services, the reasoning goes, you can't stay in business.

In the Uk, there has been a great deal of stupidity and arguement about our "Health & Safety" legislation, resulting in such daft things as banning 'conkers' in the playground of schools (might injure a kid), or ordinary folk doing simple things; like changing an office lightbulb (might injure themselves, and similar extremes.
Mostly it comes down to "liability". A 'professional' is supposed to have the necessary Insureance cover for such problems, so we'll leave the job to them.
And thus the costs rise.

My point in mentioning this daft situation is to indicate that once a ball of some size is released, it will affect everyone, sooner or later. If the Bank feels that their reputation will suffer because a business entrepreneur of erotica is now declared "morally objectionable" then it behoves said businessman to go bang on the Chairman's desk and sort it our.
The term should be legally defined, like everything else in the State, perhaps?.

Without a bit of protest from the ordinary citizen, such stupidity can only be fostered.

The goal was NOT to pressure businesses in "morally objectional fields". That was a FALSE premise. That was my point. The goal was to pressure banks to know who they are dealing with and search out ILLEGAL activities. It was not based on moral grounds.

Some banks might be doing this for "risk reasons", because banks tend to be risk averse (except on their own financial gambles), but they are not doing it under pressure from DoJ or Eric Holder who isn't even there any more.

When you trace the origins of Operation Choke Point, you see they began with the Patriot Act and have nothing to do with morality. That was fearmongering by the American Right Wing which uses fear as their primary tool.

There are lots of reasons why banks drop accounts. So far there are only a couple of anedotal stories suggesting that morality is the reason. But nothing that can be verified.

The story about the guy selling a sex game for 13 years can't be taken on face value. It can only be considered an anecdote that others might want to check out if they are in that kind of business. Yes, be suspicious and check it out, but there's no reason to start running around blaming Obama or Holder or Hitler, fer crissakes.

So far, most of the objections to Operation Choke Point have come from banks, payday lenders (they charge effective interest rates of 400 to 1600% to the poorest among us), etc.

I'm not trying to change anyone's mind. I'm suggesting that those who think they might be affected should do some real digging for themselves to see if they need to change their mind based on actual evidence. Not on the basis of unsubstantiated rumors from proven crazy right wing sites like Dead Breitbart.com, and the Washington Times (not to be confused with Washington Post) neither of which is considered a legitimate news source by intelligent people.

rj

 

[rjordan]

Diversify. One of my publishers has several imprints, including one on dog breeding (the publisher is a dog breeder and international dog show judge among other things) and one on mainstream works. That he has an erotica one also gets lost under an umbrella title attached to the dog breeding. With it all going under that for financial reporting, there's no problem in disclosure at his or my end. The accounting comes out under the umbrella imprint name. All of my writing and publishing gets reported under my licensed editorial services business.

That's the good advice. The problem is for a smaller operation, like the guy with the sex game and a modest website which is the focus of his business. If a bank or bank employee, on their own decide to eliminate businesses on moral grounds, he is going to have a tough time hiding it when he has to provide the URL to the bank.

But, in general, I would not name my business using anything controversial if I could avoid it. Sex Toys R Us is asking for trouble somewhere. Don't have crap like that on your checks.

I doubt if adult entertainers or film stars use their stage name with their employer or contractor. I bet the checks are actually written to their real names or an innocuous DBA. I could be wrong, but I've never had the opportunity to worry about it.

If this crap is happening like some say Chase Bank is doing, then it is not under the direction of the DoJ. It is at the discretion of the bank. I turned up one article that quoted an internal source at Chase saying they would have no time for silliness like that. And when you think about it, exactly what would the bank get out of it? What's in it for them when it comes to their business?

rj

 

[Bramblethorn]

Oh Lord. Here we go again. This is older, but in the same vein as Jade Helm 15. Someone on the right runs around with their hair on fire, and the echo machine spreads it to the four corners of the country.

From the article I linked:

In addition to adult businesses, Operation Choke Point targeted small gun and ammo retailers. And there's a small, cynical voice inside my head that whispers, if they had contented themselves with going after people like me--people who make or sell things related to sex--would anyone have cared? The right-wing blogosphere is filled with angry rants about Operation Choke Point, as well it should be...but none of the angry rants mention adult businesses or porn. They all focus on guns. And I just really can't make myself believe that the people rising up against the program have my interests at heart. If it were just me, I believe we wouldn't hear a peep out of them.

Don't get me wrong--for once in my life, I'm glad the Republicans are taking action about something. But I hold no illusions that next time, they will still have my back.

I've been aware of Franklin Veaux for years, as a blogger on polyamory and related topics. As should be obvious from the quote above, he's not remotely "on the right" and I've never seen signs that he's a conspiracy nut.

Spend a few minutes on google. The stated reason for Operation Choke Point is to help identify money laundering and other fraudulent and predatory financial operations like payday lenders.

Yep. The question is whether its actual activities are consistent with that stated reason. It is not exactly unknown for government agencies to exceed their stated mandate.

 

[rjordan]

From the article I linked:

The right-wing blogosphere is filled with angry rants about Operation Choke Point, as well it should be...but none of the angry rants mention adult businesses or porn. They all focus on guns.

I've been aware of Franklin Veaux for years, as a blogger on polyamory and related topics. As should be obvious from the quote above, he's not remotely "on the right" and I've never seen signs that he's a conspiracy nut. [/I]

Yea, businesses associated with guns are also named by DoJ. See the wikipedia entry for Operation Choke Point for a full list of fields of interest.

Again, DoJ is telling banks to know that they have these customers, and monitor any suspicious ILLEGAL activity that could indicate money laundering, gun running or whatever. The DoJ set guidelines and will hold banks accountable if their customers are dealing with illegal activities. But the DoJ is not pressuring them to put legal gun vendors out of business.

It just doesn't make sense for a bank to drop profitable legal businesses. People who think so don't know much about business.

Yep. The question is whether its actual activities are consistent with that stated reason. It is not exactly unknown for government agencies to exceed their stated mandate.

Of course, it happens. And it is not unknown for businesses to take the easy way out to avoid controversy. These things could be happening. Those in the Lit community who sell erotic books should be aware of the potential and check out the risk for themselves. There are lots of people in this country unhappy with anything associated with sex. They would stop your books in a heartbeat if they could without needing any "pressure" from DoJ.

I thought your original post was useful to the Lit community. But the rhetoric from subsequent posts was starting to stray into personal fantasyland.

rj

 

[robertreams]

I volunteer! I am morally irreprehensible. I am a pornographer! I write about what people do but don't talk about. Im' the little boy who splashes the mud on the little girl's first communion dress. ( Actually we used to stomp on chocolate milk cartons.)

 

[Bramblethorn]

Yea, businesses associated with guns are also named by DoJ. See the wikipedia entry for Operation Choke Point for a full list of fields of interest.

Again, DoJ is telling banks to know that they have these customers, and monitor any suspicious ILLEGAL activity that could indicate money laundering, gun running or whatever. The DoJ set guidelines and will hold banks accountable if their customers are dealing with illegal activities. But the DoJ is not pressuring them to put legal gun vendors out of business.

It just doesn't make sense for a bank to drop profitable legal businesses. People who think so don't know much about business.

Yeah, it certainly looks nonsensical to me, but that doesn't mean it's not happening. Sometimes businesses do nonsensical things that run against their own interests, for the same sorts of reasons that any other group of human beings will make bad decisions.

Payment/financial services refusing to deal with smut seems to be a recurring thing. Chase Paymentech decided that processing payments for a condom company was a reputational risk; Smashwords changed their content rules under pressure from PayPal; various porn pros have been turned down[url] for personal and business banking services, again as "reputational risks".

I don't know how much if any of that goes back to DoJ, some of it may well be fear of the Religious Right. But whatever the cause, it's concerning. SR's suggestion to diversify seems like a good one for those in a position to do so.

I thought your original post was useful to the Lit community. But the rhetoric from subsequent posts was starting to stray into personal fantasyland.

Ah, thanks. Looks like I'd misunderstood you

 

[Edward Teach]

Oh Lord. Here we go again. This is older, but in the same vein as Jade Helm 15. Someone on the right runs around with their hair on fire, and the echo machine spreads it to the four corners of the country.

Spend a few minutes on google. The stated reason for Operation Choke Point is to help identify money laundering and other fraudulent and predatory financial operations like payday lenders. It was not designed, nor does it require going after "morally objectional fields." Banks are under NO obligation to close accounts on particular fields. They ARE required to "know their customers" and search for suspicious ILLEGAL activity.

The closing of adult entertainer accounts was extrapolated by that journalistic stalwart Perez Hilton who basically made it up. Then the Dead Breitbart.com site picked it up and spread it everywhere. The Washington Times, aka Moonie Times because it was founded by the head of the Moonie church, further spread the joy.

Then, of course, the Ringleader of the Winger Clown Circus, Rep. Darrel Issa picked it up and expanded it to the national level.

This is not an Eric Holder operation to take away your porn. MOST of this started with the 2001 Patriot Act to look for money laundering that benefits terrorist organizations. Most of the domestic intel programs originated with the Bush/Cheney Administration, and like all big programs, they just carry on with the next administration.

But draw your own conclusions. Why don't people check these things out for themselves and consider the source? It does no good to run around screaming with your hair on fire. Check the sources. Check the data. Grab a fire extinguisher.

rj

Check it out??? But, but, Sean said it! Rush said it!

 

[rjordan]

Check it out??? But, but, Sean said it! Rush said it!

That's as far as most people care to go.

If one person 30 years ago had the power that school children have today with google, that person would be undisputed Ruler of the World.

Instead of advancing intellectually, half the country seems to have seriously regressed. They've gone from Nostradamus to Nostradumbass.

rj

 

[49greg]

" The goal of Operation Choke Point is to pressure businesses in morally objectionable fields out of business, by leaning on the banks that provide services to those businesses. "

I have always been fascinated by this sort of nonsense.
Just who defined what as morally objectionable ? And why ?

Yeah, that's the thing. Some people just like to push others around. When the same person has issues with certain subjects and is in a position to screw with you ... watch out.