Most Personal Defense World readers probably recognize the term Operation Choke Point. What many may not realize, however, is how close we could be to seeing that travesty happen all over again.
Operation Choke Point
First, a little background for those unfamiliar with the scandal.
Specifically, Operation Choke Point began under the Barack Obama Administration, with now-President Joe Biden as Vice President. It was an illegal attempt to use the financial system—specifically banking regulations—to choke off Second Amendment rights.
At the time, the FDIC listed several merchant categories as being high-risk. This included dating services, pawnshops, payday lenders, online gambling, pornography, tobacco sales, and many others.
Unfortunately for those in the firearms industry, firearm sales and ammunition sales also made the high-risk list. In fact, the design of the “operation” was to pressure banks into doing the administration’s dirty, anti-gun work. As a result, banks felt threatened if they provided financial services to any of the “high-risk” merchant categories. Even though many were legal businesses.
Consequently, many financial institutions terminated their relationships with businesses on the list, including gun stores and other firearms businesses.
Operation Choke Point – Under Scrutiny
On May 29, 2014, the National Shooting Sports Foundation (NSSF), the firearm industry’s trade association, looked into the allegations of unfair discrimination against gun-related businesses, and the findings were shocking.
“The National Shooting Sports Foundation has been investigating the possible role of the federal government in influencing banks in their lending and business banking relationship decisions regarding companies in our industry,” NSSF said in a prepared statement. “We have heard from several industry members that they had banking relationships terminated by their lending institutions.
“We respect the right of financial institutions to make business decisions based on objective criteria. It is unacceptable, however, to discriminate against businesses simply because they are engaged in the lawful commerce of firearms, an activity protected by the Second Amendment.”
After much public scrutiny, including congressional hearings on the matter, the FDIC finally issued revised guidance on “high-risk” categories. The revised guidance excluded the list of targeted industries. But it was already too late for some businesses that had lost banking services and couldn’t survive without them.
The Return of Martin Gruenberg
At the time of the scandal, the head of the Federal Deposit Insurance Corporation (FDIC) was Martin J. Gruenberg. So, you can imagine the alarm among many pro-gun groups and others in the firearms industry when President Biden recently nominated the man so deeply involved in Operation Choke Point to again head the FDIC.
“That Biden now proposes to reappoint the FDIC chairman under whose watch Operation Choke Point decimated many lawful and creditworthy businesses is a telling and provocative move,” the National Rifle Association’s Institute for Legislative Action wrote in a member alert.
Operation Choke Point aside, many Republicans in the U.S. House and Senate had other reasons to oppose Gruenberg. Through insider dealings on the board, Gruenberg was instrumental in ousting former chairman and Trump appointee Jelena McWilliams. McWilliams is a woman and first-generation American immigrant from Serbia. Consequently, she resigned from her unfinished term as chairman on Dec. 31.
“President Biden’s appointment of Martin Gruenberg as Chair of the FDIC shows this administration has no plans to work across the aisle to build a more inclusive financial system,” North Carolina U.S. Rep. Patrick McHenry, the top Republican on the House Financial Services Committee, said.
“Instead of nominating a fresh, dynamic candidate who understands the rapidly changing role of technology in banking, the White House has opted for more of the same. Not only has acting Chair Gruenberg been a rabid partisan at the FDIC for more than a decade, but he also was a key player in Democrats’ scheme to wrest control of the Board from then-Chair Jelena McWilliams. Nominating someone who has shown complete disregard for the Board’s 88-year tradition of independence and its norms is unacceptable,” McHenry concluded.
A Strong Rebuke
Fast forward a few months, and on Dec. 19, the U.S. Senate confirmed Gruenberg’s nomination. This once again places him at the FDIC helm. The vote total in favor of the confirmation included two Republicans—Sen. Roy Blunt of Missouri and now-retired Sen. Pat Toomey of Pennsylvania—who chose to put the orchestrator of Operation Choke Point back in charge.
The confirmation vote appalled many in the firearms industry, including the NSSF.
“The Senate’s confirmation of Martin Gruenberg is a flagrant disregard for his role in illegally using the levers of government to force discriminatory banking policies on the firearm and ammunition industry,” Lawrence G. Keane, NSSF’s senior vice president and general counsel, said in a press release.
Keane continued, “His culpability in shepherding this illegal operation was not only previously investigated by Congress but was also highlighted by Senate Banking Committee Republicans. Mr. Gruenberg’s leading role in creating, administering and punishing the firearm industry through illegal means simply because he, President Barack Obama and former Attorney General Eric Holder found this industry politically disfavored clearly disqualified him from being reconfirmed to a position of public trust.”
Whether Gruenberg will use his reacquired position atop the FDIC to bolster President Biden’s continued attack on the firearms industry and lawful gun owners remains to be seen. One thing is certain: Pro-freedom groups like the NRA and NSSF will be keeping a close watch on the situation. And they will undoubtedly be quick to blow the whistle if such shenanigans begin again.
