Targeted? Gun sellers say ‘high risk’ label from feds cuts
off banking options, restricts business
Obama plan pressures financial
institutions
By Kelly Riddell
The Washington Times
Sunday, May 18, 2014
Gun retailers say the Obama administration is trying to put
them out of business with regulations and investigations that bypass Congress
and choke off their lines of credit, freeze their assets and prohibit online
sales.
Since 2011, regulators have
increased scrutiny on banks’ customers. The Federal Deposit Insurance Corp. in 2011 urged banks to better
manage the risks of their merchant customers who employ payment processors,
such as PayPal, for credit card
transactions. The FDIC listed gun
retailers as “high risk” along with porn stores and drug paraphernalia shops.
Meanwhile, the Justice Department has launched Operation Choke Point, a credit card fraud probe
focusing on banks and payment processors. The threat of enforcement has
prompted some banks to cut ties with online gun retailers, even if those
companies have valid licenses and good credit histories.
“This administration has very
clearly told the banking industry which customers they feel represent
‘reputational risk’ to do business with,” said Peter Weinstock, a lawyer at
Hunton & Williams LLP. “So financial institutions are reacting to this
extraordinary enforcement arsenal by being ultra-conservative in who they do
business with: Any companies that engage in any margin of risk as defined by
this administration are being dropped.”
A Justice Department
representative said the agency is conducting several investigations that aim to
hold accountable banks “who are knowingly assisting fraudulent merchants who
harm consumers.”
“We’re committed to ensuring that
our efforts to combat fraud do not discourage or inhibit the lawful conduct of
these honest merchants,” the Justice Department said in a May 7 blog post.
But gun retailers say their
businesses are being targeted in the executive branch’s efforts:
• T.R. Liberti, owner and operator
of Top Gun Firearms Training & Supply in Miami, has felt the sting firsthand. Last
month, his local bank, BankUnited N.A., dumped his online business from its
service.
An explanatory email from the bank
said: “This letter in no way reflects any derogatory reasons for such action on
your behalf. But rather one of industry. Unfortunately your company’s line of
business is not commensurate with the industries we work with.”
• Black Rifle Armory in Henderson, Nevada,
had its bank accounts frozen this month as the bank tried to determine whether
any of Black Rifle’s online transactions were suspicious.
• In 2012, Bank of America suddenly dropped the 12-year account of McMillan
Group International, a gun manufacturer in Phoenix, even though the company had a good
credit history, the owner said. Gun parts maker American Spirit Arms in Scottsdale, Arizona,
received similar treatment by Bank of America, the country’s largest banking
institution.
“This seems to be happening with
greater frequency and to many more dealers,” said Joe Sirochman, owner of American
Spirit Arms. “At first, it was the bigger guys — gun parts manufacturers or
high-profile retailers. Now the smaller mom-and-pop shops are being choked out,
and they need their cash to buy inventory. Freezing their assets will put them
out of business.”
Choking off access to banks
After McMillan Group owner Kelly
McMillan publicized Bank of America’s action on his Facebook account, he found
that thousands of small gun-shop owners across the country were in the same
situation. Banks were either dropping them, freezing their accounts or refusing
to process their online sales, so he opened a credit card processing company
for the gun industry called McMillan Merchant Solutions.
“Four generations of my family
have been in this industry. This is my way to give back,” said Mr. McMillan, adding
that many of his customers were denied banking access because of the nature of
their business. “This is an attempt by the federal government to keep people
from buying guns and a way for them to combat the Second Amendment rights we
have. It’s a covert way for them to control our right to manufacture guns and
individuals to buy guns.”
Federal Deposit Insurance Corp (FDIC)
John
C. Dugan was director at the Federal
Deposit Insurance Corporation (FDIC), a comptroller for the Comptroller of the Currency, and is a partner at Covington & Burling LLP.
Note: Cantwell
F. Muckenfuss III was the counsel to the chairman for the Federal Deposit Insurance Corporation (FDIC), a senior
deputy comptroller for the Comptroller
of the Currency, and is a director at the Roosevelt Institute.
Foundation
to Promote Open Society was a funder for the Roosevelt Institute, the Committee
for Economic Development, and the NAACP
Legal Defense & Educational Fund.
George Soros
was the chairman for the Foundation to Promote Open Society.
Eugene A. Ludwig
is a trustee at the Committee for
Economic Development, was a comptroller for the Comptroller of the Currency, and a partner at Covington & Burling LLP.
Michael D. Barnes
was a senior of counsel at Covington
& Burling LLP, and the president of the Brady Campaign to Prevent Gun Violence.
Covington
& Burling LLP was the lobby firm for the Bank of America Corp. (Bailout Company), and is the lobby firm for Chiquita Brands International, Inc.
Lawyer for Chiquita in Colombia Death Squad Case May be
Next U.S. Attorney General
Dan Kovalik
USW Counsel, Workers Uniting Colombia Committee
Posted: November 6, 2008 05:12 PM
Indeed, Holder
himself, using his influence as former deputy attorney general under the Clinton Administration, helped to negotiate Chiquita's sweeheart deal with the Justice Department in the criminal case against Chiquita. Under this deal,
no Chiquita official received any jail time.
Eric H. Holder Jr.
was a partner at Covington & Burling
LLP, an intern at the NAACP Legal
Defense & Educational Fund, a board member for the American Constitution Society, Chiquita
Brands International, Inc. was his client, and is the attorney general at
the U.S. Department of Justice for
the Barack Obama administration.
Janet
Reno is a board of adviser’s member for the American Constitution Society, and was the attorney general at the U.S. Department of Justice for the William J. Clinton administration.
Mario
M. Cuomo is a board of adviser’s member for the American Constitution Society, and his daughter is Maria Cuomo Cole.
Maria Cuomo Cole
is Mario M. Cuomo’s daughter, and a
trustee at the Brady Center to Prevent
Gun Violence.
Open
Society Foundations was a funder for the American Constitution Society, and the Atlantic Council of the United
States (think tank).
George
Soros is the founder & chairman for the Open Society Foundations.
Richard W.
Edelman is a director at the Atlantic
Council of the United States
(think tank), and the president & CEO for Edelman.
PayPal
is an Edelman client.
Chiquita
Brands International, Inc. is an Edelman
client.
Linda P. Hudson
was a director at the Atlantic Council
of the United States
(think tank), and is a director at the Bank
of America Corp. (Bailout Company).
Charles O.
Rossotti is a director at the Atlantic
Council of the United States
(think tank), a director at Booz
Allen Hamilton, and was a director at the Bank of America Corp. (Bailout Company).
Robert S. Osborne
is the EVP & general counsel for Booz
Allen Hamilton, and a member of the Commercial
Club of Chicago.
Cyrus F.
Freidheim Jr. was a managing director at Booz Allen Hamilton, the chairman & CEO for Chiquita Brands International, Inc, is
a member of the Commercial Club of Chicago,
and an honorary trustee at the Brookings
Institution (think tank).
Foundation
to Promote Open Society was a funder for the Brookings Institution (think tank).
George Soros
was the chairman for the Foundation to Promote Open Society.
A.W.
Clausen was an honorary trustee at the Brookings
Institution (think tank), and the chairman & CEO for the Bank of America Corp. (Bailout Company).
Robert
A. Helman was an honorary trustee at the Brookings Institution (think tank), is a partner at Mayer Brown, and a Commercial Club of Chicago.
Mayer
Brown was the lobby firm for the Bank
of America Corp. (Bailout Company).
William M. Daley
Professional career
Daley returned to the practice of law, as a partner with the
firm Mayer Brown (then Mayer, Brown & Platt) from 1993 to 1997.
William
M. Daley was a partner at Mayer
Brown, the chief of staff for the Barack
Obama administration, and is a member of the Commercial Club of Chicago.
Walter
E. Massey is a member of the Commercial
Club of Chicago, and was the chairman for the Bank of America Corp. (Bailout Company).
Penny S. Pritzker
is a member of the Commercial Club of
Chicago, the secretary of the U.S.
Department of Commerce for the Barack
Obama administration, was the
national finance chair, fundraiser for the 2008
Barack Obama presidential campaign, a co-chair for the 2009 Barack Obama inaugural committee, a fundraiser, national
co-chair for the 2012 Barack Obama
presidential campaign, a contributor for the 2013 Barack Obama inaugural committee, the host for the Barack Obama fund-raising dinner, 7/2/2008,
and a member of the President's Council
on Jobs and Competitiveness.
Monica
C. Lozano was a member of the President's
Council on Jobs and Competitiveness, and is a director at the Bank of America Corp. (Bailout Company).
Donald E. Powell
was a director at the Bank of America
Corp. (Bailout Company), and the chairman for the Federal Deposit Insurance Corporation (FDIC).
John
L. Douglas was an attorney for the Bank
of America Corp. (Bailout Company), and the general counsel for the Federal Deposit Insurance Corporation (FDIC).
Cantwell
F. Muckenfuss III was a counsel to the chairman for the Federal Deposit Insurance Corporation (FDIC), and is a
director at the Roosevelt Institute.
George Soros
was the chairman for the Foundation to Promote Open Society.
Paul
S. Sarbanes is a governor at the Roosevelt Institute, and
was Martin J. Gruenberg’s senior
counsel.
Martin J.
Gruenberg’s senior counsel was Paul
S. Sarbanes, and is the chairman for the Federal Deposit Insurance Corporation (FDIC).
Jonathan
Soros is a senior fellow at the Roosevelt Institute,
George Soros’s son, the vice chairman for the Open Society Foundations, and was the vice
chairman for the Foundation to Promote
Open Society.
Open
Society Foundations was a funder for the Atlantic Council of the United
States (think tank).
George
Soros is Jonathan Soros’s
father, the founder & chairman for the Open
Society Foundations, and was the chairman for the Foundation to Promote Open Society.
Foundation
to Promote Open Society was a funder for the Roosevelt Institute, and the Aspen
Institute (think tank).
PayPal
is an Edelman client.
Richard W.
Edelman is a director at the Atlantic
Council of the United States
(think tank), and the president & CEO for Edelman.
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