- - Wednesday, June 6, 2018

ANALYSIS/OPINION:

Did you recently request an Uber? Order something on Amazon? Purchase a coffee using a credit card?

If the answer to any of those questions is “yes,” then you just benefited from payment processors.

Payment processors are the underappreciated, critical and essential backbone of the American economy. They act as the middlemen and merchants of all credit card transactions in the American economy. When Visa, MasterCard or American Express want to do business, they typically go through payment processors such as Stripe, PayPal, Square or Due. They act as the proverbial middlemen.

“Operation Chokepoint” was an Obama-era program designed to investigate and punish businesses that engage in commerce that the Obama administration deemed to be on the “fringe.” Included on this long list is “FinTech,” which includes all payment processors and currency innovators. Via the Department of Justice, President Obama used the Federal Trade Commission (FTC) to go after specific industries and business owners.

Just think for a second — why are we spending hundreds of millions of dollars of taxpayer money to go after our own successful industries and businesses that are essentially the backbone of American business?

In August 2017, President Trump directed the Department of Justice to end “Operation Chokepoint” immediately. This was the correct and courageous decision. Right after the move it was predictably met with harsh backlash from deep-state bureaucrats.

However, new evidence that I have personally witnessed shows that there might be a new scandal brewing within the FTC. There is monumental evidence to suggest that there are top tier regulators defying Mr. Trump’s termination of “Operation Chokepoint” and continuing the targeting of payment processors.

The FTC is using its $330 million annual budget to target U.S.-based FinTech businesses. Despite Mr. Trump’s directive to end “Operation ChokePoint,” there is still overwhelming evidence this is still occurring.

Several targets of the FTC’s investigations agreed to speak with me on condition of anonymity and fear of backlash. I spoke and met with dozens of CEOs who process more than $1 trillion in transactions annually.

One told me, “I have been in business over 30 years and have been compliant with FTC regulation and every single law on the books. For a reason I cannot understand, I am being investigated by the FTC in baseless claims. This is a continuation of operation chokepoint that was started by Obama and allegedly ended by Trump in August, but all evidence suggest this program is still very much alive. We are trying to expand our business yet our own government and tax dollars is preventing this, why are our tax dollars working against American job creation?”

The more I investigate this topic and the more people in FinTech I talk with, the more “investigations” from the FTC I discover. This feels very similar to the 2014 scandal within the IRS that resulted in Lois Lerner losing her job and the IRS being put under intense scrutiny.

In addition to unprecedented amounts of Civil Investigative Demands (CIDs) issued from the FTC, they also possess the power to confiscate the full sum of payments that the payment processors made for a merchant.

For example, imagine a payment processor like PayPal was doing the payment processing for an airline, and 5 years later, the airline went out of business and had a few customers issue a complaint with the FTC. Based on new power granted to regulators and the FTC, they can and have demanded the payment processor to fork over the entire sum total of purchases transacted — even though the money simply passed through the payment processor and was never actually in their possession. The FTC has demanded full seizure of assets from particular FinTech companies such as Universal Processing Services of Wisconsin, which has filed a federal lawsuit against the FTC and hopes to have it go all the to the Supreme Court.

I have had the chance to speak to more than 10 congressmen and senators on this issue, many of whom are considering congressional inquiries and a potential full-fledged investigation into the FTC’s practices.

One congressmen, who wished to not be named on the record due to his work facilitating oversight, told me, “All signs point to and suggest the aggressive continuation of Obama’s Operation Chokepoint. If we do not get solid answers soon from the FTC, we will have to start hosting hearings and using every power vested in the U.S. Congress to get to the bottom of this.”

Mr. Trump is doing a miraculous job turning this country around from high taxes, regulation and nonsensical rules that prevent us from being competitive on an international scale. With all that being said, this growing issue at the FTC must be immediately addressed before we have another deep-state scandal that proves anti-Trump forces were using their unlimited power to punish those with which they disagree.

Mr. Trump must call upon new FTC Commissioner Joseph Simons to cease all FTC action targeting payment processors and reinforce the complete and total end to “Operation Chokepoint.”

The American people are growing very skeptical of the unelected, unknown and unaccountable branches of government targeting American consumers and business. Congress and the president must immediately and decisively put an end to this unconstitutional and reckless targeting immediately before more collateral damage ensues.

• Charlie Kirk is the founder and executive director of Turning Point USA.


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