Los-Angeles-Shooter Loc: Los Angeles

COMMENT: Obama was almost universally supported by the adult industry, despite some warnings that he was no friend of free speech...adult or otherwise. Looks like the adult industry is being hoise on its own petard.


From: http://www.xbiz.com/blogs/#178866
Article by Lawrence Walters, Attorney at Law

Censorship by Money: Snuffing Out Adult Entertainment by Denial of Banking Services

Adult film stars are reportedly having their bank accounts systematically closed by JP Morgan Chase bank, for no other reason than their connection with porn. According to industry publications and more directly, tweets from adult film performers, Chase has been busy sending letters to hundreds of performers, arbitrarily closing their accounts with the financial institution. One actress, Teagan Presley, attempted to open another account at Bank of America after her termination at Chase but was immediately denied. Our law firm has received numerous similar stories of account closures or denial of banking services.

This is not the first time financial institutions have targeted the adult industry. Last year, adult performer Chanel Preston reported being denied a loan from City National Bank in Los Angeles due to her status in the adult industry. Earlier that month, industry producer Marc L. Greenberg was also denied a loan from Chase on what the bank called “moral” grounds. Years ago, PayPal turned its back on the adult industry, and refused to process payments for most adult-oriented products and services. More recently, blogs have noted that online payment processors such as Paypal, along with WePay, have ramped up their hostility towards erotica, by shutting down accounts of bloggers involved in merely publishing content of a sexually-oriented nature.

In response to these discriminatory banking activities, a popular Change.org petition has been created, demanding that Chase reverse these decisions. The public pressure on Chase previously caused the bank to reverse its decision on the denial of payment processing services, through its subsidiary, Paymentech, to a condom sales company who challenged the action. The outrage felt by adult industry performers and publishers is certainly justified, but is the activity illegal? Certainly, private banks can do business with whomever they choose, right? That’s partially true, but there’s more to the story. Initially, there are some restrictions imposed on the banking and financial community when it comes to illegal discrimination. For example, banks cannot systematically deny loans and other services to disadvantaged minorities, without running afoul of federal law.

However, the stunning truth is that these account closures appear to be motivated by none other than the U.S. Department of Justice (DOJ), which created a leaked program dubbed “Operation Choke Point” designed to pressure banks into denying service to certain disfavored industries including “pornography.” Vice News notes that megabanks and other financial institutions, like Chase, are responding to this pressure by closing adult performers’ accounts, and denying services to other adult businesses. The banking industry, itself, seems to be uncomfortable with this governmental overarch into the financial sector. American Bankers Association CEO Frank Keating wrote a Wall Street Journal op-ed noting that the banks may have no real say in the issue, since the choices are either to comply or get slammed with a penalty. William Isaac, the former chairman of the FDIC has even called Operation Choke Point “way out of control.”

The government’s efforts in applying thumb screws to federally-regulated banks in order to snuff out erotic businesses engaged in First Amendment-protected entertainment constitutes censorship - pure and simple. Instead of falling into the realm of discretionary private business decisions that would ordinarily be protected from legal liability, denial of banking to adult industry participants at the behest of the DOJ likely violates federal civil rights conspiracy laws, including 42 U.S.C. § 1985. This infrequently-invoked federal statute prohibits two or more individuals (or government actors) from conspiring to deprive a person’s civil rights or equal protection under the law. While the statute has primarily been used in the context of racial discrimination, it could well provide a legal vehicle for claims against banks and others who have conspired with the DOJ to discriminate against adult performers based solely on their participation in erotic expression. This sort of retaliation against citizens for participating in constitutionally-protected activity is intolerable, if not illegal. The idea that our government would use the full force and intimidation of the Department of Justice to pressure banks (who are now largely indebted to the feds for bailing them out in 2008) into terminating customers it finds politically advantageous, represents a new low in governmental censorship.

Restricting the ability to access fundamental banking services can spell disaster for any business, and the DOJ presumably knows this. In fact, the author predicted this sort of governmental interference in the financial system as a means to impose censorship of erotica as far back as 2002, in the article entitled “A Chokehold on the Gatekeepers.” Cut off the ability to move money, and the business dries up.

Far from achieving its perhaps original purpose of curbing money laundering and other illegal activities, Operation Choke Point has become a means for the federal government to use banks to do its own dirty work of censoring adult businesses – something it could not do directly, thanks to the First Amendment. While affected performers and businesses may suffer in the long term, the continued popularity of digital currencies like Bitcoin and Litecoin may prove to be an important alternative for the adult industry to stay in business. Already, it has been reported that the affected businesses are flocking to Bitcoin to avoid the banking problems. While accepting Bitcoin as a payment method has inherent risks, and no one alternative currency is the perfect solution, this is another example of the Internet routing around censorship. So long as creative solutions are considered by the affected industries, the banks will lose some of their ability to control the content of entertainment and free expression.

Larry Walters has been on the forefront of defending the adult entertainment industry for over 20 years, and has defended numerous high profile obscenity cases for adult site webmasters. He operates Walters Law Group (www.FirstAmendment.com) which focuses on Internet law, First Amendment issues and intellectual property.

travelwp Loc: New Jersey

The adult entertainment industry is having it's problems, but I understand one can still get F****d enrolling in Obamacare.

silver Loc: Santa Monica Ca.

This really smells like bullshit.

Michael O' Loc: Midwest right now

Regardless of whether or not one disapproves of this particular industry, Censorship by the Federal or any other government is disgusting, degrading, destroying, and anti-American ! What will be the next Constitutionally protected freedom lost to our new socialist controllers ?

It is becoming government by and for the governing rather than the ELECTORATE. EDUCATE AND VOTE, while we still can.

Wake up America ! We veterans can attest to the fact that freedom is worth defending and, if it is not, it WILL be lost. As was said by another, "He who does not know or care about history is destined to repeat it." We are becoming another Rome.

Michael O' Loc: Midwest right now

And you are guaranteed NOT to enjoy it.

travelwp Loc: New Jersey

:thumbup: :thumbup: :thumbup:

rocketride Loc: Upstate NY

I understand that firearms-related companies are having similar problems with their banks, similarly at the behest of Holder's merry band of thugs. I'm waiting to see the "restraint of trade" lawsuits.

Blurryeyed Loc: NC Mountains.

Yes, it really smacks of bullshit, or Fascism.... one or the other because if it is not the one then it definitely is the other, it would not surprise me to find out that the blog is accurate. What would surprise me however would be the left waking up to the ever increasing threat of fascism in this country as mega corporations and bankers either through collusion or strong arm tactics team up with the government to effect predetermined social and political outcomes.

silver Loc: Santa Monica Ca.

I really think that "blurryeyed" is a good description for you. You seem to be very paranoid and you should definitely have your condition looked at. You could also take some suppositories that would not only feel good but would get your mind off of the conspiracies.

Blurryeyed Loc: NC Mountains.

Silver, you are an idiot, I have told you this before and I can see that as time passes nothing changes... Cheers!

silver Loc: Santa Monica Ca.

And to respond, your name, blurry eyed is a perfect description for you because you are very blurry on your opinions of everything. I dont think your are an idiot, just very confused by the tee hee party.

Blurryeyed Loc: NC Mountains.

So, Silver you have not proven the article false, personally I do not know the veracity of the article but if you do some research it does seem that there is noise being made that would begin to substantiate the OP. So, if the banks are doing the bidding of the administration and the DOJ by selectively barring particular industries and employees of those industries of banking services just what does that tell you? Then when you consider the favor granted to these same banks by the federal government via the FED's discount lending and financing of the banks investment portfolios at near zero interest rates, or when you understand that federal regulation can be soft or hard for these banks depending on how they respond to the administration's wishes do you not think that just maybe there may be more to the situation than meets the eye? How about GE and other large corporations who receive tax benefit and can influence governmental policy, do you not think that the federal government at times exerts pressure on these large companies to back particular policies and initiatives? Do you think that the only benefit that our government receives from these corps comes via lobbying? Or how about Holders selective prosecution of these large corporations, is it possible that the DOJ has become a big stick for the administration to wield to keep these corporations inline with their political and societal goals? How is it that no one ever goes to jail as a result of all these DOJ prosecutions? Why is it that money and future behavior modification is always the end result instead of criminal justice for all these bad actors.... Washington is exerting more and more power and influence over our corporations, it is easier for them to pay the bounty that DC asks of them and to get into line than to fight, and besides, once they conform to the demands of DC they will be taken care of as new favor will be headed their way.

Sorry Silver, but that is what is happening more and more in this country, but keep believing that yours is an honest and transparent government that is working hard for you... I may be blurryeyed, but you are just plain blinded by your faith.

silver Loc: Santa Monica Ca.

HAHAHAHAHA you just proved my point as to how muddled your brain is. You are a shining star in the tee hee party I'm sure. You are really paranoid and you should seek help for your condition.

Blurryeyed Loc: NC Mountains.

I see, so the New York banks collapse our economy and the federal response is to not only bail them out but to give them 100's of billions of dollars in interest free loans which they use to invest into stock markets all over the world and you seem to take no exception to that nor do you see any foul play there.

DOJ goes after the same banks and rather than seek criminal charges against the thieves who took our economy down with their criminal packaging of bad paper they simply extract billions from the innocent shareholders and allow the real criminals to proceed along their merry way with their 100's of millions of dollars in ill gotten gains and that does not even cause you a moments pause..... The system is rigged Silver and the government is one of the players who is benefiting from the rigged system... but in your pea sized brain I am just a wacko.... LOL you are always good for a laugh.

Los-Angeles-Shooter Loc: Los Angeles

Much abuse of firearms-related companies by Obama's federal thugs. Restrictions on inexpensive ammo from China and Russia, attempts to ban lead-containing rifle ammunition, other abuses.