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Pot Advocacy Group Gets Taste of Financial Sector Exclusion - IceWizard - 07-26-2015
A financial services company gives a prominent reform group the boot, then backtracks.
The Marijuana Policy Project, an advocacy
group that urges reform of state and federal
laws, was told July 7 they would need to find a
new provider for employee retirement plans.
July 24, 2015 | 5:13 p.m.
Earlier this month, a financial services company informed one of the nation’s largest
marijuana advocacy groups that its business was no longer welcome, adding an unexpected twist to public debate about the de facto banking ban affecting state-legal pot businesses.
Capital Group’s decision to cast off the
Marijuana Policy Project’s employee retirement
accounts was reversed Friday, after calls from
the media and concern from Capitol Hill.
The company isn’t saying much publicly about its decision or reversal, but a spokesperson who asked not to be named said prodding from government officials was not involved, as was first suspected.
The spokesperson said the company must meet “complex and time-consuming†burdens when dealing with marijuana-related businesses. The MPP does not sell marijuana, but its name may cause confusion among people unfamiliar with its advocacy work.
[RELATED: Major Pot Reform Bill Introduced in Senate]
"The people here at MPP are Web designers,
fundraisers and policy analysts like myself who
don’t touch the plant, let alone sell it," says Dan Riffle, the MPP's director of federal policies.
Pot-dispensing businesses operating in
compliance with state medical or recreational
use laws are breaking federal law, which bans
almost all possession or sale of the drug.
The Obama administration allows state-regulated sales for medical and recreational use, but risk- averse banks have largely stayed on the sidelines, forcing many businesses to deal exclusively in cash.
Suspicion of responsibility for the MPP dilemma initially fell upon the Treasury Department’s Financial Crimes Enforcement Network, also known as FinCEN, which reformers hold partially responsible for banks’ decisions to refuse service to marijuana businesses.
But spokesman Steve Hudak tells U.S. News
FinCEN had no involvement and “does not
provide private advice to businesses concerning what business lines they pursue.â€
The division sets guidelines for financial institutions – clarifying them regarding pot businesses last year – and Hudak says “it is up to them to make business decisions.â€
[DATA: Fewer Pot Packages Found in Mail As Legalization Takes Hold[/color]]
Amy O’Leary, vice president at Capital Bank and Trust – a branch of Capital Group – informed the MPP of the decision in a letter earlier this month, but declined comment to U.S. News in a brief phone conversation.
Jim Gibney of Lincoln Financial Advisors, who is the MPP’s plan adviser, did not respond to emailed questions or answer his office phone.
The matter piqued the interest of others with
expertise this week. Rep. Sam Farr, D-Calif., said it would be “downright scary†if officials had leaned on the company and that it would raise serious First Amendment concerns.
Eugene Volokh, a law professor at UCLA, said it would be unconstitutional for government
officials to target the MPP because it’s an
advocacy group. But he said it may be legal to
target donations indirectly from pot businesses
in a viewpoint-neutral manner.
If Capital Group's telling is accurate, the issue is not the unconstitutional squelching of speech rights, but rather a permitted business decision made to the disadvantage of a marijuana- related organization.
The issue for the MPP comes as Congress
again considers lifting banking barriers for pot
businesses. On Thursday, the Senate
Appropriations Committee voted 16-14 to ban the use of federal funds to penalize banks that
serve state-legal marijuana businesses.