‘Off the Hook’: SEC Sides With Major Bank on Government Weaponization Inquiry

FIRST ON THE DAILY SIGNAL—Bank of America will not conduct a review regarding customer data policies highlighted by a congressional investigation on weaponization of government, the Securities and Exchange Commission determined. 

As The Daily Signal first reported in December, the National Legal and Policy Center submitted a shareholder proposal seeking an internal review by the company “concerning the legality and judgment of management’s decision-making” to provide customer credit card transactions to the FBI and other agencies after the Jan. 6, 2021, protest at the Capitol. 

“If President [Donald] Trump wants to get rid of weaponization against political foes, he should know that his SEC let Bank of America off the hook for assisting in weaponization of government,” Paul Chesser, the director of the Corporate Integrity Project for the NLPC, told The Daily Signal. 

In a March 5 memo provided by both the watchdog group and Bank of America’s law firm, the SEC states: “In our view, the Proposal relates to the Company’s ordinary business operations. Accordingly, we will not recommend enforcement action to the Commission if the Company omits the Proposal from its proxy materials in reliance” on a rule that allows corporations to exclude shareholder proposals that relate to ordinary business operations. 

Bank of America didn’t have an immediate response, but a spokesperson referred The Daily Signal to a Dec. 20 letter from Bank of America attorney Ronald Mueller, with the firm of Gibson Dunn, seeking to strike the shareholder proposal, citing the aforementioned rule.

“In managing customer accounts and customer account information, the company is required to comply with the vast array of laws, rules and regulations applicable to the company and its subsidiaries,” Mueller wrote. “… Decisions regarding customer accounts, including the handling of customer information, involve legal, regulatory, operational, risk management and financial considerations that implicate detailed and extensive policies and procedures and are fundamental to the company’s day-to-day operations.”

In reported statements in November 2023, Bank of America said it followed all applicable laws in interacting with the Treasury Department and federal law enforcement regarding Jan. 6, 2021. 

The initial shareholder resolution followed the House Judiciary Committee and its Select Subcommittee on the Weaponization of the Federal Government report critical of numerous financial institutions, Bank of America among them. The report was titled,  “Financial Surveillance in the United States: How the Federal Government Weaponized the Bank Secrecy Act to Spy on Americans.” The probe was prompted by Bank of America. 

“The committee and select subcommittee began this investigation into government-led financial surveillance after a whistleblower disclosed that following the events of January 6, 2021, Bank of America (BoA), voluntarily and without legal process, provided the Federal Bureau of Investigation (FBI) with a list of names of all individuals who used a BoA credit or debit card in the Washington, D.C. region around that time,” the House report says. “In response to these allegations and corroborating testimony from FBI officials, the committee and select subcommittee requested documents from BoA and six other national financial institutions about the provision of Americans’ private financial information to federal law enforcement without legal process.”

In its February response letter to Mueller’s assertion, Chessar told the SEC that the House findings should mean the matter transcends ordinary business and is related to a significant policy issue. 

“What could be more important than the weaponization of government for political purposes?” Chesser told The Daily Signal. “President Trump referenced weaponization in his address to Congress. We based our shareholder proposal on Congressman Jim Jordan’s panel on weaponization report.” 

He added, “The Bank of America just vomited up D.C. area credit card transactions in the Jan. 6 timeframe. Even if you bought a hot dog in the D.C. area [with a credit card] your name was turned over to the FBI.”