Nice business you have there. It would be a shame if anything happened to it. Whether the threat comes from the mob or the governor, it’s not a threat one takes lightly in New York. This time, Gov. Andrew Cuomo has ordered it be used against the National Rifle Association.
“I am directing the Department of Financial Services to urge insurers and bankers statewide to determine whether any relationship they may have with the NRA or similar organizations sends the wrong message to their clients and their communities who often look to them for guidance and support,” the governor wrote in a statement.
Whether anyone looks to bankers and insurers for “guidance and support” is a question few consider, probably because no one has ever done so, but what other words could Andy use to explain why he was using his authority over regulatory agencies to deny basic availability of private services to an organization that supported a cause he didn’t? He has to say something, and “because they’re awful and we need to destroy them” sounds a little negative. Nobody likes a governor who is negative.
The two letters caution recipients that “[t]hey are in the business of managing risks, including their own reputational risks, by making risk management decisions on a regular basis regarding if and how they will do business with certain sectors or entities.”
The New York Department of Financial Service wields no authority over how banks and insurers manage their “reputational risk,” which appears to be merely two words where one would do. And in New York City, where there is no gun culture outside of rappers, sports heroes and cops, the NRA is a pariah organization. It was before. It is now. It will likely be for the foreseeable future. So what’s new?
The Department encourages its chartered and licensed financial institutions to continue evaluating and managing their risks, including reputational risks, that may arise from their dealings with the NRA or similar gun promotion organizations, if any, as well as continued assessment of compliance with their own codes of social responsibility. The Department encourages regulated institutions to review any relationships they have with the NRA or similar gun promotion organizations, and to take prompt actions to managing these risks and promote public health and safety.
In other words, if you want the regulatory agency to smile upon you, do as you’re told, and you’re told to sever your relationships with the NRA. To promote health and safety, of course.
The question isn’t whether the NRA is a wonderful organization or terrible. The question is whether a governor, who happens to lead a regulatory agency in the financial capital of the nation, should order his agency to use its fiat in the myriad aspects of its legitimate concern to undermine the necessary business relationships that sustain an organization reflecting a disfavored political view.
No one can force banks and insurers to do business with the NRA if they choose not to. But forcing them not to is as New York as it gets. You don’t get a permit for that sidewalk cafe if you piss off a local pol, and in NY, there’s a permit for everything. There’s even a cottage industry called “expeditors” to get permits.
Usually, such abuses are at least thinly veiled, because they’re widely acknowledged to be wrong. But this isn’t really the case in places like New York, where everything is politicized and much business requires an “expediter, an imprecise term that is used to describe the men and women whose workdays are spent queuing up at the Manhattan branch of the New York City Department of Buildings to file the documents and pull the permits that allow construction projects—your kitchen renovation and the high-rise next door—to go forward,” as the New York Times put it in 2014. Expediters often bribe officials to speed up the process—or to just get anything done. Attorney John Chambers, who expedites gun permits in New York City, was recently convicted of bribing an NYPD sergeant.
The bigger the project, the higher up the process goes.
This is the business and political culture in which Donald Trump grew up and which molded his Rodney Dangerfield-in-Back to School view of the world. But with the money they wielded, Trump and company used a higher level of middlemen, including mayors, such as Abe Beame, and governors, such as Hugh Carey, to get permission for their projects and to block competitors.
Depriving the NRA of the infrastructure it needs to exist is a pretty big job, so it falls to Gov. Andy to do the dirty work. And most New Yorkers won’t lose a moment’s sleep over this latest use of regulatory authority to destroy an organization that has few adherents in the state. So what’s the problem?
Weaponizing regulatory power—if normalized—opens the door for Cuomo’s political opponents to do the same to his allies in the places where they govern. If liberals demonize the NRA, the equivalent bogeyman for their enemies is Planned Parenthood, which is vulnerable if conservative regulators adopt the same tactics. Actually, anybody who takes a controversial position on matters of public policy is at risk if the targeting of opponents through regulatory agencies becomes standard.
If the tactic is fine when used against the NRA, it will be just as fine when the tide turns and it’s used against other organizations. At some point, it could be one that New Yorkers like better than the NRA. Or the governor of another state which holds sway over banks and insurers, a redder state, may decide to pick up his phone and pen and flex his muscle.
The NRA is exceptionally controversial, but to point out why it’s the worst doesn’t make weaponizing regulatory authority to destroy an organization with a political agenda you despise a good idea. Once the bludgeon has been raised, it can fall on any organization, on any cause, that’s out of favor with the person wielding it. That may not always be your guy.