As have many administrations, President Barack Obama and federal agencies have unilaterally expanded their power far beyond their original authority. One brash example of this was the revelation last year that the Obama administration was going after perfectly legal businesses in sectors it dislikes, such as the gun and tobacco industries, through an orchestrated effort known as Operation Choke Point. Now, targeted businesses are starting to fight back by going public with recorded evidence of the government’s intrusions.

Under the guise of going after fraudsters, the Federal Deposit Insurance Corp. and the Justice Department have designated broad categories of businesses as “high risk,” and threatened banks with investigations in order to get them to shut down accounts and cut off the businesses’ access to capital.

Operation Choke Point reportedly has broadly targeted more than 20 industries, sweeping up absolutely legitimate businesses such as guns and ammunition dealers, tobacco dealers, coin dealers, payday lenders, dating services and sellers of will-writing kits, alongside patently illegal operations like debt consolidation scams and Ponzi schemes.

Brennan Appel owns Global Hookah Distributors (SouthSmoke.com), a tobacco parts distributor in Charlotte, N.C. Last year, he received a notice from Bank of America, terminating their 12-year business relationship and closing all his accounts – both business and personal – without any explanation. Mr. Appel was given two weeks to notify his customers, transfer his payroll and make other arrangements.

“It cost us business as a result,” he told me. He says the same thing has happened to five or six other businesses he knows in the industry.

Then in February, Mr. Appel’s payment processor, EFT Network, similarly told him it had to sever its business ties, citing the “risk” of his business. After doing some research, he stumbled upon information about Operation Choke Point and realized, “This is exactly what happened to us.” He reported his story to the U.S. Consumer Coalition, which is collecting such case studies.

In a recorded conversation with the president of EFT Network, Alex Bacon, Mr. Bacon explained that Operation Choke Point was behind Mr. Appel’s account closure, and that his own company had also been a target. Mr. Bacon then described the power wielded by the bank regulators if banks do not comply. “[Bank examiners say] ‘We’re going to make your life miserable. Instead of auditing you once a year, we’re going to audit you four times a year. And now we’re going to come in and look at all of this, and if we find anything negative, we’re going to write it up, and then you’re going to incur increased cost, increased focus with your board of directors and from other banking regulators.’ And they all run scared because they’re all sheep.” Audio clips of the conversation are available at the USCC website.

The federal agencies’ actions are “an abuse of power,” Mr. Appel said. “Now it’s 30 industries, maybe next year it will be 60.” Politicians “talk about job creation, [but] all you’re trying to do is hurt industries,” he asserted. “Instead of focusing on growth, investment, job development, businesses spend energy shifting accounts around.”

When the government has the power to shut down businesses merely because it does not like what they do, there is no rule of law or due process. The government becomes an arbitrary dictatorship.

The Obama administration likes to preach tolerance toward skin color or sexual orientation, yet it displays an astonishing intolerance when it comes to free-market capitalism and simply making a living in certain (legal) lines of business. Toleration of people and things with which we most ardently disagree is the mark of a free society. It is time government learns that this applies as much to business as it does to biology.