Citing “Reputational Risk,” Major Bank Cuts Ties With Michael Flynn
Michael Flynn’s very public fall from grace was swift and stunning. One minute he was a decorated Army lieutenant general and national security adviser to the president of the United States. The next, he was an admitted felon (for lying to the FBI), and recipient of a presidential pardon before transitioning to be an adherent to the false, discredited QAnon conspiracy theory.
Now it appears that he is persona non grata in the banking world. On Sunday Flynn posted on his Telegram account that financial giant Chase has informed him that it is severing its banking ties with him “because continuing the relationship creates possible reputational risk to our company.” Flynn posted a portion of a partially redacted letter, dated Aug. 20, informing him of the bank’s action effective Sept. 18.
🚨🚨BREAKING: Chase Bank cancels its credit card accounts with General Flynn citing possible “reputational risk” to their company. In case there was any doubt what is happening in this country. @TracyBeanzOfficial pic.twitter.com/GIyQHXgW9l
— Regina Hicks (@reginahicksreal) August 29, 2021
Whether admitted liar Flynn’s post is based on the truth has not yet been determined. But Harsh Pandya, a social scientist at the company Giant Oak whose technology helps fight financial fraud, said situations like Flynn’s – where a decision to sever a banking relationship appears to have been based solely on negative news – do happen, but they are rare.
“[Credit card] Issuers do definitely monitor the names of their customer base for what in the card business is called negative news,” Mike Brauneis, North American leader of the financial services practice at consulting firm Protiviti told creditcards.com. “Think about it like a Google search on steroids where there’s services like LexisNexis, for example, that maintain databases that aggregate public records and public news stories.”
He estimated that fewer than five percent of negative news matches trigger further scrutiny by a card issuer and even fewer accounts actually merit closure based on that scrutiny.
As a reminder, Flynn pleaded guilty in 2017 to lying to the FBI about his contacts with Russian ambassador Sergey Kislyak and then cooperated extensively with prosecutors. But he ultimately reversed course and accused the government of trying to frame him. Flynn went so far as to withdraw his first plea of guilty and substitute a second plea of not guilty, even though he’d acknowledged the underlying conduct that was against the law and been close to receiving a sentence. Trump pardoned Flynn just before Thanksgiving 2020.