USA: The banks that finance private prison companies
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Author: International Business Times
A new report released today by In The Public Interest reveals that six major Wall Street firms work in tandem with the industry: financing its debts, servicing its bonds, and extending billions of dollars in credit to pay for its operating expenses and expansion into related markets, like selling ankle GPS systems to monitor immigrants.
By acting as a credit card for private prisons, those six banks — Bank of America, JPMorgan Chase, BNP Paribas, SunTrust, US Bancorp and Wells Fargo — help the prison companies avoid corporate taxes...
The banks behind the prison industry, of course, see things differently. “We do not as a corporation take positions on public policy issues that do not directly affect our company’s ability to serve customers and support team members,” Ruben Pulido, VP of corporate communications at Wells Fargo, told IBT. “We have banking relationships with tens of thousands of companies in hundreds of different sectors, and we only do business with companies that have demonstrated a strong, ongoing commitment to complying with all applicable federal, state and local laws and regulations."...
Author: In the Public Interest
Private prison companies hold contracts to operate hundreds of prisons, jails, and immigration detention centers across the country. By profiting off of incarceration, private prison companies have a perverse incentive to make business decisions that lead to more people behind bars. Private prisons also are rife with human rights abuses, pay correctional officers less than they are paid at publicly managed prisons, and foster environments unconducive to prisoner rehabilitation.
The two private prison industry leaders, Corrections Corporation of America (CCA) and GEO Group, depend on debt financing in the form of credit, loans, and bonds to conduct their day-to-day business operations and acquire smaller companies.*1 At the end of June 2016, CCA had total debts of $1.5 billion and GEO Group had total debts of $1.9 billion.
An analysis of financial documents filed with the U.S. Securities and Exchange Commission (SEC) over the past 10 years shows that six Wall Street banks play large roles in financing CCA’s and GEO Group’s debts. These six banks—Bank of America, JPMorgan Chase, BNP Paribas, SunTrust, U.S. Bancorp, and Wells Fargo—have (1) extended revolving credit to CCA and GEO Group, (2) provided the two companies with term loans, and (3) underwritten the two companies’ bonds. For details on each bank’s involvement in CCA’s and GEO Group’s debts, see Appendix A.
By providing CCA and GEO Group with debt financing, the banks are complicit with the private prison companies in contributing to and enabling mass incarceration and the criminalization of immigration. Additionally, by collecting interest and fees on outstanding debt, the banks are complicit with CCA and GEO Group in profiting from mass incarceration and the criminalization of immigration...
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