Meet the Six Big Banks Keeping Private Prisons in Business
As the advent of a Donald Trump presidency looms, speculation about what his promises of “law and order” will mean for criminal justice reform abound. While the spectrum of theories is broad, one thing seems clear: The president-elect’s plans to deport millions of immigrants bode well for the private prison industry. The day after his election, shares of The GEO Group and CoreCivic (formerly Corrections Corporation of America), the two largest private corrections companies in the U.S., jumped 21 and 43 percent, respectively.
“There is already a shortage of beds in [Immigration and Customs Enforcement], and if Trump is indeed going to deport 2 or 3 million immigrants, they will need to be incarcerated somewhere while awaiting deportation or trial,” Benjamin Davis, a research and policy analyst with In the Public Interest, a nonpartisan, nonprofit policy research center based in Washington, D.C., told TakePart. Following the Justice Department’s directive to phase out contracts with private prison companies, he said, “it looks like the momentum may shift back toward the use of private prisons.”
Davis is the lead author of a new report that suggests another way forward for advocates looking to quash the success of the private prison industry. The report, published Thursday, identifies the six main banks that have played the largest role in financing debt issued by CoreCivic and The GEO Group, thereby enabling them to maintain and grow their businesses: Wells Fargo, Bank of America, JPMorgan Chase, BNP Paribas, SunTrust, and U.S. Bancorp. By extending revolving credit to these companies, underwriting their bonds, and providing them with term loans, the report argues, the banks are complicit in a policy of mass incarceration that has devastated families and communities.
“The banks are enabling these companies to profit off the criminal justice system,” said Davis. “If these companies didn’t have access to revolving credit, it would become much harder for them to finance their businesses.”
Though a Trump presidency may mean more business for private prison companies, advocates for divestment have long been pushing to weaken the power of the corrections giants via the banks that support them. In Portland, Oregon, Amanda Aguilar Shank has been pushing the city council to recommend that the city end its investments in Wells Fargo for more than three years. As deputy director of the racial and economic justice organization Enlace, Aguilar Shank and local activists successfully organized for the creation of a Socially Responsible Investing Committee for the city. The SRIC began reviewing the city’s investments two years ago to consider which “should go on the ‘do not buy’ list,” according to Aguilar Shank.
“Wells Fargo is at the top of the list,” Aguilar Shank told TakePart. “They have showed up every time GEO or [CoreCivic] was trying to sell bonds—they’ve long been a target for the prison divestment movement.”
Next week the Portland City Council will present a list of 10 companies it recommends the city cut ties with. On Nov. 30, it will hear testimony from those opposed to or in support of the recommendations.
“Under Trump, who is openly racist and xenophobic, we can be certain that policies of detention and deportation will persist unless we’re able to find a different way to leverage our power,” said Aguilar Shank. “Leveraging our money is one of those ways. Our strategy has always been to economically isolate the prison industry, and that’s even more important now.”
Wells Fargo’s ties to the private prison industry are just the latest unflattering revelation about the bank. In September, the Consumer Financial Protection Bureau revealed that Wells Fargo workers had opened more than 2 million fraudulent bank or credit card accounts to appease the company’s sales goals program. More than 5,000 employees were fired after the allegations went public. Following the scandal, the state of California severed most of its business with the bank. In October, CEO John Stumpf resigned after Sen. Elizabeth Warren called for criminal charges to be brought against him. The bank also made the list of institutions financing the controversial $3.8 billion Dakota Access pipeline.
Jeff Ordower, an organizer with the national ForgoWells campaign, which encourages cities and states to stop doing business with the bank, thinks the string of embarrassments is good news for the divestment movement.
“These things have opened the floodgates for folks to have a larger analysis of how bad Wells Fargo is,” Ordower told TakePart. “If anything, cities are emboldened. More than ever, folks understand the pernicious nature of these banks in our lives.”
If Portland’s full City Council votes to recommend divesting, it will be the second city to do so. In July, Berkeley, California’s City Council adopted a resolution that appealed to the city to divest from the private prison industry. The resolution is under consideration by the city’s finance department. In 2015, Columbia University became the first university to divest from private prison and security companies. Later that year, the University of California system followed, divesting $25 million from the industry.
“This is one of those moments when our local leaders can decide to stand with us and decide what side they’re on,” said Aguilar Shank. “Divesting from prisons is another way they can tell the immigrant community in Portland that they care.”