Nov 17, 2016
A new report from the research organization In the Public Interest (ITPI) highlights the banks that finance the private prison industry--and with a Trump administration on the horizon, they could be in for a windfall.
Six banks have played a major part in bankrolling the two largest private prison firms, CoreCivic (formerly the Corrections Corporation of America) and the GEO Group: Wells Fargo, Bank of America, JPMorgan Chase, BNP Paribas, SunTrust, and U.S. Bancorp, according to the ITPI's report, The Banks That Finance Private Prison Companies.
CoreCivic and GEO Group use the banks' financing--which comes in the forms of loans, bonds, and credit--to buy up smaller companies that conduct residential reentry and sell ankle monitors for border agents to place on detained asylum seekers. That has allowed the two corporations to quietly monopolize the corrections and immigration enforcement industries.
The banks, meanwhile, profit by collecting fees and interest on those loans, or investing their clients' money in the corporations' shares. At the end of June 2016, CoreCivic and GEO Group were $1.5 billion and $1.9 billion in debt, respectively.
Activists and lawmakers have long criticized the privatization of the prison industry and its partnership with Wall Street. As Sen. Ron Wyden (D-Ore.) toldInternational Business Times on Thursday, "It is wrong for private enterprises to bring a profit motive to incarceration and rehabilitation in this country, and I'm particularly concerned by how it's fueled by tax law. In my view, most taxpayers would be disturbed to learn that their dollars are subsidizing corporate profits from the mass incarceration of minority and low-income Americans."
And yet, as IBT points out, the relationship between Wall Street and the mass incarceration industry is likely to get a lot cozier under President-elect Donald Trump, who has previously expressed his support of privatization--especially for prisons and detention centers.
IBT's Avi Asher-Schapiro writes:
During the course of the presidential campaign, the private prison industry surfaced as an issue: Under pressure from activists, Hillary Clinton returned donations from GEO Group and eventually called for the end of for-profit detention. Trump charted a different course; the president-elect's Super PAC took in $100,000 from GEO Group, and he praised the industry on the campaign trail. "I do think we can do a lot of privatizations and private prisons," Trump told Chris Matthews last March. "It seems to work a lot better."
Benjamin Davis, a researcher with the ITPI, told Shapiro that CoreCivic and GEO Group "need Wall Street to survive. They are dependent on the debt."
Under President Barack Obama, the U.S. Department of Justice has said it would phase out the use of private detention--but under a Trump administration, IPTI expects that to change. In fact, immediately after Trump's shocking victory, CoreCivic and GEO Group's stocks skyrocketed--showing that, as In These Timesput it on Thursday, "a President Trump is just what the private prison industry ordered."
Many of GEO Group's facilities have been accused of violating prisoners' human rights. The Reeves County Detention Center in Texas was investigated by the U.S. Department of Justice in 2015, while the nearby Karnes County Detention Center was the site of a hunger strike by incarcerated mothers.
Mercedes Castillo, an immigration and criminal defense lawyer in Los Angeles, told In These Times, "I am disheartened, stressed, anxious, and at a loss. Right now, after several of my clients have called, texted, emailed, Facebooked--sat in my office and cried-- I have nothing to say but, 'I will fight for you and with you.'"
"GEO group might be licking its lips right about now," Davis told IBT. "Trump's talking tough on crime, deportations, national stop and frisk--many signs point to a momentum shift towards more private prisons."
Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.