The private prison industry is motivated by supposed relative efficiency largely due to facilities operating without as much public oversight as their government-owned counterparts. When the prison population swelled to over 2 million under drug prohibition policies that persist today, overcrowded facilities received negative press for violating international human rights standards.
A new report from The Center for Popular Democracy (CPD) verifies that while private prison facilities contain a range of violations, these institutions are significantly hindered by recent banking divestments to the tune of almost $1.93 billion.
$2 billion of projected losses to this industry is an enormous impact. Divesting banks include JPMorgan Chase, Wells Fargo, Bank of America, SunTrust, BNP Paribas, and Fifth Third Bancorp.
The anti-financing strategy to topple private prisons is championed by groups like #BackersofHate and #FamiliesBelongTogether — as noted by the CPD report. The combination of violations in prison and immigrant detention facilities has led to awareness about the need to shut these facilities down and defund their parent companies. But the finance sector is notoriously elusive.
This is especially the case given the complex real estate investment trust (REIT) funding and tax code schemes that ignore income tax payments. CoreCivic (formerly Corrections Corporation of America) and GEO Group (formerly Wackenhut Corrections Corporation), the two most prominent private prison companies, no longer receive Wall Street financing.
Public pronouncements are one thing and paper quite another. Who’s monitoring financial arrangement loopholes: how can the public corroborate these findings?
GEO and CoreCivic acknowledge the financial blow to their bottom lines in the long run: “Public resistance to the use of public-private partnerships for correctional, detention and community-based facilities could result in our inability to obtain new contracts or the loss of existing contracts, impact our ability to obtain or refinance debt financing or enter into commercial arrangements, which could have a material adverse effect on our business, financial condition and results of operations.”
With that knowledge of the industry’s own precarity, companies may use more covert means to stay afloat. For example, detention facility company Caliburn borrows from both SunTrust and Bank of America: two banks supposedly divesting from private prison funding.
How can financial relationships like this one be proven? Not easily, given the inherently private nature of capital investment transactions.
Enter the Private Prison Information Act (PPIA), which would allow for us to track which financial institutions work with prison companies.
This proposed legislation was first introduced by U.S. Rep. Sheila Jackson Lee, D-Texas. The PPIA (H.R. 1980) upholds the public right to access currently inaccessible private corporate information under the Freedom of Information Act (FOIA).
Its purpose is “To require non-Federal prison, correctional, and detention facilities holding Federal prisoners or detainees under a contract with the Federal Government to make the same information available to the public that Federal prisons and correctional facilities are required to make available.”
If we want to know where a company gets its money, PPIA would allow us to use FOIA.
Information transparency is a smart move for prison industry opponents, since state-run facilities are subject to FOIA requests, but private facilities remain exempt. Some states are not waiting for federal legislation and have passed their own private prison information transparency laws.
While divesting financial institutions can skirt accountability, they are likely to retain commitments if they know the public and government can access loan deal information through prison companies’ records.
This issue becomes paramount as GEO Group and CoreCivic face huge net losses from divestment, and the public grows impatient with slow change as news about detained children, separated families, and unnecessary deaths, continue apace.
The PPIA opens the door for more detailed inquiries and investigations, but the system remains intact and inaccessible — with no magic-bullet solutions to infiltrate the complex financial ties between some of Wall Street’s biggest players and prisons.