Bank of America exits the private prison industry - Activate World

Bank of America exits the private prison industry

Bank of America has ended their financial relationship with the private prison and detention companies CoreCivic and GEO Group. Two other leading U.S. banks, Wells Fargo and JPMorgan Trust, dropped their ties with CoreCivic and GEO Group in January and March, respectively. The decisions followed months of pressure from a coalition of more than 70 human rights organizations using the hashtag #FamiliesBelongTogether.

Lunchtime Conversations:

  • What is the next step for the Bank of America and others in promoting new and better policies for prison and detention reform? As a business leader, how would you set higher standards for the business relationships in your markets?
  • Senator Warren proposed eliminating federal use of private prison companies, and three Democratic competitors have previously proposed restrictive measures for federal private prisons. How would you approach this policy issue if you were running for president? 
  • Private prison companies gave a record $1.6 million to candidates in the 2016 election cycle, and Geo Group gave $250,000 to Trump’s inaugural committee. Is it surprising that President Trump reversed President Obama’s order to reduce the use of private prisons? 

Noteworthy:

  • Private prisons are a $5 billion industry that employs more than 33,000 people per the market research firm IBISWorld.
  • The states with the highest shares of inmates in private prisons were New Mexico (42.2%) and Montana (40.4%). Texas alone housed 14,293 inmates in private prisons.
  • Since Mr. Trump took office, ICE has awarded more than $480 million to GEO Group and more than $331 million to CoreCivic, the two largest private prison companies. 

Storyline:

In addition to its ties to CoreCivic and GEO Group, Bank of America faced renewed criticism over an immigration-related issue that emerged last summer, when it began freezing the accounts of individual clients over their citizenship status. The practice is a common one in other countries but highly unusual among banks in the U.S.

CNN reported that Bank of America was careful not to repeat the mistakes made by Wayfair and their response to an employee walkout. Earlier this week, the bank announced through a spokesperson that it is severing ties with private prison and immigrant detention companies at the state level, in addition to federal facilities. After discussions with the affected clients, the bank determined that a lack of “legal and policy clarity,” in combination with employee and community concerns, made it impossible to continue the relationships.

Recent events suggest the decision may have averted what could have been a significant blow to the bank’s reputation. The move came one day after bank officials toured the Homestead detention facility near Miami, Florida. The facility is run by now-former Bank of America client, Caliburn, a detention company. CNN and the Miami Herald report that Homestead does not describe itself as a prison, but, “protesters say it functions as one – the minors held inside are not allowed to leave.” 

Presidential candidates Elizabeth Warren and Amy Klobuchar visited Homestead hours before taking the stage in Miami for the first Democratic debate. The controversial for-profit detention center holds around 2,300 children from the ages of 13 to 17, who have been placed in the care of the Department of Health and Human Services after being detained at the border. 

Neither Klobuchar nor Warren was allowed inside the Homestead facility, but Warren stood on a stepladder and looked over the gate. She said she saw children walking in single-file lines and called separation of migrant families at the border “a moral stain on the U.S. inflicted by Donald Trump.

Sources: AxiosCBS NewsTriple PunditVox

Photo by Carles Rabada on Unsplash