Bank of America Corp. — the US’s second largest financial institution and lead lender to CoreCivic — made a milestone announcement this morning that they will stop financing private prison and immigrant detention companies. This follows the lead of JPMorgan Chase and Wells Fargo, who exited the sector earlier this year on the heels of mass public pressure from grassroots activists, shareholders, investors, and political leaders under the rallying call of #FamiliesBelongTogether. “We have decided to exit the relationship’’ said BofA Vice Chairman Anne Finucane in a statement to Bloomberg today. “We’ve done our due diligence that we said we would do at the annual meeting, and this is the decision we’ve made.’’
Beyond financing GEO Group and CoreCivic — the most recognizable names in the private prison game — documents filed in August with the Securities and Exchange Commission demonstrate that Bank of America provided a $380 million loan to Caliburn, as well as a $75 million revolving credit line. You may recognize the name Caliburn from recent headlines; they run the Homestead, Florida detention center under a U.S. government contract that’s making $750 per child detainee, per day.
This decision comes during a week of particularly heightened attention to the migrant crisis at our southern border. Many have winced at the image circulating social media of a Salvadoran father and daughter — 25-year old Oscar Alerto Martinez Ramirez and 2-year old Angie Valeria — who drowned trying to enter the US with hopes of a better life. Exposure of poor conditions in detention centers and the graphic treatment of migrant children has sparked debate and outrage in the US (and beyond) about the ways in which we not only allow — but actually profit from — the suffering of asylum seekers. 70% of immigrant detainees are now held in privately-owned facilities, meaning 70% of immigrant detainees are held in facilities with a clear-as-day financial incentive to lock up as many people as possible.
“With such harrowing statistics, we cannot accept anything less than an end to financing an industry profiting off the pain and suffering of children and families,” stated an official statement by the Families Belong Together Corporate Accountability Coalition. As broken down in previous articles, private prisons rely on big-name bank financing to conduct day to day operations, so BofA’s role as the third “domino” to fall can have significant consequences on the industry’s viability.
On April 24th, BofA held their annual general meeting — a mandatory yearly gathering of a company’s interested shareholders. There, shareholders expressed concerns linked to the potential human rights abuses, and have since continued to meet with bank representatives to ensure that those concerns wouldn’t fade from the radar. “As shareholders in Bank of America, investors from Interfaith Center on Corporate Responsibility have engaged with executives encouraging them to conduct human rights due diligence, including site visits, to assess the human rights risks and the commitment and capacity of GEO Group, CoreCivic, and Caliburn, to respect the rights of the individuals who are detained or in custody in their facilities,” shared Mary Beth Gallagher, Executive Director of the Tri-State Coalition for Responsible Investment. “We are pleased to see that after doing this due diligence Bank of America has decided to end these relationships. We will monitor this process and encourage them to disclose how it is moving forward.”
Recent political pressure may have also influenced the timing of BofA’s decision to cut ties. On June 21st, presidential candidate Elizabeth Warrenshared her plan to end the industry as a matter of moral priority in a twitter thread. “Private prison companies have spent millions to turn our criminal and immigration policies into ones that prioritize making them rich instead of keeping us safe — with terrible consequences. Today I’m announcing my plan to end this private profiteering off of cruelty.” Following that announcement, CoreCivic’s stock price immediately suffered a 6.3% loss.
Members of the New York State Senate also denounced the private prison industry this month and took steps towards dismantling its financial backbone. As detailed in last week’s article, New York came close to banning state-chartered banks from prison financing when Senator Brian Benjamin introduced Bill S5433A. While the bill didn’t make it to the Assembly floor in time for a vote, many are hopeful that this will come up as prospective issue of next year’s legislative docket. “This is a major step forward in the fight to starve the engine of mass incarceration of capital,” said the Senator regarding BofA’s announcement. “Divestment is the right choice, morally and financially, and you all should be proud of what you have done.”
The BofA timing also corresponds with another pressure point today: what many are referring to as the #WayfairWalkout. Workers of Wayfair, the e-commerce giant with the catchy jingle, are walking out of the company’s Back Bay offices today in protest of the company’s decision to sell furniture to operators of facilities for migrant children detained at the border. Their letter to management cites an order of $200,000 worth of bedroom furniture for a facility that will be outfitted to detain up to 3,000 migrant childrenseeking legal asylum in the United States. In leaked audio obtained by the Atlantic, the company’s co-founder and chief technology officer, Steve Conine, struggled to defend the prison relationship to his employees, though ultimately rejecting their demands to cut ties. “I mean, we’re not a political entity. We’re not trying to take a political side in this.” When asked whether their team that handles large corporate and government orders had a code of ethics, Conine responded, “We should think about a code of ethics. And I think that’s something as a company that we should have a conversation around, we should put together. We should put some thought into that.”
What Conine fails to articulate is that we live in a system where the line between finances and politics, private and public, is increasingly blurred. The private prison industry has spent a staggering $25M on lobbying the government over the past three decades to push for harsher criminal justice and immigration laws, and receives over $1B a year — almost $5.5M of taxpayer money a day — in contracts from ICE. Therefore, major companies like Bank of America know their power to make an impact on political issues, as well as their ability to choose the instances in which they can put the wellbeing of people over profitability, while still maintaining a successful enterprise.
In addition to the private prison facility operators themselves, hundreds of privately contracted companies fall under the umbrella of prison infrastructure. This includes companies in the spheres of telephone, technology, surveillance, transportation, medical, food and commissary, inspection, and — like Wayfair employees demonstrated today —down to the literal furniture put into inmate cells. Activists argue that the private prison business model is not one based on a “need” to detain more people. Rather, it’s seen as an opportunistic market to create wealth for a few at the expense of others. For example, the private equity firm HIG Capital has helped create a number of “phone, food, commissary, and health-care companies” that dominate the private prison market, generating returns for investors while significantly lowering quality of service for the incarcerated and their families. If the highest level financial support ultimately fades, making private prison operators even riskier partners, these smaller service-oriented companies presumably can move their business elsewhere (with likely less nefarious ties). For instance, with over $6.779 billion in revenue last year, Wayfair’s $200,000 contract with private prisons is proving to be an extremely small price at a high reputational risk.
So, with all these moving pieces, where should those looking to help sustain this momentum of de-financing the private prison industry focus their energy? As stated directly by GEO Group, activism targeting big banks poses significant risk to their bottom line. Suntrust, Barclays, BNP Paribas, Regions, Fifth Third, Citizens, PNC, Pinnacle Bank, First Tennessee Bank, Synovus Bank, US Bank all remain tied to the industry.
However, any company that proactively decides to cut ties with the private prison industry — no matter how direct or tangential — contributes to the movement for a more ethically-aligned public sector. This is a moment in America where many citizens are feeling helpless in the face of daunting crisis. It doesn’t have to be that way. Business owners can and should consider their connections to family detention, and recognize the powerful ability everyone has to align capital with values.