The Private Prison Divestment Movement Just Had an Incredible Week

Activists are stopping banks like JPMorgan Chase and Wells Fargo from financing the caging of migrant children. Here’s how.

David Dayen March 14, 2019

The divestment movement is scoring some major wins. (Photo by Erik McGregor/Pacific Press/LightRocket via Getty Images)

The past week has seen real progress for the cam­paign to curb the pri­vate prison indus­try. A years-long effort tar­get­ing big banks that prof­it from incar­cer­a­tion and immi­grant deten­tion — which took on new res­o­nance after the cru­el­ties of the Trump administration’s fam­i­ly sep­a­ra­tion poli­cies came to light — has yield­ed what, from the out­side, may look like an overnight success.

“We had a cultural shift around how people view migrants and refugees, and how people connect with basic values.”

My ini­tial reac­tion was dis­be­lief,” says Ana Maria Archi­la of the Cen­ter for Pop­u­lar Democ­ra­cy, a lead­ing group in the anti-pri­vate prison move­ment. There were so many points where we were like, let’s just stop, we’re get­ting nowhere. But the pres­sure worked.”

Last Tues­day, JPMor­gan Chase, which has pro­vid­ed at least $254 mil­lion in debt financ­ing to two pri­vate prison giants, Core­Civic and Geo Group, cut off that mon­ey spig­ot, stat­ing we will no longer bank the pri­vate prison indus­try.” By Sun­day, U.S. Bank told the Wash­ing­ton Post that it had reduced its cred­it expo­sure to Core­Civic and Geo Group to an imma­te­r­i­al amount.” And in con­gres­sion­al tes­ti­mo­ny this Tues­day, Wells Far­go CEO Tim Sloan, under ques­tion­ing from Rep. Alexan­dria Oca­sio-Cortez (D‑NY), said, we made a deci­sion two years ago to exit the two rela­tion­ships that we had with two pri­vate prison firms.”

Accord­ing to Wells Far­go spokesper­son Jen­nifer Dunn, the bank has ful­ly exit­ed its cred­it agree­ment with Core­Civic, and plans to exit the agree­ment with Geo Group as soon as it amor­tizes and matures. Dunn gave no time­line for that exit. Wells Far­go had telegraphed this reduc­tion in lend­ing to pri­vate pris­ons in a busi­ness stan­dards report it released in January.

JPMor­gan, Wells Far­go and U.S. Bank are three of the six banks that, accord­ing to a 2016 report from the anti-pri­va­ti­za­tion group In The Pub­lic Inter­est, pro­vide most of the financ­ing that allows the pri­vate prison indus­try to sur­vive (the oth­er three are Bank of Amer­i­ca, Sun­Trust and BNP Paribas; sub­se­quent secu­ri­ties fil­ings show par­tic­i­pa­tion by PNC Bank, Cit­i­zens Bank and Regions Bank). Because Core­Civic and Geo Group are struc­tured as real estate com­pa­nies for the pur­pos­es of tak­ing tax deduc­tions, they require con­stant infu­sions of cap­i­tal to sat­is­fy cash flow and con­tin­ue growth.

Migrant rights activists have been orga­niz­ing against pri­vate pris­ons since the com­pa­nies start­ed to piv­ot to immi­gra­tion ser­vices dur­ing the Oba­ma admin­is­tra­tion. Over two-thirds of all migrants under deten­tion sleep in pri­vate prison-oper­at­ed beds, and in 2017, Core­Civic and Geo Group earned near­ly $1 bil­lion from ICE con­tracts alone.

This advo­ca­cy helped lead Obama’s Jus­tice Depart­ment to phase out pri­vate pris­ons from fed­er­al incar­cer­a­tion, although it point­ed­ly did not address immi­grant deten­tion. But Pres­i­dent Trump, who received hun­dreds of thou­sands of dol­lars in dona­tions from the pri­vate prison indus­try for his 2016 cam­paign and inau­gu­ra­tion fes­tiv­i­ties, brought them off the mat.

The Cen­ter for Pop­u­lar Democ­ra­cy and sev­er­al immi­gra­tion groups ini­ti­at­ed the Cor­po­rate Back­ers of Hate” cam­paign in May 2017, tar­get­ing cor­po­ra­tions that prof­it­ed off of the Trump agen­da, includ­ing through immi­gra­tion enforce­ment. The ini­tial inspi­ra­tion was to real­ly shame the com­pa­nies pro­vid­ing cov­er and legit­imiz­ing him,” says Archila.

The cam­paign quick­ly saw an open­ing to high­light Wall Street’s role in facil­i­tat­ing Trump’s anti-immi­grant poli­cies. Research orga­ni­za­tions like In The Pub­lic Inter­est and Lit­tle Sis, which spe­cial­izes in track­ing cor­po­rate financ­ing, detailed the pri­vate prison industry’s reliance on large investors, with a debt load that reached $1.8 bil­lion in 2018. Crowd-sourced activists also pitched in to fol­low the mon­ey. We thought it would be impor­tant to show not only the moral stand­point but the fidu­cia­ry stand­point,” says Javier Valdes of Make the Road New York, anoth­er core orga­ni­za­tion in the campaign.

Orga­ni­za­tions tracked the finan­cial flows in real time, and worked with invest­ment advi­sors to get a pic­ture of how divest­ment could work. If you have access to a Bloomberg ter­mi­nal, you can get minute-by-minute data,” said Matt Nel­son of Pre­sente, which has been involved in pri­vate prison divest­ment for years. It’s impor­tant to have the finance exper­tise to be able to say, the banks can eas­i­ly put the pri­vate prison indus­try on a no-buy list.”

The research gave a fac­tu­al under­pin­ning to the pres­sure cam­paign. And con­sumer-fac­ing banks that have pub­licly stat­ed sup­port for diver­si­ty and iden­ti­ty seemed a nat­ur­al tar­get — in par­tic­u­lar two of the biggest: JPMor­gan Chase and Wells Fargo.

The cam­paign includ­ed civ­il dis­obe­di­ence in front of JPMor­gan CEO Jamie Dimon’s house, once play­ing the cries of chil­dren in deten­tion over a loud­speak­er, anoth­er fea­tur­ing a mari­achi band ser­e­nad­ing Dimon on Valentine’s Day to break up” with the pri­vate prison indus­try. At JPMor­gan HQ in New York, activists left shoes to sym­bol­ize migrants detained and deport­ed. Archi­la attend­ed two JPMor­gan share­hold­er meet­ings, accom­pa­nied by for­mer detainees who chal­lenged Dimon to live up to his rhetoric. We were con­cerned that he was speak­ing out of both sides of his mouth, speak­ing out against Trump pol­i­cy, but prof­it­ing on the back end,” says Javier Valdes.

When the child sep­a­ra­tion hor­rors reached a crescen­do in sum­mer 2018, the Fam­i­lies Belong Togeth­er coali­tion of over 100 orga­ni­za­tions made pri­vate prison divest­ment a major focus of its cam­paign, adding sig­nif­i­cant ener­gy and man­pow­er to the exist­ing move­ment. They ini­ti­at­ed dig­i­tal peti­tions, with hun­dreds of thou­sands of peo­ple demand­ing divest­ment. Behind the scenes, groups worked with munic­i­pal gov­ern­ments and pub­lic pen­sion funds, edu­cat­ing them on what their mon­ey was fund­ing. Pub­lic employ­ee funds in New York State, New York City and Philadel­phia dropped their invest­ments with the industry.

The turnover in pow­er in Con­gress played a role as well. When Oca­sio-Cortez attend­ed an orga­niz­ing meet­ing of move­ment lead­ers and promised to hold hear­ings on banks’ role in fund­ing pri­vate pris­ons, it had a major impact. She has this micro­phone, and any­thing she says gets atten­tion,” Archi­la says.

Archi­la added that, while the move­ment nev­er fig­ured out who inside the banks was respon­si­ble for deci­sion-mak­ing on divest­ment, they knew their work was hav­ing an impact. We learned it was rat­tling them, that they were eval­u­at­ing their invest­ment,” she says.

Still, no account­abil­i­ty cam­paign mem­bers received advance notice about JPMor­gan Chase’s divest­ment announce­ment; they found out about it from a report in Reuters. It speaks to cul­tures chang­ing and con­scious­ness increas­ing,” says Presente’s Matt Nel­son. We had a cul­tur­al shift around how peo­ple view migrants and refugees, and how peo­ple con­nect with basic values.”

While activists are cel­e­brat­ing the announce­ments around divest­ment, they are tak­ing a trust but ver­i­fy” approach. Wells Far­go hasn’t set a firm date for its Geo Group divest­ment, and the banks made no com­mit­ment to stay out of indus­try financ­ing for the long-term. JPMor­gan recent­ly under­wrote a $159.5 mil­lion pri­vate place­ment for Core­Civic to build a prison in Kansas. And any lender can step in and replace the banks who dropped pri­vate prison firms.

Valdes, of Make the Road New York, said that his orga­ni­za­tion would stand ready to make life mis­er­able for replace­ment lenders: They will feel our wrath.” Of course, the only real way to choke off fund­ing for pri­vate prison immi­gra­tion deten­tion is to halt the $1 bil­lion in gov­ern­ment fund­ing that sup­ports it. That’s a longer-term project.

But the divest­ment suc­cess does help expose Geo Group and Core­Civic. Hav­ing big banks dis­as­so­ci­ate with them eats away at their legit­i­ma­cy. Well Far­go CEO Tim Sloan like­ly doesn’t want Oca­sio-Cortez ask­ing him why was the bank involved with the caging of chil­dren,” as she did on Tues­day, ever again. And that leaves the pri­vate prison duop­oly out on an island. The mar­ket seems to be tak­ing notice: Stock prices in Geo Group and Core­Civic have plum­met­ed sig­nif­i­cant­ly in the past week.

The suc­cess around pri­vate prison divest­ment also speaks to the new par­a­digm of orga­niz­ing in the Trump era. I am heart­ened by the inspir­ing shift around our polit­i­cal imag­i­na­tion,” Nel­son says. Peo­ple want to be involved in deep­er struc­tur­al change that aligns with their val­ues and human rights. That’s what’s going to get us through these per­ilous times.”

David Dayen is an inves­tiga­tive fel­low with In These Times’ Leonard C. Good­man Insti­tute for Inves­tiga­tive Report­ing. His book Chain of Title: How Three Ordi­nary Amer­i­cans Uncov­ered Wall Street’s Great Fore­clo­sure Fraud won the 2015 Studs and Ida Terkel Prize. He lives in Los Ange­les, where pri­or to writ­ing about pol­i­tics he had a 19-year career as a tele­vi­sion pro­duc­er and editor.
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