The United States prison industry continues to shift towards private ownership of facilities, and the immigrant and minority populations in most prisons now disproportionately outnumber white inmates.
In light of these details, an economic advocacy group is pointing an accusatory finger at Wells Fargo for being a major financier of some of the largest private prison companies in the country.
The Public Accountability Initiative (PAI), a non-partisan corporate watchdog group, released a report last week titled “Jails Fargo: Banking on Immigrant Detention.”
The report names Wells Fargo, one of the nation's largest banks, as being the “issuing lender” on Corrections Corp of America's (CCA) $785 million line of credit and serving as bookkeeper for GEO Group’s $300 million corporate debt. GEO is another top private prison company. Also mentioned are financial ties to MTC, yet another prison owner.
So why the focus on Wells Fargo?
“There are other lenders to these companies. Wells Fargo is the only one that really had strong ties to all three major private prison operators,” said Kevin Connor, director of PAI and author of the report.
But Wells Fargo has defended its lending practices saying that it is only one of numerous banks that manage the financial holdings and stock investments of the prison companies on behalf of third-party investors.
“Wells Fargo Advantage fund managers must make investment decisions for the benefit of investors and independent of the interests of Wells Fargo Bank. The holdings of the mutual funds are segregated from Wells Fargo’s own assets in accordance with applicable laws,” Alan Elias, a spokesman for Wells Fargo, told Progress Illinois via email.
Elias also said the report is “filled with inaccuracies and exaggerations.”
Specifically, Elias pointed out that Wells Fargo is only one of about a dozen high-profile banks, including Bank of America and JP Morgan Chase, that have financial ties to companies like CCA.
The report goes on to claim that the detention of undocumented immigrants, which has steadily increased since 9/11, and the country’s current immigration policies have become a profit motivator for the private prison industry.
Connor questioned the ethics behind Wells Fargo’s willingness to lend to these companies.
“From any sort of moral and ethical perspective, supplying critical financing to this industry is wrong. If you look at Wells Fargo’s own marketing materials, they claim to be responsible in their business practices; and this is clearly an irresponsible use of their customer’s money,” Connor said.
Again, Wells Fargo defended its practices.
“We are a bank. We don’t set U.S. immigration policy; we have nothing to do with the setting or enforcement of immigration laws; we don’t tell judges where to place people accused of violations; and we don’t tell the federal and state governments which companies should be awarded contracts. To believe that protesting against our bank will somehow change U.S. government policy is misguided, unfortunate and unrealistic,” Elias said.
The report concludes by urging Wells Fargo to severe its financial ties to the private prison industry.