Wells Fargo and their for-profit prisons

Wow. So this is what’s taken the place of mortgages as the banking cash cow? From Salon:

As Wells Fargo has grown over the years, using its bailout funds to gobble up rival Wachovia and expand to the East Coast, so has the U.S. prison population. By 2008, one in 100 American adults were either in jail or in prison – and one in nine black men between the ages of 20 and 34, many simply for non-violent offenses, justice not so much blind as bigoted. Overall, more than 2.3 million people are currently behind bars, up 50 percent in the last 15 years, the land of the free now accounting for a full quarter of the world’s prisoners.

These developments are not unrelated.

A driving force behind the push for ever-tougher sentences is the for-profit prison industry, in which Wells Fargo is a major investor. Flush with billions in bailout money and an economic system designed to siphon wealth from the working class to the idle rich, Wells Fargo has been busy expanding its stake in the GEO Group, the second largest private jailer in America. At the end of 2011, Wells Fargo was the company’s second-largest investor, holding 4.3 million shares valued at more than $72 million. By March 2012, its stake had grown to more than4.4 million shares worth $86.7 million.

Unfortunately, it’s a safe investment. While a 50 percent growth in the number of human beings our society cages in rape factories may sound impressive – or perhaps the word is “revolting” – a study released last year by the Justice Policy Institute found that the private prison industry grew by more than 350 percent over the last decade and a half. While other industries of course benefit from state-granted privileges, companies like GEO profit by the state literally kidnapping and handing them clientèle, particularly as of late about-to-be-deported immigrants, of which President Barack Obama has ensured there is a steady, record-breaking supply.

“All prisons are awful,” says Melanie Pinkert, an activist based in Washington, DC, who along with other members of Occupy DC’s “Criminal Injustice Committee” is helping lead a boycott of Wells Fargo, which just expanded to the nation’s capital. “But private prisons take it to the next level.” Indeed, a recent report from the U.S. Justice Department found that at one GEO-run juvenile facility in Mississippi, sexual abuse was endemic, “among the worst that we have seen in any facility anywhere in the nation.” According to the report, GEO staff demonstrated:

  • Deliberate indifference to staff sexual misconduct and inappropriate behavior with youth;
  • Use of excessive use of force by [prison] staff on youth;
  • Inadequate protection of youth from youth-on-youth violence;
  • Deliberate indifference to youth at risk of self-injurious and suicidal behaviors; and
  • Deliberate indifference to the medical needs of youth.

These findings, shocking though they may seem, are not surprising. With an eye on maximizing quarterly profits, privately run facilities are even less inclined than state-run prisons to treat their involuntary customers humanely, skimping on health care and anything else that could hurt their bottom line, particularly programs aimed at reducing recidivism. As the ACLU noted in a report released late last year, “Not only is there little incentive to spend money on rehabilitation, but crime, at least in one sense, is good for private prisons: the more crimes that are committed, and the more individuals who are sent to prison, the more money private prisons stand to make.”

If you haven’t closed your Wells Fargo account yet, this would be a good time to do so. But let’s not pretend that closing our bank accounts is going to hold back the tide. There’s very, very big money involved in sending people to jail for minor infractions (so much so that our political “leaders” won’t even entertain the notion of legalizing marijuana) and it’s only getting worse. Why, now we even lock up the mentally ill instead of treating them!

From Unholy Alliance: How the Private Prison Industry is Corrupting Our Democracy and Promoting Mass Incarceration, a recent report from Public Campaign and PICO National Network, here are some pertinent points:

  • Through involvement in the leadership of ALEC (American Legislative Exchange Council), private prison companies have played a key role in lobbying for and passing harsher sentencing for non-violent offenses including three-strike laws, mandatory sentencing, and truth-in-sentencing. They are also behind the recent spate of anti-immigrant state laws that are putting more and more immigrants behind bars — the new profit center for the prison industrial complex.
  • Private prison companies employ legions of lobbyists to push for policies that support their bottom line. Since 2001, three major prison companies, CCA, GEO Group and Cornell, have spent over $22 million lobbying Congress. Recent lobbying by CCA and GEO Group includes efforts to increase funding to Immigration Customs and Enforcement (ICE).  Since 2003, CCA has employed 204 of lobbyists in 32 states, and GEO Group has employed by 79 lobbyists in 17 states.
  • Private prison companies also influence policymaking by strategically supporting political campaigns. At the federal level, the political action committees and executives of private prison companies have given at least $3.3 million to political parties, candidates, and their political action committees since 2001. The private prison industry has given more than $7.3 million to state candidates and political parties since 2001, including $1.9 million in 2010, the highest amount in the past decade.

6 thoughts on “Wells Fargo and their for-profit prisons

  1. This is a horribly misleading article. Wells Fargo did not use government money to purchase Wachovia, they used their own stock. In fact, the TARP funds that Wells was forced to take, didn’t happen until after the purchase of Wachovia. It is well documented that Wells (along with JP Morgan) were forced to take these funds so that the truly weak banks (Citigroup and BoA) wouldn’t be identified. The TARP funds cost Wells money, it didn’t make them anything.

    As far as the prison investment is concerned, $80 million dollars is a rounding error for a bank with $1.3 trillion in assets. Any possible gain off of an investment this size wouldn’t be worth a public relations issues.

    The first sentence in the original article is, “Wells Fargo is one of the top five largest banks in America, a fact that on its own is damning enough…” – this tells you everything you need to know about the author’s objectivity.

  2. When I closed my checking account at Well Fargo (after 20 some odd years that the name changed several times) I was asked why I was moving. Honestly, I answered that I didn’t think that they didn’t use the local deposits to invest in the local area.
    That’s why I am in the credit union.

  3. Amistavia, do you suppose that Wells Fargo is 1 of the 300 corporate sponsors of ALEC? Wells Fargo IS one of the top five largest banks in America is it not? Do you suppose that Wells Fargo would, as a public service, break itself into several parts so that it would no longer be too big to fail? Or do you suspect that Wells Fargo, like the other giant corporations, really isn’t all that interested in competing in the phoney “free market” that the 1% is always touting? How long have you been a Republican?

  4. Imhotep, I’m not a Republican, thank you. I see you have the same writing style as the above author though- just throw out unsubstantiated accusations.

    Wells Fargo has no need to be broken up- it never came close to failing, so its a non-issue. But if you want to talk about “public service” you may want to consider that this is a bank that doesn’t do absurdly complex financial maneuvers, it’s a bank that does things like make small business loans…you know, so that person who always dreamed of opening their own coffee shop can.

    Furthermore, as far as public service goes, you’re defending an baseless attack on a company that is the largest single contributor to the United Way, one of the top few corporate donors overall (about #$100 million a year) and a company that gives its employees two paid days a year to volunteer at the charity of their choice. One would think that you would rather attack companies that deserve it.

  5. Oh yeah Imohotep, I forgot a few other things… It’s also a company that provides benefits to same sex partners of employees, a company that goes out of its way to hire, develop, and promote minorities, and the largest lender to the alternative energy industry. Pretty evil huh? Wells Fargo is one of the most liberal, least Republican companies out there.

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