Char­lotte banks crit­i­cized for ties to ICE de­ten­tion cen­ters

The Charlotte Observer (Sunday) - - Business - BY DEON ROBERTS der­[email protected]­lot­teob­server.com Deon Roberts: 704-358-5248, @DeonERoberts

As con­tro­versy over Pres­i­dent Don­ald Trump’s im­mi­gra­tion de­ten­tion poli­cies con­tin­ues to rage, Char­lotte’s two big banks have found them­selves swept up in the strife.

Bank of Amer­ica and Wells Fargo are among the banks that do busi­ness with two firms that man­age im­mi­gra­tion-de­ten­tion fa­cil­i­ties. Those firms, Ten­nessee-based CoreCivic and Flor­ida’s GEO Group, are pub­licly traded com­pa­nies and the largest pri­vate-prison op­er­a­tors in the U.S.

It’s that con­nec­tion hthat has made the banks tar­gets of ac­tivists de­mand­ing they sever those ties. As re­cently as last month, de­mon­stra­tors en­tered the up­town Wells Fargo branch at Tryon and Third streets to de­liver a let­ter of protest.

The crit­ics ar­gue the banks are play­ing a role in sep­a­rat­ing im­mi­grant fam­i­lies as well as ben­e­fit­ing fi­nan­cially from prison firms whose busi­ness model in­volves de­tain­ing im­mi­grants.

“Our mes­sage to those peo­ple, to those banks, is stop fi­nanc­ing ha­tred,” said Héc­tor Vaca of Ac­tion NC, a non­profit that or­ga­nized Char­lotte protests this year, in­clud­ing last month’s, to call at­ten­tion to the banks’ fi­nanc­ing. Last month’s let­ter, which was also ad­dressed to JPMor­gan Chase, was signed by more than 100 groups.

“Stop fi­nanc­ing cru­elty, stop fi­nanc­ing the caging of fam­i­lies,” Vaca said. “Banks that are fund­ing this type of be­hav­ior are en­cour­ag­ing it, they’re en­cour­ag­ing all these at­tacks on im­mi­grants, en­cour­ag­ing Pres­i­dent Trump’s war on im­mi­grants.”

CoreCivic, based in Ten­nessee, and Flor­ida’s GEO Group, own and man­age im­mi­gra­tion de- ten­tion cen­ters across the U.S. They also have other busi­nesses, such as own­ing and man­ag­ing cor­rec­tional fa­cil­i­ties.

This sum­mer, the banks’ con­nec­tions to the com­pa­nies ig­nited protests in sev­eral U.S. cities.

In July, de­mon­stra­tors gathered out­side the New York home of JPMor­gan CEO Jamie Di­mon, CNN re­ported. That same month, ad­vo­cates for im­mi­grants demon­strated out­side the New Jersey home of a Wells Fargo board mem­ber, CNN and other out­lets re­ported.

‘DE­LIB­ER­ATE MISCHARACTERIZATION’

Bank of Amer­ica, Wells Fargo and other banks have pro­vided var­i­ous ser­vices to CoreCivic and GEO Group in re­cent years, Se­cu­ri­ties and Ex­change Com­mis­sion fil­ings show. The list can vary by bank but in­cludes hun­dreds of mil­lions of dol­lars in loans, as well as ar­range­ments to sell shares of the prison com­pa­nies’ stock.

It’s not known, though, how much money the banks have made off such deals.

Scru­tiny of banks’ con­nec­tions to CoreCivic and GEO Group pre­dates the Trump ad­min­is­tra­tion. But at­tacks on the banks have es­ca­lated un­der Trump, whose stepped-up im­mi­gra­tion en­force­ment will likely mean more busi­ness for both firms, crit­ics say.

In a state­ment, CoreCivic said much of the in­for­ma­tion about the com­pany be­ing shared by spe­cial in­ter­est groups is wrong and po­lit­i­cally mo­ti­vated.

The com­pany noted it is sub­ject to mul­ti­ple lev­els of over­sight and that there are more than 500 U.S. Im­mi­gra­tion and Cus­toms En­force­ment of­fi­cials as­signed to its eight ICE­con­tracted fa­cil­i­ties. It also said it has done busi­ness with ev­ery ad­min­is­tra­tion in Wash­ing­ton, D.C., for more than 30 years.

“Our sole job is to help the govern­ment solve prob­lems in ways it could not do alone – to help man­age un­prece­dented hu­man­i­tar­ian crises, dra­mat­i­cally im­prove the stan­dard of care for vul­ner­a­ble peo­ple, and meet other crit­i­cal needs ef­fi­ciently and in­no­va­tively,” CoreCivic stated.

In a state­ment, GEO Group said that calls for banks to no longer do busi­ness with it are mis­guided and “based on a de­lib­er­ate mischaracterization of our role as a long-stand­ing ser­vice provider to the govern­ment.” The com­pany added that it plays no role in set­ting crim­i­nal jus­tice or im­mi­gra­tion poli­cies, and has never ar­gued for or against such poli­cies.

Crit­i­cism of the banks’ deal­ings with the com­pa­nies has been boosted by the Trump ad­min­is­tra­tion’s “zero tol­er­ance” prac­tice of sep­a­rat­ing mi­grant chil­dren from their par­ents at­tempt­ing to en­ter the U.S.

Trump, fac­ing fury over pho­tos of cry­ing chil­dren in­side chain-link pens, signed an ex­ec­u­tive or­der in June end­ing the sep­a­ra­tions.

CoreCivic and GEO Group em­pha­sized that their fa­cil­i­ties do not house mi­nors with­out their par­ents. But in­vestors have been op­ti­mistic that the com­pa­nies will ben­e­fit from the or­der by hous­ing more fam­i­lies.

Share prices of the com­pa­nies have dwarfed gains of the ma­jor stock in­dexes since Trump’s 2016 elec­tion.

‘BANKS ARE COM­PLICIT’

Crit­ics say banks are play­ing a role in fam­ily sep­a­ra­tions by virtue of giv­ing loans and other fund­ing to pri­vate prison com­pa­nies that op­er­ate de­ten­tion cen­ters.

A 2016 re­port by In The Pub­lic In­ter­est, a Cal­i­for­nia-based govern­ment watch­dog group, called on banks to cut ties with pri­vate prison com­pa­nies, ac­cus­ing them of wide­spread hu­man rights abuses.

The re­port, “The Banks That Fi­nance Pri­vate Prison Com­pa­nies,” named Wells Fargo, Bank of Amer­ica, JPMor­gan, BNP Paribas, SunTrust and U.S. Ban­corp as hav­ing played large roles in fi­nanc­ing the com­pa­nies over the past decade.

By do­ing busi­ness with CoreCivic and GEO, “the banks are com­plicit with the pri­vate prison com­pa­nies in con­tribut­ing to and en­abling mass in­car­cer­a­tion and the crim­i­nal­iza­tion of im­mi­gra­tion,” the re­port said.

In one deal an­nounced in Au­gust, CoreCivic said Bank of Amer­ica’s Mer­rill Lynch unit is among four firms able to sell up to $200 mil­lion in CoreCivic shares the com­pany might of­fer. The firms, which in­clude SunTrust Banks and Fifth Third Ban­corp, could re­ceive up to 2 per­cent com­mis­sion from any sales, ac­cord­ing to the agree­ment.

CoreCivic in­tends to use sub­stan­tially all of the pro­ceeds to pay debts or for work­ing cap­i­tal and other gen­eral cor­po­rate pur­poses, which may in­clude in­vest­ments, the agree­ment said.

“We un­der­stand there are im­por­tant is­sues be­ing raised, and we en­cour­age the dis­cus­sion among the com­pa­nies, govern­ment of­fi­cials, and af­fected com­mu­ni­ties to ad­dress them,” Char­lotte-based Bank of Amer­ica said in a state­ment. The bank said it does not hold any CoreCivic or GEO Group stock.

Wells Fargo, which is based in San Fran­cisco but has a big pres­ence in Char­lotte, is trustee on $350 mil­lion in bonds is­sued by GEO that will ma­ture in 2026, se­cu­ri­ties fil­ings show. GEO’s plans for the pro­ceeds in­volve gen­eral cor­po­rate pur­poses, in­clud­ing re­pay­ing a line of credit, ac­cord­ing to the fil­ings.

Wells Fargo said it doesn’t com­ment on cus­tomer re­la­tion­ships. But in a state­ment, it also said it doesn’t own any CoreCivic or GEO stock, sit on ei­ther com­pany’s board or dic­tate their poli­cies or busi­ness.

“Wells Fargo re­spects the se­ri­ous­ness of our coun­try’s on­go­ing de­bate about the im­mi­gra­tion and the crim­i­nal jus­tice sys­tem, but we do not as a cor­po­ra­tion take po­si­tions on pub­lic pol­icy is­sues that do not di­rectly af­fect our com­pany’s abil­ity to serve cus­tomers and sup­port team mem­bers,” the bank said.

CoreCivic, in its state­ment, said it op­er­ates safe and hu­mane im­mi­gra­tion fa­cil­i­ties.

GEO Group said it’s proud of its record of man­ag­ing fa­cil­i­ties in safe, se­cure and hu­mane en­vi­ron­ments and that it strives to treat ev­ery­one in its care with com­pas­sion, dig­nity and re­spect.

While Bank of Amer­ica and Wells Fargo haven’t dis­closed plans to limit their deal­ings with CoreCivic and GEO, the banks this year have an­nounced steps they’ve taken in re­sponse to an­other po­lit­i­cally charged topic: mass shoot­ings.

In March, Wells Fargo CEO Tim Sloan told the Ob­server the bank was in talks with gun­maker clients af­ter a deadly shoot­ing in Fe­bru­ary at Flor­ida’s Mar­jory Stone­man Dou­glas High.

In April, a Bank of Amer­ica ex­ec­u­tive an­nounced it would no longer lend to man­u­fac­tur­ers of mil­i­tary-style guns sold for civil­ian use, as a way to help ad­dress mass shoot­ings.

Banks have made those moves as large in­vestors, such as pen­sion funds, see a clear re­la­tion­ship be­tween guns and mass shoot­ings, said Courteney Keatinge of Glass Lewis, a prom­i­nent com­pany that ad­vises share­hold­ers. But there’s less of a gen­eral un­der­stand­ing about how pri­vate prisons op­er­ate and profit from il­le­gal im­mi­gra­tion, said Keatinge, di­rec­tor of en­vi­ron­men­tal, so­cial and gov­er­nance re­search at the firm.

PEN­SION SYS­TEMS DIVESTING

Last year, the of­fice of New York City Comptroller Scott Stringer said the city’s pen­sion funds had fully di­vested from pri­vate prison com­pa­nies, in­clud­ing CoreCivic and GEO Group. In a press re­lease at the time, Stringer’s of­fice said it marked the first ma­jor U.S. pub­lic pen­sion sys­tem to make such a move. He cited re­ports of al­leged hu­man rights abuses across the in­dus­try for the de­ci­sion.

In Au­gust, the Amer­i­can Fed­er­a­tion of Teach­ers urged pen­sion funds to pull in­vest­ments they might have in about two dozen firms hold­ing stock in pri­vate prison com­pa­nies, in­clud­ing CoreCivic and GEO Group.

Mean­while, front-line bankers are or­ga­niz­ing to get banks to do less busi­ness with pri­vate prison com­pa­nies, said Kil­ian Colin, a mem­ber of Com­mit­tee for Bet­ter Banks, a coali­tion of in­dus­try work­ers that pushes for bet­ter work­ing con­di­tions at banks.

The is­sue comes up in the com­mit­tee’s con­fer­ence calls and meet­ings, said Colin, a for­mer Wells Fargo em­ployee who was raised in Iraq.

“I’m an im­mi­grant my­self,” he said. “A lot of our mem­bers are peo­ple of color.”

DEON ROBERTS [email protected]­lot­teob­server.com

Héc­tor Vaca of Ac­tion NC speaks in front of other pro­test­ers out­side of Bank of Amer­ica’s Char­lotte head­quar­ters in July. The pro­test­ers gathered to crit­i­cize Bank of Amer­ica and Wells Fargo for do­ing busi­ness with two large pri­vate prison com­pa­nies that house il­le­gal im­mi­grants.

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