Financing racism in US private prisons

CoreCivic and GEO Group are the largest providers of private prisons and immigration detention centres in the US. Clare Carlile explains how financial institutions like HSBC, BlackRock, and Citigroup are facing increasing criticism for their funding of them.

Lobbying for incarceration

America now locks up more people than anywhere else in the world. GEO Group and CoreCivic have played a role America’s high incarceration rates. Both companies are accused of lobbying for the harsh legislation that means the country now holds 20% of the world’s prisoners, despite having 5% of its population.

The disproportionate impact on black Americans is clear: a black man in America is over five times more likely to be incarcerated than a white man, and the likelihood that a low-income black man has been behind bars is 52%.

In the 1990s-2010s, both companies had links with the American Legislative Exchange Council (ALEC) – a policy group responsible for drafting legislation in multiple states to increase the severity of prison sentencing. In 2019, GEO Group and CoreCivic respectively spent $1.52 million and $1.65 million on lobbying.

While the two companies claim that they have never lobbied on criminal justice or immigration enforcement issues, they do lobby for longer sentences and increased government funding for the private prison sector. There is also substantial evidence that private prisons have lobbied for lowering the barriers to prison labour.

Time to divest

Following a long-running campaign in America, many financial institutions in the US have cut their ties with the industry. Campaign organisations estimate that 72% of future financing to private prison companies – estimated to be over $1.9 billion – is no longer available.

GEO Group has acknowledged that pressure on financial institutions to distance themselves from the industry could impact its “financial conditions”. In 2018, Barclays, HSBC, NatWest Group and BNP Paribas all provided financial services for the companies. BlackRock owns 12% of both CoreCivic and GEO Group.

The following companies were also found to hold smaller investments in CoreCivic and/or GEO Group: AIG, Allianz, AXA, Barclays, BMO Financial Group, Citigroup (Citibank), HSBC, Invesco (owns 12% of The Co-operative Bank), Legal & General, and Standard Life Aberdeen. In July 2019, Barclays told CBS Moneywatch that it has no plans to lend to the private prison industry in the future, and in 2020 committed to divesting from the sector.

Exploitation of prison labour

Both CoreCivic and GEO Group face lawsuits from multiple states for their use of penal labour in their prison and immigration facilities. Since 2018, repeated reports have stated that the companies pay migrants or prisoners under $1 an hour to do maintenance jobs such as cooking and cleaning – despite making considerable profits from their incarceration. California, Colorado, New Mexico and Washington State have all filed cases against the companies.

“I see prison labor as slave labor that still exists in the United States in 2018,”

Kevin Rashid Johnson, who is currently serving a life sentence, wrote in The Guardian in 2018. “Prisoners who do not agree to such abject slavery are put in solitary confinement. I know from personal experience.”

Immigration detention

Over the last few years, CoreCivic and GEO Group have also been criticised for their role in Trump’s brutal anti-immigration regime.

Nearly 75% of immigrants detained in America are held in private prisons. 2018 and 2019 saw repeated reports of children being separated from their parents while in custody and, in 2019, it was found that 24 immigrants had died while being detained under the Trump administration.

GEO Group also runs immigration detention centres in the UK.

Elizabeth Chavez – member of Make the Road New York, which has been campaigning for divestment from the private prison system – said immigrants and trans women would continue to stand up to those “bankrolling private immigrant detention companies.”

“It's people like us who face abuse and violence in their cages every day... we will continue to work to put the private prison industry out of business as we fight for respect and dignity for every member of our community."

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