&l;span style=&q;font-weight: 400;&q;&g;The stocks of private prison leaders GEO Group and CoreCivic are down &l;/span&g;&l;a href=&q;https://www.thestreet.com/quote/GEO.html&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;16%&l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g; and &l;/span&g;&l;a href=&q;https://www.thestreet.com/quote/CXW.html&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;8%&l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g; respectively today since last Tuesday &a;mdash; the day when the country&a;rsquo;s largest bank, &l;/span&g;&l;a href=&q;https://www.forbes.com/sites/morgansimon/2019/03/05/jpmorgan-chase-is-done-with-private-prisons/#313f771d690d&q;&g;&l;span style=&q;font-weight: 400;&q;&g;JPMorgan Chase&l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g;, publicly announced that they will take their money out of the private prison industry following mass activism by #FamiliesBelongTogether organizations and the long standing #BackersOfHate campaign. &l;/span&g;
&l;span style=&q;font-weight: 400;&q;&g;While ending this relationship has minimal impact on banks, private prison companies certainly feel the heat. &l;/span&g;&l;span style=&q;font-weight: 400;&q;&g;GEO Group and CoreCivic are structured as Real Estate Investment Trusts (REITs), which means that they have to distribute 90% of profits each year. This makes them extra reliant on big banks because they simply need a ton of cash on hand &a;mdash; like the &l;/span&g;&l;a href=&q;https://money.usnews.com/investing/news/articles/2019-03-05/jpmorgan-backs-away-from-private-prison-finance&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;$1.8 billion&l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g; debt load from investors last year &a;ndash; to do things like buy beds for their facilities and run day-to-day operations. &a;ldquo;The chain reaction in big banks stepping away from private prison companies is doing &l;/span&g;&l;a href=&q;http://inthesetimes.com/article/21793/private-prison-divestment-jpmorgan-ocasio-cortez-wells-fargo&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;major damage&l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g; to Geo Group and CoreCivic&a;rdquo; said Javier H. Valdes of Make the Road New York. &a;ldquo;Immigrant communities and our allies are going to continue to pressure all banks to withdraw from this morally bankrupt industry, which has a tragic record of violating the rights of our loved ones.&a;rdquo;&l;/span&g;
&l;img class=&q;size-full wp-image-275&q; src=&q;http://blogs-images.forbes.com/morgansimon/files/2019/03/Screen-Shot-2019-03-15-at-11.46.44-AM.jpg?width=960&q; alt=&q;&q; data-height=&q;547&q; data-width=&q;673&q;&g; CoreCivic market summary
&l;img class=&q;size-large wp-image-276&q; src=&q;http://blogs-images.forbes.com/morgansimon/files/2019/03/D1tJevhWsAEPEW0-1200x983.jpg?width=960&q; alt=&q;&q; data-height=&q;983&q; data-width=&q;1200&q;&g; GEO Group Market Summary
&l;span style=&q;font-weight: 400;&q;&g;So let&a;rsquo;s take stock of all that&a;rsquo;s happened these past two weeks (which I&a;rsquo;ve had a front-seat to as a member of the Families Belong Together Coalition). On March 5th, &l;/span&g;&l;a href=&q;https://www.forbes.com/sites/morgansimon/2019/03/05/jpmorgan-chase-is-done-with-private-prisons/#313f771d690d&q;&g;&l;span style=&q;font-weight: 400;&q;&g;JP Morgan&l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g; (which has provided &l;/span&g;&l;a href=&q;http://populardemocracy.org/sites/default/files/20180427%20CBOH%20Digital.pdf&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;at least $254 million in debt financing&l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g; to GEO Group and CoreCivic) stated &a;ldquo;we will no longer bank the private prison industry.&a;rdquo; On March 10th, U.S. Bank told &l;/span&g;&l;a href=&q;https://www.washingtonpost.com/business/economy/banks-bow-to-pressure-to-stop-profiting-from-trumps-immigration-policy-but-big-tech-remains-defiant/2019/03/10/87bec704-40ea-11e9-a0d3-1210e58a94cf_story.html?utm_term=.86338cdcf41e&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;the &l;/span&g;&l;i&g;&l;span style=&q;font-weight: 400;&q;&g;Washington Post&l;/span&g;&l;/i&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g; that it reduced its credit exposure to GEO Group and CoreCivic to &a;ldquo;an immaterial amount.&a;rdquo; Then on March 12th, Wells Fargo CEO Timothy Sloan found himself &l;/span&g;&l;a href=&q;https://www.cnsnews.com/news/article/susan-jones/rep-ocasio-cortez-blames-wells-fargo-caging-children-climate-change&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;under questioning&l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g; by Alexandria Ocasio-Cortez (D-NY) about why Wells was financing companies &a;ldquo;involved with the caging of children.&a;rdquo; Sloan&a;rsquo;s response? &a;ldquo;We will exit that relationship .&a;rdquo;&l;/span&g;
&l;span style=&q;font-weight: 400;&q;&g;How did we get for-profit prisons that are reliant on household-name big banks in the first place? In the US, &l;/span&g;&l;a href=&q;http://www.prisonstudies.org/highest-to-lowest/prison-population-total&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;the world&a;rsquo;s most incarcerated country&l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g;, &l;/span&g;&l;span style=&q;font-weight: 400;&q;&g;private prisons were virtually nonexistent before the 1980s. However the industry massively expanded, many believe, due to America&a;rsquo;s predatory &a;ldquo;&l;/span&g;&l;a href=&q;https://lasvegassun.com/news/2019/mar/13/private-prisons-are-counterproductive/&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;failed war on drugs &l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g;policies, which have destroyed countless lives, especially in working-class communities&a;rdquo; (as articulated by Nevada Assemblywoman Daniele Monroe-Moreno). For many, the horrors of private prisons first hit mainstream consciousness in 2009 with the &a;ldquo;&l;/span&g;&l;a href=&q;http://www.cnn.com/2009/CRIME/02/23/pennsylvania.corrupt.judges/&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;Kids for Cash&l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g;&a;rdquo; scandal in Pennsylvania. As a refresher, privately-owned juvenile facilities paid off judges to dictate harsh sentences to juvenile offenders and keep them incarcerated longer. This scheme continued for over nine years.&l;/span&g;
&l;span style=&q;font-weight: 400;&q;&g;Grassroots and shareholder activism in recent years has helped local jurisdictions phase out private prisons in their communities, and in 2016, President Obama&a;rsquo;s &l;/span&g;&l;a href=&q;https://www.theguardian.com/us-news/2016/aug/18/us-government-private-prisons-use-justice-department&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;Justice Department &l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g;banned the development of more federal private prisons (though, notably, not saying anything about &l;/span&g;&l;a href=&q;https://www.realmoneymoves.org/learn-more/&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;immigrant detention centers&l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g; &a;mdash; the majority of which are for-profit). This victory was short lived once &l;/span&g;&l;span style=&q;font-weight: 400;&q;&g;President Trump, who &l;/span&g;&l;a href=&q;https://www.usatoday.com/story/news/politics/2017/02/23/private-prisons-back-trump-and-could-see-big-payoffs-new-policies/98300394/&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;received hundreds of thousands of dollars&l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g; in donations from the private prison industry, came into office and reversed the decline. Private prison company stock prices then &l;/span&g;&l;a href=&q;https://www.newyorker.com/news/daily-comment/a-new-study-uncovers-troubling-information-about-immigrant-only-prisons&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;soared&l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g;: between election day 2016 and March of 2017, &l;/span&g;&l;a href=&q;https://money.cnn.com/2017/02/24/investing/private-prison-stocks-soar-trump/index.html&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;CoreCivic rose by 140% and Geo Group rose by 98%&l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g;. That makes the news of today&a;rsquo;s stock decline all the more impressive, with GEO Group and CoreCivic down &l;/span&g;&l;a href=&q;https://www.thestreet.com/quote/GEO.html&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;54%&l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g; and &l;/span&g;&l;a href=&q;https://www.thestreet.com/quote/CXW.html&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;59%&l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g; respectively since their highest points in 2017. &l;/span&g;
&l;span style=&q;font-weight: 400;&q;&g;Cautiously, activists &a;ndash; who have been pressuring the big banks to take their money out of private prisons for &l;/span&g;&l;a href=&q;https://www.forbes.com/sites/morgansimon/2018/09/25/what-do-big-banks-have-to-do-with-family-detention-familiesbelongtogether-explains/#72e451c02b6a&q;&g;&l;span style=&q;font-weight: 400;&q;&g;years &l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g;&a;mdash; are acknowledging this moment as one of historic commitments that will need to be reiterated and enforced over time. Is this a categorical acknowledgment that the banks will stay out of private prisons, or just a temporary pause? Banks have a history of making statements and then reneging. For instance, in the case of financing coal, banks made commitments in 2015 that they then &l;/span&g;&l;a href=&q;https://www.nytimes.com/2018/05/28/business/banks-coal-loans.html&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;ignored&l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g; by 2018.&a;nbsp;&l;/span&g;&l;span style=&q;font-weight: 400;&q;&g;But in the case of Wells CEO Tim Sloan, commitments were made in front of Congress and the nation &a;mdash; definitely making them much more difficult to roll back. &l;/span&g;&l;a href=&q;https://www.cnbc.com/2016/07/07/what-happens-if-you-lie-to-congress.html&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;Not telling the truth to Congress&l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g; comes with a maximum five-year prison sentence and potential fine.&l;/span&g;
&l;span style=&q;font-weight: 400;&q;&g;Additionally, it&a;rsquo;s worth noting the distinction between no longer financing (or underwriting loans) for &l;/span&g;&l;span style=&q;font-weight: 400;&q;&g;CoreCivic and GEO Group and actually divesting from stock ownership. There has not been a clear signal yet from Chase, Wells, or US Bank that they will relinquish their shares in the companies. Beyond these three banks, &l;/span&g;&l;span style=&q;font-weight: 400;&q;&g;the fight for moving money is still very much in process: according to a &l;/span&g;&l;a href=&q;https://www.inthepublicinterest.org/wp-content/uploads/ITPI_BanksPrivatePrisonCompanies_Nov2016.pdf&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;2016 report&l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g; from In The Public Interest, banks like Bank of America, SunTrust and BNP Paribas still haven&a;rsquo;t addressed their (very significant) roles in funding private prisons and immigrant detention centers. &l;/span&g;
&l;span style=&q;font-weight: 400;&q;&g;Activists hope this victory is part of a larger trend toward the eventual abolishment of private prisons in the US , as the financial rug gets pulled out from under them. Major &l;/span&g;&l;a href=&q;https://www.nytimes.com/2018/07/30/opinion/private-prisons-immigration-divest.html&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;public employee pension funds&l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g; and municipal governments in places like New York, Philadelphia, and California have been fully divesting from the private prison industry in just the last year. Additionally, research indicates that corporations linked to practices notorious for human rights abuses are at growing risk of &l;/span&g;&l;a href=&q;http://fortune.com/2019/03/14/jpmorgan-chase-private-prisons/&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;losing socially conscious customers&l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g;. As the Families Belong Together Corporate Accountability stated in a press release on Tuesday, &a;ldquo;&l;/span&g;&l;span style=&q;font-weight: 400;&q;&g;many private prisons have documented &l;/span&g;&l;a href=&q;https://apc01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.aclu.org%2Fnews%2Faclu-government-must-end-use-private-prisons-immigration-detention&a;amp;data=02%7C01%7C%7C9039d994620e4ea1b61408d6a1bc8add%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C636874228484448941&a;amp;sdata=UsoIKoEwwvwcNggKqPUsO1aOeCiCyPLVLdjKD9WJQX0%3D&a;amp;reserved=0&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;histories&l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g; of human rights abuses, and since ICE&a;rsquo;s creation in 2003, immigrant detention centers, overall, have reported &l;/span&g;&l;a href=&q;https://www.nbcnews.com/politics/immigration/22-immigrants-died-ice-detention-centers-during-past-2-years-n954781&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;188 detainee deaths&l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g;.&a;rdquo; Encouragingly for anti-incarceration advocates, 93% of millennials believe that a company&a;rsquo;s social and environmental impact is &a;ldquo;key to their investing decisions&a;rdquo; &l;/span&g;&l;span style=&q;font-weight: 400;&q;&g;&a;nbsp;&a;mdash; up from 74% only two years ago. &l;/span&g;
&l;span style=&q;font-weight: 400;&q;&g;&a;ldquo;It speaks to cultures changing and &l;/span&g;&l;a href=&q;http://inthesetimes.com/article/21793/private-prison-divestment-jpmorgan-ocasio-cortez-wells-fargo&q; target=&q;_blank&q;&g;&l;span style=&q;font-weight: 400;&q;&g;consciousness increasing&l;/span&g;&l;/a&g;&l;span style=&q;font-weight: 400;&q;&g;,&a;rdquo; said Presente.org&a;rsquo;s Matt Nelson, an organizational partner within the Families Belong Together coalition. &a;ldquo;We had a cultural shift around how people view migrants and refugees, and how people connect with basic values. They are now seeing how these values translate through their money, and now we see the results in the market.&a;rdquo; &l;/span&g;
&l;i&g;&l;span style=&q;font-weight: 400;&q;&g;In full disclosure, the author&a;rsquo;s firm, Candide Group, and its project Real Money Moves, are members of the #FamiliesBelongTogether coalition referenced in this piece. Thank you to Jasmine Rashid for her contributions to this piece. &l;/span&g;&l;/i&g;&l;/p&g;
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