Private prison companies rely on financing organizations to bankroll their operations and expansion. Banks offer CoreCivic and GEO Group, the two largest private prison and immigrant detention companies in the United States, billions of dollars in revolving credit lines, term loans, and bonds that allow them to expand their reach into carceral and correctional industries.
The main companies involved in this sector are:
Wells Fargo, of San Francisco, CA (NYSE: WFC)
Bank of America, of Charlotte, NC (NYSE: BAC)
BNP Paribas, of Paris, France (OTC: BNPQY)
JPMorgan Chase, of New York, NY (NYSE: JPM)
SunTrust Banks Inc, of Atlanta, GA (NYSE: STI)
U.S. Bancorp, of Minneapolis, MN (NYSE: USB)
Debt financing allows private prisons to purchase smaller companies and increase the privatization of incarceration, detention, surveillance, facility services, and community corrections industries. Between 2005 and 2016, GEO acquired nine prison management or electronic monitoring companies, eight of which were obtained through debt financing totaling two billion dollars. Between 2013 and 2016, CoreCivic used debt financing to purchase two of three residential reentry companies.
As of 2016, CoreCivic and GEO each had $900 million credit limits from syndicates of banks comprised of SunTrust, Bank of America, Wells Fargo, JPMorgan Chase, BNP Paribas, and Barclays. When CoreCivic and GEO draw from their credit, they do so through administrative Bank of America and BNP, respectively, that act as go-betweens for the companies and syndicates of banks. As of June 2016, both companies had used about half of their credit limit.
In April 2018, CoreCivic entered a new credit agreement for $800 million in revolving credit, of which it has used 11.8% and $200 million for a term loan. As of June 2018, CoreCivic owes $200 million and GEO owes $790 million, out of $800 million, in term loans. CoreCivic and GEO have issued $1.2 billion and $4 million bonds, respectively, as of June 2018.
As of 2017, CoreCivic and GEO are $1.18 billion and $1.94 billion in debt, respectively in the form of revolving credit limits, term loans, and bonds. Through revolving credit facility loans, CoreCivic and GEO make an agreement to borrow and repay up to a certain amount on any day leading up to the agreement’s end date. Term loans allow companies to borrow a set amount that must be repaid on an agreed-upon schedule. Through bonds, the companies issue a series of notes in exchange for money, which the banks both underwrite and hold as part of their own portfolios. The single largest lender is JPMorgan Chase, which holds a total of $167.5 million in debts.
The table below summarizes the various forms and amounts of debt-financing by JPMorgan Chase. The data is taken from a 2018 report titled, "Bankrolling Oppression."
Revolving Credit (as of June 2017)
Term Loan (as of June 2017)
Bonds (as of October 2016)
|CoreCivic, Inc.||$60 million||$13.23 million||$89 million|
|The GEO Group||$194 million||--||$77 million|
The following table summarizes the amount of debt held by JPMorgan, BlackRock, and Wells Fargo for CoreCivic, Inc. and The GEO Group in total. The data is taken from a 2018 report titled, "Bankrolling Oppression."
JPMorgan & Chase
|CoreCivic, Inc.||$60.8 million||$20.3 million||$10.4 million||$91.5 million|
|The GEO Group||$106.7 million||$65.4 million||$18.3 million||$190.4 million|
|Total||$167.5 million||$85.7 million||$28.7 million||$281.9 million|
Private Prison Investors
Enlace also identifies 42 major investors in the for-profit prison industry that own over one million shares in CoreCivic and GEO. Of the companies on Investigate, Wells Fargo, Bank of America, and JPMorgan Chase are major investors in both CoreCivic, Inc. and GEO Group and targeted by groups like Enlace as members of “The Million Shares Club.”
As of its 2018 filings with the Securities and Exchange Commission, Wells Fargo owns 790,809 shares in CoreCivic and 646,930 shares in GEO. Bank of America owns 202, 853 shares in CoreCivic and 867,973 shares in GEO. BlackRock owns 13.8 million shares in CoreCivic and 14.1 million shares in GEO.
In 2013, CoreCivic and GEO converted to Real Estate Investment Trusts (REITs), companies that own or finances income-generating real estate and are exempt from corporate income tax. Instead, these companies pay out 90% of their taxable income as dividends to shareholders at the end of each year. In 2015 alone, CoreCivic and GEO avoided paying over $113 million in taxes. Financing by wall street companies enables private prison companies to maintain their REIT business structure. In 2017, GEO received almost $44 million in tax benefits due to its REIT status. REIT status keeps taxes low and boost the value for investors. For more on REITs, read the Facility Management section.
The conversion to REITs has proved to be a growth strategy for CoreCivic and GEO and has made private ownership and management of correctional and immigration detention facilities more profitable. As REITs, CoreCivic and GEO contract with government departments to finance and build facilities which they own and oftentimes manage. In other instances, the facility is still privately owned but publicly operated or eventually transferred to the public sector. Contracts involving facilities that the company owns are more profitable than contracts with government-owned facilities. In 2017, CoreCivic collected six times the amount of profit from the facilities it owns and manages in comparison to facilities it only manages.
Financing Immigrant Detention
Make the Road New York and the Center for Popular democracy estimate that should the “zero-tolerance” immigration policy be fully implemented, the number of immigrants in private detention facilities would rise between 290 and 580 percent. The “zero-tolerance” immigration policy was issued in April 2018 in order to apprehend anyone that crossed the US southern border with criminal charges. The growing number of immigrants detained directly benefits private financiers and investors, including JPMorgan Chase, Wells Fargo, and BlackRock, as CoreCivic and GEO Group’s stock prices increase. In the three months following the “zero-tolerance” policy, CoreCivic and GEO Group’s stock prices increased by 13 and 23 percent, respectively. JPMorgan Chase’s private detention stockholdings in CoreCivic and GE increased 97 times (or 9,600%) between September 2016 and December 2017.
Private prison financiers and investors have been targeted by the public for their role in facilitating the expansion of immigrant detention centers. In 2017, Make the Road New York and the Center for Popular Democracy launched the “Backers of Hate” campaign to bring attention to how these corporations directly profit from the increasing rates of immigrant detention and demands for facilities. In July 2018, immigrant rights activists protested outside the homes of Wells Fargo and JPMorgan Chase executives.
Several of these banks have also been scrutinized for discriminating against immigrant clients. In 2018, Bank of America allegedly froze clients out of their accounts for not reporting their citizenship status. Wells Fargo is facing a pending class-action lawsuit for allegedly refusing to accept applications for student loans and credits from DACA recipients.