September 16, 2017; AlterNet
As corporations speak out more actively on issues of human rights, is it important to understand these statements and donations in the context of their other activities, which may contradict those espoused values? This question is likely to come to the fore more and more over the next few years.
Writing for AlterNet, Hannah Lownsbrough suggests we all take a closer look at the integrity of the messages sent by corporations in the midst of this period of race turbulence. In particular, she takes on JPMorgan Chase, which, she points out, “has invested time, public relations’ efforts, and money in presenting itself as a defender of human rights. But the $2 million Chase has pledged to fight racism is a drop in the ocean compared to the potential yield from its massive investment in the private prison system: one of the starkest manifestations of racial injustice in the U.S. today.” This, she says, comes into even more stark relief with the cancellation of DACA.
The private prison industry’s stocks have risen dramatically with the election of Donald Trump and some of the subsequent decisions of his presidential administration. There’s a warped internal logic to that, but, as Lownsbrough points out, investments in private prisons don’t fit with enjoying a stance as a champion for racial justice, as JPMorgan Chase CEO Jamie Dimon seems to do.
It’s also important to note that investors like JPMorgan Chase are not simply passive beneficiaries of a grossly unjust immigration system. Their financing actively encourages the private prison sector to grow. Private prison corporations rely on debt financing from banks like JPMorgan Chase to expand their control of the criminal justice and immigration enforcement systems. In turn, the banks generate revenue from collecting interest and fees on [the debts of CoreCivic, formerly the Corrections Corporation of America, or CCA] and GEO Group’s debts.
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In the Public Interest has written a fact sheet on the topic about the extent of the involvement of JPMorgan Chase in helping private prisons to expand:
Summary of JPMorgan Chase’s current involvement in CCA’s and GEO Group’s debts (through debt agreements that were active as of June 2016)
- JPMorgan Chase has extended to CCA a $132.5 million line of revolving credit, of which CCA has borrowed $65.4 million.
- JPMorgan Chase has provided a $14.3 million term loan to CCA.
- JPMorgan Chase is part of the syndicate of banks that has extended a $900 million line of revolving credit to GEO Group, of which GEO Group has borrowed $450 million.
- JPMorgan Chase underwrote at least $113 million of CCA’s and GEO Group’s bonds.
- JPMorgan Chase held $166 million of CCA’s and GEO Group’s bonds as of October 14, 2016.
Also, never forget that JPMorgan Chase was deeply involved in the mortgage crisis, which disproportionately affected communities of color and low-income communities. The company settled with federal and state civil suits for $13 billion in 2014 for its part in the packaging, marketing, sale, and issuance of residential mortgage-backed securities and never skipped a beat. In this context, what is a mere $2 million but an empty symbol and a cheap distraction.
What, if anything, might bother the company? Lownsbrough points out that the bank is a consumer bank, and that any meaningful action will need to be the result of consumer revolt.—Ruth McCambridge
