SunTrust STOP Financing Private Prisons
Today, members of Action NC and Moms Rising NC testified at the Federal Reserve hearing on the proposed BB&T and SunTrust merger. Every speech was powerful and showed just how much our community is concerned about the proposed merger between the two banking institutions.
According to an April 2019 report, SunTrust is a leading lender to private prisons and its proposed merger will only increase its ability to finance this industry, which profits from mass incarcerations and the criminalization of immigrants.
Public and private prisons are equally damaging when it comes to their role in the criminal justice system, which criminalizes people of color, tears people from their loved ones, and contributes to generational poverty and economic instability. But, private prisons are distinct, in that they generate profits from the pain of communities and the separation of families. The private prison and detention industry is a $5 billion enterprise, made possible by government contracts and facilitated by debt financing and investments made by Wall Street firms like SunTrust.
Brutality, neglect, and human rights violations are well documented in public and private prisons alike; but conditions in privately-operated facilities have proven even more deplorable than in government-operated facilities. In August of 2016, the Justice Department’s Inspector General reported that privately-operated federal prisons are more dangerous for incarcerated people than government-operated facilities. The same report stated that people held in privately-operated prisons were more likely to submit complaints about medical care, treatment by correctional officers, and quality of the food, and more likely to experience violence.
Two years ago, Pedro Salmeron, a young Salvadorian seeking asylum in the US, was in such a facility. Pedro was detained at the Stewart Detention Center, operated by CoreCivic, one of the companies that SunTrust finances. While at Stewart, Pedro was denied access to a doctor, even though he was sick, bleeding from his ears, nose, and mouth and his eyes were red. Before leaving the facility, Pedro lost over 30 pounds. Pedro told us that guards routinely woke him up in the morning, threatening him with violence. There are many such stories from many of the private prisons operated by CoreCivic and Geo Group.
SunTrust has played a leading role in financing agreements that are vital to the expansion of the private prison industry. SunTrust is part of agroup of 3 banks that offer revolving lines of credit and term loans to the 2 largest private prison companies (Geo Group and CoreCivic).
CoreCivic currently has an $800 million line of credit with a syndicate of ten banks; one of the largest contributors being SunTrust, loaning 14 percent of the credit. SunTrust has issued term loans to CoreCivic, valued at $28 million and has extended a revolving line of credit to them, valued at $112 million. As of December 31, 2018, CoreCivic had issued seven bonds totaling over $1.516 billion. Four of the bonds are senior notes, totaling $1.175 billion. SunTrust was one of the banks involved in underwriting one or more of those bonds.
Geo Group has a $900 million revolving line of credit with a syndicate of 6 banks. As of December 31, 2018, it had borrowed $490.8 million under the line credit. SunTrust is one of these lenders, but its contribution is based on the banks’ credit commitments recorded in the agreement’s lender addendums, which are not publicly available.
As of December 31, 2018, GEO Group owed six banks a total of $786 million through its term loan. The total value of the term loan is $792 million. SunTrust is one of these lenders, but its contribution is based on the bank’s credit commitments recorded in the agreement’s lender addendums, which are not publicly available.
It is evident, that SunTrust plays a giant role in financing private prisons, an industry that has a history of horrendous living conditions and violence against incarcerated individuals. In supporting this industry financially, SunTrust is complicit in the commitment of atrocities like what happened to Pedro Salmeron.
Therefore, we asked that the Federal Reserve not let this merger go forward, unless SunTrust and the new company to be formed commit to ending their association with the private prison industry, by:
1) not refinance existing agreements with any private prison companies and
2) not enter into any new financing agreements with any private prison companies.
We also called on BB&T to reconsider the merger and demand that SunTrust take its money out of private prisons. It is important for BB&T to continue being a good corporate citizen and do its part to influence its peers, in order to stop an industry that prospers off of the suffering of poor people, people of color, and our families.