Pressure from Advocacy Group Leads University of California to Partially Divest from Wells Fargo
by Christopher Zoukis
Following demands from the Afrikan Black Coalition (ABC), the University of California has agreed to terminate $475 million worth of contracts with Wells Fargo Bank. According to a press release from ABC, the terminated contracts include a $25 million commercial paper contract, a $150 million interest rate contract and a $300 million line of credit.
ABC began lobbying the University of California system to divest its assets from Wells Fargo after determining that the bank finances CoreCivic and GEO Group, the nation’s two largest private prison companies. ABC also alleged that Wells Fargo engaged in unfair lending practices in minority communities.
“Wells Fargo is the syndicating agent for CoreCivic’s (formerly Corrections Corporation of America) $900 million line of credit, a trustee for the GEO Group’s $300 million corporate debt, and are notorious for grossly discriminatory and predatory lending practices targeting Black and brown communities, evidenced by many related lawsuits and settlements,” the advocacy group wrote in a press release.
University of California representative Ricardo Vasquez and Wells Fargo representative Ruben Pulido confirmed the divestment, with Pulido noting that the bank has supported the UC system for decades and “[stands] ready to provide that ... support in the future.” Pulido also said Wells Fargo does not directly hold any shares of CoreCivic or GEO Group.
“Wells Fargo is a bank,” he stated. “We do not set U.S. detention system policy.”
While Wells Fargo may not set prison policy, it holds private prison stock through its mutual funds in addition to providing financing for CoreCivic and GEO. Vasquez held out hope for changes at the bank.
“We value our long-standing relationship with Wells Fargo,” he said. “Moving forward, we want to continue to engage with the bank as it reforms its business practices under new leadership.”
In its press release, ABC took the idea of reform one step further: “We encourage Wells Fargo to terminate ALL of its relationships with prisons (private and public), and atone for their wrongdoings by paying reparations to the communities from whom they have stolen millions of dollars and whose credit histories they have ruined.”
Previously, the California State University, Los Angeles had redirected its private prison investments into services for black students. [See: PLN, Oct. 2016, p.48]. Philadelphia and New York City’s pension funds have divested from private prisons, too.
City officials in Cincinnati, Ohio are also working to divest from the private prison industry, according to August 2017 news reports.
“If you want a glimpse into a person or a city’s values, then follow the money,” Cincinnati Councilman P.G. Sittenfeld said during a news conference on August 30. “And the money that flows into the private prison business is a stain on our community. We should not and we will not use public funds to prop up this immoral enterprise.”
Sources: www.dailycal.org, https://prisondivest.com, www.citybeat.com