Massachusetts Senator and 2020 Democratic primary hopeful Elizabeth Warren, along with Reps. Alexandria Ocasio-Cortez and Mark Pocan, is demanding information about the business practices of five private equity firms that have significant investments in prison services.
The progressive Democrats reportedly sent letters to five companies, BlueMountain Capital Management, H.I.G. Capital, American Securities, Apax Partners SAS and Platinum Equity, telling them to provide information about how much money they have invested in correctional services, how much they make from those services and if they’ve paid any fees for violating federal or state laws.
“Private equity-owned prison support services use their market power to make millions of dollars off those who are incarcerated, their families, and their communities — often while providing subpar products and services,” the letter says.
At the heart of the inquiry is how firms like Private Equity and their investors have profited from correctional facility services such as phone calls for prisoners. Platinum owns Securus Technologies Inc., which charges as much as $25 for a 15-minute phone call from a local jail, and for forcing inmates to pay fees to open, fund and close their accounts.
New York state became the first major jurisdiction in the U.S. to make inmate phone calls free, paid for by the Department of Corrections.
The Democrats’ main goal from the letters would be to use the information gleaned to help write new legislation such as the “Stop Wall Street Looting Act,” which would limit the dividends private equity firms can pay themselves, and restrict tax breaks for the debt placed on the companies they buy.
The prison information request comes on the heels of similar probes into private equity firms with ties to for-profit colleges.
Warren also is spearheading proposals to make private equity firms responsible for the debts and retirement obligations of the companies they buy, and make profits contingent on the success of the entities they control.
The companies have until Oct. 14 to respond.