Bank of America is the latest American corporate giant to display its "woke" bonafides.
Like Dick's Sporting Goods, which not so long ago announced that it would stop selling firearms as a nod to gun control advocates, Bank of America has confirmed to Fox Business News that it is severing all relationships with private companies in the business of providing prison and immigration detention services to the federal government and also to states and counties.
Private detention assistance exists because businesses can offer those services more quickly and often more cheaply than governments can do the job themselves. Democratic presidential candidate Sen. Elizabeth Warren has asserted that this is untrue in the context of immigration detention centers, but she's wrong.
Migrant advocacy groups have cited the somewhat higher daily rate it costs for detainees at privately run detention centers versus government facilities to prove that for-profit facilities should be shut down: "According to federal government data, it costs $149.58 taxpayer dollars to detain one person for one day in a privately-run immigrant prisons [sic], as opposed to $98.27 in a municipal-run immigrant jail."
So how is it possible that private facilities are a better deal? Because the daily rate cited isn't the only cost factor; it isn't even the most significant one. U.S. government facilities are staffed by officers and employees who have good salaries, mandatory overtime provisions, excellent health benefits and lifetime pensions. None of that is cheap by any means. While no one wants private facility guards who are underpaid and overworked, the fact is that using the private sector to do this work is not only a more cost effective use of taxpayer dollars, but also frees up the officers and support staff who would otherwise be in such a facility to do different but equally mission critical work.
Then there is the physical facility itself: building brick and mortar facilities is a long and arduous process in the government. There are the environmental impact studies, state and local permitting processes, and the burden of finding appropriate land that's in an area with housing and schools adequate for staff members' families. Also not insignificant is the NIMBY effect when local communities get wind of the project and rally against it. And of course the cost of erecting the facilities (especially those involving minors or families) is exorbitant and requires specific congressional approval and appropriations. In this divided Congress, that won't happen.
But when the government farms all of that out via contract and issues a request for bids to provide it with facilities and staff—subject to specifications ensuring both facility and staff meet American Correctional Association accreditation requirements—then all of those problems disappear, leaving only the requirement, then, that officials from the various Department of Homeland Security (DHS) agencies, plus DHS's Office of Inspector General, conduct periodic inspections to continue assuring that ACA facility and staff standards are met by the contractor.
Those advocates I mentioned who have lined up against privately contracted facilities know that if they press hard enough and render them an impossibility, they have dented, if not completely crashed, the federal government's ability to detain aliens and maintain what little control it has left over our sad, broken southern border. That's their aim. And this is where pressure on corporate America comes in.
It isn't insignificant when the second largest bank in America decides to stop underwriting private companies in the jail and detention business. Bank of America has essentially made itself the handmaiden of open borders advocates with this decision. I have some problems with that. As a longtime client of Bank of America, I object to the bank making politically-driven decisions on my behalf. While Bank of America has some of its own assets, in the main any bank only exists because it holds on behalf of its depositors large amounts of capital that it then uses to finance companies (including those in the private prison and detention business) for its own profit. I don't want this bank using, or denying use of, my money to engage in political theater or pursuing social objectives with which I disagree. That isn't why banks exist.
But beyond the personal, it seems to me that while perhaps a privately held bank might hold the privilege of inserting its social, philosophical and political beliefs into its business practices (and I'm dubious about that, if their depositors benefit from federally insured accounts from the FDIC), a publicly traded institution such as Bank of America is in an entirely different arena. It is, in many important ways, not dissimilar to a public utility. In modern America, to be deprived of banking services is to be crippled from functioning, whether on the business or individual level.
Should banks such as Bank of America—you know, the ones "too large to fail", which receive a multitude of federal services ranging from FDIC underwriting of their depositors' accounts, to the massive amounts of taxpayer money they obtained during the Great Recession—be free to engage in a denial of services to persons or companies going about their lawful business? I don't think so.