"Students from the Afrikan Black Coalition (ABC), an alliance of black student groups on nine UC campuses, released a statement Monday demanding Wells Fargo sell its shares in private prisons and end all business relations with the companies by Feb. 20. According to the statement, if Wells Fargo fails to do so by the deadline, ABC will continue to pressure the UC to divest its $425 million invested with Wells Fargo. ABC pressured UC to divest from private prisons in December, prompting UC to sell approximately $25 million in private prison shares.
Nia Mitchell, UCSB Black Student Union Political Chair and fourth-year environmental studies major, said black students remain upset that the UC invests in Wells Fargo despite selling its shares in private prison corporations. Mitchell said she believes Wells Fargo contributes to private prison funding.
“We cannot be complacent with the fact that our tuition is being invested, either indirectly or directly, to the incarceration of our people,” Mitchell said.
ABC spokesperson Anthony Williams, citing research conducted by Enlace’s Private Prison Divestment Campaign, said Wells Fargo is financially invested in private prison corporations such as Corrections Corporation of America (CCA) and The GEO Group (GEO) in several ways.
According to Williams, Wells Fargo owns 1.5 million shares in GEO and CCA, acts as an issuing lender on CCA’s $900 million line of credit and serves as bond trustee to GEO’s $300 million corporate debt.
“They are funding private prisons,” Williams said. “Wells Fargo is completely complicit in private prisons and what they do and how they treat people, which is horrid.”
According to Wells Fargo spokesperson Ruben Pulido, the bank bears no financial investment in either GEO or CCA. Pulido said Wells Fargo Funds, owned by the funds’ investors and not Wells Fargo, currently holds a small position in the companies through a passive index fund.
“Wells Fargo holds no investment in either The GEO Group or the Corrections Corporation of America,” Pulido said in an email. “We have no seat on either company’s board of directors, and we do not dictate their policies or business models.”
UCSB economics professor Henning Bohn said Wells Fargo provides passive index funds for customers to invest in other companies, which is a product that “any random financial firm” would offer to its customers. Bohn said Wells Fargo customers own the shares in private prison corporations, not Wells Fargo.
“From an economic perspective, I would say [Wells Fargo] doesn’t really hold an economic interest because the interest is held by their customers — those are the beneficiaries,” Bohn said.
Bohn said if Wells Fargo were to end all investments in private prison corporations through index funds, the bank would first have to withdraw all index fund products, and would only offer funds investing in companies in which the bank wants clients to invest.
“That’s something that Wells Fargo is probably not going to do,” Bohn said.
Mitchell said she does not believe the distinction between Well Fargo and Wells Fargo Funds makes a difference.
“It’s still Wells Fargo,” Mitchell said. “You can separate it however you want bureaucratically, but it is the arm of the same system.”
According to Mitchell, black student leaders want UC and other “financiers” to divest from for-profit prisons because of how incarceration oppresses black people.
“Private prisons literally make a profit off of the incarceration of people, who, within a system that’s rooted in white supremacy and capitalism, are for the most part black and brown bodies,” Mitchell said. “Their system of mass incarceration has not helped the black community.”
Williams said the business model of private prisons requires they lobby for criminal justice and immigration policies to incarcerate as many people as possible. Williams also said these policies generally lead to the disproportionate number of racial minorities in the prison facilities of corporations like GEO and CCA.
“Their business model is getting as many people incarcerated as possible and having contracts, and if they can’t do that, then how are they going to make money?” Williams said..."