Million Shares Club Member Profile: Wells Fargo
Profiting From Racial Discrimination and Incarceration
Wells Fargo is a multinational banking and financial services corporation that, through numerous
acquisitions of smaller banks, has become one of the largest in the world.
Wells Fargo: A Million Shares Club Member
The two largest private prison companies, Corrections Corporation (CCA) and GEO Group, are publiclytraded corporations and majority-owned by institutional investors. There are 29 U.S.-based major
investors in the for-profit prison industry who own over one million shares in CCA and GEO Group. CCA
and GEO Group rely heavily on the funding and political support from their major investors to manipulate
public policy towards increased criminalization and immigration enforcement. Major investors have
successfully defeated shareholder resolutions demanding political accountability and the adoption of
human rights standards in private prisons.1 Wells Fargo is a major investor in both CCA and GEO Group. As
of their latest filing with the Securities and Exchange Commission, Wells Fargo owned 998,350 shares in
CCA and 462,342 shares in GEO Group, nearly 1.5 million shares total.2
Major Lender to Private Prisons
Wells Fargo is also a major lender to CCA, the largest private prison company in the country, acting as the
syndication agent and issuing lender on CCA’s $900 million line of credit. Wells Fargo has steadily
increased this line of credit: first expanding the line from $450 million to $785 million in January 2012, and
further increased the amount to $900 million in March 2013.3 4 During this same time period, Wells Fargo
significantly increased investment in CCA from 98,731 shares worth $2.9 million in 2012 to 1.08 million
shares, valued at $36.6 million in 2014. As a major lender, Wells Fargo provides CCA and GEO Group with
the financial support they need to build new prisons and detention centers, many times preceding a
contract to fill these facilities. Once a contract is secured, Wells Fargo reaps returns as both a lender and
investor.
Discriminatory Lending
As a lender, Wells Fargo has a history of discriminating against its African American and Latino clients.
From 2004 to 2009, over 34,000 African American and Latino borrowers were paying higher rates on
Josh Lantigua. “Protestors at GEO Group Shareholders Meeting Push for Prison Safeguards.” Palm Beach Post.
5/4/2012.
2 Securities and Exchange Commission 13-F filings for reporting period 6/30/2015.
3 National Peoples Action. Banking on Immigration Detention: Wells Fargo’s Ties to the Private Prison Industry. Sept.
2012.
4 SEC 10-Q filing by CCA, for reporting period June 30, 2013.
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loans. Wells Fargo maneuvered people of color into subprime mortgages which played a key role in the
financial crisis of 2007-2008. In response to accusations of racial discrimination, Wells Fargo settled with
$175 million in 2012. Then in 2015, Wells Fargo faced a civil lawsuit from the city of Los Angeles for
predatory lending to customers, primarily those with matrículas, or ID cards issued by consulate offices of
the Government of Mexico.
Role in American Legislative Exchange Council (ALEC)
In 2011, Wells Fargo was a prominent member of the American Legislative Exchange Council (ALEC), a
group responsible for drafting the notorious Arizona SB 1070 (the “show me your papers” law), as well as
drug war era policies that target people of color for nonviolent drug offenses. In 2012, Wells Fargo revoked
its ALEC membership renewal, likely as a response to public pressure.5 However, Wells Fargo sponsored
ALEC’s annual meeting the following year, demonstrating continued support of corporate influence over
legislation and policy making.
Unethical Investment
Many socially responsible investment experts exclude private prison companies from their portfolios.
Private prisons rely on a model that maximizes profits through minimum occupancy requirements and
lobbying for incarceration, and minimizes expenses through a poorly trained and compensated staff, denial
of medical care to inmates, and a litany of other egregious practices.
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When confronted on abuses related to sexual assault in private prisons in 2012, investment
managers of Wells Fargo who held high stakes in CCA stocks voted against a sexual assault
resolution, reaffirming its consent to abusive treatment in prisons in the name of huge returns on
investment.
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In 2013, Wells Fargo blocked a GEO Group shareholder resolution to report on lobbying payments
and policy, effectively enforcing a surreptitious approach to lobbying government representatives.
Such lobbying efforts have resulted in higher charges and longer sentences for petty drug crimes,
and have increased criminalization of immigrants and communities of color.
Our Cities, Universities, Churches, and Unions can do better
Many of the institutions we belong to do business with Wells Fargo. This means either holding corporate
bonds, short, medium, or long term notes, or even doing our banking with Wells Fargo. There are currently
no portfolio screens for stocks or safeguards for bondholders to prevent their investments with Wells
Fargo from being used to invest in and extend credit to the for-profit prison industry. The ethical thing to
do is to pull this money until financial giant Wells Fargo agrees to cut their ties with the prison industry.
When we all do this together, we politically and economically isolate the prison industry, weakening and
eventually destroying their ability to push incarceration and detention on our communities.
“Merck and Wells Fargo Dump ALEC, while Duke Energy Holds Out,” PR Watch, September 14, 2012.
http://www.prwatch.org/news/2012/09/11740/merck-and-wells-fargo-dump-alec-while-duke-energy-holds-out
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