Respectfully submitted by Lawrence E. Rafferty (rafflaw) Weekend Contributor

I have written in the past about our large financial institutions and their uncanny ability to break the law and escape any criminal penalties at the corporate or personal level.  If the Department of Justice had actually indicted a Bank of America official and procured a criminal conviction, that Bank of America official could have assisted the corporate office in their no-bid contract to handle all of the federal prison systems inmate financial services and email services.

“A few blocks north, however, at the New York Metropolitan Correctional Center, there exists a market that Bank of America has locked down, literally. For the 790 federal prisoners incarcerated at MCC, Bank of America controls the provision of money transfers, e-messaging and some telephone services.

The bank’s monopoly extends across the federal Bureau of Prisons system—121 institutions housing 214,365 inmates. Since 2000, Bank of America has collected at least $76.3 million for its work on the program.” Readersupportednews  That would be $76.3 Million dollars in the Bank of America coffers without any need or worry about having to compete for this latest sweetheart deal. 

Bank of America is not alone in taking advantage of federal prisoners financial services.  When a prisoner has paid his/her debt to society and leaves prison, the refund of the prisoner’s prison bank account is made via the use of high fee debit cards.

“When inmates are released, JPMorgan steps in, issuing high-fee payment cards to distribute money from their prison accounts, which include earnings from jobs and money their families send them.  The banks’ exclusive deals came not from the Bureau of Prisons, but from the U.S. Treasury.”  RSN  It would appear that these financial behemoths have “locked” up the prisoner financial service business and they never have to worry about having to deal with any competitors.

The Treasury department has seen to it that Bank of America and JP Morgan Chase will continue to make millions without any meaningful oversight or competition.  You may be wondering how the Treasury Department can issue these contracts without the normal bidding process.   The Treasury Department uses a law passed in 1863 to grant these so-called financial agency agreements without the inconvenience of having to actually bid out the agreement.

“Treasury’s power to award the deals, known as financial agency agreements, was created in 1863 to support the nation’s first national banking system, around the time the greenback was introduced. Since then, the department’s broad use of this power has drawn criticism from lawmakers, auditors with the Government Accountability Office, federal appeals court judges and the department’s own inspector general. Treasury has said the selection process is competitive enough and the contracts are handled responsibly.” RSN

It never ceases to amaze me that large and very profitable banks like Bank of America and JP Morgan Chase need sweetheart deals like these in order to “win” the business from the Department of Treasury.  Wouldn’t the interests of the American taxpayer be better served by requiring the normal bidding process for lucrative service contracts like these?  Should we actually allow the Treasury to utilize a power granted in 1863 due to the ongoing Civil War, which in effect drips of abuse and cronyism?

Would it surprise you to know that the “contract” allowing Bank of America to provide these financial services has been amended multiple times over the years in order to provide a bigger payout to Bank of America?

“The documents show how Treasury has expanded the scope of Bank of America’s contract—originally focused on managing accounts for inmates and tracking inventory at prison stores—to include an array of services for the nation’s largest prison system, from providing e-messaging to supplying the prison system with handheld scanners. The deal allows Bank of America to subcontract with other prison vendors, positioning it as a hub of prison services that are procured outside any government bidding process.

The contract has been amended 22 times in the past 14 years.”  RSN

This sweetheart contract is not only questionable, it provides Bank of America carte blanche power to control much of the prison services vendor business.  How can the Treasury claim that the process is “competitive enough”?  I think it is far past the time for the Justice Department to investigate these sweetheart deals.  Why would the Treasury Department utilize these non-bidding processes, at least in light of the appearance of impropriety?  Maybe it is time for an independent organization or prosecutor to “follow the money”. All the way to jail.

What do you think?

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