Bank of America, JPMorgan investigated over federal prison deals

According to the Center for Public Integrity, government auditors are investigating exclusive contracts held by Bank of America Corp. and JPMorgan Chase & Co. to provide financial services inside federal prisons.




Treasury’s inspector general, Eric Thorson, will audit Treasury’s “awarding and administration” of the contracts with Bank of America and JPMorgan “in response to recent media reports concerning the selection of and high fees charged by these two financial agents,” the watchdog’s general counsel, Rich Delmar, told The Center for Public Integrity.
The Center first reported this month that the banks have exclusive access to the more than 214,000 federal inmates under contracts awarded by the U.S. Treasury Department about 15 years ago. The deals, called financial agency agreements, lack the competitive bidding or transparency requirements for most federal contracts.
Bank of America has been paid at least $76.3 million by Treasury to manage inmates’ accounts, money transfers, email service and other technology inside the 121 facilities managed by the Federal Bureau of Prisons. The contract has been amended 22 times since it was awarded without competitive bidding in 2000.
The accounts hold the money inmates earn from prison jobs paying as little as 12 cents an hour and supplemental funds sent by family and friends. Inmates use the money for clothing, phone calls, food and other expenses.
Treasury says the payments to Bank of America were reimbursed by the Department of Justice, the Bureau of Prisons’ parent agency.JPMorgan issues debit cards to inmates when they are released that contain the balance remaining in their prison accounts. JPMorgan’s original contract was awarded in 1998 and amended at least 14 times. It was re-upped in 2008and amended at least four times since then.
It is unclear how much money JPMorgan has made on the cards because the bank’s compensation comes from fees charged directly to former inmates. Aseparate Treasury document from 2013 said that about 50,000 released prisoners had been issued cards and listed fees of $2 for withdrawing money from an ATM and $1.50 for leaving an account inactive for three months.


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Posted by on October 16, 2014

Category: News, Press


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