A report from The Action Center on Race & the Economy (ACRE), has shown that banks are making huge profits from police misconduct. ACRE is a national racial justice and Wall Street accountability campaign based in Chicago.
“Some of our nation’s largest corporate entities have made $1 billion in profits off of police violence,” Maurice BP-Weeks, co-executive director of the ACRE, said in a statement.
Because of the increase in police brutality being recorded, many cities are surpassing their budgets for settlements and judgments for police violence. When the city does not have the money to pay for what their employees did, the money has to come from somewhere, so they issue police brutality bonds.
The police brutality bonds are municipal bonds issued by local governments with banks serving as underwriters. Banks then facilitate bond sales to buyers, according to the report.
The banks collect significant fees for providing this underwriting service. Wells Fargo, Bank of America, and Goldman Sachs, are a few of the banks that profited.
ACRE examined costs of police brutality in 12 counties and cities, with more detailed explanations for Cleveland, Ohio; Los Angeles, California; Milwaukee, Wisconsin; Chicago, Illinois; and Lake County, Indiana. Chicago topped the list by taking $709 million in bonds and costing taxpayers an additional $1 billion in interest between 2010-2017.
The report suggests high settlement payouts “appear to be an acceptable cost of business of policing for cities and counties across the country.” It goes on to say violent police officers and their departments are financially protected from lawsuits.
The settlements are sometimes hush money, and there is a lack of transparency and disclosure about the practice of bonding to cover police brutality settlements.
ACRE had several recommendations for cities:
1. If cities must borrow to pay for settlements and judgments, banks and investors should not be allowed to profit from that.
2. Police officers must be forced to take out individual liability insurance policies to cover the costs of settlements and judgments caused by their misconduct.
3. Governmental bodies at the local, state, and federal levels must account for and provide full transparency about which officers are behaving in ways that lead to settlements and judgments, how they are or are not being held accountable, who is paying for their misconduct and how, and who is profiting from these payments.