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Sun Jan 25, 2015, 12:21 PM

 

Is the Gates Foundation Still Investing in Private Prisons? They won't say.

One year after Mother Jones reported on multi-million-dollar investments made on behalf of the Bill & Melinda Gates Foundation that appeared to contradict the foundation's mission, the philanthropy's trust will not say if one of its most controversial holdings is still on its books.

In its 2012 tax filing, the Gates Foundation Trust, which manages the foundation's endowment, reported a $2.2 million investment in the GEO Group, a Florida-based prison company. In its most recent tax forms, the Gates Foundation Trust listed an investment in the GEO Group worth more than $2 million.

In recent years, the GEO Group has faced accusations of detainee abuse and substandard care in multiple states. In 2012, Immigration and Customs Enforcement's Office of Detention Oversight reported that GEO Group's Adelanto facility near Los Angeles had committed "several egregious errors" in administering medical care to detainees. (GEO Group has repeatedly dismissed allegations of mistreatment.) More recently, a group of former immigrant detainees in Colorado sued the company for making them work around the prison for minimal pay, sometimes under the threat of solitary confinement. (The GEO Group said detainees were working under a "volunteer work program" and that its $1-per-day wages met federal standards.) The Gates Foundation Trust did not respond to requests for comment directed through a foundation spokesperson.

According to the Gates Foundation, Bill and Melinda Gates—the only members of the trust's board—have defined areas that the trust will not invest in, "such as companies whose profit model is centrally tied to corporate activity that [Bill and Melinda Gates] find egregious." Tobacco companies fall into that category.

The trust's last reported investment in the GEO Group took the form of a $2,148,790 bank loan. (The Gates Foundation Trust did not issue the loan itself. The term "bank loan" refers to a type of corporate debt that companies with low credit ratings occasionally sell through a conventional bank to get extra cash.) The asset was reported in a tax form filed with the Internal Revenue Service this October, but is accurate only through October 2013.

Bank loans can yield higher returns for investors than stocks or bonds, but their ownership is harder to trace independently.


http://www.motherjones.com/politics/2014/12/gates-foundation-still-investing-private-prisons


Interesting business model: drain local governments for the cost of private prisons you profit from, send the cash overseas.

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