Action Center on Race & the Economy – “Police Brutality Bonds” Reveals Companies Profit from Police Violenceby Action Center on Race & the Economy June 20, 2018
What Are Police Brutality Bonds?
As the costs of police misconduct rise, cities and counties across the United States are going into debt to pay for it. Often this debt is in the form of bond borrowing. When cities or counties issue bonds to pay these costs, banks and other firms collect fees for the services they provide, and investors collect interest. The use of bonds to pay for settlements and judgments greatly increases the burden of policing costs on taxpayers, while producing a profit for banks and investors. Using bonds to pay for settlements or judgments can nearly double the costs of the original settlement. All of this is paid for by taxpayers.
These police brutality bonds quite literally allow banks and wealthy investors to profit from police violence. This is a transfer of wealth from communities–especially over-policed communities of color–to Wall Street and wealthy investors, and it needs to stop.
On June 19, 2018, the Action Center on Race & the Economy (ACRE) released a new report, “Police Brutality Bonds,” showing the estimated cost of police misconduct for taxpayers in several cities around the country, and naming several well-known companies who continue to profit from police violence.
Police violence and misconduct cases are on the rise throughout cities across the United States wreaking havoc particularly on communities of color, causing debt, and leaving taxpayers to pick up the tab while banks and investors profit.
“From Wells Fargo to Goldman Sachs, some of our nation’s largest corporate entities have made $1 billion in profits off of police violence,” said Maurice BP-Weeks from the Action Center on Race and the Economy. “We’re calling on municipalities to hold officers accountable through individual insurance policies, full transparency from municipalities on police officers’ bad behavior, and a ban on profiteering from police violence by corporate interests. City by city, we will work to ensure our nation combats police violence with true financial accountability.”
The report features 12 cities and counties, as well as five case studies on: Chicago, Cleveland, Lake County (Indiana), Los Angeles, and Milwaukee. Across these five municipalities, ACRE estimated $1.87 billion in public debt stemming from police violence and the excessive settlement and judgment costs. Of the $1.87 billion in costs related to police brutality bonds, more than half – $1 billion – was investor profit.
The interest and service fees on these bonds can nearly double the cost of the original settlement—leading to substantial profit for banks, investors, and a financial burden for everyone else. The current structure of the bonds allows cities to avoid financial responsibility for lax accountability practices and zero financial incentive for police departments to hold officers accountable for excessive violence.
The report makes three core recommendations to address this troubling trend:
- If cities must borrow to pay for settlements and judgments, banks and investors should not be allowed to profit from that.
- Police officers must take out individual liability insurance policies to cover the costs of settlements and judgments caused by their misconduct.
- 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.
“This problem is just another reason why we need to abolish this current system of policing and move towards a new system of justice,” said Alyxandra Goodwin from the Action Center on Race and the Economy, one of the authors of the report. “We will keep working towards that, but in the meantime it is shameful that banks are allowed profit from police brutality.”
On Wednesday, June 27 during the Chicago City Council meeting, Alderman Carlos Ramirez-Rosa and other Chicago Aldermen will introduce a resolution calling for hearings into the city’s routine use of police brutality bonds in light of the report.
ACRE is encouraging the public to help ensure cities, police and Wall Street ends these policies by signing a petition launched this week, linked here. The group plans to push for public hearings, and eventually, enshrined policy changes that improve training and financial accountability.
We need to abolish this system of policing and build a justice system that prioritizes the needs and well-being of all people. While we collectively work toward that, here are our key recommendations:
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.
Download the report: