US Lawmakers Probe Private Equity Firms Over Prison Profiteering Allegations

WASHINGTON (UrduPoint News / Sputnik - 02nd October, 2019) US lawmakers are investigating five private equity firms for allegedly providing low-quality food and services at prisons and making huge profits off the system, Senator Elizabeth Warren's office said in a statement.

"These companies, responsible for providing medical, food, and phone services to prisons, jails, and detention facilities housing over two million incarcerated people across the country, often deliver low-quality services to incarcerated individuals and their families at exorbitant cost, collecting over $40 billion in taxpayer funds annually and much more from the loved ones of incarcerated individuals," the release said on Tuesday.

Warren, along with Representatives Mark Pocan and Alexandria Ocasio-Cortez, wrote to BlueMountain Capital Management, H.

I.G. Capital, American Securities, Apax Partners, and Platinum Equity to gather information on the allegations.

In their letter, the three lawmakers asked the firms to provide disclosure documents and an explanation of their alleged role in the consolidation and deterioration of the prison services industry by October 14.

In July, Warren, Pocan and Ocasio-Cortez were among a coalition of lawmakers that introduced the "Stop Wall Street Looting Act," which aims to hold private equity firms jointly liable for the debts of companies under their control and requires greater transparency in firm practices.