The prison banking industry is really taking off with an assortment of small time players on the state level snatching all the taxpayer and prisoner money they can. But one of the Too Big To Fail Wall Street banks has it locked up on the federal level. And surprise surprise they have friends at Treasury ready to give them special deals.

Too Big To Fail Bank of America received an extremely lucrative and favorable deal to be the exclusive provider of technology and financial services in all federal prisons. The terms of the Bank of America deal are so favorable that even members of Congress seem uneasy. Treasury gave the contract out without competitive bid and and the transparency most federal contracts are required to have.

According to the Center For Public Integrity, the contract has already paid out $76.3 million to Bank of America. CPI also reports that the contract has been amended 22 times since it was given out in the year 2000 – with each amending process like the awarding itself lacking transparency and accountability.

Now at least one member of Congress is looking into the contract. Senator Chuck Grassley, a senior member of the Senate Judiciary Committee, has sent a letter to the Treasury Department asking for details about how the special contract is managed.

In a letter sent Friday, Sen. Charles Grassley, R-Iowa, asked Treasury how the deal can protect taxpayers from fraud and conflicts of interest, given that it was awarded without the competitive bidding and transparency required for most federal contracts.

Competitive bidding is “meant to give taxpayers the most bang for the buck,” Grassley said in a statement to the Center for Public Integrity. “Any time the government avoids competitive bidding, the practice needs exploration.”“It is concerning that these [oversight] requirements do not apply to financial agency agreements such as the one with Bank of America,” Grassley wrote. “The Treasury Department’s decision to repeatedly amend rather than competitively bid this arrangement raises significant questions.”

Special favors lead to special favors, perhaps the Treasury staffers working on the special contract want to become prison banking experts. Certainly Bank of America will need a few of those in the future, especially when amending the contract again. Cha-ching!

Treasury staffers cashing in on their public service would be nothing new. But allowing one company to have a no-bid secretive contract to handle all federal prison banking seems like an invitation for abuse. Does Bank of America engage in the kind of gauging of inmate families that state-level prison bankers do? Perhaps, then again who knows what the terms are of this now 14 year long no-bid secretly renegotiated contract.

Photo from Bureau of Prisons under public domain.

Dan Wright

Dan Wright

Daniel Wright is a longtime blogger and currently writes for Shadowproof. He lives in New Jersey, by choice.