Thursday, June 28, 2018

U.S. cities and counties are going heavily into debt to pay for the costs of police brutality, with big Wall Street banks profiting from the violence of rogue cops

Police brutality comes with heavy financial costs.

Twelve U.S. cities and counties borrowed almost $878 million to pay for the costs of police brutality and misconduct, according to a new report from a Chicago-based research and strategy group. The report, titled "Police Brutality Bonds: How Wall Street Profits from Police Violence," comes from the Action Center On Race and the Economy (ACRE).

The borrowing figure cited above does not include more than $1.03 billion paid to investors. When that is included, the total reaches $1.87 billion.

This issue hits close to home here at Legal Schnauzer, given that deputies in Greene County, Missouri, brutalized my wife, Carol, during an unlawful eviction in September 2015, leaving her with a comminuted fracture (broken in more than two places) in her left arm that required trauma surgery and put her overall health at risk -- requiring treatment for blood loss, shock, nerve damage, kidney damage, and elevated pressures.

To help cover up such brutality, Missouri prosecutors brought a "cover charge" against Carol, in the form of an "assault of a law enforcement officer" criminal case, in which the alleged police "victim" admitted he grabbed Carol first, meaning she could not be guilty of the offense as described by state statute. From the ACRE report:

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.

We call the bonds used to cover police related settlement and judgment costs “police brutality bonds”, because they 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. The companies profiting from police brutality bonds include well known institutions like Wells Fargo, Goldman Sachs, and Bank of America, as well as smaller regional banks and other firms.

In our research into the use of police brutality bonds, we found that cities and counties across the United States issue bonds to pay for police brutality settlements and judgments. The cities range from giant metropolises such as Los Angeles to smaller cities like Bethlehem, Pennsylvania. Our report includes details on police brutality bonds in twelve cities and counties, including five in-depth case studies: Chicago, Los Angeles, Milwaukee, Cleveland, and Lake County, Indiana.

All of this spending, the study finds, does not appear to curb police violence. Reports ACRE:

While the legal system assumes that hefty financial consequences for police violence serve as a deterrent to abusive policing, this does not appear to be the case. Instead, settlements and judgments—including those a city or county can’t pay without going into debt—appear to be an acceptable cost of the business of policing for cities and counties across the country. We have identified several factors contributing to this broken system.

* Violent Police Officers and Their Departments Are Shielded from Financial Consequences. Research has found that police officers are “virtually always” indemnified by their employers, meaning that the cities will cover the costs of defending officers in court cases, and will pay for any judgments or settlements that result from actions officers take in the course of their employment. Furthermore, most police departments are also insulated from the financial consequences of excessive settlement and judgment costs and are not subject to budget cuts when their settlement and judgment costs rise. Those cuts come from elsewhere in the city budget.
Comminuted fracture of Carol Shuler's left
arm, courtesy of police brutality in Missouri.
 * Settlements can function as a kind of “hush money” working to prevent accountability for violent officers and their departments. Settlements and judgments can provide a measure of restitution to victims of police violence and/or their families, but settlements can also function as “hush money” in cases where survivors or their families, in exchange for the settlement award, sign away their rights to discuss the case or the officers involved.

* There is a striking lack of transparency and disclosure around cities’ reliance on borrowing, and in each of our case studies, there is a lack of full, accessible accounting of the costs. Most cities in our sample were unable, or unwilling, to provide a full accounting of how much they are spending on borrowing for settlements and judgments. Accountability and change are impossible without transparency.

What needs to be done? ACRE has some ideas:

As we fight to hold violent officers and police departments accountable to our communities and to curb abusive policing, we must also work to hold banks and investors accountable for their role in perpetuating and profiting from our existing system. Police violence should never be a source of profit for banks or investors, or a reason we do not have the resources we need to invest in the infrastructure and services that make our communities safer and more livable. We need to dismantle this system of policing and build a justice system that prioritizes the needs and well-being of all people. While we 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.

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