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Lehman Campaign: Activists dispute private prison involvement.

Not With Our Money
Students & Communities Stop Prisons-for-Profit
Wednesday December 3, 2003
Contact: Bob Libal or Silky Shah,
(512) 971-0487, or

Activists Dispute Lehman Brothers Claims of Reduced Private Prison Involvement, Vow to Increase Pressure Against Company

Students, Activists Express Skepticism (Noting Lehman Brothers’ recent dealmaking for Wackenhut and Corrections Corp. of America) and Say Campaign Against Lehman Brothers Will Continue

Austin, TX. Attempting to appease angry students and activists in Minnesota and nationwide, New York-based Lehman Brothers, Inc. has sent a statement to the University of Minnesota distancing itself from the private prison industry. The letter, written by Lehman Brothers’ managing director John Augustine, claims that the company “has not been involved with any tax-exempt financing for private prisons for over two years. Furthermore, we do not contemplate nor do we expect to be involved in these transactions going forward.” (The letter is available by contacting

But in a statement released today, Not With Our Money!, a nationwide coalition of student and community activists opposed to prison profiteering, disputed the claim that Lehman Brothers has not been involved in private prison financing and called on Lehman to make a formal pledge to not negotiate any more prison deals, including, but not limited to, municipal financing deals.

Since 2001, Lehman Brothers has been the target of a student and community campaign focused on the company’s role in the private prison industry. In the past three years Lehman Brothers has negotiated deals worth billions of dollars for three of the largest private prison companies in the U.S. – Corrections Corporation of America, Wackenhut Corrections, and Cornell. Because of the company’s close ties to the private prison industry, students on a dozen campuses from New York to Arizona have challenged their universities’ financial relationship with Lehman Brothers – a higher education bond underwriter. Since 2002, Lehman Brothers has undwritten over $8 billion dollars worth of higher education bonds for more than 50 college and university systems, raising the company tens of millions of dollars.

While student concerns have focused on human rights abuses in private prisons, including brutality, denial of medical care and retention of prisoners beyond the time required by law, students have also raised concerns about Lehman Brothers’ role in scandals in the predatory lending industry. This June the company was ordered to pay $5 million by a California court for knowingly backing fraudulent activities of companies involved in predatory lending – a practice that involves pushing high-interest loans on poor people. Students have also raised concern about the role of Lehman subsidiary Peabody Energy in the displacement of Dine people and environmental destruction in northern Arizona.

University of Minnesota activist Sam Sharma says that while he’s glad that the campaign is making headway, he is suspicious that the letter may be an attempt to appease administrators, and not an actual move by the company to end its support of the private prison industry. “This letter is a sign that the company is feeling the heat of the campaign,” Sharma said. “Now Lehman needs to put its money where its mouth is, and commit to ending its relationship with all private prison companies.”

Frank Edwards, University of Texas student, points out that Lehman Brothers continues to negotiate deals for prison companies – including co-leading an issue of $150 million in Wackenhut senior notes and acting as a deal-manager for an issue of CCA stocks this summer. “It’s clear that Lehman Brothers continues to finance companies that profit from prison construction. While universities should be recruiting and retaining low-income students and students of color, Lehman Brothers finances companies busy incarcerating and detaining these youth.”

Until Lehman ends its relationship with the private prison industry, Sharma and Edwards say they will continue their efforts to kick Lehman off of their campuses.

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