The cost of police misconduct is increasingly sending cities around the country into debt, generating a burden for taxpayers but profits for investors, according to one advocacy group.
The Action Center on Race & the Economy (ACRE) released a report on Tuesday alleging that “police brutality bonds” – bonds taken out by cities to cover police related settlements and judgment costs – create a transfer of wealth from communities to Wall Street. The use of such bonds, ACRE claims, can nearly double the original costs of a settlement.
ACRE’s report examines 12 cities and counties, and includes case studies in Chicago, Cleveland, Los Angeles, Milwaukee, and Lake County, Indiana.
The group estimated that those five cities bonded $837.8 million between 2008 and 2017 and paid $1.03 billion in interest during that time, creating a cost of $1.87 billion for taxpayers. Chicago accounted for the vast majority of each figure, bonding an estimated $709.3 million and paying $1 billion in interest to investors.
The companies loaning to cities included Wells Fargo, Goldman Sachs, and Bank of America, in addition to other firms and smaller regional banks.
ACRE claims police brutality bonds shield officers and their departments from any financial consequences for misconduct, and that the settlements they fund often function as hush money, preventing any real accountability. The group offers three recommendations to end what it terms “the financialization of police violence.”
First, banks and investors should not profit from cities’ borrowing to pay for settlements. Banks should be required to provide no-fee, interest-free loans when lending a city money to cover police-related settlements or judgment costs, and only banks willing to meet this stipulation should be permitted to do business with the city.
Second, cities should oblige police officers to take out individual liability insurance policies to cover the costs of settlements and judgments resulting from misconduct. This policy will create a financial incentive to curb abusive behavior, and will protect taxpayers from footing the bill for violations.
Finally, the report calls for data collection and full transparency regarding officer misconduct: which individuals are causing the settlements and judgments, how they are being held accountable, who is paying for their misconduct, and who profits from these payments.
Activists will hold a press conference at Chicago City Hall on Wednesday, June 27, alongside Alderman Carlos Ramirez-Rosa to address the city’s response to these recommendations.
This summary was prepared by TCR news intern Elena Schwartz. Readers’ comments welcome.