WASHINGTON – Sen. Chuck Grassley of Iowa is asking the federal government to account for an exclusive, long-time contract between Bank of America and the government to operate an expanding array of services for federal prison inmates.
“The government has competitive bidding for good reason. It’s meant to get taxpayers the most bang for the buck,” Grassley said. “Anytime the government avoids competitive bidding, the practice needs exploration. Transparency will shed light on whether this arrangement is the best deal the government can get.”
Grassley, Ranking Member of the Senate Judiciary Committee, responded to an investigative journalism report from the Center for Public Integrity detailing the long-term agreement between Bank of America and the federal Treasury Department and the Bureau of Prisons to provide services for federal inmates. The services include electronic money transfers, phone technology and e-messaging. According to the Center for Public Integrity, the bank has received at least $76.3 million to manage the accounts since 2000, and its contract has been amended 22 times. It’s unclear how much money the bank receives directly from the inmates in service fees.
The Treasury Department has the authority to make such arrangements but it’s unclear why the department uses an exclusive agreement instead of adopting the competitive bidding and transparency that apply to most federal contracts.
“It is concerning that these requirements do not apply to financial agency agreements such as the one with Bank of America,” Grassley wrote to Treasury Secretary Jack Lew. “The Treasury Department’s decision to repeatedly amend rather than competitively bid this arrangement raises significant questions.”
Grassley’s letter notes that prisons account for a significant portion of the Justice Department’s discretionary budget, an amount that could grow. Grassley asked the Treasury Department for details of all payments by Treasury and the Justice Department to Bank of America or its subcontractors and for disclosure of all 22 amendments to the bank’s initial contract over the years.