Oct 1, 2019

Elizabeth Warren investigates for-profit prison money

Illustration: Aïda Amer/Axios

Sen. Elizabeth Warren is no fan of private equity or private prisons, and Axios has learned that she wants answers from PE firms invested in prison services companies.

The big picture: Warren's goal is to determine if private equity ownership results in a lower standard of services, similar to an investigation she launched last month into PE-owned for-profit colleges.

Warren yesterday sent letters of inquiry to 5 firms. Co-sponsoring the letters were Reps. Mark Pocan (D-Wis.) and Alexandria Ocasio-Cortez (D-N.Y.).

  • Requested information includes revenue, profits, number of employees and number of incarcerated individuals related to the underlying investments.

None of the 5 targeted firms have a specific focus on prison services, but each has made at least 1 significant investment in the sector:

  • American Securities: GTL, one of the 2 largest providers of inmate calling and emailing services.
  • Apax Partners: Attenti, a provider of electronic monitoring products.
  • BlueMountain Capital: Corizon Health, the largest private provider of medical services to prisons, operating in 220 facilities in 17 states.
  • H.I.G. Capital: Trinity Services Group, a provider of food and commissary services to correctional facilities in 43 states. It also owns health care services provider Wellpath.
  • Platinum Equity: Securus, one of the 2 largest providers of inmate calling and emailing services.

The bottom line: Warren already has proposed legislation that would make private equity funds liable for debt obligations of their portfolio companies, including worker pension obligations. Now, she seems interested in expanding that liability to "consumers" of such portfolio companies, whether they be for-profit students or prisoners.

Go deeper: Axios' deep dive on the business of private prisons

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Elizabeth Warren's frontrunner status is bad news for private equity

Illustration: Sarah Grillo/Axios. Photo by Bauzen/GC Images

Private equity wasn't mentioned by Elizabeth Warren during last night's debate, even though she got more speaking time than any of the other 11 candidates. For private equity, that was the good news.

The state of play: The bad news for private equity was that at least 9 of the other 11 candidates tacitly acknowledged that Warren is now the Democratic Party's frontrunner.

Go deeperArrowOct 16, 2019

Private equity maximized profits while sick children were neglected

A nursing company controlled by private equity firms left a trail of injury reports and seven child deaths last year as it pushed to maximize its profits, Bloomberg News reports, citing inspection reports, internal documents and interviews from former employees.

The big picture: "Home health care is considered an especially promising private-equity investment because it can save on expensive hospital stays, while generating revenue for years," according to Bloomberg.

Go deeperArrowOct 23, 2019

Private equity's other stake in surprise medical bills

Private equity firms don't just own physician firms and air ambulances that would be most affected by eradicating surprise bills. They also hold stakes in the companies that help health insurers determine what they should pay for out-of-network care.

Why it matters: Private equity has its footprint all throughout health care, but these financial firms especially have a lot on the line in Congress.

Go deeperArrowOct 28, 2019