Tom Gores has enough money to shape the future of this country in profound ways. The businesses he controls impact the lives of millions of people, every day. He’s worth $5.7 billion. Last year, Forbes ranked him as the 118th wealthiest American. He owns the Detroit Pistons and is chief executive of an investment firm called Platinum Equity that controls more than $19 billion in assets.
As far as oligarchs go, his public image is pretty good. Despite the revelation back in 2008 that he was sleeping with his sister-in-law, he generally has a reputation for being a decent guy. A glowing story in Maxim describes him as the son of immigrants who grew up poor and worked hard to get what he has. When Gores bought the Pistons in 2011, he gave a press conference in which he talked about his sense of responsibility to the people of Detroit, summing up his motives by saying, “If it ends up a great investment for us… and is not great for the community, I don’t consider myself successful.”
Since then, Bloomberg has called him a “civic leader in Michigan.” He was lauded for helping raise $10 million to address the water crisis in his hometown of Flint. He was praised for saying he supported professional athletes like Colin Kaepernick who kneeled during the national anthem, releasing a statement at the time in which he professed that “America's most treasured values include equality and diversity.”
All that is good. But where does the money come from? Through Platinum, Gores is profiting from mass incarceration and the exploitation of the poorest and most vulnerable people in America, putting himself at the center of a system that disproportionately imprisons people of color and ruthlessly extracts wealth from them and their families.
“A Great Investment for Us”
Platinum Equity’s business model is to buy companies, make them more profitable, and sell them for massive gains. Platinum, which Gores founded and runs, currently has over 40 companies in its portfolio. These companies include a manufacturer of blood glucose monitors for diabetics and a wind power company. But they also include Securus Technologies, a prison telecom company infamous for its expensive calling rates. Platinum recently took two other companies public: PAE, a government services provider that contracts with Customs and Border Patrol, and Verra Mobility, both of which Gores owns a 10 percent share of, according to SEC filings from February that also identify him as one of Verra’s directors. If you’ve ever gotten a speeding ticket in the mail, there’s a good chance it came from a subsidiary of Verra Mobility.
“Gores is profiting from mass incarceration and the exploitation of the poorest and most vulnerable people in America.”
Through these three companies, Gores is creating a pipeline to prison for poor people who commit minor traffic offenses, helping our government expand immigrant detention, and turning millions of incarcerated people into a revenue source for himself and his investors.
Of all Gores’ companies, Securus Technologies is the most controversial. Securus provides phone services to more than 3,400 prisons, jails, and detention centers across North America that are used by about 1.2 million incarcerated people, according to its website. It is one of two major prison telecom companies in the U.S. that together dominate the industry. Yet Securus in particular has become notorious for charging high rates to incarcerated people and their loved ones, causing enough outcry recently that a Pennsylvania state employee pension withheld a $100 million investment it had planned to make in Platinum Equity’s last fund.
As of 2018, Securus, which Gores bought just months after the FCC rolled back Obama-era rate caps on prison phone services, was charging as much as $24.82 for a 15-minute call. In response to criticism from prison reform activists, Gores announced in January that he would be reforming Securus and lowering call rates. But Securus is meanwhile expanding a tablet program that charges incarcerated folks steep fees for emails and ebooks, and the promised reforms have produced little change.
Today, Securus is still charging thousands of incarcerated people nationwide upwards of $10 for a 15-minute call. A company spokesperson claims that their national average rate for a 15-minute call is $2.25. But that figure likely includes prices in jurisdictions where prison reform advocates have been successful in helping pass legislation to drastically cut rates, as in New York City where a 2018 law ensures Securus’ calls are now free at local jails. The $2.25 average claimed by Securus also omits the high fees the company charges. In an agreement signed in late 2019, for example, Securus stipulates that it charges incarcerated people at Etowah County Jail in Georgia $3.00 or 3 percent each time they deposit money by debit or credit card onto their calling accounts. Deposits via Western Union, meanwhile, cost $5.95. With a rate of $0.21 per minute for domestic and $0.75 per minute for international calls, including the Western Union deposit fee, a single 15-minute call at Etowah can run as high as $9.10 or $17.20, respectively.
“A single 15-minute call for an inmate at Etowah can run as high as $9.10 or $17.20.”
“Securus’ business model is based on charging exorbitant phone rates that are born primarily by communities of color and poverty,” explained Jim Baker, director of Private Equity Stakeholder Project, a nonprofit organization that examines the impacts of investments made by private equity firms. Often, because those who are locked up can’t work and are already economically disadvantaged, their family members wind up footing the bill, causing the punishment of their incarceration to further echo through their communities.
Spokespeople from both Securus and Platinum Equity called that characterization of Securus’ business model false, but did not elaborate further.