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.
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.
“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.
Erickson Martinez of Florida is one of the many incarcerated parents whose money has helped make Gores richer. In 2019, Martinez’s daughter, a U.S. citizen, was 7 years old and living in Miami. Martinez, who had been in ICE detention for nearly three years while he fought a legal case against being deported to Colombia, was being held five and a half hours away from her at Baker County Detention Center in Macclenny, Florida—a county jail.
“The phone is very expensive at Baker,” he told me. “The first time we used it, it was a lot of money.” He remembers paying something like $20 for a 10- or 15-minute call. After that, “I did a lot of writing,” he said. “It caused me not to speak to my family.” Martinez was eventually deported to Colombia, from which his family had fled to the U.S. nearly three decades prior. When I videoconferenced with him via a free international calling app, Martinez told me he’d had his nose broken at Baker by a guard who punched him while he was handcuffed, sitting in a chair. Sawyeh Esmaili and Lily Hartmann, attorneys at Americans for Immigrant Justice who have visited and provided legal counsel to immigrants held at Baker, said several other immigrants they spoke to complained of physical abuse at the hands of guards. When questioned about Martinez’s claim, Major Randy Crews denied the allegation of abuse and claimed the guards did not act improperly, saying that Martinez was resisting and needed to be restrained. “There was fist strikes and stuff to the guy,” Crews said, “but it was a case where he was resisting. There were several people on there… but a lot of that was trying to gain compliance and control of him.”
While Gores is not responsible for the treatment of those incarcerated at Baker, Securus does help support Baker, providing a major revenue source by paying the jail a 70 percent commission on the calling fees it earns from prisoners.
Expanding a Captive Audience
PAE, a megacorporation that Platinum Equity recently took public via a merger in February, provides logistical and managerial support to government agencies. SEC documents from April show that after the merger, Platinum still owned over 25 percent of PAE’s Class A stock, and that the company reported revenue of $2.7 billion for 2019. Reporting by American Prospect has shown that PAE, together with its various subsidiary companies, has been awarded nearly $800 million in contracts from Customs and Border Patrol (CBP) since 2010, making it the single largest corporate recipient of CBP funding in the past decade.
According to filings in the Federal Procurement Data System, since Platinum acquired PAE Holdings Corporation in March 2016, CBP has paid one of its subsidiaries, PAE Aviation and Technical Services LLC, well over half a billion dollars.
According to its website, PAE provides CBP with aircraft maintenance as well as “biometric data collection, identify verification and criminal checks.” CBP uses aircraft for surveillance, tracking, and reconnaissance both at the border and within U.S. cities. Under the Trump administration, biometric data and criminal histories have both been used as justifications for separating children from their parents at the border. In FY 2017, with PAE’s help, CBP detained over 300,000 immigrants.
Through both PAE and Securus, Gores is profiting off the Trump administration’s aggressive anti-immigrant policies. In the period between September 2016 and January 2019, the number of immigrants being held by ICE spiked 22 percent from 38,810 to more than 47,000, according to a report from Syracuse University’s Transactional Records Access Clearinghouse.
In that time, many hundreds of immigrants who have been detained by ICE have ended up in facilities that contract with Securus. ICE inspection reports show that Securus has been operating in detention facilities and county jails that hold immigrants since at least 2008 and was operating in no fewer than nine as of 2019.
At 28 separate intersections in Miami Gardens, a predominantly African-American city north of Miami where the poverty rate is 22 percent, if you fail to come to a complete stop before making a right turn on a red light, a Verra Mobility camera photographs your car. A ticket for $178 arrives in the mail. If you don’t pay or contest within 60 days, a $277 citation arrives next. A month later, if you still don’t pay or contest, your driver’s license is suspended.
This all happens automatically, with little human oversight, every day in cities throughout Florida, where Verra is the state’s primary operator of red-light cameras, issuing 1,159,392 tickets through automatic camera systems in FY 2017–18 alone, many of which were for not coming to a complete stop before making a right turn. Of those, nearly a third went unpaid for 60 days, resulting in the issuance of the $277 citation.
Because Florida also suspends licenses for other kinds of unpaid debt, it is unclear how many licenses are suspended due to unpaid traffic camera tickets. But according to a report from the Florida Fines and Fees Justice Center, more than a million Floridians have their licenses suspended each year for nonpayment of fines and fees.
Each municipality sets its own standards for automated ticketing, but similar versions of the same process are playing out in cities throughout the country, often with devastating results for those experiencing poverty. Verra’s website boasts that it now operates over 5,000 automated traffic enforcement cameras in 200 jurisdictions nationwide and sends out 8.5 million tickets annually.
Driving on a suspended license (DWLS) is a misdemeanor in most states, but in some cases, it can even be a felony for repeat offenders. A 2016 report from Florida Tax Watch, a nonprofit organization that tracks government spending, found that Florida sends approximately 450 people to prison annually for felony DWLS.
When driving with a suspended license, “If you get stopped, you get cited [and] could be arrested,” explained Lisa Foster, co-director of the Fines and Fees Justice Center and a former California Superior Court judge. “That is a huge driver of criminalization. People stay stuck in the justice system because they can’t afford to pay for something as simple as a red-light ticket.”
Cassandra Francois lives in Orlando, where public records show the traffic enforcement cameras are operated by Lasercraft, Inc., a subsidiary of Verra Technologies. When Francois got a red-light ticket in the mail, she thought it was a scam because she’d seen news reports in which state officials from the Florida Department of Highway Safety and Motor Vehicles warned about fraudsters sending out fake tickets with the department’s logo.
When Francois didn’t pay, the fines increased to nearly $300 and her license was suspended. Unemployed and struggling to make ends meet, she couldn’t afford to pay to have her license reinstated, not even through the payment plan of $48 a month she was offered. “They said I don’t have any other options,” she told me. She also said that because many jobs require reliable transportation, her prospects of finding work have gotten worse.
Verra Mobility is one of the nation’s largest providers of speed and red-light cameras. According to the firm’s press releases, Gores’ Platinum Equity acquired what was then called American Traffic Solutions (ATS) in 2017, changed its name to Verra Mobility, expanded it through a series of mergers (including one with his billionaire brother’s private equity firm), and took the company public in 2018 with a $2.4 billion valuation. At that valuation, Gores’ personal 10 percent share of the company is worth nearly a quarter of a billion dollars.
Among the many it operates nationwide, Verra runs the speed camera-ticketing program in Chicago, which as of September 2018 included 162 cameras that issued on average more than 2,000 tickets each day. In 2018, Verra issued Chicago motorists $51,386,266 worth of tickets. Much of that money went into city coffers, but in return, Chicago has paid Verra (formerly ATS) nearly $38 million since 2013.
Like Securus, Verra capitalizes on those who can least afford it. Though Verra does not decide where the cameras are installed, its revenue-generating technology can be particularly tempting for cash-strapped municipalities. A 2018 study by the Woodstock Institute, a nonprofit research and policy organization, found that Chicago’s speed cameras are disproportionately located in low-income neighborhoods and communities of color, where the tickets are more likely to go unpaid, resulting in the fines doubling. Chicago also suspends the licenses of drivers who rack up five or more unpaid camera tickets.
Mark Barnhill, a partner at Platinum Equity, said that Verra “doesn’t contribute to ‘traffic enforcement practices’ any more than the manufacturer of the red light itself.”
Nothing but Net
Tom Gores has often suggested he bought the Detroit Pistons as a platform for helping revitalize the city. When his team failed to make the playoffs in 2018, Gores apologized to fans for not winning on the court, but said, “We continue to commit to Detroit, with kids and the future and the community. So we’re doing a lot of things that… are wins for the city.”
One of the wins he mentioned was moving the team from nearby Auburn Hills to Little Caesars Arena in downtown Detroit. This January, the Los Angeles Times wrote that Gores is “credited with helping revitalize Detroit by moving the Pistons downtown.” The Pistons now play in an arena that was built by the billionaire Illitch family, using over $300 million of taxpayer-backed bonds. In exchange for the subsidies, the Illitches sold city officials the dream of a 50-block development around the arena that would include retail stores and hundreds of residential units that never materialized.
Today, abandoned buildings with sagging walls and caved in roofs surround the new $863 million home Gores found for his team, which was partially paid for with public money and where attendance at games is among the worst in the league.
And business is great for Tom Gores. Better than ever. Platinum pulled in its largest ever investment fund this past year: the headline in The Wall Street Journal read, “Platinum Equity Rakes In $10 Billion as Investors Ignore Critics.” Meanwhile, the city Gores claims to be revitalizing is being hurt by gentrification and mass incarceration, both of which are mechanisms for extracting wealth from the poorest people in our society to line the pockets of the richest.
Tom Gores, through a colleague, declined to comment for this story. When I reached out to Platinum Equity (asking also about a fourth company, Transworld Systems), Barnhill, the partner, wrote back that, “There is a fundamental flaw in your basic thesis that those four companies reflect investments in the prison and law enforcement industries.”
He wrote that PAE and Verra Mobility were “not in the prison or law enforcement industries.” He claimed that Platinum “absolutely” takes ethical considerations into account when acquiring companies, and that “we have a responsibility for all impacts from the businesses we operate.” Barnhill also noted that Securus has been providing a number of free phone calls during the coronavirus pandemic, 7.3 million in total as of April 23.
A representative from Verra replied simply that, “Penalties for traffic violations are set either through state law or municipality ordinance.” She did not mention that Verra Mobility lobbies in city and state legislatures throughout the country to influence those laws and ordinances, including with the two registered lobbyists it has working on its behalf in Orlando—where when we last spoke Cassandra Francois still owed hundreds of dollars in fees and still had no license.