Tom Gores’s Prison Investment Drags NBA Into Controversy
Tom Gores’s Prison Investment Drags NBA Into Controversy
(Bloomberg) -- Calls for billionaire Tom Gores to cut ties with a controversial prison phone company have reached the National Basketball Association, days before the start of the new season.
In a letter to NBA Commissioner Adam Silver and in a full-page ad published in Sunday’s New York Times, a criminal justice group called on the league to force Gores to sell the Detroit Pistons and step down from the NBA board because of his financial interest in Securus Technologies Inc.
The letter is part of a broader campaign that has called on private equity firms, investment managers and pension funds to divest from companies that operate in correctional facilities and profit from mass incarceration. Those efforts have intensified after the killing of George Floyd in May became a catalyst for protests against systemic racism in the U.S. criminal-justice system.
“If Black Lives Matter, what are you doing about Detroit Pistons owner Tom Gores?” reads the ad, which is addressed to other club owners including Alibaba Group Holding Ltd. co-founder Joseph Tsai, former Microsoft Corp. CEO Steve Ballmer and NBA legend Michael Jordan.
Platinum Equity, the Beverly Hills, California-based buyout firm run by Gores, acquired Securus in 2017 for $1.6 billion.
“Mr. Gores continues to amass wealth and benefit from a system that exploits Black people and profits from their pain,” Bianca Tylek, executive director of Worth Rises, the organization that placed the ad, wrote in a Dec. 10 letter that was also made public on Sunday.
Mark Barnhill, a parter at Platinum, said in an emailed statement on Sunday that his firm’s priority at Securus is to “shoulder the heavy lifting necessary to transform the company and the industry, and do so in collaboration with a broad coalition of groups and individuals.”
Gores has pledged to put any personal profits from his investment in Securus back into the company to pursue the planned reforms, Barnhill said. He characterized the Worth Rises campaign as the work of an “isolated fringe.”
Vocal Supporters
NBA players have been among the most vocal supporters of social and racial-justice causes involving professional athletes this year. Playoff games ground to a three-day halt in August after the Milwaukee Bucks refused to take the floor to protest the police shooting of Jacob Blake, a Black man in Kenosha, Wisconsin.
“We understand Worth Rises’ passion for prison reform and have been in regular communication with Tom Gores regarding their concerns,” NBA spokesperson Mike Bass said in an emailed statement. Bass said the league supports Gores and his colleagues’ efforts “to address these important issues.”
The NBA has pledged to donate $300 million over the next decade to support economic empowerment in Black communities through the creation of the NBA Foundation. Its first grant under the program was announced this month.
Securus has come under fire for charging prisoners as much as $25 for a 15-minute phone call, although the company has said that it has eliminated some of the highest rates. A large portion of those fees are typically paid back to the counties and states that operate the facilities as commissions.
A representative for Securus said the company is working to make its services “as affordable and accessible as possible” and that since January it has cut the average cost of a phone call to $0.15 per minute.
Increased Pressure
Gores and Platinum have faced increased pressure to divest from Securus in recent months. In October, Gores resigned from the board of trustees of the Los Angeles County Museum of Art after his role on the board was criticized by activists, artists and donors.
Platinum earlier this year installed new executives at Securus, whose parent company was renamed Aventiv Technologies, including Chief Executive Officer David Abel.
Dallas-headquartered Securus is one of the largest providers of telephone and video-visitation services in the country, serving more than 1.2 million incarcerated people across North America, according to its website.
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