Iowa Senator Chuck Grassley is calling for an investigation into what he calls “an exclusive, longtime contract” between Bank of America and the federal government to run bank accounts for federal prison inmates. “The terms of this agreement have been changed and expanded 22 times over 14 years,” Grassley says. “The agreement has not been competitively bid. The bank has received at least $76-million from the taxpayers to manage these prisoners’ accounts.”
He says it’s unclear how much money the bank receives directly from the inmates in service fees. Grassley, a Republican, says any time the government avoids competitive bidding, the practice needs exploration. “The Treasury Department didn’t have to use competitive bidding here because the law doesn’t require it, but the question is, why they did not use competitive bidding,” Grassley says. “The government has competitive bidding for a very good reason, it’s meant to give the taxpayers the most bang for the buck.”
Grassley, the ranking Republican on the Senate Judiciary Committee, says his action is a response to an investigative report from the Center for Public Integrity that details the agreement between Bank of America and the federal Treasury Department. “I wrote to Treasury Secretary Jack Lew for details on the agreement,” Grassley says, “and as you’ve heard me say so many times, transparency is going to shed light on whether this arrangement is the best deal for the government and for the taxpayers.”
Grassley says the Treasury Department’s decision to repeatedly amend instead of competitively bid the arrangement “raises significant questions.” Grassley asked for details of all payments to Bank of America and for disclosure of all 22 amendments to the bank’s initial contract over the years.