Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 8017 sus for substantial growth in government budgets, staffing levels and media attention. Indeed, during this period, the number of federal agencies with police powers has grown to over 50, approximately 10% of the American enforcement bureaucracy. This is further encouraged by federal laws permit- ting confiscation of assets such as homes, cars, bank accounts, cash, businesses and personal property that can be used to fund federal, state, and local enforce- ment budgets. One way to look at the financial issues involved is to view them from the vantage point of the portfo- lio strategists of the large mutual funds. We have approximately 250-280 million people in America. The question from a portfolio strategist standpoint is what productive value will each one be creating in companies and communities and how does that translate into flow of funds that then translate into equity values and bond risk. The prison companies are marketing one vision of America with their prison and prisoner growth rates, while the consumer companies are market- ing another. The two are not compatible. CCA’s assumptions regarding the growth in arrests and in- carceration cannot be true if Fannie Mae’s, Freddie Mac’s and Sallie Mae’s assumptions about home- ownership and college education rates are true. We, the people, cannot refinance our mortgages or buy homes or raise our children and send them to college if we are in jail. Meantime, the municipal debt market is also fac- ing conflicting positions. If prison bonds are a good investment, then some general obligation bonds may be in trouble. We, the taxpayers, cannot sup- port the debt: we are no longer taxpayers. We have become prisoners. Whatever we are generating in prison labor, it is certainly not enough to pay for the $154,000 per prisoner per year costs indicated for the full system by the General Accounting Office. It would be very illuminating to get the rating agencies and the 10 largest mutual funds together in one room for an investor roundtable to discuss pricing levels on the investment of our savings that is internal to their portfolios and ratings. We would compare equity valuations and growth rates of: • Companies who make money from the Ameri- can people losing productivity • Companies who make money from helping the American people grow more knowledgeable and productive. We are investing in two different visions that can- not both come true. We could then calculate which was going to succeed, and what the integrated pricing level would be. Better yet, what could happen that would make the most money for the investment community. The question is which vision is best for us, the equity in- vestors of America? And why are investors assuming both can or will win as they price their stocks and bonds? It is critical to look at prison policy from the stand- point of maximizing return on equity investment. It would be a terrible thing, while I can no longer pay taxes or buy a house or send my son to college because I am in prison, if my vested pension benefits were wiped out by the time I re-entered society. It is bad enough that my life savings are being invested in companies that make money from promoting that my family and me should be arrested and incar- cerated. It would be worse if my family and I were broke because companies that make money from loss of productivity turned out to also be a bad invest- ment. Such a roundtable might make for a great New York Times article. If you are willing to take it on, Solari would be happy to assist your staff by con- tributing background analytics on how the money works in prisons. Sincerely Yours, Catherine Austin Fitts President Solari, Inc. Although my comments were prescient, the NY Times did not take up my offer. It was part of learning to publish my opinions on my own website – leading to the creation of the Solari Report. Seventeen years later, in August 2016, after the Department of Justice announced that it was not “ It is critical to look at prison policy from the standpoint of maximizing return on equity investment. It would be a terrible thing, while I can no longer pay taxes or buy a house or send my son to college be- cause I am in prison, if my vested pension benefits were wiped out by the time I re-entered society. ”