University of Miami Business Law Review


Jenna Reifler

Document Type



Municipal bonds are generally understood as mutually beneficial for both issuer and holder—they allow cities to secure capital for local improvements and investors to earn reliable and tax-exempt profits. It turns out, however, that the lack of disclosure for issuing general obligation bonds presents the perfect camouflage for cities to secure funding despite their local social responsibility inadequacies.

Cities quietly shell out millions of dollars in settlements to the victims of police-misconduct. Largely unreported and untracked, many municipalities fund such settlements through general obligation bonds, which are colloquially termed police brutality bonds. As a result, and often unbeknownst to the layperson, the burden of accountability for police misconduct lies with the taxpayer. Moreover, and in many cases, the lack of required disclosure for general obligation bonds renders the bondholders themselves unaware that their financial gain is tied to police brutality. Emerging data shows that police brutality bonds aid the transfer of “wealth from communities—especially over-policed communities of color—to Wall Street and wealthy investors.” Under increased public scrutiny for socially responsible investing, large financial institutions purchasing municipal bonds risk catastrophic reputational implications. Environmental, social, and governance criteria (“ESG”) have become the modern threshold of investment decision making, and many large banks are revising their strategies in accordance with ESG. But, absent the requisite knowledge of police misconduct to invest in accordance with ESG criteria, investors face risks when sourcing funds to municipalities.

As lawmakers’ efforts to reform policing are often thwarted by barriers like qualified immunity, financial limitations, and political disputes, incremental solutions may offer hope. By demanding information or withholding funds, large investors in the municipal bond market hold the power of the purse that can bring pressure for policy reform from all sides.