Released 13 June 2015  By Melanie Diaz and Timothy Keen - Research Associates at the Council on Hemispheric Affairs
How US Private Prisons Profit from Immigrant Detention
(....Continue from Part One)
Proponents of PPCs contracting with the U.S. Government could certainly make the argument that they act within the contours of any typical business. That is, responding to external demand for a particular service; in this case, immigrant detention centers. This argument, however, is only legitimate when the PPCs are not actively involved in altering market demand to suit their monetary interests. Extensive revelations on the lucrative cycle of lobbying and campaign contributions suggest otherwise that private prison corporations, such as CCA, have dubious records of influencing immigration enforcement policy. [xxv]
While PPCs deny allegations of influencing policy through lobbying and campaign contributions, their own statements contradict this. For example, the industry has widely exploited the United States’ post 9-11 paranoia towards immigrants. James E. Hyman, Chairman of the large private prison corporation Cornell Companies, stated: “It is clear that since September 11 there’s a heightened focus on detention…The federal business is the best business for us, and September 11 is increasing that business.”[xxvi]
Exploitation of tragedy and social issues, however, is a norm in the PIC. In reference to their 2010 annual report, CCA stated that policy reform regarding immigration could affect the number of people arrested and detained, resulting in decreased demand for its detention facilities.[xxvii] In fact, CCA believes that progressive immigration reform would greatly limit their main source of profit: immigrant detainees. Thus, the industry has developed a strategy to maintain their lucrative business model through political channels.
According to the Justice Policy report titled “Gaming the System”, the strategy of these for-profit prison corporations to influence policy is based on three primary factors: lobbying, campaign contributions, and associations.[xxviii] This tactical trifecta has allowed PPCs to heavily influence U.S. policymaking in order to maintain a status quo, restrict regulatory measures, and enact tougher enforcement laws.
CCA as an Example
CCA representative, Steven Owen, has explicitly remarked that CCA does not lobby to influence immigration enforcement legislation.[xxix] Digging a little deeper into such statements, however, reflects an entirely different reality. According to CCA’s 2013 Annual Report on Political Activity and Lobbying, the for-profit prison corporation openly admits to appropriating funds for lobbying and political contributions to federal and state candidates even in states where inflated corporate contributions are not allowed. In addition, given the recent Supreme Court decision on Citizens United Vs. The Federal Election Commission, which eliminates caps on campaign contributions, CCA’s contributions to political campaigns are made easier by the Supreme Court ruling. In fact, CCA spent a grand total of $769,000 USD on political contributions according to their 2013 Annual Report on political expenditure.[xxx] Their lobbying expenditures in the report, on the other hand, were exponentially higher, with costs on direct and indirect lobbying reaching a whopping $4.4 million USD.[xxxi]
In its 2013 Annual Report, CCA explicitly stated that it focuses on government activities that primarily affect their private detention facilities. CCA also made the assumption that policies regarding the construction and operation of detention facilities are completely separate from immigration enforcement policies. Considering the fact that CCA contracts with ICE, whose chief goal is to enforce legislative measures regarding immigration, CCA’s argument that they do not actively lobby to influence immigration policy is proven fallacious.
In fact, CCA and other similar private prison corporations certainly have a cash incentive to lobby against easing immigration policy. In 2011, CCA received $208 million USD in revenues from ICE contracts, compared to $95 million USD in 2005, according to company filings with the Security and Exchange Commission.[xxxii] Furthermore, in 2011, the Justice Policy Institute found that 50 percent of CCA’s revenues derived from its state contracts.[xxxiii] So without government contracts, CCA would essentially have its profits cut in half. This means that the industry is incentivized to lobby for secured and increased contracts from the government.
Immigration Enforcement Legislation
In 2010, National Public Radio (NPR) undertook an in-depth investigation into the drafting of one of the most controversial immigrant enforcement laws in recent history: Arizona SP1070. Ratified by then Arizona Governor Jan Brewer in 2010, the law entitles law enforcement authorities to arbitrarily arrest people whom are suspected of being in the country illegally.[xxxiv] Critics of the bill believe that it has provoked pervasive racial profiling of Latin American communities based on the law’s provisions to suspect people based solely on how they look or sound. The ACLU reports that the legislation inspired other states to make copycat laws in Arizona, Georgia, Indiana, South Carolina, and Utah.[xxxv] The ACLU indicates that Arizona’s state legislators were not the only ones involved with drafting the bill. In fact, it was heavily influenced by external stakeholders, such as PPCs, who would profit from its passing since it would ramp up immigrant incarceration rates.[xxxvi] According to the NPR, several PPC representatives were directly involved with drafting the highly controversial bill.[xxxvii] To make the connection between prison corporations and state legislators elusive to the public, PPCs operated through one of the most conservative and powerful lobbying organizations: The American Legislative Executive Council, otherwise known as ALEC. A conglomeration of powerful corporate industries, ALEC has an infamous track-record for engaging in secretive dialogue between state legislators and corporate representatives to draft model legislation, and CCA is an active member of the organization.[xxxviii]
NPR’s report also revealed that Arizona’s state legislators secretly met with CCA representatives operating through ALEC at the Grant Hyatt Hotel in Washington, D.C.[xxxix] In the meeting, the group of stakeholders discussed, debated and voted on what would become a draft for Arizona’s SB1070, and four months later, the content of the law was almost verbatim.[xl] Coincidentally, 30 of the 36 co-sponsors of the bill received donations over the next six months, from both prison lobbyists and prison companies.[xli] Even more illuminating, Governor of Arizona, Jan Brewer’s top two advisers were former private prison lobbyists. With these revelations in mind, it is clear that PPCs are not only spending vast amounts of money on lobbying and campaign contributions, but are also highly associated and connected to state legislators who are drafting draconian immigration enforcement bills to further their corporate interests.
The private prison industry has not only been involved with writing legislation for Arizona SB1070. Other reports have shed light on its long history with ALEC consisting of a task force that established model legislation including mandatory minimum sentencing, three strikes laws that give repeat offenders 25 years to life, and “truth-in-sentencing” laws that require that prisoners serve most or all of their time without a chance for parole.[xlii]
Quotas & Congressional Appropriations
While PPCs do influence legislation directly, their efforts are also indirect as they concentrate on influencing congressional appropriations. The more appropriations that they can persuade congress to funnel into the DHS, the more money becomes available to them in federal contracts. A prime example of this is the bed quota or occupancy quota.
The bed quota, which mandates that ICE must hold at least 34,000 individuals on a daily basis, is a contractual agreement between ICE and PPCs.[xliii] The quota secures and maintains revenue streams for PPCs by forcing ICE to meet a minimum standard based on an arbitrary quota, which has increased from 10,000 beds to 34,000 over the last 15 years.[xliv] It is particularly unprecedented in that no other law enforcement agencies have occupancy quotas.[xlv] A 2013 report by In the Public Interest, a resource center on privatization and responsible contracting, found that 65 percent of all private prison contracts with the Government include clauses on occupancy quotas.[xlvi] These clauses generally contain a rigid minimum 90 percent occupancy guarantee, with some prisons requiring as much as 100 percent.[xlvii] It is no surprise that PPCs profit from the bed quota and actively lobby for increased appropriations to fuel their lucrative industry. In their 2010 annual report, CCA stated that “filling these available beds would provide substantial growth in revenues, cash flow, and earnings per share.”[xlviii] Since the bed quota officially went into effect after 2010, the share of detention beds operated by PPCs expanded from 49 percent to 59 percent, while 69 percent of all lobbying expenditures by private prison companies have included direct lobbying of DHS appropriations and immigrant detention issues.[xlix] There have been attempts in Congress to eliminate the bed quota from federal contracts with prisons, but all have been shot down due to the immense political leverage of PPCs.
(Continue to Part 3....)