As Bankers Back Away, For-Profit Prison Companies Step Up Political Spending

The U.S. for-profit prison industry, already facing organized opposition from human rights and justice reform advocates, got some bad news recently from its bankers.

JPMorgan Chase & Co., the biggest U.S. bank measured by assets, last week announced its intention to stop financing private operators of prisons and immigrant detention centers after an evaluation of costs and benefits. The move follows banking giant Wells Fargo’s recent decision to scale back its involvement with the private prison industry as part of its risk management efforts. The decisions are a blow to an industry with a business model that relies on debt financing in the form of credit, loans, and bonds for day-to-day operations as well as for buying smaller companies.

The banks’ announcements come amid a years-long campaign by advocacy groups that targeted the industry’s bankers. For example, JPMorgan and Wells Fargo were among the six Wall Street firms identified in a 2016 report by California-based privatization watchdog In the Public Interest (ITPI) as financing the debt of the two biggest U.S. for-profit prison companies: Nashville, Tennessee-based CoreCivic (formerly Corrections Corporation of America), which at the time had total debt of about $1.5 billion, and The GEO Group of Boca Raton, Florida, with debt of about $1.9 billion.

In 2017, after release of the ITPI report, the national progressive advocacy group Center for Popular Democracy launched the “Corporate Backers of Hate” campaign to target “some of the companies which most egregiously prioritize profits over people,” including JPMorgan and Wells Fargo. Activists kicked off the campaign with civil disobedience at JPMorgan’s Manhattan headquarters, followed by rallies outside of shareholder meetings in Texas and Delaware. Last July, activists working with the campaign held a protest outside the New York City home of JPMorgan CEO Jamie Dimon that led to eight arrests.

Meanwhile, more than 80 organizations from immigrant rights groups to social investing firms came together last year as part of the Families Belong Together campaign to create a corporate accountability committee targeting big banks through strategies aimed at both industry insiders and consumers. At the same time, activists intensified scrutiny of the industry’s other financing. For example, a national initiative called Real Money Moves is calling on athletes, actors, artists, and activists to keep their money out of private prison companies, and a growing number of public pension funds are divesting from the industry, whose stock prices have soared under the Trump administration and its punitive immigration policies.

Then last month, U.S. Rep. Alexandria Ocasio-Cortez of New York called for hearings on banks’ funding of private prisons that hold undocumented immigrants. “We’re going to hold oversight hearings to make these banks accountable for investing in and making money off of the detention of immigrants,” she said at an event hosted by an immigrants’ rights advocacy group in New York City. “Because it’s wrong.” While just over 8 percent of all U.S. prisoners are held in private facilities, over 60 percent of those in U.S. immigrant detention are, with CoreCivic and The GEO Group together holding about 15,000 people in immigrant detention each day.

Under mounting pressure from critics, private-prison firms are stepping up their already-considerable political influence operations. The industry spent over $3.8 million on lobbying at the federal level in 2018 alone, and over $1.9 million on campaign contributions during the 2018 campaign cycle, according to OpenSecrets.org. That’s a significant increase over the industry’s spending of $2.1 million on lobbying and $522,000 on campaign contributions in the 2014 cycle.

CoreCivic’s Latest Lobbying Hires

CoreCivic, the second-largest U.S. private-prison company after The GEO Group, last month retained the lobbying services of The Vogel Group, an influential bipartisan lobbying firm headquartered in Washington, D.C, as ITPI reported in its latest weekly privatization report. The issue code on the lobbying registration paperwork? Banking.

The move expands CoreCivic’s already-considerable lobbying operation. In 2018 alone, the company spent over $1.2 million lobbying at the federal level, with that money split between six prominent firms: Akin Gump Strauss Hauer & Feld, the largest U.S. lobbying firm by revenue; Gephardt Group, the Atlanta-based labor consultancy of former U.S. Rep. Dick Gephardt of Missouri; Greenberg Traurig, another of the largest U.S. lobbying firms; Hobart Hallaway & Quayle Ventures, whose partners include the son of former U.S. Vice President Dan Quayle; Miller Strategies, whose CEO previously worked for former Texas governor and current U.S. Energy Secretary Rick Perry; and Simmons & Russell Group, whose principals have served as chiefs of staff for Senate Majority Leader Mitch McConnell of Kentucky and U.S. Sen. Mark Pryor of Arkansas.

The Vogel Group lobbyists who’ll be working with CoreCivic are CEO Alex Vogel, who previously lobbied for the company from 2010 to 2014, and principal Brian M. Johnson. The two men bring a wealth of conservative political connections and experience.

Vogel served as chief counsel for U.S. Sen. Bill Frist, a Republican who represented Tennessee from 1995 to 2007. He also served as general counsel for the National Republican Senatorial Committee and deputy counsel for the Republican National Committee, according to LittleSis, a database that tracks power networks. Vogel is married to Virginia state senator and former Republican lieutenant governor candidate Jill Holtzman Vogel and is a partnerin her law firm, Holtzman Vogel Josefiak Torchinsky, which is currently embroiled in an ongoing lawsuit over its role in wrongly accusing Democratic voters of felony voter fraud in the 2016 North Carolina gubernatorial election.

Johnson previously headed federal relations for the American Petroleum Institute, a leading oil and gas lobby, and for Americans for Tax Reform, an anti-tax advocacy group founded and led by Grover Norquist, a prominent Republican political operative who has said his goal is to bring America back to what it was “up until Teddy Roosevelt, when the socialists took over. The income tax, the death tax, regulation, all that.”

Johnson also used to direct the Alliance for Worker Freedom, now called the Center for Worker Freedom (CWF), a project of Norquist’s group that opposes labor unions. In 2014, for example, CWF led a public relations effort against the United Auto Workers (UAW) effort to organize a Volkswagen manufacturing plant in Chattanooga, Tennessee, using tactics that included billboards claiming the UAW is a cover for the “United Obama Workers.” The union lost that vote, but the following year a group of skilled trades workers at the plant voted to form a micro-union, though the company has refused to bargain with it. A union foe like Johnson would likely feel at home working on behalf of the private prison industry, where few workers belong to unions and typically make much less than workers in public prisons.

The statement CoreCivic released in response to JPMorgan’s announcement offers a hint of what the industry’s messaging strategy might look like as the political fight over private prisons continues. The company said that it is “disappointed” with the bank’s decision, as Bloomberg reported, which it claimed had played “an important role in creating better conditions for inmates entrusted in our care.”