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How Wall Street Profits from the Criminalization of Immigrants and Lobbies for More To Be Locked Up

Two Wall Street-backed powerhouses are making fat profits off of the private immigration detention system, and they're flexing their muscles in Congress.

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In addition to funds raised by the partisan appeal, Brewer’s legal effort has been bolstered by supporting briefs filed with the appeals court by three states– Florida, Texas and Virginia–that have contracts with GEO or with both GEO and CCA. The two prison companies are currently ramping up their political involvement in these states and in several others that have anti-immigrant bills moving through their respective legislatures. In all, twenty states are considering SB 1070-inspired bills, which have been endorsed by their respective Republican gubernatorial candidates, financed in large part by the Republican Governor’s Association.

Last November, CCA’s top management in Tennessee  contributed the largest block of out-of-state campaign contributions received by Arizona Governor Jan Brewer.[1] CCA, which already has several detention facilities in Arizona and hopes of expanding its immigrant prison business in that state, is expected to gain a huge increase in revenues with the implementation of SB 1070. Currently, Latinos driving out of the city of Tucson in any direction are being stopped at checkpoints, where they are asked to show their papers.

GEO and CCA are now heavily involved in the governor and state legislative races in states where they plan to expand their respective shares of the prison and incarceration market. GEO, for example, backed first-term Republican Governor, Bob McDonnell, in Virginia last year, and has contributed heavily to the Republican Governor’s Association and to the Florida Republican Party. In addition to Jan Brewer in Arizona, CCA is contributing to the campaigns of both, Republican Meg Whitman, and Democrat Jerry Brown, for governor in California. CCA is also giving money to Louisiana Governor Bobby Jindal, even though Jindal isn’t currently facing an election, and to the Republican Governors Association, which has contributed over $1.5 million to state races this year.[2]

Since the change of administration in Washington D.C., GEO has expanded its presence there by adding the services of lobbyists who formerly served in high positions in the Obama presidential campaign, the Clinton White House, and the Senate and House Appropriations committees. Currently, GEO retains the services of three Washington D.C. lobbyists who also work for Wells Fargo, GEO’s top shareholder. One of GEO’s Washington D.C. lobbyists, Barbara Comstock, is also a member of the Virginia state legislature. CCA relies on its officers to do its lobbying in Washington DC,[3] where some board members, such as former Arizona U.S. Senator Dennis DeConcini, are well-connected.

CCA’s and GEO’s share of the taxpayer-funded immigrant incarceration business has grown substantially since 2006. Today, for example, in California, anyone picked up by ICE in Los Angeles is sent to a CCA facility in San Diego, while those picked up by ICE in Seattle or Portland, OR, are sent to a GEO facility in Tacoma, Washington, because detention facilities owned and operated by the federal government are at 137% capacity, with no room to house more prisoners.

Wall Street’s Role

CCA and GEO are owned by major Wall Street institutions, which profit from the immigrant incarceration business as major shareholders.

The most influential investor in CCA is a hedge fund, Pershing Square, which is run by Wall Street investment guru activist investor, Bill Ackman. Ackman also plays a powerful role in Target Corporation and Kraft Foods. Wells Fargo is the most powerful investor in GEO.

Other major investors with the power to influence management in one or the other of the two companies are Vanguard, Lazard, Scopia, Wellington Management, FMR (Fidelity), BlackRock and Bank of America. Each of these major owners is sensitive to public opinion in one way or another. These major investors do not need to rely on either CCA or GEO to make money, since most of their money is invested in enterprises unrelated to private prisons.

 
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