A big private prison operator may have illegally funded a Trump super PAC
Few organizations stand to benefit from Donald Trump’s presidency as much as the GEO Group. It’s one of the largest private prison operators in the United States — and it’s accused of breaking the law to help put Trump in the White House.
The Federal Election Commission (FEC) received new information on Tuesday from the Campaign Legal Center, a nonpartisan campaign finance watchdog, about a complaint alleging that the GEO Group violated a federal ban on political contributions by government contractors.
The complaint, obtained by VICE News, accuses the GEO Group of using one of its subsidiaries, GEO Corrections Holding Inc., to make more than $225,000 worth of illegal contributions to Rebuilding America Now, a pro-Trump super PAC.
The Campaign Legal Center initially reported the GEO Group’s alleged violations to the election commission on Nov. 1, but the private prison company’s subsidiary made another contribution to the super PAC on the same day. The additional donation wasn’t revealed until December 8, when Rebuilding America Now disclosed it in routine FEC filings.
The GEO Group operates 64 detention centers with more than 75,000 beds in the United States. The company reported total revenues of $1.84 billion last year, much of it derived from contracts to house inmates for states and the federal government.
Federal contractors are banned from making political contributions to avoid so-called “pay to play” arrangements, in which elected officials dole out lucrative deals to companies that supported their campaigns. The GEO Group claims, however, that its donations to the Trump super PAC were “fully compliant with all applicable federal election laws.”
“Although GEO Corrections Holdings Inc., the company that made the donation, is a wholly-owned subsidiary of the GEO Group, it is a non-contracting legal entity and has no contracts with any governmental agency,” company spokesperson Pablo Paez said in a statement to VICE News.
But Brendan Fischer, an attorney with the Campaign Legal Center, alleges that the GEO Group and its subsidiary are essentially one and the same. GEO Corrections Holdings Inc. is headquartered at the same address as the GEO Group, and it employs all of its parent company’s corporate staff.
“GEO Group and GEO Corrections Holdings Inc. really seem indistinguishable, and their corporate interests are the same,” Fischer said. “Their goal is to influence the federal contracting process, which is exactly what the contractor ban is designed to prevent.”
Fischer noted that the FEC filings list the first donation from the GEO subsidiary to the Trump super PAC as coming on August 19, one day after the Justice Department announced plans to phase out the use of privately run federal prisons because they “do not maintain the same level of safety and security” as government-run facilities, and “do not save substantially on costs.”
GEO’s stock price plunged nearly 40 percent following the announcement.
Hillary Clinton vowed to ban private prisons, while Trump’s tough-on-crime rhetoric and promise to deport millions of undocumented immigrants were widely viewed as favorable to the industry. In the weeks since Trump’s victory, GEO’s stock price has rebounded, nearly returning to its peak 2016 value.
The GEO Group insisted through a spokesperson that its subsidiary’s donation to the Trump super PAC was actually made one day prior to the DOJ announcement, and that it had no advance knowledge of the federal plan to phase out the use of private prisons. The spokesperson showed VICE News a photo of a check made out to the super PAC dated Aug. 17, but declined to make it publicly available for unspecified “security reasons.”
The Campaign Legal Center alleges that the law was violated regardless of the timing of the donation, noting that GEO Corrections Holdings Inc. “has been listed as the ‘employer’ in multiple labor relations cases in federally-contracted facilities,” and in court records as the contractor in charge of operating a federal prison facility in Georgia. The GEO spokesperson said the Georgia listing was an error that the parent company has since corrected.
Daniel Weiner, senior counsel at the Brennan Center for Justice’s Democracy Program, which tracks money in politics and is not involved in the FEC complaint against GEO, told VICE News that the case is “kind of a litmus test for Citizens United,” the Supreme Court ruling that said corporations have the same right to freedom of speech as citizens.
“If the Supreme Court meant what they said and corporations should be able to give unlimited amounts to super PACs,” Weiner said, “does that include companies that are doing business with the government?”
The FEC’s commissioners — three Republicans and three Democrats — approved a $2.5 million donation by a Chevron-owned holding company to a Republican super PAC in 2012, despite the fact that another Chevron subsidiary holds federal contracts.
“[GEO] will probably find a sympathetic ear among GOP commissioners at the FEC,” Weiner said. “In other cases, they’ve held that related corporations are not subject to the contractor ban, even if they’re closely affiliated.”
The matter could still be challenged in federal court, however, and the Supreme Court has not ruled specifically on whether the contractor ban applies to super PACs.
Fischer said that if the FEC somehow finds that GEO committed a “knowing and willful violation,” the Justice Department could move enforce criminal penalties. However, he noted, the department will likely be led by Jeff Sessions, Trump’s pick for attorney general, who recently had three top aides hired as lobbyists by the GEO Group.
The Justice Department’s Public Integrity Section could also launch a criminal investigation to determine whether the GEO Group subsidiary’s donation amounted to bribery, Weiner added, though he noted that such an outcome seems unlikely.
“If [GEO] cut a check to the Trump campaign in response to being really pissed about something the Obama administration did, there probably won’t be a bribery issue, unless they find out they were promised something by the Trump folks,” Weiner said. “The mere fact that they’re angry and they gave a donation to a different ideological cause doesn’t amount to anything.”
View the Campaign Legal Center’s amended complaint to the FEC in full below: