Tuesday Sep 18

Online Only Features

Today’s NYT article about IRS interest in pursuing gift taxes on contributions from individuals to “advocacy” 501 c/4 organizations, such as Americans for Prosperity or Crossroads GPS, both decidedly conservative, completes the ascent of corporate interests to dominance in our political system. Written by Stephanie Strom, normally the ambulance chaser of journalists focused on nonprofits, this article reports on the surprising news that the IRS is finally considering enforcing a tax it declared in 1982 to apply to contributions from individuals to 501 c/4 advocacy groups like the NRA, NARAL, and the Sierra Club, organizations whose “primary purpose” cannot be electoral, but rather legislative and policy. Non-primary purpose activities CAN support or oppose candidates but must remain below 49% of total expenditures; under recent rulings, this has permitted large anonymous contributions for what are essentially independent expenditure campaigns for or against candidates.

The end result: contributions to this category of advocacy organizations, that can be made anonymously, may now (after 29 years of silence from the IRS) be subject to a 35% gift tax. The work around, however, is pretty simple: give to a 527 organizations that can do elections work but contributions to which are not subject to tax by statute. The rub, of course, is that contributions to 527’s are reportable. No more silent manipulation of the process.

But wait a minute…what about corporations? The hotly debated “Citizens United” decision issued last year by the Supreme Court reasoned that because the law had evolved to treat corporations as “persons” in certain ways, they were entitled to free speech, and under prior Court decisions, “speech” meant the ability to spend money in politics, including the ability to make anonymous contributions to 501 c/4’s.

But this is where it gets interesting. Corporations are treated as persons in only some ways. The tax system doesn’t treat corporations as people in other regards, so they aren’t subject to gift tax. Thus, the effect is that, now, untaxed anonymous political giving shall be the exclusive domain of corporations. Ta Da!!

That the Roberts Court is turning into the most activist Court in modern memory comes as no secret. But it is remarkable how quickly their well-chosen decisions is advancing the agenda of the free market, anti-government business interests. This is likely just the beginning – tilting the odds yet again in favor of corporate power and against individual rights and liberties. And looking into the near-term future, one has to like those odds for Republicans. The Tea Party folks are the wildcards, but somehow I’m not optimistic that they will unravel the unholy alliance between Big Business and the social conservatives. Meanwhile, get ready for one of the worst campaign seasons ever, fueled especially by anonymously given corporate contributions.

Editor’s Note: In the United States, Mexico, and many other countries collective bargaining, workers’ rights, and unions themselves are under attack in what can sometimes seem a coordinated attack.  One of our readers sent us this piece, and it seemed especially topical for the times, therefore we are “printing” it immediately and offering it to our readers directly as a special feature on-line feature on our website.   WR


Recent events in Wisconsinhave questioned the necessity of collective bargaining.  The governor of Wisconsin notwithstanding, collective bargaining is recognized internationally in numerous conventions, constitutions, and courts as a human right.

Legal Background

Our Constitution addresses the right of collective bargaining.  The Thirteenth Amendment provides that:

Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.

The thirteenth amendment appears to address only the issue of slavery.  However, according to the Supreme Court in 1911, the purpose of the thirteenth amendment was not simply to eliminate slavery, but:

…to make labor free by prohibiting that control by which the personal service of one man is disposed of or coerced for another's benefit.

This argument was advanced by labor leaders in the 1920’s.  They asserted that the rights to organize, strike, and boycott were the logical application of the constitution to the stage ofeconomic development of the time.As the industrial economy developed to a massive scale, the individual employee had no tangible power against the industrial behemoths of the day.

The Norris-LaGuardia Anti-Injunction Act of 1932 was the primary national statute that declared the right of collective bargaining:

Whereas, under prevailing economic conditions, developed with the aid of governmental authority for owners of property to organize in the corporate and other forms of ownership association, the individual unorganized worker is commonly helpless to exercise actual liberty of contract and to protect his freedom of labor, and thereby to obtain acceptable terms and conditions of employment.

Collective bargaining was an integral component of the National Labor Relations Act (NLRA) of 1935 also known as the Wagner Act.  Prior to the law, employers could literally spy upon union members, interrogate, punish, blacklist, and terminatethem without just cause.

The Act clearly asserts the rights of collective bargaining in Section 7:

Employees shall have the right to self-organization; to form, join, or assist labor organizations; to bargain collectively through representatives of their own choosing; and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.

This language was affirmed by Article.23 of the Universal Declaration of Human Rights in 1948 which identified the right to organize trade unions again as a fundamental human right.

Everyone who works has the right to just and favorable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection. Everyone has the right to form and to join trade unions for the protection of his interests.

Corporate Parasites

Corporate power is strangling the natural American impulse of political democracy.  Collective bargaining is an extant mechanism that ensures at least a modicum of fairness for employees.

Corporate billionaires pay swarms of lobbyists to influence legislators.  Union contributions cannot compete with such expenditures. Corporations transfer gobs of cash to legislators as the Koch brothers billionaire club did for the governor of Wisconsin.  They finance reactionary think tanks that churn out staggering amounts of false data on issues affecting middle and low income people.  Individual employees are no simply match for such corporate power and avarice.Unions serve to democratically balance that asymmetrical relationship as a “countervailing power,” as coined by economist John Kenneth Galbraith.

Our history is replete with patterns of employer abuse absent a union with the collective bargaining instrument.  Employees were routinely underpaid, overworked and dismissed unjustly at the caprices of employers.  Employees and their family’s lives were arbitrarily disrupted and sent into financial and personal chaos.  This issue crystallizes our national justification to provide a serious voice for working people and their families who perform the work in our cities and towns.

Government Parallels

Federal,  state and local governments are very large employers.  Like corporations, they wield an enormous amount of economic power over their employees.  Moreover, public sector union employees are subjected to the same work issues as private sector employees.  It is hypocritical to deny them the same protections that private union employees enjoy.  These include protections against work bullying, harassment and unequal treatment to say nothing of the right to negotiate wages and salaries.

The private sector has suffered layoffs, pay cuts and diminished work hours.  The public sector has experienced the same deprivations.  The difference is that when local and municipality services are cut, residents are puzzled and then outraged as they should be.

When city or town offices are cut they should be outraged.

When libraries and community centersare closed they should be outraged.

When bridges, roads, buildings are decrepit or crumbling they should be outraged.

When their trash is not collected they should be outraged.

When nursing homes and veteran’s homesor elder care services are cut back or eliminated they should be outraged.

When hospital emergency rooms and ambulance services hours are reduced they should be outraged.

When schools close and students are jammed into inadequate space with deficient learning materials they should be outraged.

When public school bus service declines and school crossing guards cannot protect their children they should be outraged.

When tuitions increase beyond the reach of most working people they should be outraged.

When fire departments and police departments are cut threatening public safety they should be outraged.

When public transportation service is reduced or fares are raised exorbitantly they should be outraged.

When eating establishments fail to meet sanitary or food quality standards they should be outraged.

When tap water arrives at their homes with strange hues or bacteria they should be outraged.

When their rivers become dumping grounds for municipal, industrial, commercial and medical waste, they should be outraged.

When parks and recreation areas are hazardous to the public and become trash heaps, they should be outraged.

When sewers become clogged and spill over into their streets and yards, they should be outraged.

The nexus between public sector union services and private sector quality of life is demonstrably important.Anger against sector employees threatens the basic services of towns and cities that many have taken for granted.

Benefitting All

The standards that defined American job conditions and facilitated the growth of the middle class and benefitted the working class emanated from collective bargaining.  These included the 40-hour workweek, the weekend, vacation time, employer-supported health insurance, pensions, family and medical leave, and basic safety and health protections.

Work environment is also an important issue.  The union contract can preventsplenetic supervisors from unfairly unleashing their wrath on employees.

When unionsimprove the work conditions of their members, there is a concentric effect that can benefit all working people. The non-partisan Economic Policy Institute released a report in August 2003 concluding that unions have contributed to employment standards and practices adopted throughout the nation.  Pay and working conditions are often improved for the entire workforce.

Moreover, unionshave contributed to legislation and standards that benefit all working people such as the Occupational and Safety and Health Act of 1970 and the Family Medical Leave Act of 1993.

The historical record substantiatesthat when unions are strong, wages and salaries increase for all.  Health care coverage improves and pensions are strengthened. When private and public unions are weak the quality of life for our families and communities is jeopardized.

Finally, there is no correlation between states that have collective bargaining rights and states burdened with large deficits.  Data from the Bureau of Labor Statistics in January this year and the Center on Budget Policy and Priorities this February confirmed this.  States that deny employees bargaining rights such as Nevada, North Carolina, and Arizona have huge deficits of over 30 percent. Others states that possess bargaining rights such as Massachusetts, New Mexico, and Montana have smaller deficits of less than 10 percent.

State budget deficits are not the product of collective bargaining, but largely reflect the disastrous impact of our latest recession.  The test for states is to provide essential services to cities and towns with equitable budget and tax policies not geared to breaking the backs and spirits of middle and low income folks.

Unions aredemonstrably imperfect entities.  However, without collective bargaining rights, the game is flagrantly rigged for corporations and governmental bureaucrats.  Collective bargaining is the sine qua non for labor unions.  It is an instrument to ensure economic democracy.  Our cherished institution of political democracy requires an authentic economic democracyto achieve the aspirations of all working people.

Bruce Boccardy is President of SEIU Local 888 in Massachusetts

*** Below is a special note from Social Policy Pubisher Wade Rathke***

Peter Cervantes-Gautschi’s article, Wall Street & Our Campaign to Decriminalize Immigrants from the Winter issue of Social Policy has been named the 5th most censored story of 2010-2011 by Project Censored.

Normally when a new issue of Social Policy comes out, the articles from the previous issue moves behind a subscription wall - but in the case of this article, we’ve decided to make it free-feature on the front page of SocialPolicy.org.

We’re proud of Peter and honored to be part of getting the story out.  We’re also thankful for your support that allows Peter’s voice to be heard because readers and subscribers have made Social Policy a magazine that matters.

Enjoy the read!

Wade Rathke, Publisher

Social Policy

 


 

Over the past four years roughly a million immigrants have been incarcerated in dangerous detention facilities in our taxpayer-financed private prison system. Children were abused, women were raped, and men died from lack of basic medical attention.

Corrections Corporation of America (CCA), based in Nashville, Tennessee, and the GEO Group, a global corporation based in Boca Raton, Florida, the nation’s two largest companies that design, build, finance and operate prisons, are principal moving forces in the behind-the-scenes organization of the current wave of anti-immigrant legislative efforts which, if successful, would dramatically increase the number of immigrant prisoners in over twenty states.

A little over a year after its October 2003 success in securing the contract to run GITMO (the Guantánamo Bay Detention Camp) in Guantanamo Bay, Cuba, GEO hired the services of lobbyists who had recently held influential positions with the U.S. Department of Homeland Security, Bureau of Prisons, Office of the Attorney General, and then Senate Majority Leader George Mitchell to lobby their former employers and Congress. Through 2005 and leading up to the largest immigration raid in U.S. history in December 2006, GEO and CCA spent a combined total of over $6 million on these lobbying efforts.

On May 1, 2006, while GEO and CCA were lobbying the federal government for more business, millions of people marched in favor of immigrant rights in 102 cities across the country. The marchers, despite their historic numbers, turned out to be an insufficient barrier to the government’s support of GEO’s and CCA’s business plans. This single change in enforcement of existing law created a potential of over ten million new felons, thereby multiplying the lucrative incarceration market for the private prison industry many times over, and sending a shock wave through immigrant-related communities across the country. The December 2006 raid, in which over a thousand men and women employed at Swift meat-packing plants in several states were detained, marked a change in the federal government’s enforcement of the 1995 immigration law. For the first time, many of those picked up were charged with crimes that carry long prison sentences.

At the time of the Swift raid, USA Today quoted the Reverend Clarence Sandoval of St. Thomas Aquinas Catholic Church in Logan, Utah, as saying, "They are taking mothers and fathers and we're really concerned about the children. I'm getting calls from mothers saying they don't know where their husband was taken."

Soon after the Bush Administration implemented this change in law enforcement affecting immigrants, Wall Street advisors publicly recommended buying stock in private prison companies like CCA and GEO. At the time, Vice President Dick Cheney was heavily invested in Vanguard, one of a handful of major shareholders in GEO.

The lobbying paid off for both companies in huge revenue increases from government contracts to incarcerate immigrants. From 2005 through 2009, for every dollar spent on lobbying the federal government, GEO received a $662 return in taxpayer-funded contracts, for a total of $996.7 million. CCA received a $34 return in taxpayerfunded contracts for every dollar spent on lobbying the federal government, for a total of $330.4 million. In addition, both companies increased revenues over the same period from detention facility contracts with a number of states.

In 2007 the Immigration and Customs Enforcement Agency (ICE) conducted 30,407 immigration raids in workplaces, neighborhoods, and public gathering sites such as bus stops and commuter train platforms. The number of raids conducted that year was double the 2006 total. The number of immigrants placed behind bars, for what amounts to the crime of having been born in the wrong place, increased from 256,842 in 2006 to 311,169 in 2007.

As a result of fear induced by the raids and other factors, pro-immigrant May Day marches in 2007 were much smaller than those of the previous year. In mid-2007, while many organizers were focused on legislation, marches, and raids, GEO and CCA shareholders reaped a huge profit. Both companies issued 2-for-1 stock splits that roughly doubled the value of their shareholders’ stake in the two companies.

Although stockholders profited handsomely as revenues from prison contracts rose for both companies, the increase was not large enough to satisfy some of their respective major shareholders. JPMorgan Chase, a major owner of GEO, dumped its stock and relinquished a leadership position in the company.

One problem for investors seeking huge gains from the for-profit prison business was that revenue rates could not keep rising because federal agencies did not have enough personnel to arrest and process more immigrants than the expanded number they were now handling. It became apparent that the only way to raise revenue significantly through increasing the numbers of people picked up, detained, and incarcerated was to hire more law enforcement personnel. The private prison industry now needed a new source of low-cost licensed law enforcement personnel. The new focus of business expansion for CCA and GEO apparently then became state governments.

The result of this shift in business focus is exemplified by CCA’s role in Arizona’s SB 1070 and both CCA’s and GEO’s roles in other legislative efforts aimed at dramatically increasing the arrest numbers for undocumented immigrants in over twenty states. Arizona’s Governor Jan Brewer, who received substantial campaign financing from top CCA executives in Tennessee and employs two former CCA lobbyists as top aides, signed SB 1070 into law on April 23rd.

On Friday, July 30, 2010, the Republican Governors Association, which so far this year has received over $160,000 in contributions from CCA, GEO, and their lobbyists, sent out a nationwide solicitation written by Arizona Governor Jan Brewer requesting contributions to fund an appeal of the partial injunction issued by a judge against SB1070.

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 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, who are in large part financed by the Republican Governor’s Association.

CCA and GEO are owned by major Wall Street institutions that profit from the immigrant incarceration business. The United States now has more people in prision than any other country on earth. Last November, CCA’s top management in Tennessee contributed the largest block of out-of-state campaign contributions received by Arizona Governor Jan Brewer. CCA, which already has several detention facilities in Arizona and is hoping to expand its immigrant prison business in that state, is expected to show a huge increase in revenues when SB 1070 is implemented. Brewer’s administration, in a gesture welcomed by armed white supremacist vigilante groups aligned with notorious Sheriff Joe Arpaio, recently implemented a law allowing concealed weapons to be carried in public. Both CCA and GEO, which rely almost exclusively on revenue from tax dollars at local, state, and federal levels, profited from the incarceration of immigrants apprehended by U.S. Immigration and Customs Enforcement (ICE) in 2006, after the Bush Administration changed the charge for working without a proper social security number from a misdemeanor violation with a short jail sentence to a felony violation carrying a long prison sentence.

The change in how federal law is enforced increased the market of potential immigrant inmates for CCA and GEO by more than ten million people that the government would pay to have housed, transported, and fed. CCA’s and GEO’s share of the immigrant incarceration business has grown substantially since 2006. Today, for example, 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 because detention facilities owned and operated by the federal government are at 137% of capacity. The most powerful 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), and Bank of America. Each of these major owners is sensitive to public opinion in one way or another.

None of these major investors needs to rely on either CCA or GEO to make money. By almost any measure, the increased number of deportations of immigrants has not had the desired effects on anyone other than the private prison industry. Unemployment among native-born citizens in the U.S. has skyrocketed even as the number of immigrants being deported has risen to over 400,000 a year. At over two million, the U.S. has a half million more people behind bars than China, which has the second highest number of prisoners among the nations of the world. One would like to think that bringing this information to Congress’s attention would be enough to compel them to abandon policies that criminalize immigrants. However, that is not likely to happen soon.

This probable hesitation for Congress to act is not merely because of the substantial campaign contributions that Senators and members of Congress receive from the private prison industry. Most members of Congress have personal investments in one or more of CCA’s or GEO’s major shareholders. While it is true that many people are invested in CCA or GEO through their pensions without knowing it, the reports on the personal finances of some key members of Congress suggest some of them have more than a casual interest in the fortunes of CCA or GEO.

Senator Enzi, a senior Republican who sits on the Senate Budget Committee, was awarded a 100% approval rating by U.S. Border Control, which describes itself as “a non-profit, tax-exempt, citizen's lobby. USBC is dedicated to ending illegal immigration by securing our nation's borders and reforming our immigration policies.”

Compelling Congress to abandon immigrant criminalization policies is probably going to require, among other things, that we convince some combination of our pension funds, Wells Fargo, and a hedge fund or two pull out of the private prison industry and to go elsewhere to make money. Who knows? Some of these financial institutions might even see the wisdom in investing in companies that produce family wage jobs. Peter Cervantes-Gautschi, Co-Director of Enlace, has been a labor activist since 1965, starting as a farmworker in California. He has organized for HERE, SEIU, and CWA, headed two labor councils, started two low-wage worker organizations, and co-founded several labor-community coalitions, membership organizations, and political action committees.

*** Below is a special note from Social Policy Pubisher Wade Rathke***

Peter Cervantes-Gautschi’s article, Wall Street & Our Campaign to Decriminalize Immigrants from the Winter issue of Social Policy has been named the 5th most censored story of 2010-2011 by Project Censored.

Normally when a new issue of Social Policy comes out, the articles from the previous issue moves behind a subscription wall - but in the case of this article, we’ve decided to make it free-feature on the front page of SocialPolicy.org.

We’re proud of Peter and honored to be part of getting the story out.  We’re also thankful for your support that allows Peter’s voice to be heard because readers and subscribers have made Social Policy a magazine that matters.

Enjoy the read!

Wade Rathke, Publisher

Social Policy

 


 

Over the past four years roughly a million immigrants have been incarcerated in dangerous detention facilities in our taxpayer-financed private prison system. Children were abused, women were raped, and men died from lack of basic medical attention.

Corrections Corporation of America (CCA), based in Nashville, Tennessee, and the GEO Group, a global corporation based in Boca Raton, Florida, the nation’s two largest companies that design, build, finance and operate prisons, are principal moving forces in the behind-the-scenes organization of the current wave of anti-immigrant legislative efforts which, if successful, would dramatically increase the number of immigrant prisoners in over twenty states.

A little over a year after its October 2003 success in securing the contract to run GITMO (the Guantánamo Bay Detention Camp) in Guantanamo Bay, Cuba, GEO hired the services of lobbyists who had recently held influential positions with the U.S. Department of Homeland Security, Bureau of Prisons, Office of the Attorney General, and then Senate Majority Leader George Mitchell to lobby their former employers and Congress. Through 2005 and leading up to the largest immigration raid in U.S. history in December 2006, GEO and CCA spent a combined total of over $6 million on these lobbying efforts.

On May 1, 2006, while GEO and CCA were lobbying the federal government for more business, millions of people marched in favor of immigrant rights in 102 cities across the country. The marchers, despite their historic numbers, turned out to be an insufficient barrier to the government’s support of GEO’s and CCA’s business plans. This single change in enforcement of existing law created a potential of over ten million new felons, thereby multiplying the lucrative incarceration market for the private prison industry many times over, and sending a shock wave through immigrant-related communities across the country. The December 2006 raid, in which over a thousand men and women employed at Swift meat-packing plants in several states were detained, marked a change in the federal government’s enforcement of the 1995 immigration law. For the first time, many of those picked up were charged with crimes that carry long prison sentences.

At the time of the Swift raid, USA Today quoted the Reverend Clarence Sandoval of St. Thomas Aquinas Catholic Church in Logan, Utah, as saying, "They are taking mothers and fathers and we're really concerned about the children. I'm getting calls from mothers saying they don't know where their husband was taken."

Soon after the Bush Administration implemented this change in law enforcement affecting immigrants, Wall Street advisors publicly recommended buying stock in private prison companies like CCA and GEO. At the time, Vice President Dick Cheney was heavily invested in Vanguard, one of a handful of major shareholders in GEO.

The lobbying paid off for both companies in huge revenue increases from government contracts to incarcerate immigrants. From 2005 through 2009, for every dollar spent on lobbying the federal government, GEO received a $662 return in taxpayer-funded contracts, for a total of $996.7 million. CCA received a $34 return in taxpayerfunded contracts for every dollar spent on lobbying the federal government, for a total of $330.4 million. In addition, both companies increased revenues over the same period from detention facility contracts with a number of states.

In 2007 the Immigration and Customs Enforcement Agency (ICE) conducted 30,407 immigration raids in workplaces, neighborhoods, and public gathering sites such as bus stops and commuter train platforms. The number of raids conducted that year was double the 2006 total. The number of immigrants placed behind bars, for what amounts to the crime of having been born in the wrong place, increased from 256,842 in 2006 to 311,169 in 2007.

As a result of fear induced by the raids and other factors, pro-immigrant May Day marches in 2007 were much smaller than those of the previous year. In mid-2007, while many organizers were focused on legislation, marches, and raids, GEO and CCA shareholders reaped a huge profit. Both companies issued 2-for-1 stock splits that roughly doubled the value of their shareholders’ stake in the two companies.

Although stockholders profited handsomely as revenues from prison contracts rose for both companies, the increase was not large enough to satisfy some of their respective major shareholders. JPMorgan Chase, a major owner of GEO, dumped its stock and relinquished a leadership position in the company.

One problem for investors seeking huge gains from the for-profit prison business was that revenue rates could not keep rising because federal agencies did not have enough personnel to arrest and process more immigrants than the expanded number they were now handling. It became apparent that the only way to raise revenue significantly through increasing the numbers of people picked up, detained, and incarcerated was to hire more law enforcement personnel. The private prison industry now needed a new source of low-cost licensed law enforcement personnel. The new focus of business expansion for CCA and GEO apparently then became state governments.

The result of this shift in business focus is exemplified by CCA’s role in Arizona’s SB 1070 and both CCA’s and GEO’s roles in other legislative efforts aimed at dramatically increasing the arrest numbers for undocumented immigrants in over twenty states. Arizona’s Governor Jan Brewer, who received substantial campaign financing from top CCA executives in Tennessee and employs two former CCA lobbyists as top aides, signed SB 1070 into law on April 23rd.

On Friday, July 30, 2010, the Republican Governors Association, which so far this year has received over $160,000 in contributions from CCA, GEO, and their lobbyists, sent out a nationwide solicitation written by Arizona Governor Jan Brewer requesting contributions to fund an appeal of the partial injunction issued by a judge against SB1070.

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 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, who are in large part financed by the Republican Governor’s Association.

CCA and GEO are owned by major Wall Street institutions that profit from the immigrant incarceration business. The United States now has more people in prision than any other country on earth. Last November, CCA’s top management in Tennessee contributed the largest block of out-of-state campaign contributions received by Arizona Governor Jan Brewer. CCA, which already has several detention facilities in Arizona and is hoping to expand its immigrant prison business in that state, is expected to show a huge increase in revenues when SB 1070 is implemented. Brewer’s administration, in a gesture welcomed by armed white supremacist vigilante groups aligned with notorious Sheriff Joe Arpaio, recently implemented a law allowing concealed weapons to be carried in public. Both CCA and GEO, which rely almost exclusively on revenue from tax dollars at local, state, and federal levels, profited from the incarceration of immigrants apprehended by U.S. Immigration and Customs Enforcement (ICE) in 2006, after the Bush Administration changed the charge for working without a proper social security number from a misdemeanor violation with a short jail sentence to a felony violation carrying a long prison sentence.

The change in how federal law is enforced increased the market of potential immigrant inmates for CCA and GEO by more than ten million people that the government would pay to have housed, transported, and fed. CCA’s and GEO’s share of the immigrant incarceration business has grown substantially since 2006. Today, for example, 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 because detention facilities owned and operated by the federal government are at 137% of capacity. The most powerful 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), and Bank of America. Each of these major owners is sensitive to public opinion in one way or another.

None of these major investors needs to rely on either CCA or GEO to make money. By almost any measure, the increased number of deportations of immigrants has not had the desired effects on anyone other than the private prison industry. Unemployment among native-born citizens in the U.S. has skyrocketed even as the number of immigrants being deported has risen to over 400,000 a year. At over two million, the U.S. has a half million more people behind bars than China, which has the second highest number of prisoners among the nations of the world. One would like to think that bringing this information to Congress’s attention would be enough to compel them to abandon policies that criminalize immigrants. However, that is not likely to happen soon.

This probable hesitation for Congress to act is not merely because of the substantial campaign contributions that Senators and members of Congress receive from the private prison industry. Most members of Congress have personal investments in one or more of CCA’s or GEO’s major shareholders. While it is true that many people are invested in CCA or GEO through their pensions without knowing it, the reports on the personal finances of some key members of Congress suggest some of them have more than a casual interest in the fortunes of CCA or GEO.

Senator Enzi, a senior Republican who sits on the Senate Budget Committee, was awarded a 100% approval rating by U.S. Border Control, which describes itself as “a non-profit, tax-exempt, citizen's lobby. USBC is dedicated to ending illegal immigration by securing our nation's borders and reforming our immigration policies.”

Compelling Congress to abandon immigrant criminalization policies is probably going to require, among other things, that we convince some combination of our pension funds, Wells Fargo, and a hedge fund or two pull out of the private prison industry and to go elsewhere to make money. Who knows? Some of these financial institutions might even see the wisdom in investing in companies that produce family wage jobs. Peter Cervantes-Gautschi, Co-Director of Enlace, has been a labor activist since 1965, starting as a farmworker in California. He has organized for HERE, SEIU, and CWA, headed two labor councils, started two low-wage worker organizations, and co-founded several labor-community coalitions, membership organizations, and political action committees.

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