Texas Prison Bid'ness

Corrections Corporation of America spent $240,000 in the second quarter of 2010 lobbying federal agencies and against transparency legislation that would subject private prisons to similar freedom of information act requests as publicly-operated facilities, according to an article ("Corrections Corp. spent $240,000 on 2Q lobbying," September 1) in Business Week,

Prison operator Corrections Corp. of America spent $240,000 lobbying federal officials in the second quarter. That's down slightly from the $250,000 it spent on lobbying in the first quarter of 2010 and the $260,000 it spent lobbying in the second quarter of last year.

The company said it lobbied on issues related to the private prison industry and on all provisions of the Safe Prisons Communications Act of 2009 and the Private Prison Information Act of 2009, among other topics.

Aside from Congress, Corrections Corp. also lobbied the Department of Homeland Security, the U.S. Marshals Service and U.S. Immigration & Customs Enforcement in the April-to-June quarter, according to a report filed with the Clerk of the House of Representatives on July 20.

Corrections Corporation federal lobbying figures were recently released for the first quarter of 2010, and CCA was reported to have spent a quarter of a million dollars this quarter alone. According to Forbes (Associated Press, "Corrections Corp. spent $250,000 on 1Q lobbying," May 13, 2010):

The company reported lobbying officials on provisions in a Homeland Security funding bill dealing with immigration detentions. It also lobbied on Justice Department funding related to private prisons.

Corrections Corp. also lobbied on a bill by Rep. Sheila Jackson-Lee, D-Texas, to require private prison operators to comply with open-records laws.  And it lobbied on a bill by Sen. Kay Bailey Hutchison, R-Texas, to let states request the jamming of wireless signals in prisons. Federal law lets federal agencies jam phone signals, but doesn't extend that power to state or local agencies. Hutchison's bill passed the Senate last year but is stalled in the House...

...Corrections Corp. lobbied Congress, the Homeland Security Department and the Bureau of Prisons.

At this current rate of $250,000 in a quarter, CCA would continue their trend of spending around $1 million each year on Federal-level lobbying efforts. As this graphic from Open Secrets illustrates, CCA had a significant drop in lobbying expenditures around the time of the economic recession's start, and if the other three 2010 quarters play out like the first one, we can expect to see a similar number for this year. 

Another consistent factor withing the lobbying sphere is H.R. 1889. CCA has been lobbying against the Private Prison Information Act since 2007. This act, if passed, would subject private prisons to the same laws as public prisons with regards to the retrieval of federal information. This resolution is the same one mentioned in the Associated Press article, written just a few days ago.

I was interested to see if CCA's trend of the steady funding of Federal lobbying was also true on the Texas State level. What I found was a smaller effort to lobby Texas officials (the maximum value of contracts column refers to the total maximum payments given to the lobbyists via their contracts, and the lobbyist contracts column refers to the number of registered lobbyists in the State of Texas).

CCA went from six registered lobbyists in 2007 to two in 2009. However, as of the end of Q1 this year, CCA has three registered lobbyists -- whether this means we can expect 2010 to have higher lobby expenditures than the previous two years is purely speculative. I will keep an eye on it. What we can see, however, is that the focus of CCA is by and large on the Federal level contracts over the Texas State contracts. This makes sense, given the growing trend of immigrant detention and rising number of illegal immigrant detainees. Their biggest competitor, The GEO Group, has spoken directly about their intentions to move the majority of their focus into this realm, and it is likely CCA will do the same. 

Related: 

• Top Private Prison Lobbyists in Texas

SKay Bailey Hutchisonome may say that Gov. Rick Perry is dredging up some pretty old dirt to throw at U.S. Sen. Kay Bailey Hutchinson.  But the “N-Group” scandal (Jay Root, "Perry swings back hard during final campaign week," AP, February 23rd) Perry is trying to hang around her neck is actually the playbook from which other private prison development scams appear to have been run – most recently, the infamous, outrageous saga that unfolded last year in Hardin, Montana, where local officials got bilked by a development consortium from Texas that convinced them to build a prison on speculation that a contract would soon follow.  No contract ever materialized, but the developers collected their fees and moved on.

Sen. Hutchison denies any direct involvement, but the record clearly shows that her husband Ray was deeply enmeshed in a private prison development scheme that wreaked financial mayhem across six Texas counties.  “N-Group Securities” was the brainchild of Patrick and Michael Graham, two brothers from Houston.  The enterprising Graham brothers jumped into the private corrections field in the midst of the massive prison population boom in Texas.

The N-Group was launched in 1987, at the start of Texas Governor William Clements’ second term.  The Grahams recruited a stellar set of important and politically influential Texans as business associates, including ex-Governor Mark White and Ray Hutchison, a former state senator and Texas Republican Party chairman.  With these connections to the Texas political elite, the Grahams were able to persuade six county boards to float almost $75 million in revenue bonds to finance construction of the N-Group’s rent-a-cell prisons on speculation.

County officials eagerly signed up for the development schemes after being assured that contracts to house prisoners would be forthcoming from the Texas Department of Criminal Justice.  Hutchison helped the counties establish development corporations to float the bonds, and he served as counsel for the their issuance. Drexel Burnham Lambert, the notorious (now defunct) Wall Street junk-bond house, underwrote the bonds.

By the time the six prisons were constructed, however, Ann Richards had been elected Governor.  After she took office, TDCJ managers decided that the dormitory-style facilities did not to pass muster with agency standards.  They refused to provide contracts to house prisoners.

By 1994 the Grahams were nearly buried in lawsuits filed by angry junk-bondholders, and Patrick Graham was under indictment in one Texas county on charges of criminal anti-trust violations.  Yet the brothers were able to link up with Fred Hofheintz, ex-Mayor of Huston, and extend the reach of their business into Louisiana.  The long version of the story about their failed prison development scheme in Jena, LA remains for telling another day.  But the tangled web in Louisiana snagged another high-placed Texas official, TDCJ director Andy Collins, who Patrick Graham had recruited to join the development scheme as a prospective manager of the Jena prison.   

The Jena development deal quickly unraveled, however.  In January 1996, four days after Collins resigned from his post as head of TDCJ under pressure from the head of the prison board, Patrick Graham was arrested in Houston by the FBI.  The indictment charged that he had agreed to accept $150,000 as a down-payment on a $750,000 fee he had solicited to engineer a prison escape for a former computer executive serving a 75-year sentence in Huntsville for the murder of his wife.   

Graham had claimed he could use his connections with Andy Collins to have the prisoner assigned as a low-security trusty at a prison in Galveston where he could easily escape.  Graham, a pilot, promised to arrange false identification documents for the prisoner, and fly him to Costa Rica, a country with no extradition agreement with the U.S.  Patrick Graham pleaded guilty in 1997 for the foiled prison escape.  He received a prison sentence of ten years.

In a big ruling today, the Texas Attorney General's office has ruled that County Sheriffs cannot accept salary enhancements from private prison corporations. The ruling, in response to a query by Yvonne Davis, chair of the House Committee on Urban Affairs, is summarized:

Neither the Texas Constitution nor Texas statutes authorize the person holding the office of county sheriff to be paid an administrative fee by a private organization.

Read the full ruling here.  The ruling will specifically affect the financial relationships that private prison corporation CEC has with several Texas sheriffs.  As we've reported (in our #4 Private Prison Story of 2009),

For years CEC has been paying McLennan County Sheriff Larry Lynch (and his precedessors) a "stipend" for the nominal oversight of additional prisoners in the company's downtown facility.  According to state law, Sheriffs must authorize a private detention company's presence in the county under its jurisdiction. In 2008, Waco Sheriff Larry Lynch continued to receive the kickback despite a contentious debate over whether to build a new CEC facility in McLennan County.  Former State Representative Kevin Bailey, then Chair of the Committee on Urban Affairs, requested an opinion of the Attorney General, and a bill was filed in 2009 (though ultimately wasn't successful) to outlaw the practice.  Debate flared once again this September, when Tommy Witherspoon at the Waco Tribune reported that long-standing payment practice of the Sheriff by CEC would not expand despite a new CEC lock-up opening in McLennan. Witherspoon's investigative reporting also uncovered that Limestone County Sheriff Dennis Wilson, whose county annual salary is $49,457, is paid a $24,000 stipend yearly by the county in its contract with CEC.

The ruling will certainly be seen as a victory by the McLennan County Sheriffs Officers Association and CLEAT, who fought vigorously against private jail expansion in Waco.  We'll keep you updated on the responses of today's decision.