Not by donating $9,900 at a time to Marco Rubio’s senatorial campaign, but instead by spending over $3 million on targeted independent expenditure campaign ads supporting his candidacy and opposing that of his Democratic opponent, under what is a gigantic, glaring loophole in campaign finance law. Donald Trump, Richard Burr, Marco Rubio, Roy Blunt, Todd Young, and Rob Portman were the largest beneficiaries in the 2016 race of targeted campaign spending by the NRA. Most reporting focuses on FEC filings that cover donations made by organizations directly to candidate campaigns, which are limited by law to relatively small amounts. The real campaign influence comes from a loophole that allows any person or organization to spend as much money as they like to directly target campaigns, provided there is no coordination with the candidate campaign itself, in which case it would have to be reported as a donation and would be subject to Federal donation limits.
According to data compiled by the Center for Responsive Politics, the NRA spent an astounding $53 million under this loophole influencing the 2016 Federal elections for the Presidency and the Senate. Of this total, every single penny of it was spent either supporting Republican candidates, or opposing Democratic candidates. And in an explanation of why Republican candidates are quick to heel, the NRA had an astounding success rate of 95% on their dollars invested on elections where they intervened. The vast majority of the money they spent was on the Presidential race, where they spent a combined $31 million, nearly $20 million of which was spent on ads opposing Clinton, and $11 million spent on ads supporting Trump.
On the Senate side, the vast majority was spent on six senate races, where they spent a combined $17 million opposing the Democratic candidacies of Deborah Ross in NC, Patrick Murphy in FL, Jason Kander in MO, Evan Bayh in IN, Catherine Cortez Masto in NV, and Ted Strickland in OH. Of these, the only race where they placed a losing bet was in Nevada where their bet against Senator Masto failed. Note, these figures do not include the US House, where the NRA placed considerably smaller bets. Reviewing this data, it’s clear that in at least the 2016 race, the NRA focused on the Presidency and the Senate, placed their largest bets opposing a handful of Democratic candidates rather than supporting Republican candidates, and was astonishingly successful.
In a world filled with troubles, few issues have managed to unite people of conscience on both sides in near universal outrage as has the sight of a father and daughter drowning while trying to reach asylum in the United States. Or the image of children put into wire cages in what aspires to be the best country on earth. Or the knowledge that if you visit a loved one in an immigrant prison you are forbidden from hugging them. Or that there are reports that as many as 4,500 of the children placed in our care have been sexually abused by their captors – our own employees. And now the fact that these people are being denied clean water, a place to sleep, soap, a toothbrush, and food.
Chances are, if you’ve got a pension, or invest in almost any mutual or hedge fund in the country, you’re both helping to finance and profiting from kids in cages. While many of us across the entire political spectrum are outraged by the treatment of asylum seekers that we’ve seen and read about, what we haven’t known is how we ourselves are making this abuse possible.
This report takes a look at Core Civic, the largest owner of private prisons in the country, and which investors have decided that’s a business model they like.
The two largest owners of private prisons in the country are CoreCivic and the Geo Group. There are a number of additional private prison owners that are not public, including Management and Training Corp., LaSalle Southwest Corrections, and Community Education Centers, among others.
Let’s take a look at CoreCivic since it’s the largest. CoreCivic owns or manages more than 100 correctional and detention facilities. Many of those facilities are under contract with various state and local governments as correctional facilities, and many are under contract with ICE as detention facilities. According to the company’s most recently filed 10K, ICE facilities managed by CoreCivic include the Eloy Detention Center in Eloy, AZ; the Otay Mesa Detention Center in San Diego; the Stewart Detention Center in Lumpkin, GA; the Elizabeth Detention Center in Elizabeth, NJ; the Houston Processing Center; the Laredo Processing Center; the T. Don Hutto Residential Center in Taylor, TX; the Webb County Detention Center in Laredo; and finally the South Texas Family Residential Center in Dilley, TX; among several others.
CoreCivic is public, and thus has publicly traded stock and public investors. The largest investors in public companies are required to file disclosure statements with the Securities and Exchange Commission (SEC). That’s our primary source. According to documents filed with the SEC, almost every major mutual fund, hedge fund and, unbelievably, the largest public pension funds in the country all own stock in CoreCivic, and they’re buying more. In fact, an astounding 80% of CoreCivic’s shares are owned by roughly 260 of the largest, most respected institutional investors in the country, including many that have adopted standards that prohibit investing in companies that benefit from the tragedy of others through the use of Environment, Social and Corporate Governance (ESG) standards.
Let’s look at one of CoreCivic’s facilities. The South Texas Family Residential Center, owned by CoreCivic, was, according to the Washington Post, the beneficiary of an unusual agreement signed with then President Obama’s administration that totaled roughly $1 billion over a four year period, was awarded on a no-bid basis, and pays CoreCivic a minimum of $20 million per month no matter how few people are housed in the facility. Following the award of this contract to CoreCivic, then Deputy Attorney General Sally Yates reversed course in August of 2016 and said that the justice department would phase out the use of private prisons completely, sending the stocks of publicly traded private prison operators into a tailspin. This policy was reversed again in February of 2017 by the new Trump-appointed Attorney General Jeff Sessions, who rescinded the previous memo and opened the floodgates for private prison operators.
The South Texas Family Residential Center
Here is what reporter and immigration attorney Martin Garbus had to say about his visit to the South Texas Family Residential Center, run by CoreCivic, in an article in The Nation in March of this year: “The center is actually a prison-an internment camp.” “Nearly every one of the almost 500 people that I saw in the detention center was sick.” “Bathroom breaks are frequently not granted, or not in time, so both women and children often soil themselves.” “They went to the “perrera,” or “doghouse,” a place where families were put in cages, cyclone fencing between them as though they were animals.” “She told me in an offhand way that her other younger son had drowned 10 days ago, as they were coming over the river. She repressed all but one tear. Her son was impassive.”
Let’s take a closer look at who’s decided to invest in CoreCivic, the owner of this immigrant prison. The largest owner of stock in CoreCivic is the Vanguard Group owning 17.6 million shares, or 14.8% of the company and valued at a staggering $393 million. Vanguard offers 129 different funds, everything from bond funds to stock funds to emerging market funds and real estate funds. Their real estate fund is called Real Estate Index Admiral Shares. It owns 5.8 million of Vanguard’s 17.6 million shares. The largest holding in the fund is something called Vanguard Real Estate II Index Fund Institutional Plus Shares, where the minimum investment is $100 million. That fund owns another 720k shares. Investors in funds are not required to disclose the indirect ownership interest in companies owned by the fund, allowing them to cloak their investments held in this manner so it is nearly impossible to trace who indirectly owns Core Civic through their ownership interest in Vanguard (or any other company’s) sponsored funds.
Blackrock CEO and Former Member of Trump’s Business Advisory Council Larry Fink with Trump
The second largest owner of CoreCivic is Blackrock, with 14.6 million shares. Blackrock is also a mutual fund manager, although they offer a variety of other institutional investment vehicles. It’s worth noting that Blackrock, the second largest owner of CoreCivic, is also the investment manager for both the “C Fund” and the “S Fund”, the only two domestic stock fund options for Federal employees in their own retirement plans, meaning all of the members of the US House of Representatives, the Senate, and the President’s administration. Therefore, all of the elected members of the government protesting the private prisons are also directly sponsoring those very same private prisons. In third place is Fidelity with 4.6 million shares, followed by State Street, Prudential, and Renaissance Technologies (a hedge fund formerly known for its affiliation with Republican operative Robert Mercer and now run by Peter Brown). Rounding out the top ownership in Core Civic are Bank of New York Mellon, Northern Trust, Geode Capital, New South Capital, Vaughan Nelson, Ameriprise Financial, Capital Growth Management, LSV Asset Management, and Wells Fargo.
In addition to all of the many mutual and hedge funds with ownership positions, there are a great number of pension plans for public employees that also own stock in Core Civic, including the largest pension funds in the country, with millions of beneficiaries. The Public Employees Retirement System of Ohio (OPERS) owns more stock in CoreCivic than any other public pension plan in the country, with 257k shares directly owned. They are closely followed by New York State Teachers with 251K, TIAA CREF with 233K, CalPERS with 228K, Ohio State Teachers Retirement System with 187K, and the Retirement System of Alabama with 154K, among many others including pension plans in Arizona, Alaska, Utah, Louisiana, New Mexico, Michigan, Kentucky, Colorado, Pennsylvania, and New Jersey.
Of these let’s take a look at CalPERS, the single largest pension fund in the entire country – the bellweather for socially responsible investing – with more than $370 billion under management. CalPERS discloses on its “List of Memberships and Endorsements Supported by CalPERS” that it ascribes to the Global Sullivan Principles. These principles, initially used to screen companies engaged in business in South Africa, state in part that one of the seven requirements for corporations is “working to eliminate laws and customs that impede social, economic, and political justice”. Further, CalPERS indicates it invests according to the UN Global Compact Principles that state in part “Businesses should support and respect the protection of internationally proclaimed human rights and make sure they are not complicit in human rights abuses.”
It’s also worth some time to take a look at the Public Employees Retirement System of Ohio. Of all of the public pension funds filing 13f filings with the SEC during the first quarter of this year, OPERS added more to its position that any other public pension fund in the country, increasing its ownership by 22%. The other public pension plans that purchased more stock during the first quarter included those in Alabama, Arizona, the Texas Permanent Schools Fund, and Oregon, among others.
Many of the investors mentioned above are certain to say that they only own CoreCivic in funds meant to mimic the performance of the entire real estate investment trust industry, of which CoreCivic is a part, or “index investing” in industry parlance, as though that somehow absolves the investors of any type of investment determination of the company on its own merits. If one were so inclined, you could give them that benefit of the doubt. That same benefit, however, shouldn’t extend either to direct investors that purchase the stock (except in the highly unlikely scenario they’re trying to create their own index), or to those investors that have purchased the stock in proportions above the weight of Core Civic to the overall industry of which it’s a member.
One final note, both CoreCivic and the Geo Group are structured as real estate investment trusts, or REITS. This means that in exchange for following a complex series of operational and legal structuring parameters, they are provided with a tax exemption from the US government, meaning that the private prison business is also largely a tax-free one. According to the company’s most recently filed 10-K, on revenues of $1.8 billion, it incurred a tax liability of just $8.3 million.
In March of this year, activists with a number of groups including Make the Road New York, the Center for Popular Democracy, the National Prison Divestment Campaign, and the Corporate Backers of Hate Campaign came together and successfully forced JP Morgan Chase, which until that point had been a major lender to the private prison industry, to agree to stop financing the sector. This was accomplished through a number of very high profile protests that took place in front of Chase CEO Jamie Dimon’s home on the Upper East Side of New York and at shareholder meetings. This week Bank of America also announced that it would end the financing of the private prison industry. However, these statements have thus far focused on lending relationships, and not on equity investing, both of which are critical to funding a company’s operations.
People on both the right and the left have been outraged by the conditions under which immigrants are being held in our country’s private prisons. Many people have looked to the Trump administration, ascribing the border crisis to policies that have led to the separation of families, and blaming his administration for the deplorable conditions under which asylum seekers are being held. However, it was the Obama administration that first put in place the agreement that led, at least in this instance, to the South Texas Family Detention Center. Nothing is ever as clear as it seems on the surface. What is clear is that the introduction of a profit motivation into our country’s criminal justice and immigration systems is an inherently flawed moral construct, inevitably leading to abuse. As with everything in our democracy, the power to correct these flaws sits squarely on the shoulders of We the People, provided we have the fortitude to follow the lead set by those brave activists who were able to affect change with JP Morgan Chase.
Disclaimers:
It is noted that CoreCivic states on its website under a tab marked “Setting the Record Straight”: “CoreCivic partners with Immigration and Customs Enforcement to provide safe environments where detainees can reside as they go through their legal due process in the United States. Unfortunately, there is a lot of misinformation about our company and immigrant detention. CoreCivic never has and never will house unaccompanied minors(bold added by company). Children are educated and never separated, balanced meals are planned by dieticians, and comprehensive medical and dental care is readily available.”
It is further noted that the infamous photos of “kids in cages” have been taken at a number of private prisons, but not at those run by CoreCivic.
Kevin Comer is the author of this report. He began his career as a portfolio manager with the Public Employees Retirement System of Ohio in their investment management division, the same pension fund mentioned in this report. He was employed at OPERS from 1990 to 1993. He also was a Managing Director at Deutsche Bank Alex Brown with responsibility for coverage of the real estate investment trust sector. At the time of his employment with Deutsche Bank, he had declined to provide coverage on behalf of Deutsche Bank of the private prison sector. He was employed at Deutsche Bank and its predecessors from 1995 to 2000.
No copyright infringement is intended with the use of any photo or quote in this report. No content has been monetized. Nothing contained herein is meant to imply, suggest or otherwise convey the suggestion that any person, individual, business or entity of any kind has engaged in any conduct considered to be unlawful, immoral, illegal or unjust.
MSNBC is screaming about endless streams of immigrants seeking asylum with crying children. Fox is screaming about endless streams of immigrants seeking asylum with crying children. With smallpox. Today I decided to go see for myself.
Almost nothing about my experience was what I expected it to be. I picked the border crossing in Calexico since, according to data from the US Customs and Border Patrol almost 3,500 people have been apprehended at this location just last month alone. And also because this is the border crossing that President Trump decided to go to for his April visit just after he threatened to close the border before he decided to leave it open.
My first stop was at the Imperial Regional Detention Facility on Gateway Road in Calexico. This facility holds 782 men and women, under what is described as multi-level security, and is managed by Management and Training Corporation. The facility is on the outskirts of Calexico, which is itself a small town with a population of about 40k many hours from the nearest larger city. Difficult to see from the road, it’s accessed by a long driveway that works it’s way back to the facility, but let’s just call it a prison. My first impression was the absolute desolate nature of the place. No one, and I mean no one, was in sight. The entire complex – the building, parking lot, fences, were all alone in the middle of vast fields. The parking lot had maybe 30 cars and trucks. The buildings have no windows of any kind, more like a warehouse. And they are surrounded by several layers of fence with barbed wire on top. My immediate impression was surprise at the complete lack of people: visitors, staff, and immigrants. Eerie is the only word that fit. I spent a reasonable amount of time taking photos, half expecting someone to come out but no one did. I noticed a guard perhaps on break in her car so I asked her where everyone was. She seemed puzzled so I said “I was expecting to see thousands of people, immigrants, families trying to reach them, lawyers, guards. Where is everyone?” And she said “everyone’s inside, we’re not going to let them all outside are we?” So I said “I thought you probably would let them outside. Aren’t there about 1,000 people inside?” Her reply: “yes”. I said “I thought from the news there would be more confusion, more people, more activity” and she said “no it’s not like that at all”. She then said you’re welcome to come back and visit the inside and talk with the warden if you want to but he’s not here today. She suggested I just call ahead and schedule a visit.
Imperial Regional Detention Facility
Takeaways. The building is definitely built as a high security prison. The absence of windows and outdoor facilities for exercise is strange, and eerily intimidating. It is not remotely the type of facility I would expect to house people seeking asylum and is more what I expect would house violent criminals. It’s possible there are windows and an exercise area in an interior courtyard, but if so that’s also strange. It’s also possible that the complete absence of people is deliberate, a way to make the entire facility appear more calm and under control than it is. But the combination of all of this made this part of the experience like something out of a Stephen King novel. Triple fence, barbed wire, buildings in the middle of fields, no guards, no windows, and 1,000 asylum seekers hidden from view.
Outlet mall border wall photo op location
Next stop the section of the fence where Trump’s visit was filmed. What wasn’t shown in the video footage is the enormous outlet mall whose parking lot was the backdrop for the photo op. The border wall, or fence, is simply the boundary of the outlet mall parking lot. When I pulled into the lot, I saw about 20 military trucks and countless personnel, all armed with rifles milling about, incongruously, in front of a store called A’Gaci. There were two jacklifts with fatigued military personnel on each one, slowly seeming to paint the fence, although it didn’t really look as though they were painting it, more like just raising and lowering the jacklifts and looking at the fence as they went up and down. All of the other trucks and personnel were there simply guarding the four men on two jacklifts going up and down. Again I spent a reasonable amount of time walking around and taking photos of everything. Again no one approached me to ask me what I was doing. There weren’t any people on the other side of the fence, nor really anyone else around except for the military folks, myself, and an older couple from Arizona, the man wearing a MAGA cap, taking selfies in front of the border patrol trucks and the border wall.
Military border wall inspection
I walked up to one of the trucks, this one with three men inside, all with rifles ready on their knees, and again asked my question. “Where is everyone?” Again the look. Again my explanation. Again the answer “no it’s not like that at all”. I said “that’s the actual border right?” “yes” “is there somewhere I can go to actually see all the people trying to get in?” “not that we know of, we’re not really from around here, maybe just try walking to the border crossing and ask”.
So that was my next stop. I left the outlet mall/Trump photo op with the military platoon and parked in downtown Calexico, which is actually just a block from the actual border crossing, and walked inadvertently into the outbound lane of the actual border patrol crossing. Again very nice guards, all with rifles at the ready. I explained that I was interested in understanding what was actually going on at the border while I was trying also to look into the room at the people coming into our country, all orderly, single file line, multiple checkpoints, very much like the airport. Again my question, again the look, again the response “no it’s not like that at all”. So I said “but this is the actual place where people are coming in right? That line of people right there? Those are immigrants and asylum seekers and workers and green card holders? The whole collection of people?” “yep”. So I said is there a place where I can go and see the whole line of people trying to get in? And he said not really. No viewing platform? No. Then he said “why don’t you just walk over and walk back? Then you can see the whole thing.” “ I didn’t bring a passport” “that’s ok, just use your driver’s license” “seriously? You don’t need a passport to get in?” “not if you’re an American you don’t” He said “why do you want to see the line?” While part of me was still shocked at how willing to engage every person I’d met so far had been I explained to him about MSNBC and Fox and chickenpox and swarms of people and fence climbing and screaming and crying and he just sort of smiled and said “yeah it’s not like that at all, just go ahead and go over and come back”. So I did.
All that separates us from “anarchy”
I walked across the border and into Mexico. No screening. No questions. No ID request. No registration. One Mexican guard who just smiled and nodded. No need to explain about Fox and the measles. I wandered around for a while, looking for lines of people trying to get in. Again my questions of several people I saw, again the same responses, although in Spanish. So then I came back.
I got in line with about 20 other people, the sum total of people waiting to cross into the United States at the Calexico border crossing on foot. I fumbled with a machine that everyone else was putting their ID cards into before the immigration officer motioned me forward and said “your ID won’t work in that”, of course he knew by looking. He took my driver’s license and I had a momentary flashback to when I tried to renew my driver’s license once in Connecticut and found out I had a bench warrant from Oklahoma for a speeding ticket they gave me electronically that I never knew about that precipitated a trip to Oklahoma to clear that up before I could renew my license and I was wondering how I would get to Oklahoma if I couldn’t get back into the United States when he just waived me through. No questions, no search, no screening. I knew this was my last opportunity so again I asked “Where are all the people trying to get in?” And he said “this is it, but everybody here is really just going over to shop or work and then go back home”. I said “what about all of the asylum seekers?” and he said “maybe tonight we’ll get a few”.
Line of Mexicans, and me, waiting to enter the US
So then I crossed back into the United States, said hello to the border guard I met on my way in the out door, got in my car and went to lunch.
So, lessons.
First, immigration is big business, and that’s what drives the narrative. Calexico has more infrastructure improvement projects going on than I think I’ve ever seen anywhere, certainly unusual for a city of 40k. Private prison operators are raking in the bucks, and they’re going to do whatever it takes not to screw that up, including turning their prisons into a Disneyland of strange. And fear and paranoia are good for everybody else. The President pukes it up, and the media gleefully feeds on it. This certainly doesn’t mean that there aren’t other parts of the country where the experience I had today might be different. Maybe the Rio Grande crossing is a different story, but I decided to make my stand where Trump made his. Maybe my experience would also have been different if I weren’t white and instead was brown or black. Probably. But the bottom line is that today I went to Calexico half expecting to end up in jail for trying to help an immigrant family reach the US, and instead I had completely calm conversations with armed guards at a prison, armed military at the outlet mall, armed border patrol agents at the border, and a countless number of friendly Mexicans. Oh, and a nod hello from a Mexican border agent. Always question the narrative.
