DARK MONEY

America’s second-largest private prison company accused of illegally donating to pro-Trump Super PAC

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The second-largest private prison company in America made an illegal $100,000 donation to a Super PAC supporting Donald Trump, a good government group alleged Tuesday.

A subsidiary of the GEO Group, which runs 64 prisons and jails around the country, made the donation in August to Rebuilding America Now, the primary PAC backing the Republican nominee that’s already raised upwards of $20 million for his campaign. The donation allegedly violated a law banning federal contractors from making federal political donations while in negotiations for a contract.

GEO Corrections Holdings Inc. made the $100,000 donation on August 19, just one day after the Department of Justice announced that it would phase out its private prisons, including several contracted to GEO. The donation was brought to light by the Campaign Legal Center, a nonprofit which filed a complaint to the Federal Election Commission Tuesday.

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Trump has praised private prisons—”I do think we can do a lot of privatizations and private prisons. It seems to work a lot better,” he said in March—while Hillary Clinton has called for all private prisons to be shuttered.

Federal contractors are prohibited by law from making any political donations while they are negotiating or performing a federal contract. On the same day that GEO made the $100,000 contribution, the company’s CEO, George Zoley, told shareholders on a conference call that the company was currently negotiating a contract extension for its D. Ray James facility, a federal prison in Georgia among the prisons earmarked by the DOJ for closing.

The company “presumably sought to influence the federal government contracting process and to ensure that under the next administration the federal government would continue to offer it contracts,” the Campaign Legal Center said in its complaint. It asked the FEC to sanction both GEO and Rebuilding America Now PAC with fines.

“This is why we the federal contractor ban has been on the books for a long time,” Brendan Fischer, an election lawyer for the Center, told me in a phone interview. “The ban is to make sure officials are making contracting decisions based on what’s in the public’s interest, not based on the interests of their donors.”

While the FEC, which is politically deadlocked, has recently dragged its feet on investigating campaign finance violations, Fischer said he hoped this case would spur the commission to action. “We’re hoping this has been a clear enough case that they’ll be willing to enforce the ban now,” he said. (A similar complaint, filed by the group in July, claimed that a Super PAC supporting Clinton illegally accepted a $200,000 donation from a construction company that is a federal contractor and has not been acted on.)

According to FEC records, the GEO Group PAC—a political committee that is allowed to make donations—also made a legal $50,000 donation to Rebuilding America Now on August 11.

Update, 11/2/16:

GEO Group spokesperson Pablo Paez defended the donation, saying in a statement received after publication that it was “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,” the spokesperson said, and has no contracts with any governmental agency. While a federal government website lists GEO Corrections Holdings Inc. as holding $266,000 in federal government contracts, the spokesperson said that was an error.

GEO Corrections Holdings Inc. does employ prison guards at multiple GEO prisons, including the D. Ray James facility, the facility that had a contract being negotiated on the day the $100,00 donation was made. But the GEO spokesperson said that was irrelevant because GEO Corrections Holdings Inc. does not hold the contract for that facility.