GEO Wants Taxpayers to Foot Bill for Private Prison Exploitation

GEO Execs Demand More Money
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GEO and ICE communications about litigation linked below

In the last five years, seven class action lawsuits have been filed seeking damages and injunctive relief from private prisons that stand accused of forcing people to work in violation of several federal and state laws.  In letters obtain from FOIA litigation, we now know GEO is demanding taxpayers cover their fees and even damages.  The government, even Trump's government, so far is refusing.

The first lawsuit was filed in Denver in 2014 against GEO Corp.  Judge John Kane saw through GEO's whining captioned as a Motion to Dismiss and an especially overwrought Motion for Reconsideration and allowed two of the three charges to proceed.  Other judges did likewise and even allowed the minimum wage claims to go forward, the one charge Kane had sidelined.

In 2017, GEO told the Tenth Circuit appellate panel that if the class action lawsuit in Denver were allowed to proceed it would pose a "a potentially catastrophic risk to GEO's ability to honor its contracts with the federal government."  

GEO also told the Tenth Circuit panel that "the skeleton of this suit could potentially be refiled against privately operated facilities across the United States, causing GEO and other contractors to defend them even though GEO firmly believes that policies give the Plaintiffs no legal claim."  

In early 2018, the Tenth Circuit panel unanimously green-lighted the litigation. Apparently they were concerned more about the rule of law than GEO's profits.  

On January 11, 2019, the plaintiff attorneys sent out the following notice to up to 60,000 people held in the Aurora facility: "If you were detained at GEO’s Detention Facility in Aurora, Colorado between October 22, 2004 and October 22, 2014, please read this notice. A class action lawsuit
may affect your rights..." 

After six more lawsuits were filed against private prison firms for using those in their custody to do the work on federal contracts and had survived the motions to dismiss, I was curious about how the government was responding and filed a new request for documents.  

Here are a few highlights from the 4,015 pages obtained to date, pursuant to ongoing FOIA litigation.   

In a February 14, 2018 letter from GEO's Senior Vice President of Business Development to Acting Director Thomas Homan we learn:

1)  GEO has been begging ICE to intervene and support their exploitation of immigrants and U.S. citizens in their custody. "There is an urgent need for the federal government to particpate in the current and anticipated future litigation, as well as to justify and defend the programs and policies that ICE requires of its detention contractors."

2)  GEO thinks the U.S. taxpayers should reimburse GEO for their legal fees and damages.  Of the Colorado case, GEO writes: 

The legal discovery costs could total several millions of dollars and potential damages could be in the tens of millions.  Understandably, GEO would need to be reimbursed for all of the costs through an equitable adjustment request to ICE. To date, GEO has expended $1,615,000 in legal costs for which we seek an equitable adjustment.

GEO's letter also noted an additional $442,000 in fees for its defense against two lawsuits in Washington and new litigation and laws threatening their operations in California, including one requiring GEO to release information:  "The City of Adelanto has recently received multiple broad reqeusts for information about the Adelanto facility under this provision from the news againcy BuzzFeed and one individual." 

Apparently GEO does not want the public to become aware of its operations.  (Just guessing they won't be thrilled about our reading their correspondence about them not wanting us to read their correspondence.)
 

3)  Just a few months later, in May, 2018 GEO ups the estimate of legal fees alone to $15 to $20 million, and claims damages could be in the tens of millions. (This seems low to me.  GEO provides no basis for this estimate.)

4)  GEO hopes that by dramatizing a mutual enemy, Washington State's Attorney General, perhaps ICE, a.k.a. "U.S. taxpayers," will pay off GEO: "the State of Washington's suit is pursued by Washington's Attorney General, who has publicly boasted of his victories over the current Administration, including several regarding immigration."

5)  GEO continues to live in its own legal bubble and presses claims that several judges rejected when it made these claims to ICE in February 2018:  "Decades of precedents under the Fair Labor Standards Act have upheld the $1 per day allowance for detainee work, holding that detainees are not 'employees' of detention facilities and that minimum wage standards are inapplicable to detainees...Yet, GEO finds itself defending the agency and its policies against allegations of state minimum wage violations."   This is absurd on its face.

If courts for decades were upholding GEO's legal analysis, the lawsuits would have been thrown out and GEO wouldn't be begging ICE for money.  GEO's own summary of the litigation makes it clear that some courts in recent years are holding that GEO's organization of work by those in ICE custody could be an employer-employee relation.

About one per cent of class action employment lawsuits survive motions to dismiss and go to trial.  For these class action lawsuits against GEO and CoreCivic to have gone this far, it's pretty obvious the firms made some big mistakes and might now have to pay for them.  (The mainstream media has stayed away from in-depth coverage, a reflection and perpetuation of the legal illiteracy that advantages the fraudsters who wrangle massive government contracts amid egregious violations of federal laws and regulations.)  
 
There are several problems for GEO and CCA. One challenge is that the law GEO's Senior V.P. references in the letter, 8 USC 1555(d), says that the payments should be "at such rate as may be specified from time to time in the appropriation Act involved."  The last time Congress set a rate in its appropriations act was 1978.  That appropriations act expired in 1979 and was for "no more" than one dollar/day.  It also was in effect during a time frame when few people were in detention for more than a few days. 

Anyway, on the one hand, GEO is claiming that it is paying people in accordance with this (irrelevant, because long-expired) appropriations act.  

On the other hand, GEO clearly is not doing even this.  Internal email shows ICE attorneys very attentive to how GEO is using the labor of ICE residents as a mainstay for its operations, including by paying in some cases up to six dollars/day to insure GEO has the labor supply to meet its ICE committments.  

In an email of July 20, 2017, one official writes, "It is interesting that GEO is paying different rates at the facilities."  A colleague replies 20 minutes later, "I know! I'm really curious why they would pay more at Jena.  It is odd. (But good, I guess?  Then again, I hear commissary items are outrageosly expensive.  So, they probably just recoup it all that way.)"

In the end, ICE and the Solicitor General put the law and the taxpayers before GEO and CoreCivic.  On June 21, 2018 ICE denied all of GEO's requests for contract adjustments to cover their legal fees in this litigation. (It's on the last page.) ICE also declined to file as an intervenor and refused to defend the private prisons.  

An amicus brief filed on April 1, 2019 by the Solicitor General, "in support of neither party,"  affirmed the Trafficking Victims Protection Act analysis of the plaintiffs and the district court judge, i.e., holding that a for-profit prison is not categorically excluded from TVPA protections:

As the district court [in the seventh case, filed in Georgia] correctly recognized, there is no basis for reading this broad provision to categorically exclude from its coverage facilities operated by private entities that contract or subcontract to provide immigration detention services to the federal government, particularly in light of Congress’s repeated efforts to ensure that federal contractors do not provide goods and services to the government through reliance on forced labor.

It's the Trump administration and filed on April Fool's Day so I just checked again.  Trump's S.G. really says this.

The Georgia case against CoreCivic, the facility that held Mark Lyttle and is the subject of the above S.G. brief, makes no minimum wage claims.  The Eleventh Circuit appellate court has not yet issued its decision on whether the case  can proceed.  If it adheres to the analysis of the district court and the Solicitor General, the case should be ordered to proceed.  If it does, the outcome will hang on whether the CoreCivic can prove it was running the facility consistent with the Performance Based National Detention Standards.  (We know from independent audits and the Office of Inspector General reports that CoreCivic has flunked already.)  
 
Some folks reading this may be wondering about the policy implications.  It is becoming painfully clear that there is a fundamental contradiction between the rule of law and the operations necessary to regulate the movement of people across national boundaries.  

In light of this, a lot of Trumpists think it's fine to suspend with the rule of law, the thought being: do we really want to make it either more difficult or more expensive to exclude or remove those without legal authorization from the United States? If the cost of controlling the ancestry of U.S. residents means blowing off our labor laws, then so be it, runs this line of reasoning, with no small support from some bad U.S. Supreme Court decisions from the nineteenth century.

This response reflects the success of our kleptocratic leaders in controlling public discourse.  They encourage the assumption that the object of the game is arbitrary population controls and not our intellectual, political, and economic vitality.

The important questions are the ones the Republicans and the Democrats alike don't want us asking: if we want to deter from residing here people who drain the U.S. coffers and avoid paying taxes on their booty, then why aren't we deporting the Trump family, or for that matter the Pritzkers and the Crowns of Illinois, who for decades laundered funds illicitly funneled from government coffers to themselves in the guise of public spending, going back to war profiteering in the 1940s, and who continue this through bogus "philanthropic" gifts and tax deductions today?  

"Without justice, what are kingdoms but great robberies?" -St. Augustine, City of God, c. 380.

What are the marginal public benefits of a dollar spent on GEO holding a guy who wants to pick tomatos, and his children, compared to a buck spent on investigating General Dynamics Information Technology for anti-trust violations connected to their gobbling up of firms that handle databases for Homeland Security, including apparently one that lost track of migrant children?   

Is the giant sucking sound jobs shipped to China, or funds whisked into the offshore accounts of those turned into billionaires from padded federal contracts, and who fight on various fronts to insure our taxes will never be available for responsibly, not corruptly, designed and built high speed trains, Creative Commons licensing training (and the elimination of the Bayh Act), or public health investments?  

Do we really want to investigate fewer than 1,200 cases of tax evasion annually, down from 1,948 in 2010  and leave tens of billions on the table while spending scarce resources capturing and locking up hundreds of thousands of people who might actually assist the U.S economy and pay more taxes than the jailers who are exploiting them? A Department of Treasury report notes "a significant decrease in the Collection function’s staffing in recent years.  The number of revenue officers declined over 40 percent, from 4,068 at the end of FY 2010 to 2,425 as of June 2016."

The myth is that the one percent somehow earned their wealth through the miracle of capitalism.  Sure, a few did.  But most wealth is from intergenerational transfers and much of this is from assests or commodities acquired from the state and federal government.  The largest spender in the world is the U.S. federal government, and it spent about $1 trillion, including taxes from noncitizens, on some of the world's most toxic commodities, from cluster bombs to biometric databases to prisons.  The folks hauling in these billions run firms that buy or merge with their competition, and spend millions on making nice with the people who control the purse strings to not ask questions or to install those who they can insure will not.

Shouldn't we be taking care of the real vulnerabilities to the rule of law, i.e., the corruption of those managing our treasury and our jails, i.e., our resources and liberty, before worrying about the lineage of new arrivals, a population less likely to be convicted of any crimes if they cross borders instead of being born here?

"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America." - Preamble, U.S. Constitution

Our wager as citizens is on a people defined solely by our desire to establish justice and further other principles, with no other criteria as to collective origins or fantasies thereof.  To the extent that ideas about ancestry and especially nationality favored by the identity politicians of the right and left crowd out these founding aspirations, they pose the real threats to the rule of law and hence the posterity of the founders.  Those arriving for the purpose of joining the  people of the U.S. Constitution are the posterity perfecting the rule of law and should be welcomed.  Any other decision-rules for admission or expulsion, especially hereditary, are distractions that are expensive and even lethal.

P.S. How this happened....

It's been just over ten years since June, 2009, when Mark Lyttle asked for help in obtaining what he said was $32 owed him by the Correction Corporation of America (CCA).  Mark had been working in the kitchen and had a midnight shift buffing floors at the Stewart Detention Facility in Lumpkin, Georgia.  CCA was paying him one dollar a day.

Mark, a U.S. citizen, in late 2008 was employed by a for-profit immigration jail.  The only difference between him and the janitor at the hospital down the road is that Mark was in the custody of his employer and was waiting for an immigration hearing. It's illegal for ICE to detain and deport U.S. citizens.  I was writing about that piece of his saga, and what it meant that William Cassidy, a federal attorney and hearing officer, a.k.a., immigration judge, could ship Mark to Mexico, lie about it, and still not be fired.    

I helped Mark find attorneys at the ACLU.  They filed a lawsuit for the detention and deportation.  No one followed up on the $32 CCA owed him.   

It bugged me.  I couldn't figure out why CCA thought they could pay him, or anyone who had not been convicted of a crime, one dollar per day, and not at least minimum wage.  (The 13th Amendment exampts from the prohibition against forced labor work performed as a condition of punishment.)

Thanks to the acumen of Andrew Free, who also handled the FOIA litigation crucial for obtaining documents for my research unwinding this, the class action lawsuits against the private prison firms for work programs along the lines of what Mark described to me rolled out nationwide. 

I am now also indebted to attorney Nicolette Glazer, who has stepped in to help out with the FOIA litigation, including the winding down of the prison contract litigation Andrew filed in 2014, which is still ongoing.  

Here's a link to a law review note updating the litigation last year.