"Pay to Play" for Private Prisons?

Today’s post picks up from a previous post, Crony Capitalism; Private Prison Stocks Have Doubled Since the Election. 

We all remember the “Pay to Play” rhetoric from Donald Trump during the campaign. However, the Trump administration made a controversial decision last week to award their first federal contract for an immigration detention center to the GEO Group. As mentioned in the previous post, a $100,000 donation by the GEO Group to Trump’s Super PAC may have violated federal. Private companies can’t make political donations while their contracts while holding or negotiating a federal contract. Then again, the GEO Group is unlikely to be penalized due to a technicality; one of their subsidiaries, which doesn’t have any federal contracts, made the donation.

Was there a quid-pro-quo for this newly acquired $110 million immigration detention center contract? There’s no evidence at this time, but the optics are horrible. Nonetheless, this type of decision was the exact scenario that Trump adamantly campaigned against. He was supposed to “drain the swamp.” He repeatedly pointed to the “Pay to Play System,” i.e. preferential treatment for Clinton Foundation donors. Now, he can be accused of the same kind of corruption.

Making matters worse, the Inspector General’s Office of the Department of Justice issued a damning report yesterday about another private prison operator. Their office revealed clear corporate negligence at the infamous federal prison, Leavenworth, which is being operated by CoreCivic, formerly Corrections Corporation of America (CCA). CoreCivic compromised inmate and staff safety by understaffing and closing “mandatory” security posts. Remarkably, their company compensated, at times, by placing staff members who were not corrections officers into these security posts. 

CoreCivic also repeatedly placed three beds into cells that were designed for two beds. Furthermore, their company tried to hide that decision from government auditors. There were other details demonstrating that this company prioritized profits over rehabilitation. You can view a condensed video of the Inspector general’s report:

Did this report impact the Trump administration’s decision to award the recent $110 million contract to the GEO Group? Again, there’s no evidence. And this latest report was years in the making. In fact, there’s no evidence suggesting that Jeff Sessions or the Trump administration considers the recommendations of the Inspector General’s Office in any manner. Otherwise, they would have not reversed the decision by the Obama administration to phase out all federal prison contractors, which was based upon a report by the Inspector General.

Corporate Donor for "Partnership for Drug-Free Kids" Receives $35 million fine

Another major opioid manufacturer has been fined by the DOJ since my column, “Why Corporations are Too Big to Jail in the Drug War,” was published six weeks ago. This time around it’s a corporate sponsor of the Partnership for Drug-Free Kids (formerly the Partnership for a Drug-Free America (PDFA). In fact, Mallinckrodt Pharmaceuticals is a “Champion Partner” with the Partnership for Drug-Free Kids. Then again, CVS Health is also a “Champion Partner,” even though their company was fined $3.5 million by the DOJ after pharmacists ignored red flags and filled fake prescriptions for dangerous narcotics. 

Companies such as Mallinckrodt Pharmaceuticals can hide behind their tax-deductible donations to organizations such as the Partner for Drug-Free Kids. Such contributions tend to purify the image of a company that sells opiates that are frequently abused recreationally, particularly Roxicodone. However, a recent investigative report by The Washington Paper left no doubt about the company’s complicit role in the opioid epidemic. According to confidential government records and emails that were obtained by their newspaper, Mallinckrodt Pharmaceuticals’ negligent conduct may have been responsible for nearly 44,000 federal violations and left their company liable for $2.3 billion in fines.

Roxicodone (Wikimedia Commons)

Needless to say, the obvious conclusion from this piece by The Washington Post, “The government’s struggle to hold opioid manufacturers accountable,” is that Mallinckrodt Pharmaceuticals should be facing criminal indictments. However, this is a $7.5 billion company. Hence, the same rules of criminal justice don’t apply. After multiple years of investigations and negotiations, the DOJ reached a civil settlement agreement in which their company will pay a fine of $35 million and not have to admit any wrongdoing. As you may have guessed, this penalty elicited a collective yawn from Wall Street traders as their share prices dropped merely 1% for the day.

Sen. Claire McCaskill (D-MO) is the one person on Capitol Hill who is leading an official inquiry into the major drug companies involved with the opioid epidemic. In the end, she'll likely more damning evidence that isn't presently available to the public. However, none of these companies will be truly held accountable until there are major structural changes to our governmental system. One Senator is no match to the systemic corruption that has enabled this corporate criminality. 

My column, “Why Corporations are Too Big to Jail in the Drug War,” goes into much more detail about why this cycle will continue until major changes are made. The revolving door between government and the private sector has corrupted the regulatory process. The DEA determines the exact number of prescription opiates that can be manufactured each year. Nonetheless, the DEA increased the manufacturing limit even as record numbers of prescription drug overdoses were occurring. Worst of all, financial conflicts of interest and outside pressure have forced the DEA and DOJ to act unconscionably lenient towards to the major drug companies that are responsible for this crisis. Instead, it’s much easier for the feds to target the low-hanging fruit that doesn’t have an army of lobbyists at their disposal. Our government is unwilling to confront the real players who are responsible for the massive black market for prescription drugs. Suffice it to say, the war on drugs is an absolute lie.

(By the way, there are more examples of hypocritical/shameless donors to the Partnership for a Drug-Free America included in The Drug War: A Trillion Dollar Con Game, the first volume of my book series, Rackets. All three books will be released next Tuesday, April 11th.)