October 28, 2010 - Last year, two men showed up in Benson, Ariz., a small desert town 60 miles from the Mexico border, offering a deal.
Glenn Nichols, the Benson city manager, remembers the pitch.
"The gentleman that's the main thrust of this thing has a huge turquoise ring on his finger," Nichols said. "He's a great big huge guy and I equated him to a car salesman."
What he was selling was a prison for women and children who were illegal immigrants.
"They talk [about] how positive this was going to be for the community," Nichols said, "the amount of money that we would realize from each prisoner on a daily rate."
But Nichols wasn't buying. He asked them how would they possibly keep a prison full for years — decades even — with illegal immigrants?
"They talked like they didn't have any doubt they could fill it," Nichols said.
That's because prison companies like this one had a plan — a new business model to lock up illegal immigrants. And the plan became Arizona's immigration law.
Glenn Nichols, city manager of Benson, Ariz., says two men came to the city last year "talking about building a facility to hold women and children that were illegals.
Behind-The-Scenes Effort To Draft, Pass The Law
The law is being challenged in the courts. But if it's upheld, it requires police to lock up anyone they stop who cannot show proof they entered the country legally.
When it was passed in April, it ignited a fire storm. Protesters chanted about racial profiling. Businesses threatened to boycott the state.
Supporters were equally passionate, calling it a bold positive step to curb illegal immigration.
But while the debate raged, few people were aware of how the law came about.
NPR spent the past several months analyzing hundreds of pages of campaign finance reports, lobbying documents and corporate records. What they show is a quiet, behind-the-scenes effort to help draft and pass Arizona Senate Bill 1070 by an industry that stands to benefit from it: the private prison industry.
The law could send hundreds of thousands of illegal immigrants to prison in a way never done before. And it could mean hundreds of millions of dollars in profits to private prison companies responsible for housing them.
Arizona state Sen. Russell Pearce says the bill was his idea. He says it's not about prisons. It's about what's best for the country.
"Enough is enough," Pearce said in his office, sitting under a banner reading "Let Freedom Reign." "People need to focus on the cost of not enforcing our laws and securing our border. It is the Trojan horse destroying our country and a republic cannot survive as a lawless nation."
But instead of taking his idea to the Arizona statehouse floor, Pearce first took it to a hotel conference room.
It was last December at the Grand Hyatt in Washington, D.C. Inside, there was a meeting of a secretive group called the American Legislative Exchange Council. Insiders call it ALEC.
It's a membership organization of state legislators and powerful corporations and associations, such as the tobacco company Reynolds American Inc., ExxonMobil and the National Rifle Association. Another member is the billion-dollar Corrections Corporation of America — the largest private prison company in the country.
It was there that Pearce's idea took shape.
"I did a presentation," Pearce said. "I went through the facts. I went through the impacts and they said, 'Yeah.'"
Drafting The Bill
The 50 or so people in the room included officials of the Corrections Corporation of America, according to two sources who were there.
Pearce and the Corrections Corporation of America have been coming to these meetings for years. Both have seats on one of several of ALEC's boards.
And this bill was an important one for the company. According to Corrections Corporation of America reports reviewed by NPR, executives believe immigrant detention is their next big market. Last year, they wrote that they expect to bring in "a significant portion of our revenues" from Immigration and Customs Enforcement, the agency that detains illegal immigrants.
In the conference room, the group decided they would turn the immigration idea into a model bill. They discussed and debated language. Then, they voted on it.
"There were no 'no' votes," Pearce said. "I never had one person speak up in objection to this model legislation."
Four months later, that model legislation became, almost word for word, Arizona's immigration law.
They even named it. They called it the "Support Our Law Enforcement and Safe Neighborhoods Act."
"ALEC is the conservative, free-market orientated, limited-government group," said Michael Hough, who was staff director of the meeting.
Hough works for ALEC, but he's also running for state delegate in Maryland, and if elected says he plans to support a similar bill to Arizona's law.
Asked if the private companies usually get to write model bills for the legislators, Hough said, "Yeah, that's the way it's set up. It's a public-private partnership. We believe both sides, businesses and lawmakers should be at the same table, together."
Nothing about this is illegal. Pearce's immigration plan became a prospective bill and Pearce took it home to Arizona.
Pearce said he is not concerned that it could appear private prison companies have an opportunity to lobby for legislation at the ALEC meetings.
"I don't go there to meet with them," he said. "I go there to meet with other legislators."
Pearce may go there to meet with other legislators, but 200 private companies pay tens of thousands of dollars to meet with legislators like him.
As soon as Pearce's bill hit the Arizona statehouse floor in January, there were signs of ALEC's influence. Thirty-six co-sponsors jumped on, a number almost unheard of in the capitol. According to records obtained by NPR, two-thirds of them either went to that December meeting or are ALEC members.
That same week, the Corrections Corporation of America hired a powerful new lobbyist to work the capitol.
The prison company declined requests for an interview. In a statement, a spokesman said the Corrections Corporation of America, "unequivocally has not at any time lobbied — nor have we had any outside consultants lobby – on immigration law."
At the state Capitol, campaign donations started to appear.
Thirty of the 36 co-sponsors received donations over the next six months, from prison lobbyists or prison companies — Corrections Corporation of America, Management and Training Corporation and The Geo Group.
By April, the bill was on Gov. Jan Brewer's desk.
Brewer has her own connections to private prison companies. State lobbying records show two of her top advisers — her spokesman Paul Senseman and her campaign manager Chuck Coughlin — are former lobbyists for private prison companies. Brewer signed the bill — with the name of the legislation Pearce, the Corrections Corporation of America and the others in the Hyatt conference room came up with — in four days.
Brewer and her spokesman did not respond to requests for comment.
In May, The Geo Group had a conference call with investors. When asked about the bill, company executives made light of it, asking, "Did they have some legislation on immigration?"
After company officials laughed, the company's president, Wayne Calabrese, cut in.
"This is Wayne," he said. "I can only believe the opportunities at the federal level are going to continue apace as a result of what's happening. Those people coming across the border and getting caught are going to have to be detained and that for me, at least I think, there's going to be enhanced opportunities for what we do."
Opportunities that prison companies helped create.
October 29, 2010
When you walk into the offices of the American Legislative Exchange Council, it's hard to imagine it is the birthplace of a thousand pieces of legislation introduced in statehouses across the county.
Only 28 people work in ALEC's dark, quiet headquarters in Washington, D.C. And Michael Bowman, senior director of policy, explains that the little-known organization's staff is not the ones writing the bills. The real authors are the group's members — a mix of state legislators and some of the biggest corporations in the country.
"Most of the bills are written by outside sources and companies, attorneys, [and legislative] counsels," Bowman says.
Here's how it works: ALEC is a membership organization. State legislators pay $50 a year to belong. Private corporations can join, too. The tobacco company Reynolds American Inc., Exxon Mobil Corp. and drug-maker Pfizer Inc. are among the members. They pay tens of thousands of dollars a year. Tax records show that corporations collectively pay as much as $6 million a year.
With that money, the 28 people in the ALEC offices throw three annual conferences. The companies get to sit around a table and write "model bills" with the state legislators, who then take them home to their states.
Lobbying Or Education?
One of those bills is now Arizona's controversial new immigration law. It requires police to arrest anyone who cannot prove they entered the country legally when asked. Hundreds of thousands of illegal immigrants could be locked up, and private prison companies stand to make millions.
The largest prison company in the country, the Corrections Corporation of America, was present when the model immigration legislation was drafted at an ALEC conference last year.
ALEC's Bowman says that is not unusual; more than 200 of the organization's model bills became actual laws over the past year. But he hedges when asked if that means the unofficial drafting process is an effective way to accelerate the legislative process.
"It's not an effective way to get a bill passed," he says. "It's an effective way to find good legislation."
The difference between passing bills and "finding" them is lobbying. Most states define lobbying as pushing legislators to create or pass legislation. And that comes with rules. Companies typically have to disclose to the public what they are lobbying for, who's lobbying for them or how much they are spending on it.
If ALEC's conferences were interpreted as lobbying, the group could lose its status as a non-profit. Corporations wouldn't be able to reap tax benefits from giving donations to the organization or write off those donations as a business expense. And legislators would have a hard time justifying attending a conference of lobbyists.
Bowman says what his group does is educate lawmakers.
"ALEC allows a place for everyone at the table to come and debate and discuss," he says. "You have legislators who will ask questions much more freely at our meetings because they are not under the eyes of the press, the eyes of the voters. They're just trying to learn a policy and understand it."
Much about ALEC is private. It does not disclose how it spends it money or who gives it to them. ALEC rarely grants interviews. Bowman won't even say which legislators are members.
Is it lobbying when private corporations pay money to sit in a room with state lawmakers to draft legislation that they then introduce back home? Bowman, a former lobbyist, says, "No, because we're not advocating any positions. We don't tell members to take these bills. We just expose best practices. All we're really doing is developing policies that are in model bill form."
So, for example, last December Arizona state Sen. Russell Pearce sat in a hotel conference room with representatives from the Corrections Corporation of America and several dozen others. The group voted on model legislation that was introduced into the Arizona legislature two months later, almost word for word.
Bowman says that type of meeting is an informational exchange, meant to help legislators understand policy.
But first ALEC has to get legislators to the conferences. The organization encourages state lawmakers to bring their families. Corporations sponsor golf tournaments on the side and throw parties at night, according to interviews and records obtained by NPR.
Bowman says that's nothing special: "We have breakfasts and lunch. They're at Marriotts and Hyatts. They're normal chicken dinner. Maybe sometimes they get steaks. Yeah, we feed the people. We think that it's OK to eat at a conference."
Videos and photos from one recent ALEC conference show banquets, open bar parties and baseball games — all hosted by corporations. Tax records show the group spent $138,000 to keep legislators' children entertained for the week.
But the legislators don't have to declare these as corporate gifts.
Consider this: If a corporation hosts a party or baseball game and legislators attend, most states require the lawmakers to say where they went and who paid. In this case though, legislators can just say they went to ALEC's conference. They don't have to declare which corporations sponsored these events.
'Scholarships' For Conferences
Kirk Adams, Arizona's House speaker, went to ALEC's most recent gathering in San Diego.
"I have been to ALEC's conferences and they have been pretty educational — the ones that I've been to," he says, adding that the time he spends with corporate executives does not influence his opinions on the issues.
"If we were to believe that a dinner with a lobbyist would purchase a member's allegiance to an issue, then we have much larger problems than that," Adams says. "It's just simply not been my experience at all."
When asked if he paid his own way to the ALEC conference, Adams acknowledges he accepted money from the group to help pay for the trip. ALEC calls this a "scholarship."
Many ALEC members receive these scholarships. But it's not clear who's really paying.
Michael Bowman initially said state Sen. Pearce, who also accepted a scholarship, would know who paid for his trip. But the Arizona lawmaker said ALEC paid for it. Later, Bowman said Bob Burns, another Arizona state Senator, would know. Burns was in charge of pooling money for the scholarships. He did not respond to NPR's repeated requests asking where the money came from.
In an office at the Arizona statehouse, a review of records show that not one Arizona legislator who went to the conference reported receiving any gifts of meals, parties, golf outings or banquets tickets from a private corporation.
Pearce and a dozen others wrote that they received a gift of $500 or more from ALEC.
A review of the two dozen states now considering Arizona's immigration law shows many of those pushing similar legislation across the country are ALEC members.