Illinois governor profits

Illinois governor profits off ICE detention center contracts

By NATASHA KORECKI

Gov. Bruce Rauner this year reported turning a profit from a health care group that services U.S. Immigration and Customs Enforcement detention centers, including facilities that hold immigrant families with children.

In his most recent statement of economic interests, the multi-millionaire Republican governor disclosed earnings from a private equity fund that owns Correct Care Solutions, a for-profit health care provider that has millions of dollars in government contracts with jails and prisons across the country, including immigrant detention centers.

The governor says he relinquished investment decisions to a third party and has no direct ties to Correct Care Solutions, a group whose work extends to places like Karnes County Residential Center in Texas, one of just four immigrant family detention centers in the country contracted for profit.

Still, Rauner’s disclosures reveal he’s earning income from the group, which reports making $1 billion in revenue annually.

The financial connection between a sitting governor and for-profit ICE detention contractors is one that immigration rights groups insist is a clear conflict of interest. They also point to Correct Care Solutions’ track record involving dozens of lawsuits alleging wide-ranging negligence.

The debate comes at a time when individual states are wrestling with how to navigate volatile changes to an immigration system under President Donald Trump. And it takes place as for-profit correctional contractors have seen their earnings soar under the Trump administration’s controversial immigration policies, including one that created a public firestorm over forced family separations.

Rauner, facing a rocky road to reelection this November in this heavily Democratic state, has been reluctant to even mention Trump’s name. While he did speak out against family separations, he didn’t create as much distance from the president’s policy as several other blue-state Republican governors. Massachusetts Gov. Charlie Baker and Maryland Gov. Larry Hogan recalled or declined to deploy National Guard troops in response to the policy but Rauner last month wouldn’t commit to refusing a potential request by Trump to deploy National Guard troops to the U.S.-Mexican border.

Last year, Rauner was strongly criticized by conservatives for signing into law the Illinois Trust Act, a bill limiting local authorities’ role in enforcing immigration laws.

One watchdog group said the third-party management of Rauner’s finances — an arrangement which stops short of a true blind trust — does not inoculate the governor from criticism about financial gain and called on him to divest from any funds involving immigrant detention centers.

Rauner’s campaign told POLITICO he had no plans to do so.

“He should not be in any way profiting off of this,” said Donald Cohen, executive director of In the Public Interest, a national watchdog group that monitors privatization and advocates for responsible government contracting. “It’s morally reprehensible.”

Cohen said even if Rauner’s holdings were in a complete blind trust, making money off of immigration centers puts him in a precarious ethical position, given policy decisions he might have to make regarding immigration and prison privatization.

“He is the leader of his entire state. He is participating in it. There’s no other way to say it: You’re making money from that? You are complicit, period. Complicit in the poor care that’s happening in prisons; complicit with what’s going on with immigration in our country,” Cohen continued. “He should not be investing in anything where he can as a policy maker have to make a decision related to those issues.”

Rauner’s financial disclosure does not specify the level of profit from Correct Care, except to say he earned more than $5,000 from GTCR’s Fund X, which owns the company. GTCR, Rauner’s former private equity firm, raised $3.25 billion in capital for its Fund X and used that money to acquire companies, including Correctional Healthcare in 2012, which later became Correct Care Solutions through a merger.

In 2017, Moody’s reported Correct Care held $1.2 billion in revenue and listed GTCR as among the company’s top co-investors.

The governor’s campaign said Rauner left GTCR before the 2012 health care company purchase. Rauner continued to make money from that decision, and maintained complete investment control until his election.

The governor, who has estimated his net worth at more than $500 million, did not place his expansive portfolio into a blind trust before taking office in 2015. He instead executed a power of attorney, authorizing investment decisions to a New York investment adviser, Roundtable Investment Partners. He said at the time that was the farthest he could go while complying with Illinois law requiring economic interest disclosures.

“All of Governor Rauner's assets are controlled by blind trust procedures and he is not involved in day-to-day investment decisions,” Rauner spokesman Will Allison said. “Moreover, Governor Rauner has never had any direct involvement with Correct Care.”

While Rauner has established “blind trust procedures,” there have been been questions over how much control he has actually relinquished over his investment decisions.

What is clear: the level of profits Rauner reported since becoming governor stand out.

During his first year in office, Rauner, who does not accept a state salary, reported $188 million in income, predominantly from investments. That figure, which covered 2015, was more than three times his income from the year before, when he didn’t hold an elected position.

For 2016, Rauner and his wife reported more than $91 million in state taxable income.

Complicating the connection between the governor and the for-profit health care firm is Correct Care’s spotty record in both jails and immigrant detention centers. That includes a county in Georgia that dropped the company following the deaths of five inmates in just more than two months. In Indiana, a county jail inmate alleges he was denied his cancer treatment. In Maine, the ACLU alleges an 11-year-old boy who has a mental illness, was beaten by local staff then denied medical care.

Correct Care also has a contract at the Karnes center in Texas, where immigrant families have complained they suffered cruelties during their detention.

Correct Care, which did not respond to several requests for comment, has vigorously defended the company’s staffing and quality of care.

Still, the sheer breadth of the allegations has raised the ire of groups like the American Civil Liberties Union, which says it fears for-profit correctional companies steer their loyalty to their bottom line and not to quality of care. “The medical care system has certainly come under a good deal of scrutiny because there have been such tragic outcomes in some cases,” said Victoria Lopez with the ACLU’s National Prison Project.

The potential for conflict is apparent in Rauner’s own state, according to a local immigration group.

The Illinois Coalition for Immigration and Refugee Rights has for years sought to expand a moratorium on the privatization of correctional facilities to extend to civil detention, including immigration detention centers.

“It doesn’t mean the issue has gone away. We’re trying to figure out the right occasion to revisit it,” said Fred Tsao, senior policy counsel for the ICIRR. “If we did revisit that issue, then certainly the governor’s financial ties could become an issue.”