Washington, D.C. watchdog group the Campaign Legal Center on Thursday filed a lawsuit demanding the Department of Justice explain its reversal on phasing out private prison use and release records on its interactions with private prison company the GEO Group (GEO - Get Report) .
The Campaign Legal Center sent a request under the Freedom of Information Act to the DOJ in February requesting records of documents that mention "Rebuilding America Now," the pro-Trump super PAC to which GEO contributed $225,000 during the 2016 election. The organization followed up with a letter in May and on Thursday filed a lawsuit demanding the department respond to its FOIA request immediately.
The Campaign Legal Center also has a pending complaint before the Federal Election Commission alleging that GEO's contribution to Rebuilding America Now violates a prohibition on government contractors making political contributions.
"GEO made illegal contributions to influence the election, and now DOJ is refusing to release the documents that might show whether the administration rewarded GEO for its illegal spending," said Adav Noti, senior director of trial litigation and strategy at the Campaign Legal Center and former associate general counsel for policy at the FEC, in a statement. "While we continue to wait for the FEC to hold GEO accountable, GEO seems to be reaping benefits from its illegal contribution, receiving a $110 million prison contract from the very same DOJ that is unlawfully withholding these documents."
The Boca Raton, Florida-based company in April was awarded a $110 million contract to build and run a 1,000-bed immigrant detention center in Texas. In May, it was awarded a pair of contracts valued at $664 million to continue operations at two of its Texas facilities for holding criminal aliens.
Private prison operators such as GEO and CoreCivic (CXW - Get Report) have seen their stock prices skyrocket since Trump's election. The DOJ under Obama moved to end the federal use of such facilities last year, sending shares of both companies plummeting. Attorney General Jeff Sessions in February scrapped the Obama plan.
More than 60% of GEO's revenue in 2016 came from its U.S. corrections and detention business unit, including 14% from the Bureau of Prisons, 10% from the U.S. Marshals and 18% from U.S. Immigration and Customs Enforcement. The company saw $2.2 billion in revenue in 2016.
Shares of GEO were little changed at $30.87 on Thursday, compared with a closing price of $10.61 on the day of the election, even after a three-for-two stock split in April.
GEO made a $100,000 donation to Rebuilding America Now on August 19, the day after the Obama administration announced its decision to phase out private prison contracts. It gave an additional $125,000 a week before the election. The contributions and GEO's subsequent contract awards and stock rally have raised eyebrows, but GEO says it's much ado about nothing.
"These are absolutely baseless and meritless allegations," GEO spokesman Pablo Paez said in an email to TheStreet. "All of our company's contributions have been fully compliant with all applicable laws. The contract we were awarded by the Department of Homeland Security, not the Department of Justice, was part of a competitive procurement process which was initiated by the Obama Administration in 2015, and the decision by the Department of Justice merely reinstated the long-standing policy and practice enabling the use of public-private partnerships by the Federal Bureau of Prisons, which has been in place since the 1990s under both Democratic and Republican administrations."
Department of Justice spokespeople did not return a request for comment.