Investigating the Need for Transparent Disclosures of Political Campaign Contributions and Lobbying Expenditures by U.S. Private Prison Corporations

Abstract

Transparency is a fundamental principle of good corporate governance. A disclosure is an important mechanism that enhances corporate governance through increased transparency and better informed stakeholders. When a government operation contractually assigns prison services to a nongovernment for-profit entity, then that entity is fulfilling a public interest role of incarceration and should be accountable to the citizen taxpayers (i.e., the stakeholders). Accountability is important. But what happens to accountability when the mission statements and business strategies of the nongovernment for-profit entities diverge from the original government operation? The private prison industry, annually, spends thousands and sometimes millions of dollars toward political campaigns and lobbyists to influence and educate legislatures as a part of their corporate political strategy to ensure a steady stream of growing revenues. Consequently, various laws have been implemented resulting from successful lobbying efforts that affect the public interest. These nontrivial amounts are not disclosed in their annual reports or proxy statements. However, this information is reported in a disaggregated way in various non-SEC filings. This study shows that tracking federal and state lobbying expenditures and political campaign contributions is a complicated task for a trained staff of researchers, and would be quite difficult for most stakeholders; thus, current reporting obscures transparency. I thus argue for greater transparency by requiring mandatory disclosures of political contributions and lobbying expenditures in the financial statements of publicly held private prison corporations. Benefits of audited annual reports filed with the Securities and Exchange Commission would enhance the reliability of management assertions about expenditures related to political contributions and lobbying costs reported by private prison corporations and the detailed information would be presented in a single, complete disclosure. This new disclosure requirement would improve corporate governance, increase accountability, decrease information asymmetry that exists between the private prison corporations and stakeholders, and allow external stakeholders to make informed judgments about whether those in the business of incarceration are fulfilling their public interest role.

Does IFRS Have Impact on Earning’s Quality and Audit Fee?

“…IFRS adoption relates to the increasing in disclosure and decreasing in the choice of accounting method (Ashbaugh & Morton, 2001;Scott, 2015). The study results of the of Chen, Tang, Jiang, & Lin (2010) showed that after the obligatory adoption of IFRS in the European countries, the earnings mana gement is declined with evident from a decrease in the discretionary accruals and increasing the accruals quality.…”

“…The adoption of IFRS (gradual strategy) in Indonesia begun in 2012 (Institute of Indonesia Chartered Accountants, 2009). Institute of Indonesia Chartered Accountants (IAI) proclaimed that the adoption of IFRS has proven to enhance the increase of disclosures and the decreasing number of accounting methods' options (Ashbaugh & Morton, 2001;Scott, 2015).…”

Prison Privatization: An Empirical Literature Review and Path Forward

“…To avoid potential litigation, private prisons are very protective of information concerning how they are performing. Extending public records laws to private prisons can be an effective means of ensuring transparency and accountability (Scott, 2015;Tartaglia, 2014). Private prisons perform a core governmental function relating to imprisonment.…”

“…There have been concerns that private prison corporations lobby for legislative changes involving increased use of private confinement (Lippke, 1997;Scott, 2015). Private prison corporations have donated millions of dollars to politicians who would pass legislation promoting harsher sentences, such as "three-strikes," mandatory minimum sentencing, truth in sentencing, and anti-immigration laws (Justice Policy Institute, 2011).…”

Como e porque devemos contabilizar a (e nos responsabilizar pela) violência - uma abordagem reflexiva

“…Participating in eugenics (Graham et al 2018) and normalizing violence regarding Indigenous populations (Neu, 2000 andNeu &Graham, 2006) reveal symbolic and physical violence as well. Studying incarceration, researchers describe the dynamics of power, profits and violence (Andrew, 2007(Andrew, , 2011Lehman et al 2018;Mennicken, 2013;Scott, 2015;Taylor and Cooper, 2008). As such, "Accounting becomes an eminently suitable technology to manage and enact violence on racialized populations because of its capacity to de-humanize them or render them invisible as people" (Annisette & Prasad, 2017, p. 9).…”