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CoreCivic and Geo Group are highly reliant on loans to function and expand, according to a report from Make The Road, The Center for Popular Democracy and Enlace, a group that advocates for private prison divestment. In 2017, nine out of ten dollars CoreCivic had on hand were borrowed from banks, while 19 out of 20 dollars Geo Group had on hand were also borrowed according to the report. J.P. Morgan is the largest lender for both companies, holding $167.5 million in debt, which is 62 percent more than the next lender.

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Democrat and Republican lawmakers on Wednesday took issue with the current structure of regional Federal Reserve Bank boards, though they couldn't agree on how to reform the quazi-private-public firms.

The twelve regional Fed banks have come under increased scrutiny in recent months after Democratic presidential nominee Hillary Clinton issued a statement in May saying she supports removing bankers from regional Fed boards and increasing director diversity. Her comments heightened the public profile of an issue that otherwise hasn't received much focus.

A key point of debate was concerns by consumer groups that having bankers on regional Fed boards creates a conflict of interest since reserve bank staff supervise big and small commercial banks in their districts. This contrasts to the central bank in Washington, which is a government agency with governors that are nominated by the president and confirmed by the Senate. 

For example, among the nine directors who serve on the New York Fed board are Morgan Stanley (MS) CEO James Gorman and two community bank chief executives.

House Republicans indicated during a subcommittee hearing of the House Financial Services Committee that they weren't overly concerned by bank CEOs serving on such quasi-private boards while Democrats questioned the diversity of the panels.

"I don't object to bankers being on the boards," Gwen Moore, D-Wisc., told reporters after the hearing. "I'm concerned about the voice of other directors who are there and their efficacy to participate fully and about mobilizing and empowering them once they are there."

Moore, the top Democrat on the Monetary Policy and Trade subcommittee, said she the boards need more diversity, noting that none of them have hired a Latino or African American as president of the regional Fed banks where they serve.

Meanwhile, demonstrators from a consortium of consumer groups calling itself "Fed Up" attended the hearing, dressed in green shirts with slogans such as "16 of 17 Fed leaders are white."

The group also took issue with bankers on the regional Fed boards and, in their view, a lack of board diversity.

"When these voices are excluded from the conversation, then our interests are excluded," Ruben Lucio, a representative from the Center for Popular Democracy and a member of Fed Up, told reporters outside of the hearing.

According to current rules, regional boards have nine directors divided into three classes. Three banking directors are elected by member banks, another three are designated by the same banks to represent the public and interests of commerce, industry, labor and consumers, and the final class is appointed by Fed governors to represent the public. 

Rep. Ed Perlmutter, D-Colo., said he wanted to delve more deeply into bank executives serving on the boards but noted that the Kansas City Fed, which covers the district he represents, appears to be quite diverse based on a variety of metrics.

It "has a diverse board ethnically, gender wise, labor wise, regional within the Fed and that was the template I'm using," Perlmutter said.

Two regional Fed presidents, meanwhile, pushed back against concerns about conflicts of interest during their testimony. 

Richmond Fed President Jeffrey Lacker noted that strict rules govern their conduct. "They simply have no avenue through which they can influence supervisory matters," Lacker said.

And Esther George, president of the Federal Reserve Bank of Kansas City, pointed out that bankers who serve on reserve bank boards are prohibited from participating in the selection of bank presidents.

Republicans, meanwhile, focused much of their attention on whether too much influence over monetary policy is wielded by the East Coast, particularly the New York Fed.

Rep. Bill Huizenga, R-Mich., and chairman of the monetary policy subcommittee, argued that lawmakers should back legislation he sponsored, the Federal Oversight Reform and Modernization Act, or FORM, which includes a provision that would reduce the influence of the New York bank.

The Federal Open Market Committee, the branch of the central bank that determines monetary policy, has 12 voting members made up of seven members of the Fed board of governors and five of the regional Fed banks.

The president of the New York Fed, which supervises Wall Street firms from JPMorgan Chase (JPM) to Goldman Sachs  (GS) and Citigroup (C) , is a permanent voting member but the other regional bank presidents serve rotating one-year terms. Huizenga's legislation would put the New York Fed president into the voting rotation along with all the other regional bank chiefs.

"For crying out loud, the San Francisco bank has a tremendously important area," Huizenga told reporters after the hearing. "Silicon Valley, that stretches from LA to Seattle, has tremendously valuable input and to have them only be a voting member every two or three years doesn't make a lot of sense to me."

Rep. Mia Love, R-Utah, said she was concerned that the Western states weren't well represented by the regional Fed bank structure.

"You have members on both sides of the aisle expressing concerns and I would like to know what might be done to rebalance the Fed to ensure that all Americans are represented in monetary policy decisions," she said. 

Don Lamson, of counsel at Squire Patton Boggs in Washington and a former regulator at the Office of the Comptroller of the Currency, suggested that if the goal is to create greater accountability to Congress, legislators should require the Fed regional bank system to be funded through congressional appropriations instead of the self-funding that exists now.

With that structure, legislators could remove the regional Fed boards, transforming the quazi-private-public entities into government agencies.

An appropriations process, however, would destroy the independence of the Fed, which is vital to setting interest rates and supervising banks appropriately, Moore argued.

Expanding legislative influence would also open Federal Reserve funding to unrelated policy measures that might be attached in an attempt to get them passed. "Come meet with me I'm the chairman of the Fed's appropriations committee," Moore said facetiously.

By Ronald Orol

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If a commission discovered “any wrongdoing, any corruption, any malice in that corruption,” added Julio Lopez Varona of the Center for Popular Democracy’s Puerto Rico programs, “then people should go to jail.” In his view that includes not just federal officials but local Puerto Rican officials, some of whom have come under fire for mismanaging the disaster and recovery. But Mark-Viverito notes that it is far too early to think about how to enact punishments on individuals.

Critics say the close connections between prosecutors and local police leads to unjust decisions not to prosecute officers following officer-involved shootings.

The absence of indictments of police officers in shooting deaths – especially in high-profile cases like the deaths of Michael Brown in Ferguson and Tamir Rice in Cleveland – is raising questions about the fairness of using local prosecutors to investigate police officers with whom they may have close ties.

Critics say the close working relationships between local prosecutors and law enforcement injects a bias into investigations of shootings and other deaths at the hands of police. A solution, some suggest, would be to use independent prosecutors to investigate charges of wrong-doing by police officers.

The investigation into the death of Alton Sterling in Baton Rouge, La., offers one example of the closeness often seen between prosecutors and police departments. East Baton Rouge District Attorney Hillar Moore recused himself from the investigation, as he had worked closely with both police-officer parents of one of the officers involved in the shooting. 

When a police officer is involved in a shooting, often the officer's own police department opens an internal investigation into the incident. In some cases, says Walter Katz, an independent police auditor of the city of San Jose, Calif., who has studied investigations of police use of lethal force, there is evidence that suggests the investigator's close relationship to the officer can lead to a lack of objectivity.

"That can be amplified when also the local prosecuting agency is the agency that reviews to decide whether or not to file criminal charges against a police officer," Mr. Katz tells The Christian Science Monitor. "In smaller jurisdictions ... they're going to have a close working relationship, so it creates the potential impression that it's not an arm's length review of the use of force."

The scarcity of indictments in a variety of high-profile shootings has increased scrutiny of officer prosecutions by local authorities. The prosecutors in both the Tamir Rice case in Cleveland and the Michael Brown case in Ferguson said they believed the officers involved had acted legally. Both were accused of not presenting a fair review of possible charges to the grand juries, as Ari Melber, MSNBC’s chief legal correspondent, explained in The Washington Post.

The problem of officer-involved shootings of blacks wouldn't be solved with independent prosecutors, Marbre Stahly-Butts, the deputy director of racial justice for the Center for Popular Democracy, a progressive advocacy organization, tells the Monitor. But "certainly accountability is an essential step that needs to happen," she says.

"We have the common sense that asking prosecutors who work everyday with police and depend on police for their cases, to then be objective in prosecuting them, is just not reasonable," Ms. Stahly-Butts says.

Local advocates are working to address these issues, Stahly-Butts says, especially in St. Louis and New York, where it has contributed to the passage of an executive order ensuring independent prosecutors.

On the federal level, Congressman Steve Cohen (D) of Tennessee is sponsoring a bill that would withhold federal funding from law enforcement unless the use of independent prosecutors to address instances of deadly force by police is instituted.

"There's no good reason not to have independent prosecutors," he tells the Monitor. "If you have the prosecutors who work with the law enforcement agency, which they do hand-in-glove to investigate cases and present cases, there is... an appearance of, if not outright, impropriety."

This can limit the citizenry's faith in the justice system, especially if no charges are brought against the officers, Representative Cohen says. On the flip side, when local prosecutors do bring charges, police can react negatively. After Baltimore State's Attorney Marilyn J. Mosby brought charges against officers in the death of Freddie Gray, some believe there was a work slowdown among Baltimore Police, which police officials denied, the Baltimore Sun reported. This hurts the entire community, Cohen says.

The bill, introduced in October 2015, has 80 co-sponsors as of Wednesday morning. Several states have made moves to implement independent prosecutors, including Connecticut and New York. Cohen says it is important to set a nation-wide standard, but House Judiciary Chairman Rep. Bob Goodlatte (R) of Virginia has not yet scheduled a hearing.

The bill is opposed by the National Association of Police Organizations, a law enforcement advocacy group. The organization's executive director, William Johnson, wrote a letter to Cohen expressing fears that officers would face "a great deal of pressure" if investigated by independent prosecutors, The Hill reported. 

"There is a risk that decisions to prosecute would be made based on politics, not on the law and admissible evidence," Johnson wrote. "NAPO is concerned that an officer would be indicted, even if he/she did nothing wrong."

Johnson did not respond to requests for comment from the Monitor.

Cohen says local law enforcement may oppose his bill because they benefit from the current system and may be "getting home cooking".

"That's not what justice is about," he says. "All games should be on neutral courts."

By AIDAN QUIGLEY 

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