Source: Becca Andrews, Mother Jones, September 27, 2016
The Corrections Corporation of America, the nation’s second largest private prison company, announced today that it will eliminate 50 to 55 full-time positions—approximately 12 percent of the corporate workforce—at its headquarters in Nashville, Tennessee. As part of a new effort to restructure the company and reduce costs, CEO Damon Hininger will also forfeit stock options and compensation worth $3.7 million. … Public opinion also seems to be turning against for-profit prisons. In last night’s debate, Hillary Clinton said, “I’m glad that we’re ending private prisons in the federal system. I want to see them ended in the state system. You shouldn’t have a profit motivation to fill prison cells with young Americans.” CCA’s shakeup is part of a cost reduction plan that aims to save $9 million in expenses in 2017. In its statement, the company noted that some of the risks and uncertainties it currently faces include changes to DOJ and DHS’s prison policies as well as changes in “the public acceptance of our services.”
With Scrutiny of Private Prisons Mounting, CCA Announces Staff Cuts At Its Nashville Headquarters
Source: Chas Sisk, Nashville Public Radio, September 27, 2016
Corrections Corporation of America says it’s laying off 12 percent of the workforce in its Nashville headquarters — an announcement that comes as scrutiny of private prison operators is mounting. The company said in a statement released Tuesday that it will eliminate 50 to 55 jobs from within its corporate ranks. The announcement was made after the close of trading on Wall Street. CCA shares have fallen by half since August. The company is the biggest private prison operator in the United States. … President Obama’s administration has already cut some ties at the federal level. The Department of Justice this summer announced plans to end use of private prisons, and the Department of Homeland Security is studying the possibility. Private prisons have always been controversial, but criticism has grown more fierce since the liberal magazine Mother Jones sent a reporter undercover at a CCA prison in Louisiana.
CCA looks to re-entry program growth as federal contracts shrink
Source: Jamie McGee, Tennessean, September 21, 2016
Corrections Corporation of America is looking to its re-entry programs for growth as the Nashville-based private prison operator seeks to recover from tumbling stock prices and shrinking federal government contracts. CEO Damon Hininger, speaking at an event Wednesday that featured publicly traded companies in Nashville, pointed to revenue opportunities in its growing re-entry division. In three years, the company has begun operating 25 re-entry facilities in four states. … CCA shares have plummeted 42 percent since the U.S. Department of Justice’s announcement Aug. 18 that private prison operators would be phased out. A separate report by the Office of the Inspector General, also released in August, pointed to higher incident rates of safety and security issues in private prisons. … CCA’s re-entry homes, which include 100 to 400 beds, are designed to host inmates nearing the end of their sentences to help them have successful transitions into normal life, Hininger said. CCA entered the re-entry segment three years ago when it bought San Diego-based Correctional Alternatives in a $36 million deal. In 2015, CCA added Oklahoma-based halfway house operator Avalon Correctional Services in a $158 million acquisition. In addition to re-entry programs, Hininger said he expects the company to expand its vocation programs within its current facilities as reducing recidivism rates becomes a larger focus nationally. …
WILL CLOSING PRIVATE FEDERAL PRISONS MEAN MORE MONEY IN STATE POLITICS?
Source: Maya Gold, Citizens for Responsibility and Ethics in Washington, September 19, 2016
On August 18, the Justice Department (DOJ) announced it would end its use of private prisons. Eleven days later, Secretary of Homeland Security (DHS) Jeh Johnson announced a review to determine whether his agency should do the same for privately-owned immigration detention centers. The moves arrived on the heels of a report from the DOJ’s Office of the Inspector General, which concluded that privately owned facilities are less safe and less effective than their government-run counterparts. The DOJ’s newly announced policy aims to eventually end contracts held by the Bureau of Prisons (BOP) that currently account for the incarceration of 12 percent of federal inmates. This decision is a surprising one, considering that private prison companies such as Corrections Corporation of America (CCA) and GEO Group Inc. (GEO) – which together control 75 percent of the for-profit prison market and take in a combined $3.2 billion of annual revenue – have poured an enormous amount of time and money into influencing the political system. The industry has been heralded as “the biggest lobby no one is talking about,” and the two companies have spent $14.6 million on federal lobbying efforts from 2010 to 2015. … While individual stories about CCA and GEO’s state presence abound, little research has been done on their nationwide efforts to influence politics and policy. A CREW investigation into the two companies’ state-level lobbying and political contributions finds that CCA and GEO have invested in 39 states across the country, donating millions of dollars to political campaigns and hiring dozens of lobbyists. …
The Private Prison Industry’s New Criminal Justice Ventures
Source: George Joseph, CityLab, September 14, 2016
But beyond these traditional criminal justice enterprises, private prison companies have been diversifying their holdings portfolios to capture emerging areas of the criminal justice market. Since 2005, GEO Group and the Corrections Corporation of America have poured over $2.23 billion into acquiring smaller companies that cater to different parts of the criminal justice system, such as GPS ankle-unit monitoring services, residential re-entry centers (commonly known as “halfway houses”), and prison health care services, according to a new report from the progressive advocacy group In The Public Interest. …
… From 2013 to 2016, the Corrections Corporation of America put down $230 million for residential re-entry center acquisitions. Similarly, from 2011 to 2015, GEO Group spent more than $450 million on electronic monitoring and alcohol monitoring-related acquisitions. In conversations with investors, private prison companies have been quite clear that this diversification seeks to meet the demands of the changing political climate. As Ann Schlarb, a senior vice president of GEO Group, explained at the company’s latest earnings call in April (transcript via Seeking Alpha), the company is “enthusiastic” about expanding its offender rehabilitation services, which they believe is “in line with current criminal justice reform discussions.” As of the first quarter of 2016, GEO Group’s re-entry division manages 21 halfway houses with more than 3,000 total beds, 63 day-reporting centers serving 4,000 participants, 12 residential youth-service facilities with approximately 1,300 total beds, and seven non-residential programs with 1,200 participants. Another GEO group division monitors around 139,000 offenders under community supervision, including more than 100,000 using GPS, radio-frequency, and alcohol-monitoring devices.
Closure of private prisons could hit Texas in pocketbook
Source: Dane Schiller, Houston Chronicle, September 5, 2016
Thousands of jobs and millions of dollars in lucrative government contracts could be in jeopardy in Texas with the Department of Justice’s decision to phase out the use of privately run prisons. Of the 14 private prisons facing the loss of federal contracts, five are in Texas – the most of any state. The impact will be felt not only in prison yards but also in the tax rolls and cash registers of small towns and local communities. … Wiseman said she fears that nearly all the jobs at the prison will be lost when the company’s federal contract expires in March. … The five facilities in Texas are centered in West Texas. The facilities include two side-by-side facilities at the Reeves County Detention Complex in Pecos, west of Midland; the Big Spring Correctional Facility in Howard County; Eden Detention Center in Concho County; and the Giles W. Dalby Correctional Facility in Garza County near Lubbock. …
Will states follow DOJ’s private prison move? Some are ahead of the feds.
Source: Joe Davidson, Washington Post, August 26, 2016
Uncle Sam is an influential guy. When he speaks, states listen. If history is a guide, the Justice Department’s decision to phase out private prisons could have an impact well beyond federal Bureau of Prison facilities. Already, some states are ahead of the federal government in closing for-profit correctional locations. The move by the Justice Department could encourage more of that. … Nicole D. Porter, advocacy director of the Sentencing Project, which, like the ACLU, opposes private prisons, provided these examples of states moving away from private facilities:
- Colorado officials announced plans in June to close the private Kit Carson Correctional Center.
- Mississippi officials said they will close the Walnut Grove Correctional Facility.
- D.C. Mayor Muriel Bowser (D) announced that the District would resume operation of the Correctional Treatment Facility when a contract with Corrections Corporation of America (CCA) expires next year.
- Kentucky announced the closing of its last of three facilities in 2013. In June, however, the state said it was considering reopening two private facilities because of overcrowding.
- Texas closed two private prisons in 2013.
- Idaho said in February it would no longer send prisoners to a private facility in Colorado.
This quote from America’s largest private prison company shows how much the industry fears criminal justice reform
Source: Michelle Mark, Business Insider, August 25, 2016
This quote, from a 2005 annual CCA report found in the Securities and Exchange Commission archives, reemerged in a New Yorker article on Wednesday. The quote appears to validate claims regarding the private prison industry’s concern with reform (emphasis ours):
“Our growth is generally dependent upon our ability to obtain new contracts to develop and manage new correctional and detention facilities. This possible growth depends on a number of factors we cannot control, including crime rates and sentencing patterns in various jurisdictions and acceptance of privatization. “The demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, leniency in conviction and sentencing practices or through the decriminalization of certain activities that are currently proscribed by our criminal laws. For instance, any change with respect to drugs and controlled substances or illegal immigration could affect the number of persons arrested, convicted and sentenced, thereby potentially reducing demand for correctional facilities to house them. “Similarly, reductions in crime rates could lead to reductions in arrests, convictions and sentences requiring incarceration at correctional facilities.”
The largest chapter of the Texas prison guard union supports closing private prisonsSource: Casey Tolan, Fusion, August 25, 2016
The Texas prison system should close all its private prisons and give more nonviolent inmates parole and out-of-prison supervision, the president of the largest chapter of the state prison guard union said this week. Lance Lowry, the President of the Huntsville AFSCME Texas Correctional Employees chapter, who’s been a correctional officer in the state for more than 20 years, argued in a blog post yesterday that closing private prisons is necessary with the state prison system facing $250 million in budget cuts. There are currently 10,464 offenders in the state’s 15 private prisons and jails, or about 7% of the state’s total prison population, according to the Texas Department of Criminal Justice. About half of Texas’ prison population was convicted of nonviolent crimes. Lowry, who represents 1,500 guards, said the state should shift low-level, nonviolent inmates to parole, probation, or electronic monitoring where they live at home. … The union’s advocacy for reducing incarceration comes amid wider scrutiny of private prisons. The federal Department of Justice announced last week that it would phase out the private prisons it had contracted, a decision that does not affect state private prisons. Private prison guards in Texas have a 90% staff turnover rate, compared to a 24% turnover rate among public prison guards, a 2008 State Senate report found. Public officers are older and more experienced, Lowry said. …
The Tricky Issue of Private Prisons
Source: Charles Chieppo, Governing, August 25, 2016
The reality is that most of the nation’s 2.2 million prisoners serve their sentences not in the federal system but in state and local prisons and jails. And prisons operated by for-profit companies account for about 6 percent of state inmates, according to the American Civil Liberties Union. Beyond prisons, there are a number of reasons why privatization can be an appealing option for state and local governments. The pay for success approach can shift risk away from taxpayers by conditioning a contractor’s payment on the achievement of various metrics. …
Will America Finally Stop Privatizing Everything?
Source: David Dayen, New Republic, August 24, 2016
Thirteen contracts may seem like too small a disruption to threaten the entire private corrections industry and its $629 million in annual profits. But DOJ’s repudiation has already spurred demands to close other privatized facilities. And the logic of the decision underscores the core truism of privatization, one that citizens are increasingly finding unconscionable: The only way to manage these public operations and skim a profit off the top is to do it deficiently. … It’s not hard to figure out why this happens. Private companies win contracts to manage federal prisons by undercutting the Bureau of Prisons’ operational costs. Unlike the government, private prison companies must also take their profit margins out of their budgets. The only way to make that work is to massively drop labor costs, corresponding to a severe degradation of the quality of prison management. The examples of this are legion. Wages for private prisons are over 20 percent lower than their public counterparts, and the penitentiaries are routinely short-staffed. Equipment requisitions are insufficient. Maintenance is routinely deferred. In one CCA prison in Idaho, corrections officers let the gangs help them run the facility. That reflects the problem with privatization as a whole. Private companies must carry out a government function—be it water, parking meters, mass transit, or K-12 schools—at a lower cost than the government can provide it, while taking their profit off the top. Time and again, the results reveal that to be impossible, at least if you want to provide the same quality of service. Yet we keep privatizing. …