Category Archives: Corrections

Private Prisons and Investment Risks, Part Two: How Private Prison Companies Fuel Mass Incarceration—and How Public Pension Funds Are at Risk

Source: American Federation of Teachers, 2019

From the press release:
The American Federation of Teachers is urging public pension funds with more than $3 trillion of deferred wages under management to review their holdings in the wake of a new report exposing how retirement funds are at risk through investments in private prisons that profit from mass incarceration.

“Private Prisons and Investment Risks, Part Two: How Private Prison Companies Fuel Mass Incarceration—and How Public Pension Funds Are at Risk” was released Tuesday by the AFT with the support of 35 other organizations including the Journey for Justice Alliance. The report reveals the direct and indirect investments public pension funds have in CoreCivic and GEO Group, which reap billions each year by jailing minority populations and exploiting the school-to-prison pipeline. The state pension funds named in the report currently hold over $75 million in private prison stock.

The report features a “watch list” of the private equity firms that own for-profit companies that provide services to detention facilities. And it reveals how pension funds may be backing companies that put public employees out of a job by funding firms that benefit from privatization. Private equity firms have significant investments in for-profit corrections companies, and many retirees are exposed through these funds or via direct shareholdings.

The report urges pension trustees to examine their portfolios for exposure to CoreCivic and GEO Group, and to consult the watch list when making future asset allocation decisions. Both firms’ bottom lines stand to be affected by the bipartisan passage in December of the criminal justice bill, which added to the political, legal and financial pressure on the prison industrial complex.

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Part One: Private prisons, immigrant detention and investment risks
Source: American Federation of Teachers, 2018

From the summary:
….”Private Prisons, Immigrant Detention and Investment Risks” is part 1 of two special edition reports that the AFT will be issuing to highlight the investment risks to pension funds and other investors whose portfolios contain exposure to the private prison industry or contractors who provide services to immigration detention centers. Since May 2018, when Attorney General Jeff Sessions conveyed plans to prosecute immigrants crossing trhe U.S. Mexican border, making it official U.S. policy to routinely separate children from their parents, AFT pension trustees and members have been inquiring about public pension funds that may be invested in companies that profit from detention facilities that house separated immigrant families and the risks those investments pose to members’ retirement security.

In response the AFT is issuing this two-part report to inform trustees about the top publicly traded companies that are profiting from the detainment of separated families or the incarceration of mass numbers of people—disproportionately people of color—in private prisons. Public pension funds invested in companies identified in this report may hold direct shares, or may have investments through index funds, private equity funds or hedge funds.

Part 1 of this report identifies investment managers, namely hedge fund managers, who invest millions of dollars in companies that profit from private prisons and detention facilities.

Part 2 of this report will identify an expanded list of investment managers who invest in private prison companies that profit more broadly from mass incarceration of communities of color.

Opinion: The cold hard facts about America’s private prison system

Source: Liberty Vittert, Fox News, December 19, 2018

….With the government paying private prison operators about $23,000 per year per inmate (keep in mind, the minimum wage is $15,000 per year), it’s a lucrative business. CoreCivic’s reported 2017 revenue was close to $1.8 billion, and a back-of-the-envelope calculation shows that with 80,000 beds supported by the government to the tune of $23,000 per inmate per year, it’s collecting about $1.8 billion annually from the government. Business is booming indeed – thanks to the American taxpayers.

To boot, with most private prison contracts, if the prison beds aren’t full, the government has to pay for them anyway….

… Not only are your tax dollars funding these private prison operators, but you might also be investing in them without even knowing it. As of 2016, Wells Fargo, Bank of America, JP Morgan Chase, BNP and U.S. Bancorp, all played a role in bankrolling private prison companies. And I can see why. Including the three main private prison companies – CoreCivic, The GEO Group and MTC – the industry rakes in about $5 billion in revenue a year….

….The entire argument for private prisons rests on cost-savings. Private prison companies claim they can do the work of the government for less money. But do they? The truth is, probably not. There is no evidence that they actually save taxpayers any money. In fact, the U.S. Bureau of Justice Statistics reported in 2016 that the cost-savings promised by private prisons have simply not materialized. Some research even indicates that private prisons often refuse to accept inmates that cost a lot to house (i.e. the violent offenders), making the statistics they report highly misleading….

For-profit prison companies back criminal justice reform. It could be good for business.

Source: Steve Contorno, Tampa Bay Times, December 13, 2018

A bipartisan push in Congress backed by President Donald Trump to slow America’s rising prison population has a puzzling supporter: A Boca Raton-based for-profit prison company. GEO Group, one of the country’s largest detention companies, is publicly urging the Senate not to adjourn without passing the FIRST STEP Act, a bill that seeks to shorten some federal drug sentences and reduce the likelihood inmates will end up back behind bars. GEO’s biggest competitor, CoreCivic, is backing the bill as well. On the surface, it’s a curious position for leaders of a $4.8 billion industry enriched by tough-on-crime policies that swept millions of Americans into lengthy sentences over the past three decades. But others see two companies well-positioned to profit if Congress goes through with this reform. …

Private Probation Services Council – Performance Audit

Source: State of Tennessee, Comptroller of the Treasury, Division of State Audit, December 2018

The Private Probation Services Council’s purpose is to ensure that uniform professional and contract standards are practiced and maintained by private corporations, enterprises, and entities engaged in rendering general misdemeanor probation supervision, counseling, and collection services to the courts.

We have audited the Private Probation Services Council for the period July 1, 2013, through October 31, 2018. Our audit scope included a review of internal controls and compliance with laws, regulations, policies, and procedures related to the council’s responsibilities in the following areas:
– council member appointments, meetings, and reserve balances;
– council oversight, including entity contract review and background screening;
– council conflict-of-interest disclosures; and
– initial licensure applications, annual license renewal applications, and quarterly fee collections…..

He’s Built an Empire, With Detained Migrant Children as the Bricks

Source: Kim Barker, Nicholas Kulish and Rebecca R. Ruiz, New York Times, December 2, 2018

The founder of Southwest Key made millions from housing migrant children. His nonprofit has stockpiled taxpayer dollars and possibly engaged in self-dealing with top executives. … Mr. Sanchez has built an empire on the back of a crisis. His organization, Southwest Key Programs, now houses more migrant children than any other in the nation. Casting himself as a social-justice warrior, he calls himself El Presidente, a title inscribed outside his office and on the government contracts that helped make him rich. Southwest Key has collected $1.7 billion in federal grants in the past decade, including $626 million in the past year alone. But as it has grown, tripling its revenue in three years, the organization has left a record of sloppy management and possible financial improprieties, according to dozens of interviews and an examination of documents. It has stockpiled tens of millions of taxpayer dollars with little government oversight and possibly engaged in self-dealing with top executives. …Southwest Key has created a web of for-profit companies — construction, maintenance, food services and even a florist — that has funneled money back to the charity through high management fees and helps it circumvent government limits on executive pay. …

Trans woman who died in ICE detention was housed at facility with history of abuse allegations

Source: Rebekah Entralgo, ThinkProgress, November 26, 2018

A new autopsy report shows Roxsana Hernández Rodriguez may have been beaten prior to her death. …. A transgender woman held at a privately operated Immigration and Customs Enforcement (ICE) detention center was likely beaten before her death, according to private autopsy results obtained by The Daily Beast. Both the private prison company that owns the facility and the detention center itself have faced allegations of misconduct and neglect in the past. …. Hernández Rodriguez was detained by immigration authorities at the border in early May and died on the 25th of that month, just nine days after being transferred to dedicated unit for transgender women at the Cibola County Correctional Center in New Mexico. As ThinkProgress previously reported, Hernández Rodriguez was the sixth person to die in ICE custody since October 2017. …. The Cibola County Correctional Center where Hernández Rodriguez was being held at the time of her death is operated by CoreCivic, one of the largest private prison corporations in the country. In the past, it has faced allegations of medical neglect, “including operating for months on end without a medical doctor and failing to provide basic care and screening for infectious diseases,” and come under scrutiny for a series of questionable deaths, The Nation reported in 2016. ….

ICE Handcuffs Immigrant Kids on Their 18th Birthdays, Drags Them to Jail

Source: Tim Elfrink, Miami New Times, August 23, 2018

….Since April, at least 14 children at the Homestead center have been handcuffed on their 18th birthdays and taken to a jail cell in Broward, Lehner says. And at least one of those kids had been separated from his father under the Trump administration’s since-abandoned policy to rip apart families that crossed the border together. Lehner and her colleagues have filed seven lawsuits since early July on behalf of those 18-year-old immigrants. In five of those cases, ICE has quickly released the immigrants to relatives or guardians while their cases work through the courts. (Two cases are still pending, and Lehner expects to file several more in the coming weeks.)….

Auditors confirm company did not comply with medical services contract at Milwaukee County Jail, House of Correction

Source: Don Behm, Milwaukee Journal Sentinel, August 20, 2018

he private company responsible for medical services at the Milwaukee County Jail and House of Correction failed to meet contract staffing requirements during the time that several people died while in custody at the jail, county auditors said Monday in a report.  Armor Correctional Health Services Inc., the Miami-based company hired by the county, provided an average of 89% of its staffing requirements from November 2015 to August 2017, according to county audit director Jennifer Folliard. The company only achieved that level of service by relying on employees brought in from outside employment agencies, the report says. Staffing levels for several key jobs fell below the overall average, with only 83% of registered nurse hours and 85% of mental health staff hours covered, according to the report. … In February, Armor was charged in Milwaukee County Circuit Court with falsifying health care records of inmates at the jail, including Terrill Thomas, who died of dehydration while in custody in April 2016. Armor employees allegedly “engaged in a pattern and practice of intentionally falsifying entries in inmate patient health care records,” a criminal complaint says. …

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Sheriff ‘aggressively worked’ to correct problems found in review of Milwaukee County Jail operations
Source: Ashley Luthern, Milwaukee Journal Sentinel, April 5, 2018

An outside review of the Milwaukee County Jail found outdated policies, lengthy waits for inmate medical screenings, widespread use of overtime because of staff shortages and other problems. … Acting Sheriff Richard Schmidt asked the National Institute of Corrections to review all operations at the jail in the wake of seven custody deaths over two years. One of those deaths — that of Terrill Thomas who died of dehydration in April 2016 — led to criminal charges being filed against three jail staffers and Armor Correctional Health Services, the private medical contractor at the jail. …

Company Hired to Provide Health Care for Milwaukee Inmates Charged With Falsifying Records
Source: Marti Mikkelson, WVUM, February 21, 2018

The company that cares for inmates at the Milwaukee County Jail is facing criminal charges. Employees allegedly lied about checking on a man who died of dehydration, after water to his cell was shut off. The Milwaukee County District Attorney’s office on Wednesday charged Armor Correctional Health Care Services with seven misdemeanor counts of intentionally falsifying health records. The company is the latest defendant to face charges in the death of Terrill Thomas,who spent a week without water in his cell as punishment in 2016. …

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JANET NAPOLITANO REJECTS CALLS TO SEVER TIES WITH DEFENSE CONTRACTOR

Source: Ethan Coston, The Triton, August 22, 2018
 
UC President Janet Napolitano has announced that the UC system will not sever ties with General Dynamics Information Technology—a defense contractor that works with Immigration and Customs Enforcement (ICE)—despite requests from labor unions and the UC Student Association (UCSA). On June 8, UC-AFT—the labor union that represents UC faculty and librarians—sent a letter to Napolitano calling on her to end the UC system’s contracts with defense contractor General Dynamics Information Technology (GDIT), which administers the UC system’s Analytical Writing Placement Exam to prospective UC students. … UCSA and American Federation of State, County, and Municipal Employees (AFSCME) Local 3299, the largest labor union in the UC system, released letters supporting UC-AFT’s message. …

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Labor leaders demand UC end contracts with ICE-collaborating businesses
Source: Mani Sandhu, Daily Californian, August 13, 2018

 
UC labor leaders are demanding that the UC system end contracts with businesses that work with the U.S. Immigration and Customs Enforcement agency, or ICE, in response to President Donald Trump’s policy of separating immigrant families at the border.  The UC paid more than $200 million during 2011-15 through contracts with 25 businesses — including AT&T, Maxim Healthcare Services, Time Warner Cable and General Dynamics Information Technology, or GDIT — that also provide services for ICE, according to a document from American Federation of State, County and Municipal Employees Local 3299, or AFSCME Local 3299, the UC’s largest employee union.  “To add insult to injury, not only are they outsourcing our jobs, they’re outsourcing our jobs to the people who are behind Trump’s zero tolerance policy,” said AFSCME Local 3299 spokesperson John de los Angeles. “We want UC to stand up for the communities that they’re exploiting.”

Students, unions demand UC divest from ICE-related companies
Source: Nanette Asimov, San Francisco Chronicle, August 10, 2018
 
In reaction to President Trump’s policy of separating families at the border, students and labor leaders at the University of California are urging UC President Janet Napolitano to sever contracts with dozens of companies doing business with the federal Immigration and Customs Enforcement agency.  UC labor leaders say they’ve found 25 companies — from uniform suppliers to weapons manufacturers — that do hundreds of millions of dollars of business with the university, and with ICE.  “We want UC to remove resources that are critical to ICE’s enforcement of zero tolerance and take a stand for” immigrants and people of color, said John de los Angeles, spokesman for the American Federation of State, County and Municipal Employees, AFSCME Local 3299, which represents thousands of workers across UC campuses and medical centers. …

A NJ Pension Fund Bets on CoreCivic and GEO Group

Source: Max Siegelbaum, Documented, August 16, 2018

As state pension funds pull back from companies that profit from immigration detention, one New Jersey fund has sunk nearly a million dollars into the industry. According to U.S. Securities and Exchange Commission filings, the NJ State Employees’ Deferred Compensation Plan purchased 18,000 shares of CoreCivic stock and 20,000 shares of Geo Group stock. The total investment was $964,000, a small portion of the entire fund, worth $559 million. According to SEC filings, the shares were purchased sometime between June 30 and Aug. 2, around the height of the “zero tolerance” policy period. Geo Group runs Delaney Hall Detention Facility in Newark and CoreCivic runs Elizabeth Detention Center, a low slung building in Elizabeth that houses about 300 detainees and an immigration court.

… In 2017, New York City became the first municipality to divest from the private prison industry. … Other cities and states have followed in removing public retirement funds from private prison stock. Philadelphia sold $1.2 million last October. Nashville, Tenn., has also moved to sell its holdings. Other cities like Cincinnati, Ohio, Portland, Ore. and Minneapolis have either divested or moved towards it. Universities like Columbia, Princeton and Stanford have active student divestment movements. …

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Editorial: UC should divest from companies linked with immigration crisis 
Source: Daily Bruin, August 19, 2018

President Donald Trump’s turbulent administration hit rock bottom following revelations that the federal government was separating families of asylum-seekers at the border. Among the list of offenses: caging children, coercing non-English speakers into signing esoteric forms and traumatizing minors seeking a place in this country. Californians have been crying foul ever since. The most prominent display of disdain has come from workers, who have called on state institutions to cut investments in companies linked to border detentions. American Federation of State, County and Municipal Employees Local 3299, a union representing University of California workers, called on the University in July to divest from contractors linked with the detention of immigrants at the border. And California teachers wrote a letter to administrators of the California State Teachers’ Retirement System earlier that month, demanding it divest from private prison companies and organizations involved in immigrant detention. …

Chicago teachers plan to divest private prison companies
Source: Meaghan Kilroy, Pensions & Investments, August 17, 2018
 
Chicago Public School Teachers’ Pension & Retirement Fund added private prison companies and businesses that operate immigration child detention centers to its list of prohibited investments, said Angela Miller-May, chief investment officer of the $9.8 billion pension fund, in an email. At its Thursday board meeting, the pension fund board directed investment staff to instruct the fund’s investment managers to “prudently liquidate public market holdings in (these) companies as soon as reasonably practical and in accordance with the managers’ fiduciary duties,” Ms. Miller-May wrote. The pension fund estimates it has approximately $548,000 invested in these companies. …

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