Private Prison Fails In Scotland

If anyone thinks that private prisons are ineffective only in the US, they need to think again. No matter where in the world these facilities operate, be it Idaho or Istanbul; turning rehabilitation and incarceration over to nasty corporations like CCA, GEOGroup & overseas, G4S Securior, (Wackenhut) always fails. 

Excerpt From Daily Record UK

SCOTLAND"S showpiece private prison is more violent than any other jail of its size in the country, a shock report by inspectors has revealed.

Addiewell jail has been dubbed the Addison - after the Radisson hotel chain - because cons enjoy flat-screen TVs, Sky Sports and en-suite bathrooms in their cells.

But there were more attacks on staff and inmates at Addiewell in 12 months than at Saughton in Edinburgh, Perth or Kilmarnock prisons, which are about the same size.

And the West Lothian jail has been hit by two major riots since it opened little more than two years ago at a cost of £130million.

As he unveiled his first ever report on Addiewell, Scotland's chief inspector of prisons, Brigadier Hugh Monro, said: "I worry about the violence here, as I do in all Scottish prisons - particularly the staff assaults."

 And politicians described the level of attacks on Addiewell officers as "unacceptable" and "deeply disappointing".
Addiewell staff suffered 49 "minor" attacks - almost one a week - in the 12 months to October 2010. There were also two serious assaults on officers.

That compares to just 14 "minor" attacks and two serious staff assaults in the same period at Saughton, seven "minor" assaults at Kilmarnock and only five "minor" attacks at Perth.
Addiewell was also worst for attacks by cons on other prisoners. There were 16 serious assaults - more than at Saughton (15), Perth (11) and Kilmarnock (11).

The reports also records 278 "minor" prisoner-on-prisoner attacks at Addiewell. The figures for Saughton, Perth and Kilmarnock were 274, 195 and 154 respectively.

Rioting erupted at Addiewell in October 2009. About 20 cons ran amok and an officer needed treatment in hospital.
Just three months later, an officer was hit with a pool cue as violence erupted again.

Reacting to the inspector's report, Tory justice spokesman John Lamont MSP said: "Addiewell has, in a short space of time, developed a poor history of protecting staff. It is deeply disappointing that they have not addressed this problem.

"The level of violence in this prison is unacceptable. More must be done to ensure that better safety is provided so staff do not bear the brunt of it."

Full Story

The CA (Private)(Political) Prisoner Shuffle

Does anyone really find it surprising that the Governator is making good on debts owed on his way out the door? Private prisons played a huge part in putting him in office, of course he is agreeing to shipping prisoners willy-nilly around the country for no practical or fiscally responsible reason.

In 2009, Corrections Corp. of America contributed $100,000 to Budget Reform Now, the committee organized to campaign for six state budget-related measures supported by Schwarzenegger on a special election ballot in May. Six months later their contract extension worth $54 million a year to house prisoners out of state was approved by CDCR. I'd call that a rather nice return on their investment, wouldn't you?

Corrections Corp. donated $234,500 in 2007-08, and $38,900 that same year, to several members of the California Legislature and the state Democratic and Republican parties, according to its filings with the Secretary of State.The firm also reported spending about $45,000 for each of the three prior quarters on lobbyists in California.

How safe do you imagine it is to transport busloads of prisoners across several states? Am I the only one who thinks that shipping dangerous felons around might just increase the risk for escape or mayhem? Oh, but wait, GEOGroup/Wackenthut also operates a prison transport system - so for the price of a bloated, no bid contract paid for courtesy of hard working tax payers, they'll be more than happy to ensure safe shipping of prisoners nationwide!

We just aren't supposed to take notice of the fact that in a 2006 it was reported that of California’s seven private facilities, (labeled community correctional facilities), the GEO Group operates four of those, housing over 1,800 inmates. GEO Group has donated thousands of dollars in political contributions. GEO/Wackenhut Corrections gave $34,900 to California committees during the 2002-2004 election cycle. 

How astonishing then when, "In 2005, GEO Group, Inc. was tentatively awarded a $20 million contract to operate a San Joaquin Valley correctional facility," stated the Institute's report. 

"Wackenhut gave two Schwarzenegger committees a total of $58,000 in the latter part of 2003, including $36,800 to his committee supporting the recall of then-Governor Gray Davis. According to the (San Jose) Mercury News, GEO gave another $10,000 to a third Schwarzenegger committee."

Excerpts from today's SFGate -
"When California first signed contracts to ship prisoners over state lines four years ago, it began with 2,260 inmates at a cost of $51 million annually. Now, it is set to pay the companies $330 million a year to house 15,424 prisoners, and spend a total of $365 million once administrative costs are factored in. 

The latest deal will ship 5,800 inmates to private prisons across state lines, bringing the total to more than 15,000. The transfers will begin in May under a contract that runs through June 2013 - nearly halfway through the term of Gov.-elect Jerry Brown.
Critics of moving prisoners to out-of-state facilities say it does little to relieve the underlying problems that have caused crowded conditions and questioned the timing of the new, no-bid contracts with two private companies. One of the companies houses nearly 10,000 California prisoners.

"This is the governor doing what he wants to in the last minutes of his administration," said state Sen. Mark Leno, D-San Francisco. "It is a way he can, on his watch, knock another 5,000 from the official numbers." 

Bidding Up GEO Group and ICE Contract

This couldn't possibly have anything to do with all of GEO Group's pending ICE contracts or the appointment of a GEO Group lobbyist to head up the US Marshall's Service which awards contracts for privately run detention facilities now could it? Nah...I'm sure there are no backroom deals going on and that the timing of this is just pure coincidence...
From Benzinga

Posted on 11/10/10 at 1:58pm by Chip Brian
Geo Group is in SmarTrend's Security industry and this industry is currently in an Uptrend according to our research. We are monitoring many other stocks on the move within this industry.
SmarTrend currently has shares of Geo Group in an Uptrend and issued the Uptrend alert on June 17, 2010 at $21.57. The stock has risen 16.9% since the Uptrend alert was issued.

Read more: http://www.benzinga.com/press-releases/10/11/c599265/investors-bid-up-shares-of-geo-group-up-1-geo#ixzz15O89nsLj

Geo Group's Pending ICE Contracts

Now that GEO Group has succeeded in putting one of their spokesmen/puppeteers in place as head of the US Marshall's Service, they have a stronger chance of winning the *bid* for this contract...and many others as well. Small communities everywhere should be aware and not fall for the ruse of corrections for profit as a money saving endeavor. Communities who have fallen for it have paid a pretty hefty price in many cases.

From
By Beth Brelje

Pocono Record Writer

November 15, 2010 

GEO Group, formerly known as Wackenhut, wants to build and operate the detention center in Upper Mount Bethel Township, Northampton County. The operator says the center would house 2,250 illegal immigrants awaiting deportation. The project, the company says, would provide 350 construction jobs and 500 permanent jobs.

Immigration and Customs Enforcement has announced an interest in securing additional detention space in the Northeast, said ICE spokesman Mark Medvesky. Ideally, a detention system would reduce transfers and house people near the site of their apprehension, and close to legal services and hospitals.

"Counties, along with private companies with whom they may choose to partner, are drafting concept papers for ICE's consideration. These concept papers, developed by local jurisdictions, are not binding on ICE," Medvesky said in an e-mail to the Pocono Record. "No sites for the northeastern U.S. have been selected and no intergovernmental service agreements have been awarded."

Story Continues -

What if GEO Group doesn't get a contract from ICE, or decides to leave after the center is built?

"In Littlefield, Texas, the municipality had to dip into reserves to cover payments for about $1.2 million in bonds and other debt used to finance the Bill Clayton Detention Center," Smart Money magazine reported in September. "The bonds were issued in 2000, but the expected revenue stream evaporated when, after a prisoner suicide in 2008, the 310-bed private prison lost its contract to house out-of-state inmates. In 2009, GEO Group ended its operating agreement with the detention center, leaving it unoccupied."

In Pueblo, Colo., GEO Group initially promised to fund the building of a private prison for 500 state inmates and later demanded repeated changes in the deal. GEO wanted government financing and changed the size of the proposed prison.

"GEO demanded more money. It wanted either more money per inmate, or a revenue guarantee that amounted to $1 billion over 30 years for two prisons," according to a 2006 report by the Rocky Mountain News."

For more information about the impact of the proposed facility and for more background on GEO Group Read Full Article

Geo Group's purchase of Houston private prison company leaves it highly leveraged

From Grits For Breakfast
I noticed recent news that the Geo Group (formerly Wackenhut), a private prison company which has been expanding aggressively in Texas, saw its earnings increase last quarter not because its operations became more profitable but because they purchased yet another competitor, this time the Houston-based Cornell Group.

Geo's boosted earnings, though, also bring with them nine figures in additional debt for a company already leveraged to the hilt. In 2007, I'd quoted from their 10-K (which is an annual report filed with the Securities and Exchange Commission) which informed us that:

the company has a "significant level of indebtedness that could adversely affect our financial position," mostly spent to buy competing private prison companies. And how might this debt "adversely" affect Geo? First and foremost, the company says, it could "require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness." Translated, that means they've got so much debt they're going to have to divert funds from their facilities they're operating to help pay it off!

The same warning was included in Geo's most recent 10K, but after the purchase of Cornell it deserves to be amplified. The more debt the company has, the greater risk they must "dedicate a substantial portion of our cash flow from operations to payments on our indebtedness." (They'll also be dedicating a portion of their revenue, btw, to pay the board chairman's son-in-law a fat $144K salary plus stock options, which is the kind of executive hire that to me raises a red flag.)

According to Texas Prison Bidness, Cornell operated 10 facilities around the state, many of them housing juveniles and/or focused on treatment programming. The acquisition beefs up Geo's Texas portfolio considerably after a spate of lost contracts around the state. Texas Prison Bidness recently observed that:

GEO has lost at least 5 contracts in Texas in the past several years.  GEO lost its Bridgeport TDCJ contract earlier this summer and the 2008 re-contracting of the Estes unit to MTC.  In 2007, the state of Idaho pulled its inmates from the Dickens County Correctional Center in the wake of the suicide of inmate Scot Noble Payne and a subsequent investigation into "squalid" conditions at the lock-up.  Idaho also cut its contract the Bill Clayton Detention Center in Littlefield, Texas after the 2008 suicide of Randy McCullough.  And, as the the article indicates, the Coke County Juvenile Justice Center was shuttered in October 2007 by the Texas Youth Commission after a damning investigation into conditions at the youth detention center.

Geo has six contracts up for renewal this year, according to its 10K, and at four are in Texas (Mineral Wells, North Texas ISF, South Texas ISF, and Bridgeport, which they already lost). About 1/3 of GEO's contracts end by 2012 and must be renewed or re-bid. Five customers including the State of Texas account for most of Geo's revenue:

We have provided correctional and detention management services to the United States Federal Government for 23 years, the State of California for 22 years, the State of Texas for approximately 22 years, various Australian state government entities for 18 years and the State of Florida for approximately 16 years. These customers accounted for 63.5% of our consolidated revenues for the fiscal year ended January 3, 2010.

The lull in the immigration detention market that's left competitor CCA with 12,500 empty beds is also affecting Geo on a couple of speculative construction projects, says their 10-K:

We are currently in the process of expanding two facilities to add additional beds that we do not yet have corresponding management contracts to operate. While we are working diligently with a number of different customers for the use of these remaining beds, we cannot in fact assure you that contracts for the beds will be secured on a timely basis, or at all. While these facilities are vacant, we estimate that we will incur carrying costs ranging from approximately $1.0 million to $1.5 million per facility, per fiscal quarter. Failure to secure management contracts for these projects could have a material adverse impact on our financial condition, results of operations and/or cash flows. In addition, in order to secure management contracts for these expanded beds, we may need to incur significant capital expenditures to renovate or further expand these facilities to meet potential clients’ needs.

I'd also pointed out back in 2007 that GEO making its debt payments required the company to rely on payments from subsidiaries that it could not guarantee:

The 10-K declares that Geo relies on "distributions" (i.e., "profits") from its subsidiaries to pay its increasingly large debt. Profits from subsidiaries made up more than 28% of Geo revenue last year, but the 10-K cautions that "Our subsidiaries are separate and distinct legal entities and are not obligated to make funds available for payment of our other indebtedness in the form of loans, distributions or otherwise."

In other words, we're not solvent without payments we can't ensure will keep coming, and our subsidiaries are "separate and distinct legal entities" who we don't control. That works out nicely for Geo if they go bankrupt, doesn't it?

That was written when subsidiaries made up 28% of Geo's revenue. Today, according to Geo's 10K, "For the fiscal year ended January 3, 2010, our subsidiaries accounted for 50.1% of our consolidated revenue, and, as of January 3, 2010, our subsidiaries accounted for 59.0% of our total segment assets." If the Cornell acquisitions are treated as subsidiaries, that risk will be even further magnified. The Geo Group is a heavily leveraged company.

In closing, here are a few more Texas-specific tidbits culled from Geo's 10-K:

"On May 4, 2009, we announced that we executed a contract with Bexar County, Texas Commissioners’ Court for the continued operation of the 688-bed Central Texas Detention Facility located in San Antonio, Texas. This facility, which is owned by Bexar County, houses detainees predominately for the U.S. Marshals Service. We have managed this facility since 1988. The new contract will have a term of ten years, effective April 29, 2009."

Some of the company's gains were "offset by a decrease in revenues of $20.6 million due to the termination of our management contract at the Sanders Estes Unit in Venus, Texas, Newton County Correctional Center in Newton, Texas, Jefferson County Downtown Jail in Beaumont, Texas, Fort Worth Community Corrections Facility in Fort Worth, Texas, and the Tri-County Justice & Detention Center in Ullin, Illinois."

"Effective June 15, 2009, our management contract with Fort Worth Community Corrections Facility located in Fort Worth, Texas was assigned to another party. Prior to this termination, we leased this facility (lease was due to expire August 2009) and the customer was the Texas Department of Criminal Justice."

"On September 8, 2009, we exercised our contractual right to terminate our contracts for the operation and management of the Newton County Correctional Center, referred to as Newton County, located in Newton, Texas and the Jefferson County Downtown Jail, referred to as Jefferson County, located in Beaumont, Texas."

"[R]evenues increased $24.1 million in total due to the activation of three new contracts in Third and Fourth Quarter 2008 for the management of Joe Corley Detention Facility in Conroe, Texas, Northeast New Mexico Detention Facility in Clayton, New Mexico and Maverick County Detention Facility in Maverick, Texas ... [and] revenues increased $24.6 million in 2009 as a result of our opening of our Rio Grande Detention Center in Laredo, Texas in Fourth Quarter 2008."

"On September 15, 2006, a jury in an inmate wrongful death lawsuit in a Texas state court awarded a $47.5 million verdict against us. In October 2006, the verdict was entered as a judgment against us in the amount of $51.7 million. The lawsuit, captioned Gregorio de la Rosa, Sr., et al., v. Wackenhut Corrections Corporation, (cause no. 02-110)  in the District Court, 404th Judicial District, Willacy County, Texas, is being administered under the insurance program established by The Wackenhut Corporation, our former parent company, in which we participated until October 2002. Policies secured by us under that program provide $55.0 million in aggregate annual coverage. In October 2009, this case was settled in an amount within the insurance coverage limits and the insurer has now paid the settlement amount. On February 8, 2010, the Court of Appeals, 13th  District of Texas, entered judgment dismissing the appeal and the case has been concluded."