The (Un)American Legislative Exchange Council; Prison Profiteers Extraordinaire

It is common knowledge that today in the United States millions of people are incarcerated in detention centers, county jails and prisons. What is not such common knowledge are the deep and insidious ties between those who write our laws and those who profit from them. Connections run to much deeper levels than the majority of Americans are aware of, far beyond what seems to have become acceptable by way of contributions and corruption within our government.

In a very brief nutshell, this is how the US prison system currently operates:

There are two major Corporations that run privately operated prison facilities and detention centers; GEO and CCA. There are other, smaller players but these are the two largest. Both trade on the NYSE and their value is determined by the number of beds they keep filled.

The GEO Group, Inc. was initially founded as a division of The Wackenhut Corporation in 1984 under the name of Wackenhut Corrections (WCC). They have acquired a few other companies along the way and today they operate facilities across the globe including Australia, Africa and the UK. They are the folks that run the ICE Detention Center in CO as well as GITMO.

From GEO’s webpage, “We design, construct, finance and manage jails, state and federal prisons, special-purpose institutions, and immigration and detention centers.”  Their profit? Well, according to their page, “Our revenue at year-end 2007 was $1.024 billion, and net income was $41.845 million.”

CCA founded the private corrections management industry more than 25 years ago, establishing industry standards for future-focused, forward-thinking correctional solutions...or so they say.

From CCA’s webpage, “We manage, design, build and own more than 66 correctional facilities and detention centers from coast to coast, in small cities, metropolitan areas and destinations in between.”

What few people realize is that GEO and CCA are both members of ALEC.

Ariz. Immigration Bill and Davis County Utah Connections

By Jesse Furhwith 
Salt Lake City Weekly
 
NPR's Laura Sullivan reported this week on corporate-government coziness that birthed Arizona's immigration law, the toughest in the country. One story referred to the biggest Utah-based company you've probably never heard of, and today a Utah legislator was named.


In brief, Sullivan reports on the deep involvement corporate prison companies had in drafting Arizona's law and also the vast network of state legislators from various states who were also involved in seminal meetings to create that law. The corporations even named the bill that eventually became law in Arizona and drafted it with lawmakers, Sullivan reports. One legislator says corporate influence on the law is overblown. Rep. Paul Ray, a Davis County Republican, chaired the committee of a private organization that considered the bill and passed it on as model legislation. 


Today, Sullivan delved deeper into the American Legislative Exchange Council, or ALEC, an educational endeavor for state lawmakers that seems to have as much in common with K Street-style lobbying as it does Weber State-style education. If you have not read/listened to Sullivan's bombshell stories on this, I highly recommend both of them: Shaping State Laws With Little Scrutiny and Prison Economics Help Drive Ariz. Immigration Law.
But on to the Utah connections... Ray says Sullivan's sources are lying. "If anyone is trying to say that private corrections guys had anything to do with that bill, they're flat-out lying to you."
But it gets more complicated, and Ray eventually conceded in our conversation that private-prison industry representatives were involved in crafting model legislation that became Arizona law. Corporate influence is the very nature of ALEC, Ray said.


"I hope they [private prison industry reps] were [involved in drafting the model legislation] because they have a member on the committee," he said. "I have a committee made up of a couple hundred people. [Private prison industry representatives] are members of ALEC, they have a right to be there." 


Ray denied, however, that private prison industry representatives provided any language or edits to the draft legislation--"There was not one amendment or change that came from corrections"--but pleaded ignorance as to whether private interests actually named the bill as Sullivan's reports claims. Ray says that I'd have to talk to Arizona state Sen. Russell Pearce, the lead sponsor of the Arizona immigration bill, who Ray says brought the bill to ALEC where it was discussed.


Continue Full Story On Salt Lake Weekly Blogs...

Prison industries pony up cash in governor's race

The New Mexico Governors race seem to have fallen into the hands of the Private Prison corporations. The money that is contributed surely is an honest contribution with no string attached.

These might not be the kinds of sources for campaign cash that candidates like to brag about, but the industries behind them are reliable contributors to politicians in both major parties in New Mexico. And this election year is no different.

In the governor's race, it appears that Republican Susana Martinez has a lock on money from private prison operators.

Gambling interests, including tribes who operate casinos, wagered early on Democrat Diane Denish, the current lieutenant governor. The latest campaign finance reports, however, show some of them are hedging their bets by making late contributions to front-runner Martinez, the district attorney in Las Cruces.

Denish, meanwhile, has smoked her opponent in terms of tobacco industry cash and has chugged more money from the liquor industry.

The corrections industry

The state first began contracting with private prison operators in the 1990s under then Gov. Gary Johnson, a Republican. But the prison industry didn't start pumping real money into New Mexico campaigns until after Democrat Bill Richardson became governor eight years ago.

Richardson became a favorite of the GEO Group, a Florida company formerly known as Wackenhut, which operates three private prisons in New Mexico. The most recent one, in Clayton, came about during Richardson's watch.

GEO gave Richardson $43,750 for his 2006 re-election campaign — as well as another $7,000 for his 2008 presidential run. According to the Institute of Money in State Government, Richardson has received more money from GEO than any other politician nationwide running for a state office since 2003.

The company also been generous with other state politicians, contributing more than $200,000 in recent decades. New Mexico, which has no limits on contributions, is second only to Florida among the states where GEO made political contributions. In fact, four of the top 10 recipients of GEO contributions since 2003 are New Mexico Democrats — including Denish, who has received $11,000 from the company during that period.

This year, however, Republican Martinez is getting the lion's share of GEO cash. The company has given her campaign $33,000 — including a $25,000 check contributed on Oct. 14.

Private prisons looking to cash in on illegal immigrants?

Excerpt from KTAR News -

The immigration bill was looked upon to be a "business model" as a continuous source of revenue for the community, the story says.

Pearce says the NPR story is wrong to suggest companies like Corrections Corporation of America had a hand in crafting SB 1070.

Gov. Jan Brewer agrees.

"The state has no business with CCA, it is a federal issue, those are federal-incarcerated prisoners," Brewer said.

State Representative David Lujan (D) thinks differently:

"If Senate Bill 1070 is to be enacted in full, and it increases the number of illegal immigrants that are to be detained, then they will stand to benefit from their facilities here in Arizona."

Read Full Story

Florida State-Funded, For-Profit Juvenile Prison Sued For Assault

The Southern Poverty Law Center (SPLC) took aim at a Florida state-funded, for-profit juvenile prison after allegations of horrific conditions surfaced. According to a federal lawsuit filed on behalf of children held at Thompson Academy in Broward County, Florida, the staff at Thompson Academy routinely brutalized, chocked and slammed the children into walls. At least one was sexually assaulted and after the abuse was reported administrations continued to allow the staff member to have contact with the child, resulting in a second sexual assault.

When the allegations of abuse first surfaced members of the SPLC went to interview children but Youth Services International, Inc., the company which operates the facility, prevented the children from having access to the attorneys. The children were also not allowed to have confidential phone calls with their attorneys and were later questioned about any meetings that did take place by the Academy's director and other staff. Many were coerced into signing statements ending or declining representation by the SPLC.

The allegations in the lawsuit go far beyond even these horror stories. Children live in hot and moldy living units that lack air conditioning. Some children were even forced to sleep on dirty floors of other units after becoming ill.

*Electronic Castles* In The Ground

This is the stuff nightmares are made of. This video is actually a pitch to government officials and my guess is that the brainless bought and paid for corporate legislators will eat this nastiness right up.

Built underground? Sounds an awful lot like a dungeon and seems pretty incredible to think that for all of our advances and progress, the best we can do for *pubic safety* is to revert to tactics that were proven worthless over 100 years ago.

Is it possible I wonder that corporations who profit from high recidivism rates really and truly know what is best for keeping us safe? Does anyone else see where they might have a vested interest in creating more of a criminal class than they would in lower crime rates?

Why are people allowing our lawmakers to incarcerate citizens of this country for profit; where is the outrage? Where is the common sense that tells us hiring 3rd party contractors does not lower the cost of doing business but rather, adds another layer of expense on taxpayers? Our tax dollars are not being spent to rehabilitate anyone; they are being spent on warehousing people and lining corporate slave owners to turn a profit.

Wake UP America!!!!!!!!!

Misconception Vs Reality

For well over two years now I have dedicated the majority of my life and my time to fighting for prison reform in the USA. I’ve written numerous articles highlighting the various ways our system is broken and I’ve tried to raise public awareness on privatized prisons, unjust laws and even more unjust convictions and executions. I spend a part of nearly every day helping prisoners directly by answering requests for information and indirectly by advocating for better conditions for our prisoners.

I understand full well that this cause is not a popular one. Who wants to save a prisoner when they can save a puppy or kitten? I get it, I do. Prisoners don’t exactly evoke the warm fuzzies in people’s hearts. What I don’t get is the people who make quick assumptions not only about prisoners but about the work I do.

I get accused quite often of asking people to “cry crocodile tears” for prisoners. I also get accused of thinking we can give the prisoners a teddy bear and a hug and fix everything. I’ve received hateful emails wishing that all of the prisoners I’d like to release from death row pay me and my family a visit and do us harm. It’s been assumed I want all prisons abolished. I’ve been called a bleeding heart liberal, which would be funny if it weren’t so wrong and insulting. In short, I take all kinds of flak for doing what I do and to some degree, I expect it. I do get tired of it though. I am treated with more respect from these “horrible monster” prisoners than I do from many people in the free world who find out that I work with and help prisoners.

I’d like to set the record straight about why it is that I do the work I do, once and for all. I’d like to clear up all of the wrongful assumptions people might have.

AFSC Announces Public Hearings on Prison Privatization!

 From Cell-Out AZ

The American Friends Service Committee and the Private Corrections Working Group have just announced that they will be holding the first of three public hearings regarding prison privatization around Arizona this fall.  The first hearing will be held in Tucson on Wednesday, October 27th from 6-8pm at the Pima Community College Downtown Campus.  Follow this link for a copy of the press release and more info.
These hearings are a response to 5,000 new private prison beds that have been proposed and will be located throughout Arizona, and an attempt to get serious questioned answered. These hearings are a great opportunity to hear arguments from all sides and to get YOUR VOICE HEARD! If you are interested in speaking, it is requested that you bring written testimony, comments, and questions.  It is important for everyone in Arizona communities to attend these public hearings to make a statement to Arizona and the prison corporations that we care about this issue.

The United States of McAmerica

My last article covered a few of the “acts” that ALEC (American Legislative Exchange Council; a special interest conservative right leaning organization) has helped our legislators to write and implement across the country. What I outlined previously were merely a few examples of their good works put out by their Criminal Justice/Homeland Security task forces. While I focus on ALEC in much of my writing, please keep in mind that ALEC is but one of a hundred or so groups who work behind the scenes in D.C. to buy off our politicians and force policies that meet their own political and profit driven agendas. I tend to single out ALEC only because they are one of the most prominent groups and there are numerous connections between ALEC, private prison corporations, declining education and our ever tightening and restrictive ‘tough on crime’ laws…but I cannot emphasize enough that they are just one of the players and takers of the big profit pie that our lawmakers gorge themselves on.

For this article, I am going to highlight some of the ways ALEC (and other outside influences) has helped our educational system along. Since there seems to be a direct connection between education and incarceration, this is an important piece of how politicians and CEOs are legislating profits for prison industry. Let’s face it, very few ‘hardened criminals’ have college degrees and if our government wanted high achievements from our schools, we’d damn well have high achieving schools, don’t you think?  

From ALEC’s webpage on their education task force:

Each year, the Task Force releases an annual Report Card on American Education. One of ALEC's flagship publications, the Report Card takes a comprehensive look at the state of public education all across our country. Based on a variety of indicators, the Report Card consistently shows no direct correlation between conventional measures of education inputs, such as expenditures per pupil and teacher salaries, and educational outputs, such as average scores on standardized tests.

As always, the Task Force will continue to focus on those policies that hold teachers accountable for the education they are providing as well as developing new ideas on how businesses can become partners in educating the next generations of our children.

We’ve already seen the wonders of bringing businesses into our prisons, now they want to do the same to our schools? Pardon me if I don’t jump up and down in excitement over this idea.

Here is more from ALEC’s page:

“Our Model Legislation

Resolution Supporting the Principles of No Child Left Behind”

Apparently NCLB has been a smashing success for those who profit from filling up cellblocks. Pink said it best with, “No child gets left behind, we’re not dumb and we’re not blind; they’re all sitting in your cells, while you pave the road to hell…”

When you read more closely into parts of NCLB here is what is written into the fine print, and again, this is straight off of ALEC’s page:

“Focus on Achievement: NCLB not only promotes—and fully funds—innovative reforms in public education, but the law also holds schools accountable for their own success. For the first time in history, states must prove that they are yielding academic results before the federal government hands over the money. When achievement is not up to standard, the federal and state governments expect them to focus on how they can improve public education standards.”

Back the hell up. Schools that are doing poorly get cut off from federal aid.

The perverse incentives of private prisons

LAST week authorities captured two fugitives who had been on the lam for three weeks after escaping from an Arizona prison. The convicts and an accomplice are accused of murdering a holiday-making married couple and stealing their camping trailer during their run from justice. This gruesome incident has raised questions about the wisdom and efficacy of private prisons, such as the one from which the Arizona convicts escaped.

Mother Jones reporter Suzy Khimm, writing at Ezra Klein's spot, observes that the portion of Arizona's prison population now residing in privately owned and operated facilities is 20% and growing. "Nationally," Ms Khimm notes, "there's been a similar surge in private prison construction as the inmate population has tripled between 1987 and 2007: Inmates in private prisons now account for 9% of the total US prison population, up from 6% in 2000." Should we welcome this development?

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."

The Kingman Case: Private Prison Politics

August 13, 2010
Globe-Miami Times

The Private Prison sales pitch finds a receptive audience among small, economically challenged communities who want to find jobs and a way of paying the light bill at City Hall. Or, perhaps more to the point in the case of Globe – a way of getting a new sewer line for the NW Corridor.

Yet, it turns out the sales pitch is does not give the whole story.

The Information Highway goes both ways

Consider the information provided by the Prison Policy Initiative, a non-profit, non-partisan organization which researches and documents prison policy. They report that in spreading the gospel of privatization, our friends at Corrections Corp of America (James Parkey) and its competitors (Emerald Companies, Management & Training Corp (Kingman),Cornell and others)”… have used a small body of professional literature that purports to approve the superiority of for-profit corrections. What they fail to mention is that much of this literature has been written by analysts who are either being funded by the industry or have an ideological predisposition in favor of privatization.”

What were murderers doing in Kingman?

In the effort to package their message to local communities who are more open to warehousing the “not so violent” residents are often told by the pitch men, “Prisoners housed in private facilities are far less likely to be convicted of serious or violent offenses, or to have high medical and mental health needs,than prisoners housed in public facilities used to generate cost comparisons.”

In actuality, PPI reports, Public prisoners were seven times as likely to be serving time for violent offenses, three times as likely to be serving time for serious offenses and twice as likely to have high medical needs than those housed in private facilities.


You need look no further for proof of this than our own example here in Arizona recently, when 3 murderers escaped last week, from the 1400 bed facility in Kingman which was approved in 2004 by voters as a minimum to medium security prison to house DUI and Substance Abuse Cases!

According to Management & Training Corporation – the needs of the DOC “expanded.”

Next week, we will look at the issue of funding and how that plays out in the debate over Private Prisons. You know that saying, “Freedom isn’t Free”? Well, Neither are Private Prisons.

Arizona Facilities Host “CCA Day” at the State Capitol

CCA employees connect with state officials, receive kudos for their contributions.

As if political money doesn't but these private prison corporations enough now they are boldly announcing their courtship openly.  The following is from CCA's own website about their events in Arizona at the state capitol.

More than 60 CCA employees from the six Arizona facilities – Central Arizona Detention Center, Eloy Detention Center, Florence Correctional Center, La Palma Correctional Center, Red Rock Correctional Center and Saguaro Correctional Center – recently had an opportunity to rub elbows with some of the state Capitol’s most prestigious officials.

Through an event known as “CCA Day,” the facilities invited legislators and staff from the governor’s office to the Capitol lawn for lunch catered by Macayo’s, a local Mexican food restaurant. They also got a glimpse of the Capitol’s inner workings.

“We saw it was an opportunity for decision makers at the Capitol to meet employees from our six facilities in Arizona to get a sense of both the important public service our more than 2,700 employees perform everyday as well as a chance to share with the attendees the significant economic impact the operations of our facilities have on the Arizona economy,” says John Malloy, CCA senior director, State Partnerships.