Who’s Getting Rich off the Prison-Industrial Complex?

This is definitely worth a blog post and some thought people…..

By Ray Downs

You likely already know how overcrowded and abusive the US prison system is, and you probably are also aware that the US has more people in prison than even China or Russia. In this age of privatization, of course, it’s also not surprising that many of the detention centers are not actually operated by the government, but by for-profit companies. So clearly, some people are making lots and lots of money off the booming business of keeping human beings in cages.

But who are these people?

Using NASDAQ data, I looked through the long list of investors in Corrections Corporation of America and GEO Group, the two biggest corporations that operate detention centers in the US, to find out who was cashing in the most on prisons. When we say “prison-industrial complex,” this is who we’re talking about.

Henri Wedell
The individual who’s invested the most in private prisons is Henri Wedell, who started serving on CCA’s board of directors in 2000, when the company was struggling with scandals related to prisoner abuse and mismanagement. He now owns more than 650,000 shares in the company, which is far more successful these days. Those shares are worth more than $25 million.

I called Wedell to ask him what it was like to make a fortune from the incarceration of others, and whether it bothered him to profit off a system that puts more people in prison than any other country in the world.

“America is the freest country in the world,” he told me. “America allows more freedom than any other country in the world, much more than Russia and a whole lot more than Scandinavia, where they really aren’t free. So offering all this freedom to society, there’ll be a certain number of people, more in this country than elsewhere, who take advantage of that freedom, abuse it, and end up in prison. That happens because we are so free in this country.”

Presumably, when he’s referring to all the freedom Americans have, he’s not including the 80,000 inmates in 60 prisons operated by CCA.

George Zoley
Another prison profiteer who presumably has no moral qualms about the business is George Zoley, the CEO of GEO Group and the second-biggest investor in the incarceration industry. In fact, he’s so proud of his business, which has committed a laundry list of human rights abuses, he tried to get a college football stadium named after it.

Zoley made nearly $6 million last year through salary and bonuses alone, but the real money is in stocks—he owns more than 500,000 shares in GEO, and he has made $23 million in stock trades during one 18-month period. But you can’t accuse him of not earning his pay, exactly. GEO saw a 56 percent spike in profits in the first quarter of 2013, and the company’s executives reassured investors that the incarceration rate wouldn’t be dropping any time soon when announcing its earnings. Zoley will be mega rich for years to come.

Jeremy Mindich and Matt Sirovich
Both Wedell and Zoley are big donors to the Republican party, but that doesn’t mean those from the left side of the aisle can’t play their game. Matt Sirovich and Jeremy Mindich both donate to Democratic politicians and are involved with progressive-leaning organizations like Root Capital, a nonprofit lending company that offers loans to farmers in developing countries to alleviate poverty.

Their day job, however, is running Scopia Capital, a hedge fund that is the one of the largest shareholders of GEO Group. The fund owns about $300 million in shares in that company, which represents 12 percent of its entire portfolio. Like Zoley, they are good at what they do—their fund outperformed the market by 20 percentage points, and the State of New Jersey hired Scopia to manage $150 million worth of pensions.

I called them up to ask their thoughts about being politically liberal but heavily invested in private prisons, but Mindich refused to answer any questions and Sirovich was unavailable.

It should be pointed out that while being far to the left politically might seem incompatible with investing in prisons (or managing a hedge fund in the first place), the Democratic party is totally fine with the incarceration rate. Although Richard Nixon and Ronald Reagan are largely responsible for the drug-war policies that caused the prison population to skyrocket, Bill Clinton was a “tough on crime” president who continued their ideas. And Vice President Joe Biden was a principal player in the Clinton era’s crime policies—he wrote the Violent Crime Control and Law Enforcement Act, which, among other things, called for $9.7 billion in increased funding for prisons and stiffer penalties for drug offenders.

Though the US prison population is shrinking slightly, the number of inmates in federal lockup is increasing, and while Obama keeps saying he’s ending the war on drugs, he’s also proposed budgets that call for increasing the amount of money spent on the Bureau of Prisons. So it’s not such a stretch that a Democratic donor would also be in the men-in-cages industry.

Retired People and Probably You
The Vanguard Group and Fidelity Investments are America’s top two 401(k) providers. They are also two of the private prison industry’s biggest investors.

Together, they own about 20 percent of both CCA and GEO. That means if you have a 401(k) plan, there’s a good chance you benefit financially from private prisons. And even if you don’t, there are many more mutual funds, brokerage firms, and banks that invest in private prisons—it being a growth industry and all—so if you have money somewhere other than your wallet or your mattress, it’s a good bet you’re involved in some way with companies that are locking up and probably abusing inmates.

This is especially true for government employees like public school teachers because their retirement funds are some of the biggest investors in private prisons. According to NASDAQ data, the retirement funds for public employees and teachers in New York and California together have about $60 million ($30 million each) invested in CCA and GEO. Teacher retirement funds in Texas and Kentucky have $8.3 million and $4 million invested in prisons respectively, and public employees in Florida ($10.3 million), Ohio ($8.6 million), Texas ($5.6 million), Arizona ($5.3 million), and Colorado ($2.25 million) are also connected to the industry. Except for New York, which has only one privately run detention facility, each of these states has several prisons run by CCA and GEO Group facilities. And it’s not just Americans who have ties to prisons. Foreign investors have money in them as well, including the pension fund for the Royal Canadian Mounted Police, which recently sold off its $5.1 million worth of GEO Group stock.

Most of these employees are probably unaware that their pensions are tied to prisons—and it’s hard to say that these are “bad” investments from a purely capitalistic perspective, since these prisons are making money hand over fist. The private prison industry is entrenched in our society. And the only way to make sure that we’re not individually and collectively profiting off of it is to close these things.

Follow Ray on Twitter: @RayDowns

Via VICE

 

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The Concept of Prisons for Profit….

from our friends at Beyond Bars

Private Prisons: The More Americans They Put Behind Bars The More Money They Make

How would you describe an industry that wants to put more Americans in prison and keep them there longer so that it can make more money?  In America today, approximately 130,000 people are locked up in private prisons that are being run by for-profit companies, and that number is growing very rapidly.  Overall, the U.S. has approximately 25 percent of the entire global prison population even though it only has 5 percent of the total global population.  The United States has the highest incarceration rate on the entire globe by far, and no nation in the history of the world has ever locked up more of its own citizens than we have.  Are we really such a cesspool of filth and decay that we need to lock up so many of our own people?  Or are there some other factors at work?  Could part of the problem be that we have allowed companies to lock up men and women in cages for profit?  The two largest private prison companies combined to bring in close to $3,000,000,000 in revenue in 2010, and the largest private prison companies have spent tens of millions of dollars on lobbying and campaign contributions over the past decade.  Putting Americans behind bars has become very big business, and those companies have been given a perverse incentive to push for even more Americans to be locked up.  It is a system that is absolutely teeming with corruption, and it is going to get a lot worse unless someone does something about it.

One of the keys to success in the private prison business it to get politicians to vote your way.  That is why the big private prison companies spend so much money on lobbying and campaign contributions.  The following is an excerpt from a report put out by the Justice Policy Institute entitled “Gaming the System: How the Political Strategies of Private Prison Companies Promote Ineffective Incarceration Policies“…

For-profit private prison companies primarily use three strategies to influence policy: lobbying, direct campaign contributions, and building relationships, networks, and associations. Over the years, these political strategies have allowed private prison companies to promote policies that lead to higher rates of incarceration and thus greater profit margins for their company. In particular, private prison companies have had either influence over or helped to draft model legislation such as “three-strikes” and “truth-in-sentencing” laws, both of which have driven up incarceration rates and ultimately created more opportunities for private prison companies to bid on contracts to increase revenues.

If you can believe it, three of the largest private prison companies have spent approximately $45,000,000 combined on lobbying and campaign contributions over the past decade.

Would they be spending so much money if those companies did not believe that it was getting results?

Just look at what has happened to the U.S. prison population over the
past several decades.  Prior to 1980, there were virtually no private
prisons in the United States.  But since that time, we have seen the
overall prison population and the private prison population absolutely
explode.

For example, between 1990 and 2009 the number of Americans in private prisons grew by about 1600 percent.

Overall, the U.S. prison population more than quadrupled between 1980 and 2007.

So something has definitely changed.

Not that it is wrong to put people in prison when they commit
crimes.  Of course not.  And right now violent crime is rapidly rising in many of our largest cities.  When people commit violent crimes they need to be removed from the streets.

But when you put those criminals into the hands of private companies
that are just in it to make a buck, the potential for abuse is enormous.

For example, when auditors visited one private prison in Texas, they “got so much fecal matter on their shoes they had to wipe their feet on the grass outside.”

The prisoners were literally living in their own manure.

How would you feel if a member of your own family was locked up in such a facility?

And the truth is that there seem to be endless stories of abuse in
private prisons.  One private prison company reportedly charges inmates $5.00 a minute to make phone calls but only pays them $1.00 a day to work…

Read more at http://marketdailynews.com/2013/03/11/private-prisons-the-more-americans-they-put-behind-bars-the-more-money-they-make/#xtGZj3iF91Kr3kw5.99



Happy Birthday to the Corrections Corporation of America? Thirty Years of Banking on Bondage Leaves Little to Celebrate

Corrections Corporation of America (Photo credit: Wikipedia)

By Carl Takei, ACLU National Prison Project

Thirty years ago yesterday, two retired military officers and a former prison administrator founded the Corrections Corporation of America (CCA), the first for-profit prison company in modern America. Today, CCA is the nation’s largest owner and operator of for-profit prisons, with annual revenues topping $1.7 billion. On an average day, the company incarcerates 81,384 people – more than the states of New York and New Jersey combined.

CCA essentially admits that their current profitability depends on high rates of incarceration.  In their 2011 10-K report, filed publicly with the Securities and Exchange Commission, CCA stated:

“The demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, leniency in conviction or parole standards and sentencing practices or through the decriminalization of certain activities that are currently proscribed by criminal laws.”

Specifically, “any changes with respect to drugs and controlled substances or illegal immigration” could “potentially reduc[e] demand for correctional facilities,” as would “mak[ing] more inmates eligible for early release based on good behavior,” the adoption of “sentencing alternatives [that]…could put some offenders on probation,” or “reductions in crime rates.”

As detailed in a 2011 ACLU report, massive increases in overall incarceration rates from the 1970s onward created a fertile environment for the growth of for-profit imprisonment. From 1970 to 2005, the U.S. prison population increased by approximately 700% – far outpacing crime rates and the growth of the general population. Today, more Americans are deprived of their liberty than ever before – unfairly and unnecessarily, with little benefit to public safety. Many of them are in private prisons: the latest figures from the federal Bureau of Justice Statistics show that for-profit companies presently control about 18% of federal prisoners and 6.7% of all state prisoners, and the most recent federal survey of correctional facilities revealed that private prisons accounted for nearly all of the new prisons built between 2000 and 2005.

Continue Reading @ ACLU Blog

 

30 Years Later, Private Prisons Have a Future to Secure

By Xander Pakzad

The thirty year anniversary of the founding of the Corrections Corporation of America marks an all-time high for the for-profit prison industry. An increase of immigration- and drug-related arrests have contributed to the growth of the CCA in recent years. But according to their latest 10-K, an annual performance report provided to the Securities and Exchange Commission, their profitability is threatened by many factors:

“Legislation has been proposed in numerous jurisdictions that could lower minimum sentences for some non-violent crimes and make more inmates eligible for early release based on good behavior. Also, sentencing alternatives under consideration could put some offenders on probation with electronic monitoring who would otherwise be incarcerated. Similarly, reductions in crime rates or resources dedicated to prevent and enforce crime could lead to reductions in arrests, convictions and sentences requiring incarceration at correctional facilities.”

The CCA speaks just as candidly about areas in which to capitalize. In a presentation to investors last year, the CCA attributes current economic factors in creating a “unique investment opportunity.” Increases in law enforcement and funding (due to recovery from the recession), high rates of recidivism (repeated imprisonment), and acquisition of government-owned correctional facilities are all cited as reasons for anticipated growth.

Continue Reading @ IVN

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Riot in North Bumblef*ck

A private-prison disaster in Oklahoma reveals the dangers of California‘s reliance on Corrections Corporation of America

By Dave Maass

At 11:37 a.m. on a Tuesday in October, a fight between two inmates started in the dining hall in a prison in western Oklahoma. Guards broke it up using pepper spray, and the situation returned to normal.

Or so they thought.
Minutes later, the dining hall erupted in all-out war with fists, kicks and food trays flying. Within 15 minutes, the entire facility was thrust into chaos as 600 inmates, mostly African-Americans and Hispanics associated with the Surenos prison gang, bloodied each other. Suddenly, one of the largest prison riots in California’s recent history was going down in a corrections facility a thousand miles outside the state.

Oklahoma news stations have struggled for months to obtain information about the riot at North Fork Correctional Facility. Meanwhile, California media have largely been unaware of the unrest at the facility operated by the Corrections Corporation of America (CCA), which holds a $1.18-billion contract to house approximately 9,600 California inmates at four of its out-of-state prisons. After four months of negotiations with the California Department of Corrections and Rehabilitation (CDCR) over public records, CityBeat obtained the first narrative report summarizing the incident. That narrative, combined with testimony from inmates, family members and experts, raises grave questions about the future of private contracting in the state’s efforts to reduce prison overcrowding.

The CDCR summary describes how corrections officers played a dangerous game of Whac-a-Mole as chemical agents and pepperball rounds proved ineffective. Just as they quelled one pocket of violence, another large skirmish would break out in another part of the complex. Small groups of inmates were left to fend for themselves against 100-member-strong mobs, barricading themselves in the kitchen and gated portions of the gym and recreation yard.

“We’re investigating every aspect of this incident and the response to it,” CDCR spokesperson Terry Thornton says.

Bob Walsh, a retired CDCR lieutenant who writes about prison issues for several corrections blogs, identified many security failures in the report.

“My considered opinion is that it looks like they had way too many inmates out of their cells way too early so that when the situation kicked off they couldn’t control it,” he writes in an email. “Also, it seems that their physical security was not so great. They should have been able to lock down the dining rooms and the gym. They either did not do so or could not do so.”

After seven hours, 57 inmates were injured. Eight inmates had to be flown out by helicopter. Four were hospitalized for several weeks. One was in a coma. As of February, 39 inmates were accused of attempted murder, 67 with battery or assault and 136 for participation in a riot. Not a single inmate has been formally charged in court yet.

Continue Reading @ San Diego City Beat

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The Private Prison Industry: Resistance Isn’t Futile

By

Eric Lotke

The private prison industry is on the march. In recent months the industry moved to take over 24 state prisons in southern Florida and buy five prisons in Ohio. Now it’s making moves in Michigan.

But the industry doesn’t always win. Resistance isn’t futile.

The industry wanted to buy five prisons in Ohio but had to settle for one. Community members pushed back and corrections professionals raised doubts about cost savings and program effectiveness. Policy Matters Ohio demonstrated that selling the prison will likely cost more money than it produces. Yes, the state gets $73 million immediately for the sale — but the lease commits the state to pay $4 million annually for 20 years. So depending how cost estimates are done, the sale will end up costing the state anywhere from $8 million to $15 million more than traditional corrections.

Florida shows that the prison industry can’t make an honest case for the product it sells. The move to privatize 24 prisons was slipped into the annual budget bill, and opponents were literally eliminated. The Corrections chief, Edwin Buss, was forced to resign after expressing doubt that a proper “business case” for cost savings could be made. Senator Paula Dockery (R-Lakeland), an outspoken critic of privatization, was stripped of her seat on the Criminal Justice Committee, where such legislation is ordinarily heard. Senator Mike Fasano (R-New Port Richey) was stripped of his chairmanship of the Committee on Criminal Justice Appropriations when he questioned the accelerated process, compressed hearing schedule, and absence of opposing experts.

The legislation institutionalizes secrecy. SB 2036 exempts prisons from the “applicable cost benefit analyses, business case analyses, performance contracting procedures, service comparisons, and impacts on performance standards” used in every other procurement. No such analysis would be done until after the contract has been executed.

SB 2036 turns procurement into a joke. First, buy my car. Then, after you buy it, you can check my car’s condition, compare it to your own car or see if you need a new car at all.

A truly heroic effort killed the bill. A lawsuit by the Police Benevolent Association enforced the state law requiring that such action be in separate legislation not buried in general appropriations. Organized labor, faith groups and local leaders rose up in opposition. The privatization failed in a 21-19 Senate vote on Valentines Day.

Now Michigan. Michigan is interesting because it holds a bleeding wound. The North Lake Correctional Center in Baldwin was private from the beginning, built by Wackenhut now known as the GEO Group. The prison opened in 1999, closed in 2005, and had nothing but problems in between.

The North Lake prison was more expensive than 33 out of 37 other Michigan prisons. The state was paying $75.81 per person per day for confinement that cost $64.89 per day in sufficiently secure state facilities — even though the contractor was failing to provide counseling programs or contractually required levels of staff. At the same time, North Lake was three times more violent than Michigan’s other maximum-security prisons. In the first five months of operation North Lake reported 110 critical incidents, including 46 assaults and 12 attempted suicides.

The state didn’t even need the secure space it thought it might — so it did the right thing. It served notice and closed the facility.

GEO sued to keep the prison open or compel the state to continue making lease payments anyway. But GEO lost the lawsuit and the facility sat empty for years. GEO spent $60 million renovating it from 500 juveniles to 1,700 adults and landed some inmates from California for a few months in 2011 — but the contract didn’t last and the facility again sits empty. GEO is paying capital costs and a skeleton crew for no reason.

Continue Reading @ HuffPo

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Showdown Looms Over Private Prisons

By Howard Goodman
Florida Center for Investigative Reporting

Boca Raton-based GEO Group would be among the for-profit companies to benefit if the state privatizes prisons. (Photo courtesy of GEO Group.)

By Howard Goodman
Florida Center for Investigative Reporting

The state Senate appears ready for battle today over a GOP plan to turn over a lot more of the state’s prisons to private companies.

Republican leaders have been pushing hard to privatize one-fifth of the state’s corrections facilities along with all inmate health care. Right now, about 9,000 inmates are in the state’s seven privately run “correctional facilities,” a small fraction of the roughly 100,000 people incarcerated in the third-largest state prison system in the United States.

But the privatization plan has run into opposition, not only from Democrats but from some skeptical Republicans as well.

State Sen. Paula Dockery released a report showing that the state’s existing private prisons aren’t actually saving money over publicly run prisons — undercutting the outsourcers’ strongest argument.

She’s been joined in opposition by Sen. Mike Fasano, a Pasco County Republican who was stripped of his chairmanship of the criminal justice budget committee after questioning the privatization deal. Senate President Mike Haridopolos yanked the chairmanship after Fasano offered an amendment requiring a thorough study of privatization’s costs and benefits.

That amendment failed yesterday in a close vote, 21-19 — a close enough vote that GOP leaders couldn’t be sure they’ll be able to pass their privatization bill, which they plan to present today.

Months ago, Gov. Rick Scott fired his first corrections secretary, Ed Buss, for his tepid support for the lawmakers’ plans to privatize “all of the prisons in the 18-county region south of Polk County to the Florida Keys,” according to the Palm Beach Post.

Dockery, a Republican from Lakeland, was obviously referring to such heavy-handed moves in a statement issued yesterday. “In an effort to privatize our state’s prisons, Senate leaders are acting like politicians at their worst — twisting arms in backrooms and giving contracts to special interest donors,” Dockery said. “They need to start acting like any business in the private sector would and stop using imaginary numbers.”

Proponents of the sweeping privatization plan insist that Florida will save 7 percent over state-run prisons. But Dockery has noted that there are few reliable comparisons — prisons differ so greatly. And “there’s extensive evidence that shows private prisons have received the cream-of-the-crop inmates — leaving the state with more-expensive sick, elderly and dangerous prisoners.”

Continue Reading @ FCIR

Unholy Profits: Why the UMC Must Divest from Private Prisons

From the blog: Jeremiah Weeping

“I will not revoke the punishment because they sell the righteous for silver and the needy for a pair of sandals – they who trample the head of the poor into the dust of the earth.” (Amos 2:6-7)

In his book, “The Expanding Prison,” David Cayley writes, “The Bible…is a virtual catalog of crimes” and thus, the story of God’s mission to his world is to heal those victimized by crime, and to restore those responsible into right relationship with those they have hurt. Sadly, the United Methodist Church currently is not joining in God’s mission of restoration, but is, instead, profiting from the mass incarceration of people, particularly people of color.

The United Methodist Church owns stock in two private prisons companies, Corrections Corporation of America and GEO Group. Private prisons is one of the fastest growing industries in the country today. They represent fast rising stocks so the investment is a smart one if your sole basis for making investment decisions is economic benefit. As the Justice Policy Institute (JPI) reports, these two companies combined for a 2.9 billion dollar profit in 2010. But they were not the only ones to profit – their stockholders did as well. And among those who own stock in CCA and GEO Group is the United Methodist Church, which has earned roughly $250,000. 250 grand will certainly buy a boat load of stained glass windows and youth trips to Six Flags.

Continue Reading @ Jeremiah Weeping

Report: 3 ways private prison industry expanding

By Rina Palta

A new report by the Justice Policy Institute (JPI) outlines how private prison companies have pushed punitive policies over the last few years–policies, the report says, aimed at increasing the demand for private prisons.

 

According to JPI, in 2009, there were about 129,000 people in private correctional facilities in the United States–a number that’s jumped 120 percent in federal and 33 percent in state facilities since 2000 . And while private prison companies ”may try to present themselves as just meeting existing demand for prison beds and responding to current market conditions, in fact they have worked hard over the past decade to create markets for their product.” A lucrative product: in 2010, revenues for the top two companies, Corrections Corporation of American and GEO group, exceeded $2.9 billion.

Continue Reading @ The Informant -KALW news