 |
 |
 |
|||
 |
|||
 |
|||
 |
|||
 |
|||
 |
|||
 |
|||
 |
|||
 |
|||
 |
|||
 |
|||
 |
|||
 |
|||
 |
|||
 |
|||
 |
|||
 |
|||
 |
|||
|
|||
 |
|||
|
|||
 |
|||
|
“Private Prison Industry” Experiences Boom
- Text size
Leslie Berestein
Copley News Service
May 11, 2008
At the beginning of the decade, the private prison industry was in a tailspin. After several profitable years in the 1990s, companies contracting prison beds to public corrections agencies were losing revenue at an alarming rate.
Capital earned during the 1990s had been poured into a speculative prison-building boom that backfired. State corrections agencies, a mainstay of what was then a relatively new industry, had begun pulling inmates out. There were too many prison beds and too few prisoners.
“They basically had overbuilt,” said Anton Hie, an analyst in the Nashville office of Jefferies and Co. who covered industry leader Corrections Corporation of America and its closest competitor, the GEO Group, for several years through the end of 2006. “There was a lot of promise of new inmates that never came. … It kind of all came crashing in.”
Then, in early 2000, CCA announced a lucrative new contract. The Immigration and Naturalization Service was to house 1,000 detainees at the company’s San Diego Correctional Facility in Otay Mesa, built as part of the late-1990s construction boom. The agency agreed to pay a per diem fee of $89.50 for every person held.
In a news release at the time, a company principal heralded the San Diego agreement as “one of the largest contracts ever to be awarded to the private corrections industry.”
It was one of a series of federal contracts that experts credit with saving the private prison industry, and at the same time marking a turning point in the way that immigrant detainees – illegal immigrants, asylum-seekers, legal residents appealing deportation and others – are held.
“The private prison industry was on the verge of bankruptcy in the late 1990s, until the feds bailed them out with the immigration-detention contracts,” said Michele Deitch, an expert on prison privatization with the Lyndon B. Johnson School of Public Affairs at the University of Texas in Austin.
As increasingly tough immigration laws have called for the detention and deportation of ever more immigrants, the demand for bed space by immigration authorities has helped turn what was once a dying business into a multibillion-dollar industry with record revenue and stock prices several times higher than they were eight years ago.
In San Diego, CCA is in the permitting process to build a nearly 3,000-bed facility that the company hopes will be used by U.S. Immigration and Customs Enforcement, or ICE. It would hold more than four times the detainees held in San Diego now.
Federal contracts from three agencies – ICE, the U.S. Marshals Service and the Bureau of Prisons – account for 40 percent of the 2007 revenue of CCA, which controls almost half of the private prison beds in the United States. Thirteen percent of the company’s revenue, which hit a record of nearly $1.5 billion last year, comes directly from ICE. The company reported a net income of $133 million last year.
The competing GEO Group, formerly known as Wackenhut Corrections Corp., credits the three agencies for 27 percent of its operating revenue last year, with ICE responsible for 11 percent. The company, which earned total revenues of $1.2 billion in 2007, runs the Western Regional Detention Facility in downtown San Diego, a U.S. Marshals Service prison from which ICE rents short-term space.
Other prison players that have benefited from immigration-detention contracts include the Cornell Cos., based in Texas, and Management and Training Corp., a privately held Utah company that in 2006 opened what is now the nation’s largest ICE facility, a set of tentlike structures in Willacy, Texas, that holds 2,000 people and will soon hold more. A 1,086-bed expansion was completed in March.
Detention contracts are not the only ones fueling the recent growth of prison companies, which have benefited from other federal contracts while enjoying a resurgence in demand for state prison beds.
|
|
|
|
|
However, it’s the federal contracts that pay best, experts say. Housing federal detainees typically brings in more per “man-day,” an industry term for what is earned per detainee. Companies also house immigrants for other federal agencies. CCA and GEO Group, for example, contract with the Bureau of Prisons to house foreign-born inmates under a federal “criminal alien” program. Both companies contract extensively with the U.S. Marshals Service, which receives federal funding to hold a growing number of immigrants being prosecuted for illegal re-entry after deportation.
“The federal system over the last five to seven years has been by far the largest-growing part of the (private prison) system, and it is because of the immigrant-detainee population,” Deitch said.
For the federal government, the appeal of contractors is obvious: According to ICE, the agency spent $119.28 per day on average last year to house a detainee at an agency-run facility, compared with $87.99 per day at a contract detention facility.
EMPTY BEDS TO RICHES
The private prison industry as it exists today dates to the 1980s, when state governments were grappling with overcrowding. Tougher sentencing guidelines created demand for more prison space, but many states lacked the funds and political support to build it.
The industry did well meeting this demand for several years, but it was almost done in a decade later by overexpansion and other problems. By the end of the 1990s, the industry was in “capital destruction mode,” said Hie, the analyst.
“They were victims of their own success,” Hie said. “They had so much money to spend on new prisons that they went out and did it.”
At the same time, the industry was rocked by a series of highly publicized escapes, riots and other scandals, among them a 1996 videotape showing inmates in a now-defunct firm’s Texas prison being kicked by officers and attacked by dogs, which prompted an FBI investigation.
“Many states started learning that they were not saving money, and more importantly, that there were a lot of liabilities associated with privatization,” Deitch said. “A lot of states stopped contracting.”
CCA’s stock value took a dizzying tumble, falling from a high of $70.13 on Jan. 1, 1998, to $1.15 on the same date three years later. In 2000, the company reported a net loss of $253.7 million.
Rival Wackenhut’s stock price, while not nearly as high, dropped to less than a third of its value between early January 1998 and 2001. Some smaller companies went out of business, Deitch said.
Fortunately for the industry, the federal government began seeing a surge in demand around this time, fueled by federal drug-sentencing laws that had created more inmates and tougher 1996 immigration laws that made more immigrants deportable.
In 2000, the federal Bureau of Prisons entered into an agreement with CCA to house foreign-born convicts in a California City prison, initially built on speculation in the late 1990s to house state prisoners that didn’t arrive.
The same year, CCA announced its immigration-detention contract in San Diego.
Since then, new immigration policies that focus on detaining and removing deportable immigrants have become commonplace, leaving federal immigration authorities with insufficient space to house them.
The industry leaders’ stock prices have rebounded. Since 2001, CCA shares have split twice and multiplied tenfold, closing recently at $26.17. The GEO Group, which changed its name from Wackenhut Corrections in 2003, has also completed two stock splits and seen its stock value jump from roughly $2.50 a share in early January 2001 to $26.76 recently.
Meanwhile, the industry has broadened its political influence, spending more to lobby agencies such as the Department of Homeland Security and the Bureau of Prisons. CCA alone boosted its federal lobbying expenses from $410,000 to $3 million between 2000 and 2004, according to the Center for Public Integrity.
Immigration-detention contracts can make or break quarterly profits. In its fourth-quarter 2007 financial data, the Cornell Cos., which had flat revenue last year, partly blamed a $2 million loss on the withdrawal of ICE detainees from a troubled facility in Albuquerque, N.M.
CCA, meanwhile, credited part of its success last year to revenue from ICE moving into a Georgia prison on which construction began in 1999 but was suspended a year later for lack of clients.
A NEW BUILDING BOOM
Now, as in the late 1990s, the industry is on a building spree. CCA is building or expanding nine facilities around the country for federal, state or undetermined customers. This does not include the company’s planned megaprison in San Diego, which has yet to obtain county approval.
In October, the GEO group announced it would add 1,100 beds to its ICE contract facility in Aurora, Colo. According to its most recent financial report from 2006, the company opened or expanded half a dozen facilities that year.
Unlike a decade ago, analyst Hie said, there is more demand to support the latest building boom. Strong demand also helps companies push terms favorable to them. “Take or pay” arrangements such as the one at San Diego, where ICE must pay for a set occupancy level even if beds go unfilled, are commonplace.
The demand from ICE is staggering: Last year, all of the agency’s 3,619 new detention beds were contracted.
Agency officials said there are no plans to build any more federally run detention centers, leaving contractors to fill the void.
During the February conference call, CCA executives told investors that ICE was planning to privatize three of its detention centers in California and Arizona. The agency has three facilities in these states – in El Centro, San Pedro and Florence.
“We estimate the capacity is somewhere at 11,000 beds,” said CEO John Ferguson.
Asked about this claim, ICE spokeswoman Pat Reilly in Washington, D.C., replied in an e-mail that the contractor was in error and no such plans were imminent. However, she added, “privatization is always an option.”
| WATCH ALEX JONES’ ENDGAME ONLINE NOW in its entirety. View more High quality trailers at www.endgamethemovie.com |
-
- Social bookmarks
- Email this article
-
- Print this page
- Share on Twitter
May 11th, 2008 at 1:37 pm
…Ah-bdi…Biness…bdi…biness !!!
May 11th, 2008 at 1:57 pm
We can’t have these poor people out of work… quick pass some more laws!
May 11th, 2008 at 2:12 pm
Its so horrible.
And another thing: All prisons get paid, not just on a “per-person” basis, but by each prisoner, who must buy his or her toothpaste, toothbrush, shower slippers, tvs (and yes, vcrs), etc., from the prison.
Find out in your community how many people in power (particularly judges and DAs) have investments in these private prisons and “treatment” facilities. Call them on it.
And what ever you do, if you get a chance to be on a jury, do not let the judge lie to you and tell you “You must follow the law.” That is an absolute lie.
For god’s sake, dont confront the judge. Just remember when you get back there: You’re the Judge. You’re the jury. Nobody, and I mean nobody, can touch your verdict.
Exercise some common-sense. If you think justice requires finding someone not guilty…Do it. Do you know how easy it is to commit assault on a peace officer? Just because the DA proves the simple elements of the crime, does not mean you have to send some schmuck to prison (cause that’s where he’s going).
The judge also doesnt tell the jury about the mandatory/minimum sentences for most crimes, either. In fact, most lie to you and say, “Dont’ think about sentencing…that’s up to me.” Rarely, is that the case. Most “serious” crime (you know: possession of drugs, and stuff like that) carry mandatory, minimum sentences.
After some unsuccessful jury trials, I’ve had to be the bearer of bad news to jurors, who had no clue they where sending my client away for five, ten or twenty years. To my amazement, most say they wouldnt have found him guilty if they knew that.
To which I say, “You’ve got to be kidding me?”
May 11th, 2008 at 2:33 pm
The boot of the NWO will always stand on the face of those who wish to be free.
May 11th, 2008 at 2:43 pm
Those that really thrive will be the ones that also incorporate the coming genocide. Private prisons combined with guillotines and crematories will be the best place to invest! What a wonderful world it will be, however, when we finally achieve sustainability! I hope at least one environmentalist makes it to heaven so that we can also have a perfect place up there!
May 11th, 2008 at 4:08 pm
Who would have thought crappy Robocop 3 mixed with the dorky Johnny English would come true? The Rockefellers should have stopped inbreeding a long time ago….. you will get your punishment.
May 11th, 2008 at 5:07 pm
Bob Barker “Barker Industries” from the Price is Right fame has made tens of millions of dollars off inmates. When I did my time just about everything, from the food, to the shoes, to the mattresses & pillows were supplied by Barker Industries. The prices at the commissary were ridiculous. Barker also supplied the non food items at the store too. That dude has made big bank from the prison industry. It is a huge business. Many former judges & politicians have made millions too. They are the largest shareholders of Prison Industries, Inc., a publicly traded company. UNICOR is owned by Prison Industries, Inc. UNICOR is at every prison and employs inmates to make furniture and all kinds of stuff that is wholesaled to private industry. The whole thing is such a scam. The longer those assholes can keep someone in prison, the more money they make.
May 11th, 2008 at 6:30 pm
The prison industry is nothing more than the bastard child of SLAVERY read some real amerikkkan history books and u will Know about the BLACK CODE LAWS put in place after slavery to keep the free labor going. AMERIKKKA is a HATEFILLED BIIIIOOCH!!! from begining to end.
May 11th, 2008 at 8:10 pm
I have it on good authority that the concentration camps for Europe have been built across the Eastern block nations recently joined the Union. The Queen and her government in their treasonous acts against the British Constitution, Magna Carta and British interests are speeding the ratification of the treaty as I write to be enacted January 1 2009. our only hope is that Southern Ireland vote no in their June referendum to stop the whole Union going ahead. A message to all you Irish Americans…Ring home and enlighten your kin to vote no to the union, at least you Americans will have a bolt hole in Britain and Ireland if things go really bad.
Regards Life…
May 11th, 2008 at 8:15 pm
If Ireland rejects the Libson treaty, they will be accused of being Al Qaeda sympathizers, the whole island will be fenced in barbed wire, they will confiscate the beer, and turn the whole island of Ireland into the island of Dr. Mereau.
May 11th, 2008 at 8:32 pm
Fuck all this bullshit. The real criminals are cops, judges, and politicians. Man up, carry a gun, and never let them take you in. This is treason. Not law enforcement.
Wearing a badge don’t make you right. And if any man tries to put me in jail, that mans wife is a widow.
May 12th, 2008 at 12:36 am
Confiscate the beer in Ireland? Ah, well, let them drink whiskey. Porky pig, I really enjoy your postings.
May 12th, 2008 at 1:42 am
I am going to reitorate that Stalin would absolutely the US in 2008 only if the government were grabbing all of the profits, but then again those with the “say” own these corporations or the politicians who can cast their votes so it really is all the same.
May 12th, 2008 at 8:43 am
Tyranny is rampant today, with a prisoner population well over two million, talk of profits from such a condition seems outrageous.
“The problem with mankind is that too many of them learn that more can be stolen by law that against it.” –Durant, i, 839.
May 12th, 2008 at 9:09 am
A large % of prisoners are not guilty or their crimes.DNA testing cannot even be trusted.
Before FDA untested drugs are pushed on the American public, they are unfairly tested on prisoners with or without their consent. These innocent victims are also guinea pigs being injected with many infectious diseases. Not much has changed since nazi Germany. See project paperclip for the nazi infiltration of America after WW2.
May 12th, 2008 at 9:30 am
We are all individually guilty, no man is innocent unless he does nothing. Do something!
http://infowarsmoneybomb.com
May 12th, 2008 at 9:32 am
We are all individually guilty, everyone is guilty if he does nothing. Do something!
http://infowarsmoneybomb.com
May 12th, 2008 at 9:43 am
Mr king. If Ireland dumps the treaty the whole show collapses as it was with the Dutch vote no. This will buy more time for numties like me to try and awaken the comatose sheep…Givin up aint an option.
May 12th, 2008 at 7:00 pm
They are prepared to every kind of resistance,
except one:
love
May 13th, 2008 at 4:44 am
Here here European voize
May 16th, 2008 at 2:00 pm
the private sector continues to infiltrate every area of public government imaginable–from prisons, to detention centers, from Blackwater to charter schools, this country has honed in capitalism in every sense. no matter what private industry a company is in, so long as money funds lobbying in Washington, the problem of outsourcing public services or public responsibilities will remain strong. what ever happened to holding values over profit? i also want people to think about what will be next in the line to privatize? if our government has no problem with privatizing peoples’ lives, which is essentially what happens when a private prison houses inmates, then the government–if it continues on this path–will consider privatizing every aspect of our personal lives, incarcerated or not! taking “kick-backs”, which is what lobbying provides to government officials, is a personal deal between two people, or a group of people. it does not benefit the greater good of society. Why isn’t there a law to ban this? it all seems very convoluted and corrupt to me. we craft laws to imprison people longer for non-violent offenses, so that our prison population continues to grow, and the private sector, or the people doing business with the politicians have pockets full of money. however, we do not craft laws to imprison politicians for accepting money from lobbying companies that obviously are there to do business regardless of its effect on society. politicians pointing a finger at one who, for example is caught with possession of a small amount of marijuana, is paradoxical when they commit more white collar crime that is typically “swept under the rug”. my greatest wish is for politicians in this country to stop the greed, and take hold of public service in its literal sense–to serve the people, not their pockets!
May 26th, 2008 at 7:01 am
Private prisons profit billions off of human flesh. The corporations that have investments are making the laws to increase incarceration and make sentences longer for non-violent offenders. The telephone industry, Global Tel-link makes $6 for a 14 min. call – profiting millions. Feeding the inmates inadequately, keeping them near starvation (always hungry), no medical care (inmates pay for each medical call, then have to pay for an aspirin or laxative (always constipated because no fresh vegetables or fruit is ever served). Have to buy soap, toothpaste, toothbrush, shampoo. There is also violent guards who encourage and witness rapes, beatings. Non-violent inmates witness all of this and are terrified. Is this “our America”, the home of the brave, compasionate, honest and christian people? The very politicians and corporations who claim to “be American and christians” are the very ones who are lining their bank accounts from human flesh. This type of corrupt dealing is going to be the fall of what was once “the greatest nation”.