by Bob Libal, Holly Kirby and Cristina Parker

In July 2016, executives from private prison companies Corrections Corporation of America (CCA) and the GEO Group (GEO) held investor calls to report on second quarter earnings and to discuss their financial outlook going forward.

The calls demonstrated that policy reforms that reduce incarceration and immigrant detention are bad for private prison firms, and that criminal justice reform measures – including reductions in California’s prison population – are a threat to future profits. Both CCA and GEO officials also reported expansion of their interests in alternative areas of the correctional market, including reentry services, GPS monitoring and community corrections.

Family Detention Drives Profits

The investor calls revealed to shareholders of both companies what many in Texas already knew: Two massive lockups for refugee mothers and their children in South Texas have been key to record profitability for private prison companies since 2014. CCA’s Dilley detention camp and GEO Group’s Karnes County lockup have been lucrative sources of revenue for the companies, which have reported gains in every quarter since the facilities opened.

But continued record revenue from family detention is not guaranteed. The federal government’s policy of detaining immigrant families faces two ...

On August 18, 2016, the Deputy Attorney General of the U.S. Department of Justice (DOJ) announced, via a memo to the acting director of the federal Bureau of Prisons, that the DOJ plans to phase out contracts with private, for-profit prisons.

The memo cited a scathing report by the DOJ’s Office of the Inspector General, released earlier in August, which found higher rates of assaults, disciplinary convictions, lockdowns, use of force and contraband at private prisons that hold federal prisoners. Improperly placing prisoners in segregation units was also cited as a problem at the facilities, run by Corrections Corporation of America (CCA), GEO Group and Management & Training Corp. (MTC).

“Private prisons served an important role during a difficult period, but time has shown that they compare poorly to our own Bureau facilities,” the memo stated. “They simply do not provide the same level of correctional services, programs, and resources; they do not save substantially on costs; and as noted in a recent report by the Department’s Office of Inspector General, they do not maintain the same level of safety and security.”

The findings by the OIG were, in fact, nothing new – for decades there have been reports of ...

The family of a mentally ill Oregon prisoner who died due to complications from an untreated broken neck received $7.4 million to settle their claims.

In 2012, the Lane County Jail (LCJ) in Eugene, Oregon entered into a contract with Tennessee-based Corizon Health, Inc. to provide medical care. The move ...

A New Mexico legislative committee is perplexed by the state's $2-million giveaway to GEO Group, since the Florida-based private-prison company has cut staff at one prison but continues to charge New Mexico's Corrections Department (NMCD) as if it's still employing the same number of staff.

A June 2012 report from the state's Legislative Finance Committee (LFC), in partnership with the Pew Center on the States, uncovered the fiscal waste among deeply systemic issues within NMCD, including poor parole planning and problems with "unproven” programs that are meant to lower recidivism rates—all amid projections that New Mexico's prison population will exceed capacity within the next decade.

"The NMCD has potential to reduce costs and improve public safety," said the report, which was prepared by the committee's nine-person program evaluation team. "However, the NMCD currently suffers from gaps in program oversight, ineffective use of resources, and patterns of inefficient spending."

In March 2012, an amended contract between NMCD and Lea County for the operation of the state prison in Hobbs, N.M., reduced prison staff by 32 full-time employees (FTE). But GEO Group, the for-profit company that runs the Hobbs prison—and has been forced to pay fines to NMCD totaling more than $1 ...

Less than two months into its $349-million contract with Arizona's Department of Corrections (ADC), Pittsburgh-based Wexford Health Sources, Inc. made a rather dubious, life-threatening first impression with the prison population and prisoner advocates.

On Aug. 27, 2012, a nurse already under investigation for unsafe practices, working at the Fort Lewis prison complex west of Phoenix, might have exposed more than 100 prisoners there to hepatitis-C by contaminating the prison's insulin supply.

Nwadiuto Jane Nwaohia, under investigation by Arizona's Board of Nursing since June 2012 for allegations the board would not elaborate, administered a routine dose of insulin to a diabetic prisoner who also has hepatitis-C, and then inserted the same needle into another vial to draw more insulin for the same prisoner. The vial, according to ADC Director Charles Ryan, was then placed among other vials in a medication refrigerator and got mixed up with other vials of insulin used that day on 103 diabetic prisoners.

Medical staff discovered the contamination the same day and destroyed all the vials of insulin, and Nwaohia, according to a Wexford statement, was suspended after it was learned she "had violated basic infection-control protocols while administering medication that day."

However, Wexford—which began a three-year ...

Weathered old-timers often postulate that incarceration preserves the human body. Absent the stresses of life on the street—no bills to pay, no job to grind, no imbibing hard booze or drugs—the body heals, even reverses course, and rests peacefully until their imminent release date.

It's a beautiful theory, but far from reality, as Minnesota's aging prison population and the rising costs of prisoner healthcare can attest.

According to a March 2012 Minneapolis Star-Tribune report, more than 10% of Minnesota's prisoners are over age 50. a demographic considered "elderly" in prison that has doubled just in the past decade. Many of them—more than 550—are serving life sentences and face an average of at least 30 more years in prison.

The longer any offender in Minnesota spends incarcerated, the more likely that the state's Department of Corrections (MDOC)—which had a $68-million medical budget in 2011, a three-fold increase over the last 10 years—is forced to decide whether to provide specialized treatment for expensive illnesses like cancer, diabetes and heart disease caused by the abuses of nicotine, liquor and deadly chemicals.

MDOC officials have taken to calling the ones who get treatment "million-dollar prisoners," a catchy perjorative that political opportunists and tough-on-crimers like ...

Local governments in Texas and across the nation are bearing high costs for building private prisons that are now unwanted due to a sharp decline in incarceration rates. This has led some local governments to adopt radical strategies such as closing, or even selling, the publicly-financed, privately-operated prisons that were built when incarceration rates were soaring. Some local governments' bond ratings have been lowered due to the financial strain caused by the costs of financing the boondoggle prisons.

The West Texas town of Littlefield has taken the most radical solution, putting its 383-bed prison up for auction after having been abandoned by the private prison company that contracted to fill and operate the prison. The town is hoping to make $5 million from the sale of the empty prison which is costing $65,000 a month in bond interest payments alone.

Nearby Dickens County suffered financially after the federal government transferred inmates from a 489-bed prison to a facility in Lubbock. The costs of the empty private prison included a loss of 120 jobs in a community of 2,700.

McClennan County finally was able to get prisoners from an older jail in Lubbock to its newly-completed private prison in Waco after ...

Item: California's 33 state prisons are operating at 190 percent of capacity. On January 10, 2002, Governor Gray Davis responded to this crisis by proposing to close five prisons with 1,400 beds.

Item: California is facing a $20 billion budget shortfall. It costs $70 per day to house a convict in a state prison, $44 per day in a private prison. Governor Davis opted to close five private prisons.

Item: On January 16, 2002, Davis signed into law a 34 percent pay raise for California prison guards whose base pay will increase to about $65,000 per year. Plus overtime.

Item:     The California prison guards' union spent $2.3 million to help elect Davis 4 years ago. On March 13, 2002, two months after Davis approved the guards' munificent pay raise, the union contributed an additional $251,000 to Davis.

Item:     Davis is seeking November 2002 election to a second 4-year term as governor.

Governor Gray Davis, having repeatedly snatched defeat from the jaws of victory during California's recent electric power crises, has decided to banish privately operated prisons from the Golden State. Davis' decision delivers on the promise he made to the state prison guards' union that contributed over $2 million to ...

Corrections Corporation of America paid $12,000 to settle a lawsuit by a prisoner Johnny A. Walsh for claims related to his treatment at the Silverdale Detention Center in Tennessee.

The October 2005 confidential settlement was obtained via public records request by PLN. The complaint was not made available.

See: Walsh ...

Corrections Corporation of America paid $4,000 to settle a lawsuit alleging a guard at the Shelby Training Center in Tennessee assaulted a juvenile, Brandon D. Jones.

The April 2006 confidential settlement was obtained via public records request by PLN. The complaint was not available. Jones was represented by Memphis attorney Andrew Bender.

See: CCA SA 0116-0121