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Prison Industries: “Don’t Let Society Improve or We Lose Business”

Even though we are 5 percent of the world’s population, we have 25 percent of the prisoners in the world.

Part of the Series

One out of every 100 people in the United States is imprisoned. Even though we are 5 percent of the world’s population, we have 25 percent of the prisoners in the world. We are number one in the world in the number of people we imprison – we even beat China. A normal reaction to this situation would be to try to reform our laws, our judicial system – including sentencing – our prison system and our society so that we would not have the disconcerting distinction of being the number-one jailer in the world.

Instead, in the past decade, there has been a movement to privatize more and more of our state and federal prisons to save money (which has not materialized) and ease overcrowding under the pressure of the courts. This has led to a wide world of influence peddling, self-dealing and lobbying while preying on a captured group of people to fill prison beds. Just as I have feared that privatizing the logistics of war will encourage private war-service industries to lobby for a hot war or long occupation to keep their industries viable, there has emerged a group of prison industries, state and federal legislators, and other players who will continue to benefit from our disgraceful ranking as the world’s largest warden.

There are two very large and influential prison companies in the United States who are manipulating the system to make sure they have plenty of business: The GEO Group (formerly Wackenhut) and Corrections Corporation of America (CCA). In the first part of this two-part series, I will explore The GEO Group’s influence peddling; next week, I will look at CCA.

If you have any doubt in your mind that improving society and lowering the number of prisoners in our country (normally considered a worthy social goal) is a threat to the prison industry business, all you need to do is to read about that concern in The GEO Group’s 2011 annual report:

In particular, the demand for our correctional and detention facilities and services and BI’s [a prison industry company Geo acquired in 2011] services could be adversely affected by changes in existing criminal or immigration laws, crime rates in jurisdictions in which we operate, the relaxation of criminal or immigration enforcement efforts, leniency in conviction, sentencing or deportation practices, and the decriminalization of certain activities that are currently proscribed by criminal laws or the loosening of immigration laws. For example, any changes with respect to the decriminalization of drugs and controlled substances could affect the number of persons arrested, convicted, sentenced and incarcerated, thereby potentially reducing demand for correctional facilities to house them. Similarly, reductions in crime rates could lead to reductions in arrests, convictions and sentences requiring incarceration at correctional facilities. Immigration reform laws which are currently a focus for legislators and politicians at the federal, state and local level also could materially adversely impact us.

This is an industry that needs misery, long sentences, rounded-up undocumented immigrants and increasing crime to flourish. In order to keep the prison beds filled, The GEO Group and others have paid out millions of dollars to lobbyists, federal and state legislators, and governors to allow our immigration problem to go unsolved, to make sure that no drugs are decriminalized and that an ineffective War on Drugs continues, and to make certain that long term prison sentences, like California’s three-strikes-and-you’re-imprisoned-for-life laws, keep a steady flow of revenue and profits flowing to their shareholders. They are also hoping that our national drop in crime is just a temporary trend.

According to “Justice statistics also show that 47.5 percent of drug arrests in 2007 were for marijuana offenses. Also, almost 60 percent of state prison inmates who are serving time for a drug offense had no history of violence or of any significant selling activity.” One can imagine that The GEO Group and others in the industry would be very concerned about the myriad of legislative bills and ballot initiatives floating around the country that threaten to legalize marijuana and reduce their number of paying “beds.”

And The GEO Group does do a brisk business, mainly through the federal and state governments. According to a thorough report, “Gaming the System,” which was issued last year by the Justice Policy Institute, the “state and federal prison population increased 722 percent between 1970 and 2009,” while as “of 2010, GEO contracts with 13 states, the Federal Bureau of Prison, the U.S. Marshals Service, and U.S. Immigration and Customs Enforcement. In 2010, 66 percent ($842 million) of GEO’s $1.27 billion in revenue was from U.S. corrections contracts. Of the $842 million in revenue, 47 percent came from corrections contracts with 11 states.”

Wells Fargo sees Geo Group and the prison industries as a good investment. According to an article by Charles Davis in Salon:

A driving force behind the push for ever-tougher sentences is the for-profit prison industry, in which Wells Fargo is a major investor…. Wells Fargo has been busy expanding its stake in the GEO Group, the second largest private jailer in America. At the end of 2011, Wells Fargo was the company’s second-largest investor, holding 4.3 million shares valued at more than $72 million. By March 2012, its stake had grown to more than 4.4 million shares worth $86.7 million.

The GEO Group, which is headquartered in Florida, and other private prison entities have spread plenty of lobbying money around in the Florida legislature to try to further privatize Florida’s prisons. Their first attempt failed after several floor votes, but based on the money they threw around and the money they can make running Florida’s prisons, they will be back to try again.

The Florida Independent reported:

According to the Institute [The National Institute on Money in State Politics], private prison groups have spent a lot of money to influence legislators:

Institute records show that donors from the private prison industry made nearly $1 million in contributions to Florida campaigns in 2010 – the most the industry has given over the last decade, as illustrated by the Institute’s Industry Influence tool. The majority of the money came from five companies–Geo Group, Corrections Corporation of America (CCA), Global Tel* Link, Armor Correctional Health Services, and LCS Corrections Services, Inc.

Since the state’s contribution limits cap corporate donations at $500 per candidate per election, these private prison firms gave most of their money to the state Democratic and Republican parties, which can receive unlimited amounts from corporations. The private prison industry demonstrated a signal preference for the Florida Republican Party, giving $783,494 compared to just $143,000 to the Florida Democratic Party.

In 2009, some members of the Texas legislature tried to stop the march of prison privatization in their state, only to find out just how entrenched The GEO Group was in the Texas political system.


Two state lawmakers from South Texas have financial ties to a private prison firm that runs facilities for the Texas state prison system – at a time when lawmakers are debating sweeping new measures to clamp down on corrections companies.

State Sen. Judith Zaffirini, D-Laredo, and state Rep. Rene Oliveira, D-Brownsville, have financial links to the GEO Group, a Florida-based firm that runs 19 correctional facilities in Texas, including nine under contract for the Texas Department of Criminal Justice.

Zaffirini’s husband, Carlos, is a lawyer and advocate for the firm, formerly known as Wackenhut. In December 2007, the Zaffirinis’ hometown commissioners in rural Webb County considered whether to stop supplying water and sewer lines to a local GEO-owned prison after residents voiced concerns about the company’s track record. The Laredo Morning Times reported that Zaffirini put on a spirited defense of the firm, claiming the complaints against his client were “steeped in emotion and void of logic.”

Oliveira, meanwhile, also has a cozy relationship with the prison company. His Brownsville law firm serves as its local defense counsel. The House member’s cousin David Oliveira, a partner at the firm, has represented the company on a lawsuit alleging misconduct that one judge described as “reprehensible.”

Texas is still using the private prison industry in their state.

So, according to the people who are pushing for ever-increasing numbers of privatized prisons, this is the right way to deal with prisons – staying away from wasteful and ineffective state and federal governments and turning them over to the cheaper and better-run private companies. Unfortunately for the governments who have turned over more and more of their prisoners to The GEO Group, the outcomes have been abysmal. Some examples:

Just a few days ago, NPR reported that The GEO Group completely pulled out of the state of Mississippi due to horrendous conditions in one of their youth facilities

One month after a federal court ordered sweeping changes at a troubled juvenile prison in rural Mississippi, the private company managing the prison has announced it is pulling out of the state. A report by the Justice Department describes “systemic, egregious and dangerous practices” at the Walnut Grove Youth Correctional Facility.

As those words imply, the official report is scathing.

Federal Judge Carlton Reeves wrote that the youth prison “has allowed a cesspool of unconstitutional and inhuman acts and conditions to germinate, the sum of which places the offenders at substantial ongoing risk.”

Walnut Grove, located an hour’s drive east of Jackson, is a 1,450-bed prison that houses inmates ages 13 to 22 who are minors convicted as adults. It is run by GEO Group of Boca Raton, Fla., the nation’s second-largest for-profit prison corporation, which posted a profit of $284 million last year. The Mississippi Department of Corrections pays GEO to manage the prison …

  • Prison staff had sex with incarcerated youth, which investigators called “among the worst that we’ve seen in any facility anywhere in the nation.”
  • Poorly trained guards brutally beat youth and used excessive pepper spray as a first response.
  • The prison showed “deliberate indifference” to prisoners possessing homemade knives, which were used in gang fights and inmate rapes.
  • Some guards had gang affiliations – a finding confirmed to NPR last year by former inmate Justin Bowling.

“A lot of times, the guards are in the same gang,” Bowling said. “If an inmate wanted something done, they got it. If they wanted a cell popped open to handle some business about some fighting or something like that, it just pretty much happened.” GEO did not give a reason why it was pulling out of Mississippi. Last week, CEO George Zoley said the company was discontinuing its contract at the East Mississippi Correctional Facility that houses inmates with mental illness because the facility had been “financially underperforming.”

Things for The GEO Group aren’t rosier in other countries, either. From a New York Times article last fall:

No country has more completely outsourced immigration enforcement, with more troubled results, than Australia. Under unusually severe mandatory detention laws, the system has been run by a succession of three publicly traded companies since 1998. All three are now major players in the international business of locking up and transporting unwanted foreigners.

The first, the Florida-based prison company GEO Group, lost its Australia contract in 2003 amid a commission’s findings that detained children were subjected to cruel treatment. An Australian government audit reported that the contract had not delivered “value-for-money.” In the United States, GEO controls 7,000 of 32,000 detention beds.

So, who is benefitting the most from The GEO Group’s large financial haul from our state and local prisons? Here are several examples of a current administration official and a campaign staffer who have been through The GEO Group revolving door:

According to “Gaming the System”:

President Obama’s appointed Director of the United States Marshals Service, Stacia Hylton, has strong ties to the private prison industry. In 2010, Hylton started a private prison consulting firm, called Hylton Kirk and Associates, while still working at the Department of Justice as the Federal Detention Trustee. After retiring from the trustee position, Hylton agreed to a consulting contract with The GEO Group worth $112,500. As Director of the U.S. Marshals, Hylton will head an agency that has a long-standing contractual relationship with The GEO Group. In 2010, the U.S. Marshal’s accounted for 19 percent of GEO’s revenue. With Hylton in a position to oversee government contracts with private prisons, the ongoing influence of private prison companies in the public sphere is virtually guaranteed.

Hylton had a long career within the US Marshals Service, went through the revolving door to cash in on the lucrative private prison business and then went back to the top job in the Marshals Service.

According to Open Secrets, Broderick Johnson, who worked in the Congress and the Clinton administration, became a lobbyist for The GEO Group. Last year, he joined the Obama re-election team. His career can be tracked by Open Secrets’ effective chart.

But the executives of The GEO Group, several of whom have gone through the federal government’s revolving door, have done very well in their compensation packages, especially since their business has a high percentage of state and federal money that helps to pay for this compensation through overhead formulas calculated per prison bed:

  • George C. Zoley is the founder, chairman of the board and CEO of The GEO Group, with a fiscal 2011 compensation package of $5.7 million.
  • John M. Hurley is the senior vice president and president of GEO Detention & Corrections. After working 26 years in the Federal Bureau of Prisons, he supplemented his government pension with a $1.5 million compensation package of $1.5 million.
  • Norman A. Carlson is on The GEO Group’s board of directors. After 17 years in the Federal Bureau of Prisons, including a stint as the director, he had a compensation package of $173,500 in 2010, as well as his government pension. In case you are worried that he was not making enough, he made $854,484 in 2007, and he did well in other years.
  • Brian R. Evans is the chief financial officer and senior vice president. His compensation package was $1.4 million in 2011.

A worrisome trend for The GEO Group and others in the private prison industry is that crime rates and prison populations in the states are both decreasing. The states who are already strapped for money are also finding ways of dealing with crime through diversion and rehabilitation programs to save the cost of incarceration, but the private prison industry has been working on anti-immigration laws, such as the one in Arizona to help find and imprison immigrants for deportation, which can take years, meanwhile keeping beds filled.

Next week, we will see how CCA ended up in the middle of the immigration debate and related legislation while it hitches up with American Legislative Exchange Council (ALEC), the notorious group responsible for many of the draconian immigration laws, to protect their business and fill their prisons. I will also explore a way to get control of this predatory industry so that it does not continue to corrupt our state and federal prison systems while preying on a group of people who are literally captured – sometimes for life – into the prison industry’s dreadful “bed” system.

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