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CCA Investor Call; Reports 12,000 Empty Beds

The Corrections Corporation of America held an investor conference call last month.  During the call, CCA officials discussed current capacity issues and how they were profiteering from incarcerating thousands of men, women, and children in private prison beds.  

According to CCA reports, the private prison company continues to be the largest private prison profiteer by controlling 45% of all private prison beds in the nation.  CCA reported that they have 12,000 empty beds.  Additionally, the nation’s largest private prison company stated they have lost or terminated contracts totaling more than 7,500-beds in the past 16 months and expect to lose over 3,600-beds in 2010. 

During the investor call, CCA reps mentioned they have lobbyists working in six states trying to identify new contracts.  CCA reps stated that those states are about 14,000 persons over current capacity and are not planning to build any new prisons.  While they didn’t mention Texas specifically, CCA was reported to have spent $2 million lobbying elected officials – presumably to identify the profiteering activities they outlined on the call. 

A majority of the company’s revenue is from state clients at 60%; with Texas contracts representing 5.39% of CCA business.  Federal contracts comprise about 40% of CCA’s business; specifically consisting of contracts from United States Marshall Service (USMS), Immigration Custom and Enforcement (ICE), and the Bureau of Prisons (BOP). 

CCA still reports that their average per diem rates have declined because of the change in population at the T. Don Hutto prison in Taylor, Texas.  Folks will remember that ICE ended family detention at Hutto last year, and currently detains women in that correctional facility.  That change in population impacts CCA’s ability to charge a higher per diem and affects the company’s bottom line.

"Downscaling Prisons: Lessons from Four States," a new report from Justice Strategies and the Sentencing Project anaylzes the trend in down-sizing prisons.  The report

finds that four states - Kansas, Michigan, New Jersey, and New York - have reduced their prison populations by 5-20% since 1999 without any increases in crime. This came about at a time when the national prison population increased by 12%; and in six states it increased by more than 40%.  The reductions were achieved through a mix of legislative reforms and changes in practice by corrections and parole agencies.

On the call, CCA profiteers mentioned they are monitoring current state reforms.  What continues to be disconcerting is that they talked about those policy reforms in terms of risk to their business.  We will continue to monitor CCA as they watch these reforms.  Stay tuned.