The Corrections Corporation of America (CCA), the nation’s largest prison provider, held its 2007 4th Quarter conference call earlier this year. During the call, CCA updated investors regarding capacity and addressed new beds the company was bringing online as a result of increased demand for new prison beds. Company representatives emphasized that while the country is an economic downturn, the prison system is not impacted by negative economic cycles.
As of February 2008, CCA 41 owned facilities with 50,909 beds and 24 managed only facilities with 26,751 beds. The company managed contracts with 20 states, all three federal agencies, and the District of Columbia. Further, of the beds that CCA owned or managed in 2007 about 6.64% were in Texas.
CCA likes to emphasize its strong presence in the private prison industry; controlling approximately 47% of the private prison and jail beds in the nation. The company acknowledged it's own contributions to the growth of the private prison industry where staff mentioned that in 1990 private prisons numbered 10,973 and in 2007 that number increased to over 164,000 beds.
| U.S. Market |
| Owned and|
|The Geo Group Inc.||43,402||26.4%||19,902|
|Management & Training Corp.||11,945||7.3%||506|
|TOTAL ||164,612 ||100.0% |
Source: CCA Q4 2007 Investor Presentation
CCA officials stated that new reports relating to a reduction in Texas prison capacity will not impact CCA contracts since the the private prison company was not planning any local expansion. However, CCA staff emphasized that the state continues to operate its prison -- public and private -- at capacity.
The call also addressed trends at the federal level, including those that would facilitate capacity expansion and benefit CCA's bottom line. Specifically, the recently passed federal FY 2008 budget supports an increase of the immigrant detention population of 32,000 prison beds up from 27,000 beds from FY 2007 and an increase from the President’s previous budget. Further, the budget authorizes the Department of Homeland Security (DHS) to issue future budget requests for additional capacity if needed and requires the agency to update Congress monthly on immigrant detention capacity.
Additionally, the President recently released his FY 2009 budget that increases detention population beds to 33,000. In 2005, funding for detention beds numbered only 19,000. As a result, there will be an addtional 1,000 to 1,500 new immigrant detention beds that will come online by 2009.
The call highlighted trends at the state and federal level and painted an overall picture of the direction of CCA. As advocates working to address the problem of mass incarceration and how private prison operators contribute to that growth it is truly disturbing to observe the comments of CCA represenatives who relish the nation's projected prison prison growth.
Tracie McMillan over at the Huffington Post has profiled Superdelegate Joseph F. Johnson, a former Corrections Corporation of America board member. He is a member-at-large of the Democratic National Committee from Chantilliy, Virginia - a suburb of Washington D.C.
Reports indicate that he is supporting Senator Hillary Clinton. However, he has not publicly committed to either Clinton nor Senator Barack Obama. In fact, Johnson has donated to both campaigns:
Johnson was appointed to the board of Corrections Corporation of America, the largest operator of private prisons in the country. While serving in that position from 1996 to 1999, Johnson earned accolades and handsome rewards from CCA for convincing Washington, D.C. to send prisoners to CCA's Youngstown, Ohio prison. Johnson also has a history of lobbying for private prison companies in Texas and around the nation.
The private prison in Ohio had a notorious reputation for violence and escapes. By 1998, there had been two fatal stabbings, 44 assaults, and six escapes at the prison. Despite the egregiousness of the incidents, Johnson claims that no one's was to blame. According to McMillan's article:
Mr. Johnson nonetheless profited from the deal, receiving $2.6 million in stock options for his work linking CCA with officials in Washington, D.C. Calling his work "instrumental" to their receipt of the contract, CCA said that Mr. Johnson had "exceeded his duties and obligations" to the company and also paid him $382,000 for his "consulting services" in helping to arrange the deal, and $991,000 for NCRC's services in another CCA prison in Texas.
What an interesting development in the presidential campaign that keeps on going. As potential president-makers, the Superdelegates continue to face scrutiny. It will be interesting to see if any others are linked to private prison companies.
In June 2007, President Bush nominated Gustavus A. Puryear IV, a Corrections Corporation of America (CCA) lawyer, for a federal judgeship in the Middle District of Tennessee-- the same U.S. District Court where CCA is headquartered and where much of the litigation against the company takes place.
Puryear's nomination has not been approved by the US Senate (his nomination hearing was held February 12th), but if it is, a troubling conflict of interests will arise. The former CCA lobbyist would work in the same district that most lawsuits against against his old company and its executives are filed. According to Tennesseans Against Puryear, a grassroots organization opposing Puryear's nomination, the Middle District of Tennessee has handled over 260 cases naming CCA or CCA executives or staff since 2000.
CCA has put millions in Puryear's pockets, and allowing him to preside over cases in the district where his old company is headquartered may threaten the foundation of of fairness and impartiality that is central to our judicial system.
Puryear said he would recuse himself from cases involving CCA, which slightly mitigates the conflict of interest that would inherit his federal judgeship, but it still doesn't smell right. Having a wealthy corporate lawyer preside over cases in the district where his old corporation is based makes me cringe.
In addition to a conflict of interest inherent in a Puryear's judgeship, it seems that Puryear may not even have the proper legal qualifications to take on the role of a federal judge. Puryear has never served as a judge, he has little trial experience, and his last six years of work have been spent as a corporate lawyer.
According to Tenneseans Against Puryear, "Puryear has been actively involved in just five federal cases and only one trial in Tennessee, most recently 10 years ago." The Gannette News Service wrote about Puryear's experience problem in the end of February:
"Puryear's lack of trial experience is a greater concern than his role as a corporate lawyer and his lack of judicial service, said Professor Douglas Laycock of the University of Michigan Law School.
Puryear's lack of trial experience is likely why he received a 'qualified' rating by the American Bar Association, instead of the higher "well qualified," Laycock said.
Of the 67 judges nominated by President Bush since January 2007, 14 received a unanimous or majority 'qualified' rating. The rest had unanimous or majority 'well-qualified' ratings."
Puryear's position as general counsel and lobbyist for CCA didn't net him any trial experience, and it certainly has not prepared him for the federal bench. As the top attorney and a top executive for Corrections Corporation of America (CCA), Puryear spent much of his time at the company's Nashville headquarters stemming a tide of inmates' civil rights lawsuits, finding legal niches to shield CCA from public scrutiny, negotiating new private prison contracts, lobbying the federal government to pass pro-CCA legislation, and fighting off a slew of lawsuits brought by sharholders angered by the company's shady financial practices in 2001.
Via the T. Don Hutto blog, Forbes has an article detailing that Corrections Corporation of America, operator of many private prisons in Texas including the T. Don Hutto family prison, spent a whopping $2.5 million lobbying the federal government in 2007. This amount is on top of the $180,000-$235,000 that CCA spent lobbying in Texas in 2007.
According to the article, the lobbying came in three major areas: 1) lobbying to privatize the Bureau of Indian Affairs prison system, 2) lobbying against the Public Safety Act which would outlaw private prisons, and 3) lobbying against the Private Prison Information Act which would give the public the same access to private prison information as public prisons.
In addition to lobbying Congress, CCA lobbied the Bureau of Indian Affairs, the Department of Homeland Security, the Department of Justice and other federal agencies. Homeland Security and DOJ are big targets for private prison corporations because they hand out lucrative federal detention contracts, which have become a boom industry for private prisons as the immigration law becomes more punitive.
The article goes on to list some of CCA's lobbyists who include such well-heeled folks as:
- Bart VerHulst, previously chief of staff for former Senate Majority Leader Bill Frist, R-Tenn.;
- Mike Quinlan, former director of the Federal Bureau of Prisons; and
- Gus Puryear, previously counsel to Frist and an adviser to Vice President Dick Cheney.
Followers of private prison news may know that Gus Puryear, in addition to being a former CCA lawyer and lobbyist and aid to Frist and Cheney, is a current nominee for the federal judgeship in Nashville. His nomination has drawn considerable opposition.
One of the ironies of the private prison industry is that, because the company's profit is all garnered through government contracts, all $2.5 million spent by CCA on lobbying was originally government money that CCA made off previous government contracts. We'll keep you updated on further news about private prison corporations lobbying.