Texas Prison Bid'ness

The private prison industry makes good sense for at least one group of well-heeled individuals - executives at the biggest private prison corporations who make big bucks operating these companies.  We reported last month GEO Group CEO George Zoley and chief operating officer Wayne Calabrese were amongst the highest paid south Florida executives. 

Now, Calabrese is selling two South Florida homes for a combined value of more than $3 million.  The first, a modest 1,810-square-foot house in the Boca Raton Riviera subdivision, is going for a mere $575,000.  The second is a 6,105-square-foot house Royal Palm Yacht & Country Club subdivision that is on the market for a less modest $2.475 million. Clearly, the prison business has been good to Mr. Calabrese.

Sometimes we forget that the wealth accumulated by private prison corporations and their executives comes soley from taxpayer dollars paid to companies that in turn don't spend all that money on correctional services.  Calabrese's $3.6 million compensation was more than than 19 times the salary of TDCJ director Brad Livingston and more that 16 times the starting salary of the Secretary of Corrections for the state of California. GEO head George Zoley's total compensation last year was more than $7 million, and Zoley listed a home in Fort Lauderdale for sale for nearly $11 million last January.  Private prisons are clearly good business for some. 

The Corrections Corporation of America (CCA) held its quarterly conference call last week.  We have previously reported that CCA has excess capacity and that trend continues; company officials mentioned they had unoccupied 12,500 beds in their system.  As a result there are no immediate plans to build new CCA prison beds.

CCA currently operates 65 prisons, including 44 company-owned facilities that include 89,000 beds in 19 states and the District of Columbia.  Currently, the company’s biggest customers are the state of California and the federal Bureau of Prisons (BOP).  

During the call, CCA officials made assumptions that states and the federal government would soon need new beds to accommodate a growing prison population despite current budget constraints.  The BOP is reportedly over capacity by 36%; while CCA claimed state prison systems exceed capacity by 12,000 prisoners.  
 
Company representatives went on to mention that while current state prison demand is anemic, potential state customers are not authorizing new beds making the company’s excess capacity readily available for new contracts.
 
It’s a good thing that while CCA profiteers are struggling to find new customers for their excess supply that state legislators are rethinking criminal justice policies.  In fact, the Bureau of Justice Statistics reported that state prison systems declined by nearly 3,000 beds in 2009; prison populations declined in 20 states.  While tight budgets are a salient feature they are not the sole contributing factor.  Our own Judy Greene co-authored a report earlier this year along with my Sentencing Project colleague Marc Mauer, entitled Downscaling Prisons: Lessons from Four States.  In that report, Judy and Marc document legislative and administrative reforms that predate the current recession and contributed to the states of New York, New Jersey, Michigan, and Kansas all reducing their prison populations while maintaining public safety. 

While there is movement at the state level, federal demand remains steady driven significantly by the need for capacity in the immigrant detention system.  During the CCA call, company officials mentioned that Immigration and Customs Enforcement (ICE) population numbers 33,000 persons in detention.  To meet demand,  BOP issued several requests for proposals to add new beds to their system.  These requests seek to contract with existing facilities and not new ones.  One proposal request would add a new prison in either Texas, Arizona, or Oklahoma and would require a capacity of 1,200 beds.
 
CCA’s excess supply of prison beds shows that policy reforms - legislative or administrative -- can reduce the need for prison capacity.  It further indicates that state policy makers can make other choices when confronted with how to maintain public safety.  But, the steady demand from the federal government indicates that there continues to be an over-reliance on confinement as social policy -- the reason why the United States has the highest incarceration rate in the world.  But steps can be taken at the federal level - in immigrant detention and the prison system to reduce overall capacity and undermine CCA’s efforts to fill those 12,500 beds.

Related posts:

• CCA Investor Call; Reports 12,000 Empty Beds
• CCA Projects Success in 2009 Fourth Quarter Investor Call
• Hedge Fund Manager recommends buying CCA Stock

Ronald Rodriguez, the attorney who won a more than $40 million lawsuit for the familiy of Gregario de la Rosa against the GEO Group, was recently awarded Trial Lawyer of the Year by the Public Justice Foundation.

According to a recent cover story in the alternative-monthly Laredos,

Attorney Ron Rodriguez – just back from ceremonies in Vancouver, B.C. at which he was named 2010 Trial Lawyer of the Year by the Public Justice Foundation (PJF) – said he is all at once proud and humbled by the recognition for the law-making case he built and won against private prison operator Wackenhut Corrections (now the GEO Group) on behalf of the family of murdered inmate Gregorio de la Rosa. In 2006 a Willacy County jury verdict awarded $47.5 million in punitive and compensatory damages for malicious and wrongful death against Wackenhut and one of its wardens.

De la Rosa was brutally murdered in a Wackenhut (now known as GEO Group) prison in 2000 while the company's wardens allegedly laughed and smirked.  The company was also accused of tampering with evidence, including destroying key video of the murder.   An appeals court found that "Wackenhut’s conduct in maliciously causing Gregorio’s death and thereafter spoliating critical evidence so offends this Court’s sense of justice that a high ratio is warranted."  Rodriguez also represents the families of Scot Noble Payne and Randall McCullough, two Idaho prisoners who committed suicide in separate GEO prisons in Texas.

We're a little late on this one, but Darren Barbee at the Fort Worth Star-Telegram has an excellent story ("Private company wants to keep operating Fort Worth prison for parole violators," July 22) about the GEO Group's bid for a contract renewal at it's North Texas Intermediate Sanction Facility:

A private prison for parole violators is bidding for a new contract to continue operating at 4700 Blue Mound Road. The facility is run by The GEO Group, which has had a spotty record with some of its other Texas prison facilities the past several years. Before the contract is awarded, a public hearing will be held.

"Their contract is set to expire ... and GEO is in the process of bidding on those beds again," said Jason Clark, spokesman for the Texas Department of Criminal Justice. "The hearing is a chance for the public [to] provide feedback." The hearing is scheduled for Aug. 24 at La Quinta Inn & Suites at 4700 North Freeway. (emphasis TPB)

Fort Worth's North Texas Intermediate Sanction Facility has 432 beds. The average stays are 60 to 100 days, with the longest confinement up to six months, Warden Darryl Anderson said.  "Most people don't know we're here," Anderson said.  GEO will get $6.9 million for operating the facility for the 12 months that end in February. It has operated the prison for 19 years and has about 100 employees, Anderson said.

The article points out GEO's spotty record across in Texas and weak oversight mechanisms at TDCJ:

In early 2007, a trusty paroled for aggravated robbery with a deadly weapon escaped from the facility. Anderson, who has been warden since 2006, said the man escaped with the aid of his sister and an in-law but was found shortly thereafter.

Overall, GEO's Texas facilities have had a few major problems, and the company's Coke County Juvenile Justice Center in Bronte was closed in 2007. GEO, formerly known as Wackenhut, began running the center in 2003 but let it fall into disrepair with unsafe and unsanitary conditions throughout. A few inmates at other GEO Texas facilities have committed suicide or instigated incidents categorized as riots, according to a company report.

In 2006, the company lost a wrongful-death case in Texas costing it $51.7 million, according to a filing with the Securities and Exchange Commission. This year, the company reported a $20.6 million decline because of the termination of management contracts at the Fort Worth Community Corrections Facility on North Henderson Street, as well as in Venus, Newton, Beaumont and an Illinois facility.

The Criminal Justice Department has come under fire for weaknesses in how it oversees private facilities that deliver residential services and substance abuse treatment programs, including those operated by GEO. In March, a state auditor's office report found that the department did not consistently include financial reporting requirements and performance standards in its contracts to hold providers accountable. The department also allowed three providers to conduct their own criminal-history checks of employees.

It should also be noted that GEO has lost at least 5 contracts in Texas in the past several years.  GEO lost its Bridgeport TDCJ contract earlier this summer and the 2008 re-contracting of the Estes unit to MTC.  In 2007, the state of Idaho pulled its inmates from the Dickens County Correctional Center in the wake of the suicide of inmate Scot Noble Payne and a subsequent investigation into "squalid" conditions at the lock-up.  Idaho also cut its contract the Bill Clayton Detention Center in Littlefield, Texas after the 2008 suicide of Randy McCullough.  And, as the the article indicates, the Coke County Juvenile Justice Center was shuttered in October 2007 by the Texas Youth Commission after a damning investigation into conditions at the youth detention center.

We'll see if the Fort Worth facility follows that trend.  If you've had experiences with the NTISF, please leave them in the comments.