The GEO Group is set to acquire a smaller corrections corporation, LCS Corrections. The merger could cost GEO up to $350 million dollars—borrowed from their $700 million revolving line of credit—and will add eight new facilities, and 6,500 new beds to GEO’s existing 79,000 bed capacity.
GEO is looking forward to an estimated $75-80 million extra in annual revenue. On LCS's end, the deal will bail them out of nearly $302 million in debt. The deal will reportedly be finalized by the end of this February.
A Louisiana based company, LCS, while small in comparison, is no stranger to GEO-sized gaffes and scandals. LCS has a long history of not taking proper care of the people in their facilities, racking up a number of wrongful death and corruption suits. Most recently, a former LCS warden was indicted for attempting to bribe a Justice of the Peace in Texas.
The acquisition will expand GEO Group's reach in Texas, where LCS Corrections currently operates the Brooks County Detention Center, the East Hildago Detention Center, and the Coastal Bend Detention Center.
The former warden of the privately operated East Hidalgo Detention Center, Elberto E. Bravo, was arrested last Friday in a complex bribery scandal. According to local reports, Bravo participated in a scheme to bribe former Hidalgo County Justice of the Peace Melo Ochoa to lower the bond for a Mexican drug trafficker, Luis Martinez-Gallegos .
Private prison operator LCS Corrections removed Bravo from his post as warden in February 2012 amid a federal investigation, but it is unclear if it is related to this case.
The complex case began when Martinez-Gallegos was stopped by Hidalgo County law enforcement officers and arrested for possession of 89 kilograms of cocaine in his vehicle.
According to Breitbart Texas, "Bravo, another woman, and a local attorney worked to get Martinez’s bond lowered so that federal authorities could deport him before the case went federal, the criminal complaint shows."
Ochoa took the cash and decreased the bond from $2.5 million to $50,000. Martinez-Gallegos was subsequently released and deported. What did former private prison warden Bravo have to gain from deporting a drug trafficker? That remains a mystery.
The Texas Observer broke the news in September that Corrections Corporation of America was getting back into the business of family detention in the remote South Texas town of Dilley.
The deal was for a facility that now sits on a 50-acre site just outside the town of Dilley, 70 miles southwest of San Antonio. The property is part of Sendero Ranch, a “workforce housing community,” more commonly called a “man camp,” for oilfield workers. Sendero Ranch is owned by Koontz McCombs, a commercial real estate firm.
The involvement of Red McCombs, a well-known University of Texas alumnus and booster, did not sit well with students at UT. At a protest at the eponymous McCombs School of Business, they demanded that McCombs either break the lease or students and faculty would push to have his name dropped from the school.
That wasn't the only thing about the deal that had people calling foul. The unusual contract involves a lease agreement between real estate group Koontz McCombs, Immigration and Customs Enforcement (ICE), CCA, and the town of Eloy, AZ, which is nearly 1,000 miles away.
As a result of the contract being "passed through" Eloy — which already contracts with CCA — the competitive bidding process, environmental impact report, and other safeguard measures were completely bypassed in the interest of opening the detention camp as expediently as possible. This deal streams revenue to Eloy, but leaves them free from any of the liability that comes with running a private detention facility.
Of course, CCA is not new to family detention. CCA operated the notorious T. Don Hutto family detention center until 2009, when the Obama Administration removed families from the facilities amid outcry and lawsuits over the conditions inside. Reports emerged that children as young as eight months old wore prison uniforms, lived in locked prison cells with open-toilets, were subjected to highly restricted movement, and were threatened with alarming disciplinary tactics, including threats of separation from their parents if they cried too much or played too loudly. Medical treatment was inadequate and children as young as one lost weight.
The facility opened amid criticism in December and is planned to be the single largest immigrant detention center in the U.S. With a nearly $300 per person/per day rate, CCA is poised to make millions locking up asylum-seeking women and children in the massive detention camp.