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Hill Briefing on Private Prison Information Act

Last month, a briefing was held on the Private Prison Information Act (HR 2450).  The measure was introduced by Texas Congresswoman Sheila Jackson Lee.  Our own Judy Greene presented at the briefing along with Joshua Miller of AFSCME, David Shapiro of the ACLU's National Prison Project, Tom Barry of the TransBorder Project, and Alex Friedman of the Private Corrections Institute.  The briefing was hosted by Corrections USA and moderated by Eric Milman

During the briefing, presenters like Judy made the case for expanding the Freedom of Information Act (FOIA) to all facilities detaining persons under federal jurisdiction.  This would include immigrant detention centers in addition to private prison facilities. 

According to Tom Barry's presentation, the problems with the current system include a lack of effective oversight.

A near-total absence of committed oversight has allowed the prison industry to flourish in the shadows.  Requests for the most basic information about the functioning of these prisons and detention centers routinely lead nowhere. 

Private operators like GEO Group bounce back media requests and questions from advocacy organizations to local government prison owners and to the federal outsources.  In turn, local government entities [Inter Government Agreement] IGA's refer inquiries to their contracts and subcontractors knowing that this will lead to another dead end....

Judy Greene cited several specific examples of her experience with with the lack of oversight among private prison facilities including:

In June of 2000 the BOP awarded a contract to CCA for a 2,304-bed prison they had built on speculation in California City.  Seeking to understand how CCA could acquire the legal power to operate this prison, including the power to use deadly force, in California -- a state which had not enacted legislation conferring such authority on private corporations, a colleague and I submitted a FOIA request for this critical information from [the Bureau of Prisons] BOP.  After several months time, we sere notified that under federal regulations pertaining business information, the information I was seeking was exempt from FOIA because the company had deemed it to be a trade secret.

HR 2450 specifically addresses these issues by extending FOIA to all federally contracted prisons and detention centers.  Jackson Lee's bill has garnered fifteen Congressional co-sponsors to date.

And the bill has also drawn opposition from companies with private prison interests -- most notably from the Corrections Corporation of America (CCA).  Congressman Tim Holden (D-PA) is a current co-sponsor of HR 2450 and introduced a similar measure in the last Congress that also garnered opposition.  At the time Rep. Holden stated:

In recent weeks, opposition to this bill has mobilized.  Although I cannot testify on their behalf, I can reiterate my concern that opposition to this bill is opposition to reporting transparency...

According to recent reports, CCA has paid a lot of money to lobby agains HR 2450 and similar measures.  This appears to be significant since current CCA director Charles Overby is also CEO of the Freedom Forum an organization that champions the freedom of the press. HR 2450 is still in committee in the House.  We will keep y'all posted of any developments related to the measure. 

CCA running out of water in Bartlett

Corrections Corporation of America is running out of water at it's Bartlett State Jail, according to an articlein the Dallas Morning News ("Boil water notice for Bartlett, backup well in use," January 7). 

A boil water notice has been issued for Bartlett where a shortage has led to using an emergency well and portable toilets for a state jail.

The 1,049-bed Bartlett State Jail ordered portable restrooms and 5,000 bottles of water after briefly losing city service. Steve Owen with Corrections Corp. of America says employees Wednesday occasionally shut off water so an onsite tower could refill.

Water levels in the city's two elevated storage tanks have been declining. Officials suspect a pump malfunction.

A backup well, which failed an assessment less than two years ago, was brought online this week after passing a bacterial test.

While this story doesn't seem important on its own, it does show the dramatic resource usage that prisons can often take up in small communities. 

2009 Top Private Prison Stories, #1 Family detention ends at T. Don Hutto

Another year has passed here at Texas Prison Bid'ness, and what an exciting year it has been. As we have done in the past, the bloggers here at TPB would like to recap our favorite or perhaps the most memorable stories/topics over the past year.  Over the next few days, we'll be posting 2009's top five stories related to private prisons.

The end of family detention at Hutto was TPB's biggest story of 2009. 

 #1 Family detention ends at CCA's T. Don Hutto detention center

By the beginning of 2009, perhaps no private prison in the country had become as controversial as Corrections Corporation of America's T. Don Hutto family detention center in Taylor, Texas.  The former medium-security prison was converted into a family detention center in 2006, and had been the site of dozens of vigils, a major lawsuit, two critical documentary films, intense media scrutiny, and a national movement to end family detention. 

So, when the government decided to stop sending immigrant families to Hutto, it was big news. The New York Times lead with this line on August 6th:

[T]he government will stop sending families to the T. Don Hutto Residential Center, a former state prison near Austin, Tex., that drew an American Civil Liberties Union lawsuit and scathing news coverage for putting young children behind razor wire. ...

The decision to stop sending families there - and to set aside plans for three new family detention centers - is the Obama administration's clearest departure from its predecessor's immigration enforcement policies."

Although the facility continues to hold immigrant women, the August  announcement was a huge victory for the movement to end family detention.  The efforts to close Hutto have morphed into a broader movement against private immigrant detention centers, including vigils and protests at the Willacy County Processing Center, the Houston Processing Center, and other facilities around the state. Here's to a 2010 with more victories like the one at Hutto!

Latest CCA Investor Update

The Corrections Corporation of America (CCA) held its latest investor call earlier this month.  There were no big surprises on the call except that the company reported on how changes at the T. Don Hutto facility were impacting CCA’s bottom line.

We have covered previous CCA investor calls this year.  Given the nation’s current outlook, the private prison profiteers are not planning on building any new speculative prisons right now.  During the call they mentioned over 8,000 beds that are going unused.  This is a significant portion of the more than 86,800 beds that comprise the company’s inventory in its 44-owned prisons or 21-managed only facilities. 

During the call, company officials discussed the recession and the impact of state budgets on their ability to find new customers.  State prisons continue to be overcrowded – according to reports 29 states are operating at 100% capacity or more.  CCA has an interesting take on the state prison crisis.  Rather than building new prisons or even obtaining new contracts, many states – like Texas – have responded with policy changes.  In some instances those changes involve parole reforms and identifying changes to early release practices.  But CCA officials believe that states are having a harder time implementing these changes than officials thought they would.  So they are watching state policy changes pretty closely to determine changes in demand and potential new customers. 

As a result of the state outlook, CCA officials are focusing on federal customers.  Their primary customer targets are Immigration Customs and Enforcement (ICE), United States Marshall Service (USMS), and the Bureau of Prisons (BOP).  The BOP continues to operate at 137% capacity.  CCA thinks there may be an opportunity to consolidate detention beds in centralized facilities – currently about 12,000 detainees are imprisoned in over 150 jails that do not meet new detention standards.  As a result, the company believes there is an opportunity to obtain new contracts with ICE. 

The most relevant issue for Texas may be changes in family detention at Hutto. Now that the medium security prison is detaining immigrant women it seems that CCA can’t charge the same per diem rate to ICE as when it locked up families including small children.  The CCA profiteers seemed most concerned.

The economic outlook continues to delay speculative prison construction.  But it hasn’t changed the world view of the profit minded folks at CCA.  Let’s hope that stakeholders who don’t stand to profit will continue to challenge how we respond to crime and not listen to the folks at CCA or other companies. 

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Hedge Fund Manager recommends buying CCA Stock

William Ackman of Pershing Square, L.P. recommended investing in the Corrections Corporation of America (CCA) at the fifth annual Value Investing Congress (VIC). 

According to Forbes.com ("Jailhouse Shock, Looking to cash out? Hedge fund manager Bill Ackman sees big bucks in private prison operator" October 21, 2009), Ackman says CCA is a good investment because of its 12,000 bed inventory and potential ability to incarcerate people that states like California cannot handle.  

The activist investor's company has a 9.9% stake in CCA.  During his presenation to the VIC, Ackman announced he bought CCA stock at nearly $25 a share and that he believed the stock was undervalued and really worth $40-$54 a share. 

Ackman's assessment of CCA is driven by potential profits and provides proof that persons with financial interests in mass incarceration should not be contributing to policy in this area at all.  According to Ackman, "The biggest risk for Corrections Corp. is that suddenly lots of people stop committing crimes."  He goes on to say he thinks the recession may increase crime rates. 

Ackman was also quick to brush off any concerns about falling occupancy rates at CCA, arguing that the company's aggressive building of new prisons in recent years boosted its total number of beds, and occupancy will rise as those beds are filled. Not to mention that the business is "like a hotel where you lock in the guests, and if they try to escape you shoot them."

Ackman's uninformed theories about linkages between the economy and crime rates could, at the very least, undermine the efforts that many federal and state policymakers are engaged in to deal with overcrowded prisons and bloated correction budgets.

At the most, Ackman's weak assessments could perpetuate a private prison industry that operates on speculation and thrives on the weakening of communities and families by locking up people for long periods of time. 

Following his presentation, CCA was trading up towards 2.50%.  According to Benzinga.com ("The Geo Group (GEO) and Cornell Companies (CRN) Bouncing Off Ackman Comments on Corrections Corp (CXW)" October 20, 2009), Ackman's words impacted the entire private prison industry resulting in growth in other private prison companies too. 

Ackman's announcement that he bought CXW has caused other stocks in the prison sector to spike in late day trading. Cornell Companies (NYSE: CRN) moved up a 2.3% and The Geo Group (NYSE: GEO) rose approximately 2.5% after Ackman's comments made it to the wires.

The activist investor's support of CCA is not the first time he has invested in the private prison industry.  According to the Nashville Post ("Activist investor plows into CCA", October 22, 2009), Ackman, then with Gotham Partners, also bought 6% of Prison Realty Trust as the company merged part of its operations with CCA back in 2000. 

Ackman is probably one of many private prison profiteers whose words can impact prison capacity and mass incarceration.

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CCA stock gets favorable outlook despite bad press; New stock ticker at TPB

Corrections Corporation of America (NYSE: CXW)'s stock is getting favorable review from stock analysts despite a string of seemingly bad news, according to a story in the Tennessean ("Analysts give CCA an upbeat outlook: Stock price doubles amid abuse reports," September 1),

Despite state budget crunches, reductions in beds at jails and controversy surrounding at least two detention centers, analysts and criminal justice experts say Nashville-based Corrections Corporation of America's financial forecast remains strong.

The story goes on to detail what would appear to be a host of bad news for CCA, including the allegations of abuse of Hawaii women at a Kentucky prison and the recent changes at the notorious T. Don Hutto detention center in Taylor, TX.

Those risks are real as CCA is embroiled in a federal lawsuit in Kentucky stemming from rape allegations at the Otter Creek Correctional Center in Wheelwright, Ky. An accompanying investigation involves 23 female inmates, including seven from Hawaii, who say they were sexually assaulted. Hawaii officials have said they are removing inmates from the CCA facility. CCA has asked for the lawsuit to be dismissed on procedural grounds.

Meanwhile, CCA's T. Don Hutto facility, which garnered national attention after reports of questionable treatment of immigrant families, will be converted to a female detention center, said company spokeswoman Louise Grant. "If there are any allegations, we rapidly move to take action," Grant said.

In another story ("Private prison firm to give back pay to guards," Kansas City Star, August 31), it has become public record, thanks to a legal intervention by our friends over at Prison Legal News, that CCA agreed in February to pay $7 million to employees to settle a unclaimed pay lawsuit by prison employees.

Nashville-based CCA is one of the three private prison corporations with publicly traded stock on the New York Stock Exchange.  The others are the Boca Raton, Florida-based GEO Group (NYSE: GGI) and Houston's Cornell Companies (NYSE: CRN). You can now follow the fate of the private prison corporations' stock in the stock ticker on the left hand sidebar of the Texas Prison Bid'ness website. 

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ICE: Hutto to stop detaining families; no new family detention centers

It's all the news today; CCA's notorious T. Don Hutto detention center will stop holding immigrant families.  According to the New York Times ("U.S. to Reform Policy on Detention for Immigrants," August 6th)

"[T]he government will stop sending families to the T. Don Hutto Residential Center, a former state prison near Austin, Tex., that drew an American Civil Liberties Union lawsuit and scathing news coverage for putting young children behind razor wire. ...

The decision to stop sending families there - and to set aside plans for three new family detention centers - is the Obama administration's clearest departure from its predecessor's immigration enforcement policies."

Although the facility will continue to hold immigrant women, this is a huge victory for the movement to end family detention as it substantially shrinks the immigrant family detention system, and takes the new family detention centers off the table.  We'll have more updates in the coming days, but in the meantime check out the T. Don Hutto blog or these sources:

"Just-Unveiled Immigration Detention Policies Are Excellent First Step," Women's Refugee Commission, August 6th

"Hutto detention center to change direction," Austin American-Statesman, August 6th

"Feds begin immigration detention makeover" Associated Press, August 6th

Death at CCA's Willacy Unit

We're a few weeks behind on this story, but from the Valley Morning News ("Attorney: Inmate denied asthma pump," July 2), a story about an inmate death at CCA's Willacy County TDCJ Unit. 

An attorney claimed in a statement Wednesday that an inmate who died here in June was denied the use of his asthma pump.

Thomas Detric Adderson, 32, an inmate at the Texas Department of Criminal Justice Willacy Unit in Raymondville, died on June 10 because "his asthma pump was not provided to him," according to a statement released by attorney Juan Angel Guerra, who is representing Adderson's family.

But TDCJ officials and an incident summary released Thursday state that Adderson was given an Albuterol inhalation treatment by nurses using a special breathing machine and was also allowed to use his personal oral inhaler before he went into shock and died about two hours later.

Although the jail is a state prison in the TDCJ system, it is operated by Corrections Corporation of America, a private prison company.  The TDCJ summary stated that Adderson's preliminary cause of death was "severe asthma attack."

While Mr. Guerra states in the story that he hasn't seen an autopsy, we'll do our best to obtain one and publish it here. 

Saturday: World Refugee Day protest at CCA's T. Don Hutto detention center

Corrections Corporation of America's controversial T. Don Hutto immigrant family detention center in Taylor, Texas will be the target of a march, vigil, and protest concert this weekend in conjunction with World Refugee Day. 

National organizations Amnesty International and the League of United Latin American Citizens will join a host of Texas groups including my organization Grassroots Leadership what should be the largest protest at Hutto since the World Refugee Day vigil in 2007. 

JUNE 19: Live Music Fundraiser: Dragon Rojo, Karma, Bajo Influencia, DJ Murdock, DJ Victima. Show starts a 8pm at the Twin Palms (214 Anderson Lane, Austin, Tx). Suggested Donation: $3. For more information, call Matt (512.669.9968) or Omar (469-396-7815).

JUNE 20: March and Vigil at T. Don Hutto.  Please join us for a vigil in Taylor, Texas, to honor World Refugee Day June 20th. The vigil is being organized by a coalition that includes Williamson County residents, the Border Ambassadors, Amnesty International, and the national chapter of LULAC (League of United Latin American Citizens). For more information, please contact Jay J. Johnson-Castro Sr. (830)-734-8636; jay at villadelrio dot com.

Noon: Meet at Heritage Park, 4th and Main Street, Taylor, Texas.*
1 pm: Walk from Heritage Park to T. Don Hutto Family Residential Center.*
2-4 pm: Vigil at TDH, including music and speakers.

More information, including an impressive list of vigil endorsers, is available at the T. Don Hutto blog

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CCA Holds 2009 First Quarter Investor's Call

The Corrections Corporation of America (CCA) held it's investor's call for the first quarter of 2009 earlier this month.  During the call, CCA officials emphasized a positive outlook that drove stock prices to increase by 19% following the conference call.

According to CCA, 9,300 new beds were brought online during 2008 and 2009, and the average daily compensated population increased for the quarter to 4.2% from the the previous year.  CCA remains the nation's largest owner and operator of privatized correctional and detention facilities, managing 64 facilities, 44 of them CCA-owned, designed to house approximately 86,000 prisoners.

On the call, company officials informed investors of a 10,000 bed vacancy among current capacity.  However, folks at CCA implied the for profit business strategy of building prisons on speculation in anticipation of demanded capacity would positively impact investment.

Specifically, CCA officials mentioned the federal stimulus package's assistance in helping states avoid budget shortfalls should help attract new demand to fill currently vacant beds.

CCA reps are projecting the potential demand may come from the 19 states -- including Texas -- the company currently does business with.  According to the company's analysis those states' prison populations will grow in excess of planned capacity past 2013.

It will be interesting to see if CCA's projections bear out.  We will keep following the company's contracts particularly those in Texas.  Stay tuned...

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