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The GEO Group's 2009 Q3 Conference Call Tells of Vacancies and Sale/Leaseback Initiatives

The GEO Group recently held their Quarter 3 investor conference call for the year. As usual, the call started off with the basic financial information. Their quarterly revenue went up from last quarter, $276 million to $295 million, with a projected Q4 revenue of $313-318 million. However, their average domestic U.S. per-diem fell from last quarter, down 24 cents to $53.73 from $53.97. The executives were eager to reassure their investors that with their average of $67.00 for their international per-diem rates that the drop was not a problem for them overall. Most of the conference call was centered about the next topic: that the company is suffering drops in occupancy rates. The average occupancy rate for Q3 was 95%, down from 97% last year at this time. Their initial response was that this rate had fallen because the company just added a lot of additional beds. However, investors were not taking the bait on this one, as empty new beds are just as detrimental to profit as old empty beds. This comment was odd, because an investor asked about the company's view of speculatively building prisons, to which GEO Group CEO George Zoley replied, "we will not proceed with any speculative building in advance of any contract award...that's not to say we are not prepared for any future opportunities." If the company wasn't interested in speculatively building, why would they have brand new empty prison beds that are hurting their occupancy rates? When one investor asked what the real problem was, Mr.

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"A Death in Texas": More excellent coverage of immigrant detention complex from Tom Barry

Tom Barry continues his excellent coverage of the growing system of private prisons detaining immigrants for ICE, the U.S. Marshals, and the federal prison system in a new article in the Boston Review ("A Death in Texas: Profits, Poverty, and Immigration Converge," November/December 2009) online this week. 

Barry, whose excellent blogging over at the Border Lines Blog, has covered the growing immigrant detention industrial complex in the context of the mess that is the Reeves County Detention Center out in Pecos.  In this new article, Barry takes a comprehensive look at the policies and poverty that have driven poor rural Texas towns into the prison industry, and what some of the disasterous results have been.  Here's a brief sample:

Debbie Thomas, curator of the West of the Pecos Museum (commonly known as the cowboy museum), sighs when asked about the town’s only steady business over the past two decades. “Well, we don’t want to be known as a prison town, but it’s better than being a ghost town,” she says. Pecos was once a busy crossroads and hub of industry. Today, the downtown is dead.  In 1985 Reeves County became the first of a few dozen Texas counties to get into the speculative prison business, when Judge Jimmy Galindo (no relation to Jesus Manuel Galindo) persuaded the County Commissioners Court to take a bold step for Pecos’s economic future. At the time, Judge Galindo and other county leaders argued that Pecos could cash in on the surge in incarceration rates that accompanied the war on drugs. Years later, for the prison’s two expansions, the county and the private operators would rely on the federal government to send them immigrant inmates.

GEO Group pulls out of contract for Jefferson County lock-up, leaves County scrambling

The GEO Group has pulled out of a contract to operate the Jefferson County jail in Beaumont leaving the county in precarious position, according to an article yesterday in the Beaumont Enterprise ("County has 60 days to find firm to run jail," September 14):

Jefferson County has less than 60 days to find an operator for the jail at the courthouse in Beaumont if it wants to keep a contract to house Harris County prisoners.

The contract, signed last month, called for Jefferson County to house about 400 of Harris County's overflow inmates in the downtown Beaumont jail at the courthouse.

The jail operator, Geo Group Inc., was to charge Harris County $42.50 per inmate per day. Of that money, Jefferson County was to receive $9 for each inmate per day. The total contract was estimated to be worth $2.5 million.

Geo notified the county last week that in 60 days it will terminate its contract to run the jail.

We'll keep you posted on developments from Jefferson County.

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The GEO Group's 2009 Q2 Conference Call Outlines Plans for Profit

On August 3rd, The GEO Group held their second quarter conference call for investors. In this meeting, the company outlined the deals that have been enacted so far this year as well as plans for future profit. Their total Q2 revenue came to $276 million, which they stated would rise to $300 million by the end of next quarter. The company CEO, George Zoley, attributed this expected rise in revenue to the 5,900 additional beds created in 2008 which have been filling up. He additionally noted the significance of the 100 bed addition to the Florida's Broward Transition Center contracted with ICE, as well as the 192 bed expansion to Georgia's Robert Deyton Detention Facility which is contracted with the U.S. Marshals.

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Fitch downgrades Littlefield's bond rating after Idaho removes prisoners from GEO lock-up

In a fascinating and disturbing example of what can go wrong when a locality finances a speculative prison, the Fitch ratings agency has downgraded the City of Littlefield's bond rating after the city's GEO-operated Bill Clayton Detention Center lost its contract to hold Idaho prisoners, and has subsequently been dumped by the private prison corporation. 

According the Ad Hoc News article ("Littlefield, - Fitch Downgrades Littlefield, TX' COs to 'BB'; Outlook Negative," August 24th)

GEO's Montgomery County facility's week without air

It has only been about two weeks since the Montgomery County scandal regarding budget shenanigans providing an under the table contract for The GEO Group to open a new psychiatric hospital to shadow the County jail. However, the jail is in the news again, this time because of reports from the counsel of R. Allen Stanford ("Stanford feels the heat in Conroe cell," Houston Chronicle, July 27):

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GEO uses influence to win psychiatric contract; Advocates raise eyebrows and concerns

Via Grits' excellent post ("Geo Group secretly snagged forensic psych hospital contract in budget conference committee," July 11), we find out that the GEO Group has won a contract for a new state psychiatric hospital in Montgomery County, through it's medical subsidiary GEO Care.  

Here's how the Dallas Morning News's Emily Ramshaw ("Troubled prison firm's deal for new psychiatric hospital raises questions," July 11) starts that paper's Saturday story on the scandal,

A private prison company's history of filthy conditions, sexual abuse, suicides and riots in some of its Texas lockups isn't stopping the state from paying it $7.5 million to run a new psychiatric hospital near Houston.

Lawmakers inserted an earmark into the state budget to fund the future Montgomery County facility starting in 2011. But they said they didn't know until this week that the county had selected the GEO Group to operate it, although GEO lobbyists were pushing for it as early as February.

The new facility came as a post-session shock to mental health advocates, who acknowledge the need for it. But they say they weren't informed about it and never would have signed off if they knew Florida-based GEO was operating it.

Mental health advocates are rightly pissed off about what appears to be an allocation of money behind closed doors and without Department of State Health Services requesting the funding.  

Two former GEO guards end up at company's Val Verde lock-up

Two former guards at the GEO Group's troubled Val Verde Correctional Center have been indicted on separate charges, according to an article in the Del Rio News-Herald ("Jailers jailed," May 20th),

Two former jailers recently became guests of the facility where they once worked, after one of them was arrested for burglarizing the home of a friend and the other allegedly tried to smuggle a bottle of cheap wine and love letters to an inmate.

Cristela Ramirez, 20, no address available, was arrested following an indictment on a charge of burglary of a habitation, and Bertha Alicia Martinez, 25, Lot 10 Cerezo St., was arrested on a felony charge of prohibited substances and items in an adult or juvenile correctional or detention facility, investigators with the Val Verde County Sheriff’s Office said.

Read some the previous Texas Prison Bid'ness coverage of the Val Verde Correctional Center:

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GEO Group remains quiet in face of criticism, but talks to investors about profits

Matt Pulle at Texas Watchdog has this follow-up from his story earlier this week on the GEO Group's connections to two Texas legislators. This time he muses on the GEO Group's silence on his story.  

In our story this week about how two Texas lawmakers have financial ties to the GEO Group, we tried to call the private prison company’s spokesperson Pablo Paez, particularly because we detailed the firm’s many troubles, including inmates’ deaths, riots and dangerous, filthy conditions. We never heard from him.

We don’t take it personally, though. Paez is apparently a man of few words.

In 2007, the Associated Press reported about the suicide of an Idaho man who was doing a stint in a GEO Group prison in Dickens County, Texas. Idaho had been sending its prisoners here to ease overcrowding in their own facilities. An Idaho corrections official referred to the particular GEO Group prison as “the worst facility he had ever seen,” and that it was beyond repair.

Paez declined to defend his company.

Within days, Idaho moved its prisoners out of Dickens County.

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25 GEO Prisoners Indicted for December Riot

The title says it all.  From the KWES ("25 Inmates Indicted in Connection to RCDC’s First Riot"),

The U.S. District Court in Pecos has released documents showing 25 inmates at the Reeves County Detention Center (RCDC) were indicted for their part in the first riot at the prison.

The federal grand jury documents show those inmates conspired to cause the riot that broke out December 12th at RCDC buildings one and two.

Those inmates set fire to several buildings and held two workers there against their will for hours.

At the time, inmates said they were rioting because they wanted better healthcare and asked to speak with the Mexican consulate.

A second riot broke out about a month later on January 31st and lasted several days.

Both uprisings did millions of dollars in damage to the private prison near Pecos.

Of course, this story raise the real question - who at the GEO Group or Reeves County will be held accountable for creating the conditions that led this riot?  Prison riots don't just happen; they are a response to poor conditions and poor security, two things that seem to be increasingly endemic to the GEO Group's Texas operations. 

See our previous coverage of the Reeves County Detention Center: 

Another Death at GEO's RCDC,  March 27, 2009

GEO Riots Could Cost Reeves County More than $1 Million, February 27, 2009

Family Members Protest GEO Group in Reeves County, February 14, 2009

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