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California | Santa Cruz Indymedia | U.S. | Global Justice and Anti-Capitalism | Police State and Prisons
Corrections Corporation of America: The Dismantling of a National Disgrace
Exploding corrections budgets have forced states to enact bi-partisan criminal justice reforms to reduce their prison populations. The US prison population peaked in 2009. Since then, states across the country have closed prisons due to excess capacity and generational low crime rates. Faced with empty beds, demand concerns, and a bleak outlook, this report details why we expect Corrections Corporation of America’s earnings to get smacked under the weight of current and future contract losses.
Corrections Corporation of America
Release Date: 9 July 2013
Summary (see PDF for full report)
In the last few decades, the United States has witnessed an explosion in the number of people behind bars. This move towards mass incarceration is an anomaly that began in the 1980s, prompted by the War on Drugs and a slew of tough-on-crime laws which were adopted nationwide.
Over that period, the national prison population grew so quickly that federal and state governments simply ran out of space for offenders. As a result, government agencies began contracting with newly-established private prison operators to handle the overflow.
Having seen mass incarceration as an opportunity for profit,1 the private prison industry grew rapidly, in lock-step with the US prison population, to the multi-billion dollar industry it is today. And leading this industry is Corrections Corporation of America (“CCA”), a publically-traded prison operator with a history of horrendous prison conditions and human rights abuses.
In the process of building the largest prison system in the world, state budgets have exploded into an unmitigated disaster as correctional spending has become the fastest growing area of expenditure, behind Medicaid. As a result, all stripes of government have been forced to undertake sweeping reforms to reduce their prison populations and cut their corrections spending.
The US prison population peaked in 2009. Since then, states have embraced a cascade of criminal justice reforms designed to reduce incarceration rates and dismantle 30 years of over-criminalization and draconian sentences, which were once popular, but now only seen as a burden on taxpayers. Most incredible of all is that these reforms have been the result of bipartisan action. Where historically the ills of mass incarceration were a liberal issue, conservatives are joining the fight on financial concerns.
The damage these reforms are causing CCA is obvious. For example, CCA has halted a major construction project, is experiencing a glut of empty beds, and is expected to report its first-ever annual revenue decline this year. In fact, a number of CCA’s customers are terminating some or all of their contracts with the Company. Notably, California which represents 12.2% of CCA’s revenue base is expected to cancel all its contracts with the Company in the next few years.
With the US prison population declining and CCA no longer expanding organically, Management is swinging for the fences with a new growth strategy of acquiring and managing public facilities. In doing so, CCA is touting the supposed cost-savings of privatization. So far, not a single state has taken CCA up on its offer – no doubt because multiple independent and government studies have concluded that private prisons are no more cost-effective than state prisons. For example, in 2010, the Auditor General of Arizona issued a report slamming private prisons as costing as much as 16% more than state facilities.
CCA converted to a REIT this year, and as a result, its share price exploded upwards. But what may be lost on shareholders is that CCA operated as a REIT once before in the late 1990s. Its first foray into the REIT world ended in near bankruptcy. Today, CCA is facing revenue contraction, dwindling demand, and a bleak outlook. From here the road is a short one to earnings issues and dividend cuts.
You should have expected us
anon.analytics [at] neomailbox.net
"The oldest and largest for-prison company is not what it would have you believe, at least according to Anonymous. A faction of the hacktivist group released this report this morning concluding that the publicly traded prison operator Corrections Corporation of America (CCA) is not an efficient, profitable free-market solution -- but a bad investment for shareholders." -- ACLU
The United States prison system has been a costly and harmful failure in recent years. It has also become big business and a large source of revenue despite what the government claims. As of 2011a combined total of 6,977,700 were either incarcerated in a federal or state prison or on parole which means that the United States has the highest inmate population on the planet. Arresting and incarcerating American citizens has become the new slave trade in America. A large percentage of inmates work daily for a pittance. For the tycoons who have invested in the U.S. prison industrial complex, it has been like finding a pot of gold. They don't have to worry about strikes or paying unemployment insurance, vacations or worker's compensation time. All of their workers are full-time and never arrive late or are absent because of family problems; moreover if they don't like the pay of 25 cents an hour and refuse to work they are locked up in isolation cells.
No other society in human history has locked up so many of it's own citizens. The private contracting of prisoners for work fosters incentives to arrest and lock people up. Prisons simply depend on this for income. Corporate stockholders who make >money off prisoners lobby for longer sentences in order to expand their workforce. This system feeds itself says a study by the Progressive Labor Party which accuses the prison industry of "being an imitation of Nazi Germany with respect to forced slave labor and concentration camps. This multi-million dollar industry has it's own trade exhibitions, conventions, websites and mail-order/internet catalogs. It also has direct advertising campaigns, architecture companies, food supply companies, armed security and padded cells in a variety of colors.
So what do these prisoners produce you may ask. They manufacture military helmets, ammunition belts, bullet-proof vests, ID tags, shirts, pants, tents, bags and canteens. Along with war supplies prison workers also supply you with paint, paintbrushes, stove parts and assembly, body armor, home appliances, headphones, microphones, speakers, office furniture, airplane parts, medical supplies, and much more. Prisoners are even raising seeing-eye dogs for blind people all for a quarter an hour. In the past few years crime overall has gone down but the prison population has dramatically spiked up. The reason why has already been laid out to you. The penalties for petty crimes has gotten worse over the past few years such as one case of a man being incarcerated for stealing a car and two bicycles receiving three 25 year sentences.
The new passage of laws require minimum sentencing witout regard for circumstances. Profits are so good that now there is a new business: importing inmates with long sentences, meaning the worst criminals. When a federal judge ruled that overcrowding in Texas prisons was cruel and unusual punishment, the CCA signed contracts with sheriffs in poor counties to build and run new jails and share the profits. Private prisons are the biggest business in the prison industry complex. About About 18 corporations guard 10,000 prisoners in 27 states. The two largest are Correctional Corporation of America (CCA) and Wackenhut, which together control 75%. Private prisons receive a guaranteed amount of money for each prisoner, independent of what it costs to maintain each one. According to Russell Boraas, a private prison administrator in Virginia, “the secret to low operating costs is having a minimal number of guards for the maximum number of prisoners.” The CCA has an ultra-modern prison in Lawrenceville, Virginia, where five guards on dayshift and two at night watch over 750 prisoners. In these prisons, inmates may get their sentences reduced for “good behavior,” but for any infraction, they get 30 days added which means more profits.
This abuse ends now. Anonymous sees through your deceit and will stop at nothing until the United States Prison System and affiliated corporations see the error of their ways. We will decimate any website in affiliation with this modern slave trade regardless of it being Federal, State or private corporation. You will not walk away unscathed and you will feel the full unbridled wrath of Anonymous. You will cease and desist the arrest and detention of American citizens for petty crimes such as larceny or minor traffic crimes, You will treat inmates with dignity and respect. They are still Americans regardless of their crimes and will be treated with the same liberties that free men are entitled too.
We are many and you are few. If our demands are not met we will show you the true meaning of Justice.
We are Anonymous.
We are Legion.
We do not forgive.
We do not forget.