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Corrections Corporation of America Message Board

  • fatoobs2003 fatoobs2003 Feb 17, 2009 1:23 PM Flag

    Good News Private Prison Industry

    Article from Dollars & Sense (Feb. 13, 2009);

    Full article can be found at http://www.dollarsandsense.org/archives/2009/0109barry.html

    Depending on Immigrants:
    The uptick in immigrant detention that saved the industry in 2000 (see sidebar) turned into a mighty upswing in demand for immigrant prison beds after Sept. 11 and the ensuing immigrant crackdown. The Corrections Corporation of America (CCA) has reported record profits for the last few years, largely on the strength of increasing demand from its ICE and USMS “customers.”

    Forty percent of total CCA revenue comes from three federal contractors: Bureau of Prisons, U.S. Marshals Service, and ICE. In its 2007 Security and Exchange Commission filing, CCA stated: “We are dependent on government appropriations.” CCA Chairman William Andrews warned investors that the company’s high returns could be threatened by a change in the policy environment: “The demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts…or through the decriminalization of certain activities that are currently proscribed by our criminal laws.”

    But to understand just how well the prison business is faring and how immigrants are key to prison profits, you can listen in on the prison firms’ quarterly conference call with major Wall Street investment firms of November 2008.

    Corrections Corporation of America boasted that it enjoyed a $33.6 million increase in the third quarter over last year, while earnings rose 15% during the same period. Formerly known as Wackenhut, GEO Group, the nation’s second largest prison company, saw its earnings jump 29% over 2007. Cornell Companies, another private prison firm that imprisons immigrants, reported a 9% increase in net revenues in the third quarter.

    Private prison companies aren’t worried that the Democratic Party sweep will mean fewer beds. GEO Group’s chairman George Zoley on Nov. 3 assured investors: “These federal initiatives to target, detain and deport criminal aliens throughout the country will continue to drive the need for immigration detention beds over the next several years and these initiatives have been fully funded by Congress on a bipartisan basis.”

    Addressing investor fears that recent decreases in undocumented immigration inflows might dampen company returns, CCA CEO and board chairman John Ferguson said, “So even though we have seen the border crossings and apprehensions decline in the last couple of years, we are really talking about dealing with a population well north of 12 million illegal immigrants residing in the United States.”

    The CCA chief assured investors that the company’s dependence on detained immigrants is not a factor of policy but rather of law enforcement. “The Federal Bureau of Prisons, U.S. Marshals Service, Immigration and Custom Enforcement are carrying out statutory obligations for their responsibility….We should continue to see their utilization of the private sector to meet their statutory obligations and requirements.”

    The prison executives even intimate that the economic crisis will fatten their business. When asked by an investment company representative about a Ü possible downturn in detained immigrants, James Hyman, president of Cornell Companies, said, “We do not believe we will see a decline in the need for detention beds particularly in an economy with rising unemployment among American workers.”

 
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