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Corrections Corporation of America Message Board

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  • newMK newMK Mar 18, 1999 7:32 PM Flag

    For All 2

    You have recently posted regarding two issues
    (one germane to PZN, one not)in stark shades of black
    and white. Unfortunately, things are not quite so
    simple, and you need to let a little gray or some gentle
    pastels into your thinking.

    Regarding the effect
    of escapes, nic is closer to fact than you. Putting
    all escapes into the category of Youngstown is a big
    mistake. From my remote vantage point, it appears that CCA
    was in over its head with Youngstown, or at best
    severly snake-bitten. Every successful business screws up
    at least once (remember GE and diamonds?). Yes,
    Youngstown affected the stock price and it should have,
    because there was financial consequence. There is no
    evidence that other incidents did. If in total these
    incidents indicate pervasive mismanagement, PZN will be
    further punished - first by the contracting agencies,
    then by the stock market. I don't believe it has
    reached that point. Again, avoiding such consequences is
    an incentive that public sector operators don't
    face.

    Issue 2 is Charlie Thomas. He championed
    privatization long before he received any money from the
    private sector. He became "the" expert - so much so that
    analysts still trusted his research even when told of his
    private compensation, which he received because of that
    experise and his bias toward privatization. I don't
    believe he's ever been in a position, while compensated
    by PZN, to award them a contract, if ever. And, in
    fact, is he any less conflicted than a government
    employee involved in awarding contracts to private
    entities or monitoring them who is paid by the state with
    which PZN supposedly competes? Or how about Janet Reno,
    who issued the investigatory report on Youingstown -
    isn't her boss somewhat beholden to union lobbyists who
    fight privatization every step of the way?

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    • Even WHC, which benefits from Charlie�s
      optimistic projections, did not supply him with statistics
      because they felt his numbers were skewed. The notes in
      his latest stats reflect this issue. Beyond that, the
      stats are definitely biased. Unfortunately, Charlie had
      the most comprehensive data set (biased or not). The
      Criminal Justice Institute just really started collecting
      stats on private prisons so Charlie was the only game
      in town. In general, there are problems with public
      and private facilities and the entire law enforcement
      and corrections system. Wall Street won�t penalize
      public prisons because of mismanagement, but privateers
      will be penalized because of occurrences like
      Youngstown. This is why CCA embarked upon a national media
      campaign. They realize these �horror� stories can drive
      them out of business. CCRI has practically been driven
      out of business because of the video-taped beating of
      inmates that was broadcast nationwide a couple of years
      ago. As far as public vs private accounting, I agree
      with the comments you guys have made.

 
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