New National Study of Corrections Corporation of America Warns Investors and Legislators of Risky Investment. Report explores continuing operational and financial problems; questions CCA's long-term viability as states reassess prison policies.WASHINGTON, DC, December 9, 2003 An analysis of the first two decades of Corrections Corporation of America released today by Grassroots Leadership questions how the nation's largest private prison company can remain viable in the face of continuing operational problems and current national corrections trends modifying lengthy prison terms.
As states struggle though their third consecutive year of fiscal gloom with a cumulative $200 billion in revenue shortfalls, and lawmakers in 25 states implement smarter, shorter and less costly sentencing and correctional reforms, the report draws into question how CCA can possibly keep its cellblocks full.
The 81-page study, commissioned by North Carolina-based Grassroots Leadership, takes an in-depth look at the scandals, deficiencies, and overstatement of performance in more than a dozen states (including Florida, Texas, Tennessee, and Arizona) and the District of Columbia where CCA operates.
The report portrays CCA as a company whose business model is out of step with current national trends in corrections and issues a warning to investors and legislators, emphasizing that the company's performance record is poor and that it is still financially unstable.
"The trend among states to shorten sentences to reduce prison crowding and narrow budget gaps is good public policy, but it makes CCA a risky investment," said Philip Mattera of The Corporate Research Project of Good Jobs First, who helped write the report for Grassroots Leadership.
"Not only will CCA be unable to fill its beds, but the company has not improved operationally and is still mired by debt and controversy since going virtually bankrupt in the late 1990s."
According to a study released last month by Families Against Mandatory Minimums, 25 states are embracing "smart on crime" approaches, rolling back mandatory minimums laws, offering treatment instead of prison time for some drug offenders, and reinstating early release for parole.
These findings suggest A major shift in political will away from lengthy prison terms for low-level offenders, which would seem to pose a challenge for CCA to keep its beds full.
The Grassroots Leadership report, entitled "Corrections Corporation of America: A Critical Look At Its First 20 Years," says CCA's record is an example of how the pursuit of profit stands in the way of carrying out a core public function such as corrections.
Rather than fulfilling the company's original promise to raise standards in corrections, CCA has been marred by scandal and allegations of mismanagement, mistreatment of prisoners, poor training of Employees and manipulation of public policy.
The report also says the public may not know the true extent of CCA's financial instability and organizational challenges and cites a concerted and extensive public relations campaign launched by the company in response to mounting negative media attention.
"States should think twice before signing any new contracts with CCA," said co-author Mafruza Khan, also from Good Jobs First. "This report shows that CCA has not undergone any significant transformation since being racked by scandals at its prisons in the late 1990s. It is still involved in numerous controversies and lawsuits involving conditions in its facilities."
The study also notes hefty campaign contributions by CCA to legislators to drive policies to maintain and grow the prisoner population. The report reviews cases in which CCA appeared to use its contributions and ties with public officials and legislators to help it win new contracts and influence public policy.
According to the Institute on Money in State Politics (www.followthemoney.org), 830 candidates in the 2000 election received contributions from the private prison industry for a total of $1.12 million. CCA was the top Giver with 600 contributions for a total of $443,300. Also documented are CCA's attempts to expand overseas and the controversies that surrounded its joint venture operations in the U.K and Australia.
"Within 20 years CCA went from having global aspirations to disposing of its relatively meager international operations," said Stephen Nathan, an independent journalist and researcher who also co-authored the report.
The report lays out some of the debacles that have consumed CCA in states across the country, for example:
Since 1999, CCA staff members have mistakenly released prisoners more than a dozen times at the then-brand new David L. Moss Criminal Justice Center in Tulsa, Oklahoma. In 2002, the Tulsa County Criminal Justice Authority penalized CCA in conjunction with the erroneous releases of three prisoners. Officials attempted to put blame on low-level employees, yet one employee told a local newspaper reporter, "was never trained how to read court documents. No one ever gave me any formal training on how to do anything down here."
In March 2003, Tamara L. Schlitters filed a federal lawsuit against CCA and various company employees charging that her 26-year-old son, Jeffery Buller, died while in custody allegedly because officials refused to fill a prescription for him, with only ten days left to serve, at Kit Carson Correctional Center in Colorado. Buller died one day before his scheduled release.
In May of 1997, with free land and large tax abatements from the city, CCA opened the Youngstown, Ohio, facility to house prisoners from the District of Columbia. Almost immediately the facility became plagued with stabbings and violence. CCA had to settle a class-action lawsuit that claimed unsafe conditions and paid $1.6 million to prisoners for the facility, which was plagued by violence and considered a "ticking bomb" from the beginning.
In 1998 the uproar over management reached new heights when six prisoners, including four convicted murderers, cut through a gate and escaped in broad daylight.
The prison was finally closed in 2001 after the District of Columbia refused to renew its contract, leaving employees without a job and the town with an empty facility (negotiations are currently underway to re-open the Youngstown facility).
CCA continues to be plagued by the same kind of operational deficiencies, scandals, and mismanagement that characterized its performance during its early years, the report concludes, citing CCA's own acknowledgement that "the operation of corrections and detention facilities by private entities has not achieved complete acceptance by either governments or the public." The report is available online at Grassroots Leadership org
Note to editors and reporters: Interviews with the authors are available by contacting Tonyia Rawls at Grassroots Leadership, 704-968-4916 or agr8image@aol.com.
This report is a joint project of Grassroots Leadership and the Corporate Research Project of Good Jobs First. Grassroots Leadership is a multi-racial team of organizers based in Charlotte, NC.
Its goal is to help Southern community and labor organizations think critically, work strategically and gain power to achieve justice and equity. Grassroots Leadership provides a range of support to Southern organizations and labor unions including public policy development, community education, research, direct action campaigns, coalition building and crisis intervention.
Authors Philip Mattera and Mafruza Khan are with The Corporate Research Project, an affiliate of Good Jobs First in Washington, DC. The project provides strategic information and analysis on companies for labor, environmental, public interest and other activist groups around the country. Author Stephen Nathan is an independent journalist and researcher. He also edits Prison Privatisation Report International, a newsletter published by the Public Services International Research.
Tonyia Rawls posted 10 December 03
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