To be
profitable, private prison firms
must ensure that prisons are not
only built but also filled.
Industry experts say a 90-95 per
cent capacity rate is needed to
guarantee the hefty rates of
return needed to lure investors.
Prudential Securities issued a
wildly bullish report on CCA a
few years ago but cautioned, "It
takes time to bring inmate
population levels up to where
they cover costs. Low occupancy
is a drag on profits." Still,
said the report, company
earnings would be strong if CCA
succeeded in ramp(ing) up
population levels in its new
facilities at an acceptable
rate".
"(There is a)
basic philosophical problem when
you begin turning over
administration of prisons to
people who have an interest in
keeping people locked up" notes
Jenni Gainsborough of the ACLU's
National Prison Project.
Private prison
companies have also begun to
push, even if discreetly, for
the type of get-tough policies
needed to ensure their continued
growth. All the major firms in
the field have hired big-time
lobbyists. When it was seeking a
contract to run a halfway house
in New York City, Esmor hired a
onetime aide to State
Representative Edolphus Towns to
lobby on its behalf. The aide
succeeded in winning the
contract and also the vote of
his former boss, who had been an
opponent of the project. In
1995, Wackenhut Chairman Tim
Cole testified before the Senate
Judiciary Committee to urge
support for amendments to the
Violent Crime Control Act --
which subsequently passed --
that authorized the expenditure
of $10 billion to construct and
repair state prisons.
CCA has been
especially adept at expansion
via political payoffs. The first
prison the company managed was
the Silverdale Workhouse in
Hamilton County, Tennessee.
After commissioner Bob Long
voted to accept CCA's bid for
the project, the company awarded
Long's pest control firm a
lucrative contract. When Long
decided the time was right to
quit public life, CCA hired him
to lobby on its behalf. CCA has
been a major financial supporter
of Lamar Alexander, the former
Tennessee governor and failed
presidential candidate. In one
of a number of sweetheart deals,
Lamar's wife, Honey Alexander,
made more than $130,000 on a
$5,000 investment in CCA.
Tennessee Governor Ned McWherter
is another CCA stockholder and
is quoted in the company's 1995
annual report as saying that
"the federal government would be
well served to privatize all of
their corrections."
In another
ominous development, the
revolving door between the
public and private sector has
led to the type of company
boards that are typical of those
found in the military-industrial
complex. CCA co-founders were T.
Don Hutto, an ex-corrections
commissioner in Virginia, and
Tom Beasley, a former chairman
of the Tennessee Republican
Party. A top company official is
Michael Quinlan, once director
of the Federal Bureau of
Prisons. The board of Wackenhut
is graced by a former Marine
Corps commander, two retired Air
Force generals and a former
under secretary of the Air
Force, as well as James
Thompson, ex-governer of
Illinois, Stuart Gerson, a
former assistant US attorney
general and Richard Staley, who
previously worked with the INS.
http://www.corpwatch.org/article.php?id=867
CXW - Corrections
Corporation of America Stock
Research - Stock ... Research Corrections
Corporation of America with
InvestorGuide.com stock
research tool. CXW quotes,
charts, earnings, profiles,
news, analysis, financials,
... MORE:>>
Corrections Corporation of
America is the nation's
largest owner and operator
of privatized correctional
and detention facilities and
one of the largest prison
operators in the United
States, behind only the
federal government and three
states. CXW currently
operates 65 facilities,
including 44 company-owned
facilities, with a total
design capacity of
approximately 87,000 beds in
19 states and the District
of Columbia. http://www.gurufocus.com/news.php?id=72487
Judges in PA take bribes
from private prisons | media
island ... Feb 19, 2009 ... No charges
have been filed against the
private prisons that paid
the bribes. Pennsylvania's
Supreme Court has appointed
an outside judge to ... MORE:>>
Company
Focus 3 prison
stocks
poised to
break out
Thanks in
part to
overcrowding,
governments
are turning
to private
companies to
build and
manage
prisons.
Here's how
to pick the
right time
to buy into
the trend.
In what
might be a
revealing
commentary
on our
country's
state of
affairs, the
nation's
private
prison
companies
look like
solid
investments
for the next
several
years.
The three
big prison
companies --
Corrections
Corp. of
America (CXW,
news, msgs),
The Geo
Group (GGI,
news, msgs)
and even the
troubled
Cornell Cos.
(CRN, news,
msgs) --
have decent
growth
prospects
for the
following
reasons. Increased
border
patrols. The
Intelligence
Reform and
Terrorism
Prevention
Act of 2004,
signed by
the
president in
December,
calls for
stepped up
border
patrols to
improve
domestic
security.
This makes
it likely
that more
illegal
immigrants
will be
caught.
Lawmakers
estimate
that by 2010
the Bureau
of
Immigration
and Customs
Enforcement
(ICE) will
need another
40,000
prison
"beds," as
they say in
the
business. Governments
are hard up
for cash.
"Because of
tight
budgets,
there has
not been a
lot of new
prison
construction,"
says Irving
Lingo,
Corrections
Corp. of
America's
finance
chief.
Instead,
state and
federal
prison
systems turn
to private
companies
that build
and manage
prisons. In
the 2005
federal
budget, for
example,
Congress cut
prison
construction
spending by
48%, says
Patrick
Swindle, an
analyst who
covers the
sector for
the
brokerage
Avondale
Partners.
Government
prison
systems turn
to the
private
sector in
part because
costs are
10% to 15%
lower. Start
investing
with $100. Government
prisons are
overcrowded
and the
prison
population
will keep
growing.
"Federal
prisons are
at 33%
overcapacity,
and more
than half
the states
are at
overcapacity,"
says
Swindle.
"There is a
scarcity of
beds, and
companies in
the private
prison space
are being
asked to
meet the
demand." Demand
should pick
up over the
next decade
for a simple
demographic
reason. The
children of
baby
boomers, the
so-called
echo boom,
are about to
enter the
18- to
24-year old
age group --
the years
when people
commit the
most crimes.
The Federal
Bureau of
Prisons
estimates it
will have a
36,000 bed
shortfall by
2010, partly
due to this
trend.
The big-fish
theory These
numbers may
not seem
like much.
But it's a
big deal for
the tiny
private
prison
sector,
which houses
only around
7% of the
2.1 million
people in
prison in
the United
States.
To see why,
let's take a
closer look
at some
numbers. The
two federal
agencies,
ICE and FBP,
will need
76,000 new
prison slots
over the
next five
years. That
alone is
more than
the number
of beds now
run by the
biggest
private
prison
company,
Corrections
Corp., which
houses about
70,000
inmates. And
it doesn't
even include
increases in
demand
expected at
the state
level.
More:
http://moneycentral.msn.com/content/P105034.asp
Private
Prison
Companies
Have a Lock
on the
Business
For a land of the free, the U.S. has a lot of prisoners: Over the past 25 years, our inmate population has swelled to 2.38 million, from roughly 700,000. Our incarceration rate is the highest in the world, and our federal prisons are at 137% of their capacity.
This should be good news for the private prisons that absorb the spillover from congested federal and state penitentiaries. But, alas, the recession has ruffled the economics of even law and order. Cash-strapped states are mulling measures, such as quicker paroles and earlier releases.
As a result, private-prison stocks are selling at unusual -- and untenable -- discounts to their historical multiples or value. The three biggest companies are Corrections Corp. of America, which controls 39% of private-prison beds, Geo Group, which runs 25%, and Cornell, with 10%. While their stocks have rebounded recently, they still trade at 12 to 18 times what each is expected to earn in 2010 -- compared with multiples pushing 30 before the financial crisis.
These grim valuations overlook private prisons' steady profitability, their stranglehold on a tough-to-penetrate industry and the chasm between supply and demand. Barclays analyst Manav Patnaik pegs the annual demand for new prison beds at 35,000, and the supply at just 20,000 public and private beds.
Today, budget-constrained states can ill afford the time or capital to build new facilities. And many increasingly find it cheaper to outsource part of their prison system. That explains why half the new inmates over the past year were sent to private prisons, even though less than 9% of U.S. prison beds are privatized.
Any reform that shortens sentences will hurt private prisons. But bulls say that the stocks may have already factored in much of the threat.
Case in point: Colorado wants to cut its prison population by 26%, or 6,000 inmates, over the next two years. But Signal Hill analyst T.C. Robillard doubts the state "can classify a quarter of its inmates as low-risk or near the end of their sentences." Mr. Patnaik pegs the net impact at just 1,000 beds, noting that releases will be offset by new intake.
Besides, private prisons earn steadily recurring revenue, impervious to seasons or business cycles. Customers don't defect easily to competitors. And the facilities tend to be durable, low-maintenance and quite immune to changing architectural whims. http://online.wsj.com/article/SB125641692049506073.html
Privatized Prisons and the Capitalist Drug Syndicate
Wed Aug 25, 2010 10:10
Privatized Prisons and the Capitalist Drug Syndicate
What's the connection between privatized prisons and the global drug
syndicate? ... The focus of the drug war in the United States has
shifted significantly ... http://www.hermes-press.com/prisons_drugs.htm
“We’ve spent a trillion dollars prosecuting the war on drugs,” Norm
Stamper, a former police chief of Seattle, told me. “What do we have to
show for it? Drugs are more readily available, at lower prices and
higher levels of potency. It’s a dismal failure.”
For that reason, he favors legalization of drugs, perhaps by the
equivalent of state liquor stores or registered pharmacists. Other
experts favor keeping drug production and sales illegal but
decriminalizing possession, as some foreign countries have done.
Here in the United States, four decades of drug war have had three
consequences:
First, we have vastly increased the proportion of our population in
prisons. The United States now incarcerates people at a rate nearly five
times the world average. In part, that’s because the number of people in
prison for drug offenses rose roughly from 41,000 in 1980 to 500,000
today. Until the war on drugs, our incarceration rate was roughly the
same as that of other countries.
Second, we have empowered criminals at home and terrorists abroad. One
reason many prominent economists have favored easing drug laws is that
interdiction raises prices, which increases profit margins for everyone,
from the Latin drug cartels to the Taliban. Former presidents of Mexico,
Brazil and Colombia this year jointly implored the United States to
adopt a new approach to narcotics, based on the public health campaign
against tobacco.
Third, we have squandered resources. Jeffrey Miron, a Harvard economist,
found that federal, state and local governments spend $44.1 billion
annually enforcing drug prohibitions. We spend seven times as much on
drug interdiction, policing and imprisonment as on treatment. (Of people
with drug problems in state prisons, only 14 percent get treatment.)
I’ve seen lives destroyed by drugs, and many neighbors in my hometown of
Yamhill, Oregon, have had their lives ripped apart by crystal meth. Yet
I find people like Mr. Stamper persuasive when they argue that if our
aim is to reduce the influence of harmful drugs, we can do better.
Mr. Stamper is active in Law Enforcement Against Prohibition, or LEAP,
an organization of police officers, prosecutors, judges and citizens who
favor a dramatic liberalization of American drug laws. He said he
gradually became disillusioned with the drug war, beginning in 1967 when
he was a young beat officer in San Diego.
“I had arrested a 19-year-old, in his own home, for possession of
marijuana,” he recalled. “I literally broke down the door, on the basis
of probable cause. I took him to jail on a felony charge.” The arrest
and related paperwork took several hours, and Mr. Stamper suddenly had
an “aha!” moment: “I could be doing real police work.”
It’s now broadly acknowledged that the drug war approach has failed.
President Obama’s new drug czar, Gil Kerlikowske, told the Wall Street
Journal that he wants to banish the war on drugs phraseology, while
shifting more toward treatment over imprisonment.
The stakes are huge, the uncertainties great, and there’s a genuine risk
that liberalizing drug laws might lead to an increase in use and in
addiction. But the evidence suggests that such a risk is small. After
all, cocaine was used at only one-fifth of current levels when it was
legal in the United States before 1914. And those states that have
decriminalized marijuana possession have not seen surging consumption.
“I don’t see any big downside to marijuana decriminalization,” said
Peter Reuter, a professor of criminology at the University of Maryland
who has been skeptical of some of the arguments of the legalization
camp. At most, he said, there would be only a modest increase in usage.
Moving forward, we need to be less ideological and more empirical in
figuring out what works in combating America’s drug problem. One
approach would be for a state or two to experiment with legalization of
marijuana, allowing it to be sold by licensed pharmacists, while
measuring the impact on usage and crime.
I’m not the only one who is rethinking these issues. Senator Jim Webb of
Virginia has sponsored legislation to create a presidential commission
to examine various elements of the criminal justice system, including
drug policy. So far 28 senators have co-sponsored the legislation, and
Mr. Webb says that Mr. Obama has been supportive of the idea as well.
“Our nation’s broken drug policies are just one reason why we must
re-examine the entire criminal justice system,” Mr. Webb says. That’s a
brave position for a politician, and it’s the kind of leadership that we
need as we grope toward a more effective strategy against narcotics in
America.
American Jury Institute/Fully Informed Jury Association: Home A non-profit educational association whose mission is to inform all
Americans about their rights, powers and responsibilities when serving
as trial jurors http://www.apfn.org/apfn/judge.htm
Corrections Corporation of
America (CCA) Commentators and human rights activists have raised concerns
about the morality imprisoning humans for profit. Traded on the New York
Stock Exchange, investors have an interest in keeping private prisons
filled. Industry experts say a profitable prison must have a 90-95 percent
capacity rate. In a 1990's report, Prudential Securities was bullish on CCA
but noted, "It takes time to bring inmate population levels up to where they
cover costs. Low occupancy is a drag on profits... company earnings would be
strong if CCA succeeded in ramp(ing) up population levels in its new
facilities at an acceptable rate"
http://en.wikipedia.org/wiki/Corrections_Corporation_of_America
"WACKENHUT" AND "XE"
As you read on, one company has over 700 government contracts
out of just over 900 security contracts available of which most are
“Non-Bidding”. Talk about competition being alive and well. Their histories
are made for the wide screen. Corruption, fraud, deceit, personal data
collection, graft and even unproven but connected murder. What is scary is
the fact these corporations are world wide in their business’s and therefore
out of the jurisdiction of American influence and laws in some instances.
Xe: ( previously Blackwater Worldwide.) More here:
http://www.redroom.com/blog/warren/wackenhut-and-xe
snip) In
addition, private prisons have substantially greater market accountability
because they are concerned with winning new contracts and renewing old ones, and
with avoiding both adverse publicity and drops in stock price.
2. Private Prisons� Market Accountability. � Market mechanisms, such as
governments� ability to rescind or decline to renew private firms� contracts,
and more generally, the potential for bad publicity to cause a drop in firms�
stock prices, further increase private prison companies� accountability
b) Adverse Stock Price Effects. � Private corporations are sensitive to drops in
their stock prices.� Contract rescission, as well as the possibility of lawsuits
with high damage awards, affects profitability, and perceptions of a company�s
profitability are reflected in the price of its stock.� Thus, a private
corporation is punished financially for bad news, and possibly for mismanagement
that may impose costs in the future.� For example, the INS detention center in
Elizabeth, New Jersey, run by Esmor Corrections, erupted in a massive riot in
1994 because the company had continuously cut corners on food and facility
upkeep.� Esmor�s stock price dropped from $20 a share to $7 after news of the
riot became known.[109] snip)
More:
http://volokh.com/sasha/prisons.html
Operation: 'Fast
and Furious' Gun Running
