Corrections Corporation of America
|Traded as||NYSE: CXW|
|Founded||Nashville, Tennessee, U.S. (1983)|
|Founder||Thomas W. Beasley
T. Don Hutto
Doctor Robert Crants
|Headquarters||Nashville, Tennessee, U.S.|
|John D. Ferguson
Chairman of the Board
Damon T. Hininger
President & CEO
|Revenue||$ 1.736 billion|
|$ 332.06 million|
|$ 162.51 million|
|Total assets||$ 3.020 billion|
|Total equity||$ 1.408 billion|
Number of employees
|16,750 – December 2011|
|Footnotes / references
2011 financial statements
Corrections Corporation of America (CCA) is a company that owns and manages private prisons and detention centers and operates others on a concession basis. Co-founded by Thomas W. Beasley, a leader in the Republican Party, Doctor Robert Crants, and T. Don Hutto in 1983, it received initial investments from Hospital Corporation of America's founder Jack C. Massey, the Tennessee Valley Authority, and Vanderbilt University.
As of 2015, the company is the largest private corrections company in the United States. It manages more than 65 correctional and detention facilities with a capacity of more than 90,000 beds in 19 states and the District of Columbia. The company’s revenue in 2012 exceeded more than $1.7 billion.
Controversies related to the company include: treatment of inmates and disclosure of oversight, lobbying efforts to conceal details of operations, a lawsuit about gang influence in Idaho prison and substantial falsification of records, co-operation with local law enforcement in a school drug sweep, and the deadly 2012 riot in a Mississippi facility.
- 1 History
- 2 Overview
- 3 Immigrant Detention Facilities
- 4 Closed Facilities
- 5 Controversies
- 6 See also
- 7 References
- 8 External links
Corrections Corporation of America (CCA) was founded in Nashville, Tennessee, on January 28, 1983, by Thomas W. Beasley, Doctor Robert Crants and Terrell Don Hutto. Beasley served as the chairman of the Tennessee Republican Party; Crants was the chief financial officer of a real estate company in Nashville; Hutto was the president-elect of the American Correctional Association. A founding member of its board of directors was Maurice Sigler, the former chairman of the United States Board of Parole. The initial investment came from Jack C. Massey, the co-founder of the Hospital Corporation of America. An early investor prior to its IPO was Vanderbilt University, where Beasley was a law graduate. Additionally, the Tennessee Valley Authority was another early financial backer.
The company opened its first facility, the Houston Processing Center, in 1984; under contract to the U.S. Department of Justice for the Bureau of Immigration and Customs Enforcement (formerly Immigration and Naturalization Service). The Houston Detention Center was built to house individuals awaiting a decision on immigration cases or repatriation.
In 1984, CCA also took over the operations of the Tall Trees non-secure juvenile facility, for the Juvenile Court of Memphis and Shelby County. Two years later, CCA built the 200-bed Shelby Training Center in Memphis to house juvenile male-offenders.
The Leavenworth Detention Center, operated for the U.S. Marshals Service, was opened in 1992. This 256-bed facility was the first maximum-security private prison under direct contract with a federal agency.
CCA entered the United Kingdom in 1992, when it entered a partnership with Mowlem and Sir Robert McAlpine to form UK Detention Services. It opened the 650-bed Blackenhurst prison in Worcestershire, England.
The stockholders are mostly corporate entities. Research published in Social Justice by scholars at Rutgers University showed that in 2007, the company had "114 institutional stockholders that together amount[ed] to 28,736,071 shares of stock." The scholars added, "The largest number of shares of CCA stock is held by RS Investments (3,296,500), WesleyCapital MGMT (2,486,866) and Capital Research and MGMT (2,057,600)."
In 2010, the ACLU filed a lawsuit on behalf of inmates at the Idaho Correctional Center, claiming that understaffing contributed to the high levels of violence there. In 2014, the Federal Bureau of Investigation (FBI) began an investigation into CCA management of the ICC to ascertain whether any Federal statutes were violated because of the understaffing of the facility and what had been found to be falsification of staffing records.
Founded in 1983, Corrections Corporation of America (CCA) owns or operates jails and prisons on contract with federal, state and local governments. CCA designs, builds, manages and operates correctional facilities and detention centers for the Federal Bureau of Prisons, Immigration and Customs Enforcement, the United States Marshals Service, as well as state and county facilities across the United States.
CCA houses approximately 90,000 offenders and detainees in its more than 60 facilities; it employs more than 17,000 persons nationwide.
The American Correctional Association (ACA) has accredited 90% of CCA's facilities. ACA's Accreditation is a system of verification that correctional agencies and facilities comply with national standards promulgated by the American Correctional Association. Accreditation is achieved through a series of reviews, evaluations, audits and hearings.
A critical aspect of America’s prison system includes reentry and rehabilitation programs for inmates. Such programs often include education, vocational training, addiction treatment as well as faith-based programs.
CCA says it offers basic adult education, post-secondary education, GRE preparation, and testing and literacy programs to all inmates. The Department of Justice's Bureau of Justice Statistics reported in 2008 that only 60% of privately run facilities offered programming to inmates. According to national research, providing inmates with education and vocational programs can reduce the likelihood that offenders will commit new offenses upon release and return to prison.
In 1993, CCA launched the LifeLine substance abuse training program at the Metro-Davidson County Detention Facility in Nashville, Tennessee. In the early 21st century, CCA offers the program in 23 of its 60 facilities.
In addition to the reentry and rehabilitation programs, prisons often offer inmates recreational and optional faith-based opportunities. The latter is considered an integral part of inmate rehabilitation
Occupancy and profitability
In a 1990s 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".
In 2011, responding to an initiative from the State of Ohio to reduce "overhead costs by saving $13 million annually while adding 700 beds to house inmates in the overcrowded system," Corrections Corporation of America agreed to buy the Lake Erie Correctional Institution for $72.7 million. This is a change in company policy, as previously CCA had always constructed their own prisons. Their purchase was contingent on the Ohio Department of Rehabilitation and Correction agreeing to contractual occupancy requirements. The failure to find a buyer for many other prisons which the State offered for sale was taken as good news by the Ohio Civil Service Employees Association, the union for prison guards.
In 2012, CCA sent a letter to prison officials in 48 states, offering to buy prisons from these states in exchange for a 20-year management contract and a guaranteed occupancy rate of 90%. Community organizations have criticized the proposals, arguing that the contractual obligations of states to fill the prisons to 90% occupancy are poor public policy that could force communities into creating criminals. They believe that these contractual clauses end up costing taxpayers more than state-run prisons would.
CCA was named in 2008 as one of the 100 best corporate citizens by Corporate Responsibility Officer magazine. The national military magazine GI Jobs has highlighted CCA as a solid employer for veterans; It has ranked CCA as one of its "Top 50 Military Friendly Jobs" on four[not in citation given] separate occasions.
But in 2010, a Muskogee, Oklahoma federal court jury found CCA guilty of violating the employment rights of a shift supervisor by terminating his job when he was deployed to Iraq. It determined that CCA should pay about $53,000 in damages for violation of the Uniformed Services Employment and Re-employment Rights Act.
Immigrant Detention Facilities
T. Don Hutto Residential Center
The T. Don Hutto Residential Center is a former medium-security prison in Taylor, Texas, which, from 2006 to 2009, held immigrant detainees ages 2 and up under a pass-through contract with Immigration and Customs Enforcement (ICE) division of Homeland Security. After local and national protests, federal officials announced on August 6, 2009, that it would no longer house immigrant families in this prison. Instead, only female detainees will be housed there. In September 2009, the last families left the facility and were moved to the Berks Family Residential Center in Pennsylvania. In November 2015, a hunger strike at the Hutto Center quickly grew to include 500 immigrant females. They were protesting their extended detention in this center.
Eloy Detention Center
The Eloy Detention Center of Arizona, operated by CCA, has had 14 detainee deaths in 12 years, including five by suicide. Congressman Raúl Grijalva, D-Ariz., said these events made it "the deadliest immigration detention center in the U.S.;" in late July 2015 he called for an independent investigation into the most recent suicide.
CCA closed the Huerfano County Correctional Center at Walsenburg, Colorado, in 2010. CCA appealed an initial county assessment of $30.5 million in property taxes for 2010. CCA's deal with the county specified CCA would pay only $19 million for 2011 and $15 million for each of the next three years.
- As of June 2013, Kentucky did not renew its contract with Corrections Corporation of America for the Marion Adjustment Center in St. Mary, ending three decades of contracting with private companies to incarcerate inmates for the state.
- The Lee Adjustment Center, in Beattyville, Lee County, held Vermont prisoners in addition to those from Kentucky, until 2015. In September 2004 a riot broke out involving Kentucky and Vermont prisoners.
- The Otter Creek Correctional Center, located in Wheelwright, Floyd county, suffered a riot in July 2001, involving Kentucky and Indiana male prisoners. It was closed by CCA and converted to a women's prison. Following numerous reports of sexual abuse by its staff, including a chaplain, of female inmates from Hawaii and Kentucky, those states removed their prisoners from the facility in August 2009. CCA closed the facility in 2013.
Appleton, Minnesota, in Swift County, is home to a vacant medium-security prison, the Prairie Correctional Facility, which CCA closed in 2010. Although the state corrections needs additional capacity, neither the Department of Corrections nor the governor favor leasing the prison or contracting with CCA to operate it. In November 2015, state Corrections Commissioner Tom Roy said he was not ruling out use of Appleton, but said he does not like the basic principle underlying private prisons. "The notion of incarceration for profit," he said, "I don't think is very popular in this state."
Treatment of inmates and disclosure of shortcomings of oversight
Responding to an inmate's death in 2006 at CCA's immigration jail in Eloy, Arizona, government investigators found the medical care provided meant that "detainee welfare is in jeopardy". A subsequent inmate death at the facility resulted in an additional inquiry and "another scathing report," according to the New York Times.
In 2013, CCA confirmed that an internal review showed the corporation had falsified records involving about 4,800 employee hours over a period of seven months in the Idaho state prison it operated. In 2014 a subsequent KPMG audit showed the actual overbilling was for over 26,000 hours. Governor Butch Otter ordered Idaho State Police to investigate to see if criminal charges should be brought. Otter had received a total of $20,000 in campaign contributions from employees of the company since 2003.  In March, the state announced that the FBI was taking over the investigation, as well as investigating CCA operations in other states.
CCA has been criticized for hiring "revolving door" executives from agencies with which it has contracted. Harley Lappin and J. Michael Quinlan, former directors of the Federal Bureau of Prisons, were hired soon after resignations from BOP following scandal at the agency.
In the fall of 2012, state auditors of the Lake Erie Correctional Institution in Ohio, which CCA had acquired and operated since January of that same year, deducted $500,000 for contract violations and inadequate staffing. The prison had suffered a high rate of violence and contraband drugs after CCA took it over.
In August 2009 the ACLU filed suit against CCA and related government agencies because government officials who were responsible for overseeing the care provided failed to provide data about conditions. The Obama administration acknowledged that immigration detention facilities had suffered rates of death of 1 in 10 deaths among inmates, and that this data had been omitted from a list of deaths presented to Congress earlier that year. Two of those deaths took place at CCA's Eloy Detention Center. CCA's Eloy jail had nine known fatalities – more than any other immigration jail under contract to the federal government, according to documents obtained in 2009 under FOIA requests by the New York Times and the ACLU.
CCA lobbyists have worked to pass or defeat private prison legislation in many localities, including Texas, New York, Illinois and Tennessee. CCA spent $17.4 million lobbying the Department of Homeland Security, U.S. Immigration and Customs Enforcement (ICE), the Office of Management and Budget, the Bureau of Prisons, both houses of Congress, and others between 2002 and 2012. This sum included $1.9 million in campaign contributions.
According to the Boston Phoenix, CCA spent more than $2.7 million from 2006 through September 2008 on lobbying for stricter laws, in order to generate prisoners. CCA responded that it does not lobby lawmakers to increase jail time or push for longer sentences under any circumstance, noting that it "educates officials on the benefits of public-private partnership but does not lobby on crime and sentencing policies."
Among its risk factors listed in its 10-K annual report, as required by the SEC, CCA includes the following:
- "The demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, leniency in conviction or parole standards and sentencing practices or through the decriminalization of certain activities that are currently proscribed by our criminal laws. For instance, any changes with respect to drugs and controlled substances or illegal immigration could affect the number of persons arrested, convicted, and sentenced, thereby potentially reducing demand for correctional facilities to house them."
At the federal level, the corporation's lobbying focuses largely on immigrant detention. In 2012, CCA spent $1,790,000 lobbying Congress and federal bureaucracies on issues relating to homeland security, law enforcement, immigrant detention, and information disclosure legislation.
Lawsuit about gang influence in Idaho prison
In 2010 the FBI conducted an investigation of CCA practices following an incident at their prison in Idaho Correctional Center in which a prison inmate was beaten unconscious in an inmate attack. A video released by the Associated Press showed the incident underway as guards watched without taking action. Because the matter was under litigation, the company had said publicly only that the release of the video is "an unnecessary security risk to our staff, the inmates entrusted to our care and ultimately to the public." CCA said it was cooperating with investigators.
In March 2010, the ACLU filed suit against CCA in Idaho, alleging that guards were not protecting inmates from other violent inmates. In February 2014, the federal judge hearing the case awarded $349,000 to the ACLU for its costs in bringing the action. A settlement was reached to correct conditions at the prisons run by CCA.
In November 2012, eight inmates filed a federal lawsuit in Idaho alleging that CCA prison officials partially ceded control of the Idaho Correctional Center to gang leaders. The lawsuit cited Idaho Department of Correction reports suggesting that the Aryan Knights and the Severely Violent Criminals were able to wrest control from staff members after prison officials began housing members of the same gangs together in some cell blocks to reduce violent clashes. In September 2013, a federal judge held CCA in contempt of court for persistently understaffing the Idaho Correctional Center in direct violation of a legal settlement. In October 2013, CCA was encouraged not to bid on a new contract to operate the Idaho Correctional Center. The state re-assumed control of its prison on July 1, 2014.
Also in 2012, former and current employees in Lieutenant positions, who were categorized as "Salary Employees," filed law suits arguing that their daily duties and work hours were not that of a salary employee. Specifically, they sued CCA because their actual duties were not those of typical salaried employees in criminal justice, nor did they have the authority to "Hire and Fire" as a salaried employee should. CCA lost the law suit and paid out hundreds of thousands to its current and former Lieutenants. After losing the suit, CCA continued to classify their Lieutenants as salaried employees, saying, "It's cheaper to pay out law suits every couple years than it is to pay them for the (overtime) hours they actually work."
Co-operation with local law enforcement in a school drug sweep
In 2012, CCA conducted a drug sweep of Vista Grande High School in Casa Grande, Arizona in concert with local law enforcement. The program director of the Tucson office of the American Friends Service Committee said, “It is chilling to think that any school official would be willing to put vulnerable students at risk this way.”
2012 fatal prison riot in Mississippi facility
In May 2012 a riot at CCA-operated Adams County Correctional Facility in Natchez, Mississippi resulted in the death of a Corrections Officer and injury of sixteen staff members and three prisoners. Twenty-five employees were held hostage during the disturbance. It was ultimately quelled by facility staff with assistance from the Mississippi Highway Patrol and the Federal Bureau of Prisons. According to a company statement, the fatality was the second time an employee had "lost his life to inmate assault."
2015 fatal prison fight in Oklahoma
Following a series of escalating disturbances, including a riot involving 200-300 prisoners in June, four inmates died and four others were hospitalized as a result of a fight on September 13, 2015 at the Cimarron Correctional Facility in Cushing, Oklahoma.
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