The math is simple. More demand for immigrant detention beds, plus more government funding, equals more business for Corrections Corporation of America. Every year since 2003, the company has made record profits.
CCA generated its highest revenue ever in 2006 when ICE doubled its detention beds from 19,500 to 27,500.
The company won contracts to provide about half of these new beds.
“We’ve never seen the wind at our back like it is today,” CCA’s President and Chief Executive Officer, John D. Ferguson said after discussing $1.3 billion in revenue during a May 2006 conference call with investors.
The infusion of detention center contracts marked a high point for the company after it had struggled for several years to expand. In 1999, independent auditors expressed doubt that CCA could even stay in business after the company suffered a net loss of $72 million mainly due to an abundance of empty beds.
That year, CCA spun off its real estate operations, Prison Realty Trust, from its correctional management services in a failed move that required a bailout from well-connected private equity firm, The Blackstone Group. The firm brought in Lehman Brothers and Bank of America to lend $350 million in exchange for four seats on the company’s board and 25 percent of company stock.
Blackstone’s Senior Managing Director, Thomas Saylak, convinced the Wall Street partners that the infusion of capital would allow CCA to “maximize growth prospects. Over time, we believe this new direction will be recognized and rewarded by investors.” Read More...
CONTRACTS In San Diego, the ACLU lawsuit prompted ICE to move some of the detainees to other detention centers. It also prompted CCA to propose constructing a new facility nearby that would hold four times more detainees. Thus, rather than being penalized for overcrowding, the company may even end up winning a new contract.
San Diego, CA - In 2006, the CCA-run San Diego Correctional Facility was so crowded that three immigrant detainees lived in cells designed for two. So where did the third person sleep?
“They would put what they called a boat, a plastic unit, on the floor in the only floor space available in the room – beneath the toilet,” explained Tom Jawetz, an attorney with the American Civil Liberties Prison Project.
The detainees soon became restless from living in cells where they could barely move around. When new detainees were brought in, they nearly broke out into a riot and had to be subdued with teargas. By the time Jawetz filed suit to stop the overcrowding, CCA was housing overflow population in the facility’s day rooms.
Over the years, ACLU has sued CCA for overcrowding and substandard medical treatment. ACLU lawyers say that CCA squeezes profit from immigrant detention contracts by scrimping on the already minimal services it is required to provide. Unlike prison contracts, immigrant detention contracts only provide for housing, food and medical services, not rehabilitation and education services.
CCA makes the most money from facilities that are full or beyond capacity. In San Diego, the ACLU lawsuit prompted Immigration and Customs Enforcement to move some of the detainees to other detention centers. It also prompted CCA to propose constructing a new facility nearby that would hold four times more detainees.
Thus, rather than being penalized for overcrowding, the company may even end up winning a new contract. “We have an existing relationship with Immigration and Customs Enforcement and other federal customers and we want to be able to maintain that relationship,” CCA spokesman, Steve Owen, told the San Diego Union Tribune.
CCA also got away with providing only substandard medical care. At the San Diego facility, conditions were so bad that the Department of Immigration Health Services was forced to take over.
“The DHS concluded CCA’s provision of medical care was deficient and that CCA was attempting to increase its profits by decreasing the medical services to detainees,” said Jawetz. Read More...
CONNECTIONS CCA plays the game of politics like a pro. After all forty percent of its revenue comes from federal contracts. The company backs key politicians who support an immigration crackdown, and has intensified its lobbying in order to influence those still on the fence.
Washington, D.C. - CCA plays the game of politics like a pro. After all forty percent of its revenue comes from federal contracts.
The company backs key politicians who support an immigration crackdown, and has intensified its lobbying in order to influence those still on the fence. For good measure, it hires former prison and immigration officials to coordinate its federal relations.
When Republicans and Democrats failed to agree on comprehensive immigration reform, CCA backed lawmakers who found common ground on the issue of funding detention. 2007 was the first year CCA’s Political Action Committee, otherwise staunchly Republican, donated $15,000 to the Democratic Congressional and Senatorial Committees, according the Federal Election Commission. However, the company gave twice this amount to the GOP.
The rest of CCA’s political giving went directly to lawmakers who determine detention funding through their positions on the appropriations committee in the House and Senate. In 2008, the committees approved a $2.3 billion budget for ICE detention and deportation of undocumented immigrants, including funds for an additional 4,870 new beds.
More than half the senators backed by CCA’s PAC are on the appropriations committee, and four of them are on the subcommittee on Homeland Security. The company was most generous with the minority ranking member, donating $5,000 each to Thad Cochran (R-MS), and the Senate Minority leader, Mitch McConnell.
In 2006, it gave $1,000 to committee member, Loretta Sanchez (D-CA), who nonetheless remains critical of mass detention based.
“In Orange County, we’ve had electronic monitoring devices and more supervision when we’ve let people out of detention centers, its been a most cost effective way to deal with a certain portion of the population, especially women with children, the elderly, and the ill,” said Sanchez. “I think there are ways we could use appropriate alternatives to keep the costs down and still monitor where people are.”
One CCA-backed appropriations committee member deserves special mention. Former Tennessee governor, Senator Lamar Alexander (R-TN) received $31,200 from 2003-2008 from the Nashville-based company and its employees, spouses and their subsidiaries, according to Federal Election Commission documents. Alexander’s history of supporting CCA includes endorsing its failed bid in 1985 to take over the Tennessee prison system. Read More...
