CoreCivic Inc

Stock Symbols
NYSE
:
CXW
company headquarters
USA
ISSUES

CoreCivic, Inc. is the largest private prison corporation in the United States. The company owns and manages 70 correctional detention and residential reentry facilities and manages another seven facilities owned by government agencies.

CoreCivic, Inc., formerly known as Corrections Corporation of America or CCA, is the largest private prison corporation in the United States. CoreCivic was the first company to design, build, and operate a private prison. As of December 2017, CoreCivic owns and manages 70 correctional detention and residential reentry facilities and manages another seven facilities owned by government partners. In total, these 77 facilities have a capacity of 78,000 beds in 19 states. CoreCivic also estimates that it owns 58 percent of all privately owned prison beds, manages 39 percent of all private prison beds, and is the second largest community corrections service provider in the United States.

In 2017, CoreCivic reported $1.77 billion in revenue, a decrease from $1.85 billion in 2016. Almost half of CoreCivic’s revenue is derived from federal contracts with US Immigrant and Customs Enforcement (ICE), US Marshals, and the Bureau of Prisons (BOP). In 2017, ICE accounted for 25 percent of CoreCivic’s total revenue, an increase from 13 percent in 2014.

Private Prisons

While private prisons companies claim to lower the national recidivism rate through correctional services, these companies’ profit model creates a perverse incentive to keep as many people in custody for as long as possible, in order to maximize revenues. The profit model of private facilities works further against the social goals of rehabilitation because it is driven by the incentive to cut costs, which leads to inadequate staff training, high turnaround for guards, and poor services.

The conditions at CoreCivic’s Trousdale Turner Correctional Center in Hartsville, Tennessee have called attention to the counterproductivity of privatized prisons. Since 2016, when the facility became operational, there have been concerns around inadequate staffing, excessive use of force, and solitary confinement. After only four months of operation, the state stopped sending prisoners to the new facility. In January 2017, a lawsuit against CoreCivic alleged that understaffing at the facility had led to insufficient care for about 60 diabetic people.

The Trousdale correctional facility is only one of many CoreCivic private prison facilities that have faced public scrutiny. In 2010, an Associated Press report revealed that the company’s Idaho Correctional Center had more assaults than all other Idaho prisons combined. It was dubbed the “Gladiator School” after video footage showed an incarcerated person being severely beaten by another incarcerated person, pleading for help as company guards looked on. In 2012, incarcerated people filed suit against CoreCivic for deliberately understaffing the facility. The judge found CoreCivic guilty of understaffing but was not forced to pay for damages. In 2014, CoreCivic lost its $30 million contract for the prison.

In 2013, the Texas Observer called the CoreCivic-run Dawson State Jail “the worst state jail in Texas.” Between 2004 and 2013, seven incarcerated people died due to medical neglect and malpractice. One prisoner gave birth to a premature baby at 26 weeks after CoreCivic guards ignored her cries for medical attention. The baby was delivered in a prison toilet with no medical attention and died four days later. In August 2013, the Texas Department of Criminal Justice closed the facility.

Corporate Influence and Lobbying

Through the for-profit model of private prisons, GEO and other private prison companies are incentivized to expand the carceral system by lobbying for more beds, harsher sentencing, and longer periods of “community” supervision. Private prison companies spend millions of dollars on lobbying and campaign contributions in order to encourage policy that favors higher rates of incarceration that benefits their profit-making. Since 1989, CoreCivic and The GEO Group (GEO) have spent over $10 million on political candidates and nearly $25 million on lobbying efforts to ensure that their prison beds are filled.

In 2005, alone, CoreCivic spent over three million dollars on lobbying. Between 2008 and 2010, CoreCivic, then CCA, spent $4.4 million lobbying the Department of Homeland Security, ICE, the Office of the Federal Detention Trustee, the Office of Budget Management, the Bureau of Prisons, and both houses of Congress. In 2016, CoreCivic, Inc. spent over one million dollars on lobbying Congress, the Department of Homeland Security, the U.S. Marshals Service, the Federal Bureau of Prisons, the Department of State. CoreCivic has lobbied on matters of budgetary appropriations for prison and detention center contracts, immigration reform, and the Private Prison Information Act - a bill that would require private prisons to make available the same information as federal prisons. CoreCivic donated $250,000 to President Trump’s inaugural fund.

CoreCivic has also been a longtime member and financial supporter of the American Legislative Exchange Council (ALEC), a business-backed group that authors pro-incarceration state legislation for coCongressALEC is known for its role in the rapid growth of mass incarceration in the 1980s and 1990s, and more recently, its role in expanding prison labor. For this reason, a company’s ALEC affiliation is often enough reason for activists to target the company with demands for divestment from the prison industrial complex. In 2010, it was reported that ALEC had arranged secret meetings with Arizona state legislator’s and CoreCivic, then CCA, to draft Arizona’s anti-immigrant law.

Facility Financing, Construction, and Ownership

In January 2013, CoreCivic converted to a Real Estate Investment Trust (REIT). Although CoreCivic’s primary form of business is operating prisons, the prisons themselves are considered real estate. There are special tax advantages for REITs, which generally pay no income tax.

According to a 2018 report published by In the Public Interest, CoreCivic has been actively pushing governments to consider private financing of new facilities. REITS mark a shift into an ownership and maintenance model designed to increase the real estate business side of the company, which is more profitable than managed-only contracts. For instance, in 2017, CoreCivic made six times the profit from owning and managing its facilities as opposed to only managing. However, this has potential serious implications for policy making: private prison construction deals perpetuate mass incarceration, result in higher financing costs for the public, and often neglect standards for facility maintenance.

CoreCivic’s contract with the Trousdale County to finance and construct the Trousdale Turner Correctional Center in Hartsville, Tennessee is an example of the fully privatized finance model, whereby the private company designs, builds, finances, operates, and maintains the facility. Once completed, the company will own the facility. The government will pay the company according to a previously decided number of prisoners for a specified amount of time. CoreCivic invested approximately $144 million in constructing the Trousdale correctional facility and finished construction in 2015. In turn, the company stands to collect $276 million from the state over a five-year period. A similar contract was awarded to CoreCivic in November 2017 by the Kansas Department of Corrections (KDOC) to design, finance, build, and manage a new facility in Lansing. KDOC will operate the private facility, and at the end of the 20-year contract term, the prison will transfer ownership to the state.

Immigrant Detention Centers

The federal government operates only ten percent of all detention centers. The remaining 90% are contracted out to corporations like CoreCivic. Reports show how the “zero-tolerance” immigration policy contributes to increased immigrant detention rates, and plans to build and expand detention centers. Increased government demand for immigrant detention centers offers greater business opportunities for private prison companies. The New York times reported that there has been a fivefold increase in the number of immigrant children in federal custody since May 2017, from 2,400 to 12,800 detained children in increasingly overcrowded government shelters. A 2018 report by Make the Road New York and the Center for Popular Democracy shows that the number of immigrants in private detention facilities will grow by 290 to 580 percent in two years if the “zero-tolerance” policy is fully implemented.

In 2017, the single largest source of revenue for CoreCivic was ICE, accounting for 25% of total revenue. This is an increase from 2014, when ICE contracts accounted for only 14% of the company’s revenues. CoreCivic owns and manages nine detention facilities for ICE. In 2017, the company announced an extension of its  ICE contract with its South Texas Family Residential Center in Dilley, Texas and a new contract with ICE to provide 2,016 beds at its Northeast Ohio Correctional Center.

CoreCivic’s South Texas Family Residential Center was implicated in the June 2018 systematic separation and detention of immigrant families following President Trump’s “zero-tolerance” immigration policy in April 2018. CoreCivic also stands to profit from President Trump’s order that ended the policy to separate undocumented parents and children. Families now will be detained together while they await legal proceedings, which creates greater demand for beds. In May 2018, CoreCivic proposed reopening a vacant facility in Minnesota and expanding a detention center in Nevada to supply ICE with 1,200 more beds in response to ICE’s increasing rates of arrest.

CoreCivic’s immigration detention centers have faced public scrutiny for human rights abuse, including medical neglect, sexual and physical assault against detainees, and understaffing and overcrowding. In 2017, a federal audit revealed that a CoreCivic immigration detention center in Kansas lacked oversight and was severely understaffed. The audit concluded that this was also a problem at other CoreCivic detention facilities.

In February 2017, detainees at an ICE facility managed by CoreCivic went on a hunger strike to protest their detention and CoreCivic retaliated by locking them in solitary confinement. As of April 2018, CoreCivic faces three lawsuits for alleged forced labor and other abuses in its immigration detention facilities. These cases, filed on behalf of several former detainees, allege that GEO forced them to work for a dollar a day by threatening to place them in solitary confinement.

Community Correctional Services

As of 2017, CoreCivic is one of the largest community corrections owner and operator in the United States, second to The GEO Group. The company began expanding into the community correctional services in 2013, through the acquisition of Correctional Alternatives, Inc. (CAI). At the time, CAI provided work furloughs, residential reentry programs, and home confinement. In 2015 and 2016, CoreCivic continued expanding into the sector, acquiring Avalon Correctional Services, Inc. and Correctional Management, Inc. (CMI), and purchasing four community correctional facilities from Community Education Centers. In 2016, CoreCivic generated a total revenue of $41.5 million from its acquisitions of Avalon and CMI. As of December 2017, CoreCivic owns and manages 19 community correctional facilities.

CoreCivic manages four reentry facilities within Oklahoma and each are rife with controversy. In 2016, at Carver Transitional Center, which houses 494 men, a surprise search of the facility revealed a large amount of contraband, including drugs, knives, and electronics. In 2016, at Tulsa Transitional Center, which houses 390 men, an incarcerated person was found unresponsive and was later pronounced dead at the facility. Turley Residential Center, which houses 289 women, faced criticism in 2013, when a report revealed inappropriate relationships between staff and incarcerated people and unreported sexual abuse. In 2018, the family of a women who died while detained in a CoreCivic Center is suing the private prison company.

Avalon Corrections Corporation

Avalon Corrections is a wholly owned subsidiary of CoreCivic which specializes in community correctional services, drug and alcohol treatment services, and residential reentry services. CoreCivic acquired Avalon in 2015 as a way to expand into the community corrections industry The acquisition cost $157.5 million and was expected to increase CoreCivic’s total revenues between $35 and $40 million. As of 2018, the most recently-available data estimates Avalon’s revenues at approximately $33.21 million per year.

As of 2018, Avalon manages 12 facilities with over 3,000 beds in Oklahoma, Texas, and Wyoming. The company generates its revenue from direct payments and fees collected from incarcerated individuals and from contracts providing services that were previously provided for by the government or non-profit organizations.

Residents in Avalon facilities are required to find employment in the local community and are restricted to night curfews. In certain states, such as Oklahoma, residents’ income from such work is used to pay Avalon. If residents are unable to pay because they could not find or keep a job, they are sent back to state prison. This arrangement, by which residents are expected to pay for their stay at Avalon’s halfway homes creates an exploitative and unsafe environment for those in Avalon’s care.

Since 2008, allegations have surfaced in other states, including insufficient security, unqualified staff, falsified drug tests, sexual relations between staff and prisoners, and inadequate record-keeping. At one Avalon-run women’s facility in Oklahoma, Avalon administrators repeatedly ignored reports of abuse and sexual harassment in order to keep the women at the facility. The women were repeatedly threatened with being returned to prison or charged with misconduct for speaking out. As a result, 50 women filed suit against Avalon in 2014. As the suit progresses, more women have come forward with similar stories, and investigators have uncovered incidents of “inappropriate staff/offender relationships.” At the same Oklahoma women’s facility, a woman’s family filed a lawsuit in 2014 after Avalon staff denied her medical care, resulting in her death the next day. Before this incident, Avalon had previously abandoned its non-correctional care facilities, including elderly care, in part due to patient deaths.

These are not the first reports of sexual assault by Avalon employees with convictions dating as far back as 2002. In 2003, former Avalon employees sued both the company and Colorado officials, alleging that state officials had refused to investigate problems that included inappropriate sexual relations between staff and incarcerated persons, drugs, broken or missing security equipment, and billing for services not actually rendered. Colorado later canceled all of its contracts with Avalon. In 2014, Avalon Tulsa residents sued the company alleging that staff members were involved in drug sales among residents and guards, falsified drug tests, extortion, gambling activity, and fights between residents as a form of punishment.

Local investigators have criticized Avalon’s practice of underreporting and hiding resident conduct violations, including escape and rampant drug use. After a surprise visit from the Department of Corrections, nearly half of all residents at Avalon’s Tulsa center tested positive for drugs. Avalon had either ignored or downgraded these offenses in order to maintain revenue flow from the state. In order to make profit, Avalon is incentivized to break protocol and keep residents at Avalon instead of sending them back to prison. In 2014, Oklahoma state officials shut down one of its facilities, and issued a corrective plan for another due to Avalon’s reporting problems.

Avalon has been subjected to press scrutiny and litigation following numerous reports of escapes and improper treatment of facility residents. Resident escapes from Avalon halfway houses have been reported in local media, including two escapes in 2015 from a Texas men’s facility. Investigations also revealed that almost 30% of residents had escape-related violations.

Prison and Detention Transportation services

CoreCivic owns a subsidiary called TransCor America, LLC, which claims to be the largest detainee and prisoner transportation company in the US. In 2017, TransCor generated $2.3 million, a decrease from 2016 and 2015 revenue of $2.6 million and $4.1 million, respectively. The prison transportation sector has faced criticism because of abuse that is rampant within transit. TransCor is paid per prisoner per mile, and therefore overcrowds the vans, limits food and water intake, does not allow for bathroom breaks.

Economic Activism Highlights
  • On July 17, 2018, the Metro Nashville City Council voted to pass a resolution to not invest or contribute to any private company going forward. The resolution targeted CoreCivic, a publicly traded company that operates private prisons in Tennessee and profits from the detention of immigrant detainees.

  • On July 13, 2018, New York State announced that it will fully divest from private prisons and private immigrant detention center corporations, becoming the first in the country to eliminate private prison stock holdings in CoreCivic and GEO Group. The campaign was lead by Make the Road New York with the support of Enlace.

  • On June 8, 2017, New York City's pension funds divested $48 million from private prison companies, including CoreCivic, Inc.

  • On January 29, 2017, the University of California decided to terminate $150 million worth of contracts and $300 million line of credit with Wells Fargo, after previously terminating $25 million commercial paper contract with the bank in November 2016. The decision was the result of protests by the Afrikan Black Coalition and the Prison Divestment Campaign.

  • On February 25, 2016, University of California Davis ASUCD passed prison divestment resolution that urges “both the Board of Regents of the University of California (UC Regents) and the ASUCD to undertake practices of corporate social responsibility by divesting in corporations which are directly and indirectly involved in the private prison industry,” including CoreCivic, The Geo Group, Inc., and Wells Fargo. 
  • On February 22, 2016, the city of Portland’s Social Responsible Investments Committee unanimously voted to recommend to the city to divest from Wells Fargo & Company for its ties to private-prison companies, such as CoreCivic. 
  • On February 10, 2016, California State University, Los Angeles administrators have agreed to divest from private prison companies, including CoreCivic, after pressure from CSULA Black Student Union.
  • In December 2015, University of California Chief Investment Officer announced that the UC endowment, covering 10 campuses across the state, divested from private prisons, including CoreCivic. 
  • In December 2015, the California Endowment divested its holdings from "companies that derive significant annual revenue from private prison services," including CoreCivic. 
  • In October of 2015, the FCC passed new rules regarding the cost of local and long distant calls, it eliminates or limits exorbitant fees commonly tacked on by providers, such as CoreCivic. 
  • In July 2014, Columbia University divested from CoreCivic after a student lead campaign. The decision also prohibits any future investment in the prison industry. 
  • In April 2014, three investors, Scopia Capital, DSM, and Amica Mutual Insurance all pledged to remove their collective investments of about $60,000,000 from the CoreCivic and The GEO Group, Inc. DSM President Hugh Welsh explained, “In accordance with the principles of the UN Global Compact, with respect to the protection of internationally proclaimed human rights, the pension fund has divested from the for-profit prison industry.” 
  • In December of 2013, Systematic Financial Management divested 2,754,722 shares of CoreCivic stock, thereby exiting from the private prison industry completely. Systematic Financial Management is an investment company that manages over $13 billion in investments for local governments, retirement funds, corporations, wealthy individuals, and unions.
  • In 2012, the United Methodist Church voted to permanently divest its shares in CoreCivic and simultaneously moved to institute a screen against future investment in any prison-related industry.
  • In 2012, General Electric divested 2.7 million shares in CoreCivic
  • In 2011, Pershing Square Capital Management fully divested its CoreCivic holdings of over 7 million shares worth $180 million 
  • In 2007, Farallon, the hedge fund responsible for managing Yale University's endowment, sold its entire $90 million stock in CoreCivic, including Yale's $1.5 million stock in the company. The decision followed a concerted campaign by Yale's Graduate Employees and Students Organization against CoreCivic, supported by teachers and students at eight other universities managed by Farallon.
  • In 2001, a student campaign resulted in six US universities (American University, SUNY-Albany, Goucher College, Evergreen State, James Madison University, and Oberlin) dropping their contracts with Sodexo SA due to the company's investment and close relationship with CoreCivic. The loss of contracts caused Sodexo to sell all of its shares in CoreCivico, and CoreCivic's president also resigned from Sodexo's board of directors. 
This profile was last updated on
20 September 2018