CoreCivic, Inc. (formerly Corrections Corporation of America, or CCA) is the largest private prison corporation in the U.S. It owns or controls 66 correctional and detention facilities in 18 states and the District of Columbia. 6 of these facilities are leased to third-party operators. It also manages 11 correctional and detention facilities owned by government agencies. The majority of CCA facilities and operations are located in the Southwest with a high concentration located in Texas. As of its 2015 filings, the company estimates that this represents nearly 42% of all beds under contract with private operators of correctional and detention facilities in the United States.
CoreCivic reported $1.8 billion in revenue in 2015. 51% was from federal contracts: 16% U.S. Marshals, 11% Bureau Of Prisons, 24% Immigration and Customs Enforcement (an increase from previous years). Business from state customers constituted 48%, a decrease from previous years. It generated $244.7 million in revenue for 2015 solely from its South Texas Family Residential Center facility, which houses 2,400 undocumented women and children. It is the largest receiver of government contracts in the industry. Contracts with the state of California alone account for 11% of total CoreCivic revenue, a decrease from the two previous years. In October 2014, it announced it secured a 3-year renewal with the state of California.
CoreCivic also owns a subsidiary called TransCor America, LLC, which claims to be the largest detainee/prisoner transportation company in the United States. TransCor generated a total revenue of $4.1 million in 2015.
In January of 2013, CoreCivic (then CCA) converted to a Real Estate Investment Trust (REIT). Although the company operates prisons as its primary form of business, the prisons themselves constitute real estate. By creating an entity called a taxable REIT subsidiary (TRS), the company can separate the operational side of its private prison management from the real estate side of owning and generating income from correctional facilities. There are special tax advantages for REITs, which generally pay no income tax. They also must distribute at least 90 percent of their income to shareholders in the form of dividends. In April of 2013, CCA awarded a special dividend to stockholders of $675 million, or $6.66 per share of common stock.
According to federal lobby records, CoreCivic, then CCA, spent $9,345,000 lobbying the federal government from the first quarter of 2010 through the fourth quarter of 2014. During this time CCA lobbied both houses of Congress, the Department of Homeland Security (DHS), the U.S. Marshals Service (USMS), the Federal Bureau of Prisons (BoP), and the Department of State (DoS) on budgetary appropriations for immigrant detention and federal incarceration contracts, “monitor[ing] of immigration reform,” and the Private Prison Information Act (a bill which would have subjected private prison contractors to transparency under the Freedom of Information Act). CCA has its own political action committee (PAC), which spent $218.7 thousand in the 2014 election cycle.
The company has come under fire in the past for its lobbying expenditures and relationships with government officials. The discovery that two of Arizona Governor Jan Brewer’s top advisers were former CCA lobbyists raised concerns that these affiliations influenced the creation of SB1070, Arizona’s famous “show me your papers” law, which would have generated significant business for CCA with the state.
A 2010 Associated Press report revealed that the company’s Idaho Correctional Center (ICC) had more assaults than all other Idaho prisons combined. Dubbed the “Gladiator School,” video footage showed a prisoner being severely beaten by another inmate, pleading for help as comapny guards looked on. In 2011 the ACLU sued CoreCivic on behalf of individuals incarcerated at the Idaho Correctional Center for severe understaffing and falsely reporting thousands of employee hours to the State. CoreCivic lost its $30 million contract for the prison with the state, and the FBI launched an investigation into the company in 2014. CoreCivic lost its appeal in May 2016.
In 2013, the Texas Observer called the state’s CCA-run Dawson State Jail for nonviolent offenders in Dallas “the worst state jail in Texas.” Seven inmates have died in Dawson since 2004, generally due to medical neglect and malpractice. One prisoner gave birth to a premature baby at 26 weeks after CCA guards refused her cries for medical attention, she claims. The baby was delivered in a prison toilet with no medical assistance and died four days later.
CCA’s Don T Hutto facility, a “family residential facility” for immigrant detainees and their children, was found to be violating nearly every standard for minors in ICE custody. Families were crammed into small cells with no privacy, children were dressed in prison scrubs, and conditions were appalling. After an ACLU lawsuit, the facility is no longer used for family detention. Yet in 2011, two federal sexual abuse investigations and a class action lawsuit were filed on behalf of immigrant women who alleged they were sexually assaulted by guards in the facility. One CCA guard was sentenced to 10 months in federal prison.
On April 11, 2016, CCA acquired Correctional Management, Inc, for approximately $35 million in cash. Correctional Management is a privately held community corrections company that operates seven facilities comprising 605 beds in Colorado. In June 2016, CCA completed its acquisition of a residential facility in Long Beach, California from a privately held owner, in an all-cash deal valued at $35 Million. The residential reentry facility has a capacity of 112 beds and is leased to Community Education Centers, Inc.
Economic Activism Highlights
- February 25, 2016—UC 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 CCA, Geo Group, 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 CCA.
- On February 10, 2016, California State University, Los Angeles administrators have agreed to divest from private prison companies 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 CCA.
- In December 2015, the California Endowment divested its holdings from "companies that derive significant annual revenue from private prison services," including CCA.
- 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 CCA.
- In July 2014, Columbia University divested from CCA 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 CCA and the GEO Group. 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 CCA 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 CCA, 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 CCA
- In 2011, Pershing Square Capital Management fully divested its CCA 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 CCA, 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 CCA, supported by teachers and students at eight other universities managed by Farallon.
- In 2001, a student campaign resulted in 6 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 CCA. The loss of contracts caused Sodexo to sell all of its shares in CCA, and CCA's president also resigned from Sodexo's board of directors.