CoreCivic, Inc., formerly known as Corrections Corporation of America or CCA, is the largest private prison corporation in the US. In 2016, CoreCivic owned 76 facilities, including 49 correctional or detention facilities and 25 residential reentry facilities within 20 states. Additionally, CoreCivic managed 11 correctional and detention facilities owned by government agencies. CoreCivic estimated that, as of December 2016, it owned 58 percent of all prison beds, managed 41 percent of all private prison beds, and is the second largest community corrections service provider within the US.
In 2016, CoreCivic reported $1.85 billion in revenue. The majority of the revenue is derived from federal contracts with Immigrant and Customs Enforcement (ICE), US Marshals, and the Bureau of Prisons (BOP), and most of these from ICE contracts. The percentage is on the rise. In 2016, ICE accounted for 28 percent of CoreCivic’s total revenue, an increase from 24 percent in 2015 and 13 percent in 2014.
In January 2013, CoreCivic, Inc. converted to a Real Estate Investment Trust (REIT). Although CoreCivic, Inc.’s primary form of business is operating prisons, the prisons themselves are considered 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 2013, CoreCivic, Inc. awarded a special dividend to stockholders of $675 million, or $6.66 per share of common stock.
Private Prison Facilities
CoreCivic was the first company to design, build, and operate a private prison. In 2016, the company claims to own 58 percent and manage 41 percent of all prison beds within the US. The company operates prisons for the BOP and 18 states.
Many of CoreCivic’s private prison facilities have faced 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 held as company guards looked on. In 2012, incarcerated people filed suit against CoreCivic for deliberately understaffing the facility. The judge found the company 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, most due to medical neglect and malpractice. One prisoner gave birth to a premature baby at 26 weeks after CoreCivic guards refused 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.
While CoreCivic claims to lower the national recidivism rate through correctional services, there is a perverse incentive for the company to keep people in custody to maximize profits. According to federal lobby records, CoreCivic, Inc. has spent over $1 million on lobbying expenditures in 2016, lobbying Congress, the Department of Homeland Security, the U.S. Marshals Service, the Federal Bureau of Prisons, and the Department of State on 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 federal prisons are required to make available). CoreCivic also has a political action committee which has spent $284,002 in the 2016 election cycle.
Immigration Detention Centers
The federal government operates only ten percent of all detention centers. The remaining 90 percent are contracted out to corporations like CoreCivic. In 2016, the single largest source of revenue for CoreCivic came from ICE, accounting for 28 percent of total revenue. This is up from 2014, when ICE contracts accounted for only half, or 14 percent of the company’s revenues. CoreCivic owns and manages 9 detention facilities for ICE. In 2016, CoreCivic announced two new contracts with ICE to operate detention centers.
CoreCivic’s immigration detention centers 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-owned immigration detention center in Kansas lacked oversight and was severely understaffed. The audit concluded that this was also a problem at other CoreCivic-owned facilities.
Community Correctional Services
In 2016, CoreCivic was one of the largest community corrections owner and operator in the US, following close behind The GEO Group. The company began maneuvering into the community correctional services in 2013, through the acquisition of Correctional Alternatives, Inc. (CAI). At the time, CAI has provided work furloughs, residential reentry programs, and home confinement. In 2015 and 2016, CoreCivic continued into the sector, acquiring Avalon Correctional Services, Inc. and Correctional Management, Inc., and purchasing four community correctional facilities from Community Education Centers. As of December 2016, CoreCivic owns and manages 20 community correctional facilities and leased 5 facilities.
CoreCivic has three 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. The facility has also had numerous “escapes.” Since the facility is a reentry facility, those incarcerated are allowed to leave for work and interviews, but are required to report back. 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.
CoreCivic owns a subsidiary called TransCor America, LLC, which claims to be the largest detainee/prisoner transportation company in the US. TransCor generated $2.6 million in 2016, a decrease from 2015 and 2014 revenue of $4.1 million and $4.4 million, respectively. The prisoner 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, doesn’t allow for bathroom breaks.
Economic Activism Highlights
- On June 8, 2017, New York City's pension funds divested $48 million from private prison companies, including CoreCivic, Inc.
- 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.