GEO Group is the second largest for-profit prison corporation in the US. Based out of Boca Raton, Florida, the company oversees the operation and management of approximately 81,000 beds in 73 correctional and detention facilities, including projects under development.
GEO Group’s 2014 total revenues increased to $1.69 billion from $1.52 billion the previous year. US Corrections and detention contracts represent 65% of its revenues; 20% are from its “community corrections” program, recently re-named GEO Care; 12% are International contracts; and 3% from construction. Contracts with the federal government represent 42% of its portfolio (2014 Annual Report). The largest customers of GEO’s services are the US Bureau of Prisons and the US Immigration and Customs Enforcement. Australia is GEO’s largest overseas revenue source, accounting for 9% in 2014.
GEO’s in-house transportation division, GEO Transport, Inc. (GTI) provides armed, secure transportation to federal, state and local government clients in the United States and internationally.
In January of 2013, GEO 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. As part of this transition, the company had to separate from its in-house health provision subsidiary, GEO Care, which became a private company, Correct Care Solutions. The GEO Care brand remained with the company, and it is now used for the its juvenile detention, electronic monitoring, and reentry services.
One of GEO’s growth strategies is to acquire existing, smaller prison companies and absorb their contracts. In its 2014 Annual Report, GEO states that, “over the last five years, GEO has developed and acquired more correctional, detention, and community reentry facilities than any other correctional organization in the world, with approximately 30,000 built or acquired beds in that time period.” This is a reference to the acquisition of LCS Corrections Services in 2015, which added eight correctional and detention facilities, totaling more than 6,500 beds.
In the U.S., GEO Group administers GEO Care, which “oversees the operation of GEO’s community reentry facilities, day reporting centers, and youth services facilities along with the provision of electronic and location monitoring services. ” GEO Care oversees more than 1,200 juvenile detention beds spanning a dozen residential facilities and additional non-residential programs. B.I. Incorporated, a fully owned subsidiary of GEO Group, “is the leading provider of community supervision and electronic monitoring in every state in the country,” and tracks approximately 70,000 people, according to the 2014 annual report.
This diversification is clearly another central growth strategy for the corporation. In its 2014 Annual Report, the company boasts, “beginning in 2015, GEO will make an additional annual investment of $5 million to expand its ‘GEO Continuum of Care’ platform and expects to roll out ‘GEO Continuum of Care’ programs at select state correctional facilities around the country... we believe our industry-leading diversified services position GEO to pursue additional opportunities in the delivery of evidence-based rehabilitation and reentry services, which is in-line with worldwide efforts to focus resources on offender rehabilitation and community transition programs, and we expect these opportunities to drive new growth and continue to create value for our shareholders.”
From 2010 through 2014, GEO Group spent $1.95 million lobbying the federal government, including the U.S. House and Senate, the Department of Justice (DOJ), the Department of Homeland Security (DHS), the White House Office of Management and Budget, Department of Transportation, Department of Labor, the US Marshal's Service and Immigration and Customs Enforcement (ICE).
Issues lobbied on were primarily: Federal appropriations (Department of Justice and Homeland Security), closure of BOP prisons, alternatives to ICE detention, and transportation of prisoners/detainees. Secondary areas of interest included labor issues, tort issues and transportation issues.
Economic Activism Highlights
- On July 22, 2016, the Berkeley City Council passed a resolution to divest from "major human rights violators," including GEO.
- 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 CoreCivic, Inc., 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 Geo Group.
- 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 GEO.
- In December 2015 the California Endowment divested its holdings from "companies that derive significant annual revenue from private prison services," including GEO Group.
- In July 2014, Columbia University divested its shares in GEO Group after a student-led campaign. The decision also prohibits any future investment in the prison industry.
- In April 2014, three investors, Scopia Capital, DSM, and Amica Mutual Insurance pledged to remove their collective investments of about $60 Million from the CoreCivic, Inc. 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.” This marks full divestment for DSM and Amica and a 27% decrease in shares for Scopia, which has decreased its private prison stock by 59% since December 2012.
- In December of 2013, Systematic Financial Management divested 74,550 shares of GEO 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 April 2013, Florida Atlantic University ultimately rejected a 6 million dollar donation from GEO Group in exchange for naming rights on the university's football stadium, after severe pressure from students, faculty, and community activists protesting the company's human rights record and links to the prison industry.
- In 2012, Wells Fargo divested nearly 33% of their holdings in GEO Group.
- In 2012, the United Methodist Church voted to permanently divest its shares in GEO Group, and simultaneously moved to institute a screen against future investment in any prison-related industry.