Community Corrections

“Community Corrections” refers to criminal justice supervision and services provided to individuals outside prisons and jails. It includes “alternatives to incarceration,” such as probation, electronic monitoring, home confinement, day reporting centers, intermediate sanctions facilities and programs, and court-ordered treatment programs, as well as re-entry services, including parole supervision, halfway houses, and transition programs.

Community corrections is a huge segment of the criminal justice system. Overall, two-thirds of individuals involved in the criminal justice system are in the community, not behind bars. One in 45 adults is on probation or parole, as compared to 1 in 100 in prison or jail. As the pendulum has swung back from the tough-on-crime approach and cash-strapped states have embraced a national movement towards evidence-based sentencing reform, some states have reduced their prison populations so significantly that they have closed prisons. This movement away from incarceration threatens the expansion of the for-profit prison industry.

The main companies involved in this sector are:
The GEO Group, Inc., of Boca Raton, FL (NYSE: GEO)
Correctional Alternatives, Inc., belongs to CoreCivic, Inc., of Nashville, TN (NYSE: CXW)
G4S plc, of Brawley, U.K. (LON: GFS)
Avalon Correctional Services, belongs to CoreCivic, Inc., of Nashville TN (NYSE: CXW)
Aspen Education Group, a subsidiary of Acadia Healthcare, of Franklin, TN (NASDAQ: ACHC)
Community Education Centers, Inc. (CEC), of West Caldwell, NJ (Private)
ComCor, Inc., of Colorado Springs, CO (Nonprofit)

Privatization of the Sector
To take advantage of these emerging markets, for-profit prison corporations have begun acquiring smaller companies that specialize in healthcare, mental health, and substance abuse treatment. Additionally, these companies acquire smaller companies that offer “alternatives to incarceration” such as electronic monitoring, reentry services, and community corrections. 

The GEO Group, Inc. is the largest provider of community correction services. In 2016, over 18 percent of GEO’s revenue came from this sector. The diversification came after, in 2010, GEO acquired BI Incorporated, which makes electronic monitoring products, including GPS ankle bracelet monitors, voice verification technology, and alcohol monitors for individuals on home confinement. In 2017, GEO announced that it acquired Community Education Centers, a company that had approximately 12,000 reentry and treatment facilities for $360 million.

CoreCivic, Inc. is also one of the largest community correction providers in the U.S. In 2013, the company acquired Correctional Alternatives, Inc. (CAI). In doing so, CoreCivic absorbed CAI’s existing contracts providing work furloughs, residential reentry programs, and home confinement for San Diego County, the Federal Bureau of Prisons, and the U.S. Pretrial Services and Probation. Between 2015 and 2016, CoreCivic continued acquiring businesses within the sector, including Avalon Correctional Services, Inc., Correctional Management, Inc., and purchasing four community correctional facilities from Community Education Centers.

While many sentencing reform efforts are geared towards keeping people out of the system and returning them to their communities as quickly as possible, the financial incentive for private prison corporations is to keep people in custody or under some form of supervision for as long as possible at the highest per diem rate possible to maximize profits. It creates the potential for a dangerous trend of “net widening” -- placing more people on stricter forms of supervision than is necessary for longer than is warranted.

Technology has made this approach cost-effective for corporations. Supervision and Surveillance is a huge subset of this industry, with a proliferation of companies making every conceivable device to monitor, report, scan, test, and control the movement of people.

Companies
The largest companies involved in the sector are the private prison companies, CoreCivic, Inc. and The GEO Group, Inc.

Among the companies listed here, we recommend these 4 for divestment.