Community Corrections

"Community corrections" is a term referring to criminal justice supervision and services provided to individuals outside prisons and jails. This includes both “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.

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)

Community corrections include a huge segment of the criminal justice system. According to a Pew Center report of 2009, two-thirds of all individuals involved in the criminal justice systems were in the community, not behind bars. One in 45 adults was on probation or parole and 1 in 100 is 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 toward 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.

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

For-profit prison corporations are maneuvering to take advantage of this potential avenue of expansion. In 2010, GEO Group acquired BI Incorporated, which makes electronic monitoring products, including GPS ankle bracelet monitors, voice verification technology, and alcohol monitors for individuals on home confinement. The company boasts of its newly reorganized “Community Services” unit, which operates halfway houses, day reporting centers, and juvenile detention facilities. This segment represented 20% of GEO Group’s operations in 2012.

CoreCivic, Inc. has more recently begun to follow suit. In August of 2013, the company acquired Correctional Alternatives, Inc (CAI). In doing so, CoreCivic, Inc. absorbed CAI’s existing contracts providing work furloughs, residential reentry programs and home confinement for San Diego County, the Federal Bureau of Prisons and United States Pretrial Services and Probation. In 2015, CoreCivic, Inc. acquired four community corrections facilities from a Community Education Centers (CEC) for approximately $13.5 million.

While many sentencing reform efforts are geared toward 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 in order to maximize profits. This 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.

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