Facility Management - U.S.

When thinking of prison privatization, the most commonly associated arrangement is facility management: a for-profit corporation is awarded a contract with the city, county, state, or federal government to manage the daily operations of a jail, prison, or detention center. In the US, 7 percent of state prisoners, 18 percent of federal prisoners, and 65 percent of immigration detainees are housed in private prison or detention facilities. In 2016, the two largest private prison corporations, CoreCivic, Inc. and the GEO Group, together generated over $4 billion in revenue, and represent the majority of private prison business.

Today, there are three top corporations in the field, with a handful of smaller businesses operating in select states. While other corporations have emerged to take advantage of this burgeoning market, the trend has shifted to market consolidation as the larger companies gobble up the “smaller fish” through mergers and acquisitions. The largest and second largest corporations, CoreCivic and GEO, respectively, are publicly traded. The other corporations are Management and Training Corporation, LaSalle Southwest Corrections, and Emerald Correctional Management, all of which are private corporations. In addition, G4S operates 27 private juvenile detention centers.

The main companies involved in this sector are:
CoreCivic, Inc., of Nashville, TN (NYSE: CXW)
The Geo Group, Inc., of Boca Raton, FL (NYSE: GEO)
G4S plc, of Crawly, U.K. (LON: GFS, OMX: G4S)
Sodexo SA, of Issy-les-Moulineaux, France (EPA: SW)
Management and Tarining Corporation, of Centerville, UT (Private)
Emerald Corrections Management, of Lafayette, LA (Private)
LaSalle Management Company, of Ruston, LA (Private)
Community Education Centers, Inc. (CEC), of West Caldwell, NJ (Private)

Prison Facilities
In 1984, CoreCivic opened the first private prison. The company was founded on the principle that one could sell prisons “just like selling hamburgers.” In the thirty years since, the incarcerated population has increased by more than 500 percent, with over 2.2 million people incarcerated today. From 1999 to 2015, while the prison population increased by 12 percent, there has been an 83 percent increase in prisoners held within private prisons. The bulk of CoreCivic and GEO’s revenue comes from states, with CoreCivic operating facilities in 20 states and GEO operating facilities in 33 states. In August 2016, the Obama administration stated that the Bureau of Prisons (BOP) would begin phasing out private prisons, a decision that was ultimately reversed by the Trump administration in February 2017.

As the industry has grown and the political and economic influence of the companies have increased, ethical concerns have been raised about the privatized facilities, primarily the morality of profiting from depriving human beings of their liberty and the “perverse incentive” created by the for-profit incarceration model. For the majority of these contracts, the corporations are paid based upon how many beds are occupied in any given facility. Therefore, to actually rehabilitate prisoners and reduce recidivism rates is not financially beneficial. One study found that incarcerated people in private prisons are likely to serve two or three months more behind bars than those in public prisons, and are equally likely to commit more crimes after release, despite industry claims to lower recidivism rates through high-quality and innovation rehabilitation programs.

Additionally, these corporations spend significant time and resources to lobbying and campaign contributions in order to receive contracts and promote legislation that results in higher rates of incarceration. Since 1989, GEO and CoreCivic have spent over $35 million in lobbying efforts and candidate donations. Most of the “tough on crime” legislation in the 1990’s arose from the American Legislative Exchange Council (ALEC). The Private Sector Chair of ALEC’s Public Safety Task Force was CoreCivic.

These corporations have also faced numerous controversies and problems. The most common include medical neglect, suicide and self-harm, wrongful death lawsuits, physical and sexual abuse of prisoners by staff and other incarcerated people, fights and riots, lack of vocational programming, treatment services, and jobs, understaffing and high staff vacancy rates, poor facility audits and lost contracts, and staff misconduct including bringing drugs into the prisons and staff arrested for crimes committed within and outside prison walls.

In 2011, Enlace launched a national Prison Divestment Campaign against CoreCivic and GEO with a coalition of unions and immigration rights and community groups. In 2012, the United Methodist Church, which has the largest faith-based pension fund in the US, divested $180 million from prisons. More churches and religious groups, colleges and universities, and cities followed suit. In addition, companies such as Wells Fargo, Scopia Capital Management, DSM North America, and Amica mutual Insurance pulled investments from CoreCivic and GEO.

Immigration Detention Centers
The number of people held in immigration detention centers has also increased significantly from the 1980s, rising from a daily average of 131 people detained to between 31,000 and 34,000 in 2016. The annual cost of detention alone is $2 billion. In 2016, over 65 percent of detainees are held within private facilities, and immigration is a growing sector for corporations like CoreCivic and GEO. In 2014, 13 percent of CoreCivic’s revenue came from Immigration and Enforcement Customs (ICE) and, in 2016, that number more than doubled to 28 percent.

In February 2017, the Trump administration prioritized an ICE expansion, including deportations and detention center, and two new private detention centers opened in Georgia and Texas, and another one expected to open in 2018.

There are numerous human right abuse allegations against private detention centers. These allegations are similar to prison facilities, including medical neglect, abuse at the hands of guards and detainees, and self-harm. Critics also claim that there is little oversight of these corporations or, when abuses are publicized, the allegations are ignored. In 2016, a CoreCivic-owned detention center in New Mexico was reported to be severely neglecting those detained within the facility, including operating without a medical doctor and failing to provide basic care. When the allegations were made public, the federal government terminated the contract with CoreCivic. However, less than a month after the termination, ICE negotiated a new contract with CoreCivic at the same facility. As of February 2017, the facility currently holds 400 detainees, with space for 800 more. 

Private Facilities Outside the US
Increasingly, other countries are importing the private correction models. While the US outpaces the world in prison privatization, Australia, New Zealand, and the UK have higher percentages of incarcerated people within private prisons than the US. There is some type of prison privatization in eleven countries. As we live in a global economy, where many corporations have business and investors trans-nationally, we have conducted research into the main private prison operators abroad, to produce the first list of such companies. The fuller summary of private prisons abroad can be found here or on our main prison page.

The major corporations involved in private prison facilities outside the US are The GEO Group, G4S, Serco, Sodexo, Broadspectrum (a subsidiary of Ferrovial), MITIE, Reliance Security, and Corbel Management Corporation.

Among the companies listed here, we recommend these 5 for divestment.