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History

Corrections Corporation of America (CCA) was founded in Nashville, Tennessee, on January 28, 1983, by Thomas W. Beasley, Doctor Robert Crants and Terrell Don Hutto. Beasley served as the chairman of the Tennessee Republican Party; Crants was the chief financial officer of a real estate company in Nashville; Hutto was the president-elect of the American Correctional Association. A founding member of its board of directors was Maurice Sigler, the former chairman of the United States Board of Parole. The initial investment came from Jack C. Massey, co-founder of the Hospital Corporation of America. An early investor prior to the IPO was Vanderbilt University, where Beasley was a law graduate. Additionally, the Tennessee Valley Authority was another early financial backer.

In a 2013 video published on CCA's website, Beasley and Hutto fondly reminisced about the humble beginnings of CCA. Because of Hutto's well-earned reputation through his years of experience in corrections and as president-elect of the American Correctional Association, a first meeting about a potential joint venture to detain illegal aliens in Texas, took place between Beasley, Hutto, the Federal Bureau of Prisons and the now defunct Immigration and Naturalization Service (INS) which operated under U.S. Department of Justice from 1933 to 2003. As a result of the initial meeting, CCA were awarded an RFB with it was under contract to the U.S. Department of Justice for the Bureau of Immigration and Customs Enforcement (formerly Immigration and Naturalization Service)., which was the "first contract ever to design, build, finance and operate a secure correctional facility." This marked the beginning of the private prison industry. Hutto, described how at the time, INS had "unrealistic expectations" putting pressure on CCA to have the facilities ready by early January, ninety days from the signing of the contract. In a desperate attempt to find a solution, Hutto and Beasley flew to Houston, Texas and after several days managed to negotiate a deal with the owner of Olympic Motel—a "pair of non-descript two-story buildings" on "I-45 North between Tidwell and Parker"—to hire their family and friends to staff the re-purposed motel for four months. On Super Bowl Sunday at the end of January, the first 87 undocumented aliens were personally processed by Hutto and CCA received their first payment. The company opened its first facility, the Houston Processing Center, in 1984; it was under contract to the U.S. Department of Justice for the Bureau of Immigration and Customs Enforcement (formerly Immigration and Naturalization Service). The Houston Detention Center was built to house individuals awaiting a decision on immigration cases or repatriation.

In 1984, CCA also took over the operations of the Tall Trees non-secure juvenile facility, for the Juvenile Court of Memphis and Shelby County. Two years later, CCA built the 200-bed Shelby Training Center in Memphis to house juvenile male-offenders.

In 1989, it opened the New Mexico Women's Correctional Facility in Grants, New Mexico; it had constructed this facility of 204 beds.

In the 1980s, CCA officials met with representatives of the Mitterrand administration in France. They did not win any contracts there for CCA prisons.

In 1990, CCA opened the first medium-security privately operated prison, the state-owned Winn Correctional Center, in Winn Parish, Louisiana.

It opened the Leavenworth Detention Center, operated for the U.S. Marshals Service, in 1992. This 256-bed facility was the first maximum-security private prison under direct contract to a federal agency.

CCA entered the United Kingdom in 1992, when it entered a partnership with Mowlem and Sir Robert McAlpine to form UK Detention Services. It opened the 650-bed Blackenhurst prison in Worcestershire, England.

The stockholders are mostly corporate entities and it is classified as a real estate investment trust, or REIT. Research published in Social Justice by scholars at Rutgers University showed that in 2007, the company had "114 institutional stockholders that together amount[ed] to 28,736,071 shares of stock." The scholars added, "The largest number of shares of CCA stock is held by RS Investments (3,296,500), WesleyCapital MGMT (2,486,866) and Capital Research and MGMT (2,057,600)."

In 2010, the ACLU filed a lawsuit on behalf of inmates at the Idaho Correctional Center, claiming that understaffing contributed to the high levels of violence there. In 2014, the Federal Bureau of Investigation (FBI) began an investigation into CCA management of the ICC to ascertain whether any Federal statutes were violated because of the understaffing of the facility and what was found to be falsification of staffing records.

In 2016, the Obama administration provided the CCA a $1 billion no-bid contract to detain asylum seekers from Central America.

Overview

Founded in 1983, Corrections Corporation of America (CCA) owns or operates jails and prisons on contract with federal, state and local governments. CCA designs, builds, manages and operates correctional facilities and detention centers for the Federal Bureau of Prisons, Immigration and Customs Enforcement, the United States Marshals Service, as well as state and county facilities across the United States.

CCA houses approximately 90,000 offenders and detainees in its more than 60 facilities; it employs more than 17,000 persons nationwide. Federal contracts for correctional and detention facilities generated up to 51% of its revenues in 2015. It operated 22 federal facilities with the capacity for 25,851 prisoners.

The American Correctional Association (ACA) has accredited 90% of CCA's facilities. ACA's Accreditation is a system of verification that correctional agencies and facilities comply with national standards promulgated by the American Correctional Association. Accreditation is achieved through a series of reviews, evaluations, audits and hearings.

On August 18, 2016, Deputy U.S. Attorney General Sally Yates announced that the Justice Department intended to end its Bureau of Prisons contracts with for-profit prison operators, because its own analysis concluded "...the facilities are both less safe and less effective at providing correctional services..." than the Federal Bureau of Prisons. In a memorandum, Yates continued, for-profit "...prisons served an important role during a difficult period, but time has shown that they compare poorly to our own Bureau facilities. They simply do not provide the same level of correctional services, programs, and resources; they do not save substantially on costs; and as noted in a recent report by the Department's Office of Inspector General, they do not maintain the same level of safety and security. The rehabilitative services that the Bureau provides, such as educational programs and job training, have proved difficult to replicate and outsource and these services are essential to reducing recidivism and improving public safety."

Inmate rehabilitation

The United States prison system provides reentry and rehabilitation programs for inmates. Such programs often include education, vocational training, addiction treatment as well as faith-based programs. In addition to the reentry and rehabilitation programs, prisons often offer inmates recreational and optional faith-based opportunities. The latter is considered an integral part of inmate rehabilitation.

CCA says it offers basic adult education, post-secondary education, GRE preparation, and testing and literacy programs to all inmates. The Department of Justice's Bureau of Justice Statistics reported in 2008 that 40% of privately run facilities did not offer such programming to inmates. According to national research, providing inmates with education and vocational programs can reduce the likelihood that offenders will commit new offenses upon release and return to prison.

In 1993, CCA launched the LifeLine substance abuse training program at the Metro-Davidson County Detention Facility in Nashville, Tennessee. In the early 21st century, CCA offers the program in 23 of its 60 facilities.

Occupancy and profitability

In a 1990s report, Prudential Securities was bullish on CCA but noted, "It takes time to bring inmate population levels up to where they cover costs. Low occupancy is a drag on profits... company earnings would be strong if CCA succeeded in ramp(ing) up population levels in its new facilities at an acceptable rate".

In 2011, responding to an initiative from the State of Ohio to reduce "overhead costs by saving $13 million annually while adding 700 beds to house inmates in the overcrowded system," Corrections Corporation of America agreed to buy the Lake Erie Correctional Institution for $72.7 million. This is a change in company policy, as previously CCA had always constructed its own prisons. The purchase was contingent on the Ohio Department of Rehabilitation and Correction agreeing to a high level of occupancy under the contract. The State failed to find buyers for many other prisons which it offered for sale. This was considered good news by the Ohio Civil Service Employees Association, the union for prison guards.

In 2012, CCA sent a letter to prison officials in 48 states, offering to buy prisons from these states in exchange for a 20-year management contract with a guaranteed occupancy rate of 90%. Many community organizations have criticized the proposals, arguing that the contractual obligations of states to fill the prisons to 90% occupancy are poor public policy, creating an incentive to criminalize behavior and lengthen sentences in order to keep the prisons filled. They believe that these contractual clauses end up costing taxpayers more than state-run prisons would and add to over-incarceration.

Employment issues

In 2002 CCA agreed to pay more than $152,000 in back wages to 96 Oklahoma women denied employment because of gender discrimination. A U.S. Department of Labor audit showed women applicants, who were equally or better qualified than men hired, were rejected.

In 2008 CCA was ranked as one of the 100 best corporate citizens by Corporate Responsibility Officer magazine. The national military magazine GI Jobs highlighted CCA as a solid employer for veterans. In 2010 it ranked CCA as one of the "Top 50 Military Friendly Jobs."

But in 2010, a Muskogee, Oklahoma federal court jury found CCA guilty of violating the employment rights of a shift supervisor by terminating his job when he was deployed to Iraq. It determined that CCA should pay about $53,000 in damages for violation of the Uniformed Services Employment and Re-employment Rights Act.

Immigrant detention facilities

The prison industry declined in the late 20th century, as the crime rate was decreasing nationally and privatization was under attack by critics and legislators. There had been widespread reports of escapes, inmate violence, and deplorable conditions in such private facilities. Speculative prison building, sometimes supported by small municipalities hoping to increase local employment, had increased competition and the pressure to keep prisons filled.

CCA and the industry as a whole rebounded in the early 2000s, following a massive increase by the federal government in detentions of undocumented immigrants in the wake of 9/11 attacks. This created a new market for its facilities. From 2001 to 2011, CCA revenue increased 88 percent, and they received at least $1 billion in revenue for each of the eight years from 2003 to 2011.

In 2012, CCA derived 30 percent of its revenue from federal contracts. In 2012 some $546 million for CCA came from federal contracts with the Bureau of Prisons and the U.S. Marshals Service. Although they have denied lobbying, private prison corporations specifically target Republican legislators over immigration "reform." The companies' success in lobbying for immigrant detention was similar to their harnessing the zeitgeists of the preceding decades, from "Tough On Crime" and privatization in the 1980s and 1990s. By 2015, CCA derived 51% of its revenue from federal contracts.

In March, 2017 President Donald J. Trump announced he would increase immigrant detention, although this was anounsed under the guise of national security. The administration decided it would be in the best national interest to radically expand the United States' detention capacity, specifically for women and children, by over four-hundred fifty per cent (450%). U.S. immigration chief stated that he plans to expand the number of mother-child "beds" in immigration centers near the border from the current 3,500 beds up to 20,000 beds. This signals the largest increase in immigrant detention since World War Two.

T. Don Hutto Residential Center

The T. Don Hutto Residential Center is a former medium-security prison in Taylor, Texas, which, from 2006 to 2009, held immigrant detainees ages 2 and up under a pass-through contract with Immigration and Customs Enforcement (ICE) division of Homeland Security. After local and national protests, federal officials announced on August 6, 2009, that it would no longer house immigrant families in this prison. Instead, only female detainees will be housed there. In September 2009, the last families left the facility and were moved to the Berks Family Residential Center in Pennsylvania.(owned by the Nakamoto Group). In November 2015, a hunger strike at the Hutto Center quickly grew to include 500 immigrant women. They were protesting their extended detention in this center.

Eloy Detention Center

The Eloy Detention Center of Arizona, operated by CCA, has had 15 detainee deaths since 2003, including five by suicide. Congressman Raúl Grijalva, D-Ariz., said these events made it "the deadliest immigration detention center in the U.S." In late July 2015 he called for an independent investigation into the most recent suicide.

Central Detention Center of Arizona

This 2,304-bed facility serves multiple federal detention constituencies: U.S. Marshals Service, TRANSCOR, Bureau of Immigration and Customs Enforcement, Pascua, and the USAF, with multiple security levels. It is located in Florence, AZ and has an entirely male population.

South Texas Residential Center, Dilley, Texas

In April 2016, an application for a child-care license for the Dilley detention facility, which is run by Corrections Corporation of America, was pending. This facility houses 2,400 children and female detainees. A license inspection in April of that facility had found 12 deficiencies. Those included: all playgrounds showed worn AstroTurf and exposed seams, creating a potential tripping hazard; and unsecured medical supplies, such as scalpels and used syringes, were seen on top of counters. No temporary license was to be issued until those problems were corrected.

Laredo Processing Center

Texas ICE facility for processing illegal immigrants. Has 404 beds for both male and female detainees. It has been operated by CCA since 1985.

Houston Processing Center

Bureau of Immigration and Customs Enforcement Medium Security processing center for illegal immigrants; it has been owned by CCA since 1984. It is a 1,000-bed male and female detainee center.

Colorado

CCA closed the Huerfano County Correctional Center at Walsenburg, Colorado, in 2010. CCA appealed an initial county assessment of $30.5 million in property taxes for 2010. CCA's contract with the county had specified that CCA would pay only $19 million for 2011 and $15 million for each of the next three years.

Kentucky

As of June 2013, Kentucky did not renew its contract with CCA for the Marion Adjustment Center in St. Mary. This was its last contract for private operations, ending three decades of contracting with private companies to operate prisons for the state.

Until 2015, the Lee Adjustment Center, in Beattyville, Lee County, held Vermont prisoners in addition to those from Kentucky. In September 2004 a riot broke out involving Kentucky and Vermont prisoners.

The Otter Creek Correctional Center, located in Wheelwright, Floyd county, suffered a riot in July 2001, involving Kentucky and Indiana male prisoners. It was closed by CCA and converted to a women's prison. In August 2009, following numerous reports of sexual abuse of prisoners here by staff, including a chaplain, of female inmates from Hawaii and Kentucky, those states removed their prisoners from the Otter Creek Center. CCA closed the facility in 2013.

Minnesota

Appleton, Minnesota, in Swift County, is home to a vacant medium-security prison, the Prairie Correctional Facility, which CCA closed in 2010. Although the state corrections needs additional capacity, neither the Department of Corrections nor the governor favor leasing the prison or contracting with CCA to operate it. In November 2015, state Corrections Commissioner Tom Roy said he was not ruling out use of Appleton, but said he does not like the basic principle underlying private prisons. "The notion of incarceration for profit," he said, "I don't think is very popular in this state."

Oklahoma

In May 2004 rioting broke out at the Diamondback Correctional Facility in Watonga, Oklahoma, constructed in 1998. CCA closed it in 2010 after losing a federal contract. The town hoped to find other uses for the facility. The North Fork Correctional Facility, in Sayre, Oklahoma near the Texas border, was constructed in 1998. It suffered rioting in April and June 2000, and in October 2011. It was closed in November 2015.

In January 2016, Joe Allbaugh, best known for managing the gubernatorial campaign of George W. Bush and serving as the Director of the Federal Emergency Management Agency, was appointed by Governor Mary Fallin as the Interim Corrections Commissioner of Oklahoma. He had no correctional experience. His predecessor was forced to leave after two executions were badly mismanaged. In 2002, Allbaugh had recommended Michael D. Brown as his successor at FEMA. His "Allbaugh Company" clients included The Shaw Group, winner of a bid to refurbish buildings and provide emergency housing following damage from Hurricane Katrina, and Halliburton subsidiary KBR, which received $29.8 million contracts to rebuild Navy bases in Louisiana and Mississippi. Brown, who was an Oklahoma native and Allbaugh's longtime friend from Republican state politics, had been hired by Allbaugh as FEMA's general counsel. His legal and emergency services credentials have been found to have been padded.

After being appointed in Oklahoma, Allbaugh initiated a contract to lease North Fork from CCA. He directed the transfer of state prisoners to Sayre from county jail work centers. In those sites, the prisoners were closer to their families and worked in their communities for such county maintenance functions as litter pickup and park maintenance. The Sayre prison is far from the mostly urban centers from which inmates had been sentenced and held, such as Tulsa (230 miles) and Oklahoma City (130 miles). This has made it difficult for families and friends to maintain connections that support the prisoners.

The contract negotiated by Allbaugh's staff to lease CCA's empty 2,600-bed for-profit prison in Sayre while closing the state’s 15 inmate work centers was voted on in May 2016, by the Oklahoma Board of Corrections. No one was authorized to discuss the contract publicly. The prison began losing inmates in 2012 after California removed its prisoners.

Treatment of inmates and disclosure of shortcomings of oversight

Responding to an inmate's death in 2006 at CCA's immigration jail in Eloy, Arizona, government investigators found the medical care provided meant that "detainee welfare is in jeopardy". A subsequent inmate death at the facility resulted in an additional inquiry and "another scathing report," according to the New York Times.

In August 2009 the ACLU filed suit against CCA and related government agencies because government officials who were responsible for overseeing the care provided failed to provide data about conditions. The Obama administration acknowledged that immigration detention facilities had suffered rates of death of 1 in 10 deaths among inmates, and that this data had been omitted from a list of deaths presented to Congress earlier that year. Two of those deaths took place at CCA's Eloy Detention Center. CCA's Eloy jail had nine known fatalities – more than any other immigration jail under contract to the federal government, according to documents obtained in 2009 under FOIA requests by the New York Times and the ACLU.

In 2013, CCA confirmed that an internal review showed the corporation had falsified records involving about 4,800 employee hours over a period of seven months, at its Idaho State Correctional Center. In 2014 a subsequent KPMG audit showed the actual overbilling was for over 26,000 hours. Governor Butch Otter ordered Idaho State Police to investigate to see if criminal charges should be brought. Otter had received a total of $20,000 in campaign contributions from employees of the company since 2003. In March, the state announced that the FBI was taking over the investigation, as well as investigating CCA operations in other states.

CCA has been criticized for hiring "revolving door" executives from agencies with which it has contracted. Harley Lappin and J. Michael Quinlan, former directors of the Federal Bureau of Prisons, were hired soon after resignations from BOP following scandal at the agency.

In the fall of 2012, state auditors of the Lake Erie Correctional Institution in Ohio, which CCA had acquired and operated since January of that same year, deducted $500,000 for contract violations and inadequate staffing. The prison had suffered a high rate of violence and contraband drugs after CCA took it over.

Lobbying efforts

CCA lobbyists have worked to shape and support private prison legislation in many localities, including Texas, New York, Illinois and Tennessee. Between 2002 and 2012, CCA spent $17.4 million lobbying the Department of Homeland Security, U.S. Immigration and Customs Enforcement (ICE), the Office of Management and Budget, the Bureau of Prisons, both houses of Congress, and others. This sum included $1.9 million in campaign contributions.

According to the Boston Phoenix, CCA spent more than $2.7 million from 2006 through September 2008 on lobbying for stricter criminal laws and mandatory sentencing terms, in order to generate prisoners. CCA responded that it does not lobby lawmakers to increase jail time or push for longer sentences under any circumstance, noting that it "educates officials on the benefits of public-private partnership but does not lobby on crime and sentencing policies."

Among its risk factors listed in its 10-K annual report, as required by the SEC, CCA includes the following:

"The demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, leniency in conviction or parole standards and sentencing practices or through the decriminalization of certain activities that are currently proscribed by our criminal laws. For instance, any changes with respect to drugs and controlled substances or illegal immigration could affect the number of persons arrested, convicted, and sentenced, thereby potentially reducing demand for correctional facilities to house them."

At the federal level, the corporation's lobbying focuses largely on immigrant detention. In 2012, CCA spent nearly $1.8 million lobbying Congress and federal bureaucracies on issues relating to homeland security, law enforcement, immigrant detention, and information disclosure legislation.

Lawsuit about gang influence in Idaho prison

In 2010 the FBI conducted an investigation of CCA practices following an incident at their prison in Idaho Correctional Center in which a prison inmate was beaten unconscious in an inmate attack. A video released by the Associated Press showed the incident underway as guards watched without taking action. Because the matter was under litigation, the company had said publicly that the release of the video is "an unnecessary security risk to our staff, the inmates entrusted to our care and ultimately to the public." CCA said it was cooperating with investigators.

In March 2010, the ACLU filed suit in federal court against CCA in Idaho, alleging that guards were not protecting inmates from other violent inmates. In February 2014, the federal judge hearing the case awarded $349,000 in attorney fees to the ACLU for its costs in bringing the action. A settlement was reached to correct conditions at the prisons run by CCA.

In November 2012, eight inmates filed a federal lawsuit in Idaho alleging that CCA prison officials partially ceded control of the Idaho Correctional Center to gang leaders. The lawsuit cited Idaho Department of Correction reports suggesting that the Aryan Knights and the Severely Violent Criminals were able to wrest control from staff members after prison officials began housing members of the same gangs together in some cell blocks to reduce violent clashes. In September 2013, a federal judge held CCA in contempt of court for persistently understaffing the Idaho Correctional Center in direct violation of a legal settlement. In October 2013, CCA was discouraged from bidding on a new contract to operate the Idaho Correctional Center. The state took back control and operations of its prison on July 1, 2014.

Also in 2012, former and current employees in Lieutenant positions, who were categorized as "Salary Employees," filed lawsuits arguing that their daily duties and work hours were not that of a salary employee. They worked considerable overtime. Specifically, they sued CCA because their actual duties were not those of typical salaried employees in criminal justice, nor did they have the authority to "Hire and Fire" as a salaried employee should. CCA lost the lawsuit and paid a settlement of hundreds of thousands of dollars to its current and former Lieutenants. After losing the suit, CCA continued to classify their Lieutenants as salaried employees, saying, "It's cheaper to pay out law suits every couple years than it is to pay them for the (overtime) hours they actually work."

Co-operation with local law enforcement in a school drug sweep

In 2012, CCA conducted a drug sweep of Vista Grande High School in Casa Grande, Arizona in concert with local law enforcement. The program director of the Tucson office of the American Friends Service Committee said, “It is chilling to think that any school official would be willing to put vulnerable students at risk this way.”

2012 fatal prison riot in Mississippi facility

In May 2012 a riot at CCA-operated Adams County Correctional Facility in Natchez, Mississippi resulted in the death of a Corrections Officer and injury to sixteen staff members and three prisoners. Twenty-five employees were held hostage during the disturbance. It was quelled by facility staff with assistance from the Mississippi Highway Patrol and the Federal Bureau of Prisons. According to a company statement, the fatality was the second time an employee had "lost his life to inmate assault."

Prison fights and fatalities in Oklahoma

In 2015 violence increased at Cimarron Correctional Facility in Cushing, Oklahoma, including a riot involving 200–300 prisoners in June 2015 that resulted in eleven inmates being hospitalized. On September 13, 2015, a fight between white gangs broke out that resulted in the deaths of four inmates and hospitalization of four others because of their injuries. It was the deadliest event in the Oklahoma corrections’ history. Interim Corrections Commissioner Joe Allbaugh said, “We don't have the flexibility in our system to segregate these gangs, so they are together in close quarters and so sometimes things happen.”

The American Civil Liberties Union (ALCU) of Oklahoma director says it receives “a great deal” of complaints about treatment in private prisons, “I would say we get roughly double the number per capita from private prison inmates from public prison inmates.” The complaints range from safety concerns to lack of appropriate food and medical care. CCA declined multiple requests for a recorded interview after the Cimmaron events.

Oklahoma most recently sent a "notice to cure" to a private prison in October to inform Cimarron Correctional Facility it was more than seven months behind in reporting use of force standards and reportable incidents. According to DOC’s contract with CCA, the business has five days to submit proper forms, but the state was waiting on reports dating back to March 2015.

The ACLU’s Brady Henderson said this pointed to a practice within the prison system of concealing records. “Even in public facilities, there's an incredible amount of secrecy," a lack of transparency. "It's already hard to know. It gets 10 times harder with a private facility,” he said.

Allbaugh said that because of overcrowding in the Oklahoma system, his agency would continue to do business with private prison companies.“As much as I don't think the state ought to be doing business with private prisons, I'm glad they're around because they're our only relief valve available to us during this crunch.” In March 2016, video from a contraband cell phone was released that showed a group of inmates throwing another prisoner off a tier.

U.S. Department of Homeland Security oversight

In August 2016, U.S. Homeland Security Secretary Jeh C. Johnson announced that the group would be reviewing its use of private detention facilities for housing illegal immigrants. This followed the announcement by the Department of Justice that the Bureau of Prisons would phase out its private contracts. As of 2015, federal revenues made up 51% of CCA's total income. CCA operates 22 federal facilities with a capacity of 25,851 prisoners.