Tag Archives: Corecivic

About CoreCivic: Gov. Phil Scott’s partner in the prison business

Governor Phil Scott’s administration is planning to create (hire a company to design and build)  a 925- bed state prison/treatment complex in Franklin County. The plan involves partnering with the for-profit prison corporation CoreCivic (formerly Corrections Corporation of America). According to Vtdigger.com: [Sec. Vermont Agency of Human Services]  Al Gobeille is proposing that the state contract out the design, construction and financing to a private entity, which then would lease the facilities to the state for 25 years. The state would make annual appropriations to pay for the use of the campus.[added emphasis]

For now, many specific details are a moving target but this feature of the proposed dealVermont would lease the facility from CoreCivicis pretty interesting in light of recent changes in CoreCivic’s business model.corecivicVTAHS1

Historically CoreCivic political donations and lobbying are directed overwhelmingly to Republican Party candidates at all levels of government. They even ponied up $250,000 to support Trump’s inauguration celebration last year.

And  under the Obama administration as contracts dwindled, for-profit prisons stocks fell. CoreCivic and another major for-profit prison corporation, GEO Group, were looking at hard times.

Then in 2013  CoreCivic (then CCA) and the GEO Group (that together own 80% of all US for-profit prison facilities) restructured themselves more profitably as real estate investment trusts (REIT). Now, thanks to the recent GOP tax code changes signed into law by Donald Trump, these two for-profit prison corporations will reap a windfall

The Guardian.com reports: Under the new GOP law, investments in so-called “real estate investment trusts” (REIT) will see a 25% reduction in tax, from 39.6% down to 29.6%. [added emphasis]

Before converting to a reit in 2013, Corecivic was subject to a 36% corporate tax rate. After the reorganization, it reported paying an effective tax rate in the first quarter of 2015 of just 3%.

Sooo much winning for prison corps!

And here’s how it works. Lauren-Brooke Eisen, an attorney at the Brennan Center for Justice, said: “The way they are able to get away with that, is that they’re not allowed to keep a lot of cash on hand, they have to give it back to investors though dividends. But it allows them to have an incredibly low tax rate.”

According to Eisen, prison companies have essentially argued that renting out cells to the government is the equivalent of charging a tenant rent, thus making such business primarily a real estate venture.

It is a debate whether or not a lease deal with CoreCivic is good for Vermont. But there’s little doubt it’s REAL GOOD for CoreCivic. In fact the profits might seem almost criminal.

Wonder why GEO Group canceled VT’s prison contract?

In December (after the election, of course) GEO Group (formerly Wackenhut Corrections Corporation) unexpectedly opted not to renew a multi-year contract to house State of Vermont prisoners. Their North Lake Correctional Facility in Michigan was housing less than 300 Vermont inmates (the only occupants in the facility) but has a potential capacity of 1,748.

Private for-profit prison companies just got a belated Valentine’s Day  love letter from new Attorney General Jefferson Beauregard Sessions. The Valentine came in the form of a memo that reverses acting Attorney General Sally Yates’ directives aimed to slow and ultimately end the Bureau of Prisons’ use of privately run for-profit prisons. The Obama Justice Department had acted on data (see here and here )suggesting that private prisons are less well run than those managed by the Bureau of Prisons, and since overall prison population wasn’t growing, they were no longer be needed.

However, Attorney General Sessions shifted — well actually reversed — the policy in his memo Thursday by declaring that curtailing private prison use “impaired the Bureau’s [Bureau of Prisons’] ability to meet the future needs of the federal correctional system.”  cell door Think about what that says about the future Session envisions.

The new Attorney General may not have been the only one anticipating that Trump’s aggressive immigration sweeps will be supplying new detainees to occupy private prison beds. And  since they opted out of the next one-year extension of Vermont’s contract in Dec. 2016, GEO Group will have emptied one of its facilities by June. So, maybe look for the future announcement that GEO’s North Lake will re-open to house the overflow of ICE detainees from Trump’s sweeps awaiting deportation hearings.

GEO Group is the largest (CoreCivic formerly Corrections Corporation of America is second) contract provider of detention services for ICE, the Federal Bureau of Prisons, and the U.S. Marshals Service. With recent acquisitions Geo Corrections & Detention and Geo Care will own or manage about 98,000 beds worldwide including about 7,000 community reentry beds.prisonprofitper

And GEO’s political action committee spends lavishly on politicians. In 2016 alone they gave $300,000 to Trump’s presidential campaign and almost that much in Senate and Congressional races — overwhelmingly to Republican candidates — all that in addition to heavy lobby spending on state legislators and governors[the following was added 2/26Phil Scott got his bit:a $2,000.00 donation from GEO in March 2016].  GEO Group (and earlier Wackenhut) has helped fund and is listed as a member of ALEC (the conservative American Legislative Exchange Council).

So, it’s probably no accident GEO Group knew which way the wind was going to blow regarding immigrant detention when Trump said he’d deport ‘em all. There are estimated to be up to 8 million people in the country illegally that could be considered priorities for deportation. Sessions’ memo  just monetized them. And GEO stock is at an all time peak.