4/20/2023 0 Comments Prisons big business![]() ![]() The bulk of CCA and GEO Group’s multibillion-dollar revenue stream comes from taxpayers, but both companies have found a way to avoid paying millions of dollars in income taxes by converting themselves into real estate investment trusts, or “REITs.” Activists say these diverted tax revenues encourage powerful investors to manipulate politicians and shape public policy to favor incarceration.Įstablished in 1960 by President Dwight Eisenhower, REITs were originally intended to be passive investment vehicles allowing groups of investors to put money into real estate properties without actually buying and servicing them, much like a mutual fund. ![]() Neither CCA nor GEO Group responded to requests for comment from Truthout.Īctivists Demand an End to Tax Breaks for Prison Companies The government typically pays prison companies a daily rate for each prisoner held in a private facility, and holding one prisoner an extra two months costs about $3,000. In their financial reports, prison companies chalk up negative publicity generated by riots and other problems as a cost of doing business, but even violence and disorder can bring in revenue.Ī 2015 study found that the average prisoner at private prisons in Mississippi spent an additional two to three months behind bars because private facilities handed out twice as many conduct violations as public facilities. So it’s no surprise that prisons suffer from outbreaks of violence from time to time. ![]() Little data is available on rates of assaults perpetrated by prison guards against prisoners, but attacks and cover-ups by guards in New York and other states are beginning to attract media attention.Ĭaging people is itself a violent act, and packing hundreds or thousands of people together in a small space with no escape tends to provoke anxiety and anger, no matter who those people are. After the Lake Erie Correctional Institution in Ohio was privatized in 2011, prisoner-on-prisoner assaults increased by 188 percent, and prisoner-on-staff assaults increased by 306 percent. Last year, CCA lost a government contract and paid $1 million in fines for understaffing at a prison in Idaho that become so violent it earned the nickname “gladiator school,” according to ITPI. General safety is also a concern, because private prison firms have been known to reduce staff pay and training. Indeed, a growing number of medical malpractice cases and several deaths in jails and prisons have been linked to privatization. “Paying private prison companies massive profits diverts resources from programs and training that would help both prisoners and correctional officers,” said Donald Cohen, In the Public Interest’s executive director.Ĭohen argues that operating prisons for profit creates incentives to cut corners and provide poor services and living conditions. Reformers have long argued that for-profit prisons suck taxpayer money out of the criminal legal system that could otherwise pay for alternatives to incarceration, educational programs for prisoners and enhanced training for police and correctional officers. CCA CEO Damon Hininger earned an $882,807 salary and $2.5 million in other forms of compensation last year. In comparison, GEO Group CEO George Zoley enjoyed a $1 million salary in 2015 along with $5.6 million in benefits such as bonuses and stock awards, according to ITPI and company reports. One in four officers employed at private prisons make less than $26,091, putting them near or below the poverty line for a family of four. ![]() Lower Wages Are Bad for Prison Safety but Good for ProfitĪnnual salaries for correctional officers at GEO Group and CCA facilities average around $32,000, while their counterparts at publicly run prisons make an average of about $41,000, according to ITPI. From 2012 to 2015, the average hourly wage for correctional officers at both companies dropped from $16.47 per hour to $15.53, according to an analysis by the watchdog group In the Public Interest (ITPI). The massive tax breaks have enraged prison reformers and advocates for communities impacted by incarceration, and they are currently petitioning Congress to remove them.įederal law requires the bulk of these tax benefits to be paid out to shareholders in dividends, so the benefits do not trickle down to average private prison employees unless they are stockholders themselves. CCA, which owns 66 jails and prisons nationwide and runs an additional 11 facilities on behalf of the federal and state governments, reported a net income tax benefit of nearly $138 million in 2013 alone. The conversion has effectively lowered each company’s tax rate by 30 percent or more, according to annual reports submitted to investors and regulators. ![]()
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