Prison Legal News Attends CCA Shareholder Meeting

by Alex Friedmann

From 1992 to 1998, I served time at the South Central Correctional Center in Wayne County, Tennessee, which is operated by Corrections Corporation of America (CCA), the nation’s largest private prison firm. On May 16, 2008 I attended CCA’s annual shareholder meeting at the company’s corporate office in Nashville ... as an investor. I’ve been to several other CCA shareholder meetings over the years, usually in the company of Harmon Wray – a tireless advocate for criminal justice reform through his work with the United Methodist Church and Vanderbilt Program in Faith and Criminal Justice. Harmon died unexpectedly in July 2007, so this year I went alone.

All of CCA’s board members were present plus most of the corporate officers, including general counsel Gustavus A. Puryear IV. Gus and I don’t have much in common. He’s a multi-millionaire and I’m not. He’s a member of the exclusive, notoriously discriminatory Belle Meade Country Club; I’m not. He’s been nominated for a lifetime appointment to the federal bench in Middle Tennessee, the same jurisdiction where CCA is headquartered. I’m trying to derail his nomination (for details, visit www.againstpuryear.org).

We didn’t exchange pleasantries. Before the meeting I met with Sister Gwen Farry of the Sisters of Charity of the Blessed Virgin Mary (BVM), and discussed a shareholder resolution sponsored by her organization and three other faith groups that would require CCA to disclose its expenditures and policies related to political contributions. The company spent $2.5 million on lobbying on the federal level alone last year. A 2004 report found that approximately 94% of political donations from CCA and company insiders went to Republicans. The BVM resolution failed to pass but did receive around 1/3 of the voting shares in favor, which was an exceptional result considering the lack of interest by most stockholders in the companies in which they invest. The resolution will likely be re-introduced next year. Nuns can be stubborn.

As a shareholder of record (I own one share of CCA stock), I addressed the Board members and informed them that Harmon, also a single-share stockholder, had passed away. I noted that while Harmon’s views did not coincide with the Board’s, he was a man of conscience who truly lived his faith – and his friends, fellow shareholders and CCA were poorer for his untimely death. I also presented two questions. The first was a bit lengthy:

“On March 13, Time magazine published an article based on the allegations of a former CCA senior manager turned whistleblower, who accused CCA of failing to disclose full and accurate quality assurance reports to contracting government agencies. The next day, on March 14, CCA sent a letter to all of its government customers, informing them of the Time article and assuring there was no basis for these allegations. That letter was filed with the SEC on a Form 8-K. Assuming there was no investigation by corporate staff in the one-day period between when the article was published and when the letter was sent, has CCA’s Board initiated any investigation to determine whether CCA’s internal quality assurance reports are being accurately and fully disclosed to contracting government agencies ...?”

CCA CEO John Ferguson initially asked me to disclose my affiliations and “agenda,” so everyone would know I was against prison privatization. I acknowledged that I was the associate editor for Prison Legal News and served in a voluntary capacity as vice president of the Private Corrections Institute, a citizen watchdog group that opposes for-profit prisons. I was polite and didn’t ask Mr. Ferguson about his own agenda – e.g., his annual salary of $712,249 and the 178,600 shares of CCA stock he owns valued at $4.6 million, according to SEC reports.

Ferguson then answered, without elaboration, that the Board had conducted an investigation and was satisfied with the results. And that, as they say, was that. Private prison corporate transparency at its finest. My second question was more succinct:
“The Time magazine article was related to the judicial nomination of vice president and general counsel Gustavus Puryear. Has CCA expended any company funds in connection with Mr. Puryear’s judicial nomination ...? If so, to what extent does the expenditure of such funds benefit shareholders?”

Ferguson admitted that CCA was expending funds on Gus’ judicial nomination, to the extent the company needed to counter “unfounded” accusations and “mischaracterizations” about CCA as a result of nomination-related media coverage. He was polite and didn’t mention that I’ve been the driving force behind most of that media coverage, which has included articles in the Tennessean, Mother Jones, Harpers, the Nashville Post and the Nashville Scene, as well as by the Associated Press, Alternet and UPI, plus the radio show Democracy Now.

Following the shareholder meeting I was approached by CCA’s communications director, Louise Grant. We sparred a bit but I told her I was open to discussing matters and hearing her side; however, she indicated that would be pointless since it was clear I wouldn’t change my mind. In fairness, she probably wouldn’t change hers, either. CCA deputy general counsel Steve Groom also had the courtesy to introduce himself. Gus left immediately after the meeting, without comment.I doubt CCA officials would have ever expected a former prisoner from one of their for-profit lock-ups to attend a shareholder meeting as an investor and question the company’s practices. This could only happen in America – the “land of the free” which, at last count, had 2.3 million people behind bars and growing, including an increasing number held in CCA’s privately-run prisons.

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