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SEC rejects shareholder resolution to reduce phone rates at CCA facilities

Nashville Scene, Jan. 1, 2014.
SEC rejects shareholder resolution to reduce phone rates at CCA facilities - Nashville Scene 2014

CCA Blocks Resolution Aimed at Lowering Cost of Phone Calls Between Inmates and Their Families


Corrections Corporation of America, the nation's largest for-profit prison company which is headquartered right here in Nashville, has successfully blocked a shareholder resolution which supporters say was aimed at lowering the cost of phone calls between inmates and their families on the outside.

The resolution was filed by Alex Friedmann, a former CCA prisoner who is now the managing editor for Prison Legal News, an associate director for the Human Rights Defense Center, and, importantly, a CCA shareholder. He's been a persistent thorn in CCA's side.

According to a release from the HRDC, Friedmann's resolution "would have required CCA to forgo “commission” kickbacks from prison phone service providers. Such kickbacks are typically based on a percentage of revenue generated from inmate telephone services (ITS) — revenue that is mostly paid not by prisoners but by their families."

Last week, per the HRDC release, the Securities and Exchange Commission granted CCA's request to exclude that resolution. More from the HRDC, after the jump:

Specifically, the shareholder resolution stated that CCA “shall not accept commissions; rather, when evaluating and entering into ITS contracts, the company shall give the greatest consideration to the overall lowest ITS charges among the factors that it considers.” CCA filed a no-action request with the SEC seeking to exclude the resolution from its proxy materials.
Prison phone rates are typically much higher than non-prison rates due in large part to the commission kickbacks — which average almost 48% of ITS revenue. The high cost of prison phone calls makes it difficult for prisoners to maintain regular contact with their families and children; an estimated 2.7 million children in the U.S. have an incarcerated parent, and eight states have banned ITS commissions in order to reduce prison phone rates.

On February 11, 2014 a Federal Communications Commission (FCC) order went into effect that caps the cost of long distance prison phone calls nationwide at $.25 per minute for collect calls and $.21 per minute for debit and prepaid calls. The order does not apply to intrastate (in-state) prison phone rates, however, which remain high at many correctional facilities.

As stated by FCC Commissioner Mignon Clyburn last year: “Studies have shown that having meaningful contact beyond prison walls can make a real difference in maintaining community ties, promoting rehabilitation, and reducing recidivism. Making these calls more affordable can facilitate all of these objectives and more.”

“In contracting with government agencies to incarcerate prisoners, CCA has a responsibility to ensure that those prisoners are afforded opportunities to rehabilitate themselves,” stated HRDC prison phone justice director David Ganim. “Reducing phone rates at CCA facilities would have resulted in greater communication between prisoners and their families and children, leading to lower recidivism rates and benefiting our communities through less crime.”

“CCA put its profits first,” said Friedmann, a former prisoner who served six years at a CCA-operated prison in the 1990s. “The company claims that it’s interested in rehabilitating offenders, but when faced with a resolution that would have reduced phone rates at its for-profit facilities, thereby having a rehabilitative effect on prisoners and resulting in less recidivism, CCA decided its profits from prison phone kickbacks were more important. Which demonstrates that despite its corporate PR rhetoric, CCA cares little about rehabilitation or public safety.”

The resolution had noted that before the FCC order went into effect, one CCA-operated facility, the Silverdale Detention Facility in Chattanooga, received a commission kickback of 48% of prison phone revenue, and that a 15-minute call from that facility cost as much as $9.75.



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