HRDC condemns CoreCivic for rejecting independent audits
Human Rights Defense Center
For Immediate Release
February 15, 2017
National Human Rights Group Condemns Private Prison Company’s Rejection of Oversight
Nashville, TN – Today, the Human Rights Defense Center condemned Nashville-based CoreCivic (NYSE: CXW), the nation’s largest for-profit prison operator – formerly known as Corrections Corporation of America – for rejecting a shareholder resolution seeking independent audits of the company’s detention facilities. CoreCivic’s objection to the audits was despite a report by the U.S. Department of Justice’s Office of the Inspector General (OIG) that found the company’s federal prisons had higher average rates of prisoner-on-prisoner assaults, sexual assaults on staff, fights and suicide attempts, in comparison with other privately-operated federal prisons.
The Human Rights Defense Center, founded in 1990 and based in Lake Worth, Florida, is a non- profit organization dedicated to protecting the rights of people held in U.S. detention facilities.
Following the OIG report, the U.S. Department of Justice announced plans to phase out the Bureau of Prisons’ use of private prisons. On August 18, 2016, then-Deputy Attorney General Sally Q. Yates wrote in a memo that for-profit prisons “simply do not provide the same level of correctional services, programs, and resources; they do not save substantially on costs; and ... they do not maintain the same level of safety and security.”
The call for independent audits of CoreCivic facilities was included in a shareholder resolution filed by Human Rights Defense Center associate director Alex Friedmann. Friedmann owns
a small amount of CoreCivic stock as an activist investor, which allows him to attend the company’s shareholder meetings and file resolutions to improve the company’s operations. On February 13, however, the Securities and Exchange Commission (SEC) granted CoreCivic’s request to reject the resolution seeking independent audits.
“CoreCivic, better known as CCA, has a long and sordid history of abuses and problems at its privately-operated prisons, jails and immigration detention centers,” said Paul Wright, executive director of the Human Rights Defense Center. “This company is a poster child for the need for independent audits to ensure humane and safe conditions of confinement in its for-profit facilities, and CoreCivic’s opposition to the resolution requiring such audits makes one wonder what they have to hide.”
The resolution called for all CoreCivic facilities to undergo independent third-party audits beginning in 2018. “Such audits shall examine operational benchmarks at the Company’s correctional and detention facilities that include, but are not limited to, those examined in the August 2016 OIG report – including rates of violence and use of force incidents, disciplinary and grievance systems, contraband, lockdowns and positive drug tests.”
Since the OIG report was released last August, CoreCivic has faced multiple shareholder lawsuits; it has also faced criticism for its operation of state prisons, including the Trousdale Turner Correctional Facility in Tennessee. And this week, a trial began in a federal suit alleging the company was responsible for high levels of violence at the Idaho Correctional Center (ICC) due to understaffing – part of a larger scandal that resulted in CoreCivic being held in contempt, paying the State of Idaho $1 million and ultimately losing its contract to operate ICC.
In its objection filed with the SEC, CoreCivic argued that the resolution should be excluded because it concerned the company’s “ordinary business operations,” claiming that it intruded upon issues “fundamental to management’s ability to run a company on a day-to-day basis.”
The corporation also said the resolution was vague or misleading, and noted that audits of its facilities already were being conducted – though such audits are not independent based on the requirements set forth in the shareholder resolution.
“Following the negative findings by the Office of the Inspector General, CoreCivic should welcome independent audits of its facilities. That is the responsible thing to do not only for its business operations and contracting government partners, but also for prisoners, CoreCivic employees and shareholders,” Friedmann stated. “Apparently, however, the company does not share those goals, nor has it offered a solution other than independent operational audits.”
Friedmann was ably represented before the SEC by attorneys Jeffrey Lowenthal, Joel T. Dodge and Daniel N. Park with the New York law firm of Stroock & Stroock & Lavan LLP.
The Human Rights Defense Center, founded in 1990 and based in Lake Worth, Florida, is a non-profit organization dedicated to protecting human rights in U.S. detention facilities.HRDC publishes Prison Legal News (PLN), a monthly magazine that includes reports, reviews and analysis of court rulings and news related to prisoners’ rights and criminal justice issues. PLN has thousands of subscribers nationwide and operates a website (www.prisonlegalnews.org) that includes a comprehensive database of prison and jail-related articles, news reports, court rulings, verdicts, settlements and related documents.
For further information, please contact:
Alex Friedmann, Associate Director Paul Wright, Executive Director
Human Rights Defense Center Human Rights Defense Center
(615) 495-6568 (802) 275-8594