UK Security Company’s Long History of Controversy, Misconduct
According to its website, G4S is the world’s “leading global integrated security company.” Besides providing security services, it also operates private prisons and immigration detention centers, provides electronic tagging (monitoring) for offenders on community supervision and has a prisoner transport service – mostly in the United Kingdom. G4S also manages over 30 juvenile facilities in the U.S.
Despite its impressive portfolio of security-related services, G4S was assessed a £109 million ($164 million) fine plus tax by the UK’s Ministry of Justice in March 2014. The company admitted to charging the British government for the electronic monitoring of deceased, non-existent or already-incarcerated offenders. The fraud allegedly took place between 2005 and 2013.
According to Sadiq Khan, the UK’s Shadow Justice Minister, “This large sum of money G4S [is] repaying taxpayers shows the true scale of the wrongdoing that went on ... [and] led to huge damage to the public’s confidence in our criminal justice system.”
As a result of the electronic monitoring scandal, G4S was banned from doing business with the British government until the Ministry of Justice saw evidence of “corporate renewal.” The government lifted its ban in April 2014, one month after the security firm agreed to pay the fine, stating progress had been made.
The company’s reputation had previously suffered after it failed to fulfill its contract with the 2012 London Olympic Committee to provide sufficient numbers of security personnel to safeguard the Summer Olympics, forcing UK officials to provide members of the armed forces at the last moment.
This should not have come as a surprise, as G4S had a long history of contractual breaches. Since 2010 the British government has fined the company at least 100 times, totaling £2.7 million, for violating its contracts. The Guardian reported on April 15, 2016 that the G4S-operated HM Prison Rye Hill alone was fined £1 million.
Shadow Civil Service Minister Louise Haigh expressed concerns that the fines are merely a “slap on the wrist” for the multi-national security giant. “At the Medway youth jail, where an undercover investigation revealed endemic child abuse, G4S only received a meagre £700 fine. It’s no surprise they’re so slow to get their act together,” she commented.
The investigation at the Medway facility also revealed that G4S guards had forged records downplaying the use of force against juveniles. “The allegation of G4S deliberately falsifying incident records is shocking. There needs to be a wholesale review of private sector involvement in the delivery of public services,” stated Shadow Home Secretary Andy Burnham. G4S announced in February 2016 that it plans to sell off all its children’s homes and youth detention facilities.
The company’s operations are not just confined to the UK. G4S also provides security services in the United States and over 100 other countries around the world, and has approximately 611,000 employees. Security firms have experienced significant growth in business since the 9-11 attacks, and G4S has been one of the most successful.
However, allegations of human rights abuses by G4S are as widespread as its global operations. Ranging from manslaughter charges after an Angolan deportee, Jimmy Mubenga, died following an altercation with G4S employees on an airplane in October 2010 to allegedly torturing an HIV-positive prisoner to death for requesting an extra blanket at the Mangaung Correctional Centre in South Africa in 2005, the company has quite the track record of misconduct. G4S temporarily lost control of the Mangaung facility in 2013 amid allegations of prisoner abuse. [See: PLN, Jan. 2014, p.12].
Further, the firm has faced criticism over the 2008 death of Aboriginal elder Ian Ward, who died due to heatstroke in a prison transport van in Australia, resulting in a $285,000 fine against the company. In another incident, 79-year-old UK prisoner Peter McCormack was handcuffed to a G4S guard for eight days while hospitalized for a heart operation; he subsequently received a £6,000 award for degrading and humiliating treatment.
“I feel G4S should be barred from running prisons and be barred from having anything to do with any contracts in this country,” McCormack stated. “They have an appalling reputation.”
Former G4S Chief Executive Officer Nick Buckles resigned in the wake of the botched London Olympics contract and electronic monitoring fraud. He was replaced by South African businessman Ashley Almanza in June 2013. Almanza responded to the British government’s demands for reforms by drastically restructuring and downsizing.
As a result of increased public scrutiny, G4S’s finances have been exceptionally volatile over the past several years. The company reported a £190 million loss in 2013 after posting a £158 million profit in 2012. Almanza attributed the 2013 plunge in profits to £386 million that G4S spent on restructuring the company in order to increase profitability and win back government contracts. That investment apparently paid off, as the firm reported pretax profits of £148 million in 2014 and £227 million in 2015.
In recent years, government contracts in the UK have constituted almost ten percent of G4S’s revenue, while almost a quarter of its revenue is generated through its North American operations. G4S announced in March 2016 that it intends to sell its controversial Israeli security contracts, which generate roughly £100 million in annual revenue. The firm’s stock, traded on the London Stock Exchange, has steadily dropped from around $284/share in June 2015 to $177/share in June 2016.
Meanwhile, G4S continues to face both controversy and scrutiny.
On June 12, 2016, 49 people were shot to death and 53 others wounded at the Pulse nightclub in Orlando, Florida. The shooter, Omar Mateen, 29, had been employed by G4S as an armed security officer for nine years; he had previously worked as a Florida state prison guard before being “administratively dismissed.” During the nightclub attack Mateen called 911 and claimed allegiance with the terrorist group ISIS. He was killed by responding police officers.
Mateen had passed G4S screenings and background checks, even though the company knew he had previously been investigated by the FBI for ties with extremist groups, and had received complaints about racist, violent and homophobic comments he had made while on security assignments. Although Mateen was off-duty when he committed the mass shooting, G4S was connected with the incident.
According to media reports, Mateen had been cleared to carry a firearm by a psychological evaluation that G4S submitted to state officials, but the psychologist listed on the report denied having seen him and did not work in Florida at the time. G4S claimed the discrepancy on the evaluation was a “clerical error.” The company’s stock dropped 8% in the days after the Orlando nightclub attack.
In 2002, G4S – then operating as Group 4 Falck – merged with the security company Wackenhut Corp. and became the indirect owner of Wackenhut Corrections, the second-largest private prison contractor in the U.S. Wackenhut Corrections, which later changed its name to the GEO Group, bought back a majority of its stock and became an independent company in 2003.
Sources: www.independent.co.uk, www.theguardian.com, www.rt.com, www.wsj.com, www.g4s.com, www.reuters.com, The Australian, www.bbc.com, www.businessinsider.com