GEO Group and CoreCivic Lose Critical Financial Support
But they also stand out for another reason: Like other corporations accused of prioritizing profits over people, both firms have been plagued by allegations of controversial business practices. Critics claim that the public-private partnerships through which the companies take over prison operations actually serve to line the pockets of politicians in exchange for regulatory concessions that curb oversight and protect the industry’s financial bottom line – all at the expense of the prisoners they are charged to oversee.
That, however, may soon be coming to an end.
Criminal justice activists have long sought, without success, to dismantle the private prison industry. Their efforts have been thwarted, in large measure, by an apathetic public with little appetite for addressing issues related to mass incarceration in America. But with the 2018 immigration crisis, that began to change. Images of children being separated from their families and the abysmal conditions inside some privately operated detention centers brought a collective gasp from many Americans, who were appalled by what they saw, and they demanded action.
Galvanized by the public backlash, opponents of the private prison industry renewed their efforts. This time they sought to affect the industry’s bottom line by bringing the fight to a new battlefield: Wall Street. Using #FamiliesBelongTogether and #BackersOfHate as their rallying cry, a coalition of prison reform advocates circulated petitions, pressured stockholders, and organized protests to demand that Wall Street sever its financial ties with private prison companies. And they succeeded. In 2019, eight banks — JP Morgan Chase, Wells Fargo, Bank of America, to name a few — announced they would no longer finance the operations of GEO Group, CoreCivic, and others.
The effect on the private prison industry was severe. GEO Group and CoreCivic lost a reported $2.35 billion in credit lines and term loans, lowering their credit ratings and significantly curtailing their ability to obtain new contracts, finance their debt, and maintain their long-term operating budgets. GEO Group’s March 2019 quarterly report stated that the loss “could have a material adverse effect on our business, financial condition, and results of operation.”
Now there are 22 states with bans on contracts with private prison operators. The federal Bureau of Prisons uses them – as does federal Immigration and Customs Enforcement (ICE). From a 2012 peak of more than 136,000, the number of prisoners housed by industry firms has shrunk to about 122,000 – just over 8 percent of the people incarcerated in America.
GEO Group and CoreCivic responded by teaming with Management and Training Corporation (MTC), another company that operates correctional facilities, to form Day 1 Alliance (D1A). Launched in October 2019, D1A’s mandate is to “educate America on the small but valued role the private sector plays in addressing correctional and detention challenges in the United States,” according to its published mission statement.
To perform this task, D1A hired Alexandra Wilkes, the former executive director of the America Rising SuperPAC, a conservative opposition research firm that has also faced accusations of using questionable tactics to discredit Democratic political opponents.
“We launched D1A because of the huge gap that has opened up between the false, distorted rhetoric that activists and some politicians use against this industry and the facts on the ground,” Wilkes said.
With her at the helm, D1A went on the offensive. Wilkes crafted op-eds and press releases to recast the private prison industry as “private contractors [who] lead through innovative programs that reduce recidivism, help prevent humanitarian crises…and provide cost-effective solutions to government partners in order to achieve vital public safety needs.”
“Don’t be fooled,” warned Jess Morales Rocketto, chairwoman of the nonprofit Families Belong Together. “This is an effort to defend a multi-billion-dollar industry that regularly gouges American taxpayers and take attention away from the conditions in these jails.”
She said D1A’s published talking points are designed to rehabilitate the industry’s tarnished public image, but they may not reflect any actual changes in GEO Group, CoreCivic, or MTC’s business practices. Some claims made by Wilkes on behalf of D1A are refuted by numerous reports citing privately run prison facilities for inhumane living conditions and implementing cost-cutting security measures that put the safety of prisoners at risk. According to a study by The Public Interest, recidivism rates at private prisons are higher because prisoners are exposed to “higher rates of violence and [are] housed at facilities far from their communities.”
Will the Day 1 Alliance help the private-prison industry recover? Only time will tell. As Wall Street and others have abandoned GEO Group, CoreCivic, and MTC, it remains to be seen if the politicians who have staunchly supported the industry in the past will abandon them, too.