Tag Archives: GEOGroup

First Step Act: CoreCivic & GEO Group’s prison break? Updated

Business, National, , ,

[Update 12/19:  The First Step Act made it through the Senate with support from the leadership of both parties. The vote for the bill which will affect one tenth of the federal prison population was 87 yeas to 12 nays – all from Republican senators.

Steve Benen at the Maddow Blog speculated on why Donald Trump championed the bill: As for why Donald “tough on crime” Trump would endorse such a package, that’s a little tougher to explain. My best guess is that the president has no idea what’s in the bill, but he likes the idea of signing bipartisan legislation on an important national issue.

Trump may not know the details but he and certainly son-in-law Jared Kushner are aware of the benefits their friends in the for profit prison business are expecting to see.]

Somehow between negotiating a peace settlement in the mid-east, defending his friend Saudi Prince Mohammed bin Salman — the accused murderer of Washington Post journalist Jamal Khashoggi — Trump’s utility man, son-in-law Jared Kushner, has also been “the administration’s driving force” behind The First Step Act, a criminal justice reform bill that will be voted on in Congress next week according to the NYTimes.com.

The bill’s advocates say Mr. Kushner’s efforts were part of the reason Mr. McConnell reversed course, announcing that the Senate would vote on the bill next week. But even more important was his ability, over a course of years, to make Mr. Trump comfortable with the need for criminal justice overhaul in the first place.

“The bipartisan coalition was there before Jared showed up,” said Ronald A. Klain, a former senior official in the Obama and Clinton administrations.“The Koch brothers deserve credit for that. But if Jared got the president to be for it, that is a key part of getting it done, and he does deserve credit for that.”corebreak1

Criminal justice and the federal prison system desperately need reform, and parts of this bill may help — but don’t be too quick to think good thoughts about Trump and the GOP efforts. It appears for all the world as if private prison corporations such as GEO Group and CoreCivic (big GOP donors) will be getting a helping hand as federal policy emphasis shifts from their bread and butter incarceration business to  treatment/care franchising.

Oh, and… here in Vermont Gov. Phil Scott and CoreCivic cozied up together on a plan for building a giant 925-bed prison/treatment complex in northern Vermont’s Franklin County. Negative feedback from the public and virtually every Vt. public official and legislator, regardless of political affiliation, landed the project in limbo for the time being.

CoreCivic has invested donations directly in Governor Scott’s election campaigns and indirectly through their contributions to the  Republican Governors Association — which funded Scott ‘s  TV adverting during the recent campaign.

Nationally after losing federal contracts under the Obama administration and opposing reforms, for-profit prison interests threw their lot ($$$) in with Trump and the GOP when it became clear reform was likely to happen.

The Tampa Bay Times reports: For their part, GEO Group and CoreCivic have closely aligned themselves with Trump. Each donated $250,000 to Trump’s inaugural fund. Last year GEO Group moved its annual leadership conference from a venue near its Boca Raton headquarters to a Trump-owned Miami-area golf resort, the Washington Post reported last year.

GEO has hired lobbyists close to the president including influential Florida powerbroker Brian Ballard. It heavily supported Trump ally Gov. Rick Scott in his race for U.S. Senate. The company, which operates five facilities in Florida, and its CEO George Zoley donated $414,000 to [Rick] Scott’s campaign and various related committees, more than it gave any other candidate.

Trump and for-profit prisons are again in lockstep on the FIRST STEP Act.

Hopefully there’s some smidgen of actual reform in this bill, but pardon me if I  believe the first step Trump, Kushner and the GOP take is to give their prison corporation buddies a break.

About CoreCivic: Gov. Phil Scott’s partner in the prison business

Business, local/regional, , ,

Governor Phil Scott’s administration is planning to create (hire a company to design and build)  a 925- bed state prison/treatment complex in Franklin County. The plan involves partnering with the for-profit prison corporation CoreCivic (formerly Corrections Corporation of America). According to Vtdigger.com: [Sec. Vermont Agency of Human Services]  Al Gobeille is proposing that the state contract out the design, construction and financing to a private entity, which then would lease the facilities to the state for 25 years. The state would make annual appropriations to pay for the use of the campus.[added emphasis]

For now, many specific details are a moving target but this feature of the proposed deal – Vermont would lease the facility from CoreCivic – is pretty interesting in light of recent changes in CoreCivic’s business model.corecivicVTAHS1

Historically CoreCivic political donations and lobbying are directed overwhelmingly to Republican Party candidates at all levels of government. They even ponied up $250,000 to support Trump’s inauguration celebration last year.

And  under the Obama administration as contracts dwindled, for-profit prisons stocks fell. CoreCivic and another major for-profit prison corporation, GEO Group, were looking at hard times.

Then in 2013  CoreCivic (then CCA) and the GEO Group (that together own 80% of all US for-profit prison facilities) restructured themselves more profitably as real estate investment trusts (REIT). Now, thanks to the recent GOP tax code changes signed into law by Donald Trump, these two for-profit prison corporations will reap a windfall

The Guardian.com reports: Under the new GOP law, investments in so-called “real estate investment trusts” (REIT) will see a 25% reduction in tax, from 39.6% down to 29.6%. [added emphasis]

Before converting to a reit in 2013, Corecivic was subject to a 36% corporate tax rate. After the reorganization, it reported paying an effective tax rate in the first quarter of 2015 of just 3%.

Sooo much winning for prison corps!

And here’s how it works. Lauren-Brooke Eisen, an attorney at the Brennan Center for Justice, said: “The way they are able to get away with that, is that they’re not allowed to keep a lot of cash on hand, they have to give it back to investors though dividends. But it allows them to have an incredibly low tax rate.”

According to Eisen, prison companies have essentially argued that renting out cells to the government is the equivalent of charging a tenant rent, thus making such business primarily a real estate venture.

It is a debate whether or not a lease deal with CoreCivic is good for Vermont. But there’s little doubt it’s REAL GOOD for CoreCivic. In fact the profits might seem almost criminal.