The Americans Profiting From Private Prisons

May 9th 2015

Many people are terrified by the idea of a for-profit prison system, and they should be. Just like oil companies that pollute the environment without consequence and influence policy making, it's an industry that has gotten out of control. It's gotten to the point that many private prisons have contracts with the government that guarantee they will remain 80 to 90 percent full, and the Corrections Corporation of America (CCA), the country's largest private prison company, has seen a 500 percent profit increase in 20 years.

One of the major problems with private prisons is how they make their money. Aside from the obvious concept that it's a business based on making sure there are enough people imprisoned and that these corporations lobby Congress to encourage strict laws, they're often inhumane. A Texas facility, run by Management & Training Corp. (MTC), recently had to close due to poor healthcare and filthy living conditions. The facility didn't close, despite many outcries, until a riot started. Many other facilities around the country are said to be in similar conditions, since the prisons make more profits if they skimp on basic amenities. But these are not entirely faceless corporations; there are powerful people running them and making a lot of money from them. Here are a few: 

1. Damon T. Hininger

Damon T. HiningerYoutube - youtube.com

Damon T. Hininger is the CEO of Corrections Corporation of America (CCA). The company had a total revenue of over $1.6 billion in 2014. It's the largest private prison company in the United States. His base salary was believed to be nearly $3 million a year in 2012. In 2011, Forbes named Hininger as one of the top 20 "most powerful CEOs age 40 or under." 

CCA is known for neglecting and abusing illegal immigrants in Texas, according to the ACLU, and for trying to convert an empty prison into an "assisted living and/or nursing facility," where it could profit off the Medicaid/Medicare funds it would receive for treating ill and elderly prisoners. The company has come up with many creative ways to profit off of government contracts. The company also spent millions to lobby against and successfully defeated the Private Prison Information Act of 2007, which would have required private prisons that have contracts with the federal government to be subjected to the same Freedom of Information Act requests the government is subject to. These requests make it possible for journalists and lawyers to get information, like financial documents, from these companies.

According to In These Times, CCA met with Arizona legislators in 2010 to help draft the SB 1070 law, which is infamous for allowing police officers to ask someone for their citizenship papers at any moment if they had a suspicion the person was an illegal immigrant.

2. George Zoley

George ZoleyPRWatch.org - prwatch.org

George Zoley is the CEO of Geo Group, which is the second largest private prison corporation. Geo also has a revenue just over $1.6 billion in 2014. Zoley's exact salary is not publicly known, but he allegedly earned over $22 million between 2008 and 2012. The Center for Media and Democracy's (CMD) has estimated 86 percent of the $1.4 billion Geo made in 2012 came from taxpayers through its federal contracts. 

Both Geo and CCA have worked closely with the American Legislative Exchange Council (ALEC). ALEC has pushed lawmakers to pass stricter laws, like the three strikes felony laws, and has lobbied for longer prison sentences, all of which has increased the overall prison population. ALEC has also pushed for using inmates as unpaid laborers. 

Geo faced its own prison riot in Texas in 2008, when an epileptic inmate died after not getting medical treatment. Beyond the death that sparked the riot, the same facility experienced two suicides around that time, and the prisoners who started the riot claimed the food was inedible, the prison was overcrowded, and the guards were putting people in solitary confinement for complaining about poor medical treatment.

3. Frederick William McNabb III

mcnabbScreenshot from YouTube - youtube.com

While not directly involved in the private prison industry, Vanguard Group is an investment company and a top 401(k) provider. It's the world's largest mutual bond fund. Vanguard is also the top shareholder for Geo and CCA. Frederick William McNabb III is the CEO of Vanguard Group. ATTN: contacted the company to address its investments in the prison industry. "With more than $3 trillion in assets under management, our funds are the largest holder in many companies," a spokesperson said. "We own at least a small stake in nearly every publicly traded company in the country."

It is true that Vanguard has a wide array of stock investments, with Apple and Exxon near the top of its list, but it is also true that Vanguard owns well over twice as many shares of CCA and Geo as any other company. 

4. Laurence D. Fink

Laurence D. Finkhttps://www.youtube.com/watch?v=PZFgBwebR1g - youtube.com

Laurence D. Fink is the CEO of BlackRock. BlackRock is another investment management company, and it is a top shareholder for GEO and CCA. BlackRock's revenue was over $10 billion in 2014. Fink makes over $22 million a year.

BlackRock has regularly lobbied against government supervision and regulation of its business activities, despite it controlling over $3 trillion in assets. It has been said that BlackRock was the single largest beneficiary of the recession and the bailout, since it received so many important contracts from the federal government without any competitive bidding. BlackRock did not immediately respond to a request for a comment.

So what can we do?

For starters, do not invest in or buy shares of publicly traded private prison corporations. Second, vote for politicians who want to reduce the incarceration rate and end the War on Drugs. If you are not registered to vote, you can do so here. To learn where the likely 2016 presidential candidates stand on private prisons, click here.

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