Additional Information on C.C.A.Privatization of America's correctional system might be a exciting prospect. The reality is many of "America's Most Wanted " could be guarded by the lowest bidder with guards who have wages that match McDonald's. Middle Tennessee State University criminologist Frank Lee said ``Private prisons don't work,''(1)
What about the mental health needs of the guards, and inmates? Corrections is high stress occupation. In fact its among blue-collar occupations with the highest for certain types of stress related heart disease (2).
Many of the inmates who are now are in prison are victims of deinstitutionalization (3). They have been thrown out of mental institutions. This was to prevent abuse and institutionalization of patients. This means the inmates and the public interest could be better served in a therapeutic setting. America's prisons in the new millennium has been called new mental hospital(4). How will the mentally ill be treated in a private prison? What of the safety of fellow inmates from violently mentally ill inmates? Or others who might be taken advantage of by other inmates? Remember all of this will be done by the lowest bidder who offers "McDonald's" like wages.
Something else to consider being these are private corporations. What if the private corporations folds? One expert ( University of North Florida criminologist Michael Hallet) noted "Taking over the private prisons would be ‘prohibitively expensive,'"(5).
Researchers at Louisiana State University's School of Social Work, found private prisons Wackenhut's Allen Parish are just marginally cheaper $22.93 Vs $26.60 for a nearby government institution.(6)
As with any private industry, private prisons can be effected by demand, and other business hazards. California scrapped its plans for a 500 bed prison. Georgia canceled its plans for a 1,500 bed prison. Scott Stallings of the Georgia department of corrections said ``We don't new beds right now, nor is the state planning to increase funding for more private prisons,''. This effects the profitability of the corporation as a whole.(7)
Another hazard is gross incompetence.
Severely depressed Former Steel town Youngstown Ohio was approached by Corrections Corporation of America they proposed to build a private prison that would employ 350 people.(8)
Youngstown state senator Bob Hagan said "Oh, they got the greatest deal in the world. You know, you come to town and you say, "We're bringing all these jobs." Youngstown says, "Great. Here's what we'll do. We'll give you free land, or land for a dollar. We'll hook your utilities up for free. We'll give you 75 percent tax abatement for seven years." What better deal can you get?(9)
Soon the deal wasn't such a deal. CCA sign a contract to take Washington DC overpopulated prison population which included hundreds of convicted murders, rapist and violent prisoners.(10)
Soon there were reports of assault stabbing, and an inmate revolt. When Youngstown tried investigate they (CCA) refused to let them in, and Youngstown had no authority to go in.(11)
Bob Hagan also said " You could escape from this prison and walk out, and the sheriff's department and the Youngstown city police department had no authority whatsoever to arrest that individual."(12). Bob Hagan passed a bill making it illegal to escape from a private prison in March 1998.(13)
Youngstown Mayor George McKelvey tells about one escape, "I guess an inmate tapped the guard on the shoulder and said, I want to tell you something.". The guard said "So what do you want to tell me?" The inmate replied "Well, there's a big hole in the fence, and six inmates are gone." The mayor continued "Yes, the, you know, if I didn't laugh, I'd cry. This could have been the largest prison break in the history of the United States. There were more than 200 inmates in that yard who could have gone through that hole, because the guards, nobody knows where they were.Now, that's incompetence."(14)
They have other critics who note, "they haven't been successful at what they're doing, that they haven't done well from a financial-savings standpoint, and they haven't done well from prisoner-safety and public-safety standpoints." Said Barry Holman, policy analyst with the National Center on Institutions and Alternatives, a Washington think tank promoting alternatives to prisons, said the state of the private-prison.(15)
A 1996 report by the General Accounting Office, based on studies comparing costs of private and public prisons in five states, concluded there wasn't much evidence that private prisons help save money. And a 1999 study by the Justice Department and the National Institute of Corrections of a Wackenhut-managed facility for the Bureau of Prisons in Taft, Calif., concluded that "the Taft privatization experiment will not save taxpayers money."(16)
Every business has ups and downs and pit falls. Many businesses go under. What if a major private prison firm goes under?
These financial factors don't look good. But what could be the cause? One factor could be rampant abuse of inmates who are in these private institutions (check out links)
(Privacites)
Corrections Corporation of America (CCA) Ticker NYSE : CXW
CAA took the drastic step of doing a reverse Stock split. A reverse Stock Split can be used to attempt to keep the Stock price from falling too far. Simply it is condensing the number of stocks.CAA effective May 18 2001 turned ten stocks into one stock(NASHVILLE, Tenn.--BUSINESS, WIRE--May 7, 2001).
Additional Information on C.C.A.
LInks doesn't work, maybeCornell Companies, Inc.Ticker NYSE:CRN
Cornell though the financial out look isn't as bad as CCA's its not good either.
Cornell Corrections, Inc. reported a larger-than-expected decline in fourth-quarter earnings, citing higher costs, and said start-up costs for five expansions will hurt 2001 earnings. The Company said that the expansions will reduce 2001 earnings by 4 cents a share.The consensus estimate had put the Company's 2001 earnings per share at 99 cents and 2002's at $1.01.
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CorrectionalServices Ticker Nasdaq: CSCQ
Correctional Services Corp. is a developer, operator, and manager of correctional and detention facilities for federal, state and local government. For the fiscal year ended 12/31/00, revenues decreased 10% to $210.8 million. Net income before extraordinary item totaled $5.8 million vs. a loss of $4.2 million. Revenues reflect the discontinuance of 11 facilities. Net income reflects the absence of $13.9 million in merger costs and related restructuring charges.
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Wackenhut Correction Corp Ticker NYSE:WHC)
Wackenhut Correction Corp. develops and manages privatized correctional and detention facilities in North America, the United Kingdom, South Africa and Australia. For the 13 weeks ended 4/1/01, revenues rose 3% to $135 million. Net income decreased 45% to $2.6 million. Revenues reflect new facility openings and an increase in the average facility occupancy. Earnings were offset by increased expenses related to new facility openings.
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