Corrections Corporation of America and other operators of private prisons have drawn fire from public employees unions for allegedly paying lower wages and straining public services in communities.
However, CCA also earned kudos from a police detective and town government official in Florence, where the company operates two prisons.
CCA pays correctional officers only $10 to $12 an hour while correctional officers in Arizona state prisons earn $18 to $20 an hour, said Chuck Foy, executive director of the Arizona Correctional Peace Officers Association. The Phoenix-based union has about 3,500 members.
CCA officials could not be reached for comment.
Barrett Marson, a public information officer for the Arizona Department of Corrections, said he does not know the pay scales in private prisons. However, he said starting pay for correctional officers at state prisons is in the mid-$30,000 range.
Private prisons "also put a strain on law enforcement (and) local prosecutors because the private prison folks cannot investigate crimes," Foy said.
However, Florence has a "pretty low crime rate" despite being home to 10 prisons or jails, said Jess Knudson, public information officer for the town. He added Florence has more inmates at 17,000 than residents at 10,000.
"We like to acknowledge our police force," Knudson said. He added the Pinal County Sheriff's Office is based in Florence because it is the county seat.
Florence Police Detective Walt Hunter commented, "I can't remember the last time I responded to CCA." He has been on the job six years.
"We definitely have a good working relationship with CCA," Hunter said. "First of all, we work a lot in cooperative efforts. We assist them with investigations."
He continued, "These guys have always been very cooperative, very professional. There is nothing I can say bad about them."
Foy faults private prisons for allegedly hiring correctional officers with less training than their public-sector counterparts. He said the Department of Corrections requires 360 hours of training, compared with 120 hours for CCA.
CCA's website states all new full-time security employees receive a minimum of 120 hours of training during their first year of employment. Courses cover cultural diversity, defensive tactics, emergency procedures, firearms training, hostage situations, radio communications and other subject matters.
Private prisons also are exempt from public records laws, Foy said.
Marson said the exemption applies because they are privately owned.
He said he does not know how many private prisons operate in the state because they do not have to report to the Department of Corrections.
A prisoner who escaped from a Clinton, Tenn., prison has been captured in Georgia.
Stephen Allen Hester, 26, was discovered missing on Saturday during a headcount at the Corrections Corporation of America-managed prison. He was serving an eight-year sentence for an aggravated robbery conviction in Memphis.
He was caught in Franklin County, Georgia in the car he stole from a woman he abducted at a market. She was let go unharmed in Tennessee.
Law enforcement agents used spike strips on Highway 328 after a cross-county high-speed chase to catch Hester.
We came across this little gem of a press release last week. It's interesting that Corrections Corporation of America still claims it is in a recession-resistant field and yet it's losing prison beds and having to renegotiate lower rates with cash starved states who have contracted with CCA.
If I was a small town (like Lumpkin, GA) that has become dependent upon CCA's cash to possibly subsidize there own very small budgets then I would be really worried about the 2 months or so notice that it appears that Appleton, Minnesota (population 2,871) just received that the open sign just got flipped to closed. While the CCA drafted press release below is probably accurate in stating that "The closure of the Prairie facility is not expected to have a material impact on CCA's financial results" I am sure that the closure of this facility will result in lots of financial hardship for the local area. Not to mention all of those soon to be out of work recession-resistant CCA jobs that will no doubt be flooding the local job market. I'd say that Prarie Correctional Facilities "Career Information Line" will not be doing much good in Appleton for quite some time.
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Corrections Corporation of America to Cease Operations at Prairie Correctional Facility
NASHVILLE, TN--(Marketwire - December 4, 2009) - Corrections Corporation of America (NYSE: CXW) ("CCA"), the nation's largest provider of corrections management services to government agencies, announced today its intention to cease operations at the CCA-owned and operated Prairie Correctional Facility located in Appleton, Minnesota. The 1,600-bed facility will officially cease operations on or about February 1, 2010.
During 2009, the Prairie facility has housed offenders from the states of Minnesota and Washington. However, due to excess capacity in the states' systems, both states have been reducing the populations held at Prairie. The facility currently houses about 200 offenders from the state of Minnesota. The state of Washington has removed all of its offenders from the Prairie facility, but maintains a population of approximately 125 inmates in two CCA-owned facilities in Arizona. The closure of the Prairie facility is not expected to have a material impact on CCA's financial results.
Damon Hininger, President and CEO of CCA commented, "It is CCA's strong desire to continue every effort to market the facility to another government partner, which we believe provides a viable option for our partners needing significant capacity. We are committed to finding the right opportunity that will allow us to re-open Prairie, so we can continue to offer meaningful careers to our dedicated staff, and promote economic vitality to the Appleton community."
Mr. Hininger continued, "We are disappointed to make the decision to close the Prairie Correctional Facility. Unfortunately, without an inmate population large enough to significantly utilize the facility, maintaining operations at the Prairie facility isn't economically viable. I would like to thank our outstanding and dedicated staff who have done an exceptional job, and we look forward to resuming operations at the facility at some point in the future."
About CCA
CCA is the nation's largest owner and operator of privatized correctional and detention facilities and one of the largest prison operators in the United States, behind only the federal government and three states. We currently operate 65 facilities, including 44 company-owned facilities, with a total design capacity of approximately 87,000 beds in 19 states and the District of Columbia. We specialize in owning, operating and managing prisons and other correctional facilities and providing inmate residential and prisoner transportation services for governmental agencies. In addition to providing the fundamental residential services relating to inmates, our facilities offer a variety of rehabilitation and educational programs, including basic education, religious services, life skills and employment training and substance abuse treatment. These services are intended to reduce recidivism and to prepare inmates for their successful re-entry into society upon their release. We also provide health care (including medical, dental and psychiatric services), food services and work and recreational programs.
Forward-Looking Statements
This press release contains statements as to our beliefs and expectations of the outcome of future events that are forward-looking statements as defined within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. These include, but are not limited to, the risks and uncertainties associated with: (i) general economic and market conditions, including the impact governmental budgets can have on our per diem rates and occupancy; (ii) fluctuations in our operating results because of, among other things, changes in occupancy levels, competition, increases in cost of operations, fluctuations in interest rates and risks of operations; (iii) our ability to obtain and maintain correctional facility management contracts, including as a result of sufficient governmental appropriations and as a result of inmate disturbances; (iv) changes in the privatization of the corrections and detention industry, the public acceptance of our services, the timing of the opening of and demand for new prison facilities and the commencement of new management contracts; (v) risks associated with judicial challenges regarding the transfer of California inmates to out of state private correctional facilities; and (vi) increases in costs to construct or expand correctional facilities that exceed original estimates, or the inability to complete such projects on schedule as a result of various factors, many of which are beyond our control, such as weather, labor conditions and material shortages, resulting in increased construction costs. Other factors that could cause operating and financial results to differ are described in the filings made from time to time by us with the Securities and Exchange Commission.
CCA takes no responsibility for updating the information contained in this press release following the date hereof to reflect events or circumstances occurring after the date hereof or the occurrence of unanticipated events or for any changes or modifications made to this press release.
Contact: Karin Demler Investor Relations 615-263-3005
