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GEO U.S. Map
(Source:Private Prison Divestment Campaign)

The GEO Group, Inc. (GEO), formerly known as Wackenhut Corrections Corporation, "is the world's leading provider of correctional, detention, and community reentry services with 98 facilities, approximately 78,500 beds, and 18,000 employees around the globe," according to its corporate website.[1][2] It is the second-largest for-profit prison operator in the United States, behind Corrections Corporation of America (CCA). The company was founded in 1984 and is headquartered in Boca Raton, Florida.[1]

Since its founding nearly 30 years ago, GEO Group has profited from federal and state policies that have led to a dramatic rise in incarceration and detention in the United States -- an increase of more than 500 percent over the past thirty years.[3][4][5] As of 2011, around half of all prisoners in state facilities were there for nonviolent crimes, and half of inmates in federal prisons were serving time for drug offenses.[6]

Studies have shown that for many offenses, incarceration has little if any impact on public safety, and that time in prison actually increases a person's likelihood of committing more crimes.[7][8]

According to the Justice Policy Institute: "While private prison companies may try to present themselves as just meeting existing 'demand' for prison beds and responding to current 'market' conditions, in fact they have worked hard over the past decade to create markets for their product."[9]

Although it claims that it has not lobbied for bills that extend or increase sentences for prisoners, for many years GEO Group participated in the task force of the American Legislative Exchange Council (ALEC) that pushed bills that lengthened time in prison, such as so-called “truth-in-sentencing” and “three strikes” legislation, as models for states to adopt across the nation.

GEO Group is now a multi-billion-dollar corporation whose for-profit prison operations have become increasingly controversial. The two primary critiques are that (1) GEO Group's lobbying and campaign contributions have led to federal and state policies and government contracts that expand its profit margins, but in many cases at the expense of the public interest; (2) the company's profit-increasing and cost-cutting strategies lead to a vicious cycle where lower wages and benefits for workers, high employee turnover, insufficient training, and under-staffing results in poor oversight and mistreatment of detained persons, increased violence, and riots. Other profit-focused measures that affect inmates, such as withholding medical care or inadequate nutrition, add to the volatility of the situation. This, in turn, has led to dangerous working conditions for correctional staff, as well as the communities where GEO Group's prisons operate. [10]

Contents

GEO revenue 08-12.jpg

PROFITS AND OWNERSHIP: GEO’s revenue in 2013 exceeded $1.5 billion and its profits were $115 million, down slightly from $133 million the previous year.[11][12]

BUSINESS MODEL: GEO "contracts with federal corrections agencies such as the Federal Bureau of Prisons, U.S. Marshals Service, and U.S. Immigration and Customs Enforcement, as well as eleven state correctional clients and various county and city jurisdictions."[2] GEO's 2012 annual report states: "Our federal customers generated 43% of our total revenue for both of the years ended December 31, 2012 and 2011."[13]

On January 1, 2013, GEO Group announced that as of the end of 2012 it had “completed all the necessary restructuring steps” to convert to a real estate investment trust (REIT), a special tax designation used to reduce the payment of federal income taxes. In May 2013, GEO Group reported that its first-quarter profit rose 56 percent, helped by lower income taxes. [14] On an August 7, 2013 earnings conference call, GEO Group's Chief Financial Officer Brian Evans said: "Our quarterly results include a tax benefit of $8.4 million associated with our recent REIT conversion. This tax benefit is offset by $1 million after-tax, one time REIT conversion related expenses, and $4.4 million after-tax associated with the write-off of deferred financing fees in connection with our recent financing activities." [15]

For prisons, "GEO has 98 facilities in the United States, the United Kingdom, Australia, and South Africa with approximately 78,500 beds, and 18,000 employees around the globe." The bulk of its prisons appear to be within the U.S., where it claims to operate approximately 61,000 beds in 56 correctional and detention facilities. [1] It also "has approximately 60 subsidiaries offering services beyond corrections and detention such as transportation services, community reentry facilities, community supervision services, mental health institutions and electronic monitoring technologies."[16]

FOUNDING: The company that later became GEO Group originally began in 1954 as a private investigation company in Boca Raton, Florida, founded by four former FBI agents, including George Wackenhut. In 1958, Wackenhut bought out his partners and formed the Wackenhut Corporation, which focused on building dossiers of civil rights demonstrators, anti-war protesters and others on the left politically that George Wackenhut, an extreme right-winger, considered communist sympathizers or "derogatory types," according to Frank Donner's book "Age of Surveillance."[17] The Wackenhut files included the corporation's investigation of the NAACP, the Reverend Martin Luther King, Jr., The Progressive magazine, and numerous others active in the peace and justice movements.[18] By the time Congress began investigating government and corporate entities that kept dossiers on Americans in the mid-1970s, Wackenhut reportedly had four million names on file, more than any other private entity, according to Donner.[19]

Prison overcrowding350px.jpg

Even after those investigations, Wackenhut continued to monitor Americans and in 1991 was investigated by Congress for spying on Americans for a consortium of oil companies; the investigation focused on Wackenhut's secret operations against former oil broker Chuck Hamel, who had blown the whistle on the environmental damage in the Port of Valdez and from the TransAlaska pipeline. [20] Wackenhut's operatives acknowledged the spying but claimed no federal or state laws were broken, even though a former Wackenhut investigator told Congress he was concerned Wackenhut's "Special Investigation Unit" was violating Americans' civil rights and federal and state surveillance laws.[21] The congressional Committee on Interior and Insular Affairs, however, found that "the Wackenhut agents engaged in a pattern of deceitful, grossly offensive and potentially, if not blatantly, illegal conduct to accomplish their objectives ... Aleyska's disastrous campaign to silence its critics."[22]

Aside from its spying business, Wackenhut Corporation also obtained contracts to provide private security to government buildings, such as Cape Canaveral and nuclear testing facilities. In 1964 he took the company public.[23] The Wackenhut Corporation also received a contract from the state of Florida in the 1960s to help "fight" crime. [24]

In 1984, Wackenhut formed a new division called "Wackenhut Corrections Corporation" (WCC) to seek contracts to run private prisons. Its first private prison contract appears to have been in 1987 with the Reagan Administration’s Immigration and Naturalization Service (INS) (a federal agency that was subsequently reorganized to become part of the Department of Homeland Security and its enforcement operations were renamed the U.S. Immigration and Customs Enforcement [ICE]).[25] Wackenhut also pursued contracts for juvenile detention facilities.[26]

In 1988, Wackenhut incorporated WCC as a subsidiary and took it public in 1994. In 2003, WCC purchased all the company's stock and changed its name to the GEO Group. In 2004, the other parts of the Wackenhut Corporation were purchased by Group 4 Falck which became G4S Wackenhut and ultimately became known as G4S Secure Solutions, which focused on security contracts.

Profiting From More People Behind Bars

GEO's business model rests on incarceration. The more individuals locked up, the more GEO and its shareholders profit. Increases in GEO's earnings and stock prices have corresponded with America's incarceration boom -- and laws that criminalize a longer list of conduct and require that those convicted serve longer sentences are good for business.

According to the Justice Policy Institute: "Since private prison companies are in the business to make money, policies that maintain or increase incarceration boost their revenues; from a business perspective, the economic and social costs of mass incarceration are "externalities" that aren’t figured into their corporate bottom line."[9]

Indeed, the company has faced challenges in recent years as the public has slowly shifted away from a tough-on-crime model.

Although GEO has denied lobbying for criminal justice or sentencing laws, GEO's own contracts requiring a guaranteed occupancy for its prisons has a similar impact: these occupancy quotas can encourage tough enforcement and sentencing policies, or, at a minimum, can help deter reform.

GEO's role in the American Legislative Exchange Council (ALEC), which has advanced harsh sentencing measures, has raised additional questions.

Occupancy Guarantees or Quotas in GEO Contracts Keep Prisons Full and Profits Up


Findings from In the Public Interest, Sept. 19, 2013
(Criminal--How Lockup Quotas and “Low-Crime Taxes” Guarantee Profits)

Many for profit prison operators have successfully inserted occupancy quota provisions into prison privatization contracts, according to a report by In The Public Interest (ITPI). Over half of the state and local level contracts analyzed by ITPI contained bed guarantee provisions; the occupancy requirements were between 80 and 100 percent, with many around 90 percent.[27]

Roger Werholtz, former Kansas secretary of corrections, told USA Today that states may be tempted by the "quick infusion of cash" associated with a for-profit prison contract, but agreeing to these occupancy quotas could warp public interest goals of reducing the prison population.

"My concern would be that our state would be obligated to maintain these (occupancy) rates and subtle pressure would be applied to make sentencing laws more severe with a clear intent to drive up the population," he said.[28]

During a 2013 first quarter conference call, GEO Group boasted that the company continues to have “solid occupancy rates in mid to high 90s.”

In addition to warping a state's criminal justice goals, "these clauses can force corrections departments to pay thousands, sometimes millions, for unused beds. The private prison industry often claims that prison privatization saves states money. Numerous studies and audits have shown these claims of cost savings to be illusory, and bed occupancy requirements are one way that private prison companies lock in inflated costs after the contract is signed," ITPI wrote.

"By contractually requiring states to guarantee payment for a large percentage of prison beds, the prison companies are able to protect themselves against fluctuations in the prison population. These provisions guarantee prison companies a consistent and regular inflow of revenue, insulating them from ordinary business risks. The financial risks are borne by the public, while the private corporations are guaranteed profits from taxpayer dollars," ITPI wrote.

In Arizona, for example, GEO Group has managed to negotiate 100% occupancy guarantees for two facilities, the Arizona State Prison – Phoenix West and Arizona State Prison – Florence West. According to ITPI:

"The bed guarantee provisions were the result of an agreement between the Arizona Department of Corrections (ADC) and the private prison companies in 2008. In this “deal,” the corporations agreed to lower rates for emergency beds meant to temporarily house an overflow of prisoners, in exchange for the state accepting a 100 percent occupancy guarantee for all regularly-rated beds in all three facilities. Even with the addition of the 100 percent bed guarantee clauses, an August 2012 analysis from Tucson Citizen shows that the per prisoner, per day rates for the three facilities have increased by an average of 13.9 percent since the contracts were first awarded."[27]

Ties to the American Legislative Exchange Council

GEO Group's parent company, Wackenhut Corporation, has funded the American Legislative Exchange Council (ALEC).[29] GEO Group itself is also a member as of 2010, according to In These Times.[30]

While Wackenhut (later GEO) was a member of ALEC's crime Task Force, ALEC pushed legislation to privatize prisons, and at the same time advanced harsh sentencing bills to put more people in prison for more time, particularly "truth-in-sentencing" legislation calling for all violent offenders to serve 85 percent of their sentences before being eligible for release, and "three strikes you're out" bills requiring mandatory life imprisonment for a third felony conviction. These bills became law in a majority of states during the 1990s and early 2000s.

Between 2003 and 2010, ProPublica reports that GEO Group contributed to many candidates who have or had connections to ALEC.[31]

About ALEC
ALEC is a corporate bill mill. It is not just a lobby or a front group; it is much more powerful than that. Through ALEC, corporations hand state legislators their wishlists to benefit their bottom line. Corporations fund almost all of ALEC's operations. They pay for a seat on ALEC task forces where corporate lobbyists and special interest reps vote with elected officials to approve “model” bills. Learn more at the Center for Media and Democracy's ALECexposed.org, and check out breaking news on our PRWatch.org site.

Connections to ALEC and Harsh Sentencing Laws, Which Drove up Private Prison Profits

Reporting for In These Times in 2010, investigative journalist Beau Hodai wrote:[30]

"In the early '90s, the ALEC's Criminal Justice Task Force [later known as the Public Safety and Elections Task Force] was co-chaired by Corrections Corporation of America (CCA), the country's largest private prison company. During those years, the National Rifle Association (NRA), another task force member (and the current task force co-chair), initiated a campaign to introduce two pieces of ALEC-inspired legislation at the state and federal level: the so-called "truth-in-sentencing" and "three-strikes-you're-out" laws. Truth-in-sentencing called for all violent offenders to serve 85 percent of their sentences before being eligible for release. Three strikes called for mandatory life imprisonment for a third felony conviction.
The NRA campaign, dubbed "CrimeStrike," was seen by many as a reaction to the Clinton administration's efforts to pass gun control. CrimeStrike set forth the precept that "guns don't kill people, people kill people" and derided any legislator backing gun control as being "soft on crime." With memories of the Willie Horton disaster of the failed 1988 Michael Dukakis presidential campaign still on the minds of lawmakers, this accusation hit a nerve and elicited knee-jerk support of the laws by Democrats."[30]

An ALEC/NRA CrimeStrike report from 1994 can be viewed here; in addition to calling for tough sentencing laws, the report demands "the legal authority for the states and localities to privatize prisons, jails, and other detention facilities."

ALEC bills adopted and promoted during Wackenhut/GEO Group's association with the group, which would potentially expand GEO Group's profits, include:

ALEC exposed logo200px.jpg
The American Prospect[32]

Case Study: Wisconsin "Truth-in-Sentencing"

WI Governor Scott Walker
An American Radio Works report from 2002 analyzing the connections between ALEC, harsh sentencing laws, and for-profit prison companies (particularly GEO competitor Corrections Corporation of America) discussed a case study in Wisconsin:
"In forming and spreading its ideas, ALEC gets help from corporate leaders. More than a hundred companies co-sponsor ALEC conferences -- including . . . Wackenhut Corrections, a private prison corporation. . . .
"In Wisconsin, a group of lawmakers led passage of truth-in-sentencing in 1998.
'Many of us, myself included, were part of ALEC,' says the bill's author, [then] Republican state representative Scott Walker.
'Clearly ALEC had proposed model legislation,' Walker recalls. 'And probably more important than just the model legislation, [ALEC] had actually put together reports and such that showed the benefits of truth-in-sentencing and showed the successes in other states. And those sorts of statistics were very helpful to us when we pushed it through, when we passed the final legislation.'
But a former head of Wisconsin's prison system, Walter Dickey -- now a University of Wisconsin Law Professor -- says he finds it 'shocking' that lawmakers would write sentencing policy with help from ALEC, a group that gets funding and, supposedly, expertise, from a private prison corporation.
'I don't know that they know anything about sentencing,' Dickey says. 'They know how to build prisons, presumably, since that's the business they're in. They don't know anything about probation and parole. They don't know about the development of alternatives. They don't know about how public safety might be created and defended in communities in this state and other states.'"[33]

As a legislator, Walker also promoted prison privatization in the state (albeit unsuccessfully).[34]

The Wisconsin state legislature apparently recognized the folly of truth in sentencing and rolled back aspects of the law between 2001 and 2009. When Scott Walker became governor in 2011, however, he reversed this progress and pushed for legislation fully restoring the ALEC corporate-supported truth in sentencing, despite the costs to taxpayers and despite claiming Wisconsin was "broke." In early July 2011, Governor Walker's office released a statement supporting expanded use of prison labor, another idea promoted in ALEC bills. Some observers speculated that for-profit private prisons would be next.[35]

Connections to the ALEC/Arizona SB1070 Anti-Immigrant Law

Former Arizona State Senator Russell Pearce
In 2009, Arizona State Senator Russell Pearce (R-Mesa), the ALEC State Chair for Arizona, brought the No Sanctuary Cities for Illegal Immigrants Act -- later to become known as "S.B. 1070" -- to ALEC for adoption as a "model" bill.

At the time, GEO Group competitor CCA was an executive member of ALEC's Public Safety and Elections Task Force, as was Sen. Pearce, and GEO Group was reportedly a member of ALEC as well.[30] GEO Group stood to profit from increased immigration enforcement and detention.

A few months later, Pearce introduced the ALEC "No Sanctuary Cities for Illegal Immigrants Act" as Senate Bill 1070 (S.B. 1070), and it quickly passed the legislature and was signed into law by Governor Jan Brewer, an ALEC alumni.

When the bill was introduced in Arizona, 30 of the 36 bill co-sponsors received donations over the next six months, from prison lobbyists or prison companies: GEO Group, Corrections Corporation of America, and Management and Training Corporation.[36]

National Public Radio reported in 2010:[36]

"In May, The GEO Group had a conference call with investors. When asked about the [S.B. 1070] bill, company executives made light of it, asking, 'Did they have some legislation on immigration?'
"After company officials laughed, the company's president, Wayne Calabrese, cut in.
"'This is Wayne,' he said. 'I can only believe the opportunities at the federal level are going to continue apace as a result of what's happening. Those people coming across the border and getting caught are going to have to be detained and that for me, at least I think, there's going to be enhanced opportunities for what we do.'"

(In 2012, much of S.B. 1070 was struck down by the Supreme Court in the case Arizona v. United States, 567 US ___ (2012)).[37]

Immigrant Detention Is GEO Group's New Profit Center


Immigrants For Sale
State prison populations have been declining in recent years, but federal numbers have increased -- thanks in no small part to a rise in immigration detention.[38] GEO's 2012 annual report states: "Our federal customers generated 43% of our total revenue for both of the years ended December 31, 2012 and 2011."[13]

From 1970 to 2005, the number of people locked up in the U.S. shot up by 700 percent, according to an ACLU report. Between 1990 and 2009, the number of prisoners behind for-profit prison bars expanded significantly from 7,000 to 129,000 inmates, at a rate of 1600 percent.[39]

GEO Group (then Wackenhut) and other for-profit prison companies were on the brink of financial collapse in the 1990s following widespread stories of escapes, inmate violence, and deplorable conditions in their facilities, not to mention declining crime rates.[40] The company and the industry as a whole rebounded in the early 2000s, following a massive increase in the amount of illegal immigrant detentions in the wake of 9/11, which created a whole new market for its facilities. From 2002 to 2010, GEO Group revenue increased 121 percent, from $517 million in 2002 to $1.3 billion in 2010.[41]

As the Huffington Post reported in August 2013:

"Because of punitive drug laws, drug offenders still make up more than 46 percent of the federal prison system, according to the Department of Justice. Immigrants are the third-highest category of offenders, at 11 percent. But this year, more than 60 percent of all federal criminal convictions have been for immigration-related crimes, federal data show."[42]

In the wake of September 11, 2001, the George W. Bush administration began a zero-tolerance policy known as "Operation Streamline,"[43] arresting and detaining people at the border. No longer were immigrants deported relatively rapidly or put into a civil detention center. This led to a four-fold increase in immigration cases from the previous decade, as research from Syracuse University's Transactional Records Access Clearinghouse showed in 2012. "This is the crime du jour," Justice Strategies director Judith Greene told the Huffington Post. "It's the drug war all over again. It's what's driving the market in federal prisons."[42]

This resulted in significant windfall for private companies such as GEO Group and CCA: $384 million for GEO Group came from federal contracts with the Bureau of Prisons and the U.S. Marshals Service in 2012.[13] $546 million was pocketed by CCA in 2012, 30 percent of its revenue from both agencies.[44]

Although for-profit prison companies like GEO Group and CCA have denied lobbying to influence immigration policy, the evidence suggests otherwise. For example, an analysis by the Associated Press in 2012 found that the three major for-profit prison corporations -- CCA, the GEO Group, and another smaller company -- spent roughly $45 million over the past decade on campaign donations and lobbyists.[45]

The for-profit prison corporations specifically target Republican legislators over immigration "reform," according to The Nation.[46] The companies' success in lobbying echoes their harnessing the zeitgeists of the preceding decades, from "Tough On Crime" in the 1980s and 1990s, and terrorism-induced blowback to immigration in the early 21st century.[47]

Cost Cutting Leads to Violence, Abuse, and Death

One of the most common critiques of for-profit prisons is that the industry's goals of maximizing profits are at odds with the traditional goals of the criminal justice system, such as offender rehabilitation, reducing recidivism rates, increasing public safety, and lowering crime rates.

In addition to making more profits when more people are behind bars, GEO's cost-cutting measures have been called out for their relationship to inmate-on-inmate and guard-on-inmate (and vice-versa) violence which are many times a result of inadequate training, low pay, and high turnover of corrections staff as well as chronic understaffing. Further allegations of civil rights abuses and medical neglect have resulted in individual and class-action lawsuits brought against the company. For example, a spreadsheet of lawsuits complied by Private Corrections Working Group/Private Corrections Institute lists hundreds of lawsuits filed against GEO Group, many of which were settled before trial. These suits range from inmate abuse allegations to employment discrimination. [48]

When comparing for-profit prisons with public, a nationwide study in 2001 found that assaults on guards by inmates were 49 percent more frequent in private prisons than in government-run prisons. The same study revealed that assaults on fellow inmates were 65 percent more frequent in for-profit/private prisons.[49] Another study from the same year concluded that “Privately operated prisons appear to have systemic problems in maintaining secure facilities” concluding that for-profit/private prisons have significantly more escapes, homicides, assaults, and drug abuse compared to government-run prisons.[50]

(More recent analyses reveal similar patterns, although, according to American Friends Service Committee’s report in 2012, under-reporting of incidents appears to be a widespread problem making it difficult to make these comparisons.[51])

Many of these problems can be attributed to high employee turnover, inadequate training for officers, under-staffing, and miserable conditions experienced by the inmate population.[51]

The supposed “cost savings” of for-profit prisons can result in inadequate medical care, abuse, and other civil rights violations against the persons incarcerated in these facilities. According to In the Public Interest, a comprehensive resource center on privatization and responsible contracting: "Incarceration for profit has caused many problems, as private companies fail to make decisions in the best interest of the inmates or the communities in which the prisons are located. Private prison companies have employed unqualified guards, resorted to excessive violence and cruelty to control inmates, and provided substandard medical care, resulting in unnecessary deaths. Prison privatization has led to numerous lawsuits and litigation, fines, and increased need for federal oversight, at great cost to taxpayers, communities, inmates and their families."[52]

Allegations of Prisoner Abuse, Sexual Assault, Civil Rights Violations, Violence, Riots, & Escapes in GEO Group Facilities

Below are just a few examples of lawsuits or other allegations asserting prisoner abuse and sexual assault, withholding medical care resulting in death, and negligently allowing violence, riots and escapes in GEO-run facilities.

  • ACLU Lawsuit in Mississippi Alleges “Barbaric and Horrific” Conditions - In May 2013, inmates at East Mississippi Correctional Facility (EMCF), sued the state in U.S. District Court alleging "barbaric and horrific conditions" at the facility.[53] GEO ran the facility from 1999[54] to 2012,[55] but as of September 2013 it is run by Management and Training Corporation (the third largest for-profit prison operator in the United States).[56]

The ACLU reports: "EMCF is a cesspool. Prisoners are underfed and routinely held in cells that are infested with rats and have no working toilets or lights. Although designated as a facility to care for prisoners with special needs and serious psychiatric disabilities, ECMF denies prisoners even the most rudimentary mental health care services. Many prisoners have attempted to commit suicide; some have succeeded. One prisoner is now legally blind after EMCF failed to provide his glaucoma medications and take him to a specialist, and another had part of his finger amputated after he was stabbed and developed gangrene."[53]

Gabriel Eber, staff counsel with the ACLU National Prison Project reported: "When you combine solitary confinement, abuse, lack of basic medical and mental health care, and denial of basic human needs, it's a recipe for disaster."[57]
Security Cameras Capture Horrific Mississippi Prison Conditions
The suit was filed on behalf of 16 inmates. One of them, Christopher Lindsey, 27, went blind after guards denied him access to treatment for his glaucoma despite repeated pleas for help between 2011 and 2013.[58]
During its management of EMCF, GEO Group was sued regarding conditions at the facility by the family of Sammy Robinson, a prisoner who died while in custody. The preliminary autopsy performed by the Lauderdale County Coroner's Office and the East Mississippi Correctional Facility declared that he died of asphyxia due to self-hanging, but a secondary provisional autopsy performed by Dr. Matthias I. Okoye of the Nebraska Institute of Forensic Science found that "there were no neck organs including larynx, proximal trachea and neck skeletal muscles available for forensic pathologic evaluation. Next, Dr. Okoye found blunt force trauma to the trunk, the upper extremities, lower extremities, as well as sharp force trauma to the right upper and lower extremities. Dr. Okoye noted several abrasions and contusions all over the body of Mr. Robinson."[59]
  • Jury Awards Over $40 Million to Family of Inmate Killed in Beating - Gregorio De La Rosa, an honorably discharged former National Guardsman, was serving a six-month sentence for drug possession at a prison in Raymondville, Texas operated by GEO Group (then known as Wackenhut). The details of the case are laid out in a damning 2009 Court of Appeals ruling that upheld most of a $40 million dollar jury verdict against the company and Warden David Forrest. (PDF) A few days before his expected release in 2001, Gregorio was beaten to death by two other inmates using a lock tied to a sock, an incident that prompted officers and wardens to smirk and laugh, as well as allegations of a cover-up and destruction of evidence.(PDF). After the Court of Appeals ruling, the case was settled for an undisclosed amount. [60] [61]
  • GEO Settles Suit with Family of a Woman who Committed Suicide after Reporting Rape – A woman committed suicide at GEO Group-Operated Val Verde County jail in Texas. Shortly before her death, the woman reported that she had been raped and assaulted by male inmates who were housed in the same cell block. She also reported being sexually humiliated by a GEO guard after reporting to the warden that guards allowed male and female inmates to have sex. The woman’s family sued The GEO Group and several of its guards. In March 2007, the company reportedly settled with the family for $200,000.[62] Additionally, an investigation into sex abuse allegations at another GEO-run Texas prison led to the firing of a guard who was a convicted sex offender.[63]
  • Class Action Strip-Search Lawsuit Against GEO Group - Stephen Dimitri Bussy filed a nationwide civil rights class action lawsuit under 42 U.S.C. § 1983 challenging the practice of strip searches conducted in detention facilities operated by the GEO Group Inc. In July 2007, Bussy was arrested and charged with DUI and transported to a jail in Pennsylvania operated by the GEO Group, where he was strip searched. The plaintiffs allege that the GEO Group’s policy of strip searching all pre-trial detainees regardless of the crime charged and in the absence of a reasonable suspicion that the detainee possesses weapons or contraband violates the Constitution. In May 2010, the parties settled the lawsuit for nearly $3 million. The agreement covers up to 10,000 inmates in six facilities who were subjected to strip searches upon admission between January 2005 and January 2008.[64][65]
  • State of Texas Fines Company $625,000 and Terminates $12 Million Contract for Mismanagement of Jail; 12 Employees Charged with Sexual Assault – In 1999, the AP reported that the state of Texas terminated Wackenhut's $12 million a year contract to run a jail in Travis County due to mismanagement that eventually led to eleven guards and one case manager being charged with sexually assaulting female inmates.[66]Over a period of two years, the state levied $625,000 in penalties due to chronic staffing shortages at the facility. A state audit showed that the jail barely kept the minimum number of guards required in the contract.[67][68]
  • Three Former Guards Found Guilty of Civil Rights Conspiracy and Obstruction Charges - The Department of Justice (DOJ) reported in 2002 that three former Wackenhut guards were found guilty of civil rights conspiracy and obstruction charges at the Lea County Corrections Facility in Hobbs, New Mexico. The jury found the defendants guilty of willfully assaulting an inmate by repeatedly kicking him in the head and causing bodily injury. The jury also found the defendants guilty of falsifying reports and lying to investigators to explain the incident.[69]

Allegations of Violence, Squalor, and Sexual Abuse in GEO Juvenile Prisons

Bloomberg News reports that at for-profit prisons in Mississippi, the assault rate was three times higher on average than in state-run lockups. None was as violent as the Walnut Grove Youth Correctional Facility, run by GEO for two years, from August 2010 until July 2012, according to the paper.[70]
  • Widespread Abuse and Sexual Assault at GEO-Operated Juvenile Prison Results in "Groundbreaking" Settlement and Consent Decree - The GEO-operated Walnut Grove Correctional Facility (WGYCF) juvenile prison in Mississippi was the subject of a legal complaint filed by the ACLU and the Southern Poverty Law Center (SPLC) alleging that the "for-profit entities that manage WCGYF perpetuate violence and corruption." According to the complaint, some juveniles were “kicked and punched while handcuffed, and others have been stripped naked and placed in solitary confinement for weeks;” one inmate claimed to have been "held hostage in his cell for almost 24 hours, brutally raped and physically assaulted after prison staff failed to heed his plea for protection," according to news reports.[71][72]
The settlement, which the SPLC calls “groundbreaking”, will ensure juveniles incarcerated in Mississippi will no longer be housed in the privately run prison or subjected to brutal solitary confinement. Additionally, the Mississippi Department of Corrections will be required to remove youths from the GEO-operated prison and house them at a stand-alone facility governed by juvenile justice, rather than adult, standards. The decree also categorically bars the state from subjecting juveniles to solitary confinement, which the SPLC reports is the first time a federal court has banned the practice of housing juvenile offenders in long-term isolation.[73]
The Southern Poverty Law Center also reports: “The U.S. Department of Justice launched an investigation into the conditions at the facility in late 2010 and in March 2012 reported finding a wide array of inhumane and unconstitutional conditions at the prison. The report said the state showed ‘deliberate indifference’ in failing to protect youths from harm in seven major areas: sexual misconduct between guards and inmates; use of excessive force by guards; excessive use of chemical agents; poor use-of-force policies, reporting, training and investigations; youth-on-youth violence and sexual assault; and seriously inadequate medical and mental health care. Sexual misconduct, it said, ‘was among the worst that we have seen in any facility anywhere in the nation.’”[73]
  • Texas Auditors Find Deplorable Conditions, Including Fecal Matter, Ignored By Internal Monitors - In 2007, the Texas Youth Commission found child inmates "living in filth" in a West Texas juvenile prison run by GEO Group. Employees who had previously been tasked with monitoring had not only failed to report the squalid conditions, they had actually given GEO Group exemplary marks and praised the company for its work with youth -- but, it was later discovered, those same employees had worked for GEO Group immediately before starting work as monitors.
Findings in that independent report included the following, according to the ACLU:[74]
  • “The GEO Group does not ensure that the youth are provided with a clean and orderly living environment.”
  • “Cells were filthy, smelled of feces and urine, and were in need of paint.”
  • “[T]here are serious problems with insects throughout the facility and grounds.”
  • “Plumbing chases were not secure at the time of the inspection. Contraband and pests were found in these areas.”
  • “Water leaks are numerous throughout the facility, creating an unsanitary and unsafe environment for all youth and staff.”
  • “There is racial segregation [in] the dorms; Hispanics are not allowed to be cell mates with African Americans.”
  • “Youth sprayed with [Oleoresin Capsicum] pepper spray are not routinely decontaminated.”
Children at the facility told the Commission:
  • They have “not received church services in over two months.”
  • They are “disciplined for speaking Spanish.”
  • They “are sometimes not allowed to brush their teeth for days at a time.”
  • They “had been forced to urinate or defecate in some container other than a toilet.”

The audit can be accessed here.[75]

Seven employees of the TYC were fired for not reporting the wretched conditions of the prison before the September-October 2007 audit referenced above. In fact, the Dallas Morning News reported that the employees “not only failed to report substandard conditions but praised the operation. In the monitors' most recent review . . . the prison was awarded an overall compliance score of 97.7 percent. In that [February 2007] review, monitors also thanked GEO staff for their positive work with [Texas] youth.”[76][77]
The Dallas Morning News later discovered that three of the TYC workers who were fired were former employees of GEO Group, the operator of the facility the TYC monitors were supposed to oversee.[78][79][77]
See also: Texans for Public Justice & Grassroots Leadership, Lax Oversight Plagues Private Prisons in Texas, “Watch Your Assets”, Vol. 1, No. 9, February 6, 2008.
  • Wackenhut (GEO Group) Settles Allegations of Sexual, Physical, and Mental Abuse of Female Juveniles for $1.5 Million - Several young women sued Wackenhut (GEO Group) after they were allegedly sexually, physically, and mentally abused by employees of Wackenhut-owned and operated Coke County Juvenile Justice Center in Texas. The claims were settled in mediation for $1,500,000, according to an appeal filed to enjoin enforcement of the settlement agreement.[80]
  • U.S. Justice Department Sues and Files for Emergency Relief to Protect Juveniles from "Dangerous and Life-Threatening Conditions" at Wackenhut (GEO Group) Juvenile Facility in Louisiana - The Department of Justice (DOJ) settled a lawsuit with the state of Louisiana and Wackenhut over allegations of excessive force and neglect at the company’s Jena Juvenile Justice Center in 2000, according to a DOJ press release. The government alleged juveniles were being subjected to "dangerous and life-threatening conditions" at the center. The DOJ filed the emergency lawsuit under the Violent Crime Control and Law Enforcement Act of 1994. In the days that followed, Wackenhut turned over control of the facility to the state, which agreed to implement major reforms at the facility.[81]

Instances of Medical Neglect Resulting in Death and Unrest

A UMNS photo by Paul Jeffrey.
  • Immigrant Detainee Dies after Suffering an Epileptic Seizure in Solitary Confinement - On December 12, 2008, Jesus Manuel Galindo, aged 32, died of a seizure in his solitary confinement cell at the GEO-managed Reeves County Detention Center in Texas. Galindo, who like many of the inmates at Reeves was being held for entering the country illegally, had been locked up in the Special Housing Unit since November 12, despite desperate pleas "with prison officials to return him to the general population where he had friends who woke him up to take his pills and took care of him during his frequent seizures," according to the Texas Observer.

Prison authorities told Galindo's family they placed him in the Special Housing Unit (SHU) to "keep an eye on him," but prisoners and others have said the SHU was frequently used to isolate and punish men with health problems who complained about their medical care. Both Galindo's mother and his attorney inquired on his behalf. The public defender in charge of his case was so worried about his health that she even sent a private investigator to the prison on December 4, who urged officials to put Galindo back into the general population.[82]

On December 10, Galindo wrote to his family saying that he felt ill and had asked both the doctor and warden to do something. According to the Texas Observer, "The letters began in the morning, with Galindo noting that a nurse had promised him that she would return later that day to take his blood. . . . 'Mama, the day already passed and nothing,' he writes later that same day. 'All they did was walk up and down but here, where I am, no one even stopped. We’ll see what happens tomorrow.'" By the time Galindo was found in his cell two days later, rigor mortis had already set in. The El Paso County medical examiner ruled the cause of death as epileptiform seizure disorder; the toxicology report found “below-therapeutic levels” of Dilantin, a cheap anti-epileptic drug, in Galindo’s blood and urine. The drug is only effective at certain dosages, and a patient’s blood must be checked regularly to make sure it’s not too high or low.[82]
The ACLU of Texas, on behalf of Galindo's family, filed a wrongful death lawsuit against GEO Group and the federal government.[83] Galindo's death later sparked a riot at the prison where he died (see below for more).
  • Riot Sparked by Galindo's Death and the Prison's Inattention to Medical Needs On December 12, 2008, inmates at Reeves County Detention Center near Pecos,Texas started a twenty-four hour riot, sparked by the death of Jesus Manuel Galindo that same day (see above) and stemming from a string of others proceeding his, which they attributed to the prison's inattention to medical needs.

Leaders of the rebellion demanded "a meeting with the Mexican Consulate, the FBI and the warden to discuss a number of grievances that they said GEO Group, the prison company that manages the 3,700-bed facility, had refused to address," according to the Texas Observer. That evening, they explained to the authorities "that the uprising had erupted from widespread dissatisfaction with almost every aspect of the prison: inedible food, a dearth of legal resources, the use of solitary confinement to punish people who complained about their medical treatment, overcrowding and, above all, poor health care." The riot cause more than $1 million worth of damage to the prison.[82]

Less than two months later, on January 31, prisoners rose up again. The riot lasted for five days and ended with one building destroyed and some $20 million in damage. "Prison and law enforcement officials have released little information on the disturbance, but inmates, advocates and family members say it began when Ramon Garcia, 25, was forced into solitary confinement after complaining of dizziness and feeling sick," according to the Texas Observer.[82]
  • Ronald Sites Dies Under "Protective Custody" in Oklahoma Facility After Being Placed with Violent Cellmate - In 2011, GEO Group was found liable for the wrongful death of prisoner Ronald Sites at its facility in Lawton, Oklahoma and ordered to pay $6.5 million to his family, according to the Herald Tribune. Sites had been strangled to death by his cellmate in 2005.[84] While Sites was supposed to be in protective custody because of a medical condition and kept away from other prisoners, the GEO Group employed guards that placed him with a cellmate who had a history of violence and had previously talked about killing his cellmate, according to a press release from the plaintiffs' attorneys.[85]
GEO Group argued that it had no reason to foresee the cellmate's violence towards Sites, but the court found gross negligence on behalf of the prison guards. GEO Group was forced to pay $6 million in compensatory damages and $500,000 in punitive damages by the District Court of Comanche County, Oklahoma, according to MoreLaw.[86]
  • Patient Dies in Hypothyroid-Related Coma While Awaiting Trial for Shoplifting - In 2007, the estate of Cassandra Morgan filed a wrongful death lawsuit against the George W. Hill Correctional Facility (GHCF) in Thornton, Pennsylvania, which was run by the GEO Group Inc. at the time. Morgan, who was diagnosed as a paranoid schizophrenic, died on March 29, 2006 after lapsing into a hypothyroid-related coma on the floor of her jail cell about six weeks after being arrested for shoplifting. The medical director at GHCF testified that no medical doctor ever examined Cassandra Morgan during the entire six weeks she was at the prison, according to the Delaware County Daily Times.[87]
Morgan's family had repeatedly tried to contact GEO officials to notify them of her medical condition, but they were "virtually ignored," according to the family's attorney. GEO Group agreed to pay an undisclosed amount to settle a wrongful death suit, which alleged deliberate indifference to Morgan's medical needs. Between 2001 and 2006, six prisoners died of unnatural causes at GHCF, including two suicides and one homicide. Citing “underperformance and frequent litigation,” GEO terminated its contract with Delaware County, Pennsylvania to operate GHCF effective December 31, 2008, according to Prison Legal News.[88][89]
  • Class Action Lawsuit to Remedy "Grossly Inadequate and Inhumane Level of Medical Care" at GEO Group-Owned Facility in North Carolina – Inmates at the Rivers Correctional Institution in North Carolina, operated by The GEO Group Inc., filed a class action lawsuit to remedy what they allege is a "grossly inadequate and inhumane level of medical care" at the facility that “has placed men there at substantial and ongoing risk of serious injury or premature death, and has caused permanent physical damage and profound mental and physical pain,” according to the complaint.[90][91] The case was jointly dismissed in March 2012.[92]

GEO Group Facilities Plagued by Security Issues, Escapes, & Drugs

  • Numerous Escapes from GEO Facilities Reported To Be a Threat to Public Safety - At least 27 escapes were reported from GEO-operated facilities between 2004 and 2011, including one that led to a murder, according to the Arizona Republic.[93]
  • Escape From GEO Facility Leads to Murder; Six Others Escaped From Same Facility in Two-Year Period Anthony Ray Farrell fled from the Southeast Texas Transitional Center (formerly known as the Ben A. Reid Community Correctional Facility) in October 2010 and had been on the run for a month when he shot and killed a good samaritan who tried to prevent him from taking a woman's purse at gunpoint, according to the Houston Chronicle.[94] During a two year period from 2010 to 2012, a total of six people escaped from the same GEO-operated halfway house for high-risk sex offenders, including convicted child rapists, according to the Houston Press.[95][96]
  • Inmate Dies From Heroin Overdose at Federal Jail, Drugs Allegedly Provided by Prison Guards - Albert Gomez, Jr. died May 19, 2010 from a heroin overdose while he was being held at the Central Texas Detention Facility. The jail was owned by Bexar County but managed by GEO Group, which had a contract with the county and the U.S. Marshals Service to detain federal inmates prior to trial. Gomez's parents, Albert Sr. and Sandra, filed a wrongful death suit against GEO Group and a guard at the facility who they claim smuggled in the drugs and provided them to Gomez. They accused GEO Group of not properly training guards to handle prisoners with drug addictions and allowing guards to participate in the illegal sale of drugs to detainees, according to the San Antonio Express-News.[97]

GEO Group Cuts Costs at the Expense of its Workforce: Allegations of Federal Labor and Wage Law Violations and Employment Discrimination

Private-prisons-for-profit.jpg
The "cost savings" claimed by the for-profit prison industry is generally achieved at the expense of its workforce, by slashing wages and benefits for correctional staff. There is also evidence that the GEO has engaged in chronic under-staffing, falsified staffing records, and violated the Fair Labor Standards Act (FLSA) by refusing to pay overtime.

Below are just a few examples of lawsuits alleging GEO Group's failure to pay employees overtime or pay for hours worked in general, as well as allegations of sexual harassment, discrimination, and anti-union activity.

Allegations of Sexual Harassment and Discrimination

GEO has a record of alleged racial and gender discrimination, sexual harassment, and allegations that the company intentionally maintains a male-dominated workforce.

  • Sexual Harassment Lawsuit in Washington. In 2009, Molly Ware filed an action for wrongful termination against GEO Group in Federal District Court for the Western District of Washington at Tacoma. Ware alleged that she was the victim of sexual harassment in the form of lewd comments from a coworker at a GEO Group correctional facility where she was a prison guard. She claimed there was a hostile work environment at the GEO Group facility because her complaints of sexual harassment were ignored as a result of gender-based discrimination.

However, the claim was dismissed on GEO Group’s motion for summary judgment because the court found an oral reprimand of the alleged sexual harassment perpetrator sufficient. Ware also alleged that she was fired in retaliation for making the complaint. Both parties moved for summary judgment on this issue. The court found there was a genuine issue of material fact about the causation of Ware’s termination and dismissed GEO Group’s motion for summary judgment. Likewise the court found a genuine issue of material fact about GEO Group’s reasons for termination, as an investigation revealed various forms of improper conduct by Ware. Thus, Ware’s motion for summary judgment on retaliation was also denied. [98]

It appears the case proceeded to trial as evidenced from a motion to compel discovery which followed the summary judgment determination. [99]
  • EEOC complaints over sexual harassment of female employees in Florence, Arizona. In October 2010, the U.S. Equal Employment Opportunity Commission filed a lawsuit against GEO Group and some male managers supervising correctional officers for fostering a “sexual and sex-based hostile work environment” at two Florence prisons that allowed harassment and retaliation against female employees. The EEOC said the male employees engaged in verbal and physical harassment of female employees. A male manager grabbed and pinched a female employee, and a female employee was forced on a desk and kissed and touched by a male employee, the lawsuit says. The EEOC alleges GEO Group was aware but failed to take measures to prevent the harassment. [100]

The Arizona Civil Rights Division joined the EEOC in prosecuting GEO Group. The case went to trial on April 23, 2013. It was settled on April 26 with GEO Group agreeing to pay $140,000 to two female employees and agreeing to furnish other relief such as various remedial measures and provisions to prevent further sexual harassment. GEO Group also promised not to rehire two former supervisors. [101]

Occupational Safety and Health Administration (OSHA) Complaints

  • OSHA fines over conditions at facility in Meridian, Mississippi. In June 2012, OSHA proposed fines totaling $104,100 for sub-standard conditions at a correctional facility. According to Clyde Payne, OSHA’s director in Jackson, Mississippi, GEO Group “knowingly put workers at risk of injury or death by failing to implement well recognized measures that would protect employees from physical assaults by inmates.” [102]
A $70,000 fine was proposed because of failure to keep enough guards on duty, fix cell locks and train workers to protect themselves. $16,500 was proposed for failing to conduct medical evaluations for workers required to wear respirators. $17,600 in penalties for violations including failing to make sure that respirators fit employees, that respirators were stored away from dust or chemicals, and failing to make a plan to control bacteria and viruses transmitted by exposure to blood and other bodily substances. [103]

GEO Cuts Costs, But Taxpayers Don't See the Savings

According to the ACLU:

"While supporters of privatization tout the idea that governments can save money through private facilities, the evidence for supposed cost savings is mixed at best. As state governments across the nation confront deep fiscal deficits, the assertion that private prisons demonstrably reduce the costs of incarceration can be dangerous and irresponsible.
Such claims may lure states into building private prisons or privatizing existing ones rather than reducing incarceration rates and limiting corrections spending through serious criminal justice reform."[74]

For example, in Arizona, an American Friends Service Committee (AFSC) report indicates the state is actually losing money due to prison privatization. In 2008, 2009, and 2010, the state overspent on for-profit/private prisons by an average of $3.5 million per year - a total of $10 million in those three years alone.[51]

A Sept. 2010 report by Arizona’s Office of the Auditor General found that privately-operated prisons housing minimum-security state prisoners actually cost $.33 per diem more than state prisons ($46.81 per diem in state prisons vs. $47.14 in private prisons), while private prisons that house medium-security state prisoners cost $7.76 per diem more than state facilities ($48.13 per diem in state prisons vs. $55.89 in private prisons), after adjusting for comparable costs. [104]

Tax Avoidance

GEO transformed itself into a real estate investment trust (REIT) in 2013. REITs are “designed to reduce the payment of corporate federal income taxes, REITs are a special tax designation for companies that focus on real estate holdings,” explains a report from Grassroots Leadership. [105]

On January 1, 2013, GEO Group announced that as of the end of 2012 it had “completed all the necessary restructuring steps” to convert to a REIT. GEO Group says it authorized an initial special dividend of $350 million to investors. [106]

In May 2013, GEO Group reported that its first-quarter profit rose 56 percent, helped by lower income taxes.

On an August 7, 2013 earnings conference call, GEO Group's Chief Financial Officer Brian Evans said: "Our quarterly results include a tax benefit of $8.4 million associated with our recent REIT conversion. This tax benefit is offset by $1 million after-tax, one time REIT conversion related expenses, and $4.4 million after-tax associated with the write-off of deferred financing fees in connection with our recent financing activities." [107]

Other Controversies

Residents Object to Plans to Build For-Profit GEO Prison in McAllen, Texas

Proposed private prison stirs controversy in McAllen, Texas
On September 11, 2013 approximately 60 people packed City Hall’s third-floor meeting room to urge city officials to reject a plan to partner with GEO Group to construct a 1,000 bed prison in their community.

While the prison was touted as a way to create jobs and a steady income stream for the city, residents rejected the argument on moral and financial grounds. According to local news reports:[108]

On the question of whether or not the city of McAllen should build a for-profit prison was answered with a resounding 'no' by the community at Wednesday night's public forum. 'I think a private prison anywhere is a problem because a prison for money is gonna create a demand for prisoners, and that's why we are definitely against the private prisons,' said Samantha Magdaleno, anti-prison activist.

ACLU attorney Carl Takei knows exactly what problems McAllen can anticipate. Takei works on private prison cases across the nation and says these prisons do more harm than good for the cities that they occupy. 'The economic development is actually not near what it's been chalked up to be,' Takei explained. 'The potential risk for the reputation of the city and becoming known for having one of these horrible detention facilities run by a company like GEO Group, it's a really bad deal for the city.'


GEO Executive Uses Daughter-in-Law's Immigrant Status to Threaten Over Domestic Abuse Complaint

In 2011, Thomas M. Wierdsma, current senior Vice President of Project Development, reportedly got involved in his daughter-in-law’s domestic abuse investigation against his son Charles and threatened to use his power at GEO against her. GEO currently manages nine detention centers for illegal immigrants.

Wierdsma sent his daughter-in-law, Beatrix Szeremi, a legal Hungarian immigrant, an email threatening her legal status after attempting to remove her from the house she shared with his son, Charles. His email said:

“Should I send eviction notices to you or your attorney? Not sure who is representing you for this matter. I understand that you currently have no plans to move out of our home. I will be copying the Department of Homeland Security, Immigration and Customs Enforcement with this and other information. So you know, I funded the legal work and processing fees for you to become a citizen, but am now disappointed in your actions which now require legal proceedings.”

According to a deposition reported on by the Daily Camera, Wierdsma claims he was “frustrated” and “blowing off steam,” when he sent Szeremi emails, Szeremi was later awarded $1.2 million in damages, $150,000 were punitive damages attributed to the conduct of Wierdsma. [109]

Controversy Surrounding Florida Atlantic University Stadium Naming Rights, President Resigns

George C. Zoley, GEO’s Chairman of the Board, Chief Executive Officer and Founder, is an alum of Florida Atlantic University (FAU), where he earned his bachelor's and master's degrees in Public Administration.[110] The GEO Group planned to donate $6 million to FAU in exchange for the naming rights of the university’s football stadium, which would be called "GEO Group Stadium."[111] There was considerable protest[112] and criticism of the decision.[113]

The Miami Herald reported that after months of controversy, the Florida Atlantic University President Mary Jane Saunders resigned her post, citing "fiercely negative media coverage" as a factor in her decision. "Saunders had been heavily involved in the university's decision to name its new stadium for Boca Raton-based GEO Group, an idea that prompted the nickname 'Owlcatraz' after FAU’s mascot. When critics of the naming decision highlighted GEO's questionable human-rights record, Saunders and the FAU trustees initially refused to reconsider."[114]

In April 2013, responding to the outcry, GEO not only withdrew its naming request, but also withdrew its $6 million donation.[115]

Incident of No Guards Manning Control Room at South Bay, Florida Facility

On June 13, 2011, Florida Department of Corrections staff attempted to perform a surprise drug sweep of GEO Group’s prison in South Bay, Florida. When the staff reached the prison’s front entrance, no one answered an alert button that the inspection team pressed twice. And no one responded after the team shined a flashlight at a security camera to try to get the attention of guards who were supposed to be in the privately run prison’s control room. [116]

According to reports by the Department of Corrections and the Florida Department of Management Services, there was no staff in the control room monitoring security cameras at the time. The Department of Corrections does not have direct authority to oversee private GEO Group prisons. Oversight at the time was conducted by the Department of Management which lets GEO Group run their own internal investigations. [117] After this event on July 20, oversight was transferred to the Department of Corrections while the Department of Management retained control over contracting.

Investors

According to Nasdaq, major investors in GEO Group include: Vanguard, BlackRock, Scopia Capital -- a hedge fund run by Jeremy Mindich and Matt Sirovich -- Barclays Global Investors, Bank of New York Mellon, and more.[118]

George Zoley, CEO of GEO, is a major stockholder with over 500,000 shares.[119] For more on investors, see Ray Downs, "Who is getting rich off the Prison Industrial Complex?," Vice, June 2013.

Political Activity

Lobbying

From 2004 to September 2013, GEO spent just over $3 million lobbying the federal government, with its biggest lobbying expenditures in 2010 at $660,000, according to the Center for Responsive Politics (CRP). They also employ two to three lobbying firms a year. Most recently, their additional lobbyists and firms have included Lionel ‘Leo’ Aguirre, Podesta Group, Navigators Global LLC, Public Policy Partners, and Bryan Cave LLP.[120]

Most of the bills GEO Group lobbies for at the federal level are homeland security, immigration, and appropriations bills. For example, in 2013, GEO Group heavily lobbied for H.R. 2217, the Department of Homeland Security Appropriations act, and S. 744, the Border Security, Economic Opportunity and Immigration Modernization Act, according to CRP,[120] because they provided for more funding to border patrol, fences along borders, and more measures. While many other for-profit prison corporations, such as Corrections Corporation of America, try to deny their involvement in anti-immigration and enhanced border security bills, GEO CEO George Zoley admitted the company's political preferences in a 2011 letter to stakeholders:[121]

"At the federal level, initiatives related to border enforcement and immigration detention with an emphasis on criminal alien populations as well as the consolidation of existing detainee populations have continued to create demand for larger-scale, cost efficient facilities."[121]

Aguirre, GEO Group’s top lobbyist, has been a lobbyist for the group exclusively since 2008. From 2008 to 2013, Aguirre has received $1.02 million in lobbying income from the company, just over one-third of GEO Group's total lobbying expenditures from 2004 to 2013, according to CRP.[120][122] An article published by Grassroots Leadership reported that Aguirre lobbied the Department of Homeland Security, ICE, the United States Marshals, the House of Representatives, the Department of Transportation, Department of Labor, and the Department of Justice in 2011 and 2012.[123]

In the states, GEO Group hired 142 lobbyists in 25 states from 2003 to 2012, according to the National Institute on Money in State Politics (NIMSP).[124]

Political Contributions

GEO Group and its employees have made nearly $2.3 million in political contributions to individuals and PACs at the federal level from 2004 to September 2013, according to CRP.[125]

GEO Group created a political action committee called the GEO Group Inc. PAC. The PAC was most active in the 2008 election, with its $353,259 in spending, followed closely by the 2012 election and 2010 election, with $331,425 and $305,580 spent respectively. The PAC raised more funds in the 2012 election cycle -- $470,564 -- than in any previous cycle, according to CRP.[126]

Most recent contributions to candidates and members in 2012 and 2014 include Robert B. Aderholt (R-AL), Henry Cuellar (D-TX), Mike Haridopolos (R-FL), Connie Mack (R-FL), and Andrew Crenshaw (R-FL), according to CRP.[127]

GEO Group and its employees also pumped over $3.2 million into state-level politics in 24 states from 2003 to 2012, including contributions to candidates for office, party committees, and ballot initiatives, according to the National Institute on Money in State Politics.[128]

The Justice Policy Institute wrote in 2011:

"private prison companies tend to concentrate their efforts in specific states, particularly California, Florida, and to a lesser degree, Georgia. Florida, the home of the GEO Group, not only has the second highest private prison population in the country, but has budgetary mandates that certain prison beds be privatized. Attention to California is likely based on the state having the largest incarcerated population, and the existence of a U.S. Supreme Court-order to reduce its overcrowded prison system by as many as 46,000 people over the next two years; private prison companies are offering policymakers a way to transfer, rather than reduce, the number of people they lock up."[9]

Two-thirds of GEO Group's state-level spending went to California, Florida, and New Mexico, according to JPI.[9]

Political Connections

Corruption in Florida?

The FBI has investigated allegations of corruption and political favoritism by Republican leaders in the Florida Legislature toward GEO Group, a top political donor in the state.

According to a report by the Center for Media and Democracy/DBA Press, GEO Group was a top contributor to the Florida Republican Party. "Through two political action committees (PACs), Florida GEO Group, Inc. PAC and GEO Group, Inc. PAC, the corporation gave $85,000 to the Republican Party of Florida from 2006 through 2009, along with tens of thousands of dollars in additional contributions to other state Republican Party PACs and campaigns of individual Republican candidates."[129] "GEO consistently reports annual revenue in excess of one billion dollars -- all of which it earns through state, county and federal contracts for the detention of both criminal offenders and immigrant detainees."[129]

Florida Senator Marco Rubio
From 2005 through 2010, Geo, through its PACs, dispensed an additional $15,000 to the National Republican Congressional Committee, an additional $32,000 to the National Republican Senatorial Committee, and an additional $10,000 over 2009 and 2010 directly to the Marco Rubio for U.S. Senate PAC.[129] In addition, GEO CEO and founder, George Zoley gave $7,400 in personal contributions to Rubio's campaign.[129]

In March 2010, Elva McCaig, a nurse employed by the Florida Department of Corrections at the Santa Rosa Correctional Institute, wrote a letter to the U.S. Attorney for the Northern District of Florida and State Attorney for Florida's Second Judicial District describing concerns that the state's largest for-profit prison, Blackwater River Correctional Facility, was a handout to GEO Group.[129]

McCaig's letter pointed out that budgetary provisions which called for $110 million to be appropriated as a giveaway to GEO Group were inserted into the state budget under very questionable circumstances (particularly the cycle of influence between GEO's parent company, Wackenhut Corrections, Geo, and the Florida Senate). Federal investigators began looking into the matter.[129]

According to DBA Press, U.S. Senator Marco Rubio (R-FL) and other state GOP lawmakers and party contributors were the subject of "multiple wide-ranging state and federal investigations conducted by the FBI and the Florida Department of Law Enforcement," including $110 million in appropriations for the GEO designed and operated Blackwater River Correctional Facility, which opened in November 2010.[130]

In 2009 and 2010, DBA Press continues, the GEO Group Inc. PAC contributed $10,000 to the Marco Rubio for U.S. Senate PAC. In addition, on one single day in 2010, "several top GEO corporate executives, along with GEO lobbyists and subcontractors, gave a total of $33,500 in individual contributions to the Florida Victory Committee, a PAC created for the benefit of three other PACS: Marco Rubio for U.S. Senate, the National Republican Senatorial Committee and the Republican Party of Florida." GEO Chief Executive Officer and founder George Zoley made a total of $7,400 in personal disbursements to the Rubio campaign that day.[130]

McCaig's letter "sparked the interest of federal investigators," according to DBA Press. Florida's prosecution ended up focusing on the alleged "improper use of Florida Republican Party credit cards . . . [by] former party chairman Jim Greer." The appropriations language for Blackwater CF was written into the 2008-2009 budget by Sen. Rubio's former budget chief, Representative Ray Sansom (R-Destin). He "was indicted on charges of lying to a grand jury, official misconduct, grand theft and conspiracy in relation to the Odom case," but Florida dropped all charges in May 2011.[130]

The federal immigration reform bill of 2013 shone a new spotlight on Sen. Rubio's connections to GEO Group. As the Columbia Journalism Review pointed out in June 2013, GEO Group "operates many of the federal facilities that hold detained or incarcerated immigrants," and Sen. Rubio "is the Senate’s leading career recipient of contributions from the Florida-based company, garnering $27,300 in support, according to data compiled by the Center for Responsive Politics."[131]

GEO Group had reportedly pledged not to participate in the debate around immigration reform, but in June 2013, The Nation reported that a firm hired by the company had lobbied Congress in the first quarter of 2013 on "issues related to comprehensive immigration reform."[132]

Director of U.S. Marshals Service Tied to GEO Group

In 2011, President Obama appointed as Stacia Hylton, who has strong ties to the for-profit prison industry, to Director of the United States Marshals Service. She was previously Federal Detention Trustee.

The ACLU noted in 2011: "According to a letter from the American Federation of Government Employees to Senator Patrick Leahy, during Stacia A. Hylton’s tenure as Federal Detention Trustee, GEO obtained contracts to house federal prisoners, including U.S. Marshals Service detainees, that generate more than $80 million in annual revenue for the company. The letter asserts that even before she retired as Federal Detention Trustee, Hylton formed a private consulting company. Shortly after retiring, the letter continues, Hylton accepted $112,500 from the GEO Group, her only client."[77]

Justice Policy Institute notes: "As Director of the U.S. Marshals, Hylton will head an agency that has a long-standing contractual relationship with The GEO Group. In 2010, the U.S. Marshals accounted for 19 percent of GEO’s revenue. With Hylton in a position to oversee government contracts with for-profit prisons, the ongoing influence of for-profit prison companies in the public sphere is virtually guaranteed."[9]

Pennsylvania

Beau Hodai wrote at In These Times: "In 1995, the Pennsylvania Legislature passed several pieces of tough-on-crime laws based on ALEC model legislation. ALEC member and State Rep. John Perzel (R-Philadelphia) was the Pennsylvania House majority leader from 1995 to 2003, when he was elected House speaker. In 2005, he joined the board of directors of ALEC member GEO Group, the nation's second largest for-profit/private prison corporation. Perzel resigned from the corporation's board In November 2009, following an indictment handed down that same month for his alleged role in a scandal. His staffers and other lawmakers were charged with using taxpayer dollars to fund their campaign activities." [30]

New Mexico

Former New Mexico Secretary of Corrections Joe Williams was criticized in 2010 by state legislators for waiving $18 million in fines against GEO and CCA, despite contract violations. Prior to his role as Secretary of Corrections, Williams was a warden in one of GEO’s correctional facilities. After New Mexico appointed a new corrections secretary in January 2011, Miller returned to GEO. [93][9]

GEO Tells Investors that Reducing Crime Could Hurt Its Bottom Line in SEC Filings on "Risk Factors"

In its filings with the Securities and Exchange Commission, GEO Group cites some of the following as “risk factors” that may affect its business and future prospects:

  • "[A]ny changes with respect to the decriminalization of drugs and controlled substances could affect the number of persons arrested, convicted, sentenced and incarcerated, thereby potentially reducing demand for correctional facilities to house them."[133]
  • "Reductions in crime rates could lead to reductions in arrests, convictions and sentences requiring incarceration at correctional facilities."
  • "Immigration reform laws which are currently a focus for legislators and politicians at the federal, state and local level also could materially adversely impact us."[133]
  • "Public resistance to privatization of correctional, detention, mental health and residential facilities could result in our inability to obtain new contracts or the loss of existing contracts, which could have a material adverse effect on our business, financial condition and results of operations. The management and operation of correctional, detention, mental health and residential facilities by private entities has not achieved complete acceptance by either government agencies or the public."[133]
  • "Public sector demand for new privatized facilities in our areas of operation may decrease and our potential for growth will depend on a number of factors we cannot control, including overall economic conditions, governmental and public acceptance of the concept of privatization, government budgetary constraints, and the number of facilities available for privatization." [133]
  • "The demand for our correctional and detention facilities and services, electronic monitoring services, community-based re-entry services and monitoring and supervision services could be adversely affected by changes in existing criminal or immigration laws, crime rates in jurisdictions in which we operate, the relaxation of criminal or immigration enforcement efforts, leniency in conviction, sentencing or deportation practices, and the decriminalization of certain activities that are currently proscribed by criminal laws or the loosening of immigration laws." [133]
  • "Various factors outside our control could adversely impact the growth of our GEO Community Service business, including government customer resistance to the privatization of mental health or residential treatment facilities, and changes to Medicare and Medicaid reimbursement programs." [133]
  • "[M]ost of our revenues are generated under facility management contracts which provide for per diem payments based upon daily occupancy.... Under a per diem rate structure, a decrease in our occupancy rates could cause a decrease in revenues and profitability."[133]

Corporate Subsidies and Government Contracts

According to Subsidy Tracker, a project of Good Jobs First, GEO Group received a training reimbursement subsidy of $7,815 in 2010 from the Mississippi Community College Board-Office of Workforce Education for their East Mississippi Correctional Facility.[134]

GEO Group has received $2,629,423,344 in contract awards from the federal government according to USASpending.gov, with the largest amount in awards coming from the Department of Justice, the Department of Homeland Security, and the Department of State.[135]

History

According to the Justice Policy Institute:

"Founded in 1984 under the name Wackenhut Corrections Corporation, the company solidified its first contract, the Aurora ICE Processing Center with the Bureau of Immigration and Custody Enforcement, in 1987.
Wackenhut was acquired by Group 4 Falck (now G4S) in 2002, and a year later repurchased all of its stock shares to become an independent company. In 2003 Wackenhut Corrections Corporation officially changed its name to The GEO Group, Inc. As of 2010, GEO contracts with 13 states, the Federal Bureau of Prison, the U.S. Marshals Service, and U.S. Immigration and Customs Enforcement. In 2010, 66 percent ($842 million) of GEO’s $1.27 billion in revenue was from U.S. corrections contracts. Of the $842 million in revenue, 47 percent came from corrections contracts with 11 states.
On August 12, 2010 the GEO Group acquired Cornell Companies—a for-profit private prison company with revenues of over $400 million in 2009—in a merger estimated at $730 million. The acquisition of Cornell by GEO signifies a change in the landscape of the private prison industry with the majority of private prisons now under the management of either GEO or CCA." [9]

Personnel

CEO

George Zoley
George C. Zoley is GEO Group's Chairman of the Board, Chief Executive Officer, and founder. He has been employed by GEO Group for 26 years, after founding the company in 1984. Zoley also serves as director for many of GEO Group's subsidiaries worldwide. He is a graduate of Florida Atlantic University and Nova Southeastern University.[136]

Zoley's base salary for the 2013 fiscal year was $1,179,350. He also received $1.87 million in stock awards, a $1.3 million bonus, a $256,675 increase in the value of his pension, and $85,609 in other compensation, for a total compensation of $4,621,496.[137]

In 2012, in addition to the $5,976,604 that Zoley received in compensation from the GEO Group,[138] he also received more than $5 million in dividends from converting the GEO Group into a real estate trust, according to the Palm Beach Post.[139] The Post also reports that as part of the REIT conversion, GEO sold its residential treatment centers, at a loss, for $36 million to a group led by Zoley, and quotes compensation expert Paul Hodgson of BHJ Partners as saying the deal "raises multiple red flags." Hodgson is quoted as saying "that’s a clear conflict of interest. If I were a shareholder of that firm, I’d be raising questions."[140]

According to SEC filings, from 2008-2012 George C. Zoley's compensation was $26,937,200.[141][137]

2008 : $2,866,248
2009 : $4,253,096
2010 : $3,484,807
2011 : $5,734,949
2012 : $5,976,604
2013 : $4,621,496
Total: $26,937,200

Total executive compensation for the top GEO executives from 2008 to 2013 was $50,003,948.[141][137]

2008 : $4,143,154
2009 : $6,831,741
2010 : $7,079,224
2011 : $11,174,992
2012 : $11,486,300
2013 : $9,288,537
Total: $50,003,948

Born in 1960, Zoley has been with GEO or its former parent company, the Wackenhut Corporation, since 1981.[142] He once called the late George Wackenhut, the controversial[143][144] right-wing founder of Wackenhut Corporation, the person he most admired.[145]

When Zoley joined Wackenhut in the early 1980s, the company was expanding into providing strike support services for private companies to allow them to continue operating during strikes.[146][147][148]

Zoley has been prominently involved in local and national privatization battles throughout his career. In his early years at Wackenhut, Zoley promoted the privatization of public fire departments.[149] In Dover, New Hampshire, the International Association of Firefighters and a citizen's group fought Zoley's efforts tenaciously, suing to block one such outsourcing of their local fire department, saying it was intended to break the union.[150]

Zoley's efforts were being promoted at the time by the pro-privatization Reason Foundation, which covered the pitched privatization battle between Wackenhut’s Zoley and the firefighters in Dover in its magazine.[151] Reason also pushed Zoley's views on private policing.[152] Wackenhut has financially supported the Reason Foundation.[153]

As a staff member at Wackenhut (1981-1988), Zoley helped the company form Wackenhut Corrections Corporation (WCC) as a division in 1984. A GEO Group timeline reports that during this period, Zoley "was instrumental to the development and marketing of detention and correctional services to government agencies."[154] In promoting the use of private prisons, Zoley reportedly said they are "kind of like a hotel with room and board."[155]

In 1987, under Zoley’s direction, Wackenhut received its first contract, from the former U.S. Immigration and Naturalization Service (INS), to build and operate a detention center in Aurora, Colorado;[156] and in 1988 was hired to run two facilities in Texas.[157] That year, Wackenhut incorporated WCC as a subsidiary, and in July 1994, with Zoley as president and director, took it public.

In 1997, Zoley secured WCC's first contract with the federal bureau of prisons to operate the Taft Correctional Institution in California, and led WCC into the private prison health industry by buying Atlantic Shores Hospital and securing newly-created GEO Care's first contract.[158]

In 2003, with Zoley as board chair, WCC purchased its remaining stock from G4S (which had merged with its parent company Wackenhut and become an indirect owner of WCC shares) and renamed itself The GEO Group. In 2005, Zoley signed an agreement with Indiana making GEO Group the first private company to run a prison in the state.[159]

From 2006 to 2008, Zoley, as GEO Group CEO and board chair, was involved in a shareholder lawsuit over CentraCore Properties Trust (CPT), a real estate investment trust (REIT) that was technically independent of GEO but that, according to investigative reporter Beau Hodai, was “essentially the entity which held all of Wackenhut/GEO's real estate holdings.” Zoley was a founding CPT Trustee. According to Hodai, questions had been raised by both CPT shareholders and the SEC over whether CPT was in fact independent of GEO Group. When GEO Group sought to merge with CPT, shareholders filed suit in Maryland and Florida, “alleging that the merger was an inside deal beneficial to CPT trustees and GEO executives and that there were irreconcilable conflicts of interest between the two.”[160] The lawsuits were settled out of court in 2008 on undisclosed terms.[161]

Zoley has been politically active in Florida and nationally, contributing to the campaigns of now-Senator Marco Rubio, former Governor Charlie Crist,[162] and raising more than $100,000 for George W. Bush's 2004 presidential campaign.[163] Zoley has close ties with current Florida governor Rick Scott, who has pushed hard to privatize Florida's prison and prison healthcare systems. Zoley travelled to Britain with Scott in July 2012 on a business development trip.[164]

Zoley, along with other Geo Group employees,[165] also weighed in with a campaign contribution to former Arizona House Speaker Kirk Adams, who sponsored the controversial SB 1070 bill empowering state and local law enforcement officers to check the immigration status of residents (much of the law was later struck down by the U.S. Supreme Court).

Zoley was also involved in a controversial $6 million deal in 2013 over Florida International University's agreement to sell the naming rights to its sports stadium to GEO Group. Zoley is an FAU alumnus, former chair of the FAU board of trustees, one-time chair of its presidential search committee, and board member of the FAU foundation.[166] The deal, which collapsed under heavy adverse publicity, led to the resignation of the university president, Mary Jane Saunders.[167]

Board of Directors

GEO Group board of directors as of August 2014: [168]

Management Team

GEO Group management team as of August 2014: [169]

Subsidiaries

GEO Group subsidiaries include: [170]

  • GEO International Holdings, LLC.
  • GEO RE Holdings LLC
  • WCC Financial, Inc.
  • WCC Development, Inc.
  • WCC/FL/01, Inc.
  • WCC/FL/02, Inc.
  • GEO/FL/03, Inc.
  • GEO Design Services, Inc.
  • The GEO Group UK Ltd.
  • The GEO Group Ltd.
  • South African Custodial Holdings Pty. Ltd.
  • The GEO Group Australasia Pty. Ltd.
  • GEO Australasia Pty. Ltd.
  • The GEO Group Australia Pty. Ltd.
  • Australasian Correctional Investment Pty. Ltd.
  • Pacific Rim Employment Pty. Ltd.
  • Canadian Corrections Management, Inc.
  • Miramichi Youth Center Management, Inc.
  • The GEO Group New Zealand Limited
  • Correctional Services Corporation, LLC
  • CPT Limited Partner, LLC
  • CPT Operating Partnership LP
  • Correctional Properties Prison Finance LLC
  • Public Properties Development & Leasing LLC
  • GEO Holdings I, Inc.
  • GEO Acquisition II, Inc.
  • GEO Transport, Inc.
  • CSC of Tacoma, LLC
  • Cornell Companies, LLC
  • Cornell Corrections Management, LLC
  • CCG I, LLC
  • Cornell Corrections of Alaska, Inc.
  • Cornell Corrections of California, Inc.
  • Cornell Corrections of Texas, Inc.
  • Cornell Corrections of Rhode Island, Inc.
  • Cornell Interventions, Inc.
  • Correctional Systems, LLC
  • WBP Leasing, LLC
  • Sentencing Concepts, Inc.
  • Cornell Abraxas Group, Inc.
  • BII Holding Corp.
  • BII Holding I Corp.
  • Behavioral Holding Corp.
  • Behavioral Acquisition Corporation
  • BI Incorporated
  • GEO Custodial Ltd.
  • BI Incorporated Puerto Rico, Inc.
  • MCF GP, LLC
  • GEO MCF LP, LLC
  • Municipal Corrections Finance, LP
  • Australasian Correctional Services Pty. Ltd.
  • GEO Corrections Holdings, Inc.
  • GEO Corrections and Detention, LLC
  • GEO Re-entry Services, LLC
  • Cornell Abraxas Group OS, LLC
  • Cornell Interventions OS, LLC
  • Cornell Companies of California OS, LLC
  • Cornell Companies of Texas OS, LLC
  • GEO Operations, LLC
  • Wackenhut Corrections Corporation N.V.

Contact Information

The GEO Group, Inc.
621 NW 53rd Street
Suite 700
Boca Raton, FL 33487
United States

Phone: 561-893-0101
Fax: 561-999-7635

Website: http://www.geogroup.com

Related Articles and Resources

Key Reports

Related SourceWatch Articles

Related PRWatch Articles

External Articles

References

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