Private Prison Exec Waves Off Criminal Justice Reform, Predicts More Profits

By Lee Fang, The Intercept

24 December 15

senior executive with the second-largest for-profit prison company in America assured investment bankers last summer that despite talk of drug policy and criminal justice reform, the country will continue to “attract crime,” generating new “correctional needs.”

“The reality is, we are a very affluent country, we have loose borders, and we have a bad education system,” said Shayn March, the vice president and treasurer of the Geo Group. “And all that adds up to a significant amount of correctional needs, which, thankfully, we’ve been able to help the country out with and states with by providing a lower cost solution.”

The previously unreported remarks were made during a presentation at the Barclays High Yield Bond & Syndicated Loan conference in June.

While students and activists have protested private prison corporations, scoring a recent victory last week with the decision by the University of California system to divest from firms like Geo Group and Corrections Corporation of America, the firms have largely avoided the spotlight.

Private prison companies are a controversial player in America’s criminal justice system. In the 1990s, private prison firms pushed for tougher sentencing laws at the state level and have been tied to efforts in recent years to compel local law enforcement officers to enforce immigration laws. Geo Group has also been faulted for multiple incidents of abuse, ranging from inmates who have died in their facilities to employees charged with sexual assault.

March told attendees at the conference that he was getting questions about drug offenses and sentencing guidelines, an issue he noted had been raised by Hillary Clinton on the campaign trail. “I got to be honest with you, there’s very few people I know, if anybody, who’s in prison for smoking marijuana. It doesn’t exist, guys. That’s not why people are in prison,” March said.

Rather than reducing incarceration rates, March told his audience that drug reform could have the “opposite effect” by increasing prison terms. Most drug-related sentences, he asserted, are the result of plea deals stemming from violent crimes, so if there isn’t an alternative plea arrangement, the only outcome defendants face is for the violent crime, which carries longer sentences.

March argued that crime is inherent in America because of affluence. “No one is committing a lot of crime in poor countries because, well, who are you going to steal from?” March continued.

He also claimed that mandatory minimum sentences have not greatly impacted the overall incarceration rate, and that growth in mandatory sentencing has been “just as substantial” as non-mandatory sentencing. Rather, “there’s just been a lot more crime,” March said.

How March came to this conclusion is unclear. The Geo Group did not respond to The Intercept’s request for the sourcing of his claims.

While there is research that shows inequality as a driver of crime, there is little evidence to support March’s claims about affluence. In the Western Hemisphere, the countries that rank among the lowest in GDP per capita, Honduras and El Salvador, have the highest murder rates in the world outside of a war zone. Countries with the least violent crime and lowest murder rates, including Singapore, Japan, and Denmark, are among the wealthiest societies in the world.

In fact, crime rates have fallen in America while incarceration rates have increased over the last decade. Moreover, according to a 2010 report by the U.S. Sentencing Commission, 58.1 percent of offenders in Bureau of Prisons custody were convicted of an offense carrying a mandatory minimum, and 39.4 percent “were subject to that mandatory minimum penalty at sentencing.” The U.S. has 2.3 million people imprisoned, more than any country in the world.

March spent a significant portion of his talk downplaying the impact of criminal and drug justice reforms on his company’s business. But in its Securities and Exchange Commission filing, Geo Group disclosed to investors that the firm 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.”

Corrections Corporation of America, the largest for-profit prison company in the U.S. and a competitor of Geo Group, discussed sentencing reforms on a call with investors in August. Damon Hininger, the chief executive of CCA, told analysts that new guidelines that narrow the disparity between crack and powder cocaine sentences will “have an impact” on “Bureau of Prisons populations.”

However, March told attendees that factoring in elderly care, immigrant detention, and expansion plans overseas, the company is sure to grow. “I think I started at GEO, our stock price … got down to $12.50. And if you factor in an apples-to-apples comparison to where we are today, our stock is well over $50 a share. So we have quadrupled our value in that six-year period.”

He added, “No, we’re not Google, but we’re still doing pretty good.”