The GEO Group, Inc. (GEO) is a Florida-based company specializing in privatized corrections, detention, and mental health treatment. It maintains facilities in North America, Australia, South Africa, and the United Kingdom. In 2015, the GEO Group's contracts with the U.S. federal government for operating prisons generated about 45% of its revenues. GEO Group facilities include prisons of all three security levels, immigration detention centers, minimum-security detention centers, and mental-health and residential-treatment facilities. It owns numerous facilities and, in other cases, operates state or federal facilities under contract.
|Traded as||NYSE: GEO
S&P 400 Component
|Industry||Outsourced correctional services|
|Predecessor||The Wackenhut Corporation|
|Founded||1984 (as Wackenhut Corrections Corporation (WCC))|
|Headquarters||621 NW 53rd St.
Boca Raton, Florida, U.S.
(Chairman & CEO)
|Revenue||$ 1.61 billion (2011)|
|$ 192.2 million (2011)|
|$ 77.5 million (2011)q|
|Total assets||$ 3.049 billion (2011)|
|Total equity||$ 1.039 billion (2011)|
Number of employees
|Subsidiaries||GEO Care, Inc.
The GEO Group Australia
GEO Transportation, Inc.
The GEO Group UK Ltd.
GEO Corrections Holdings Inc.
The company has been the subject of civil suits in the United States by prisoners and families of prisoners for injuries due to riots and poor treatment at prisons and immigrant detention facilities which it has operated. In addition, due to settlement of a class-action suit in 2012 for its management of Walnut Grove Youth Correctional Facility in Mississippi, the GEO Group lost its contract for this and two other Mississippi prisons (which it had been operating since 2010). Related federal investigations of kickback and bribery schemes associated with nearly $1 billion in Mississippi state contracts for prisons and related services have resulted in the criminal prosecution of several public officials in the state. In February 2017, the state attorney general announced a civil suit for damages, to recover monies from contracts completed in the period of corruption.
In August 2016, the U.S. Department of Justice announced its intention to phase out contracts with privately operated prisons. The U.S. Department of Homeland Security said it was reviewing its contracts with private firms, which operate several immigrant detention facilities. In the spring of 2017, officials of the Donald Trump administration said they would be reviewing this policy.
Wackenhut Corrections Corporation (WCC) was formed as a division of the Wackenhut Corporation (now a subsidiary of G4S Secure Solutions) in 1984. It was incorporated as a Wackenhut subsidiary in 1988. In July 1994, WCC became a separately traded public company. In 2003, WCC management raised funds to repurchase all common stock held by G4S, changing its name to the GEO Group, Inc.
GEO sold CSC's juvenile services division in 2005 to James Slattery, CSC's former CEO, for $3.75 million. Slattery renamed this business as Slattery's Youth Services International.
GEO announced the closing of its $360 million cash purchase of Community Education Centers on April 4, 2017. CEC owned and/or managed more than 12,000 beds in the U.S. This included over 7,000 community re-entry beds. It provided in-prison treatment services at over 30 government-operated facilities.
In 2010, the company was reported to operate more than a dozen facilities in the state of Texas, and nearly three dozen in the rest of the United States. In addition to prison facilities operated under contract with U.S. states, the GEO Group owns and operates the Broward Transitional Center in Pompano Beach, Florida, the Aurora Detention Facility and the Northwest Detention Center in Tacoma, Washington, all under contract with U.S. Immigration and Customs Enforcement. As of the fiscal year ended December 31, 2012, GEO managed 96 facilities worldwide totaling about 73,000 beds, including 65,949 active beds and 6,056 idle beds. The company had an average facility occupancy rate of 95.7% for 2012.
Other GEO Group facilities include the Reeves County Detention Complex, a three-part complex in Texas described as the largest private prison in the world. It houses more than 3700 inmates, mostly immigrants held for low-level crimes before being deported after serving their sentences. Riots here by prisoners in 2008 and 2009 because of poor conditions resulted in more than $21 million in damages.
Internationally, in 2010, GEO operated a total of another 10 facilities in Australia, England, South Africa, and Cuba. As of 2016, subsidiary GEO Group Australia operated four prisons (Junee Correctional Centre, Arthur Gorrie Correctional Centre, Parklea Correctional Centre, and Fulham Correctional Centre), with a fifth facility expected to open in late 2017.
In the U.K., GEO Group's sole facility is the Dungavel Immigration Removal Centre, expanded in 2013 to hold 249 detainees, male and female. In 2004 the Children's Commissioner for Scotland described conditions at the facility as "morally upsetting" and threatened to report the UK and Scottish governments to the United Nations Committee on the Rights of the Child.
GEO conducts its business through four business segments – U.S. corrections segment, international services segment, GEO Care segment, and facility construction and design segment. The U.S. corrections segment primarily encompasses GEO's U.S.-based privatized corrections and detention business for federal and state authorities.
The international services segment primarily consists of GEO's privatized corrections and detention operations in South Africa, Australia, and the United Kingdom. International services reviews opportunities to further diversify into related foreign-based governmental-outsourced services on an ongoing basis.
The GEO Care segment, which is operated by GEO's wholly owned subsidiary GEO Care, Inc., comprises GEO's privatized mental-health and residential-treatment services business. As of 2016, it conducts this business in the U.S. only.
GEO's facility construction and design segment primarily consists of contracts with various state, local, and federal agencies for the design and construction of prison and related facilities for which GEO has been awarded management contracts.
In February 2013, the GEO Group's private foundation pledged US$6 million to company founder George Zoley's alma mater, Florida Atlantic University. In return, the GEO Group received naming rights to the university's football stadium. In April, after pressure from students, faculty, and alumni, GEO Group withdrew its $6 million naming-rights gift to Florida Atlantic University.
Incidents, lawsuits, and investigationsEdit
In 2001, an inmate was murdered at GEO's Willacy County State Jail in Texas by two other inmates. In 2006, GEO was sued by the man's family, and found liable for $47.5 million for destruction of evidence and negligently causing the man's death. In 2009, GEO appealed the court's decision; the appeals court upheld a verdict and damages of $42.5 million.
Between 2005 and 2009, at least eight people died at the GEO Group-operated George W. Hill Correctional Facility in Delaware County, Pennsylvania, that state's only privately run jail. Following those deaths, family members filed lawsuits against the company and facility, saying that it did not provide adequate medical care or proper supervision for offenders. On December 31, 2008, GEO pulled out of operations and dropped this facility, "citing underperformance and frequent litigations." As of 2018, GEO is again managing this facility.
In 2007, the Texas Youth Commission (TYC) fired seven employees responsible for monitoring prison conditions after discovering that the GEO-run Coke County Juvenile Justice Center had "deplorable conditions". Those seven employees had earlier worked directly for GEO. The monitors had failed to report problems at the county facility, but an inspection by the TYC found the facility to be understaffed, ill-managed, and unsanitary. The TYC ordered that all inmates be transferred elsewhere, terminated their state contract with GEO, and subsequently closed the facility. GEO had run the facility since 1994.
A class-action suit was filed in 2010 against state authorities and GEO over conditions at the Walnut Grove Youth Correctional Facility in Mississippi, the largest juvenile facility in the United States. Settlement of the suit in 2012 required the state to end its contract with GEO, and put operations at the facility under a federal court monitor. The state transferred juvenile offenders to more suitable state-run facilities that complied with standards of juvenile care. The company also lost contracts for operating two other prisons in Mississippi. A related federal investigation resulted in numerous indictments for mismanagement and corruption, including of the state Commissioner of Corrections and the mayor of Walnut Grove, both of whom were forced to resign.
In July 2012, two undocumented immigrants in Florida turned themselves in to police, with the expectation that they would be transported to and housed in GEO's Broward Transitional Center, a 720-bed facility in Pompano Beach, Florida, that holds immigration detainees. It is the only privately owned immigration detention center in Florida. The pair intended to report firsthand on the conditions inside the facility, as many accounts in the immigrant community reported substandard conditions. The pair reported "substandard or callous medical care, including a woman taken for ovarian surgery and returned the same day, still bleeding, to her cell, and a man who urinated blood for days but was not taken to see a doctor."
In response to these and other serious allegations, U.S. Congressman Ted Deutch of Pompano Beach wrote a letter in September 2012 to ICE regarding the contract under which GEO operates the facility, requesting a case-by-case investigation. Twenty-five other congressional representatives signed on to the inquiry.
In March 2017, a class-action lawsuit accused GEO Group of violating the U.S. Constitution and federal antislavery laws by forcing some 60,000 current and former immigrant detainees at the Denver Contract Detention Facility based in Aurora, Colorado, to work for less than a dollar a day or for nothing at all. It evolved from a 2014 lawsuit filed on behalf of nine immigrant plaintiffs, who alleged they were forced to work without pay and were threatened with solitary confinement if they refused. They have not been convicted of any crime, so may not be required to work with little or no pay like convicts in prison. On December 2, 2017, 64-year-old Kamyar Samimi, who had come to the U.S.in 1976, was taken into ICE custody at his home due to his having been arrested for a minor drug offense in 2005. He was imprisoned at the Aurora contract facility, where he died 16 days later from cardiac arrest. In 2012, Evalin-Ali Mandza died of cardiac arrest at the same detention center. An investigation of Mandza's death found GEO employees did not know how to use an EKG machine and the procrastinated in calling an ambulance. A 2016 ACLU report entitled "Fatal Neglect: How ICE Ignored Deaths in Detention", discovered 200 immigrant detainees had died in ICE contract facilities since 2003.
In 2018, two Florida employees of Behavioral Intervention Inc., a GEO subsidiary, were arrested for taking bribes of up to $5,000 to have electronic monitoring devices removed from immigrants who were allowed to remain free on bail if the wore the monitors. Elisa Pelaez was sentenced to thirty-three months in federal prison, and Ginou Baptiste, a second GEO worker involved in the bribery will be sentenced in April, as will a confederate of the two who pretended to be an ICE agent in furtherance of the scheme.
On April 24, 2007, inmates rioted for two hours at the GEO Group's state-owned New Castle Correctional Facility in Indiana. The riot resulted in fires and minor injuries to staff and inmates. The Indiana Department of Correction concluded that its recent transfer of 600 inmates over six weeks from Arizona to a new section at New Castle increased tensions at the facility, as the inmates comprised a large group and prison staff lacked experience. The department held the inmates responsible for the riot. Following the riot, Indiana authorities suspended further transfers of Arizona inmates, pending measures to help out-of-state inmates adjust to Indiana prison policies, and to ensure that inmates were transferred more gradually to be able to integrate them into the prison population at New Castle.
In 2008 and 2009, prisoners at the Reeves County Detention Complex in Texas, the largest privately owned prison in the United States, rioted over poor conditions. The complex housed more than 3700 prisoners, mostly immigrants serving short sentences prior to deportation. They caused damages of $1 million and $21 million, respectively, as the second riot resulted in a severe fire.
A facility-wide, eight-hour riot broke out in GEO Group's Great Plains Correctional Facility in Hinton, Oklahoma, on July 9, 2017. Four hundred of the 1,940 federal inmates refused to leave the recreation yards and took control of a building. Three guards suffered injuries and two were taken hostage. Regaining control required the intervention of eight law enforcement agencies to secure the perimeter to prevent escapes, including the Caddo and Canadian County Sheriffs' deputies, the Bureau of Indian Affairs, the Oklahoma Highway Patrol, and the Hinton, Hydro, Geary, and Binger, Oklahoma, police departments," as well as GEO's Correctional Emergency Response Team members from its Lawton, Oklahoma, prison, 70 miles south. Tear gas and pepper spray were employed to regain control of the prison.
Operation Mississippi Hustle and state civil suitEdit
A federal investigation, dubbed Operation Mississippi Hustle, was initiated in 2014 or earlier by the United States Attorney and prosecuted in the United States Court for the Southern District of Mississippi. It has examined the relationship between officials of the Mississippi Department of Corrections and local jurisdictions, and various prison contractors and subcontractors. The investigation resulted in indictments against the commissioner of the Department of Corrections, and the longtime mayor of Walnut Grove, both of whom resigned from office. By 2016, indictments for corruption had been issued against eight other officials, consultants, and contractors. Former commissioner Chris Epps and several other individuals have pleaded guilty or been convicted as of February 2017 in this continuing investigation.
As a result of this investigation, in February 2017, Mississippi State Attorney General Jim Hood announced a civil suit against 15 contractors and several persons for damages and punitive damages, to recover the amounts of state contracts awarded under Epps during the roughly decade-long period when he has been found to have been taking bribes. GEO Group was among the for-profit prison management companies named in this suit. Hood said that the company had been awarded $260 million in contracts in an eight-year period.
Alabama prison purchase proposalEdit
Alabama legislators were concerned in May 2017 by an amendment that state senator Bobby Singleton added to the major $845 million prison construction bill in development. It required state officials to make "a good faith effort" to purchase the GEO Group prison facility in Perry County.
U.S. federal contractsEdit
On August 18, 2016, Deputy U.S. Attorney General Sally Yates announced that the Justice Department intended to end its Bureau of Prisons contracts with for-profit prison operators, because it concluded "...the facilities are both less safe and less effective at providing correctional services..." than the Federal Bureau of Prisons. In a memorandum, Yates said that private prisons
compare poorly to our own Bureau facilities. They simply do not provide the same level of correctional services, programs, and resources; they do not save substantially on costs; and as noted in a recent report by the Department's Office of Inspector General, they do not maintain the same level of safety and security. The rehabilitative services that the bureau provides, such as educational programs and job training, have proved difficult to replicate and outsource and these services are essential to reducing recidivism and improving public safety.
Homeland Security Secretary Jeh C. Johnson announced his department would be reviewing its contracts with prison REITs related to detention of immigrants in their privately owned facilities. As of 2015, GEO Groups operated 26 federal prison centers, for the departments of both Justice and Homeland Security. These centers had a total capacity of 35,692 prisoners, representing 45% of the company's revenue.
On February 23, 2017, newly confirmed Trump administration Attorney General Jeff Sessions rescinded the August 2016 guidance. In March 2017, Pablo Paez, GEO Group vice president, defended the legality of his company's $225,000 donation to a pro-Trump political action committee. He said that the donation was made by a subsidiary, GEO Corrections Holdings Inc., which has no contracts with any governmental agency, rather than directly from GEO Group itself. Democratic Congressmen Emmanuel Cleaver and Luis Gutiérrez disputed that claim in a letter to GEO and its rival, CoreCivic. The Campaign Legal Center filed a complaint challenging the contribution with the Federal Elections Commission. GEO and CoreCivic, each donated $250,000 supporting Trump's inaugural festivities, according to the corporations' spokesmen. GEO gave $275,00 to the pro-Trump super PAC Rebuilding America Now, according to FEC filings. A $100,000 donation had been made only a day after Sally Yates, at the Department of Justice, announced it would be phasing out its for-profit prison and detention contracts.
The government ended GEO's prison contract to operate the Parklea prison and excluded it from bidding on the new contract, though it allowed industry competitors to do so. GEO had run the prison since 2009. It had to deal with serious security breaches over the past few years, including the a guard being stabbed. Chronic problems had surfaced, including an inmate in another prison being discovered with the secret architectural plans for a new maximum-security wing at Parklea. Another inmate filmed himself with a weapon and illegal drugs, and it was distributed widely throughout the country.
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