GEO Group (formerly Wackenhut Corrections) is the second-largest private prison company in the country.
Guess where it gets a nice chunk of revenue? By taking kickbacks from the companies that put phone lines into its prisons. According to a letter it sent to the SEC, GEO Group received $608,108 in prison phone commissions in 2012. (Though the company pointed out that's less than one percent of its $2.8 billion in assets, $1.339 million in income and $1.5 billion in revenues.)
A GEO Group shareholder -- a very interesting one -- attempted to bring this to the attention of fellow shareholders. He hoped that, since it creates an unnecessary cost to inmates' families (many of them poor), and since it was really a small sliver of GEO's revenue, the shareholders could vote on a resolution to nix this revenue stream. But this week, the GEO Group put the smackdown on that attempt.
Today, Alex Friedmann is the associate director of the Human Rights Defense Center (HRDC), and the managing editor of Prison Legal News. But fifteen years ago, he was a prison inmate, serving a twenty-year sentence for attempted murder, armed robbery, and attempted aggravated robbery related to a botched attack on a gold and silver coin store.
"I committed very bad and serious crimes in the late 1980s and 1990s," he tells New Times. "Back then, I was young and stupid and greedy, and today I'm old and not so stupid and not so greedy." Upon his release, he grew into an activist fighting against all the ills and dysfunction of the modern prison system. "Our corrections system doesn't correct anybody," he quips.
"No one comes out better than they went in," and "those who manage to stay out do so in spite of the negative impacts of the system. When prisoners get out, we don't let them find jobs, or find housing, they're cut off from social assistance, they don't get grants for education, we don't let them vote, and we treat them as second-class citizens -- and then complain bitterly when they go back to prison."
One of the tactics that Friedmann uses is to buy stock in private prison companies, which gives him leverage -- he becomes part-owner of said company. In 2012, he used this influence to try to get shareholders of Corrections Corporation of America to agree that the company would work to reduce rapes in prisons.
Today, Friedmann is focused on another matter that has long been important to prisoners and their families: jacked-up phone rates. He explains that three companies -- Securus, Global Tel Link, and CenturyLink -- together have 85 percent of nation's phone business in state prisons.
They compete against each other, and so to get the exclusive contracts with the private prisons, these phone companies offer the prison companies part of the profits --- on average, a whopping 47.8 percent of the revenue from prisoners' phone calls, according to an analysis by Prison Legal News.
In turn, the phone companies charge the prisoners and their families higher-than-normal rates. One woman with firsthand experience calling an incarcerated family member -- Maya Schenwar, executive director of Truthout -- has said that a typical call costs over $4. Given the high incarceration rate for poor folks, this expense falls on families who can least afford it.
It's a "tax on the poorest people," Friedmann says. He says $17.30 for a 15-minute-call was the highest found in PLN's analysis; in Florida state prisons, the cost is $2.10 for an in-state 15-minute collect call. County jails have their own rates.
Friedmann bought and held $2,000 in GEO Group stock to become eligible to introduce a resolution for his fellow shareholders to vote on. He proposed a resolution that would decline the phone company commissions, and also require that GEO Group, when inking future contracts, give special consideration to phone companies that charge prisoners' families the lowest rates.
GEO balked, and argued to the SEC that it should not have to present this resolution to shareholders for various reasons, including that Friedmann had a "personal grievance." On Tuesday, the SEC sided with GEO Group.
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"This is what happens when essential public safety and criminal justice services, such as operating prisons, are contracted out to a private corporation without a conscience that is only interested in making money," Friedmann said in a statement. Friedmann says studies show that prisoners who stay connected to family members "have better post-release outcomes and lower recidivism rates."
The Federal Communications Commission has agreed with that. In 2013, the agency voted to cap the cost of interstate calls for prisoners at $.25 per minute for collect calls and $.21 per minute for debit and prepaid calls. Commissioner Mignon Clyburn said, "Studies have shown that having meaningful contact beyond prison walls can make a real difference in maintaining community ties, promoting rehabilitation, and reducing recidivism." The FCC's decision did not, however, affect in-state calls, which remain expensive.
Says Friedmann: "Make no mistake, when GEO claims it is interested in rehabilitating offenders, as it does on its website, it is merely providing lip-service. GEO Group had an opportunity to make a real difference in terms of increasing the ability of prisoners to stay in touch with their families, which would benefit our communities through lower recidivism rates and thus less crime and victimization. Instead, the company chose to protect its prison phone kickback profits."
Send story tips to Deirdra.Funcheon@BrowardPalmBeach.com