TORONTO - U.S. companies that might be interested in operating the
planned superjail in Penetanguishene, Ontario have had a bad week.
On April 1, the Tennessean reported that prison operator
Corrections Corporation of America (CCA) had lost US$203 million for
financial year 1999, while its holding company, Prison Realty Trust,
had lost $62 million. The company is now looking for a rescuer.
“We assume a bankruptcy filing is the most likely ‘stand-alone
alternative’ if additional equity cannot be raised by midyear 2000,”
financial analyst Jerry Doctrow told the newspaper.
Share prices for CCA and rival Wackenhut Corrections Corporation
have fallen by 80 per cent and 70 per cent respectively in the last
year. Investors have stayed away in droves from the scandal-plagued
industry.
At Wackenhut, “Operational difficulties at several U.S.
facilities had a negative impact on income in the fourth quarter,”
according to a Feb. 17 news release.
An “operational difficulty” was on display this week. For the
first time ever, the United States Department of Justice has taken
legal action to protect inmates from abuse.
The department is asking a Baton Rouge district court to intervene
to stop abuse of young boys at a Wackenhut juvenile prison in
Louisiana, the Guardian reports.
Wackenhut runs 22 per cent of U.S. private prison operations; CCA
runs 56 per cent.
“If either of these companies ever runs an Ontario correctional
facility, it is reasonable to assume that they will be in major
cost-cutting mode,” said Leah Casselman, president of the Ontario
Public Service Employees Union. “The record around the world is
clear: corporate cost-cutting in corrections means cutting back on
safety for inmates, staff, and communities.”
News reports cited in this release are available at
