As The Criminal Justice System Changes, So Does A Private Prison Giant

At a halfway house in southeast Pennsylvania last May, a former prison inmate on his way to reentering society died of a heroin and fentanyl overdose, the eighth person to die of a drug overdose there since the start of 2016, and the fifth in the first five months of 2017 alone, the Reading Eagle found in a November report that documented egregious mismanagement.

“Nobody’s going to get any kind of help in there,” Dawn Zdanowicz, who was released from the facility in November, told International Business Times. Her roomate was among those eight to fatally overdose. “If you’re going to run a dual diagnosis center, you have to have the training that goes with that.”

What took place there was a microcosm of not only the nation’s opioid crisis, but shifts within the criminal justice system that are pushing private prison companies toward business opportunities in the market for halfway houses, which treat many of the nation's addicts on their way out of prison.

The Pennsylvania facility, known as the Alcohol & Drug Addiction Parole and Probation Treatment center, or simply ADAPPT, was acquired in April by politically-connected GEO Group Inc., better known for its private prison management. The previous manager, now a GEO subsidiary, is Community Education Centers, a private contractor known for its halfway houses. (GEO declined to comment on Zdanowicz’s criticism of ADAPPT.)

The April CEC acquisition followed GEO’s 2010 purchase of Cornell Companies, another private prison and rehabilitation firm that owns facilities focued on drug treatment and counseling. In 2011, GEO purchased BI Inc., a maker of electronic monitoring equipment and operator of non-residential day-reporting centers, which test newly released inmates for drug use and, in some cases, treat or offer counseling for substance abuse problems. GEO’s buys have helped the private prison giant build up its new health care and rehabilitation brand, GEO Care, and have increasingly put it in a position to treat the victims of the nation’s opioid epidemic, which affects a disproportionate number of prison inmates.

GEO’s Growing Post-Prison ‘Continuum’

In addition to the acquisitions, over the past couple of years, GEO Group has boosted spending on its “GEO Continuum of Care,” a division that’s overseen by GEO Care, and that handles criminal reentry, “offender rehabilitation programs” and “evidence-based treatment.” Along with “faith-based services,” “cognitive behavioral treatment programs” and academic and job training programs, the Continuum of Care division includes substance abuse treatment, education and counseling, according to its website. GEO spent $5 million launching the Continuum of Care division in 2015, according to an annual report from that year. Last year, investment in the division doubled to $10 million, according to GEO’s 2016 annual report. Both BI and CEC — along with Cornell’s behavioral health and youth and family services division, Abraxas, which includes substance abuse treatment centers — were integrated into the GEO Care brand.

GEO has been active on the federal lobbying front since at least 2002. In the second quarter of 2015, the firm began lobbying Congress on “the promotion of the benefits in the use of public-private partnerships for the delivery of secure residential care, community reentry and supervision [and] offender rehabilitation,” federal lobbying forms show. It has continued to promote such partnerships.

In the first and second quarters of this year, GEO lobbied Congress for the first time on “public-private partnerships in… the provision of evidence-based rehabilitation, both in-custody and post-release, through the ‘GEO Continuum of Care.’” Prior to 2015, GEO’s lobbying activity mainly concerned immigration enforcement policy. Pablo Paez, GEO Group’s vice president of corporate relations, declined to answer questions from IBT about its lobbying efforts.

When questioned about the company’s move toward drug addiction treatment for inmates as part of the expansion of this division and its parent brand, Paez said that outside of the GEO Care subsidiary, the company is “not focused on acquiring or developing drug treatment centers.” But for America’s prisoners, a disproportionate number of whom have substance abuse problems, GEO’s facilities, with its “GEO Care” brand and “Continuum of Care” division, are serving the essentially same purpose.

Indeed, GEO is not buying up voluntary-admission sober centers, but has been aggressively acquiring halfway houses, or residential reentry centers, which are the more structured of the two, and are generally managed by the government or for-profit and nonprofit contractors. The firm’s main competitor, CoreCivic, formerly known as Corrections Corporation of America, has been active in this business as well.

GEO’s latest quarterly SEC filing states that the company offers “counseling, education and/or treatment to inmates with alcohol and drug abuse problems at most of the domestic facilities we manage.” An IBT review of the nearly 200 facilities listed on GEO’s locations webpage found that at least 125 offered substance abuse programming, while 27 focused predominantly on such programming. Among GEO’s 54 residential reentry centers, 42 offered such programming, and 21 focused predominantly on substance abuse.

Those estimates are conservative, as many of the listings have little information, often nothing but an address, a phone number and a fax number. For a majority of the locations, there is minimal information about them online. An employee at one location refused to describe its treatment offerings to a reporter. Paez also declined to respond to questions about how many GEO facilities offered common prescription substance abuse treatments, such as Suboxone or methadone, and how many were primarily focused on drug addiction programming.

Of GEO Group’s 600-plus job openings as of Nov. 30, 93 posts, or roughly one in seven, advertised drug and alcohol or substance abuse counselors, outpatient substance abuse managers, “therapeutic counselor[s],” therapists, substance abuse supervisors, substance abuse specialists, social workers and case managers dealing with addicts and drug and alcohol or substance abuse counselor assistants, among other similar posts.

The company’s acquisition of CEC — a reentry program giant with deep ties to the administration of former New Jersey Governor Chris Christie and a reputation for facilities rife with drug use, as documented by a multi-part New York Times investigation in 2012 and 2013 — “makes so much sense,” said Kathy O’Leary, of the activist coalition New Jersey Prison Divest. Large companies that manage reentry and rehab, she said, “try to do economies of scale, but it’s a more intimate experience than that.”

“If you look at these programs that are successful, these faith-based nonprofits, they really have a more individualized approach,” said O’Leary. Pointing to the Times’ series, she said the privatized reentry centers “have created environments where drugs are more available than they are on the streets.”

CEC did not comment on the allegations laid out in a June 2012 Times story on the Albert M. “Bo” Robinson Assessment and Treatment Center in Trenton, now listed among GEO’s locations, that described sexual assault accusations, violence, “lax security” and “rampant” drug use.

“You see horror stories with private centers, but you see horror stories with government centers as well,” said Len Gilroy, director of government reform at the libertarian Reason Foundation. He said the use of performance-based contracts, in which the contracting companies don’t get paid unless they do a high-quality job, are keeping such problems at bay. “Government contracting always has to have proper due diligence… Governments are learning how to do this better and better.”

Still, like New Jersey Prison Divest’s O’Leary, Donald Cohen, executive director of In the Public Interest, a policy research center focused on privatization, argued that the existence of obligation to shareholders was a problematic element regardless.

“They’re only making money if they’re controlling people,” he said. “The incentive is to control as much as possible and spend as little as possible.”

Providing ‘GEO Care’ For Those Who Need It Most

Many have advocated for the treatment of drug addiction within U.S. prisons as a means of stemming the crisis. According to a June report from the Bureau of Justice Statistics, 58 percent of state prisoners and 63 percent of sentenced jail inmates fit the definition of drug-dependent or substance abusers, compared to 5 percent of the general population. Roughly a quarter of those state prisoners and sentenced jail inmates reported having used heroin or opiates, and between one in five and one in eight said they’d used the substances regularly, the bureau found. (The numbers varied depending on the year during which they were surveyed, but tended to be larger in more recent years.)

An earlier study, from the National Center on Addiction and Substance Abuse, described 85 percent of inmates as “substance-involved” and two-thirds of them as meeting the 4th-edition Diagnostic and Statistical Manual of Mental Disorders’ criteria for addiction.

Once they’re no longer behind bars, inmates with histories of drug abuse are at greater risk of relapse; according to a 2016 Surgeon General report, which estimated that “half of the United States prison population has an active substance use disorder,” about 15 percent of former prisoners’ deaths between 1999 and 2009 “were related to opioids.” Their tolerance for the drugs fell during incarceration, the report noted, rendering them more susceptible to overdose upon relapse.

And in rural areas ravaged by the epidemic, treatment can be scarce. Because of this, several women in Martinsburg, Virginia, started a volunteer organization with the sole purpose of driving addicts to the nearest detox or rehab facility, often several hours away.

“We know, when a lot of them come out of prison or jails, they need help with treatment and reentry,” Tina Stride, who helped found and is one of several women running the Hope Dealers Project in Martinsburg, told IBT. She added that, because of the lack of available treatment centers in her community, if a for-profit prison company is offering that service to inmates on their way to release, so be it, as long as the company is properly evaluated. “We know there’s a scarcity of these [rehab] facilities — the scarcity is huge… This is why we even came to be: because we were tired of our town dying.”

The night before Stride and several other women running the Hope Dealer Project spoke with IBT by phone, Stride said, there were 11 overdoses in their small city in the West Virginia panhandle.

Beverly Sharp, who has worked in various managerial, training and human resources positions within the Bureau of Prisons over three decades, said the staggering demand for treatment between incarceration and full release is putting the whole justice system at risk. Sharp, who is working to form a reentry nonprofit in West Virginia, said she welcomed any viable option for prisoner addicts seeking a return to normal life, including the private one.

“When you’re returning people to the same people and places they were around before they were incarcerated,” they’re in obvious danger of not only renewed criminal behavior, but relapse, she said. “If we don’t change how we’re doing things… eventually, we’re going to have more people in society that are ex-offenders than those that aren’t.”

But given the track record of for-profit prisons, including a February University of Wisconsin-Madison study that found private prisons to be more expensive because they keep inmates behind bars for longer and don’t reduce recidivism, many critics are uncomfortable with the idea of such companies handling inmates’ addiction treatment.

“When you have private companies taking control, they say ‘cheaper, better, faster,’” said Cohen, of In the Public Interest. “There’s money that’s being taken from that system — executive salaries, shareholder returns, lobbying expenditures, campaign expenditures, maybe. That money should be in the system.”

While America may need more facilities for drug abuse treatment, especially post-incarceration, Cohen said, “we don’t need more private ones.”

Others, meanwhile, see privatization as one more efficient way to satisfy widespread and growing demand for treatment for those who need it most — individuals stuck in the criminal justice system. Sharp said she’d visited a GEO facility that had impressed her, and that the federal government was “not doing a good job.” Gilroy, of the Reason Foundation, for his part, pointed out that the use of private contracts was nothing new for the U.S. government.

“Historically, we have not and I don’t think we should have a problem with putting companies to work in service of the public,” said Gilroy. “If they’re making a profit, well, fantastic.”

Adapting To An Evolving Market

Recovering drug attics and prisoners gradually working to reenter society weren’t always a major focus for private prisons, which housed 62 percent of Immigration and Customs Enforcement (ICE) detention beds in 2016 and close to a fifth of federal inmates in 2014.

But while the number of “holds” by ICE of undocumented immigrants in the U.S., a population fueling growth in the use of private prisons, ticked up to nearly 14,000 in the first few months of Donald Trump’s presidency, that figure is roughly half ICE’s 2011 peak, according to the Transactional Records Access Clearinghouse (TRAC), a Syracuse University data organization. Federal criminal prosecutions have taken a dip as well under the new administration, falling 12 percent from a year earlier and 31 percent compared to five years earlier, TRAC found.

The general prison population has also declined in the past couple of years, with that of private prisons falling especially steeply — by 8 percent, compared to a 5 percent drop in the number of inmates overall — according to an April report from the Pew Research Center.

Dealing a blow to firms like GEO — and, to a lesser extent, its rival CoreCivic — that have turned toward halfway houses, however, the Bureau of Prisons cut contracts with at least 16 of its 180 contracted reentry centers this year, Reuters reported in October, noting that four in five inmates reside in such centers on their way to societal reintegration. But under Attorney General Jeff Sessions, the flow of inmates with substance abuse issues into prisons and out to society by way of halfway houses, especially private ones, is bound to increase.

Last week, Sessions pledged $12 million to local law enforcement as part of his Justice Department’s effort to reverse the “deadly tide” of addiction and overdose deaths. In announcing the move, he cited his mandate to “prevent new addictions from starting” and “go after” those who “exploit the vulnerable and profit off addiction.”

In May, Sessions issued a memorandum rescinding the previous administration’s policy of urging prosecutors to avoid mandatory minimum sentences for drug offenders. Less than two weeks after his February confirmation, he’d already canceled the Barack Obama administration’s rollback of private contracting for prisons.

The move reaffirmed the commitment of GEO’s most valuable customer: the federal government. Between 2007 and 2016, the portion of GEO’s tens of millions — and, in more recent years, billions — of dollars in revenues derived from “various agencies of the U.S. Federal Government” grew from just over a quarter to nearly half, according to some of its most recent annual filings with the Securities and Exchange Commission.

Although Sessions’ decision surely provided GEO with some windfall from the federal government for prison contracts, the shift toward private contracts for residential reentry centers started during the previous administration. In a Nov. 30, 2016 memorandum to the acting director of the Bureau of Prisons, then-Deputy Attorney General Sally Yates wrote that despite “serious reservations” about privatization of U.S. prisons, the federal government “lacks the capacity to own and operate its own” residential reentry centers, because the bureau had relied on a mix of for-profit and non-profit providers to do so since the early 1980s.

“Instead, we must direct our efforts in the short term towards ensuring that the private market for federal halfway houses operates efficiently, transparently and fairly, with a focus on both the public’s safety and the needs of those leaving prison,” Yates wrote. She noted that the centers were required by the agency “to recruit and retain skilled staff members, including employment-placement specialists, case managers, and substance abuse treatment specialists, and to provide extensive training to [reentry center] employees.”

The federal government could’ve managed its own halfway houses or more frequently contracted with nonprofits — if such things were fiscally viable, said Sharp, the former Bureau of Prisons manager.

“With nonprofits, there’s just no funding,” she said, pointing out that Trump’s late October declaration of the opioid crisis as a “Nationwide Public Health Emergency” fell short of his pledge to declare a “national emergency,” which, unlike the former category, would quickly free up federal funds. Private sector actors, she added, are often better equipped to cut costs than the federal government. “When you have places like GEO opening the centers, they have to follow the same rules and regulations, but they don’t always have as much red tape to go through.”

But that’s exactly what worries opponents of for-profit prisons and halfway houses. Either way, the situation is dire, as Stride, of the Hope Dealer Project, told IBT.

“We just need help, but I don’t want someone just coming in and using them as pawns to make a profit,” she said of former inmates struggling with addiction. “We pray that they are good. We don’t want to be picky.”