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UK paper profiles PLN associate editor's CCA shareholder resolution re prisoner rape

The Guardian, Jan. 1, 2012.
UK paper profiles PLN associate editor's CCA shareholder resolution re prisoner rape - The Guardian 2012

Righting the record on prison rape

One lone shareholder is on a crusade to force America's largest private prison corporation to publish records on sexual abuse

Sadhbh Walshe, Thursday 1 March 2012 16.19 EST

Alex Friedmann, the associate editor of the monthly magazine Prison Legal News, once served six years at a private prison run by the Corrections Corporation of America (CCA), the country's largest for-profit prison company. Friedmann now owns 191 shares of CCA stock, just enough to allow him to introduce a stockholder resolution.

His recent proposal that the CCA's board of directors (pdf) provide biannual reports to their stockholders about the company's efforts to reduce incidents of rape and sexual abuse in their facilities was greeted with outright horror by the CCA, which immediately wrote to the US Securities and Exchange Commission (SEC) asking to be allowed to omit the proposal from their proxy materials.

The CCA's objections to the proposal were threefold (pdf): first, because "it related to ordinary business operations of the company; second, because "the proposal relates to the redress of a personal claim or grievance against the company; and third, because the proposal has "already been substantially implemented by the company". In a major victory for Friedmann, the SEC did not concur with any of the CCA's arguments (pdf).

And so, the CCA has no choice but to include the proposal in their proxy materials. They made it clear in a letter to Friedmann (pdf), however, that they intend to include a lengthy rebuttal and will recommend voting against it. In the same letter, they claim to "take a zero tolerance approach to prisoner sexual abuse". They also claim to have taken "a leadership position on eliminating prisoner sexual abuse". So it seems somewhat bizarre that a company that is so adamant about its excellent record on rape prevention would not wholeheartedly support a proposal to let their shareholders know all the great things they have been doing about it.

About that record. In 2007, a report by the Bureau of Justice Statistics (BJS) found that the CCA facility in Torrance, New Mexico had one of the highest levels of sexual victimization of any prison in the country. In 2009, the state of Hawaii withdrew all 168 of its female inmates from the Otter Creek Correctional Center in Kentucky, another CCA-run facility, because of charges of sexual abuse by guards. Not long after, the state of Kentucky withdrew all its female prisoners from the facility also.

Losing inmates on the scale that occurred at Otter Creek is no different than a private company losing a major account. I imagine the amount of money the CCA has paid out in settlements to many of the women who have since sued the company should also be of concern to shareholders. Even if you make the bold assumption that majority of people who buy stock in a company that runs prisons for profit do not do so for humanitarian reasons, you'd imagine they'd still want to know how these cumulative incidents of sexual assault affect their bottom line.

Shareholders should also want to be kept in the loop about the lawsuit filed last October by the ACLU of Texas seeking class action damages on behalf of three immigrant women who (along with numerous others) have made allegations of sexual assault at the T Don Hutto Family Residential Center, another CCA facility. According to Mark Whitburn, a senior staff attorney for the ACLU, one of the reasons they brought the case as a class action was because the CCA was contractually bound to adhere to the policy of transporting women to the facility with same-sex guards, yet this policy was violated by numerous individuals employed by the company. One would think that a company that prides itself on having
taken a "leadership position on eliminating prisoner sexual abuse" would insist on its staff adhering to such a simple assault prevention policy.

The shareholders may not be too finicky about the CCA's actual record on protecting inmates from being raped or sexually violated: Friedmann told me if he sold his 191 shares today, they would be worth around $4,750. That's over $24 per share. He intends to hold on to his shares for the time being, so that he can continue to introduce resolutions he believes will make the CCA a better company. However much of a thorn he may be in the CCA's side, his fellow shareholders may ultimately be indebted to him.