Q: How do you gain access to Vermont’s for-profit prison? A: You don’t.

Update: For those finding this post afresh, please also read the following entry, which includes the response from the Department of Corrections. 

Here’s a little goodie from Vermont’s Best Newspaper (Out Of State Division), the Valley News. Columnist Jim Kenyon has a problem with the whole concept of for-profit prisons…

The mere concept of for-profit prisons defies logic. [The operator] only gets paid when its prison beds are occupied. It’s not in the financial interests of the company — or its shareholders — to work toward keeping people out of prison.

… what elected officials don’t talk about much is the toll that being so far away from home can have on inmates, their families and their future. Elected officials also gloss over the reasons why GEO and other for-profit prison companies are less costly.

(Kenyon’s essay is behind a semi-permeable paywall. If you sign up for the Valley News email list, you can read up to five articles per month for free.)

Kenyon’s interest in the issue goes back almost 20 years, when he visited Vermont’s first proxy prison in Virginia. Yes, the outsourcing of prisoners is a sad legacy from the Howard Dean era. Currently, a few hundred Vermonters subjected to the tender mercies of a Michigan prison owned by The GEO Group, an operator of prisons that’s legally organized as a “real estate investment trust,” maybe for tax reasons or maybe because it looks better on a business card than “Mass Incarcerator of Persons.”

Anyway, Kenyon thought it’d be a good idea to actually visit the GEO facility in Michigan where Vermont inmates are imprisoned at Vermont taxpayer expense. On August 13, he made a formal request to then-Corrections Commissioner Andy Pallito, in writing.

Radio silence.

Two weeks ago, Pallito resigned from the DOC to become the state’s budget chief.

Finally, last week, after a more than one-month-long delay, DOC notified Kenyon that his request had been passed on to the GEO Group. Which is kind of a jaw-dropper.

Last Thursday, I emailed GEO’s headquarters in Boca Raton, Fla., about setting up a visit. I haven’t heard back. Maybe I’d have better luck reaching them on Wall Street.

This is, to put it bluntly, a disgrace. How do state officials sit on a legitimate journalist’s request for so long? Why can’t they arrange a visit to Vermont inmates by a journalist who covers Vermont? Why pass the buck? What is the state, or its corporate contractor, trying to hide?

Note: I have requested comment from the Shumlin administration. This post will be updated when (if?) I hear back.


3 thoughts on “Q: How do you gain access to Vermont’s for-profit prison? A: You don’t.

  1. Don. P.

    So this is where a Vermonter can find actual news? Finally. Thanks. I’m sure Geo Group will meet this reporter with open arms, after making sure the place is ship shape and everyone has their marching orders. Feels like something out of an episode of Orange is the New Black.

  2. climateplan

    First, kudos to Jim Kenyon. He’s got an uphill battle ahead of him.

    The key to the issue of transparency is the fact that GEO Group, Inc is structured as a Real Estate Investment Trust (REIT). Getting information from a REIT is generally a passive activity — as in reading annual reports, investor relations puff and keeping up on the news on financial sites like Seeking Alpha. And in fact, The GEO Group, Inc, is unlikely to response because it’s the wrong entity to talk to.

    Before we get to “what this means for prison families,” here’s a quick bit on GEO as a REIT. Look, finance is gobbledook for most people — but that’s exactly why the average person gets screwed without knowing the least bit about it. So it’s worth a moment to self-educate and well, not skip the next few paragraphs. Boring, yes — but damn important because it’s the reason why it’s hard to get information from the for-profit prison.

    A REIT is different from many stocks in two important ways. First, its value is based on property, not operations. Second, it provides a regular source of income. Basically, REIT owners are like landlords, earning 90% of income from property income in the form of dividends.

    GEO’s REIT restructuring was reported in a January 2013 Forbes article, “Why Would A Prison Corporation Restructure As A Real Estate Company?” (http://tinyurl.com/pwuf67m) The short answer is to make the company attractive to a wider base of investors in the post-financial market. Interest earnings on municapl bonds are at an all time low, making regular dividends from REITs more attractive. GEO REIT owners are currently earning 2.48% annually.

    Who owns GEO REIT? It could be you. Lots of folks have mutual or index funds. Vanguard is the primary institutional share owner of GEO. Fidelity, Raymond James, Charles Schwab and a lot of institutional investors buy GEO REIT shares.

    But — here’s the hook — GEO Group, Inc. doesn’t operate activity in its prisons. In order to be a REIT, operations are separated from property assets. Prison operations and day-to-day management is conducted by a subsidiary. Which one? Sheesh, I just wasted fifteen minutes looking through the company’s 2014 annual report. GEO Care maybe? The GEO Group REIT has more subsidiaries than I have time.

    **What this means to reporters and families.** If a reporter asks for information and doesn’t get a response, he/she may never realize the inquiry was inevitably directed up the chain of command to the ultimate owner, The GEO Group, Inc. REIT. And since this entity doesn’t deal with operations and management, they have no reason to respond.

    So who is the best person to get information from? Go back to the new Corrections Commisioner and shake the tree a little harder. It might be a good idea to put a little fire under the feet of former Corrections Commissioner Andy Pallito. Jim Kenyon deserves to know why Vermont public officials sent him to GEO Group. They should know he needs to talk to the operations management subsidiary. DOC should also be able to provide better oversight of Vermont prisoners in private prisons. DOCs response to Kenyon gives the appearnce that Vermont officials are washing their hands of responsibility. This would be particularly ironic given Vermont’s presential candidate has prison reform as a platform priority.

    Sorry for the long comment. I hesitate to even bring up finance because it tends to land on deaf ears. I learned the hard way. In 2008/2009 I tried to communicate VSAC’s shady abuse of a legal loophole in the bond market which allowed Vermont’s sacred cow to bilk the federal government at a rate of 9% on its bond offerings. The subject was complicated and, wow, did I take a pretty big hit of backlash for that. Fortunately, I had the moral support from a handful of (bipartisan) folks who understood the language of municipal bonds.

    The point is, if we don’t understand or are unwilling to learn finance, we tend to respond ineffectively, or worse, unwittingly contribute to the same problem we wish to resolve. So, um, check your portfolio or ask your (competent) financial advisor. Do you own any REIT Fund that includes The GEO Group?

    If so, you’re part of the problem.

  3. climateplan

    Sorry for the typos in my comment above. I’ve got a very busy day and didn’t have time to proofread.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s