BIG CAPITAL & THE CARCERAL STATE
Laura I Applemanf

Who is accountable for the imposition of punishment in our carceral system? The answer
used to be much simpler, as we held local, state, and federal government actors responsible. In
recent decades, however, our correctional system has become increasingly privatized, with deeply
troubling results. All aspects of the carceral state—whether prisons, jails, juvenile detention,
rehabilitation, forensic hospitals, bail, or electronic monitoring—have dramatically increased
their use of privatized correctional services.
With this new world of privatized corrections, we frequently don’t know whom can be held
accountable when wrongdoing occurs. The bulk of our correctional services are now provided by
complicated web of private entities, some of them large and publicly held, some owned by private
equity. I dub them “Big Capital.”
Big Capital has invaded the carceral universe. Almost every aspect of correctional control
has been outsourced to private companies somewhere. The normalization of private equity firms
and enormous correction corporations partnering with public carceral institutions has resulted in
a failure of basic incarceration services. Although private prisons, prison labor for private profit,
and privatized services for inmates are nothing new, Big Capital’s recent infiltration into the
carceral state has no historical parallel.
This Article seeks to uncover these companies’ incursion into the realm of public
corrections and detail the disastrous results for those under correctional control. In so doing, I
also explais why allowing complicated private entities to control our carceral system has made
matters far worse, violating fundamental U.S. philosophies about punishment and rehabilitation,
creating conflicts of interest, undermining democratic legitimacy, and ultimately corrupting the
administration of justice.

Ó Laura I Appleman 2023.
f
Van Winkle Melton Professor of Law, Willamette University. J.D., Yale University; B.A., M.A., Univ. of
Pennsylvania. Thanks to Emmanuel Arnaud, Paulina Arnold, Mike Cahill, Erin Collins, Michelle Dempsey, Jeffrey
Fagan, Brenner Fissel, David Friedman, Brian Gallini, David Gray, Cynthia Godsoe, Brian Highsmith, Alexis HoagFordjour, Doug Husak, Elizabeth Kaplan, David Kwok, Ben Levin, Justin Murray, Anthony O’Roarke, Judith Resnik,
Alice Ristroph, Anna Roberts, Ric Simmons, Jocelyn Simonson, Sarah Swan, and the participants in the
Markelloquium 2023 and CrimFest 2022 for their helpful comments. Thanks also to Willamette for its research
support.

Electronic copy available at: https://ssrn.com/abstract=4404200

TABLE OF CONTENTS
Introduction ..................................................................................................................................... 3
Part I: Big Capital’s Investment in Punishment and the Loss of Accountability ........................... 5
A. Troubled Youth, Quick Profits: Juvenile Justice and Youth Detention Centers ................... 5
1. Juvenile Justice ................................................................................................................ 6
2. Juvenile Pre-Trial Detention …………………………………………………………10
B. Psychiatric Hospitals & Behavioral Services ....................................................................... 11
1. Psychiatric Care for At-Risk Youth .............................................................................. 11
2. Psychiatric Hospitals ..................................................................................................... 14
C. Correctional Control ............................................................................................................ 18
1. Bail Bonds ..................................................................................................................... 18
2. Electronic Monitoring ................................................................................................... 21
3. Alternative Corrections Services ................................................................................... 22
a. Private Probation .......................................................................................................... 22
b. Drug and Alcohol Rehabilitation............................................................................... 22
D. Correctional Healthcare ....................................................................................................... 25
Part II: Who Owns This Stuff? Unwinding the Labyrinth .......................................................... 29
A. Private Equity ....................................................................................................................... 30
B. Large, Publicly Traded Corporations.................................................................................... 32
C. International Insurance Conglomerates ................................................................................ 34
Part III: Profits over People: Big Capital’s Growing Role in Criminal Justice........................... 34
A. Monopolistic Conditions ...................................................................................................... 36
B. Lack of Transparency .......................................................................................................... 38
C. Destruction/Dismantling of Services for Profit ................................................................... 42
D. Purchasing political favorability .......................................................................................... 44
E. Difficulty Divesting ............................................................................................................. 47
Part IV: Uncontrolled Profiteering in a World of Public Punishment.......................................... 49
A. Diminishes the Provision of Core Public Services ............................................................ 50
B. Democratic Concerns ........................................................................................................ 51
C. Who Imposes Punishment ? .............................................................................................. 53
Conclusion ..................................................................................................................................... 54

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INTRODUCTION
For centuries, the American system of incarceration and rehabilitation has centered on the
public provision of punishment that follows from community sanctions. Of course, there have
always been entanglements of public service with the private sector. At all levels, the government
must contract with private firms for certain goods and services.1 In the carceral sector specifically,
the bail system has extensively relied on private elements to make it work financially. Prisons
have long sought to defray their cost of operations by selling the work and output of the
incarcerated to private parties.2
Recently, however, something fundamental has changed. When federal, state, and local
entities charged with punishment and rehabilitation began looking to the private sector to provide
core services, a new set of for-profit entities emerged to bid on and perform it. Where there is a
flow of public money, there is always a rush of capital flooding in to drink. There are, however,
vastly different implications for privatizing correctional services than, for example, hiring private
construction companies for public work, or contracting out the operation of highway rest stops.
Here, a core power of administration of justice is being contracted out, largely to save
money. If that is the fiscal choice, holding both public and private players accountable for the
quality of their services becomes extremely important. Although much attention has been paid to
holding military services contractors publicly accountable,3 much less has been paid to holding
accountable those to whom we entrust our carceral system.
In the for-profit corrections sector, we find that services are often being performed by “Big
Capital” entities: subsidiaries of large publicly held corporations, privately-held portfolio
companies held by secretive private equity firms, and large insurance companies. As I show in
this Article, when things go wrong, it can be incredibly complicated to figure out who is
accountable or determine how things have gone wrong. Moreover, the incentives to get things
right are frequently missing. The carceral system was certainly imperfect before the large-scale
privatization of its administration, but the influx of Big Capital into corrections has made life for
justice-involved individuals even more difficult.
This Article is the first piece of scholarship to comprehensively detail and trace how Big
Capital furtively purchases and combines private correctional service companies, thereby
transforming the carceral landscape in pursuit of profit. By tracing the tangled webs of private
financing that underly so much of modern public punishment, we will be better able to understand
the way the profit incentive continues to drive the carceral state.

1

Hadar Aviram discussed this aspect of privatized services in prisons, calling it “piecemeal privatization.” Hadar
Aviram, Are Private Prisons to Blame for Mass Incarceration and its Evils? Prison Conditions, Neoliberalism, and
Public Choice, 42 FORDHAM URB. L.J. 411, 411 (2014)
2
See generally Laura I Appleman, Bloody Lucre: Carceral Labor & Prison Profit, 2022 WISC. L. REV. 619 (2022).
3
See Charles Mahoney, How, and Why, to Hold Defense Companies Accountable, DEFENSE NEWS (June 1, 2017),
https://www.defensenews.com/opinion/commentary/2017/06/01/how-and-why-to-hold-defense-companiesaccountable-commentary/

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These complicated private entities should be forbidden from providing private services to
public corrections, because allowing them to do so violates fundamental American philosophies
about punishment and rehabilitation, creates conflicts of interest, and ultimately corrupts the
administration of justice. Incarceration should be focused on holding individuals accountable for
their actions and providing them with opportunities for rehabilitation, not on partnering with Big
Capital to generate profits.
In Part I of this Article, I describe how our system of incarceration and rehabilitation has
been privatized and the problems that emerge from that alone. Part II looks at different areas of
the criminal justice system and exposes the complexity and diversity of the ownership of those
entities that now provide the services. I discuss private prisons, treatment centers, juvenile
services, mental health providers, and bail providers – and how private equity investors, publiclyheld corporations, and large insurers have altered the structure of how we provide services and
manage accountability.
Part III discusses the normalization of Big Capital partnerships with public carceral
institutions, looking specifically at the results: not only a failure of basic correctional services, but
also the relentless privileging of money-making over any other focus, benefiting only select private
investors. In Part IV, I explain why having Big Capital take over correctional services violates
fundamental American philosophies about punishment and rehabilitation, creates conflicts of
interest, undermines democratic legitimacy, and ultimately corrupts the administration of justice.
We have lost some of our public voice to profit-focused Big Capital entities that are almost
completely opaque. In doing so, we have tied together the choices of private investors and the
results of criminal justice, at the expense of our social contract. I conclude that although structural
change may be slow, bringing as much transparency as we can to our current system is our fastest
route to accountability, though it may not ultimately suffice.

PART I: BIG CAPITAL’S INVESTMENT IN PUNISHMENT AND THE LOSS OF ACCOUNTABILITY
Private equity firms, insurance firms, and large publicly held corporations (to which I
collectively refer as “Big Capital”) have deeply invested in the various private correctional
companies providing services to a wide variety of corrections, ranging from juvenile justice
institutions, forensic psychiatric hospitals and behavioral services, to almost every aspect of
correctional control, including bail bonds, electric monitoring, private probation, and halfway
houses. Big Capital corrections services routinely cut staff and guards, fail to adequately maintain
facilities, and eliminate needed safeguards and oversight, all in the name of increasing profit. The
consequences for justice-involved individuals? Abuse, neglect, unsafe living conditions, serious
health issues, and sometimes death. Although much attention has gone to the role of privatized
prisons, less has been paid to the role of Big Capital in consuming entire areas of correctional
services. Big Capital’s investment in corrections has largely flown under the radar, with troubling
results.

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A. Troubled Youth, Quick Profits: Juvenile Justice and Youth Detention Centers
Big Capital has been increasingly investing in services for troubled youth, including children
enrolled in foster care, juvenile justice, troubled teen programs.4 Youth behavioral health services,
whether in juvenile justice facilities or youth detention centers, are a hot investment in the business
world, especially for private equity firms.5 The number of private equity deals to purchase health
care companies almost tripled between 2010 and 2021,6 including youth behavioral health
services.
The private equity model does not fit well with an approach that centers on child welfare,
however. For one, private equity companies frequently have goals of doubling or tripling their
investment over the course of 4-7 years.7 Chasing such large investment returns over a short period
of time often requires cost-cutting in the institutions, which damages the type and quality of care
provided.8 Additionally, private equity’s use of leverage to enhance returns requires high debt
levels, which can divert available spending money from the actual daily operation of these
institutions to the pockets of the private equity owners, who expect frequent interest payments and
dividends.9
Private equity companies have made significant inroads in two different types of justiceinvolved youth services providers: juvenile justice and immigrant youth detention. As I reveal
below, the change has not been salutary for the children involved.
1. Juvenile Justice
Residential programs for children involved in the juvenile justice system have been a
tempting area of investment for private equity firms. For several of these private equity companies,
however, the programs that they took over resulted in abuse and neglect of the youth, forcing states
to either close facilities or sever contracts.10 The impact on the children involved appears largely
negative, posing a unique and significant risk to them.11
One repeat private equity-owned player has been Sequel Youth & Family Services, a
leading provider of youth residential services, which includes housing children residing in juvenile
4

See Michelle Conlin, Private Equity’s Latest Play: The Troubled Kids Industry, REUTERS (February 17, 2022),
https://www.reuters.com/business/private-equitys-latest-play-troubled-kids-industry-2022-02-17/
5
See Fred Schulte, Sick Profits: Private Equity’s Stealthy Takeover Of Health Care In Multiple Cities, Specialties,
USA Today (November 11, 2022), https://www.usatoday.com/story/news/health/2022/11/13/private-equity-firmstakeover-health-care/8294483001/?gnt-cfr=1
6
See Schulte, supra note __, at id.
7
See Eileen O’Grady, The Kids Are Not Alright: How Private Equity Profits Off Behavioral Health Services for
Vulnerable and At-Risk Youth 3, PRIVATE EQUITY STAKEHOLDER PROJECT (February 2022),
https://pestakeholder.org/wp-content/uploads/2022/02/PESP_Youth_BH_Report_2022.pdf
8
O’Grady, supra note __, at id.
9
O’Grady, supra note __, at id.
10
O’Grady, supra note __, at 12.
11
See Confining Youth for Profit, NATIONAL JUVENILE JUSTICE NETWORK (September 2015),
https://www.njjn.org/our-work/confining-youth-for-profit--policy-platform

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justice facilities.12 Recently serving up to 10,000 youth at 50 separate locations in 21 states, Sequel
is currently owned by Altamont Capital Partners, which purchased Sequel in August 2017 from
Canadian private equity firm Alaris Royalty.13 Alaris profited tremendously from its ownership of
Sequel, harvesting $71 million in profit—roughly 23% annual return--on its investment.14
State governments pay Sequel, and other for-profit, private-equity owned corrections
companies, to house children who are involved in their juvenile justice systems.15 These
companies have been associated with abuse, neglect, and death of youth for whose welfare they
are responsible. For example, in April 2020, a teenager, Cornelius Fredericks, was tackled and
restrained by at least six staff members at Sequel’s Lakeside Academy, a Kalamazoo, Michigan
facility housing foster-care and juvenile-justice involved youth.16 The child’s alleged offense?
Throwing a sandwich.17 Two of the staff members, who held Fredericks to the ground for several
minutes, were charged with homicide, and a school nurse was charged with manslaughter for her
failure to call 911 in a timely manner.18 The school nurse claims she thought the child was “faking
unconsciousness.”19
Sequel’s response to this tragedy? They fired the staff members accused of killing the teen,
but appeared to do little else to fix the problems at the facility.20 Indifference to children’s wellbeing seems to be an issue at Sequel facilities, where numerous juvenile justice detainees criticized
the actions of Sequel staff members in multiple states, noting that they used inappropriate physical
restraints to control their charges.21 Some restraint techniques were allegedly so violent that the
children lost consciousness.22 The list of allegations against staff working in Sequel-owned and
operated facilities is long and disturbing, including rape, sexual assault, injuries from severe
restraint techniques, long-term seclusion, broken bones, and concussions.23

12

O’Grady, supra note __, at 12.
See Altamont Capital Partners Invests in Sequel Youth & Family Services, PR Newswire (September 5, 2017),
https://www.prnewswire.com/news-releases/altamont-capital-partners-invests-in-sequel-youth--family-services300513614.html
14
O’Grady, supra note __, at 12.
15
O’Grady, supra note __, at 4.
16
See Tyler Kingkade, Video Shows Fatal Restraint of Cornelius Frederick, 16, in Michigan Foster Facility, NBC
NEWS (July 22, 2020), https://www.nbcnews.com/news/us-news/video-shows-fatal-restraint-cornelius-fredericks16-michigan-foster-facility-n1233122
17
See Kingkade, supra note __, at id.
18
See Kingkade, supra note __, at id.
19
See Kingkade, supra note __, at id
20
See Kingkade, supra note __, at id
21
See Hannah Rappleye, Eric Salzman and Kate Snow, “They Told Me It Was Going to Be a Good Place:”
Allegations of Abuse at Home for At-Risk Kids, NBC NEWS (March 16, 2019), https://www.nbcnews.com/news/usnews/they-told-me-it-was-going-be-good-place-allegations-n987176
22
See Rappleye et. al, supra note __, at id.
23
See Lee Rood, Clarinda Students Were Restrained and Injured as Punishment, Records Show, DES MOINES
REGISTER (December 22, 2018), https://www.desmoinesregister.com/story/news/investigations/readerswatchdog/2018/12/22/clarinda-academy-iowa-students-restrained-injured-punishment-investigation-woodwardacademy/2387163002/
13

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Certainly, the public systems have problems, too.24 What is different about Big Capital? In
part, private equity-owned, for-profit facilities tend to use short-term or shift workers, who may
not properly trained to work with children who have serious behavioral challenges.25 Although
publicly run juvenile justice centers are not without flaws, their staff tends to be more permanent.26
The more temporary workers working in Big Capital-funded juvenile justice may over-rely on
restraint techniques for misbehaving children, frequently failing to follow the protocol required
for proper behavioral interventions.27
The other problem with more involvement of Big Capital is the challenge of overseeing
juvenile residential corrections, which involves complex and overlapping local, state, and federal
regulation.28 Because there are so many different regulatory entities, consistent oversight of their
operations can sometimes fall through the cracks.29 Private equity firms and other big capital
companies have benefited from these gaps in oversight.
Privatized youth confinement facilities are a common feature throughout the U.S., since
almost half of the youth facilities in the country are privately operated.30 Profitability targets lead
to pressure to maintain or increase the head count of confined children, while simultaneously
cutting costs.31 The result is often is failure to meet the minimum standards normally required for
state-run juvenile justice facilities, including benchmarks such as use of force standards, incident
reporting, operating standards, minimum staffing ratios, medical standards, and emergency
protocols.32
The absence of strong regulatory oversight has permitted companies like Sequel and their
private equity investors to operate with limited restrictions. For the majority of Sequel’s twentythree years in operation, it neatly eluded public accountability.33 Although there were occasional
news stories about individual abuses at various centers, “the full picture of the problems in Sequel’s
programs was obscured by a patchwork of oversight bodies spread across multiple states and local
jurisdictions.”34 The company would simply close a facility when conditions deteriorated. .35
24

Rikers Island, for example, was notoriously dangerous for juvenile detainees, leading to the permanent removal of
young teens from the jail. See Christopher Robbins, Raise the Age Moves All Young Teenagers Off Rikers Island,
Gothamist (October 1, 2018), https://gothamist.com/news/raise-the-age-moves-all-young-teenagers-off-rikers-island
25
Rappleye et. al, supra note __, at id.
26
See Kelan Lyons, Staffing shortages at NC juvenile detention centers: So bad that, ‘If you show up to work today,
you get a bonus,’ NC POLICY WATCH (12/14/22), https://ncpolicywatch.com/2022/12/14/staffing-shortages-at-ncsjuvenile-detention-centers-reaches-crisis-levels/
27
Rappleye et. al, supra note __, at id.
28
O’Grady, supra note __, at 4.
29
O’Grady, supra note __, at 4.
30
See Sarah Hockenberry, Melissa Sickmund, and Anthony Sladky, Juvenile Residential Facility Census, 2012:
Selected Findings 2, Office of Juvenile Justice and Delinquency Prevention, US DOJ (March 2015),
https://files.eric.ed.gov/fulltext/ED590915.pdf
31
See Confining Youth for Profit, NATIONAL JUVENILE JUSTICE NETWORK (September 2015),
https://www.njjn.org/our-work/confining-youth-for-profit--policy-platform
32
See Essential Public Interest Protections for Private Prison Contracts 7, IN THE PUBLIC INTEREST (October 2012),
http://bit.ly/1JJzfc8.

33

See Gilbert & Dake, supra note __, at id.
See Gilbert & Dake, supra note __, at id.
35
See Gilbert & Dake, supra note __, at id.
34

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Part of the public problem is that Sequel, and companies like it, are willing to house and
oversee the troubled children that other treatment and residential centers either cannot or will not.36
This means that states are often reluctant to cut ties with them, despite knowledge of the abuse and
mistreatment.37 The ultimate result, then is a “business model that banks on governments’
incapacity to create safe places for their most vulnerable children.”38 It is this precise business
model that private equity firms have begun to monetize.
By 2018, approximately 40% of all residential youth detention centers were operated by
private, for-profit companies.39 A significant subset are controlled and owned by private equity
firms.40 A troubled sector, privately run residential youth detention centers tend to be “buried under
layers of bureaucracy,” and do not have to comply with open records laws, like state-run centers.41
Ultimately, the lack of accountability is the most dangerous factor for the children living in these
centers.42 When there is an incident in state-run juvenile residential centers, there is usually a public
investigation, and legislators and state government are quickly involved.43 With privately run juvenile
residential centers, however, there is little oversight, and thus all but the most terrible incidents can be
more easily concealed.44 The primary type of oversight for private facilities is created through the
licensure and contracting process; this, however, only normally requires general oversight, mostly
up-front, with considerable inconsistency.45
The lack of public oversight and state regulation can be deadly. At Lakeside Academy, where
Cornelius Fredericks was killed, the staff’s alleged casual abuse of the children residing there was
chilling. Improper restraining of youth, like the hold that killed Fredericks, was specifically taught to
staff members to help “control” the residents.46 These dangerous holds are common among residential
programs, particularly those who are not well regulated: “What happened to (Fredericks) happens
in Sequel facilities, in juvenile justice facilities, in residential care facilities, in psychiatric facilities
across the country multiple times a day … every day of the year.”47 Similarly, due to lack of
oversight, private equity-owned juvenile justice facilities have hired staff members without
background checks.48 In contrast, publicly owned juvenile detention centers normally screen their
staff as a condition of hiring.49

36

See Gilbert & Dake, supra note __, at id.
See Gilbert & Dake, supra note __, at id.
38
See Gilbert & Dake, supra note __, at id.
39
See Franco LaTona & Jos Fox, ‘I Can’t Breathe:’ Hidden Abuse in Some Private Detention Centers, KIDS
IMPRISONED, NEWS 21, August 21, 2020, https://kidsimprisoned.news21.com/for-profit-juvenile-detention-centers/
40
Get percentages.
41
See Tona & Fox, supra note __, at id.
42
See Tona & Fox, supra note __, at id.
43
See Tona & Fox, supra note __, at id.
44
See Tona & Fox, supra note __, at id.
45
See Tona & Fox, supra note __, at id.
46
See Tona & Fox, supra note __, at id.
47
See Tona & Fox, supra note __, at id.
48
See Tona & Fox, supra note __, at id.
49
See., e.g., Juvenile Justice Detention Officer I - 80003881 , State of Florida (Feb. 15, 2023),
https://jobs.myflorida.com/job/DAYTONA-BEACH-JUVENILE-JUSTICE-DETENTION-OFFICER-I-80003881FL-32124/993876200/
37

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Although Michigan health services required corrective action plans for each abusive
episode at Lakeside Academy, nothing was made public.50 This secrecy, along with contracting
with individually-run juvenile facilities, has allowed the existing private equity firms in charge to
fly well under the radar.51 For example, Sequel, fully owned by Altamont Capital Partners,
operates approximately 40 residential juvenile justice facilities around the country.52 Because each
of the facilities is registered under a separate, independent name, it is difficult to trace back to the
ultimate owner: the private equity investment firm.
Moreover, the abusive treatment and lack of oversight tend to occur more frequently with
high-needs children, who often have severe behavioral and psychological issues. Companies like
Sequel particularly focus on serving these particular children, who are often sent to out-of-state
residential care facilities as a last resort. Because these children are far from home and struggle
with behavior, often the abuse is ignored, or goes unreported.53 When abuse does happen, the
entity who runs the residential homes is almost never publicly blamed or held to account.
The frequent sales and name changes of the private companies that run the troubled
juvenile detention facilities makes tracking these entities difficult. For example, in 2022, Sequel,
under fire for its abuse scandals, shut down approximately half of their centers, selling the rest to
Vivant Behavioral Healthcare.54 Vivant Behavioral Healthcare, however, was founded in 2021 by
Jay Ripley, one of three 1999 founders of Sequel.55 As Vivant, the company is using its technical
change of ownership to fight litigation against treatment centers formerly owned by Sequel.56
The privatization rate of juvenile detention centers has risen, from 33% of facilities in
1999 to 40% in 2016.57 Outcomes for the minors assigned to their care and supervision have not
improved. In 2012, the Department of Justice found that private juvenile facilities had twice the
sexual abuse rate (8%) as public facilities (4%).58 Additionally, the death rate for juveniles detained
in juvenile justice residential facilities was higher in private facilities as opposed to public (2.8%
vs. 2.3%).59 The numbers are twice as worse in juvenile detention centers, where the death rate
50

See Tona & Fox, supra note __, at id.
See Tona & Fox, supra note __, at id.
52
See Tona & Fox, supra note __, at id.
53
See Tona & Fox, supra note __, at id.
54
See Curtis Gilbert, Under Scrutiny, Company That Claimed to Help Troubled Youth Closes Many Operations and
Sells Others, APMREPORTS (April 23, 2022), https://www.apmreports.org/story/2022/04/26/sequel-closes-sellsyouth-treatment-centers
55
Gilbert, supra note __, at id. Ripley was also the original founder of another abuse scandal-ridden youth
behavioral services company, Youth Services Industries, which was finally ceased operations in 2016. See John
Kelly, Is Youth Services International Finally Out of Business, THE IMPRINT (March 21, 2016),
https://imprintnews.org/justice/juvenile-justice-2/is-youth-services-international-finally-out-of-business/16785
56
Gilbert, supra note __, at id.
57
See Caitlin Curley, Why Is No One Paying Attention to Private Juvenile Detention Centers, GENBIZ (September
14, 2016), https://genbiz.com/no-one-paying-attention-private-juvenile-detention-centers
58
See Allen Beck and David Cantor, Sexual Victimization in Juvenile Facilities Reported by Youth 17, National
Survey of Youth in Custody 2012, BJS (June 2013), https://bjs.ojp.gov/content/pub/pdf/svjfry12.pdf (nb: double
check source)
59
See Sarah Hockenberry, Melissa Sickmund, and Anthony Sladky, Juvenile Residential Facility Census, 2012:
Selected Findings 13, OFFICE OF JUVENILE JUSTICE AND DELINQUENCY PREVENTION (March 2015),
https://ojjdp.ojp.gov/sites/g/files/xyckuh176/files/pubs/247207.pdf
51

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was 5.8% for privately-run detention centers compared to 3.1% for public detention centers.
Though we cannot discern precisely why these results are so much worse, we should be able to
know more.
This baseline neglect and disturbing record of abuse is no surprise. As one observer has
pointed out, “[p]rivate equity’s goal isn’t to provide a safe and comfortable environment for those
in its care, it’s to make outsized returns.”60 Indeed, understaffing, lack of proper training, poor
living conditions, physical and sexual abuse, and underreported use of restraints in these facilities
continue apace. These problems are the specific “by-product of the private equity business model,”
which increases profits by running unmonitored shoestring operations.61
One reason juvenile justice residential facilities are so appealing to private equity is due to
the increasing amount of public subsidy directed at it over the past decade, courtesy of the
Affordable Care Act.62 The revenue stream makes this segment of criminal justice ripe for private
equity takeover.63 But what has been profitable for private investors has not proven beneficial for
those children under correctional control.
2. Juvenile Pre-Trial Detention Services
Large, publicly traded companies have also rolled up64 and invested in various private
corrections companies which provide youth pre-trial detention services. In 2019, for example,
CoreCivic, a multi-billion dollar publicly-held corrections corporation, entered into a five-year,
$29 million contract with the U.S. Department of Justice for detention and transportation services
at Otay Mesa Detention Center.65
Otay Mesa Detention Center provides pre-trial detention for juvenile offenders, among
other services, and has been criticized for their poor treatment of individuals relegated to their care.
Otay Mesa has recently come under fire for use of pepper spray on its juvenile detainees, despite
San Diego commission requests for officers to limit and eventually eliminate its use.66
Additionally, the Center had limited nursing and clerical staff to help treat and document illnesses,
and only minimally necessary medical equipment, potentially hampering emergency responses.67

60

See David Dayen, Private Equity Eyes Youth Treatment Centers as a Takeover Target, AMERICAN PROSPECT
(Feb. 17, 2022), https://prospect.org/power/rollups-private-equity-eyes-youth-treatment-centers-as-takeover-target/
61
Dayen, Takeover Target, supra note __, at id.
62
Dayen, Takeover Target, supra note __, at id.
63
Dayen, Takeover Target, supra note __, at id.
64
A roll up, or roll up merger, is when “an investor…. buys up companies in the same market and merges them
together. Roll-up mergers, also known as a "roll up" or a "rollup," combine multiple small companies into a larger
entity that is better positioned to enjoy economies of scale.” See James Chen, Investopedia (September 11, 2022),
https://www.investopedia.com/roll-up-merger-definition-4683958
65
See DOJ Contract with CoreCivic, USA SPENDING,
https://www.usaspending.gov/award/CONT_AWD_15M40021FA3500007_1544_70CDCR20D00000007_7012
66
See Jill Castellano, Youth in San Diego Detention Said Locked in Rooms Without Written Permission, TIMES OF
SAN DIEGO (April 21, 2022), https://timesofsandiego.com/politics/2022/04/21/youth-in-sd-detention-said-locked-inrooms-without-written-justification/
67
See Castellano, supra note __, at id.

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Finally, there was little to any tracking of the juvenile detainees after release, making it hard to
ensure that they got proper rehabilitation and re-entry services.68
Given that CoreCivic is known for cost-cutting in the correctional facilities they serve,69 it
is hardly a surprise that their pre-trial detention services for juveniles appear troubled..
B. Psychiatric Hospitals & Behavioral Services
Behavioral health, psychiatric care, and forensic hospitals have also been attractive investment
targets for big capital companies, as they are seen as ripe for purchase, streamlining, and profit
extraction. The expansion of Big Capital into behavioral health has often been ruinous for the
patients involved, who are frequently mentally fragile by the time they arrive at these institutions.
Instead of providing assistance, proper forensic care, or comfort, however, the corrections
behavioral health companies often have worsened an individual’s situation.70 Private provision of
these public services again hampers our ability to monitor the provision of healthcare services, and
oversee minimum levels of competence.71
1. Psychiatric Care for At-Risk Youth
Behavioral services for teens and younger children have also been markets for investment for
private equity firms, resulting in troubling provision of services for youth in need of psychiatric
care. In Alabama, Sequel ran 4 child psychiatric residential treatment facilities, all of which were
found to be “violent and chaotic places where youth are physically and emotionally abused by staff
and peers, subjected to wretched living conditions, provided inadequate supervision and medical
care, and subjected to illegal seclusion and restraint,”72 as alleged by the Alabama Disabilities
Advocacy Program.
In 2019, for example, the Sequel-run teen facility in Courtland, Alabama allegedly failed to
prevent repeated employee attacks on a boy under their care, possibly leading to his suicide
attempt.73 Sequel’s services in housing foster youth and teens charged with crimes have been
nothing short of a failure, as evidenced by the forced shutdown of 14 out of 36 residential facilities,
including 5 facilities closed in 2021.74 After complaints of child sexual abuse by staff members,

68

See Castellano, supra note __, at id.
See generally Laura I Appleman, Cashing in on Convicts: Privatization, Punishment, and the People, 2018 UTAH
L. REV. 579 (2018).
70
See The Treatment Industrial Complex 14, Prison Policy (November 2014),
https://www.prisonpolicy.org/scans/afsc/tic_report_online.pdf
71
See Eileen O’Grady, Understaffed, Unlicensed, and Untrained: Behavioral Health Under Private Equity,
PRIVATE EQUITY STAKEHOLDER PROJECT (February 22, 2020), https://pestakeholder.org/reports/understaffedunlicensed-and-untrained-behavioral-health-under-private-equity/
72
See Nancy Anderson, Letter to Alabama State Commissioners, ALABAMA DISABILITIES ADVOCACY PROGRAM
(July 6, 2020), https://adap.ua.edu/uploads/5/7/8/9/57892141/letter_to_state_re_sequel.pdf
73
See Caroline Klapp, Abuse at Sequel Courtland Led Child to Attempt Suicide, WAFF48 (December 17, 2020),
https://www.waff.com/2020/12/17/attorney-abuse-sequel-courtland-led-child-attempt-suicide/
74
See O’Grady, Kids Are Not Alright, supra note __, at 16-17.
69

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ignored by Sequel, eventually reached police, the media, and disability advocates, Sequel is
essentially no more.75
Similarly, the Cornell Abraxas Group, a subsidiary of the Geo Group, runs various juvenile
treatment and detention centers, with a division entitled Abraxas Youth and Family Services.76
Abraxas Youth and Family Services owns and runs the Abraxas Youth Center in South Mountain,
Pennsylvania, a residential juvenile treatment center providing “secure youth treatment” on “the
secluded grounds of the state owned, South Mountain Restoration Center.”77 The treatment
provided includes secure residential treatment for male youth and secure detention services,78 and
operates as a custodial facility for juvenile court adjudicated male youths, ages 12-18.79
According to allegations in a recent class action lawsuit, services provided at Abraxas,
however, may have been harmful. According to the complaint filed in March 2022, staff
repeatedly abused children at the Abraxas Western Pennsylvania juvenile detention center.80 The
class action alleges physical, mental, and sexual abuse of the children while they were in custody
of Abraxas.81 Specifically, the suit claims that the children residing at the Abraxas juvenile
detention center in Pennsylvania were subjected to both physical and emotional abuse, excessive
use of force, and abuse from staffers hired and trained by Abraxas.82
The South Mountain facility claimed to provide a rehabilitative base program for juveniles,
and was lauded as “the Harvard of Reform Schools.”83 Partially based on this reputation, children
from a variety of states were placed at the school.84 This reputation did not reflect myriad of
abuses perpetuated on its juvenile residents, according to the plaintiffs. Children were abused
sexually, physically, and mentally by staff members, repeatedly and over long periods of time.85
As the lawsuit alleges, “[u]nder a veneer of civility, there is a ‘Dickensian culture of violence’ and
intimidation at the school that has severely impacted plaintiffs through systematic extensive force,
threats of longer sentences for those who report the abuse, and detention beyond commitment dates
for those students with injuries that would be noticed upon release from the School.”86 Violent
restraints were used on the children routinely and abusively, despite the requirement that they be

75

See Curtis Gilbert, Under Scrutiny, Company That Claimed to Help Troubled Youth Closes Many Operations and
Sells Others. AMPM REPORTS (April 26, 2022), https://www.apmreports.org/story/2022/04/26/sequel-closes-sellsyouth-treatment-centers
76
See ABRAXAS YOUTH AND FAMILY SERVICES, https://abraxasyfs.org/about.html (“a national leader in providing
residential, community based and in home services for youth, adults and families.”)
77
See Abraxas Youth Center, ABRAXAS YOUTH AND FAMILY SERVICES, https://abraxasyfs.org/abraxas-youthcenter.html
78
See Abraxas Youth Center, supra note __, at id.
79
See Van Buren, supra note __, at 5.
80
See New Class Action Alleges Abuse at Pa. Juvenile Detention Center, THE LEGAL INTELLIGENCER (March 31,
2022), https://www.law.com/thelegalintelligencer/2022/03/31/new-class-action-alleges-abuse-at-pa-juveniledetention-center/?slreturn=20220611231359
81
See Abuse at Pa. Juvenile Detention Center, supra note __, at id.
82
See Van Buren, supra note __, at 4.
83
See Van Buren, supra note __, at 6.
84
See Van Buren, supra note __, at 6.
85
See Van Buren, supra note __, at 6.
86
See Van Buren, supra note __, at 8.

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used only as a last resort.87 This behavior allegedly continued on despite news reports,88 lawsuits,89
internal complaints,90 and reports from court monitors.91
As the pleading points out:
The School, by contract and legislation in Pennsylvania, has been delegated a
critical and legislatively mandated public function: (a) to provide a custodial setting
for children adjudicated delinquent in juvenile court proceedings, as well as
children at risk for delinquency or criminal conduct; and (b) to carry out
legislatively mandated control and related services, and to provide appropriate
sanctions and rehabilitation under the laws governing punishment and treatment of
juveniles for criminal acts.92
Accordingly, whatever abuses were committed by the Pennsylvania detention center, which was
run and staffed by Abraxas, the Commonwealth of Pennsylvania should absorb some
responsibility, since it had delegated its job to an outside, private corrections company.
Nowhere in any of the media reports or allegations, however, is there anything that
indicates that Abraxas is part of Cornell Abraxas LLC, which is part of GEO Group, one of the
two largest private correctional services companies in the United States.93 Although the class
action suit filed in 2022 names Cornell Abraxas LLC and the GEO Group in its class action
complaint, there is no other indicator of Abraxas Youth and Family Services is part of a giant
correctional control corporation Looking at the lawsuit alone will not tell you the full scope of the
complicated ownership structure. Indeed, there is not even any mention of the GEO Group on the
Abraxas Youth and Family Services website.94 As I explore in Part II, the GEO Group is another
large, publicly traded corporation.95 .
The GEO Group’s ownership of Abraxas Youth and Family Services, and thus its
responsibility for what happened at the youth detention center, should have been front and center
in the expose of the horrors occurring at South Mountain Facility, but was never once mentioned.
It is another way that the invisible hand of Big Capital hides in plain sight.
87

See Carley Bonk, Stories of Abuse, Intimidation Revealed in Investigation of South Mountain Treatment Unit,
CHAMBERSBURG PUBLIC OPINION (April 29, 2020),
https://www.publicopiniononline.com/story/news/local/2020/04/30/pa-youth-treatment-facility-center-civil-lawsuitalleging-abuse-south-mountain/5030534002/
88
See Bonk, Stories of Abuse, supra note __, at id.
89
See Complaint, Disability Rights Pennsylvania v. Pennsylvania Department of Human Services, U.S. Dist. Ct.
(M.D. Pa) (April 30, 2019), 1:19-cv-00737-CCC, https://www.scribd.com/document/434652331/Disability-RightsPennsylvania-v-Pennsylvania-Department-of-Human-Services#from_embed
90
See Carley Bonk, Inside the Alleged Abuse of At-Risk Youth in Pa. Treatment Centers, CHAMBERSBURG PUBLIC
OPINION (April 30, 2020), https://www.publicopiniononline.com/in-depth/news/local/2020/04/30/pennsylvaniayouth-treatment-centers-have-been-accused-abusing-kids-south-mountain/4084874002/
91
See Van Buren, supra note __, at 9.
92
Class Action Complaint, Tobias Van Buren vs. Abraxas Youth and Family Services at 1, U.S. Dist. Ct (W.D. Pa)
(March 28, 2022), 2:22-cv-499, https://drive.google.com/file/d/1mgEDjWUfXWsS-r4nBzf2E9V1BW2ICpBm/view
93
See Appleman, Treatment-Industrial Complex, supra note __, at 40.
94
See Abraxas Youth and Family Services, About Us, https://abraxasyfs.org/about.html.
95
See Appleman, Treatment-Industrial Complex, supra note __, at 40.

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B. Psychiatric Hospitals
Despite repeated abuse and neglectful behavior, the private equity-owned companies
running psychiatric facilities continually close and reopen. “Sequel briefly reopened a psychiatric
hospital in Ohio that had shut down in 2020 under state pressure after a nurse there was charged
with assaulting a resident.96 The company rebranded Sequel Pomegranate as Torii Behavioral
Health, but within months it notified the state that the facility was closing again.”97
The expansion of private equity owned correctional health companies should give us pause.
In New Hampshire, for example, five children’s health organizations have asked the state to
reconsider permitting Wellpath, a correctional healthcare company owned by private equity firm
HIG Capital,98 to take over a children’s psychiatric hospital, given its troubling track record in
providing care at Bridgewater State Hospital. Wellpath’s contracted with Bridgewater State to
provide mental health services to those under correctional control.99 Among the issues regarding
Wellpath’s running of the hospital were allegedly dangerous levels of mold growth, “illegal
chemical and physical restraint and seclusion practices, [and] the pervasive culture of punishment
and intimidation,” as alleged by Disability Law Center.100
In particular, Wellpath’s repeated use of isolation tactics, punitive restraint through
physical and chemical means, and overmedication of patients transferred from correctional
facilities allegedly created an unsafe and untherapeutic facility, a status quo that persisted for over
eight years.101 And yet this level of alleged malfeasance has not stopped Wellpath from continuing
to expand into new areas of mental health provision for state forensic hospitals and correctional
services. Indeed, despite protests from various organizations, Wellpath still won the contract to
run Hampstead Hospital in New Hampshire.102
Likewise, GEO Care, a wholly-owned subsidiary of GEO Group, has also allegedly
mistreated incarcerated patients in forensic psychiatric hospitals. According to the American Civil
Liberties Union, GEO Care provided substandard care for the patients at the Montgomery County
Mental Health Treatment Facility in Texas, including overuse of restraints without appropriate
96

See Hana Ikramuddin and Curtis Gilbert, Sequel to Close New Mexico Youth Facility Amid More Abuse
Allegations, APM REPORTS (December 21, 2021), https://www.apmreports.org/story/2021/12/03/sequel-bernalilloacademy-abuse-allegations
97
Ikramuddin & Gilbert, supra note __, at id.
98
See Wellpath, HIG Private Equity, https://higprivateequity.com/portfolio/company/403
99
See AnnMarie Timmins, Organizations Call on Executive Council to Reconsider Wellpath Contract for
Hampstead Hospital, NEW HAMPSHIRE BULLETIN (May 3, 2022),
https://newhampshirebulletin.com/briefs/organizations-call-on-sununu-councilors-to-reject-wellpath-contract-forhampstead-hospital/
100
See Disability Law Center Finds Serious Health and Safety Concerns at Bridgewater State Hospital, Confirming
Widespread Mold and Improper Use of Restraint, DISABILITY LAW CENTER (February 9, 2022), https://www.dlcma.org/2022/02/09/disability-law-center-finds-serious-health-and-safety-concerns-at-bridgewater-state-hospitalconfirming-widespread-mold-and-improper-use-of-restraint/
101
Serious Health and Safety Concerns, supra note __, at id.
102
See Annmarie Timmins, After Assurances From AG, Council Approves Wellpath Contract for Hampstead
Hospital, NEW HAMPSHIRE BULLETIN (May 4, 2022), https://newhampshirebulletin.com/briefs/after-assurancesfrom-ag-council-approves-wellpath-contract-for-hampstead-hospital/

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physician’s orders, neglect of mentally disturbed patients, and repeatedly keeping patients in the
facility for months after they had been found competent to stand trial.103 This privately-run,
publicly-funded psychiatric hospital, focused on treating mentally incompetent defendants, racked
up multiple violations of state law, such as improper restraints and insufficient monitoring.104
Nonetheless, GEO Care was the only company to bid for the contract, and as the state insisted
privatizing one state hospital and cutting costs by 10%, it was essentially the only option.105
Despite the poor showing in Texas, Geo Care continues to run private psychiatric hospitals
for states. In Florida, for example, the Treasure Coast Forensic Treatment Center (TCFTC), which
houses those found not guilty by reason of insanity and rehabilitates arrestees’ mental health in
order to undergo felony trial, was reportedly plagued by GEO Group’s typical understaffing and
neglectful care.106 In seven years that Geo Care had assumed responsibility for the forensic
hospital, one patient had died from assault by another patient.107 Several more had been maimed,
including one patient who hit other inmates in the face, poked them in the eye, and bit off chunks
from their ears.108 This operation was profitable, however; the TCFTC produced an estimated
annual revenue of $577 million under Geo Care’s supervision.109
The level of care at TCFTC did not improve when CorrectCare (also owned by HIG
Capital) came to take over from GEO Group, retaining many of the same staff and management.110
Half the fines, a third of the reported assaults and two of the four patient deaths occurred between
2015 and 2018.111 The officer to patient ratio was low, with uncertified officers and high staff
turnover.112 In addition, as of 2017, the TCFTC was not registered with the Florida Agency for
Health Care Administration (HCA), as required by state law.113 This meant that Correct Care (now

103

See Ryan Meltzer, Is Patient Care – Or Profits – The Priority at Privatized Montgomery County Mental Health
Treatment Facility In Conroe?, ACLU TEXAS (August 12, 2012), https://www.aclutx.org/en/news/patient-care-orprofits-priority-privatized-montgomery-county-mental-health-treatment-facility
104
See Lomi Criel, Conroe Psychiatric Hospital May Face Big Fines, HOUSTON CHRONICLE (July 26, 2012),
https://www.chron.com/news/houston-texas/article/Conroe-psychiatric-hospital-may-face-big-fines-3739104.php
105
See Criel, supra note __, at id.
106
See Lucas Daprile, Dangerous Detention: Treasure Coast mental hospital lacks staff, training, licensing, funding,
TREASURE COAST PALM (January 21, 2018),
https://www.tcpalm.com/story/news/investigations/2018/01/21/treasure-coast-mental-hospital-not-enough-stafftraining-equipment-funding-tcpalm-investigation-find/921183001/
107
Emily Bowhatch, After nearly two years, man charged with murder at Indiantown mental health facility,
TREASURE COAST PALM (October 31, 2017), https://www.tcpalm.com/story/news/crime/martincounty/2017/10/31/after-nearly-two-years-man-charged-murder-indiantown-mental-health-facility/818284001/
108
See Leonora Anton, Michael Braga, & Anthony Cornier, Insane, Invisible, In Danger, TAMPA BAY
TIMES/HERALD TRIBUNE (October 29, 2015), https://projects.tampabay.com/projects/2015/investigations/floridamental-health-hospitals/cuts/
109
Daprile, Dangerous Detention, supra note __, at id.
110
Daprile, Dangerous Detention, supra note __, at id.
111
Daprile, Dangerous Detention, supra note __, at id.
112
Daprile, Dangerous Detention, supra note __, at id.
113
Daprile, Dangerous Detention, supra note __, at id.

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Wellpath)114 was not subject to the HCA’s annual inspections and $25,000 maximum fines for
violations not swiftly remedied.115
CorrectCare ran the South Florida state hospital in a similar fashion, resulting in multiple
patient deaths in 2011 and 2013 due to poor staffing and neglect of patients.116 Despite these
tragedies, Wellpath still runs this particular psychiatric hospital today, along with three others in
the state of Florida.117
Correct Care/Wellpath’s chronic understaffing may have been dangerous for both staff and
patients, but it has been profitable for HIG Capital: in a year and a half’s worth of time, the
company saved $545,801 from payroll, even after paying fines to the state.118 For every $1 it
spends on fines Correct Care/Wellpath saves $4 in payroll savings from hiring fewer employees,
thus making profit on the backs of the mentally ill.119
Florida entered into contracts with both Geo Care and Correct Care/Wellpath because they
were the cheapest operators available to run a forensic psychiatric hospital.120 Due to chronic
underfunding for mental health services, Florida, and a number of other states look for the lowest
bidder to provide these services.121 Since 2009, Florida has cut $100 million from their psychiatric
hospital budget,122 allowing private equity owned companies to run their hospitals for the monetary
savings. As a Florida state audit admitted, “The absence of sufficient (DCF) oversight may also
have contributed to the deficiencies.”123
Time after time, facility after facility, Big Capital companies such as Wellpath or Geo Care
have wreaked havoc on state forensic psychiatric hospitals. In Massachusetts, Wellpath’s
operation of Bridgewater State Hospital, a facility for mentally ill men who are incarcerated,
involuntarily committed or awaiting pretrial evaluations, has been continually substandard.124 By
January 2022, conditions had become so bad at the hospital that the Disability Law Center called

114

See Joel Stinnett, One of Nashville's Largest Private Companies Merges with California Firm, Changes Name,
Nashville Business Journal (November 8, 2018), https://www.bizjournals.com/nashville/news/2018/11/07/one-ofnashvilles-largest-private-companies-merges.html
115
Daprile, Dangerous Detention, supra note __, at id.
116
See Anton et. al., Death on the Wards, supra note __, at id.
117
See South Florida State Hospital Receives Full Accreditation from the Joint Commission, CISION (January 9,
2018), https://www.prnewswire.com/news-releases/south-florida-state-hospital-receives-full-accreditation-from-thejoint-commission-300579881.html
118
Daprile, Correct Care Solutions profited $546,000 by understaffing in violation of state contract, TREASURE
COAST PALM (February 1st, 2018), https://www.tcpalm.com/story/news/investigations/2018/01/21/dangerousdetention-treasure-coast-mental-hospital-profits-understaffing-despite-fines-workers-comp/922682001/
119
Dapril, Correct Care Solutions, supra note__, at id.
120
Daprile, Dangerous Detention, supra note __, at id.
121
Daprile, Dangerous Detention, supra note __, at id.
122
See Leonora Lapeter Anton, Michael Braga & Anthony Cormier, Death on the Wards: 14 People Who Didn’t
Have to Die at Florida’s Mental Hospitals, TAMPA BAY TIMES/HERALD TRIBUNE (October 29, 2015),
https://projects.tampabay.com/projects/2015/investigations/florida-mental-health-hospitals/14-patients-died/
123
Daprile, Dangerous Detention, supra note __, at id.
124
Haley Cornell, Safety Report Calls for Shutdown of Bridgeport State Hospital, PATCH (February 9, 2022),
https://patch.com/massachusetts/brockton/safety-report-calls-shut-down-bridgewater-state-hospital

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for its closure.125 According to reports, Wellpath had allowed the hospital to become a “broken
facility,” riddled with toxic mold, potential asbestos, and filth, which endangered patients and
staff.126
In addition, Wellpath was charged with abusive and cruel behavior in its treatment of
patients sentenced to Bridgewater State Hospital.127 The company’s methods allegedly included
repeated use of chemical and physical restraints where there was no threat of imminent harm,
which violates Massachusetts law.128 Wellpath also allegedly forced the use of psychotropic
medication on patients in unsanctioned circumstances and non-emergency situations, according to
Disability Law Center.129 In addition, Wellpath allegedly imposed improper and unnecessary
seclusion on many patients for infractions such as throwing a glass of water, despite the lack of
any recorded imminent threat of physical harm.130 As the Disability Law Center noted in their
detailed report, a culture of intimidation pervaded the hospital: “Even [patients] who simply
express frustration, anger, or distress are likely to face [staff] outfitted in tactical gear prepared to
force them into submission through the use of ETOs, manual holds, mechanical restraint, and
seclusion.”131
Finally, Wellpath allegedly limited access to medical care for patients,132 presumably to
save money. Patients were not allowed to seek out the medical staff on their own.133 If seeking
medical care or advice, a patient had to approach a staff member in the middle of other duties to
report symptoms or request facility medical staff, which created a low likelihood that their medical
issue would be reported or addressed.134 Their other option was to file a formal written grievance
to the Person Served Advocate, a non-medical staff member who processes all the grievances for
the forensic hospital, which has a low likelihood of response.135
The level of care and proper treatment of patients sentenced to forensic mental hospitals
run by privately owned big correctional companies has been simply shameful. Even given the
often low level of care provided at state forensic hospitals, the services provided by
Wellpath/Correct Care and Geo Group are inferior. Big Capital’s takeover of correctional
psychiatric treatment is likely poised to grow from here; between 2010 and 2019, these types of
private equity deals in health care in general almost tripled in value, growing from $42 billion to

125

Cornell, Safety Report, supra note __, at id.
See Shira Shoenberg, Pervasive Mold Plagues State Hospital for Mentally Ill Detainees, COMMONWEALTH
(February 8, 2022), https://commonwealthmagazine.org/courts/pervasive-mold-plagues-state-hospital-for-mentallyill-detainees/
127
Shoenberg, Pervasive Mold, supra note __, at id.
128
See Public Report: Efficacy of Service Delivery Reforms at Bridgewater State Hospital (BSH) and Continuity of
Care for BSH Persons Served 16, DISABILITY LAW CENTER MASS. (January 2022), https://www.dlc-ma.org/wpcontent/uploads/2022/02/DLC-BSH-January-2022-Public-Report-2.9.2022.pdf
129
See Bridgewater State Hospital, supra note __, at 17, 21.
130
See Bridgewater State Hospital, supra note __, at 22, 23.
131
See Bridgewater State Hospital, supra note __, at 25, 26.
132
Cornell, Safety Report, supra note __, at id.
133
See Bridgewater State Hospital, supra note __, at 30.
134
See Bridgewater State Hospital, supra note __, at 30.
135
See Bridgewater State Hospital, supra note __, at 30 -31.
126

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$120 billion.136 Indeed, the “profit-making goals of private equity are …. at odds with the needs
of patients and the rules of government-financed health care programs.”137 Whether owned by
private equity firms or large, publicly traded companies, the private correctional companies
providing forensic psychiatric services to patients under correctional control seem focused on
profits, not care.
C. Correctional Control
Big Capital has also expanded into the ever-growing field of correctional control: the
oversight and surveillance of those individuals still involved in the corrections system.
Correctional control encompasses everything from bail bonds to electronic monitoring after
release to mandatory rehabilitation services, and as this sector grows, so too does the investment
by private equity. None of this is beneficial to the people under the yoke of profit.
1. Bail Bonds
Despite the recent movement towards eliminating money bail,138 the bail bond industry is
still alive and well. Most courts assign cash bail as a condition of pre-trial release.139 A substantial
majority of individuals arrested for alleged crimes, however, cannot afford to pay their bail in order
to be released from jail before trial.140 The commercial bail bond industry helps to secure the
release of some of these pre-trial detainees, loaning them the necessary bail amount in return for
specific collateral, such as a car, house, or valuables.141 In exchange for a premium fee, the
commercial bail agents enter into an agreement with the court that they will pay an individual’s
full bail amount if they fail to appear.142 This non-refundable fee is usually 10 to 15 percent of the
bond amount.143 Since courts frequently set bail amounts quite high, many borrowers must pay
back the sum in installments, which come with high interest rates.144

136

See Jeanne Markey and Raymond Sarola, Private Equity, Health Care, And Profits: It’s Time to Protect Patients,
STAT NEWS (March 24, 2022), https://www.statnews.com/2022/03/24/private-equity-health-care-profits-time-toprotect-patients/
137
Markey & Sarola, supra note __, at id.
138
See Will Snowden, Money Bail is Unjust and Should End, FORBES (October 1, 2021),
https://www.forbes.com/sites/forbeseq/2021/10/01/money-bail-is-unjust-and-should-end/?sh=652bec366f06
139
See Allie Preston & Rachael Eisenberg, Profit Over People: Primer on U.S. Cash Bail Systems, CENTER FOR
AMERICAN PROGRESS (July 6, 2022), https://www.americanprogress.org/article/profit-over-people-primer-on-u-scash-bail-systems/
140
See Laura I Appleman, Justice in the Shadowlands: Pretrial Detention, Punishment, & the Sixth Amendment, 69
WASH. & LEE L. REV. 1297, 1305 (2012).
141
See Sara Murphy, Reforming the Cash Bail System Benefits Both the Accused and Taxpayers, BEACON
MAGAZINE (February 9, 2021), https://www.savannahnow.com/in-depth/special/2021/02/09/reforming-cash-bailsystem-benefits-both-accused-and-taxpayers/3948807001/
142
See Will Kenton, Bail Bond, Investopedia (November 24, 2020), https://www.investopedia.com/terms/b/bailbond.asp#toc-what-is-a-bail-bond
143
See Murphy, Cash Bail, supra note __, at id.
144
See Profiting Off Misery: Endeavour Capital and the Predatory Bail Industry 3, ACLU SMART JUSTICE
(December 2019), https://www.aclu.org/report/profiting-misery

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The commercial bail bond industry is almost entirely unregulated and frequently corrupt.145
This is because “bail bondsmen hold an immense amount of power over the bailees, despite the
bondsmen's lack of legal, political, or police authority.”146 There is little to no regulation on the
power of bail bondsmen to revoke bail and return the arrestee to jail, which can cost the individual
thousands of dollars.147 The lack of supervisory authority means that bail bond companies are held
accountable by any poor decisions of their employees in revoking bail or surrendering an arrestee,
all of which means profit for the company.148
Given that the commercial bail bond industry “traps people who cannot afford cash bail
premiums in a predatory cycle of debt and incarceration,”149 it is unsurprising that private equity
has stepped in to invest. Aladdin Bail Bonds, the largest bail bond company in the country,
operating in nine states, was owned by private equity firm Endeavour Capital, from 2012-2020.150
During its period of acquisition, Endeavour Capital expanded its bail bond company to several
additional states, spending millions on lobbying to expand the bail bond industry to states where
it is currently illegal.151 In addition, Endeavour Capital pushed back hard against any efforts to
reform the bail bond industry in general.152 After considerable negative press, however,
Endeavour Capital sold Aladdin Bail Bonds, disliking the controversy that accompanied the
industry.153
Randall & Quilter, a global non-life specialty insurance company, apparently has not been
deterred by this controversy. In 2014, Randall & Quilter acquired Accredited Surety, one of the
nine main bail bond insurance companies that underwrite the bail bond companies.154 Accredited
Surety, as a major backer of many commercial bail bond companies, was sued by the National
Consumer Law Center in 2019 for price-fixing and maintaining a long-running anticompetitive
conspiracy to keep bail bond premiums artificially high.155 As the complaint details, the surety coonspirators, through the bail agents they control, required an inflated percentage of the bond—up
to 10%—as a non-refundable premium, and refuse to compete to lower prices.156 In California
145

See Appleman, Shadowlands, supra note __, at 1307.
Appleman, Shadowlands, supra note __, at 1307.
147
Appleman, Shadowlands, supra note __, at 1307.
148
Appleman, Shadowlands, supra note __, at 1310.
149
Profit Over People: The Commercial Bail Industry Fueling America’s Cash Bail Systems, Center for American
Progress (July 6, 2022), https://www.americanprogress.org/article/profit-over-people/
150
See Following ACLU Report, Endeavour Capital Exits Bail Bond Investment, PRIVATE EQUITY STAKEHOLDER
PROJECT (March 5, 2020), https://pestakeholder.org/news/following-aclu-report-endeavour-capital-exits-bail-bondinvestment/
151
See Bail Bond Investment, supra note __, at id.
152
See Bail Bond Investment, supra note __, at id.
153
See Lauren Kusisto, Criminal Justice Changes Are Sweeping the Bail Bond Industry, WALL ST. J. (February 21,
2020), https://www.wsj.com/articles/criminal-justice-reforms-are-squeezing-the-bail-bond-industry-11582299332
154
See Udi Ofer, 9 Major Insurance Companies Are Profiting the Most Off the Broken Bail System, ACLU
(February 12, 2018), https://www.aclu.org/news/smart-justice/9-major-insurance-companies-are-profiting-mostbroken-bail-system
155
See Crain v. Accredited Surety, et. al, Class Action Complaint, Case No RG1900-4509
(January 29, 2019), https://www.nclc.org/images/pdf/litigation/complaint-crain-vs-accredited-jan2019.pdf
156
See Press Release, Insurance Companies Conspired to Inflate Bail Bond Premiums Contends Lawsuit Brought by
Lieff Cabraser, National Consumer Law Center and Other Public Interest Groups, NATIONAL CONSUMER LAW
CENTER (January 30, 2019), https://www.nclc.org/media-center/pr-insurance-companies-conspired-to-inflat-bail146

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alone, the bail bond companies collected $308 million from non-refundable premium fees, from
the poorest and most vulnerable individuals involved in the criminal justice system.157 The class
action “seeks damages for many thousands of Californians who allege they have overpaid for
unlawfully inflated bail bond premiums due to the elimination of competition in the market for
bail bonds.”158
Between bail bond companies and insurance backers, the commercial bail industry collects
somewhere around $1.4 billion to $2.4 billion a year.159 And who else can claim profit? Large
international insurance companies, another kind of Big Capital in corrections. There are nine large
insurance companies that dominate the underwriting of the U.S. bail bond industry.160 Of these
nine companies, the largest, Fairfax Financial Holdings Ltd161 is a large international holding
company. These global insurance companies often have structures and reinsurance arrangements
that make it difficult to clarify the specifics of their involvement.
There is minimal state or federal regulation of the bail bond insurance industry; because
the bail bond insurance industry is relatively small part of the insurance business regulated by state
insurance divisions, it tends to get little notice.162 Thus, abuses that occur are often ignored.163
Moreover, the piecemeal regulatory system overseeing the bail bond industry, which varies from
state to state, means that many detrimental policies and practices fall between the cracks.164 In
part, this is because bail bond companies and their insurers exist in an nebulous middle ground
between criminal courts and state insurance departments.165 Although states are usually charged
with regulating them, they seldom do.166
The loose regulation and high profits from bail bond companies and their insurers has
unsurprisingly resulted in big capital investments.167 These insurance companies, with help from
the bail bond industry, collects approximately $2 billion a year, primarily from the poor and
disadvantaged.168 Because there is so little risk—many bail bond insurance underwriters have had

bond-premiums-contends-lawsuit-brought-by-lieff-cabraser-national-consumer-law-center-and-other-publicinterest-groups.html
157
See Inflate Bail Bond Premiums, supra note __, at id.
158
See Inflate Bail Bond Premiums, supra note __, at id.
159
See Selling Off Our Freedom: How Insurance Corporations Have Taken Over Our Bail System 9, ACLU/COLOR
OF CHANGE (May 2017), https://d11gn0ip9m46ig.cloudfront.net/images/059_Bail_Report.pdf
160
See Bryce Covert, America is Waking Up to the Injustice of Cash Bail, Nation (October 19, 2017),
https://www.thenation.com/article/archive/america-is-waking-up-to-the-injustice-of-cash-bail/
161
Fairfax Financial Holdings Limited, a Canadian-owned holding company, states that its corporate objective is
“to achieve a high rate of return on invested capital and build long-term shareholder value.” See Company Profile,
Fairfax Financial Holdings, https://www.fairfax.ca/Corporate/company-profile/default.aspx All of Fairfax’s
investments are managed by their own in-house investment company, Hamblin Watsa Investment Counsel Ltd.,
162
See Selling Off Our Freedom, supra note __, at 36.
163
See Selling Off Our Freedom, supra note __, at 36.
164
See Selling Off Our Freedom, supra note __, at 36.
165
See Jessica Silver-Greenberg and Shaila Dewan, When Bail Feels Less Like Freedom, More Like Extortion, New
York Times (March 31, 2018), https://www.nytimes.com/2018/03/31/us/bail-bonds-extortion.html
166
See Silver-Greenberg & Dewan, supra note __, at id.
167
See Silver-Greenberg & Dewan, , supra note __, at id.
168
See Selling Off Our Freedom, supra note __, at 9.

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no losses for decades—the industry is extremely profitable.169 The gross profit margin of bail
bonds averages around 83%, after claims and related expenses are paid.170 Since 2019, bail insurers
increased their premium income by 8%,171 a significant jump.
In an arena where liberty is at stake, especially for those who have not been convicted of a
crime, the presence and incentives for profit may distort incentives away from pure notions of
justice and fairness. Again, it is also difficult to see who specifically profits from this system and
how.
2. Electronic Monitoring
One recent investment area for Big Capital is in the growing field of electronic monitoring.
In 2017, Apax Partners, a private equity firm, acquired Attenti from 3M for $200 million dollars.172
Attenti provides a variety of electronic monitoring technologies for those individuals under
correctional control, including Global Positioning Systems (GPS), Radio Frequency (RF), and
alcohol verification monitoring and tracking services.173 As I have discussed elsewhere, the cost
of electronic monitoring is frequently foisted on individuals under probation or post-release
supervision, since many courts require them to pay for the full costs of GPS monitoring, drug
testing, and alcohol monitoring.174 For example, a GPS-enabled electronic monitoring device can
cost hundreds of dollars a month.175
As electronic monitoring technology profits are derived from such costs, the more monies
created by exorbitant fees, the better the bottom line for the company itself.176 And since so much
of the profit is extracted from those under correctional control, there is little incentive to stop it.177
3. Alternative Corrections Services
Private equity firms have also invested in companies providing alternative corrections
services, often mandatory parts of prisoners’ sentences upon release. Alternative corrections
services such as probation, rehabilitation and halfway houses, and diversion programs, have been
169

See Silver-Greenberg & Dewan, Less Like Freedom, supra note __, at id.
See Alwyn Scott and Suzanne Barlyn, U.S. Bail-Bond Insurers Spend Big to Keep Defendants Paying, REUTERS
(March 26, 2021), https://www.reuters.com/article/us-usa-insurance-bail-jails-insight/u-s-bail-bond-insurers-spendbig-to-keep-defendants-paying-idUSKBN2BI1BP
171
See Scott & Barlyn, U.S. Bail-Bond Insurers, supra note __, at id.
172
See Jim Baker, Continuing Incarceration: Apax Partners Digital Shackles 1, PRIVATE EQUITY STAKEHOLDER
PROJECT (October 2019), https://pestakeholder.org/wp-content/uploads/2019/10/Continuing-Incarceration-ApaxPartners-PESP-100319.pdf
173
See Funds Advised by Apax Partners to Acquire 3M’s Electronic Monitoring Business, APAX PARTNERS (June 1,
2017), https://www.apax.com/news/press-releases/2017/funds-advised-by-apax-partners-to-acquire3m%E2%80%99s-electronic-monitoring-business/
174
See Laura I Appleman, Nickeled and Dimed into Incarceration: Cash Register Justice in the Criminal System,
57 B.C.L. REV. 1483, 1508 (2016). See also HUMAN RIGHTS WATCH, PROFITING FROM PROBATION: AMERICA’S
“OFFENDER-FUNDED” PROBATION INDUSTRY 33 (2014).
175
See Baker, Continuing Incarceration, supra note __, at 2.
176
See Appleman, Cash Register Justice, supra note __, at 1509.
177
See Appleman, Cash Register Justice, supra note __, at 1508.
170

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outsourced to private companies, many of which have been purchased by various private equity
firms and other global investment firms.178 I describe a few examples below.
a. Private Probation
State and local governments routinely use private probation companies to provide services
such as drug testing, addiction services, and behavioral-therapy to those individuals who have been
released from formal incarceration but are still under correctional supervision.179 These private
probation companies are popular because many of the costs of misdemeanor probation are shunted
to the probationers themselves, thus saving state and local considerable monies.180 Private equity
firms have invested in private probation companies, most notably Sentinel Offender Services,
which partners with community corrections, courts, and law enforcement.181 Sentinel is owned by
Bison Capital Asset Management, a private equity firm.182
b. Drug and Alcohol Rehabilitation
Big Capital has also begun acquiring drug and alcohol rehabilitation centers, with a wave
of investments in recent years.183 This new interest is largely due to the growing need for more
recovery services, both in and outside of the carceral context, and private equity is inevitably drawn
to a “hole in the market.”184 According to private equity analysts, addiction treatment remains
an “extremely immature market,” but with “great opportunity remaining,” especially for those
firms who aren’t afraid to buy up distressed assets for pennies on the dollar.185
Some states, like California, now divert people convicted in drug court to treatment
programs rather than sending them to prison.186 Oregon gives people caught with small amounts
of illegal drugs a ticket and a reference to rehab.187 This push towards rehabilitation rather than
178

See Laura I Appleman, The Treatment-Industrial Complex: Alternative Corrections, Private Prison Companies,
& Criminal Justice Debt, 55 HARV. C.R.-C.L. 1, 6 (2020).
179
See Sharon Cohen, Poor Offenders Pay High Price When Probation Turns on Profit,
THE SPOKESMAN-REVIEW (Mar. 12, 2016), http://www.spokesman.com/stories/2016/mar/12/
poor-offenders-pay-high-price-when-probation-turns/
180
See Appleman, The Treatment-Industrial Complex, supra note __, at 7.
181
See Fact Sheet: Private equity-owned firms dominate prison and detention services, PE Stakeholder (September
17, 2018), https://pestakeholder.org/reports/fact-sheet-private-equity-owned-firms-dominate-prison-and-detentionservices/
182
https://bisoncapital.com/portfolio-items/sentinel-offender-services/
183
See Phil Albinus, Alcohol and Drug Treatment Centers Draw Private Equity Backing, MIDDLE MARKET
GROWTH (March 10, 2021), https://middlemarketgrowth.org/the-round-alcohol-and-drug-treatment-centers-drawprivate-equity-backing/
184
Albinus, supra note __, at id.
185
See Nick Jaworski, The Pitfalls Private Equity Firms Need to Avoid When Evaluating an Addiction Treatment
Center, CIRCLESOCIAL INC, https://www.circlesocialinc.com/the-pitfalls-private-equity-firms-need-to-avoid-whenevaluating-an-addiction-treatment-center/
186
Appleman, Treatment-Industrial Complex, supra note __, at 13.
187
In 2020, Oregon passed Measure 110, which decriminalized simple possession of drugs, including cocaine,
methamphetamine, heroin, and other controlled substances. Instead of being charged with a misdemeanor, people
caught in possession of these drugs are issued a civil citation, along with a small fine. Penalties are waived if the
person underwent a health assessment at an addiction-recovery center. See Sophie Quinton, Oregon’s Drug

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incarceration means that the market for treatment programs is increasing, a state of affairs about
which Big Capital is well aware.
The aforementioned Wellpath is the biggest provider of correctional rehabilitation, both in
and outside of prisons and jails, in the United States.188 Its owner HIG Capital is one of the largest
private equity investors in corrections companies.189 Wellpath has gained notoriety even among
correctional healthcare and rehabilitation services for its shoddy dealings and poor service. In
March 2022, its CEO and founder Gerald Boyle pled guilty to federal bribery charges for
participating in a 12 year bribery scheme with the sheriff of the Norfolk, Virginia jail in order to
obtain the jail’s medical services contracts.190 Between 2014-18, Wellpath was sued at least 70
times for its negligence in contributing to deaths for those under correctional control.191 When
operating under its former name pre-merger, CorrectCare, it was sued 1,395 times in federal court
from 2003 – 2018.192
Halfway houses and re-entry centers are also tempting targets for large, publicly owned
corrections corporations. Geo Group, for example, now owns a collection of “community re-entry
services” and treatment programs, having purchased the country’s largest electronic-monitoring
firm, BI Incorporated, in 2011.193 Likewise, in 2017, CoreCivic acquired halfway houses in
Georgia, North Carolina, and Colorado for nearly $22 million.194
Over 30% of all halfway houses nationwide are owned and operated by Community
Education Centers,195 a private company recently acquired by Geo Group.196 Halfway houses are
supposed to provide safe housing, job placement assistance, and other social services for people
Decriminalization Might Spread, Despite Unclear Results, PEW (November 3, 2021),
https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2021/11/03/oregons-drug-decriminalizationmay-spread-despite-unclear-results
188
“Headquartered in Nashville, Tennessee, and maintaining a strong presence in San Diego, California, Wellpath
provides localized, high-quality, compassionate healthcare to nearly 300,000 patients daily in more than 550 health
clinics and hospitals across nearly 40 U.S. states and Australia.” See Wellpath, HIG Capital,
https://higcapital.com/portfolio/company/403
189
See Founder of HIG Capital-Owned Wellpath Indicted on Federal Bribery Charges, PE STAKEHOLDER
(December 5, 2019), https://pestakeholder.org/news/founder-of-hig-capital-owned-wellpath-indicted-on-federalbribery-charges-2/
190
See Brian Farrell, Man to Spend 3 Years in Prison, Pay $35K After Bribing Former Norfolk Sheriff Bob McCabe,
13 NEWS NOW (February 25, 2022), https://www.13newsnow.com/article/news/crime/ceo-sentenced-formernorfolk-sheriff-bob-mccabe-bribery-case/291-22a0b296-fd5f-45ef-aab6-a1f0b9fc109e
191
See Blake and Ellis, Before It’s Too Late, supra note __, at id.
192
See Heidi Beetle, A Look at Suicide and Death Statistics in Colorado Jails, COLORADO SPRINGS INDY (February
3, 2021), https://www.csindy.com/news/local/a-look-at-suicide-and-death-statistics-in-coloradojails/article_b285ff5e-6585-11eb-81de-bb2024f40e8e.html
193
Appleman, Treatment-Industrial Complex, supra note __, at 14.
194
See Geert de Lombaerde, CoreCivic Buys Halfway Houses in Three States, NASHVILLEPOST (Nov. 9, 2017),
https://www.nashvillepost.com/business/area-stocks/article/20982163/corecivic-buys-halfway-houses-in-three-states
195
See LAUREN SUKIN, THE CENTURY FOUND., WHEN JAIL IS THE BETTER OPTION: THE FAILURE
OF HALFWAY HOUSES (June 23, 2015), https://tcf.org/content/commentary/when-jail-isthebetter-option-the-failure-of-halfway-houses/
196
See The GEO Group Announces $360 Million Acquisition of Community Education Centers, BUSINESS WIRE
(February 22, 2017), https://www.businesswire.com/news/home/20170222005729/en/The-GEO-Group-Announces360-Million-Acquisition-of-Community-Education-Centers

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on parole as they prepare to leave correctional control.197 CEC halfway houses across the country,
however, are notorious for their inhumane conditions.198 In 2011, for example, an Indiana CEC
inhabitant died from problems arising from an untreated pregnancy.199 CEC-run halfway houses
in Colorado have suffered from assaults, gang violence and rampant drug use.200 Likewise, CEC
halfway houses in California have been plagued by inadequate clinical programs, routine violence,
and residential drug and alcohol abuse.201
The halfway houses run by Avalon Correctional Services, owned by CoreCivic, appear no
better. Avalon owns and manages private halfway houses through subsidiaries in Oklahoma,
Texas, and Wyoming, with a gross profit margin of 36.3%, as compared to the industry average
of 32.3%.202 Allegations of mismanagement include reports of “insufficient security, unqualified
staff, falsified drug tests, sexual relations between staff and prisoners, and inadequate recordkeeping.”203 Today, these same halfway houses, currently run by CoreCivic itself, have a high
failure rate in preventing residents from recidivating.204
The privately-owned intensive residential treatment programs in Colorado suffer from
many of the same problems. One in five residents in Colorado’s halfway houses are serving a
sentence related to substance abuse.205 The treatment they receive at the court-ordered halfway
houses is often rudimentary, however, with ineffective programs which capture residents in a
revolving door of prison and residential treatment stays, increasing profits for the companies that
own the programs.206 Additionally, 38% of the residents in diversion programs failed out in 2020
due to minor technical violations, such as breaking curfew or violating other minor rules.207 In
other words, there is financial incentive for keeping inmates in a cycle of treatment and
incarceration.208 Of the 29 residential community correction facilities in the state, 24 are privately
run.209

197

See Anat Rubin, California Relies on Halfway House Operator with Troubled Past, SFGATE (Apr. 11, 2015),
https://www.sfgate.com/crime/article/California-relies-on-halfwayhouseoperator-with-6193752.php
198
See Appleman, Treatment-Industrial Complex, supra note __, at 16.
199
See Anat Rubin, A Record of Trouble, THE MARSHALL PROJECT (Apr. 11, 2015), https://
www.themarshallproject.org/2015/04/11/a-record-of-trouble
200
See Rubin, Record of Trouble, supra note __, at id.
201
See Rubin, Halfway House Operator, supra note __, at id.
202
See Avalon Correctional Services Inc., INVESTIGATE AFSC, https://investigate.afsc.org/company/avaloncorrectional-services
203
See Avalon Correctional Services Inc., supra note __, at id.
204
See Moe Clark, “Another Place to Warehouse People”: The State Where Halfway Houses Are a Revolving Door
to Prison, PROPUBLICA (September 16, 2022), https://www.propublica.org/article/colorado-halfway-houses-prisoncommunity-corrections
205
See Clark, Place to Warehouse People, supra note __, at id.
206
See Clark, Place to Warehouse People, supra note __, at id.
207
See Moe Clark, Colorado’s Halfway Houses Receive Millions in State Fund Every Year Despite Poor Outcomes,
COLORADO NEWSLINE (April 20, 2021), link.
208
See Clark, Place to Warehouse People, supra note __, at id.
209
See Clark, Colorado’s Halfway Houses, supra note __, at id.

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Unsurprisingly, two of the publicly held corporations involved in managing Colorado’s
halfway houses are Geo Group and CoreCivic.210 Geo Group and CoreCivic run the majority of
the halfway houses in Colorado, excluding the city of Denver.211 Denver stopped using the private
prison industry to run its halfway houses in 2019, because of their terrible track record including
poor sanitary conditions, lack of sufficient food, and forced labor.212 Moreover, the high rate of
recidivism for released residents – 50% vs. 40% -- demonstrates the failure of the privatized
halfway house system in Colorado.213
CoreCivic and the Geo Group appear to have serious challenges managing and operating
halfway houses around the nation. Incidents at Denver, Boulder, Oklahoma City, Tulsa, and
Casper, Wyoming halfway houses, all run by the two private corrections giants, have included
rampant drug use, incessant fighting, violent attacks, several escapes, and numerous medical
emergencies.214 The fiscal bottom line of having a state correctional halfway house run by Big
Capital may be positive, but the short- and long-term effects on the residents is certainly not.
D. Correctional Healthcare
Inmate healthcare has been another primary focus of expansion for Big Capital.215 A
majority of states have outsourced their correctional healthcare to private companies in an attempt
to cut costs.216 Private healthcare in the correctional space is notoriously poor, and hundreds of
lawsuits have been filed as a result.217 Despite the litigation, however, data on private prison
healthcare has been difficult to obtain.218
Wellpath is the largest of the private correctional health care providers.219 Among
correctional healthcare providers, Wellpath is notorious for abuse and neglect.220 Wellpath was
created by private equity firm H.I.G. through purchasing and combining two separate prison health
companies, CorrectCare Solutions and Correctional Medical Group Companies.221 This was part
210

See Clark, Place to Warehouse People, supra note __, at id
See Ali Budner, Denver Didn’t Want the Private Prison Industry to Run Its Halfway Houses. Now Who’s Going
to Do It?, COLORADO PUBLIC RADIO (March 6, 2020), https://www.cpr.org/2020/03/06/denver-didnt-want-theprivate-prison-industry-to-run-its-halfway-houses-now-whos-going-to-do-it/
212
See Budner, supra note __, at id.
213
See Budner, supra note __, at id.
214
See Chad Marks, Private Halfway Houses Plagued with Escapes, Drugs, Sex and Violence, PRISON LEGAL NEWS
(May 3, 2019), https://www.prisonlegalnews.org/news/2019/may/3/private-halfway-houses-plagued-escapes-drugssex-and-violence/
215
See Alan Greenblatt, America Has a Health-Care Crisis — in Prisons, GOVERNING (July 29, 2019),
https://www.governing.com/archive/gov-prison-health-care.html
216
See Greenblatt, supra note __, at id.
217
See Greenblatt, supra note __, at id.
218
See Victoria Law, Health Care in Jails and Prisons Is Terrible. The Pandemic Made It Even Worse, VOX (June
28, 2022), https://www.vox.com/23175978/health-care-prison-jail-covid-pandemic
219
See Michaela Gelman, Note: Mismanaged Care: Exploring the Costs and Benefits of Private vs. Public
Healthcare in Correctional Facilities, 95 NYU L. REV. 1386, 1396 (2020).
220
See Blake Ellis & Melody Hinken, CNN Investigation Exposes Preventable Deaths and Dangerous Care that
Government Agencies Have Failed to Stop, CNN (June 2019), https://www.cnn.com/interactive/2019/06/us/jailhealth-care-ccs-invs/
221
See O’Grady, Understaffed, Unlicensed, and Untrained, supra note __, at 8.
211

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of a larger trend of private equity companies making equity deals in health care, at the expense of
those who need medical care and treatment.222 Indeed, “[w]hen private equity buys a health care
company, patients often pay the price.”223
This has certainly been the case with Wellpath.224 Over the past several years, there have
been repeated concerns about the private company’s provision of sufficient and adequately trained
healthcare staff at facilities it serves.225 Wellpath’s substantial correctional healthcare footprint
includes jails, detention centers, state and federal prisons, and state psychiatric hospitals.226 It is
currently the largest private entity in the correctional healthcare market, and has been subject to at
least 1400 lawsuits from 2018 onwards,227 alleging, among other things, negligence and lack of
timely access to health care.228
In 2021, the U.S. Department of Justice (DOJ) issued a stinging report of Wellpath’s
failures in its provision of medical care at the San Luis Obispo County Jail in California.229 The
DOJ concluded that Wellpath’s practices failed to provide basic medical care or mental health care
to prisoners, used excessive force, overused restrictive housing, and failed to properly
accommodate prisoners with disabilities.230 In part, this was in reaction to the 16 prisoner deaths
in jail custody between 2012 - 2020.231 The DOJ investigation found that prisoners suffered
substantial risk of serious harm from Wellpath’s failure to provide adequate medical care,
including lack of screening, little continuity of care, poor medication management, and significant
delays and deficiencies in what minimal care was provided.232 DOJ also concluded that Wellpath
inadequately staffed, monitored, and oversaw the medical care provided at the San Luis Obismo
County Jail.233 Perhaps most damningly, the DOJ found that Wellpath did all of these things
intentionally.234
222

See Jeanne A. Markey and Raymond M. Sarola, Private Equity, Health Care, and Profits: It’s Time to Protect
Patients, STAT NEWS (March 24, 2022), https://www.statnews.com/2022/03/24/private-equity-health-care-profitstime-to-protect-patients/
223
See Markey & Sarola, Private Equity, supra note __, at id.
224
See Vanessa Murphy, Mother Files Lawsuit Following Daughter’s Death In Las Vegas Jail Cell, 8 TEAMS NOW
INVESTIGATES (July 21, 2021), https://www.8newsnow.com/investigators/i-team-mother-files-lawsuit-followingdaughters-death-in-a-las-vegas-jail-cell/
225
See Jails and Prisons Served by H.I.G. Capital-owned Wellpath face COVID-19 outbreaks, deaths, concerns
regarding staffing levels, PE Stakeholder (July 8, 2020), https://pestakeholder.org/news/jails-and-prisons-served-byh-i-g-capital-owned-wellpath-face-covid-19-outbreaks-deaths-concerns-regarding-staffing-levels-2
226
See Jim Baker, HIG Capital’s and Wellpath’s Correctional Healthcare Investment Risks 1, PRIVATE EQUITY
STAKEHOLDER PROJECT (July 2019), https://pestakeholder.org/wp-content/uploads/2019/07/HIG-CapitalsCorrectional-Healthcare-Investment-Risks-PESP-070819.pdf
227
See Andy Pierrotti, It Could Have Been Prevented: Medical Staff Didn’t Take Inmate’s Complaints Seriously,
He Died Hours Later, Officer Said, 11 ALIVE (November 23, 2021),
https://www.11alive.com/article/news/investigations/the-reveal/medical-staff-did-not-take-inmates-complaintsseriously/85-b3600969-f619-4113-b603-b2719a3a6731
228
See Baker, HIG Capital, supra note __, at 1-2.
229
See Investigation of the San Luis Obispo County Jail, U.S. DOJ CIVIL RIGHTS DIV. (August 31, 2021),
https://www.justice.gov/crt/case-document/file/1429036/download
230
See San Luis County Jail, supra note __, at 1.
231
See San Luis County Jail, supra note __, at 3.
232
See San Luis County Jail, supra note __, at 6-9.
233
See San Luis County Jail, supra note __, at 14, 18, 26.
234
See San Luis County Jail, supra note __, 18, 26.

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Denying or limiting healthcare boosts profit. By controlling when corrections residents are
seen by doctors and sent to the hospital, a private company can cut many costs.235 The fewer
hospital trips, the more money saved.236 This has resulted in inadequate and untimely health care,
where prisoners are refused anything but the most minor aspects of basic health care, with little
follow-up care and sometimes even failure to follow basic sanitary procedures.237 The motivations
to curb costs by denying medical procedures and limit hospital and emergency room trips are
strong.238 Sometimes Wellpath will even try to cut a deal with the correction facility, offering to
split the savings made by curbing off-site medical care, in order to fully incentivize them.239 The
end results have led to severe illness, injury and death for those prisoners under Wellpath’s medical
care.240
Public records laws do not apply to private corrections health care companies, so there is
little oversight or regulation about the health care provided in correctional settings.241 Granted, the
Vermont Supreme Court recently held that Wellpath might be subject to the state’s public records
law given that it was working for the state.242 That decision is an outlier, however, and represented
six years of litigation by the Human Rights Defense Center to obtain Wellpath records.243 Even
so, the Vermont Supreme Court didn’t decisively rule that the documents sought were in the public
record, instead sending the case back down to the lower court to determine what is eligible for
public release.244
Wellpath is not alone in its poor correctional health services. As of 2017, five
corporations—Corizon Health, NaphCare, Wexford Health, Centurion Health, and Wellpath
Holdings—are collectively responsible for prison health care in 28 states and 62% of jail health
care in the United States, pocketing 40% of all correctional spending.245 The corporate focus on

235

See Pierrotti, Could Have Been Prevented, supra note __, at id.
See Susan Sharon, 'It's Horrible' — Report Alleges Improper Care by Private Health Provider in Maine State
Prison, MAINE PUBLIC RADIO (March 8, 2021), https://www.mainepublic.org/health/2021-03-08/its-horrible-reportalleges-improper-care-by-private-health-provider-in-maine-state-prison
237
See Sharon, Improper Care, supra note __, at id.
238
See Beth Healy and Christine Willemson, Pain and Profits: Sheriffs Hand Off Care to Private Health
Companies, WBUR (March 24, 2020), https://www.wbur.org/news/2020/03/24/jail-health-companies-profitsheriffs-watch
239
See Healy & Willemson, supra note __, at id.
240
See Healy & Willemson, supra note __, at id.
241
See Healy & Willemson, supra note __, at id.
242
See Alan J. Keays, High court finds private health care contractor for state subject to public records law, VT.
DIGGER (September 5, 2021), https://vtdigger.org/2021/09/05/high-court-finds-private-health-care-contractor-forstate-subject-to-public-records-law/
243
See Keays, supra note __, at id.
244
See Keays, supra note __, at id.
245
The Prison Industry: How it Started. How it Works. How it Harms, WORTH RISES 76
(Dec. 2020); Kil Huh, et al., Prison Health Care: Costs and Quality - How and Why States Strive for HighPerforming Systems, The Pew Charitable Trusts (Oct. 2017); https://www.pewtrusts.org/-/media/assets/2017/10/sfh_prison_health_care_costs_and_quality_final.pdf.
236

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jail healthcare is growing.246 In part, this is because jails are attractive targets, since they frequently
involve higher profit margins.247
Corizon Health is another corrections healthcare behemoth with many pending lawsuits
and a troubling track record.248 From Mississippi to Maine, from Pennsylvania to Arizona,
Corizon has had hundreds of lawsuits filed against it for faulty delivery of care to inmates and
inhumane conditions.249 Owned until recently by BlueMountain Capital Management, a private
equity firm, Corizon is now solely owned by Flacks Group, an investment firm that specializes in
turnarounds.250 Flacks calls itself a “special situations” investor, focusing on acquiring struggling
companies and increasing their profits.251 This may be great for investors, but has not proven
particularly beneficial to inmates in Corizon-served corrections facilities.
A review of incarcerated deaths from 2016-18 covering 500 jails found that state jails using
these five private correctional services companies for health care had far higher rates of death.252
“The death rates were 18% to 58% higher, depending upon the company.”253 In part, this is
because private corrections companies often lack quantified standards for care in their contracts,
leaving such critical aspects as staffing requirements, protocols for inmate health evaluations, and
hospitalization policy vague.254 Such vagueness allows Big Capital to make economies on
prisoner health care, to ultimately benefit the company’s bottom line.255 “It is a one to one, dollar
to dollar, relationship between denying care and profit.”256
There is unquestionably a low standard of medical care provided in America’s state and
federal corrections system.257 But private correctional healthcare providers tend to do even poorer
job providing medical services to those under correctional control.258 Big Capital correctional
healthcare providers, however, provide the most minimal healthcare of all. Given that goals of

246

See Marsha McLeod, The Private Option, ATLANTIC (September 12, 2019), at
https://www.theatlantic.com/politics/archive/2019/09/private-equitys-grip-on-jail-healthcare/597871/+&cd=1&hl=en&ct=clnk&gl=us&client=firefox-b-1-d
247
See McLeod, supra note __, at id.
248
See Sarah Solon and Jesse Lava, Meet the Company Making $1.4 Billion a Year off Sick Prisoners, ACLU
(October 8, 2013), https://www.aclu.org/news/smart-justice/meet-company-making-14-billion-year-sick-prisoners
249
See Dan Christenson, Florida Prison Officials Didn’t Ask, Companies Didn’t Tell About Hundreds Of
Malpractice Cases, FLORIDA BULLDOG (October 2, 2013), https://www.floridabulldog.org/2013/10/florida-prisonofficials-didnt-ask-companies-didnt-tell-about-hundreds-of-malpractice-cases/
250
See Matt Blois, Investment Firm Acquires Corizon, NASHVILLE POST (June 30, 2020),
https://www.nashvillepost.com/investment-firm-acquires-corizon/article_eeba5a0a-486c-5779-886c2d50b1befc5a.html
251
Blois, Investment Firm, supra note __, at id.
252
See Jason Szep, Ned Parker, Linda So, Peter Eisler, and Grant Smith, U.S. Jails Are Outsourcing Medical Care
— And the Death Toll Is Rising, REUTERS (October 26, 2020), https://www.reuters.com/article/us-usa-jailsprivatization-special-repor/special-report-u-s-jails-are-outsourcing-medical-care-and-the-death-toll-is-risingidUSKBN27B1DH
253
See Szep et. al, Outsourcing Medical Care, supra note __, at id.
254
See Szep et. al, Outsourcing Medical Care, supra note __, at id.
255
See Szep et. al, Outsourcing Medical Care, supra note __, at id.
256
See Szep et. al, Outsourcing Medical Care, supra note __, at id.
257
Appleman, Cashing in on Convicts, supra note __, at 600.
258
Appleman, Cashing in on Convicts, supra note __, at 599.

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Big Capital—that is, extracting value—are largely antagonistic to the needs of both patients and
correctional health care programs, this should come as no great surprise.259

PART II: WHO OWNS THIS STUFF? UNWINDING THE LABYRINTH
Although Big Capital invests in a variety of public corrections services, unwinding which
for-profit entity owns what corrections company can be labyrinthine. As we saw in Part I,
corrections services are often being performed by entities that are subsidiaries of large publicly
held companies, or by privately held portfolio companies held by secretive private equity firms.
We also saw how large global insurance companies, though not owners, provide the risk backing
that enables the private bail system to work. When things go wrong, however, it can be a real
struggle to figure out who is accountable, and to determine who is ultimately responsible when
things have gone wrong.
Due to these complicated layers of ownership structure, we often do not know who
ultimately is responsible for delivering the amount and quality of correctional services, services
that enable retention of the public-private contracts, and what the incentives might be. We do not
know to whom to complain, because critical correctional services are now provided by a byzantine
web of private companies, some of them large and publicly-held corporations, some owned by
private equity, and others floating on a financial system backed by international insurers.
In the public arena where punishment and correctional services are meted out, we normally
hold state officials and elected officials accountable. Today, instead, we increasingly can only hold
them accountable for those with whom they contract. But figuring out correctional accountability
is extremely complex, what with private money, global financial structures, and frequent renaming and restructuring of private correctional companies.
There are three main players in Big Capital Corrections, each with its own area of
obfuscation and complexity: Private equity firms; large, publicly held private companies; and
international insurance firms. Below I seek to expose the complexity and diversity of correctional
services company ownership, and how these large profit-seeking entities have fundamentally
altered the structure of how we provide services and manage accountability.
A. Private Equity
Who are the private equity firms most invested in public corrections? The firms include
BlueMountain Capital Management, H.I.G. Capital, American Securities, and Platinum Equity, all
of which own portfolio companies that provide a wide range of services to prisons.260

259
260

See Markee and Sarola, Private Equity, Health Care, & Profits, supra note __, at id.
See Valadares, Prisoner’s Misery, supra note__ at id.

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HIG Private Equity, the private equity arm of HIG Capital LLC,261 is the creator and owner
of Wellpath, the largest correctional healthcare company in the United States, serving 10% of
counties nationwide.262 Wellpath was formed by rolling up three smaller correctional healthcare
companies to create it: Correct Care, purchased by HIG in 2018; Correctional Medical Group
Companies, acquired by HIG in 2013, and California Forensic Medical Group, which was
previously acquired by Correctional Medical Group Companies.263
Recently, Moody’s downgraded Wellpath’s Corporate Family Ratings Inc. from a B2 to a
B3, and Probability of Default Rating from a B2 to a B3, although the ratings outlook remained
stable.264 This is because Moody’s anticipates that Wellpath’s earnings and cash flows will
continue to be pressured due to the company’s elevated expenses, stemming from labor shortages
and wage inflation, as well as slower receivables collections.265 Wellpath’s thin margins and work
in the highly volatile correctional healthcare market make it challenging to maintain a high level
of profit, given that providing healthcare in myriad correctional facilities across the country
continues to be an “ongoing challenge,” presenting “unique complexities.”266 These issues
illustrate the problem with having such a behemoth company oversee any one individual
correctional institution’s healthcare, since earnings and cash flow pressure can affect the level of
care offered.
HIG also controls TKC Holdings, a Delaware corporation and holding company that
provides products and services to correctional and lodging markets,267 which has, as two of its
wholly owned subsidiaries, Trinity Service Group and Keefe Group.268 Recently TKC Holdings
took out a five year $320 million pay-in-kind-toggle term loan, with the proceeds earmarked for a
shareholder dividend.269 HIG also owns Access Corrections, one of the three major money transfer
services in the U.S.270 Access Corrections charges high rates to deposit money in an inmate’s bank
account, ranging from 5% to 37%, thus squeezing money out of the impoverished.271 In addition,
the Keefe group holds ICSolutions, a wholly-owned subsidiary providing telecom services to

261

See H.I.G. Capital Acquires Wellpath, Mergr (October 1, 2018), https://mergr.com/h.i.g.-capital-acquireswellpath-holdings
262
See McLeod, supra note __, at id.
263
See Private Equity Firms Rebrand Prison Healthcare Companies, But Care Issues Continue, supra note __, at 5.
264
See Moody's downgrades Wellpath Holdings, Inc.'s Corporate Family Rating to B3, Outlook Stable, Moody’s
(July 11, 2022), https://www.moodys.com/research/Moodys-downgrades-Wellpath-Holdings-Incs-CorporateFamily-Rating-to-B3--PR_467713
265
Moody’s, supra note__, at id.
266
Moody’s, supra note__, at id.
267
See Private Equity Firms Rebrand Prison Healthcare Companies, supra note __, at 2.
268
See Ella Millburn, Are Prison Services Companies the Next Frontier for Responsible Investment in the Age of
Black Lives Matters?, RESPONSIBLE INVESTOR (October 19, 2020), https://www.responsible-investor.com/areprison-services-companies-the-next-frontier-for-responsible-investment-in-the-age-of-black-lives-matter/
269
See Jonathan Hemingway, TKC Holdings Completes Upsized $320M Pay-In-Kind-Toggle Term Loan; Terms,
S&P GLOBAL MARKET INTELLIGENCE (Feb. 8, 2022), https://www.spglobal.com/marketintelligence/en/newsinsights/latest-news-headlines/tkc-holdings-completes-upsized-320m-pay-in-kind-toggle-term-loan-terms-68800135
270
See Evan Weinberger, Inmate Families Face Cash-Transfer Fees ‘Just to Stay Connected,’ Bloomberg Law
(January 11, 2022), https://news.bloomberglaw.com/banking-law/inmate-families-face-cash-transfer-fees-just-tostay-connected
271
See Weinberger, supra note __, at id.

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correctional facilities.272 In other words, ICSolutions is a wholly owned subsidiary of the Keefe
Group, which is a wholly owned subsidiary of TKS Holdings, which is indirectly controlled by
HIG Capital LLC.273
Another private equity company, Platinum Equity, owns Aventiv, which contains three
separate correctional companies, each of which are wholly owned subsidiaries. 274 First is Securus,
which provides correctional monitoring, biometrics, and communication products for inmates.275
Next is JPay, providing correctional technologies for prisoner payment, email, and tablet use.276
Aventiv’s last wholly owned subsidiary is AllPaid, a government services provider that provides
payment processing services for inmates.277
American Securities, another private equity firm, owns Global Tel Link (GTL), the largest
correctional telecommunication provider.278 American Securities recently rebranded GTL into
Viapath Technologies, which now provides communication services to incarcerated individuals
and tablets to assist with re-entry.279 Nowhere on Viapath’s website does it have any mention or
reference to it being a wholly owned subsidiary of a private equity firm, however.280
BlueMountain Capital Management owned YesCare/Corizon, the second largest
correctional healthcare company, until 2020, when it was sold to the Flacks Group.281 Upon
acquisition, the Flacks Group noted that it views itself as a “‘special situations’ investor and
focuses on acquiring struggling companies or divisions and turning them around.282 By the end of
2021, Corizon was insolvent and heading towards bankruptcy, so restructured its organization
through a Texas “divisional merger,” dividing itself into two companies.283 After undergoing the
divisional merger, Corizon Health survived, while also creating a new corporation, CHS TX, Inc.,
to which the bulk of the assets were assigned.284 Corizon retained all of its expired contracts and

272

See Lily Chahine & Afia Akosah Bempah, Distortion On the Inside: How Commissary Privatization Skews the
Worth of Time, COLLEGE HILL INDEPENDENT (April 29, 2022), https://www.theindy.org/article/2693
273
See Public Notice, Applications Filed for the Transfer of Control of Centurylink Public Communications, Inc. to
Inmate Calling Solutions, Llc D/B/A ICSolutions, FCC (June 25, 2020), https://docs.fcc.gov/public/attachments/DA20-673A1.pdf
274
See Aventiv, Our Company, PLATINUM EQUITY, https://www.platinumequity.com/our-company/aventiv/
275
See id.
276
See id.
277
https://www.aventiv.com/allpaid/
278
See American Securities Big Bet on Prison Phone Calls 2, PE STAKEHOLDER (February 2020),
https://pestakeholder.org/wp-content/uploads/2020/02/American-Securities-Big-Bet-on-Prison-Phone-Calls-PESP022020.pdf
279
See GTL Becomes ViaPath Technologies, Launches Expanded Reentry Services, AMERICAN SECURITIES (Jan. 4,
2022), https://www.american-securities.com/en/press-releases/gtl-becomes-viapath-technologies-launchesexpanded-reentry-services
280
https://www.viapath.com
281
See Matt Blois, Investment Firm Acquires Corizon, Nashville Post (June 30, 2020),
https://www.nashvillepost.com/investment-firm-acquires-corizon/article_eeba5a0a-486c-5779-886c2d50b1befc5a.html
282
See Blois, supra note __, at id.
283
ORDER ON PLAINTIFF'S MOTION FOR SUBSTITUTION (ECF NO. 25), Kelly v. Corizon Health Inc., 2:22cv-10589, at 1, (E.D. Mich. Nov. 1, 2022), https://casetext.com/case/kelly-v-corizon-health-inc-1
284
Corizon Health, at 2.

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their corresponding liabilities.285 Post divisional merger, YesCare, Inc. acquired CHS TX, and
CHS TX began informally doing business under its parent company's name.286 Nowhere on
YesCare’s website is there any mention of the Flacks Group or its previous life as Corizon.287
Finally, as noted earlier, Aladdin Bail Bonds, the largest bail bond company in the country,
was owned by Endeavour Capital, a Portland, Oregon-based private equity firm, from 20122020.288
B. Large, Publicly Traded Corporations
The two largest corrections corporations in the U.S. are CoreCivic and Geo Group. Geo
Group, a publicly traded international C corporation,289 has many shareholders and institutional
investors. Institutional shareholders own 76.58% of the corporation, with mutual fund owners
holding 42.92% of shares.290 The three largest public owners are BlackRock Fund Advisors
(14.1%), the Vanguard Group (10.99%), and iShares Core S&P Small Cap ETF (7.07%).291 Geo
Group recently changed its corporate structure from a pass-through REIT to a C corporation, in
part to free up cash flow and address future debt maturities.292
Geo Group owns a large number of smaller, private companies providing health care,
juvenile justice, and other correctional services, making difficult for consumers and justiceinvolved individuals to ascertain true ownership. Until 2021, for example, Geo Group owned
Cornell Abraxas, which runs juvenile justice centers for “hard to place” youth.293 During that time,
however, it was virtually impossible for the average person to find out who truly owned the
company. Abraxas Youth and Family Services stated on its website that it is a “nonprofit provider
of a diversified array of services to over 6,500 youth, adults and families each year.”294 Its legal
name is “The Cornell Abraxas Group, LLC,” and it is now incorporated as a non-profit company
in Delaware, corporation number S52PMDBXDLW7.295 But nowhere on the website does it ever

285

Corizon Health, at 2.
Corizon Health, at 2.
287
https://www.yescarecorp.com/about
288
See Following ACLU Report, Endeavour Capital Exits Bail Bond Investment, PRIVATE EQUITY STAKEHOLDER
PROJECT (March 5, 2020), https://pestakeholder.org/news/following-aclu-report-endeavour-capital-exits-bail-bondinvestment/
289
See The GEO Group Announces Change in Corporate Structure, BUSINESS WIRE (December 2, 2021),
https://www.businesswire.com/news/home/20211202005319/en/The-GEO-Group-Announces-Change-in-CorporateStructure
290
See Geo Group, CNN BUSINESS (February 10, 2023),
https://money.cnn.com/quote/profile/profile.html?symb=GEO
291
See Top 10 Owners of Geo Group, CNN BUSINESS (February 10, 2023),
https://money.cnn.com/quote/shareholders/shareholders.html?symb=GEO&subView=institutional
292
See Change in Corporate Structure, supra note __, at id.
293
See The Geo Group Inc., Investigate, AMERICAN FRIENDS SERVICE COMMITTEE,
https://investigate.afsc.org/company/geo-group
294
See id.
295
See Abraxas Youth and Family Services, OPENGOVUS (July 26, 2022), https://opengovus.com/samentity/S52PMDBXDLW7
286

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mention that Cornell Abraxas Group, LLC was recently a wholly owned subsidiary of the GEO
Group,296 or that its non-profit status is extremely new.
In addition, GEO Group is the biggest provider of alternative corrections, as it owns, leases,
and manages 49 residential community corrections/reentry centers and 84 non-residential reentry
centers or Day Reporting Centers (DRCs).297 It gained this position by purchasing both Cornell
Companies298 and Community Education Centers (CEC).299 CEC owns and operates over 30% of
all halfway houses nationwide.300
The Geo Group also owns the country’s largest electronic-monitoring firm, BI
Incorporated.301
BI Incorporated monitors justice-involved individuals through various
technology products including radio frequency, GPS, and alcohol monitoring devices.302
CoreCivic, formerly the Corrections Corporation of American, is a publicly traded
government solutions C corporation.303 The largest correctional services company in America,
CoreCivic is primarily owned by shareholders, with 81.89% institutional owners,304 52.63% of
them mutual funds.305 In 2020, CoreCivic decided to change its corporate structure from a passthrough REIT to a C corporation, in order to reduce debt and then to return more capital to
shareholders.306
Like Geo Group, CoreCivic has invested in community corrections companies, owning and
operating 26 residential reentry centers around the country, including Correctional Alternatives,
Avalon Correctional Services Inc., Correctional Management Inc., and Rehabilitation Services
Inc.307 CoreCivic has also acquired two electronic monitoring companies, Recovery Monitoring

296

See The Geo Group, Inc., Subsidiaries, SECURITIES AND EXCHANGE COMMISSION (July 26, 2022),
https://www.sec.gov/Archives/edgar/data/923796/000119312517056831/d320699dex211.htm
297
See Geo Group Inc, AFSC, supra note __, at id.
298
See Tess Stynes, GEO Group Agrees to Acquire Cornell in $385 Million Deal, WALL ST. JOURNAL (April 19,
2010), https://www.wsj.com/articles/SB10001424052748704671904575193643911801532
299
See The GEO Group Closes $360 Million Acquisition of Community Education Centers, Business Wire (April
16, 2017), https://www.businesswire.com/news/home/20170406005543/en/The-GEO-Group-Closes-360-MillionAcquisition-of-Community-Education-Centers
300
See SUKIN, supra __, at id.
301
Appleman, Treatment-Industrial Complex, supra note __, at 14.
302
See https://bi.com/
303
See Company Description, CoreCivic, CNN Business (February 10, 2023),
https://money.cnn.com/quote/profile/profile.html?symb=CXWhttps://money.cnn.com/quote/profile/profile.html?sy
mb=CXW
304
See CXW Institutional Holdings, NASDAQ (February 10, 2023), https://www.nasdaq.com/marketactivity/stocks/cxw/institutional-holdings
305
See Institutional Ownership, CoreCivic, CNN Business (February 10, 2023),
https://money.cnn.com/quote/shareholders/shareholders.html?symb=CXW&subView=institutional
306
See CoreCivic Announces Change in Corporate Structure and New Capital Allocation Strategy, CORECIVIC
(August 5, 2020), https://www.globenewswire.com/en/news-release/2020/08/05/2073709/0/en/CoreCivicAnnounces-Change-in-Corporate-Structure-and-New-Capital-Allocation-Strategy.html
307
See CoreCivic Inc., Investigate, AFSC, https://investigate.afsc.org/company/corecivic

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Solutions and Rocky Mountain Offender Management Systems.308 Also in CoreCivic’s portfolio
is TransCor America, one of the largest private providers of prisoner and detainee transportation.309
C. International Insurance Conglomerates
Major insurance firms back the bail bond industry. These major insurance firms are
themselves owned by enormous investment companies. For example, Randall & Quilter, a global
insurance company, acquired Accredited Surety & Casualty Co. in 2014, one of the nine main bail
bond insurance companies that underwrite the bail bond industry.310 Other bail bond insurance
companies include Fairfax Financials Holdings LTD, which owns Crum & Forester and Bail USA;
and IAT Insurance Group, which owns AIA Surety. 311 These corporate “holdings are often murky
because global insurers build in several layers of opaque corporate structures between their
corporate brand, bond-insurance operations, and bail-bonds storefronts.”312 It is extremely
difficult to determine who is the ultimate owner of any one bail bond company, especially for the
unsophisticated consumer.
Ultimately, by allowing these secretive, for-profit entities to provide a substantial segment of
correctional services, a core power of administration of justice is being bid out, with little recourse
when they fail. If that is the fiscal choice, then being able to hold the public and private players
accountable for the quality of their services becomes extremely important.

PART III: PROFITS OVER PEOPLE: BIG CAPITAL’S GROWING ROLE IN CRIMINAL JUSTICE
The recent, overwhelming expansion of Big Capital into the services and operational sector
of the incarceration and correctional control landscape has no parallel. The rise of enormous
corporations and private equity firms as owners and operators of a realm of correctional services
means oversight and regulation of these companies is increasingly important. And yet there is
little supervision over what these companies actually do and how they are structured.
Private equity firms in particular are uniquely situated to extract profits from the carceral
world. Private equity firms do not have stockholders and are not publicly traded. Instead, they are
privately funded by institutions or wealthy individuals, and invest their money in buying,
restructuring, merging, and selling other companies within a short period of time.313 Private equity
308

See id.
See id.
310
See Udi Ofer, 9 Major Insurance Companies Are Profiting the Most Off the Broken Bail System, ACLU
(February 12, 2018), https://www.aclu.org/news/smart-justice/9-major-insurance-companies-are-profiting-mostbroken-bail-system
311
See Factbox: Major Insurers of U.S. Bail Bonds, REUTERS (March 26, 2021),
https://www.reuters.com/article/us-usa-insurance-bail-jails-factbox/factbox-major-insurers-of-u-s-bail-bondsidUSKBN2BI1DR
312
See Gillian White, Who Really Makes Money Off of Bail Bonds, ATLANTIC (May 12, 2017),
https://www.theatlantic.com/business/archive/2017/05/bail-bonds/526542/
313
See Felix Barber and Michael Goold, The Strategic Secret of Private Equity, HARV. BUS. REV. (September 2007),
https://hbr.org/2007/09/the-strategic-secret-of-private-equity
309

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funds frequently purchase controlling interests in companies for a short time, then implement
drastic cost-cutting measures, including loading them with debt, selling off company assets,
charging high fees, and ultimately selling the stripped-down companies at a profit.314 Since private
equity firms are structured as private partnerships, this gives them important tax and regulatory
advantages over public companies.315
In addition, the regulation of Big Capital corrections, by either state or federal government,
is fairly minimal.316 This ensures that the dominance of Big Capital corrections is poised to grow,
and as well as their penchant of “cutting costs and corners and jobs to extract financial gain.”317
Given that private equity companies and large, publicly-traded corporations own a majority share
in a huge segment of the corrections industry,318 this is a troubling oversight. Ultimately Big
Capital corrections utilize their dominant market power to profit from millions made off of
individuals under correction control, their families, and their communities.319
The profit-making affiliation between Big Capital and public corrections has become
standard throughout the entire criminal justice system, from bail to jail, arrest to incarceration, and
throughout all aspects of correctional control.320 Big Capital threads through every level of
criminal process as well, from the local to the state and federal.321 In short, private industry’s
investment of money into carceral services has ballooned over the last 10-15 years.322
Private equity firms, large, publicly traded corporations, and insurance conglomerates all have
several advantages in the financial market, including the potential for monopolies in specified
areas, lack of transparency, minimal income tax, and huge amounts spent in governmental
lobbying and campaign contributions. Over the past twenty years, Big Capital-owned correctional
services companies have become “a quasi-oligopolistic market force across the carceral
economy.”323 Below I discuss how and why.

314

See Elizabeth Warren, Letter to BlueMountain 2, September 30, 2019,
https://www.warren.senate.gov/imo/media/doc/2019-0930%20Letters%20to%20PE%20Firms%20re%20Prison%20Services.pdf
315
Barber & Goold, Private Equity, supra note __, at id.
316
See Hannah Levintova, The Smash and Grab Economy, MOTHER JONES (May-June 2022),
https://www.motherjones.com/politics/2022/05/private-equity-buyout-kkr-houdaille/
317
Levintova, supra note __, at id.
318
See Hannah Levintova and Tim Murphy, Everything Everywhere All at Once: How Private Equity Rules Your
World, MOTHER JONES (May-June 2022), https://www.motherjones.com/politics/2022/05/private-equity-citypensions-burger-king-roark-liverpool-yale/
319
See Warren, supra note __, at 4
320
See Jacob Swansen and Mary Fainsod Katzenstein, Turning Over Keys: Public Prisons, Private Equity, and
Normalization of Markets Behind Bars, 19 PERSPECTIVES ON POLITICS: SPECIAL ISSUE: RACE AND POLITICS IN
AMERICA 1247, 1249 (December 2021), https://doi.org/10.1017/S1537592721002218.
321
Swansen & Katzenstein, supra note __, at 1249.
322
Swansen & Katzenstein, supra note __, at 1248.
323
Swansen & Katzenstein, supra note __, at 1247.

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A. Monopolistic Conditions
Private equity firms and large, publicly traded corporations have long been a force for
consolidation, higher prices, and fewer choices for the captive consumer.324 The frequent mergers
and acquisitions of similar companies by Big Capital has become a systemic problem.325 Big
Capital controls a large part of U.S. corrections, and its reliance on the “extractive business model”
means it gobbles up more and more companies each year.326
The private equity industry in particular has a protracted history of adding on and rolling
up companies into a single entity, a practice that has been criticized for contributing to
monopolistic conditions in various industries.327 Private equity works through buying up various
independent companies in the same sector, extracting value from them by restructuring, frequently
firing existing workers, hiking prices, avoiding regulation, and diverting the revenue directly back
to the PE firm.328 In addition, the PE industry consolidates its profits by acquiring numerous similar
companies, and placing them in a portfolio, draining revenues from all of them.329 This results in
poorer services for clients and fewer options for alternate providers.330 All too frequently, clients
have no choice but to submit to the market power wielded by private equity firms in hyper local
markets,331 particularly when that market is an highly specialized one, such as correctional
services. This often results in the creation of a dominant player in the market, with a substantial
market share and the ability to exert significant control over prices and other market conditions.
The private equity industry’s “practice of ‘add on and roll up’” bundles fragments of
competing local or regional players into consolidated entities. Accordingly, through both vertical
and horizontal consolidation, a private equity-owned corporation can “forge near-monopolistic
conditions.”332 Specifically, company acquisitions by private equity firms frequently bundle
complementary services into a larger, interconnected dominant firm.333
We see similar practices when it comes to large, publicly-owned corporations, such as
CoreCivic and Geo Group, who dominate the correctional-services market.334 Over the last 12
years, these for-profit corrections corporations have rolled up the smaller private correctional
324

See Natalia Renta, Antitrust Authorities Turn Focus to Private Equity Role in Monopolies, Our Financial Security
(July 2022), https://ourfinancialsecurity.org/2022/07/blog-antitrust-authorities-turn-focus-to-private-equity-role-inmonopolies/
325
See Letter to FTC & Department of Justice, Request for Information on Merger Enforcement, Americans for
Financial Reform (April 21, 2022), https://ourfinancialsecurity.org/wp-content/uploads/2022/04/4.21.22-PE_AFRCEPR-UFR-Comment-DOJ-FTC-mergers.pdf
326
See Request for Information on Merger Enforcement, supra note __, at 1.
327
See David Dayen, Cut Off Private Equity’s Money Spigot, American Prospect (July 28, 2022),
https://prospect.org/economy/cut-off-private-equitys-money-spigot/
328
See Request for Information on Merger Enforcement, supra note __, at 2.
329
See Request for Information on Merger Enforcement, supra note __, at 3.
330
See Request for Information on Merger Enforcement, supra note __, at 3
331
See Request for Information on Merger Enforcement, supra note __, at 4.
332
Swansen & Katzenstein, supra note __, at 1248
333
See Request for Information on Merger Enforcement, supra note __, at 9.
334
See Tim Requarth, How Private Companies Are Turning Public Prisons into Big Profits, THE NATION, (Apr. 30,
2019), https://www.thenation.com/article/prison-privatization-private-equity-hig/

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services companies into larger, wholly owned subsidiaries, which then have been structured into
the two behemoths.335
Roll-ups are often viewed as efficient ways to streamline services.336 With correctional
services, however, “the most common expression of this efficiency is simply abusive market power
over consumers.”337 Although the underlying theory for roll-ups is a gain of efficiency through
economies of scale, in reality the result is usually lower-quality service.338 Both private equity
firms and large public corporations often look to extract value from the companies they acquire
through cost-cutting measures, such as layoffs and asset stripping.339 In the world of corrections,
profits are extracted not only from public sites of incarceration, but also from the incarcerated
individuals themselves.
Private equity particularly enables the expansion of private corrections companies.340 HIG
Capital, for example, which manages over $30 billion in assets, has helped consolidate small
corrections-industry companies into huge entities that dominate their markets.341 The role of
private equity firms in helping broker rollups has transformed the private correctional-services
industry.342 These practices can erase any competition between companies, allowing private
equity-owned corrections companies to create a “vicious cycle of monopolization.”343 For
example, the market for corrections healthcare has been consolidating rapidly over the last 10
years, eliminating the smaller rivals.344
Private ownership of correctional services companies has made the services provided far
worse, because the monopolies and duopolies created simply do not provide any competition.345
The massive consolidation created by Big Capital in the correctional services space has translated
into worse services at higher prices for incarcerated individuals.346
B. Lack of Transparency
Transparency is key to proper operation of correctional facilities, because public scrutiny
is essential to ensure that public institutions are accountable to the commuity, not “hidden,

335

See Requarth, Big Profits, supra note __, at id.
See Request for Information on Merger Enforcement, supra note __, at 9
337
Request for Information on Merger Enforcement, supra note __, at 9.
338
See Request for Information on Merger Enforcement, supra note __, at 9.
339
See Eileen Applebaum & Rosemary Pratt, Private Equity Buyouts in Heathcare: Who Wins, Who Loses 7-8,
12,16, INSTITUTE FOR NEW ECONOMIC THINKING (March 15, 2020), https://www.cepr.net/wpcontent/uploads/2020/03/WP_118-Appelbaum-and-Batt.pdf
340
See Laura I Appleman, The Treatment-Industrial Complex: Alternative Corrections, Private Prison Companies,
& Criminal Justice Debt, 55 HARV. C.R.- C.L. L. REV. 1, 41 (2020).
341
See Requarth, Big Profits, supra note __, at id.
342
See Requarth, Big Profits, supra note __, at id.
343
See Request for Information on Merger Enforcement, supra note __, at 2.
344
McLeod, The Private Option, supra note __, at id
345
See Milburn, Prison Service Companies, supra note __, at id.
346
See Milburn, Prison Service Companies, supra note __, at id.
336

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mysterious places on the far edge of democracy.”347 Privatized operations of public corrections
have even more need for transparency, to make sure that the private companies operating the
carceral sites further such critical goals like rehabilitation, safety (for both the public and those
incarcerated), health, and reduction of recidivism.348
Most private correction companies, however, do not comply with FOIA or state reporting
statutes because they claim it does not apply to them. They claim that FOIA sec. 4 exempts any
private companies from FOIA’s reporting requirements. FOIA sec. 4 protects "trade secrets and
commercial or financial information obtained from a person [that is] privileged or confidential."349
The majority of sec. 4 exemptions fall under confidential commercial and financial information,
which tends to be widely interpreted.350
Private corrections companies tend to make similar arguments regarding state open records
laws. The majority of private correctional companies refuse to comply with state open records law
as well.351 This means that documentation that used to be available for public review and
examination is now frequently hidden behind the walls of private corrections companies.352 When
private corrections companies are running or providing services for prisons and jails, the records
are frequently inaccessible, in part because the goals of private correctional companies are
frequently oppositional to the purpose of public records laws.353
In addition, private equity operations in particular are far from transparent themselves, with
limited reporting requirements, whether to the Securities Exchange Commission or to a formalized
stockholder entity.354 Because the growth of private equity correction services companies has been
largely administrative, much of their expansion has gone relatively unnoticed.355 Thus much of
the expansion of private equity operations have been out of the public spotlight, unhampered by
most reporting requirements.356 This has resulted in private equity companies making decisions
about services in public correctional facilities that are not subject to either accountability statues
or any public investigatory body.357

347

See Sarah Geraghty and Melanie Velez, Bringing Transparency and Accountability to Criminal Justice
Institutions in the South, 22 STAN. L. & POL'Y REV. 455, 456 (2011).
348
See Geraghty and Velez, , supra note __, at 473.
349
See 5 U.S.C. § 552(b)(4) (2006), amended by OPEN Government Act of 2007, Pub. L. No. 110175, 121 Stat.
252.
350
See Exemption 4, Dep’t of Justice Guide to the Freedom of Information Act 266-67,
https://www.justice.gov/archive/oip/foia_guide09/exemption4.pdf
351
See Stephen Raher, The Business of Punishing: Impediments to Accountability in the Private Corrections
Industry, 13 RICH. J.L. & PUB. INT. 209, 240-47 (2010).
352
See Matthew Bunker & Charles Davis, Privatized Government Functions and Freedom of Information: Public
Accountability in an Age of Private Governance, 75 JOUR. & MASS COMM. Q. 464, 466 (1998).
353
See Bunker & Davis, Privatized Government Functions, supra note __, at 466.
354
Swanson & Katzenstein, supra note __, at 1248.
355
Swanson & Katzenstein, supra note __, at 1249.
356
Swanson & Katzenstein, supra note __, at 1249.
357
See Andrea Headley, Jean-Claude Garcia-Zamor, The Privatization of Prisons and its Impact on Transparency
and Accountability in Relation to Maladministration, 8 INT’L J. HUM. SOC. SCI. & EDUC. 23, 28 (2014).

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Private equity usually acquires businesses below the federal regulatory radar.358 One
investigation found that more than 90% of private equity takeovers or investments fall underneath
the transaction threshold, the level that initiates an antitrust review by the FTC and the DOJ.359
Under the Hart-Scott-Rodino Antitrust Improvement Act,360 any proposed merger must be
reported to the FTC and the Justice Department antitrust division for review, in order to prevent
deals that could hinder marketplace competition.361 But the reporting threshold for such deals
must be above $101 million at the time of closing,362 a number that private equity firms carefully
avoid.363
Private equity firms have long been accused of operating with impunity, largely immune
from consequences for their actions. This is particularly evident when it comes to investigations
or fraud lawsuits brought by the federal government.364 Despite facing allegations of wrongdoing,
few private equity firms actually end up paying fines in these cases. This is because the private
equity-owned companies themselves pay the fines.365
Private equity firms are notoriously difficult to regulate.366 They operate in a largely
opaque and secretive manner, making it difficult for regulators to gather sufficient evidence to
pursue enforcement action.367 Additionally, private equity firms often have complex corporate
structures and offshore subsidiaries, which can make it difficult to track and hold them accountable
for their actions.368
Nonetheless, even with false billing complaints, most private equity firms manage to avoid
scrutiny.369 From 2013 - 2021, although 25 private equity-backed health care companies paid $573
million in government fraud settlement, there were only three private equity firms themselves that
paid any fines at all.370 Furthermore, even when regulators are able to build a case against a private
equity firm, the firms often have the resources and legal expertise to drag out the process for

358

See Schulte, supra note __, at id.
See Schulte, supra note __, at id.
360
5 U.S.C. § 18a.
361
See Hart-Scott-Rodino Antitrust Improvements Act of 1976, Federal Trade Commission,
https://www.ftc.gov/legal-library/browse/statutes/hart-scott-rodino-antitrust-improvements-act-1976
362
See HSR threshold adjustments and reportability for 2022, Federal Trade Commission (February 11, 2022),
https://www.ftc.gov/enforcement/competition-matters/2022/02/hsr-threshold-adjustments-reportability-2022
363
See Schulte, supra note __, at id.
364
See Schulte, supra note __, at id.
365
See Schulte, supra note __, at id.
366
See Leah Nylen and Todd Shields, US Is Focused on Regulating Private Equity Like Never Before, Bloomberg
Finance (Nov. 22, 2022), https://www.bloomberg.com/news/articles/2022-11-22/private-equity-regulation-becomesbiden-administration-focus?leadSource=uverify%20wall
367
Nylen & Shields, supra note __, at id.
368
See Renee Butler, Grasp the Accounting of Private Equity Funds, Investopedia (May 31, 2021),
https://www.investopedia.com/articles/active-trading/121015/understanding-accounting-private-equity-funds.asp
369
See Private Equity Loses Its Shield as U.S. Cracks Down on Fraud, Bloomberg Law (February 22, 2021),
https://news.bloomberglaw.com/private-equity/the-feds-pierce-private-equitys-defenses-against-whistleblowers
370
See Private Equity Loses Its Shield, supra note __, at id.
359

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years.371 This effectively wears down the regulatory agency, making it less likely that a fine will
be imposed.372
Likewise, publicly traded corporations such as CoreCivic and Geo Group have fought any
transparency into their workings, refusing to share data on any incidents,373 covering up dangerous
living conditions,374 collecting private data from their electronic monitoring companies without
supervision or regulation,375 and ignoring multiple OSHA workplace safety violations.376 Their
fierce opposition to FOIA requests377 and other basic information about their inner workings is
simply antithetical to entities working in a public system of punishment.
This lack of transparency is particularly troubling. The relentless privatization of correctional
services makes it difficult to find reliable data on their size and profit margins.378 Additionally,
the ultimate ownership of these correctional services companies by both private equity firms and
public corporations is shielded information, extremely difficult to obtain and clarify. In general,
Big Capital is too often a “black hole of information.”379
Federal FOIA reporting requirements are usually inapplicable to private correctional services
companies, despite their operating in the service of the justice system.380 Although there have
been several attempts to expand FOIA to include information from private correctional companies,

371

See Private Equity Loses Its Shield, supra note __, at id.
See Private Equity Loses Its Shield, supra note __, at id.
373
See, e.g., Scathing State Audit Slams Tennessee Prisons, CoreCivic For Staffing, Sexual Assaults, and Deaths in
Jails, NEWSCHANNEL5 NASHVILLE (January 21, 2020), https://www.newschannel5.com/news/scathing-state-auditslams-tennessee-prisons-corecivic-for-staffing-sexual-assaults-and-deaths-in-jails
374
See Advocacy Groups Submit Records Requests Seeking Transparency in Troubled Torrance Detention Center,
ACLU-New Mexico (May 13, 2022), https://www.aclu-nm.org/en/news/advocacy-groups-submit-records-requestsseeking-transparency-troubled-torrance-detention-center
375
See Johana Bhuiyan, Poor Tech, Opaque Rules, Exhausted Staff: Inside the Private Company Surveilling US
Immigrants, GUARDIAN (March 7, 2022), https://www.theguardian.com/us-news/2022/mar/07/us-immigrationsurveillance-ice-bi-isap
376
See OSHA News Release—Region 4, OSHA (February 27, 2014),
https://www.osha.gov/news/newsreleases/region4/02272014-0
377
See Press Release, Supreme Court Rules in Favor of Government Transparency Against Private Prison
Corporations, CENTER FOR CONSTITUTIONAL RIGHTS (October 10, 2017), https://ccrjustice.org/home/presscenter/press-releases/supreme-court-rules-favor-government-transparency-against-private
378
See Chahine and Bempah, Distortion on the Inside, supra note __, at id.
379
See Todd Frankel, The Search for Oligarchs’ Wealth in U.S. is Hindered by Investment Loopholes, WASHINGTON
POST (March 16, 2022), https://www.washingtonpost.com/business/2022/03/16/private-equity-regulation-gap/
380
See Matt Stroud, Updated: Private Prisons Are Exempted From Federal Disclosure Laws; Advocates Say That
Should Change, FORBES (Feb.7,2013), http://www.forbes.com/sites/mattstroud/2013/02/07/private-prisons-areexempted-from-federal-disclosure-laws-advocates-say-that-should-change/#31bbd463
372

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most recently in November 2021,381 so far, such efforts have not been successful.382 State FOIA
reporting laws and other open records law usually also do not apply to such PE-run companies.383
For example, in Texas, the state government has the ability to remove prison wardens and
demand prison transparency and accountability in its state prisons.384 For correctional facilities
run by private equity firms, however, there is no such power.385 Only Connecticut, Florida, and
South Carolina require their private corrections companies to disclose information under public
records laws.386
Regulating these large private corrections companies is extraordinarily challenging. One
prime example is Sequel Youth and Family Services, a behavioral health services company
owned/funded by Altamont Capital. Sequel has proven to be difficult to regulate, in part because
so many different governmental entities oversee different aspects :
“Because it operates in so many states, Sequel is overseen by a dizzying array of
government agencies: state departments of human services, corrections, health and
education, county probation, social services and courts, local police and sheriff’s
offices, and the federal Centers for Medicare and Medicaid Services, to name just
a few. But each agency regulates only a sliver of the company’s operations. The
full picture is visible to none of them.”387
Because Big Capital corrections companies are paid with public funds for providing
services to public corrections, at minimum their work should fall under governmental
accountability services. As more and more private correctional service companies fulfill public
criminal justice functions—thereby acting as a government proxy—it is all the more important
that there is public access to the information revealing the inner functioning of these companies.388

381

See Press Release, Cardin, Leahy, Raskin Introduce Legislation to Improve Transparency for Prisoners and
Detainees In Private Facilities, Leahy Senate Office (November 4, 2021),
https://www.leahy.senate.gov/press/cardin-leahy-raskin-introduce-legislation-to-improve-transparency-forprisoners-and-detainees-in-private-facilities
382
H.R.5853 - Private Prison Information Act of 2021, which was introduced on Nov. 4, 2021, was immediately
referred to the Judiciary Committee, where it still sits. See https://www.congress.gov/bill/117th-congress/housebill/5853/all-info
383
See Michelle Rindels, Transparency Advocates Concerned About Nevada's New Partnership with Private Prison,
Which Is Exempt from Public Records Law, NEVADA INDEPENDENT (Oct. 22, 2017),
https://thenevadaindependent.com/article/transparency-advocates-concerned-about-nevadas-new-partnership-withprivate-prison-which-is-exempt-from-public-records-law
384
See Privatization of Correctional Operations & Services Handing Over Control to Private Businesses Is
Dangerous for Texas 3, TEXAS CRIMINAL JUSTICE COALITION (May 2011),
https://www.texascjc.org/system/files?file=publications/Privatization%20of%20Correctional%20Operations%20Ser
vices%20%28May%202011%29.pdf.
385
See Dangerous for Texas, supra note __, at 3.
386
See Lauren-Brooke Eisen, Private Prisons Lock Up Thousands of Americans With Almost No Oversight, Brennan
Center (Nov. 8, 2017), https://www.brennancenter.org/our-work/analysis-opinion/private-prisons-lock-thousandsamericans-almost-no-oversight
387
See Gilbert & Dake, You Were Abused There, supra note __, at id.
388
See Geraghty and Velez, supra note __, at 476.

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Overall, the lack of consequences for Big Capital corrections when it comes to
investigations undermines the integrity of their financial system, leaving those reliant on their
private correctional companies vulnerable to abuse. Regulators must take steps to increase
transparency and accountability, including the imposition of more substantial penalties for
wrongdoing.
C. Destruction/Dismantling of Services for Profit
The speed in which Big Capital corrections often purchases and then dismantles or strips
companies providing services in the incarceration space means that many justice-involved
individuals pay the price, all while profits stream into the pockets of private equity fund investors.
Simply put, obtaining a good deal for investors does not mean that other stakeholders in
incarceration services are being equally well-served.389 Indeed, in the market for incarceration,
justice-involved individuals are almost always the loser.
As discussed in Part I, Big Capital has honed in on several different areas of private
corrections services, including juvenile justice, behavioral and psychiatric services, correctional
control, and correctional healthcare. The private equity firms, large corporations, and insurance
conglomerates in each of these areas have purchased and consolidated various smaller private
businesses to create far larger enterprises. This is cause for concern, especially given that Big
Capital has a history of purchasing companies, stripping them of assets while loading them with
debt, and extracting exorbitant fees before selling them for a profit.390 The investors make money,
but those under correctional control suffer.
Private equity firms in particular tend to buy up assets on the cheap, frequently targeting
companies that are struggling, and holding on to them for a while before selling them.391 When
corrections businesses are taken over by private equity firms, they inevitably raise prices while
providing fewer services and diminished quality of care.392
For example, Endeavor Capital purchased Aladdin Bail Bonds in 2012, along with Seaview
Insurance, a related insurer.393 After purchase, Endeavor expanded Aladdin to several more
states,394 spending an enormous amount of money in order to defeat California’s SB 10, which in
2018 granted judges much more discretion in setting terms of pretrial release for most defendants,
389

See Emily Stewart, What is Private Equity, and Why Is It Killing Everything You Love, VOX (January 6, 2020),
https://www.vox.com/the-goods/2020/1/6/21024740/private-equity-taylor-swift-toys-r-us-elizabeth-warren
390
See Matthew Clark, Members of Congress Investigate Private Equity Firms that Own Companies Providing
Prison Services, PRISON LEGAL NEWS (February 4, 2020),
https://www.prisonlegalnews.org/news/2020/feb/4/members-congress-investigate-private-equity-firms-owncompanies-providing-prison-services/
391
See Ben Protess and Isaac Bevacqua, A Primer on Private Equity, DEALBOOK: NEW YORK TIMES (June 25,
2016), https://www.nytimes.com/2016/06/26/business/dealbook/what-is-private-equity.html
392
See Fred Schulte, Sick Profit: Investigating Private Equity’s Stealthy Takeover of Health Care Across Cities and
Specialties, KHN (November 14, 2022), https://khn.org/news/article/private-equity-takeover-health-care-citiesspecialties/
393
See Ted Sickinger, ACLU Urges Oregon to Leave Bail Bond Industry Out of Pension Investments, OREGONIAN
(September 20, 2018), https://www.oregonlive.com/politics/2018/09/oregon_pension_managers_ask_to.html
394
See Sickinger, Bail Bond Industry, supra note __, at id.

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all but the ones charged with crimes of serious violence.395 This massive reduction of cash bail
was fiercely opposed by the bail bond industry, who backed a voter referendum to overturn the
law.396 Triton Management, also owned by Endeavor, was the largest contributor, donating almost
$800,000.397
Where did the money come from to fund the referendum to reinstate cash bail in California?
From the heavy costs imposed on criminal defendants by the bail bond companies (as discussed in
Part I), all of which eventually redounded to Endeavor. After the California bail bond reform law
was repealed,398 Endeavor ultimately sold its stake in Aladdin in 2020, having extracted as much
profit as was possible.399 Other major investors in bail bond companies have followed suit by
divesting, now that the industry is not reaping profits as it once used to.400
Likewise, HIG Capital has purchased and consolidated a large subset of private
correctional services companies, exploiting justice-involved individuals in areas as diverse as food,
communications, and healthcare.401 Through this consolidation, HIG’s correctional services
companies have taken over their markets while lowering the quality of the services and increasing
prices for the incarcerated and their families.402 Over the past 18 years, HIG has consolidated
prison telephony, correctional food services, and correctional health care, creating private
companies that dominate all three industries and have reshaped the correctional landscape.403 By
dramatically cutting staffing and increasing prices for the incarcerated, HIG has made the
correctional service industry simultaneously more profitable for its investors and worse for its
actual consumers, both in terms of financial costs and quality of service, whether food,
communication, or healthcare.404
Wellpath, HIG’s correctional healthcare company, made approximately $1.6 billion in
revenue as of 2019. The Wellpath healthcare actually provided to carceral institutions, however,
has been abysmal.405 The complaints about minimal or non-existent correctional staffing and
training, abusive practices, both physical and mental, and ever-increasing use of restraints,
395

See Michael Hiltzik, Facing Eradication, the Bail Industry Gears Up to Mislead the Public About Its Value, L.A.
TIMES (October 4, 2019), https://www.latimes.com/business/story/2019-10-04/hiltzik-bail-industry-eradication
396
Hiltzik, supra note __, at id.
397
Hiltzik, supra note __, at id.
398
See Scott Rodd, Cash Bail Survived the Ballot, But Reformers Say the Battle to End It Isn’t Over, CAP RADIO
(November 12, 2020), https://www.capradio.org/articles/2020/11/12/cash-bail-survived-the-ballot-but-reformerssay-the-battle-to-end-it-isnt-over/
399
See Laura Kusisto, Criminal-Justice Changes Are Squeezing the Bail-Bond Industry, WALL STREET JOURNAL
(February 21, 2020), https://www.wsj.com/articles/criminal-justice-reforms-are-squeezing-the-bail-bond-industry11582299332
400
Kusisto, supra note __, at id.
401
See David Dayen, Rollups: Private Equity Eyes Youth Treatment Centers as a Takeover Target, AMERICAN
PROSPECT (Feburary 17, 2022), https://prospect.org/power/rollups-private-equity-eyes-youth-treatment-centers-astakeover-target/
402
See Tim Requarth, How Private Equity Is Turning Public Prisons Into Big Profits, INVESTMENT WATCH BLOG
(May 7, 2019), https://www.investmentwatchblog.com/how-private-equity-is-turning-public-prisons-into-bigprofits/
403
Requarth, Public Prisons, supra note __, at id.
404
Requarth, Public Prisons, supra note __, at id.
405
See infra Part I, B and D.

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isolation, and neglect have continued to multiply over the years.406 Private equity firms like HIG
have extracted billions of dollars from these industries, funneling the money to dividend and
management payments.407 All of this is a “by-product of the private equity business model.”408
This is because private equity’s goals are to make large returns for investors.409
The merging of companies ends up creating even more consolidation.410 In part, this is
because Big Capital Corrections tends to operate by buying up and rolling up industries, to make
them hyper-efficient.411 Private equity firms, to take one example, do so by creating a platform
company and then purchasing several similar companies to run as one.412 For a company like HIG,
the goal is to double or triple profits from the initial investment to the sale of the newly
consolidated industry.413 Many of these profits are obtained by slashing staffing, which can be
some of the highest costs.414 By providing low wages for labor and cutting many staff positions,
private equity firm are able to extract high returns for their investors.415 In doing so, however, the
individuals who are served by private equity-owned correctional services companies suffer from
“inadequate staffing and training, substandard living conditions, physical and sexual abuse, and
the growing use of restraints and solitary confinement.”416
All this is simply seen as a regrettable byproduct of private equity rollups.417 These rollups, combining smaller and more fragmented regional companies into much larger conglomerates,
have dramatically reshaped the world of private correctional services.418 None of this has been for
the benefit of justice-involved individuals.
A. Purchasing political favorability
Part of Big Capital’s ability to quickly dominate the privatized corrections market is due
to their influence in Congress. The federal government’s extremely limited regulation of political
money essentially permits Big Capital to purchase influence over correctional policymaking.
Through campaign contributions and lobbying, private corrections companies can massage
criminal justice policy to eradicate any time of challenge to policies supporting mass
incarceration.419 For example, in the 2016 election cycle, Geo Group donated $1.2 million to
various politicians, and CoreCivic contributed $1.1 million to lobby against then-President

406

Dayen, Rollups, supra note __, at id
Dayen, Rollups, supra note __, at id
408
Dayen, Rollups, supra note __, at id.
409
Dayen, Rollups, supra note __, at id.
410
McLeod, supra note __, at id
411
McLeod, supra note __, at id
412
See Dayen, Rollups, supra note __, at id.
413
McLeod, supra note __, at id.
414
See Dayen, Rollups, supra note __, at id.
415
See Dayen, Rollups, supra note __, at id.
416
Dayen, Rollups, supra note __, at id.
417
See Dayen, Rollups, supra note __, at id.
418
See Requarth, Public Prisons, supra note __, at id.
419
See Christopher Hartley & Caroline Glessman, Prison Bed Profiteers: How Corporations Are Reshaping
Criminal Justice in the U.S., NAT’L COUNCIL ON CRIME & DELINQUENCY, 13-14 (May 2012).
407

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Obama’s effort to withdraw from private federal prisons.420 In 2022, CoreCivic spent $1.8 million
on federal lobbying, employing 12 lobbyists to push issues as varied as law enforcement and crime,
finance, and homeland security.421 Likewise, Geo Group spent $920,000 on federal lobbying in
2022, employing 12 lobbyists on pending bills such as the 2023 Homeland Security Appropriations
Act and Commerce, Justice, Science, and Related Agencies Appropriations Act.422
As for the private equity industry, it employs almost 200 lobbyists and has paid over $600
million in campaign contributions over the last ten years,423 making it highly unlikely that any real
scrutiny of their carceral strategies will happen. Because private equity firms do not directly lobby
any groups, leaving that to the companies they own and control, their power is largely anonymous,
allowing them to apply pressure to government under the radar.424
Wellpath, for example, makes considerable donations through the Wellpath PAC.425 Since
2015, the Wellpath PAC has given out over 100 payments to various groups and individuals,
including vendor fees, other PAC contributions, and donations to judicial, legislative, and
executive candidates at both state and local levels.426
Payment and attention to state legislatures also continues apace, greasing the wheels for
the continued takeover of the correctional market. In Texas, for example, a 2006 amendment to
the Texas Local Government Code allowed profits that Texas jails made from a lucrative private
phone provider contract to be spent on jailhouse operations, not inmate welfare, as the law had
formerly required.427
Individual private equity firms ensure that their specific companies can continue to operate
for profit in state correctional systems by focusing on not only state legislatures but also the state
executive. For example, Apax Partners, which owns electronic monitoring company Attenti,
utilizes widespread lobbying to ensure their products continue to be used in state corrections. In
Florida between 2017-19, Apax paid Southern Strategy Group, their registered lobbyist, up to
$30,000 for their executive branch work and between $20,000 and $50,000 for their legislative
branch work.428 In Michigan, Apax’s lobbyist spent nearly $48,000 total on the state’s legislature

420

See Sara Swann, For-Profit Prisons: Background, OPEN SECRETS (May 2017),
https://www.opensecrets.org/industries/background.php?cycle=2018&ind=G7000
421
https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2022&id=D000021940
422
https://www.opensecrets.org/federal-lobbying/clients/bills?cycle=2022&id=D000022003
423
See Private Equity and Investment Firms, OPEN SECRETS (Feb. 1, 2022),
https://www.opensecrets.org/industries/totals.php?cycle=2020&ind=F2600
424
See Ben Protess et al, How Private Equity Found Power and Profit in State Capitols, DEALBOOK: NEW YORK
TIMES (July 14, 2016), https://www.nytimes.com/2016/07/15/business/dealbook/private-equity-influence-fortressinvestment-group.html
425
See Michael Fenne, Private Equity Companies Rebrand Prison Healthcare Companies, But Care Issues Continue
17, PRIVATE EQUITY STAKEHOLDER PROJECT (November 2022), https://pestakeholder.org/wpcontent/uploads/2022/11/Wellpath_HIG_12-2022.pdf
426
See Fenne, supra note __, at 17.
427
Swanson & Katzenstein, supra note __, at 1250.
428
See Baker, Continuing Incarceration, supra note __, at 7.

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and executive branches during 2017 and 2018.429 Apax paid $30,000 to its Mississippi lobbyist in
2018.430
Such lobbying also extends to ensuring that FOIA laws continue to be inapplicable to
private corrections companies. Between 2007 – 2014, for example, Geo Group spent about $7
million successfully lobbying against legislation that would have subjected its prisons to FOIA
reporting obligations.431
Many of these Big Capital corrections companies have engaged in various forms of pay to
play to support their contracting efforts. Wellpath, for example, has a long and clearly reported
pay for play history using campaign contributions to secure government contracts, including
bribing a Norfolk, VA sheriff to ensure Wellpath got the contract to provide medical services for
Norfolk City Jail;432 and donating heavily to a Loudoun County, VA sheriff’s 2014 re-election
campaign to maintain their contract providing medical and mental health care to detainees at the
Loudoun County Adult Detention Center.433 Indeed, at least six Virginia sheriff candidates have
taken approximately $41,000 in contributions from Wellpath and its predecessors between 2007
and 2019.434
Lobbying is also a familiar path for bail bond insurance companies. In the lucrative bail
bond insurance industry, for example, there is an insurance industry group, the American Bail
Coalition (ABC), which has lobbied heavily against any attempts to eliminate or restrict for-profit
bail.435 ABC’s efforts were crucial in derailing California’s attempt to eliminate cash bail. In
2018, California passed a law replacing cash bail with a system that allowed judges, with help
from a computer algorithm, to determine flight risk.436 The new system no longer required cash
bail for most misdemeanors.437
Since this new law was directly against the financial interests of both the bail bond
providers and their insurance backers, ABC quickly went to work. ABC spent $2.8 million, raised
primarily from their enormous surety underwriters, to gather enough signatures for a ballot
initiative which would let voters to decide on the bill.438 After ABC spent over $7 million more,

429

See Baker, Continuing Incarceration, supra note __, at 7.
See Baker, Continuing Incarceration, supra note __, at 7.
431
See WAREHOUSED AND FORGOTTEN: IMMIGRANTS TRAPPED IN OUR SHADOW PRIVATE PRISON SYSTEM 58,
ACLU (June 2014), https://www.aclu.org/sites/default/files/assets/060614-aclu-car-reportonline.pdf
432
See Margaret Kavanaugh, Former Norfolk Sheriff Indicted on Public Corruption Charges, WTKR (October 25,
2019), https://www.wtkr.com/2019/10/24/former-norfolk-sheriff-indicted-on-public-corruption-charges
433
See David Reutter, Major Prison Health Care Companies Funnel Campaign Contributions to Sheriffs, Get
Rewards, Prison Legal News (March 3, 2020), https://www.prisonlegalnews.org/news/2020/mar/3/major-prisonhealth-care-companies-funnel-campaign-contributions-sheriffs-get-rewards/
434
See Aaron Morrison, Virginia Sheriff Seeking Re-election Took Campaign Donations from Healthcare Provider
For Jail He Oversees, THE APPEAL (Oct. 17, 2019), https://theappeal.org/virginia-sheriff-loudoun-county-campaignmoney/
435
See Scott & Barlyn, supra note __, at id.
436
See Scott & Barlyn, supra note __, at id.
437
See Scott & Barlyn, supra note __, at id.
438
See Scott & Barlyn, supra note __, at id.
430

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donated from bail bond companies and their sureties, to persuade voters to say no, the initiative
was defeated, keeping cash bail in place for most crimes within California.439
The bail bond industry has done similarly in other states to defeat the elimination of cash
bail, spending over $23 million on lobbying, campaigns and candidate contributions over the
past 10 years.440 ABC alone has 234 lobbyists working in 14 states.441
The time and money invested by Big Capital to ensure that it is awarded state and federal
corrections contracts is one reason why these private entities are so hard to eliminate.
B. Difficulty Divesting
Although much press has covered the recent divestment movement of retirement funds,
universities, and individuals from private prison stocks, a similar call for the public to divest from
private equity firms controlling privatized correction services will be far harder to achieve.
Eliminating such industries would affect not only private equity firms such as HIG Capital or DC
Capital, but also many retirees and pension owners from across the country.
This is because defined contribution retirement plans are now permitted to indirectly invest
in private equity companies,442 many of which provide private prison services. For example, in
2020, Vanguard began allowing institutional clients like pension funds to access private-equity
investments through HarbourVest Partners, an $85 billion, independent global private markets
investment firm.443 Fidelity and Schwab have done likewise.444 Courtesy of the Labor Department,
mutual plan sponsors are now permitted to allow private-equity investments within definedcontribution plans as part of professionally managed asset- allocation funds, generally known as
target-date funds.445
Given how hard private equity firms are pushing to be part of defined contribution
retirement plans, it seems inevitable that their reach will soon extend to many more 401(k)

439

See Scott & Barlyn, supra note __, at id.
See Scott & Barlyn, supra note __, at id.
441
Ciara O’Neill, Bail Bond Businesses Buck for Bookings, Appendix B: Bail Bond Companies’ Lobbyists, 20092017, FOLLOW THE MONEY (June 7, 2018), https://www.followthemoney.org/research/institute-reports/bail-bondbusinesses-buck-for-bookings
442
See DOL Creates Path for 401(k) Plans to Offer Private Equity Investment Options, NAT’L L. REV. (Sep’t 11,
2020), https://www.natlawreview.com/article/dol-creates-path-401k-plans-to-offer-private-equity-investmentoptions
443
See Debbie Carlson, As Vanguard Pushes into Private Equity, Some Fans Get Queasy, MARKETWATCH (Dec. 7,
2021), https://www.marketwatch.com/story/as-vanguard-pushes-into-private-equity-some-fans-get-queasy11638828074
444
See Brooke Southall, Vanguard Group’s Private Equity Retail Push Gets Real as It Launches Buyer-Beware
Products This Summer to its Brokerage Account as Prelude to Selection for ‘Suitability’ Through Its Ria, RIABIZ
(May 25, 2021), https://riabiz.com/a/2021/5/26/vanguard-groups-private-equity-retail-push-gets-real-as-it-launchesbuyer-beware-products-this-summer-to-its-brokerage-accounts-as-prelude-to-selection-for-suitability-through-its-ria
445
See Carlson, supra note __, at id.
440

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retirement accounts.446 In 2021, for example, the average state and local pension fund had 11.9%
of its assets allocated to private equity, a little more than double the amount allocated in 2011,
which was 5.6%.447 For example, CalPers, the California pension plan, one of the largest state
pension plans in the nation, is invested in HIG Europe, with $105,050,973 committed in state
funds.448 Likewise, in 2021, the New York State Teachers Retirement System allocated $200M to
HIG Capital.449 And a collection of diverse organizations including the Knight Foundation, the
Sherman Fairchild Foundation, the Ford Foundation, the Police & Fire Pension Association of
Colorado, and the Producer-Writers Guild of America Pension Plan all are invested in HIG.450
Many analysts argue that 401(k) participants should be able to likewise invest in PE
funds. In addition, the Retirement Savings Modernization Act has been proposed to incentivize
retirement investment in private equity funds.452 An amendment to ERISA, the bill would clarify
that fiduciaries managing defined contribution plans can invest in a variety of assets.453 It is likely
that the integration of private equity funds into 401(k) plans will continue to grow.454
451

The business of profitmaking can create some strange incentives for investors. For
example, the stock of private prison companies can fluctuate wildly due to the actions of day
traders, who often look for “heavily shorted stocks to pile into, forcing some [private prison]
investors to buy back stock for higher prices and causing share values to rapidly soar.”455 In other
words, money managers might hold onto private prison stocks hoping for a rise in prices from a
short squeeze.456 Although this might be profitable for individual traders and money managers,
and possibly even investors, it can be ruinous for those justice-involved individuals who suffer the
downstream consequences of money being extracted from these private correctional companies.
In addition, many investment and pension funds are invested in Big Capital corrections
companies, placing millions of dollars in holdings in these vehicles. Vanguard and Fidelity, the
two leading investment companies in the United States, own significant stock in CoreCivic and

446

See Larry Swedloe, Does Private Equity Belong in Defined Contribution Plans, WEALTH MANAGEMENT
(December 15, 2022), https://www.wealthmanagement.com/alternative-investments/does-private-equity-belongdefined-contribution-plans
447
See Lewis Braham, Private Equity Is Coming to 401Ks. Be Aware of the Risk, BARRONS (October 25, 2022),
https://www.barrons.com/advisor/articles/private-equity-401k-investing-risk-51666648855
448
See HIG Europe, Private Equity Fund Performance Review CalPers, (June 30, 2022),
https://www.calpers.ca.gov/page/investments/about-investment-office/investment-organization/pep-fundperformance
449
See New York State Teachers Retirement System allocates $200M to HIG Capital and $100M to Comvest Credit,
PELTZ INT’L INC. (April 27, 2021), https://peltzinternational.com/new-york-state-teachers-retirement-systemallocates-200m-to-hig-capital-and-100m-to-comvest-credit/
450
See Requarth, Private Equity, supra note __, at id.
451
Braham, supra note __, at id.
452
See Paul Mulholland, New Bill Seeks to Encourage 401(k) Investment in Alternative Assets, PlanAdviser
(October 5, 2022), https://www.planadviser.com/new-bill-seeks-encourage-401k-investment-alternative-assets/
453
Mulholland, supra note __, at id.
454
See Austin Ramsey, Private Equity Firms Are Winning the Fight for Your 401(k), BLOOMBERG LAW (January 31,
2022), https://news.bloomberglaw.com/daily-labor-report/private-equity-firms-are-winning-the-fight-for-your-401k
455
See Ganeva, supra note __, at id.
456
See Ganeva, supra note __, at id.

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GEO Group.457 Passively managed index funds, often incorporated into mutual funds or 401Ks,
own stock in Big Capital corrections companies as well.458 In addition to private investment,
twenty-four states own approximately $75 million in stock in Geo Group and CoreCivic as of
February 2019.459 The investors include state pension funds, teacher retirement funds, and public
employee funds in states such as Florida460 and Oregon.461 Many universities hold stock in Big
Capital corrections as well.462
It is becoming increasingly challenging to oversee, regulate, control, and divest from Big
Capital corrections. And yet continuing to let these private entities dominate the carceral world
leads to increased suffering, violence, and sometimes even death. In a world of ever-increasing
criminal punishment, allowing Big Capital corrections to impose public punishment, in the name
of the people, is antithetical to our basic understanding of justice.

PART IV: UNCONTROLLED PROFITEERING IN A WORLD OF PUBLIC PUNISHMENT
There is an essential disconnect when we allow Big Capital, whose focus is on creating
high returns from investments, to run essential public functions such as juvenile justice centers,
psychiatric hospitals, juvenile detention centers, prison healthcare, and so on. What does it mean
when we abandon a traditionally governmental role to not just private actors, but to companies
whose existence focuses on extracting profits for shareholders?
Big Capital’s move into administering fundamentally public amenities raises major issues
about the role that governments must play in providing public services, particularly “public safety
services.”463 With few regulatory barriers or constraints, private equity firms, large, publicly held
corporations, and global insurance conglomerates are gobbling up core functions of the criminal

457

See Morgan Simon, What Do Big Banks Have to Do with Family Detention? #FamiliesBelongTogether Explains,
FORBES (Sept. 18, 2018), https://www.forbes.com/sites/morgansimon/2018/09/25/what-do-big-banks-have-to-dowith-family-detention-families-belongtogether-explains/#538e5bec2b6a
458
The top ten mutual funds holding CoreCivic stock, for example, include iShares Core S&P Small Cap ETF ,
Fidelity Low Priced Stock Fund, Vanguard Small Cap Index Fund, Vanguard Total Stock Market Index, Vanguard
Small Cap Value Index Fund, iShares Russell 2000 ETF, Vanguard Extended Market Index Fund, and AMG River
Road Small Cap Value Fund.
https://money.cnn.com/quote/shareholders/shareholders.html?symb=CXW&subView=institutional
459
See Liz Farmer, These Pension Funds Invest Millions in Private Prisons, GOVERNING (Feb. 8, 2019),
https://www.governing.com/archive/gov-pension-funds-investing-millions-private-prisons.html
460
https://www.cnn.com/2022/08/17/politics/desantis-pension-rules-esg-investing/index.html
461
https://www.wweek.com/news/state/2019/07/17/oregons-public-pension-fund-invests-in-the-immigrationdetention-centers-that-residents-and-politicians-say-they-hate/
462
See Sarah Brodsky, Investors Question Private Prison Holdings, IMPACT INVESTIGATING EXCHANGE (Apr. 11,
2019), https://www.impactinvestingexchange.com/investors-question-private-prison-holdings/
463
See Danielle Ivory, et. al., When You Dial 911 and Wall Street Answers, DEALBOOK: NEW YORK TIMES (June 25,
2016), https://www.nytimes.com/2016/06/26/business/dealbook/when-you-dial-911-and-wall-street-answers.html

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justice system, alienating this primary responsibility away from public government, whether state,
local, or federal.464
Big Capital corrections companies should not be allowed to provide private services to the
criminal justice system, because allowing them to do so violates fundamental U.S. philosophies
about punishment and rehabilitation, creates conflicts of interest, and ultimately corrupts the
administration of justice. The role of the carceral state should be focused on holding individuals
accountable for their actions and providing them with opportunities for rehabilitation, not on
generating profits for private equity firm investors or mutual fund holders.
Additionally, allowing Big Capital to provide our core public correctional services violates
our fundamental philosophies about punishment. American theories of punishment are intended
to impose retribution, help reform, and rehabilitate justice-involved individuals, not used as a
vehicle for generating profit. There are numerous financial and philosophical reasons why private
equity firms should not be involved in providing essential public services, most of which go to the
critical values of local democracy and community adjudication.
A. Diminishes the Provision of Core Public Services
Big Capital corrections companies who have taken over essential public functions such as
carceral services are profiting from the public weal. The private correctional services industries
make their money off the backs of incarcerated individuals and those under correctional control.
Much of this profit is literally extracted from those who are incarcerated. Some profit is
made from prisoner labor, which enriches the two largest private prison companies.465 Some of
the profit is extracted from cutting staff, training, and salaries for behavioral and health services,
as discussed in Part I. And some of the profit is generated by providing overpriced and/or
substandard food, telephony, banking, monitoring, and electronic communications, both in and
outside of carceral institutions.466
Big Capital corrections profits from state and local taxpayers, who fund the carceral
state.
States spend enormous amounts of money on corrections, between $60 million to $8
billion a year.468 The budget for incarceration and correctional control comes largely from state
467

464

See Bill Schubart, Keep Private Investors Away from Nonprofits in Health Care, Journalism, Corrections, VT
DIGGER (December 4, 2022), https://vtdigger.org/2022/12/04/bill-schubart-keep-private-investors-away-fromnonprofits-in-health-care-journalism-corrections/
465
See Appleman, Bloody Lucre, supra note __, at 675.
466
See Requarth, supra note __, at id. See also Rupert Neate, Welcome to Jail Inc: How Private Companies Make
Money Off US Prisons, GUARDIAN (June 16, 2016), https://www.theguardian.com/us-news/2016/jun/16/us-prisonsjail-private-healthcare-companies-profit
467
See Mayra R. Valladares, Private Equity Executives Should Not Profit from The Misery of Prisoners and Their
Families, FORBES (October 1, 2019), https://www.forbes.com/sites/mayrarodriguezvalladares/2019/10/01/privateequity-executives-should-not-profit-from-the-misery-of-prisoners-and-their-families/?sh=6f9959803edd
468
See Ronnie Stephens, Annual Prison Costs a Huge Part of State Federal Budgets, INTERROGATING JUSTICE
(February 16, 2021), https://interrogatingjustice.org/prisons/annual-prison-costs-budgets/

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taxpayers.469 The taxes collected by the state usually come from personal income taxes and sales
taxes, both primarily provided by in-state residents.470 Because of this, every state’s citizens have
a stake in how and on what the state budget is spent.471 The same system applies to the federal
budget as well, with the monies coming from federal government tax collection.472 Thus the bulk
of the profit flowing into Big Capital coffers comes directly from the wallet of the average
taxpayer.
When Big Capital corrections provides the bulk of public correctional services, this creates
a serious conflict of interest, potentially corrupting the fair administration of justice. Private
corrections entities are often influenced by their financial interests when making decisions about
the release of inmates, rather than considering what is in the best interests of the individuals or
society in general. This can result in a biased and unfair system that disproportionately harms
marginalized communities and perpetuates systemic racism.
Big Capital corrections also has an obligation to their investors to be profitable. This
obligation, however, does not square with the government’s obligation to its those it imprisons, as
well as to wider society.473
Accordingly, a core public service – incarceration and punishment – is now often
controlled by profit-focused private entities, who provide substandard services with seemingly no
remorse. Because mass incarceration is both so poorly regulated and so incredibly remunerative,
these private correctional companies have little to no incentive to improve their services,
notwithstanding the tremendous toll it takes on justice-involved individuals and their families. Big
Capital corrections has little motivation to act in the public interest, despite extracting their profits
from the community they are supposed to serve.
B. Democratic concerns
Our normative theories of democracy and democratic deliberation have always included
public involvement in all aspects of criminal justice.474 It is the community’s shared principles of
justice that make the rule of law both workable and legitimate.475 In a liberal democracy,
legitimacy originates both from the rule of law and from the will of the people.476 Criminal law in

469

Policy Basics: Where Do Our State Tax Dollars Go, CENT. BUDGET & POLICY PRIORITIES (July 25, 2018),
https://www.cbpp.org/research/state-budget-and-tax/where-do-our-state-tax-dollars-go
470
State Budget Basics, CENT. BUDGET & POLICY PRIORITIES (MAY 24, 2022),
HTTPS://WWW.CBPP.ORG/RESEARCH/STATE-BUDGET-AND-TAX/STATE-BUDGETS-BASICS
471
State Budget Basics, supra note __, at id.
472
See How Much Has the U.S. Government Spent This Year, FISCAL DATA, https://fiscaldata.treasury.gov/americasfinance-guide/federal-spending/
473
See Hana Kiros, ‘A Slow Motion Version of the Death Penalty’: Why Harvard Shouldn’t Invest In Prisons,
HARVARD CRIMSON (March 22, 2022), https://www.thecrimson.com/article/2022/3/22/kiros-private-prisons/
474
See Laura I Appleman, Cashing in On Convicts: Privatization, Punishment, and the People, 2018 Utah L. Rev.
579, 621.
475
See LAURA I APPLEMAN, DEFENDING THE JURY: CRIME, COMMUNITY & THE CONSTITUTION 187-90 (2015)
476
Sigler, supra note __, at 156.

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particular helps uphold the moral agreement needed to maintain social norms in our diverse
society.477
This delicate balance is completely upended when Big Capital corrections is imposing
punishment upon justice-involved individuals. Instead of decision-making deriving from the will
of the people, or even the hand of the government, we get “ad hoc judgments of private actors,”
who are largely uninterested with public concerns.478 Competitive profit seeking, eliminating
competition, and meeting expectations of heightened returns over a short time period rarely tend
to foster democratic legitimacy in the correctional context.
Allowing Big Capital to mint money from their monopoly of correctional services
essentially changes the relationship between state and society in the criminal context.479 This is
because outsourcing this work to private, profit-seeking companies removes the essence of being
under correctional control from the local and state government, a task specifically delegated from
the local community.480 Instead, it places these critical services in the hands of an industry that is
solely focused on extracting profit, and has little interest in inculcating the public norms that
underlie our basic assumptions of criminal justice.481 By entrusting the decision-making and
implementation of punishment to entirely private entities, we cede the authority over a critical
societal function: the act of punishment.
When carceral institutions and alternative corrections centers contract out essential services
to Big Capital corrections, those private companies have virtually no accountability to democratic
concerns.482 Given the distance and disconnect between the boardroom and the carceral site the
public aspect to such services and the real needs of incarcerated people, families, and
communities—have been virtually eliminated.483
The regulation and administration of carceral institutions has long been a public task,
because the political system currently assigns sole control over the legitimate use of force to the
government.484 Using private, for-profit actors to administer correctional services can undermine
the legitimacy of government action, since the public may suspect that the focus of such entities is
private revenue-making, rather than the traditional purposes of criminal justice.485
Moreover, for a government to retain legitimate accountability for its correctional system,
it must be able to “reclaim any privatized portion of its own prison system.”486 To do this, of
477

See Laura I Appleman, Local Democracy, Community Adjudication, and Criminal Justice, 111 NORTHWESTERN
L. REV. 1413, 1425 (2017).
478
Sigler, supra note __, at 156.
479
See Ahmed A. White, Rule of Law and the Limits of Sovereignty: The Private Prison in Jurisprudential
Perspective, 38 AM. CRIM. L. REV. 111, 112 (2001).
480
See White, id. at 119.
481
See White, id. at 119.
482
See Fenne, supra note __, at 22.
483
See Fenne, supra note __, at 22.
484
See Martha Minow, Public and Private Partnerships: Accounting for the New Religion, 116 HARV. L. REV.
1229, 1234 (2003).
485
Minow, supra note __, at 1234.
486
Richard Harding, Private Prisons, 28 Crime & Justice 282, 284 (2002).

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course, it needs to have the ability to step in and take over if there is a problem.487 This can only
be done if the government provides direct services to at least some of its correctional institutions.488
Completely outsourcing such services to Big Capital corrections thus cuts the link between a
government’s democratic legitimacy and the workings of its penal system.
C. Who Imposes Punishment ?
We have a local, publicly funded system of criminal prosecution, and only local, public
punishment should result from that. As Mary Sigler argued, “Punishment . . effects a form of
community censure that takes its meaning from the community’s values and conventions.”489 As
detailed above, Big Capital corrections’ refusal to open up their processes or practices bypasses
local control of punishment, something that is indivisible from our democratic decision-making.490
The power to punish and incarcerate are normally reserved to the local government.491
While delegating punishment and imprisonment is technically legal, do we truly want to delegate
the role of incarcerating, punishing, deterring, and rehabilitating justice-involved individuals to
private companies primarily focused on reaping profits ? Given how long incarceration can last
for many individuals—from pre-trial detention all the way to post-release correctional control—
it is important that the bodies imposing the state-sanctioned punishment speak with the voice of
the people.
In a liberal democracy, punishment must be inherently public, since it is inflicted for public
wrongs in the name of the people and the community. By outsourcing some of the critical roles of
correctional facilities to Big Capital corrections, the state is allowing a core state responsibility to
be placed in private hands.492 This is because all correctional personnel, from healthcare providers
to psychiatric orderlies to alternative corrections staff, have considerable discretion and power in
doing their jobs.493 This power can directly affect not just an inmate’s quality of life, but also
whether they live or die. Such fundamental rights as safety, liberty, and life are ‘‘inherently
governmental,’’ because those decisions reflect the power of the people.494 Such power should
never be subcontracted outside to private, for-profit parties.
By allowing Big Capital to provide key correctional services, state and federal
governments are transforming criminal justice into yet another commodity.495 Using private
correctional service companies instead of the state to impose public punishment means that the

487

See Harding, supra note __, at id.
See Harding, supra note __, at id.
489
Mary Sigler, Private Prisons, Public Functions, and the Meaning of Punishment, 38 FL. ST. L. REV. 149, 173
(2010).
490
See Appleman, Cashing In On Convicts, supra note __, at 626.
491
See Appleman, Cashing In On Convicts, supra note __, at 630.
492
See Sigler, supra note __, at
493
See Sigler, supra note __, at 175.
494
See Alfred Aman, Private Prisons and the Democratic Deficit 7 (March 9, 2010),
http://ssrn.com/abstract=1567129
495
See Sigler, , supra note __, at 176.
488

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public is unknowingly relinquishing a “momentous social task: depriving other human beings of
their liberty on a daily basis.”496 We do so at our peril.

CONCLUSION
It is hard to find a more destructive force than Big Capital corrections.497 Private equity
firms, large publicly traded corporations, and global insurance conglomerates all invest in and
profit from the private corrections industry, which continues to fuel disturbing and degrading
treatment within our system of mass incarceration. Big Capital’s overwhelming focus on profits
has led to violence, abuse, and death within the carceral system, perpetuating systemic injustices
on justice-involved individuals, their families, and their communities. Continued Big Capital
participation in public punishment and criminal justice harms both those in the system and society
as a whole.
What can be done? As I have argued above, a major problem with the current system is the
virtual lack of regulation of private correctional services. One way to maintain some control would
be to require much stricter oversight of any for-profit entity working or contracting in the carceral
system. Although this would be difficult to achieve, it is not impossible; under the proposed
H.R.5853 - Private Prison Information Act of 2021, all state or local correctional facilities, private
or public, would be required to provide information under the Freedom of Information Act if they
held federal prisoners.498 This would grant us some small measure of transparency into workings
of Big Capital’s privatized correctional services. Of course, given that most criminal punishment
is state punishment, this would only affect a small slice of the carceral world.
The ultimate solution may be to ban the private, for-profit world entirely from corrections.
But as detailed above, this would be extremely difficult, given the level of investment the average
American has made in Big Capital corrections, often unwittingly, through their mutual funds,
pensions, and other investments. Only through a strategy of major divestment and financial
separation from private corrections companies will this problem ever be solved.

496

See Jean Casella and James Ridgway, Outsourcing Punishment and the Privatization of Justice, SOLITARY
WATCH (August 12, 2010), https://solitarywatch.org/2010/08/12/outsourcing-punishment-and-the-privatization-ofjustice/
497
Dayen, Private Equity’s Money Spigot, supra note __, at id.
498
H.R. 5853, The Private Prison Information Act of 2021, https://www.congress.gov/bill/117th-congress/housebill/5853?s=1&r=92

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