There are two issues that were brought up at the HOA meeting with ICE and CCA that should be discussed. The first is taxes. CCA should contribute their fair share of property taxes, a good portion that would go to our local schools. CCA says they fully expect to pay their obligation of taxes once the facility is up and operational. Our research has shown that if past dictates present, CCA will use one or more means of tax avoidance to get out of this obligation.
One example is where they’ve used real estate tax shelters, until they became a hindrance to their growth. Another time, in 2002, the federal government sued CCA for $54 million after they discovered CCA was using tax loopholes to avoid paying federal taxes. In another example, in Cleveland, Ohio, the city and county gave CCA more than a 50% tax abatement for 3 years, but that wasn’t enough for CCA, they wanted more ; the county said no and CCA pulled out of the contract because they didn’t want to pay their share of local taxes. At a facility in KS CCA paid their taxes under protest, arguing that 90% of the prison should be reclassified as residential.
The second and most disturbing issue is town indemnification. CCA told us the town will be fully indemnified in the new contract. This is the insurance we need as a town to protect us from the liability and costs that would come from a prison riot or an escape. Without insurance, we are liable. CCA is not being honest with us. The truth is they won't – and can't indemnify us. The claims can be hard to enforce and the insurance may be unobtainable. There is growing evidence that private prison companies may not be able to secure full liability insurance for themselves, much less their jurisdictions.
In one SEC filing, Cornell Corrections was unable to secure insurance for some business risks including riots, civil commotions and the acts of an escaped offender. Hamilton County TN called for $25 million insurance policy to protect the county from liability. After the contract had been signed, the county learned CCA did not have this amount nor were they able to secure it through an insurance company. In another example, the District of Columbia sued CCA for breach of contract when they found out they weren’t covered either.
A Private prison will only increase indemnification costs or hold harmless agreements between the town and CCA. These may not be enforceable and the ultimate liability will lie with the town and taxpayers.
Our town should not be putting us in this kind of position where we may lose money or be held liable for costs incurred from an escape or injury/death related to that escape. No matter what they tell us, chances are CCA will not be able to indemnify our town. And neither will anyone else. Our mayor, Town Council and Town Attorney should be protecting this town and its residents, instead they’re throwing us under the bus.
ACLU Foundation of Chicago. “Prisons for Profit: A Look at Prison Privatization.” 16 January 2012