Subject: Re:private prisons
From: PSL (Paul.Leighton@emich.edu)
Date: Sat Apr 01 2000 - 20:49:12 CST
Some interesting developments on private prison front. Corrections Corp
of America and CCA's Prison Realty Trust have a serious cashflow problem
and is in default of the terms of some of its credit lines. According to
the company's press release, independent auditors have expressed
"substantial doubt about the ability of either company to continue as a
going concern". We can't count them out yet, as there are some
investment proposals, but we can hope.
The text below is what I wrote for my website, where there are 15 links
embedded in it to relevant sources.
http://www.paulsjusticepage.com
PaulsNewswire 3/31/2000: Shares of the Corrections Corp of America, the
industry leader in private prisons, hit a new 52 week low of $2.75 a
share and down from the 52 week high of $22.37. CCA had spun off, then
later merged into, Prison Realty Trust (NASDAQ symbol PZN) - a Real
Estate Investment Trust that is exempt from corporate taxes if it meets
certain conditions. Prison Realty Trust failed to meet those conditions
because of cash flow problems, has posted a $62 million loss for 1999
and is in default on the terms of its credit facility.
Wall Street was unimpressed at the company's scheme to issue junk bonds.
Investors are angry that PZN lost its REIT status and the related
dividend; they are filing class actions suits against Prison Realty for
false claims on Securities and Exchange Commission documents.
Meanwhile, Prison Realty just paid a dividend on their preferred stock
(belonging to executives and institutional partners), which sent the
common stock to new lows as shareholders realized they are not likely to
see any dividends. Company audits released today expressed increasing
doubt on the company's solvency and sent the stock to yet another 52
week low.
In related news, Charles Thomas is before the Florida Ethics Commission
for conflict of interest issues relating to his being on the Prison
Realty Trust Board of Directors, a Florida government committee that
oversees private prisons, and doing research (in which his affiliation
is a University of Florida professor) showing private prisons to be
cheaper and have lower recidivism. According to a newspaper account, the
Ethics Commission rejected as ''pitifully low" a settlement agreement
that would have required him "to pay a $2,000 fine for a conflict of
interest that brought him millions of dollars in compensation and
investment gains from private prisons companies that had funded his
research."
The US has more inmates per capita than any other nation and we simply
do not need prisons here so badly that we should put up with companies
like Prison Realty. Let's pull the plug on the perpetual prisoner
machine, say no more prison construction and ...
NO MORE PRIVATE PRISONS
RANDOM (NON ESSENTIAL) OBSERVATION
According to information over at GreatDomains.com, 'lesbian' is the 3rd
most used word to search the internet (and 'nude girls' is #6). The
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-- is microsoft putting subliminal messages in windows? you won't see it on the X files, but you can read about it on http://www.paulsjusticepage.comDr Paul S. Leighton Dept of Sociology, Anthropology & Criminology 712 Pray Harrold, Eastern Michigan University Ypsilanti, MI 48197 734/487-0012
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