Why is a Private Prison Corporation Doing Business with the IRS?

Private prison corporation CoreCivic kicked off its latest quarterly earnings report with the obvious highlights: new contracts to, as they put it, “care for” prisoners in Arizona, Ohio, and three other states.

But they buried the lede.

CoreCivic now owns what appear to be its first buildings that have nothing to do with incarceration. In September, the publicly traded corporation that owns and operates prisons, jails, immigration detention centers, and halfway houses bought properties in North Carolina and Georgia that are leased to the Internal Revenue Service (IRS) and Social Security Administration (SSA).

In their words, the deals are part of a plan to make “additional investment via acquisition in mission-critical government real estate asset classes outside of our traditional correctional detention residential reentry facilities.”

In other words, CoreCivic wants to be a landlord of all types of government buildings.

We shouldn’t be surprised. If you recall, CoreCivic used to be Corrections Corporation of America, which rebranded last October not only to outrun bad PR but also to provide a “wider range of government solutions” and “better the public good.” And several years ago, along with primary competitor GEO Group, they changed their corporate legal status to a real estate company—technically, a Real Estate Investment Trust (REIT)—to score a massive tax break. In 2015 alone, the corporations used their REIT status and other avenues to avoid a combined $113 million in federal income taxes.

Private prison corporations have long seen the writing on wall as more and more people wake up to the heartbreaking fact that the U.S. imprisons more people than any other country—by far. GEO Group has for years boosted spending beyond prison walls, on smaller companies that provide ankle monitors, halfway houses, substance abuse treatment, and even faith-based services.

But CoreCivic’s latest move highlights the newest private prison trend, towards building, owning, and leasing real estate—and they’re selling it hard. They’ve almost got Kansas convinced to let them build and maintain a new prison that they can lease to the public, despite it being the more expensive way to go.

In the end, every public dollar that goes to private prison corporation executives and shareholders is one less that can be spent on what our communities really need. CoreCivic and GEO Group don’t deserve our business.

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