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Saturday, April 27th, 2013

The Corrections Corporation of America’s Latest Shady Business? Tax Evasion

Author:     KRISTEN GWYNNE
Source:     AlterNet (U.S.)
Publication Date:     26-Apr-13
 Link: The Corrections Corporation of America’s Latest Shady Business? Tax Evasion
Stephan:   This report is a trifecta of corrupted capitalism. It starts with the latest in the Prison Privatization trend, followed by the New American Slavery trend. In every way that one can measure these prison companies they consistently show what I can only characterize as depravity. Consider for a moment the requirement that private prison companies be assured by the government paying them -- that is to say you and me -- that they will keep them at least 90 per cent stocked at all times. Just contemplate the implications of that sentence. Then it moves on to the corruption of real estate investment trusts (REIT), the latest in the Deregulation trend.

Earlier this year, the Corrections Corporation of America offered to take over state-run prisons, provided that they remain 90% stocked full of inmates ready for cheap labor. Now, the CCA — which runs 44 private prisons and detention centers across America — is gearing up to avoid paying taxes by claiming to be a real estate investment trust (REIT). The CCA is using the new trend in corporate maneuvering to basically claim that money its collects from the government to hold prisoners is just cash for rent.

The Internal Revenue Service has quietly approved the change, and the shady move is expected to save the CCA $70 million in tax dollars in 2013.To save millions, however, requires no changes to business as usual for the CCA. The chief executive of the Corrections Corporation, Damon T. Hininger, told investors in February that the new arrangement should help the CCA achieve its goal of ‘housing more and more population for federal, state and local levels as they grow or deal with overcrowding.

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