Private prison operator holds close ties with lawmakers as it sidesteps state law

The corporate office of CoreCivic, a private prison contractor, in Brentwood, Tenn. The company is using a loophole in state law to scoop up government contracts. (Photo: John Partipilo)

Flush with donations from CoreCivic, Tennessee’s lawmakers have spent the past three years enacting tough-on-crime policy that could help the state’s private-prison operator in spite of complaints that profiting on the backs of inmates is bad business.

Moves to create laws that require teenagers to be tried as adults for certain crimes and remove rewards for prisoners’ good behavior are likely to lead to higher incarceration rates, critics say.

The changes are expected to put Brentwood-based CoreCivic, a national prison operator, in better position to continue to exploit a little-known state loophole that allows it to run four Tennessee prisons.

Privately-run prisons have been a point of contention in Tennessee since the mid-1980s, so much so that state law prohibited more than one state contract with Corrections Corporation of America — the company’s name until rebranded as CoreCivic in 2016 — when it obtained its first Tennessee deal with the help of Republican and Democratic state lawmakers.

The company contracts with Tennessee to run one of its prisons and has deals with two local governments to operate three other state prisons.

The agreement has allowed CoreCivic to circumvent the original state law, enabling it to make $233 million last year from its Tennessee prison contracts.

Overall in 2023, CoreCivic generated about $1.9 billion in revenue through state and federal contracts, though it recently lost a deal in Texas to run an immigrant holding facility there.

The company continues to hold a close relationship with Tennessee lawmakers, mainly Republicans, giving to them lavishly over the last 15 years.

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CoreCivic’s CEO, Damon Hininger, spoke at the most recent state Republican annual fundraising dinner, making overtures for a gubernatorial run in two years.

CoreCivic also was one of the main sponsors at Tennessee’s recent Republican National Convention delegate dinner in Milwaukee. U.S. Sen. Marsha Blackburn, Senate Majority Leader Jack Johnson of Franklin and House Speaker Cameron Sexton of Crossville were among the speakers at the dinner.

Other sponsors of the RNC dinner were FedEx, Lee Beaman and Julie Hannah, The Coggin Group, Eastman Chemical and Cash Express founder Garry McNabb.

Sexton was the main proponent of harsher sentencing laws that reduced early releases for inmates who showed good behavior and often got out after doing only 30% of their time. The Crossville Republican also is sponsoring a constitutional amendment that would eliminate bail for numerous violent offenses, requiring defendants in most criminal cases to stay in jail until their court date.

The company has donated $44,500 to Sexton since he first came into office in 2011.

How the loophole works

CoreCivic contracts with Hardeman County in West Tennessee to run Hardeman County Correctional Facility at a rate of $51 million annually, Whiteville Correctional Facility for $46.4 million a year and with Trousdale County to operate Trousdale Turner for $77.7 million annually.

Those entities, in turn, contract with the state for prison services.

CoreCivic’s only contract with the Tennessee Department of Correction is for $47.8 million annually to run South Central Correctional Facility in Clifton.

The department received approval from lawmakers last year to increase payments to CoreCivic with the stamp of approval from Tennessee Department of Correction Commissioner Frank Strada who told the Lookout he is satisfied with the company’s efforts to improve their policies and operations.

The state boosted its payout to CoreCivic by $7 million despite a bad audit that showed persistent personnel shortages, the second weak report it received from the Tennessee Comptroller’s Office in the last few years. For instance, the prison company sustained a 146% turnover rate in 2023 because of difficulty hiring correctional officers, making it harder to monitor prisoners and avert safety risks.

Lawmakers approved the increase even though CoreCivic paid $20 million in liquidated damages in recent years for failing to meet contract requirements.

Parents of three inmates who died in CoreCivic-run prisons in a four-month period in 2021 accused the private company of prioritizing profits over safety in a lawsuit against the state.

Yet Brian Todd, a spokesperson for CoreCivic, said the partnership with the state has been a success.

“We’re proud of the innovative solutions we’ve provided to those individuals that the Tennessee Department of Correction has entrusted to our care, which help prepare them to successfully return to their communities, while also saving taxpayers money,” Todd said.

Todd did not specify what types of savings the company makes for the state. He pointed out the state determines prison capacity and operational needs and works with the governor’s office and lawmakers to address them.

Taking aim at CoreCivic

Private prisons leave a bad taste with many members of the state Legislature, even though many prefer not to speak about the situation publicly.

Democratic state Rep. G.A. Hardaway of Memphis has opposed CoreCivic’s arrangements for years.

“I’m not comfortable with anybody making money off of prisons. Any time you have a profit incentive, that’s directly counter-intuitive to making the best decisions for your clients who are a combination of the inmates and the public,” Hardaway said.

Hardaway contends “justice” should be paid for and managed by the public/government.

“That’s the only way it’s gonna be balanced,” he said. “You can’t always make decisions that are going to be profitable for the management. That’s why you’ve gotta keep private management out of it.”

Democratic state Rep. Justin J. Pearson of Memphis argues that several criminal justice bills approved this year are “intended to fund the corporations who are profiting off of the backs of Black folks, white folks, poor folks and everyone in between.”

I’m not comfortable with anybody making money off of prisons. Any time you have a profit incentive, that’s directly counter-intuitive to making the best decisions for your clients who are a combination of the inmates and the public.

– Rep. G.A. Hardaway, D-Memphis

While state officials continue pouring money into CoreCivic contracts, Pearson argues the “litany of unjust laws” won’t get at the root causes of crime or lead to rehabilitation.

“Our state should invest in its people and our future, not promulgate destructive policies that only incarcerate,” he said.

Both parties brought CoreCivic in

Despite criticism from today’s Democrats, both parties played a role in the company’s ascension in Tennessee, though Republicans have been its biggest boosters.

Founded as Corrections Corporation of America in the early 1980s, it obtained its first contract with the state in 1985 under Lamar Alexander, the former Republican governor and eventual U.S. senator. His wife was a stockholder in the company, as was then-House Speaker Ned Ray McWherter, a Democrat who in 1999 became a board member of Prison Realty Trust, the holding company for CoreCivic, years after leaving office.

When Republican Don Sundquist became governor in 1994, the company made more inroads around 1995 but had to find a way around the state law allowing only one contract with a private prison operator.

It started working with local governments.

Access through donations

CoreCivic and its predecessor have long been a financial backer of the state’s top leaders, and the practice continues.

Prison Legal News reported that during the Sundquist era, company executives gave nearly $60,500 to state lawmakers, $38,500 of that to Sundquist’s election campaign in 1994.

At the time, House Democratic Caucus Chairman Randy Rinks received $2,000, and Democratic Sen. Jim Kyle of Memphis, chairman of the Select Oversight Committee on Corrections, received $1,350 from executives, according to a Prison Legal News article.

Sundquist supported the local government deal in 1995 allowing CoreCivic to contract with Hardeman County for a 1,540-bed facility paid for with $47 million in municipal bonds backed by the state. The former governor’s chief of staff, Peaches Simpkins, also reportedly held company stock in that era, and House Speaker Jimmy Naifeh’s wife, Betty Anderson, was a company lobbyist, Prison Legal News reported.

The relationship between CoreCivic and top lawmakers remains tight.

Since 2009, the company has given $138,000 to Republican Party and caucus political actions committees and $7,500 to the Tennessee Democratic Caucus.

Gov. Bill Lee has been its biggest beneficiary over the last few years, receiving $69,000, including a donation to his inaugural funds, according to a Tennessee Lookout analysis of campaign finances.

But Lee has not always been a proponent of harsher sentencing, running on a criminal justice reform platform in 2018. He did not support the law making it harder to be released for good behavior, but instead of vetoing it, he let it become law without his signature.

Other top recipients since 2009 include

• Lt. Gov. Randy McNally, an Oak Ridge Republican, $65,000 over the past 15 years
• Senate Republican Caucus Chairman Ken Yager of Kingston: $17,500
• Republican Sen. Ferrell Haile of Gallatin: $14,500
• House Republican Majority Leader William Lamberth of Portland: $14,250
• Rep. Johnny Shaw, a Bolivar Democrat, $13,500. Two prisons are located in his West Tennessee district.
• Senate Republican Majority Leader Johnson of Franklin: $9,000
• Republican Rep. Bud Hulsey of Kingsport: $8,500
• Republican Sen. Joey Hensley of Hohenwald: $8,000
• Republican Sen. Bo Watson of Hixon: $7,500,
• Republican Sen. Ed Jackson of Jackson: $7,200,
• Republican Rep. Mary Littleton of Dickson $7,000.

CoreCivic’s spokesman points out the company supports local elected officials “in accordance with all applicable laws. Any insinuation otherwise is false.”

Adam Friedman contributed to this report.

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