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CCA Objects to Shareholder Resolution Filed by Former CCA Prisoner, PLN Associate Editor
When PLN associate editor Alex Friedmann was released from prison in November 1999, he had served six of the ten years he spent behind bars at the South Central Correctional Center in Clifton, Tennessee, a private prison operated by Corrections Corporation of America (CCA).
Following his release he became a CCA shareholder, purchasing one share of stock so he could attend the company’s annual shareholder meetings and ask questions of CCA’s executives as a shareholder of record. [See: PLN, Sept. 2008, p.40].
Friedmann bought an additional 190 shares of CCA stock in 2010; by holding the shares for a year he was eligible to introduce a shareholder resolution, which he did in November 2011. His resolution called for CCA’s Board of Directors to produce bi-annual reports “on the Board’s oversight of the company’s efforts to reduce incidents of rape and sexual abuse of prisoners housed in facilities operated by the company. The reports should describe the Board’s oversight of the company’s response to incidents of rape and sexual abuse at the company’s facilities, including statistical data by facility regarding all such incidents during each reporting period.”
“The purpose of the resolution is twofold,” said Friedmann. “First, to ensure that shareholders know the scope of the problem of sexual abuse at CCA’s facilities, the risk that problem poses, and what the company is doing to mitigate that risk. Also, if CCA knows it will be accountable to shareholders, then the company will have an incentive to take actions to reduce sexual abuse of prisoners, particularly by CCA employees – which is a significant problem.”
CCA filed a formal objection with the U.S. Securities and Exchange Commission (SEC) seeking to exclude the shareholder resolution, saying the company would voluntarily provide reports related to prisoner rape and sexual abuse. However, the reports that CCA proposed to produce would be issued just once a year and would only include data from a “sample” of CCA’s facilities. Friedmann argued in his response to the SEC that such reports would fail to substantially implement the resolution.
“If CCA is serious about reducing rape and sexual abuse of prisoners then they wouldn’t offer to provide incomplete, untimely and less frequent reports,” Friedmann stated. “If Walmart or McDonald’s employees were raping or sexually abusing customers on a consistent basis, there would be a public outcry. Equally, there should be outrage when CCA’s private prison employees rape or sexually abuse prisoners.”
Friedmann noted in the resolution’s supporting statement that the Department of Justice had found in a 2008 report that a CCA-operated facility had the highest rate of sexual victimization among over 280 jails surveyed. [See: PLN, May 2009, p.1]. Two states, Kentucky and Hawaii, removed their female prisoners from CCA’s Otter Creek facility in Kentucky following a sex scandal involving at least six CCA employees. [See: PLN, Sept. 2011, p.16; Oct. 2009, p.40]. Further, in October 2011 the ACLU of Texas filed a class-action lawsuit alleging that immigrant detainees were sexually assaulted by a CCA guard at the company’s T. Don. Hutto facility. [See: PLN, Dec. 2011, p.42].
In his response to CCA’s objections, Friedmann noted that he had “specifically raised concerns about rape and sexual abuse in the company’s facilities at two previous shareholder meetings, and discussed this issue with one of the company’s Board members. It is a direct result of the insufficient efforts of the company and its Board to reduce incidents of rape and sexual abuse at CCA facilities” that led him to introduce the resolution.
CCA also argued in its objections filed with the SEC that the shareholder resolution was a “personal claim or grievance,” noting that Friedmann opposes prison privatization and has been involved in lawsuits against the company.
“It’s true that I oppose incarcerating people for corporate profit,” Friedmann admitted. “Regardless, so long as we have private prisons, they need to be run in a manner that minimizes incidents of rape and sexual abuse of prisoners, particularly by private prison employees. I have no ‘personal claim’ or ‘grievance’ in wanting to reduce rape and sexual abuse at CCA facilities, other than the concern that all people should share in wanting to reduce such incidents – a concern that apparently is not shared by CCA.”
Lastly, CCA objected to Friedmann’s shareholder resolution by arguing that it involved “ordinary business operations” that were not appropriate for shareholders. “Certainly, the company cannot contend with a straight face that the rape and sexual abuse of prisoners is an ‘ordinary business matter’ rather than a significant social and public policy issue,” Friedmann countered in his response.
On February 10, 2012, the SEC rejected CCA’s objections to the shareholder resolution. The SEC wrote that it was “unable to conclude that Corrections Corporation of America has met its burden of establishing that it may exclude the proposal” based on the arguments raised by the company. Thus, the resolution will be included in CCA’s proxy materials filed with the SEC and sent to shareholders in advance of the company’s next annual meeting, to be held in mid-2012.
“I expect that CCA’s Board of Directors will recommend voting against the resolution in CCA’s proxy statement,” Friedmann said. “That would further demonstrate CCA’s reluctance to address the serious problem of rape and sexual abuse of prisoners housed in the company’s for-profit prisons.”
A number of organizations have voiced support for Friedmann’s shareholder resolution, including the National Center on Domestic and Sexual Violence; the National Organization for Women; the National Center for Transgender Equality; Citizens United for the Rehabilitation of Errants (CURE); Justice Fellowship, the public policy arm of Prison Fellowship; the National Lawyers Guild; the National Council of Women’s Organizations; Detention Watch Network, a coalition involved in immigration detention issues; the Partnership for Safety and Justice; Justice Policy Institute; and Enlace, an alliance of worker centers, unions and community organizations that works against corporate abuses.
Meanwhile, incidents of sexual misconduct involving CCA employees continue to occur. On December 5, 2011, the ACLU filed suit on behalf of former prisoner Tanya Guzman-Martinez, a transgender woman who was held at CCA’s Eloy Detention Center in Arizona when she was sexually abused by CCA guard Justin Manford, who masturbated into a cup and then “demanded that she ingest his ejaculated semen.” Manford was charged in June 2010 with attempted unlawful sexual contact and sentenced to two days with time served. CCA also allegedly failed to protect Guzman-Martinez from a second sexual assault by another prisoner. See: Guzman-Martinez v. CCA, U.S.D.C. (D. Ariz.), Case No. 2:11-cv-02390-NVW.
Most recently, according to a January 7, 2012 news report, Tammy DeShawn Jackson, 32, a guard at CCA’s Silverdale Detention Facility in Chattanooga, Tennessee, was charged with official misconduct and having sexual contact with a prisoner.
Sources: Human Rights Defense Center press release (Feb. 16, 2012), SEC determination letter and related documents, www.reason.com, www.fronterasdesk.org, www.timesfreepress.com
Following his release he became a CCA shareholder, purchasing one share of stock so he could attend the company’s annual shareholder meetings and ask questions of CCA’s executives as a shareholder of record. [See: PLN, Sept. 2008, p.40].
Friedmann bought an additional 190 shares of CCA stock in 2010; by holding the shares for a year he was eligible to introduce a shareholder resolution, which he did in November 2011. His resolution called for CCA’s Board of Directors to produce bi-annual reports “on the Board’s oversight of the company’s efforts to reduce incidents of rape and sexual abuse of prisoners housed in facilities operated by the company. The reports should describe the Board’s oversight of the company’s response to incidents of rape and sexual abuse at the company’s facilities, including statistical data by facility regarding all such incidents during each reporting period.”
“The purpose of the resolution is twofold,” said Friedmann. “First, to ensure that shareholders know the scope of the problem of sexual abuse at CCA’s facilities, the risk that problem poses, and what the company is doing to mitigate that risk. Also, if CCA knows it will be accountable to shareholders, then the company will have an incentive to take actions to reduce sexual abuse of prisoners, particularly by CCA employees – which is a significant problem.”
CCA filed a formal objection with the U.S. Securities and Exchange Commission (SEC) seeking to exclude the shareholder resolution, saying the company would voluntarily provide reports related to prisoner rape and sexual abuse. However, the reports that CCA proposed to produce would be issued just once a year and would only include data from a “sample” of CCA’s facilities. Friedmann argued in his response to the SEC that such reports would fail to substantially implement the resolution.
“If CCA is serious about reducing rape and sexual abuse of prisoners then they wouldn’t offer to provide incomplete, untimely and less frequent reports,” Friedmann stated. “If Walmart or McDonald’s employees were raping or sexually abusing customers on a consistent basis, there would be a public outcry. Equally, there should be outrage when CCA’s private prison employees rape or sexually abuse prisoners.”
Friedmann noted in the resolution’s supporting statement that the Department of Justice had found in a 2008 report that a CCA-operated facility had the highest rate of sexual victimization among over 280 jails surveyed. [See: PLN, May 2009, p.1]. Two states, Kentucky and Hawaii, removed their female prisoners from CCA’s Otter Creek facility in Kentucky following a sex scandal involving at least six CCA employees. [See: PLN, Sept. 2011, p.16; Oct. 2009, p.40]. Further, in October 2011 the ACLU of Texas filed a class-action lawsuit alleging that immigrant detainees were sexually assaulted by a CCA guard at the company’s T. Don. Hutto facility. [See: PLN, Dec. 2011, p.42].
In his response to CCA’s objections, Friedmann noted that he had “specifically raised concerns about rape and sexual abuse in the company’s facilities at two previous shareholder meetings, and discussed this issue with one of the company’s Board members. It is a direct result of the insufficient efforts of the company and its Board to reduce incidents of rape and sexual abuse at CCA facilities” that led him to introduce the resolution.
CCA also argued in its objections filed with the SEC that the shareholder resolution was a “personal claim or grievance,” noting that Friedmann opposes prison privatization and has been involved in lawsuits against the company.
“It’s true that I oppose incarcerating people for corporate profit,” Friedmann admitted. “Regardless, so long as we have private prisons, they need to be run in a manner that minimizes incidents of rape and sexual abuse of prisoners, particularly by private prison employees. I have no ‘personal claim’ or ‘grievance’ in wanting to reduce rape and sexual abuse at CCA facilities, other than the concern that all people should share in wanting to reduce such incidents – a concern that apparently is not shared by CCA.”
Lastly, CCA objected to Friedmann’s shareholder resolution by arguing that it involved “ordinary business operations” that were not appropriate for shareholders. “Certainly, the company cannot contend with a straight face that the rape and sexual abuse of prisoners is an ‘ordinary business matter’ rather than a significant social and public policy issue,” Friedmann countered in his response.
On February 10, 2012, the SEC rejected CCA’s objections to the shareholder resolution. The SEC wrote that it was “unable to conclude that Corrections Corporation of America has met its burden of establishing that it may exclude the proposal” based on the arguments raised by the company. Thus, the resolution will be included in CCA’s proxy materials filed with the SEC and sent to shareholders in advance of the company’s next annual meeting, to be held in mid-2012.
“I expect that CCA’s Board of Directors will recommend voting against the resolution in CCA’s proxy statement,” Friedmann said. “That would further demonstrate CCA’s reluctance to address the serious problem of rape and sexual abuse of prisoners housed in the company’s for-profit prisons.”
A number of organizations have voiced support for Friedmann’s shareholder resolution, including the National Center on Domestic and Sexual Violence; the National Organization for Women; the National Center for Transgender Equality; Citizens United for the Rehabilitation of Errants (CURE); Justice Fellowship, the public policy arm of Prison Fellowship; the National Lawyers Guild; the National Council of Women’s Organizations; Detention Watch Network, a coalition involved in immigration detention issues; the Partnership for Safety and Justice; Justice Policy Institute; and Enlace, an alliance of worker centers, unions and community organizations that works against corporate abuses.
Meanwhile, incidents of sexual misconduct involving CCA employees continue to occur. On December 5, 2011, the ACLU filed suit on behalf of former prisoner Tanya Guzman-Martinez, a transgender woman who was held at CCA’s Eloy Detention Center in Arizona when she was sexually abused by CCA guard Justin Manford, who masturbated into a cup and then “demanded that she ingest his ejaculated semen.” Manford was charged in June 2010 with attempted unlawful sexual contact and sentenced to two days with time served. CCA also allegedly failed to protect Guzman-Martinez from a second sexual assault by another prisoner. See: Guzman-Martinez v. CCA, U.S.D.C. (D. Ariz.), Case No. 2:11-cv-02390-NVW.
Most recently, according to a January 7, 2012 news report, Tammy DeShawn Jackson, 32, a guard at CCA’s Silverdale Detention Facility in Chattanooga, Tennessee, was charged with official misconduct and having sexual contact with a prisoner.
Sources: Human Rights Defense Center press release (Feb. 16, 2012), SEC determination letter and related documents, www.reason.com, www.fronterasdesk.org, www.timesfreepress.com
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Related legal case
Guzman-Martinez v. CCA
| Year | 2011 |
|---|---|
| Cite | U.S.D.C. (D. Ariz.), Case No. 2:11-cv-02390-NVW |
| Level | District Court |
| Injunction Status | N/A |