5 Dumbest Things on Wall Street This Week: April 19
5. Corrections Corp. Corruption
Corrections Corp. of America
Shares of the private prison operator suffered a minor, well, correction last Friday, after the company admitted to falsifying nearly 4,800 hours of staffing records over seven months last year at Idaho's largest penitentiary located just south of Boise. An internal review mandated by the Idaho Department of Correction showed vacant positions during hours when prison staff and guards were supposedly manning security posts. The company's stock fell nearly half a percentage point to $40.25 before recovering to finish the day's trading just under $41 on news of the scam.
Idaho Department of Correction spokesman Jeff Ray said the agency will perform its own review of the situation, and then "explore how to go forward from there." Corrections Corp. announced it will reprimand its workers for their shenanigans and reimburse the state for the time they didn't serve.
"We will take appropriate disciplinary action with the involved personnel, and we will work to enhance the staffing, training and record keeping processes at the facility," said company spokesman Steve Owen, proudly adding there "was no apparent increase in violence" during the period in question.
Hey! That's great news guys. Maybe we should let the inmates run the asylum all the time. Who needs the financial burden of imaginary, no-show guards when you have real life criminals keeping the peace?
Perhaps the real reason why both Ray and Owen are desperately trying to contain the scandal -- lock it up, if you will -- is that Correction's Corp.'s annual $29 million contract is at stake. The pact, which expires in June 2014, has come under scrutiny after a recent slew of successful inmate lawsuits showed the prison to be chronically and dangerously understaffed.
On that note, maybe Corrections Corp. should pay those crafty convicts for their good behavior rather than reimburse the state for its role in the fraud.
Think about it.
They were the unsupervised lot working hard not to riot, escape, play Mozart over the loudspeaker or eat 50 hardboiled eggs, now weren't they?