Private prison companies are expanding their operations to include the management of psychiatric hospitals. Market watchers are bullish on the GEO Group a company with soaring profits -- more than $1 billion in revenue and a 5.8% net profit margin in 2008 -- and entirely dependent on local, state and federal contracts. The company created a subsidiary, GEO Care, and joined the stampede to run psychiatric hospitals, also dependent on local, state and federal contracts.
A $7.5 million contract for the Florida-based company to run a psychiatric hospital outside of Houston is running into problems. Last week Emily Ramshaw, writing in the Dallas Morning News reported Texas wanted the company to run a new psychiatric hospital despite its scandal ridden history of "filthy conditions, sexual abuse, suicides and riots in some of its Texas lockups."
An offshoot of Wackenhut, which got its start in the 1950s in the prison industry, the GEO Group describes its operations as:
one of the world's largest public companies managing privatized correctional and detention facilities - and we're the second largest provider of correctional services to the United States Federal Government.
Human rights activists have questioned the role of GEO's well-paid lobbyists in squelching anti-private prison bills in Texas. Mental health advocates say they would not have endorsed the hospital had the transactions including GEO been transparent. Last month the company was the center of a controversy when it tried to buy Northeast Florida State Hospital.
