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Wednesday, April 24, 2013

Strategic CSR - Prisons

A couple of months ago, there was a lot of media coverage surrounding the announcement by Florida Atlantic University that its new football stadium was to be sponsored by a private prison company. The article in the url below, for example, explained that:
 
“The GEO Group is a for-profit prison company based in Boca Raton, Fla., that calls itself ‘the world’s leading provider of correctional and detention management and community reentry services to federal, state and local government agencies.’ It can also call itself the world’s leading provider of Florida Atlantic University Owls football, having paid $6 million to put its name on the school’s stadium.”
 
Most commentators deemed the story sufficiently interesting due to the nature of the sponsor's industry. The combination of university education and private-sector incarceration was thought to be bordering on the offensive. In particular, the fact that the GEO Group’s main customer is the government and that, ultimately, the firm’s revenue was provided by taxpayers, suggested that the company was making too much money and that this was an inappropriate way to spend it. Perhaps more controversial was the firm’s past record of transgressions:
 
“… in 2010, the Southern Poverty Law Center and the ACLU National Prison Project alleged in a class action lawsuit that a youth detention center GEO Group used to operate in Mississippi was home to ‘rampant contraband brought in by guards, sex between female guards and male inmates, inadequate medical care, prisoners held inhumanely in isolation, guards brutalizing inmates and inmate-on-inmate violence that was so brutal it led to brain damage.’”
 
I wondered what all the fuss was about (see protests here and here). There is a bigger issue of corporate involvement with university sports, in general, and the corrupt practices of the NCAA; but, if we are going to allow corporate sponsors, I do not see a problem with one of them being a private prison operator. In fact, you could argue that operating a prison delivers a significant amount of social value, since the firm is dealing with those individuals who have been deemed to be a threat to society. In essence, a company is a company, and this company is arguably delivering a product with as much social value as any other. I think it is instructive that we wouldn’t blink if it was Pepsi that was sponsoring the stadium, yet its products do a great deal of social harm. While there are certainly problems with the so-called “prison industrial complex” in the U.S., my sense is that the source of this problem is the criminal justice system and biased application of ineffective legislation, rather than the company that actually implements the judicial sentences that are imposed. I agree there is some discomfort with the idea that incarcerating people is “good business;” so good, in fact, that a firm can afford to spend $6 million sponsoring a college stadium, but I experience equal (if not greater) discomfort in the idea that it is “good business” to produce and distribute fundamentally unhealthy foods, just as it is “good business” to construct a financial system that relies on public subsidy to unjustly reward a few at the expense of the many, and “good business” to exploit the scarce resources of our planet to convince people to buy things they neither need nor want. Yet, sponsorship by firms from these three industries (food, finance, and retail) is broadly accepted and widely practiced. Again, whether to allow any corporate sponsorship of collegiate athletics is one thing; but if we are going to say that that is OK, then I think it is hypocritical to judge the GEO Group by a different standard than the many other companies whose money forces colleges to compromise their principles with a smile every day.
 
That is not to say, of course, that hypocrisy does not have a prominent place in today’s modern society. As a result of the public backlash, the decision to sponsor the stadium was eventually withdrawn by the firm (see here):
 
“Members of a student group called the Stop Owlcatraz Coalition, which had protested the deal, declared victory after the announcement. The [GEO Group’s] chief executive pledged $500,000 to the university for academic scholarships in lieu of the stadium deal.”
 
Take care
David
 
 
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Florida Atlantic University's Stadium Named After a Prison Company
By Ira Boudway
February 20, 2013
Bloomberg Businessweek