The following is a "fact" sheet provided to campus administrators by the Sodexho Marriott Services Corporate Affairs Department. Stung by the recent success of Not With Our Money! campaign, the company is moving aggressively to discredit the campaign. It will be up to students (and not "professional activists" as the company suggests) to respond to the challenge by learning the facts and winning the arguments. To make that a little easier, we've provided the SMS arguments (everything in normal type) and the NWOM commentary (everything in italics).
Letting the Facts Speak for Themselves
Sodexho Marriott Services
(Annotated with textual commentary provided by Not With Our Money!)
The Prison Moratorium Project Protests
"For every dollar going to Sodexho Marriott, almost 50 cents goes to Sodexho Alliance." (Source: Kevin Pranis, PMP leader quoted in The Link, Concordia's Independent Newspaper, June 6, 2000)
COMMENT: This critical point is never refuted. And for the last time, PMP does not have a "leader" (as in, "Take me to your leader"). PMP's Program Director is Kate Rhee, and Kevin Pranis is a member of the Board of Directors.
"Each year, college students and parents provide more than $1.2 billion in revenues to Sodexho Marriott... helping to expand this "modern day slave trade." (Source: Poster distributed by PMP/No More Prisons.)
As a publicly-traded company, Sodexho Marriott Services has more than 36,000 shareholders. The largest is Sodexho Alliance, an international firm that owns a 48 percent stake in the company.
COMMENT: While it's true that SMS has 36,000 shareholders, ONE of those shareholders owns 48% of the company, while the other 35,999+ share the other 52% (meaning that the rest of the shareholders own, on average, 0.14% of SMS apiece). It is widely acknowledged by the financial community and even Sodexho Alliance Chairman Pierre Bellon himself that Sodexho Marriott is a subsidiary of Sodexho Alliance, and that SMS generates 52% of SA's total revenues. SMS uses the phrase "publicly-traded company" to suggest that investors like Sodexho Alliance come and go as shares are bought and sold, but nothing could be further from the truth. Sodexho Marriott was created by Sodexho Alliance in such a way that SA could maintain complete control through its 48% ownership. While other shares of SMS stock change hands, Sodexho Alliance's shares have never been "publicly traded" since they have always been held by SA.
Sodexho Alliance also holds shares in the Corrections Corporation of America, which were purchased from 1994 to 1996 - before March 1998 when Sodexho Marriott Services was formed. Since that time Sodexho Alliance has made no further cash investment in CCA.
COMMENT: This statement is technically accurate but highly misleading. Not only has Sodexho retained its role as CCA's largest institutional investor and played an active role in running the company (through Sodexho's contractual seat on the prison company's board), but Sodexho has also expanded its private prison holdings overseas in recent years. Just last month, Sodexho Alliance entered into an agreement with CCA in which Sodexho will acquire complete control of two British and Australian private prison companies (U.K. Detention Services and Corrections Corporation of Australia) in exchange for a cash payment of $6.4 million (Prison Realty Trust SEC filing 8-K, 9/12/00). With these acquisitions, Sodexho Alliance will not only be the largest institutional investor in the world's private prison company, but will also become the second largest owner and operator of private prisons overseas.
Sodexho Alliance's chairman Pierre Bellon has said publicly that he intends to sell the CCA stock, which seems to be a clear indication that Sodexho Alliance will not invest further in CCA.
COMMENT: If true, this would go part of the way toward meeting our demands. Unfortunately, it looks like Sodexho Alliance is actually headed in the opposite directions thanks to its recent acquisition of U.K. Detention Services and Corrections Corporation of Australia.
The bottom line is this: Sodexho Marriott Services has no control over Sodexho Alliance investments.
COMMENT: Fortunately, students do have the potential to control Sodexho Alliance's investments. By withholding student dollars from Sodexho Marriott-which provides 52% of Sodexho Alliance's worlwide revenues-we can effect Sodexho Alliance's bottom line and get the company out of the prison business. Sodexho Alliance's newly declared intention of divesting from CCA (doubtful though it may be) simply proves our point: by refusing to do business with Sodexho Marriott,, students have already begun to make a real difference.
"'It's true that Sodexho-Marriott doesn't own any prisons,' said Kevin Pranis (leader of the Prison Moratorium Project). While Pranis acknowledges that Sodexho Marriott may have no direct control over the prison industry, he's willing to exploit the connection between Sodexho Alliance and CCA." (Source: The Link, Concordia's Independent Newspaper, June 6, 2000)
COMMENT: This is a classic example of Sodexho Marriott's misleading use of "facts" taken out of context. The original quote reads, "It's true that Sodexho-Marriott doesn't own any prisons, but it's also true that Kathie-Lee Gifford doesn't own any sweatshops." There is a long and proud tradition of students and other social justice activists holding corporations responsible for their complicity in wrongdoing-from the anti-Apartheid movement to the anti-sweatshop movement to the movement to stop a French multinational conglomerate from reaping hundreds of millions of dollars from U.S. students while simultaneously investing in prisons-for-profit. There is also a long and much less proud tradition of large corporations-from banks to Shell oil to Nike to Sodexho-hiding behind cleverly crafted legal fictions in order to avoid responsibility.p>
"The Prison Moratorium Project is a youth-led grassroots organization dedicated to halting prison expansion, empowering youth and other constituencies affected by prison expansion, and advocating for a fair, effective and humane criminal justice system." (Source: PMP's homepage at www.nomoreprisons.com)
PMP was founded in 1995 by professional activist Kevin Pranis. PMP is closely affiliated with the Democratic Socialists of America, the U.S. chapter of the London-based Socialist International. PMP receives support from two labor unions - the Hotel Employees and Restaurant Employees International Union and the American Federation of State and Municipal Employees - in its campaign against Sodexho Marriott Services.
COMMENT: PMP is an independent organization that was founded in 1995 by a group of students (not professionals) out of meetings with former prisoners. The organization currently has one full-time staffperson (Program Director Kate Rhee) and three interns, and is supported by individual donations and grants. Despite Sodexho-Marriott's transparent attempt to red-bait the campaign, PMP is proud of our working relationship with DSA, just as we are proud of our working relationship with the Florida Police Benevolent Association, the United Methodist Church's Restorative Justice Ministries, the U.S. Student Association and dozens of other organizations that care about these issues.
"The founder of CCA "Doc" Crantz also sits on the board of directors of Sodexho-Marriott." (Source: Flyer distributed by the Prison Moratorium Project, September 2000)
Doctor Crants, the former president and CEO of Corrections Corporation of America, resigned from Sodexho Marriott's board of directors in April.
COMMENT: This quote appeared in the first Not With Our Money! brochures, which were sent out in March. The revised text now reads: "In addition to common stock ownership, CCA, Sodexho Alliance and Sodexho Marriott have interlocking boards. CCA founder "Doc" Crantz sat on the Sodexho Marriott board until April, 2000, when he was forced to resign under pressure from student activists."
Sodexho (Marriott) uses part of its revenues to finance expansion of a modern-day slave trade: for-profit prisons." (Source: Kevin Pranis, leader of PMP)
Sodexho Marriott Services is in the food service facilities management business, not the prison business, and has no financial interest in the prison industry nor any official position regarding the for-profit prison industry.
Our profits do not go towards the prison industry.
COMMENT: 48% of Sodexho Marriott's profits go to Sodexho Alliance and that company, in turn, invests in the private prison industry. (The paranthetical "Marriott" in the quote attributed to Kevin Pranis has been inserted by Sodexho Marriott and is inaccurate.)
Private prisons tend to be poorly managed and largely unregulated, while private prison guards are underpaid, unorganized and minimally trained. (Source: PMP homepage at www.nomoreprisons.org).
Note: While Sodexho Marriott Services has no official position on the issues surrounding the for-profit prison industry, there are two sides to every story and here is another perspective.
COMMENT: It is not surprising that, despite frequent protests that it has no stake in this issue, Sodexho Marriott has begun trying to defend the private prison industry. After all, its parent company, Sodexho Alliance, is deeply invested in the industry and going deeper.
"Conditions... (are better) at private correctional institutions than at public ones, as researchers have found by analyzing records and interviewing residents and staff members.
"Richard F. Culp, a professor at the John Jay College of Criminal Justice, who compared more than 200 juvenile correctional facilities across the country, reported significantly less crowding, better morale and fewer problems at private institutions. His 1998 findings jibe with those of earlier studies, including one by the Urban Institute and another by Charles H. Logan, a sociologist at the University of Connecticut, who compared federal prisons."
COMMENT: 1. Richard Culp's study is based on data collected in a 1991 survey of NON-PROFIT juvenile facilities conducted by Abt Associates, and is completely irrelevant, since the problems associated with for-profit facilities are driven by attempts to cut corners in order to maximize profits. 2. The 1989 Urban Institute study is not only completely outdated but also seriously flawed according to Abt Associate's Gerry Gaes in his 1998 review of privatization research. "The methods employed resulted in arbitrary decisions and attributions about degrees of comparability and levels of performance, and in general obfuscated the meaning of any public and private sector differences in the measurement set." (http://www.nicic.org/pubs/1998/014789.pdf)
"Adrian T. Moore, an economist at the Reason Public Policy Institute reached a similar conclusion. 'There's no evidence that conditions in private prisons are worse than in public ones, and there's growing evidence conditions are better. People like to say that private prison aren't accountable, but they're actually more accountable than public ones."
COMMENT: Reason Public Policy Institute is an ultra-right wing think-tank that argues for the privatization of everything from airports to child welfare, and has received funding from CCA, Wackenhut and Securicor. Moore's research is out of date, and Moore himself has recently recanted some of the study's claims about cost savings, saying in a panel debate last month that the cost surveys are "problematic and should be taken with a grain of salt." On page 31 of the study Moore published a picture of a girl receiving "Individual Counseling at Coke County Juvenile Justice Center" in Texas. The Texas Youth Council stopped sending girls to this facility after two of Wackenhut's "caregivers" (who also served as counselors) were indicted (and later convicted) for rape of girls under their "care." Sara Lowe, one of the girls who was sexually abused at this facility, committed suicide the day Wackenhut settled her civil rights claim against the company. The details of her case were covered in the recent 60-MinutesII expose of Wackenhut.
"Can you think of any public prison where the entire staff was fired (following a scandal)? At best you see a blue-ribbon commission report that might lead to some policy changes in a year or two. Private companies can't afford the luxury of inaction, and not merely because their contracts can be canceled. Any scandal has immediate consequences on their reputation and their prospects for getting future business." (Source: The New York Times, August 15, 2000).
COMMENT: The preceding text comes from a New York Times column by columnist John Tierney, not from an actual article (hence the poor quality of the research). Unfortunately, Tierney's conclusions represent wishful thinking. Private prison companies forced to fire an incompetent staff as a result of scandal invariably hire a new incompetent staff. In fact, high turnover (as much as 70% a year) has helped make private prisons a dismal failure. And for many reasons, the disastrous record of the private prison companies has done little to stem their growth. Two people died and six escaped from CCA's Youngstown facility, yet the Federal Bureau of Prisons just handed the company-whose Chief Operating Officer, Michael Quinlan, just happens to be a former director of the BoP-a 10-year $800 million contract. In Louisiana, the Federal government is suing Wackenhut Corrections for horrible abuses comitted against children in the company's Jena juvenile facility, yet the BoP has just given the company a new contract to house D.C. prisoners in a facility built on an old slave plantation in North Carolina. Unless we take action, these companies will continue to use political contributions, lobbying and the revolving door between public and private corrections to make themselves a large and permanent part of our criminal justice system.
"Profit has become the driving force behind the high rates of incarceration..." (Source: Letter from PMP supporter to the Dean of Students at Wheaton College, August 29, 2000.)
"All of us should be concerned about how our correctional system operates and how prisoners confined in the system are treated. Just as there are well-managed and poorly managed public correctional facilities, there are well-managed and poorly managed private correctional facilities. It cannot possibly make good public policy sense for us to tolerate poor performance by either a public agency or a private firm that has the responsibility for delivering any essential service. But some... concerns may be caused by... misunderstanding of how contracting works. First, the courts sentence prisoners. Private management firms do not have the power either to increase or to decrease those sentences. Second, a combination of laws and contract requirements drafted by public agencies determine the minimum employment standards for private correctional employees. The most common legal and contractual requirements mandating training and experience that is either equal of more demnading than what comparable public employees in the jurisdiction must satisfy. Third, minimum standards for the breadth , depth and quality of services provided by private management firms are established by government agencies that award contracts and are never set by the management firms." (Source: Charles W. Thomas, Professor of Criminology (retired), Center for Studies in Criminology & Law, University of Florida, April 2000)
COMMENT: For many years, Charles Thomas was the leading academic proponent of prison privatization... until it was discovered that he received three million dollars as a "consultant" to CCA during its 1998 restructuring, and had been a stockholder and consultant to the company for years. He has since been forced into retirement and denied the title of "Professor Emeritus" by the University of Florida at Gainesville. Thomas is a perfect example of the corruption that characterizes the private prison industry. In addition to the fact that he is not in any way credible as a source of information, Thomans is wrong to suggest that the public sets the standards for private prison. In terms of sentence lengths, there are documented cases of CCA and other private prison companies writing unnecessary incident reports and mis-evaluating juveniles in order to prolong their stay and keeps beds full. And in terms of staffing and programming standards, private prisons almost always fail to live up to the terms of their contracts, forcing governments to take prisoners back (a difficult task), ignore the problem or give the companies even more money.
"For years, we've watched the government take money from public universities to put record numbers of non-violent youth behind bars," says State University of New York at Binghamton activist Cory Finger. "Now we find out that Sodexho is trying to profit off their misery." (Source: Joint news release from Prison Moratorium Project and Hotel Employees and Restaurant Employees International Union, April 2000)
"Sodexho Marriott Services is making a huge profit off of its prison investments... " (Source: Letter from PMP supporter to the Dean of Students at Wheaton College, August 28, 2000.)
Sodexho Marriott Services has no prison investments and has made no money from the prison industry. Sodexho Alliance's investment in CCA has lost significant value since the shares were purchased in the mid-1990s.
COMMENT: The first quote attributed to the campaign is absolutely correct. Sodexho Alliance is trying (with mixed success) to profit from the misery of prisoners, families, youth, students, etc. The second is slightly inaccurate, and should probably read, "Sodexho Alliance has made a huge profit off U.S. students, allowing the company to invest in the private prison industry." Sodexho Alliance has, in fact, made large profits and taken large losses from its private prison investments. CCA stock peaked a couple of years ago, and then fell precipitously due to gross financial mismanagement. Sodexho Alliance, which was represented on the CCA board the entire time, is partly responsible for that mismanagement, and the company had many opportunity to pull out of the company, as many other investors did during its two-year decline. Sources close to the company suggest that Sodexho Alliance remained invested because they viewed CCA as a strategic investment, that would help move them closer to becoming a global private prison operator in their own right. While CCA's stock remains low, CCA spokesperson Susan Hart suggests that Sodexho Alliance is still benefiting substantially from its relationship to CCA. ""No, considering that Sodexho just voted for the merger. They maintain their holdings and, in fact, have gained quite favorably from this transaction that was approved. I don't think their (the students) campaign was very effective." (Tennessee Politics, 9/18/00)