PROFIT, POLITICS, PAIN - Huge profits and sweet setups for Wall Street darlings; rape, squalor, murder in lockups - and the price for Florida taxpayers
George Zoley was in a London taxicab with Wackenhut executive Wayne Calabrese in 2003, casting about for their Florida prison company’s new name.
The Palm Beach Gardens company was already established. Started by Zoley as a division of The Wackenhut Corp., the prison business plumped that company’s bottom line for 19 years. Now it was being spun off, independent of its corporate parent. It needed to shed the Wackenhut brand.
Geo, the two men decided. It would be called Geo, in what a company newsletter suggested was a nod to global ambitions: Geo is the Greek prefix for world. That could have as easily been a nod to Zoley, born in a small Greek town.
A decade later, the two men’s global ambitions are more than justified. The Boca Raton firm’s reach extends to Australia, the United Kingdom and South Africa. Last year, revenues topped $1.4 billion.
Wackenhut’s rough and tumble beginnings didn’t hint at a future international prison enterprise. In the mid-1950s, founder George Wackenhut’s fledging security business dissolved after a fistfight with a partner.
The former FBI agent struck out on his own, putting down roots in Coral Gables.
Contracts followed. Wackenhut inked deals to handle security at airports, NASA, federal nuclear weapons sites and embassies.
In 1967, flamboyant Florida Gov. Claude R. Kirk Jr. tapped Wackenhut to lead a private, statewide police force answering only to the governor. A “War on Crime” was the stated goal, but Wackenhut infuriated some after reportedly saying his company would investigate not only criminals, but “everyone and anyone who needs investigating.”
Wackenhut by then had purchased 2.5 million dossiers on private citizens compiled by the former lead researcher for Sen. Joseph McCarthy. Some dossiers were sold off, a Wackenhut executive told reporters, but the company was adding 10,000 new dossiers a month.
The controversies did not diminish the company’s success. Wackenhut’s name became synonymous with security.
Board members brought impeccable credentials, including a former head of the Defense Intelligence Agency, a former CIA director and a former CIA deputy director. The CIA presence breathed life into rumors that Wackenhut was a CIA front, an accusation that the company’s right-wing leaning founder dismissed.
By the mid-1970s, George Wackenhut had arrived, living with his family in a 57-room Coral Gables mansion dubbed “Castle Wackenhut,” a British-styled compound featuring a moat, a tower, a pub and a man-made cliff.
But the security business generated small profit margins. Operating prisons was more lucrative, Zoley, then a Wackenhut executive, believed. In 1986, he made a deal to build an immigrant detention center for the federal government.
Tens of millions of dollars in prison business followed, including $32 million to build and run South Bay Correctional in Palm Beach County. Wackenhut, though, had grander goals. It began pushing for Florida to privatize all of its prisons.
That didn’t pan out. However, another deal did: A Danish company purchased Wackenhut in 2002.
Wackenhut’s new owner wasn’t interested in the prison business, and sold it. Zoley and Calabrese, who already headed the prison division, spearheaded the purchase. GEO Group Inc. was born, with Zoley as CEO and Calabrese as president.
There already had been well-publicized stumbles. In Texas, one center for young female offenders made headlines following widespread allegations of rape. In Louisiana, the Justice Department found widespread squalor at a detention center for young offenders.
But shareholders saw promise in the company. Press reports were inaccurate and selective, the company contended. And Zoley told The Post in 2003, “Operationally, we’ve cleaned up our act.”
The stock took off. In 2003, it traded at about $3. Today, shares are in the $35 range.
Zoley has reaped the rewards. Salary and bonuses in 2011 totaled $2.48 million.
On the private side, Zoley, who holds bachelor’s and master’s degrees from Florida Atlantic University as well as a doctorate in public administration from Nova Southeastern — he is sometimes referred to as Dr. Zoley at GEO — began lending a hand to his alma mater.
He chaired FAU’s board of trustees and held a seat on its foundation’s board. He supported increased academic freedom for students and helped slow the search for a new president, paving the way for former Lt. Gov. Frank Brogan to take the post.
But GEO’s offer this year of $6 million for naming rights to the university’s stadium provoked unexpected student protests.
Reports of human rights violations at GEO prisons and detention centers triggered them. Civil rights activists, the ACLU and national press quickly picked up on the controversy. The university’s mascot is an owl, and a new national punchline was born: Owlcatraz.
GEO withdrew its offer.
“What was originally intended as a gesture of GEO’s goodwill to financially assist the university’s athletic scholarship program has surprisingly evolved into an ongoing distraction to both of our organizations,” Zoley said.
Any blow to corporate pride was offset by other compensations: The day after GEO withdrew its gift, shares hit $37.19, a 29 percent increase in just four months.