As a businessman, GEO Group Chairman George Zoley is a sharp-elbowed capitalist who has made millions running a company that has been criticized by government regulators time and again.
As a philanthropist, Zoley is a generous supporter of Florida Atlantic University, giving time and money to his alma mater.
Zoley’s two passions intersected last month, when FAU accepted a $6 million gift from Boca Raton-based GEO Group, a private operator of public prisons. After FAU said it would name its football stadium for Zoley’s firm, some students and professors balked at such a prominent placement of the contentious company’s name.
In a forum with students Friday, FAU President Mary Jane Saunders praised what she called Zoley’s “love” of FAU and said she wasn’t concerned about the company’s history of regulatory issues.
“I don’t believe in America today we’re ever going to have a big, complex organization without problems,” Saunders said.
Zoley, 63, has been fending off critics’ barbs for years. One round of scrutiny came in 2000, when National Public Radio, The New York Times, Harper’s magazine and other media outlets detailed gruesome abuses of juvenile inmates at his prisons. Zoley dismissed the coverage as sloppy.
“Often that reporting is incomplete and biased,” Zoley told an audience of Wackenhut insiders at the company’s annual meeting in 2000 at the Ritz-Carlton in Manalapan.
Biased or not, the hits have kept coming. Among those who have examined GEO Group’s practices in recent years and found them wanting are federal regulators in Mississippi and Arizona, state regulators in Texas and Florida and a jury in Oklahoma.
While Zoley hasn’t directly addressed students’ demands that FAU return the money, GEO Group spokesman Pablo Paez defended the company in a commentary that appeared Friday in The Palm Beach Post.
“Critics often cite specific incidents that don’t fully reflect all the facts,” Paez wrote.
Sherry Plymale served as vice chairman of FAU’s board of trustees while Zoley was chairman, and she said the protests focusing on GEO Group’s shortcomings don’t match her experiences working with Zoley. She said he was efficient, hard-working and even-handed as he ran the board.
“I imagine this latest round of criticism is a little surprising to him,” said Plymale, who hasn’t spoken to Zoley for several months. “This is a purely generous gift on behalf of George and his company.”
Zoley has been the driving force behind GEO Group’s expansion for three decades. Under his watch, the company has grown consistently for years. Last year, it posted a profit of $135 million on revenue of $1.49 billion. Shares of GEO Group (NYSE: GEO) are near an all-time high, trading Friday at $34.42, making Zoley’s 700,000 shares worth $24 million.
Zoley earned bachelor’s and master’s degrees in public administration from FAU in the 1970s, then completed a doctorate in public administration at Nova Southeastern University. At GEO Group, he’s known as “Dr. Zoley.”
Zoley joined Wackenhut Corp. in the 1980s. At the time, it was a Coral Gables-based security company that had just begun to branch into the new niche of running prisons.
The nascent industry grew by pitching itself as a cost-effective alternative to government-run prisons. In 1988, Wackenhut named Zoley president of Wackenhut Corrections Corp., which later spun off into its own publicly traded company.
Wackenhut and Wackenhut Corrections moved their headquarters from Coral Gables to Palm Beach Gardens in the 1990s. After Danish security firm Group 4 Falck bought Wackenhut Corp. in 2002, Wackenhut Corrections changed names – to GEO Group – and moved its head office to Boca.
Zoley has proven skilled at negotiating generous compensation for himself. In one example, the Group 4 Falck deal triggered a “change in control” payment that gave Zoley and two of his top executives three times their annual salary and bonus. The deal also gave the executives cars and lowered their retirement ages.
Despite the golden parachutes, Zoley and the other two executives stayed in their positions of GEO Group. The move raised eyebrows among observers such as analyst Richard Bove.
“Generally, if a change in control payment is triggered, there should be a change in control,” Bove told The Palm Beach Post in 2004, after GEO Group disclosed the payouts in a regulatory filing.
Zoley collected a salary of $1.15 million in 2011, plus a bonus of $1.33 million and stock worth $2.46 million. Perks included personal flights on the company plane worth $70,453 and a car allowance of $13,712.
In his latest maneuver, Zoley converted GEO Group to a real estate investment trust, a corporate structure that exempts a company from corporate income taxes so long as most profits are paid out in the form of dividends.
As part of the deal, GEO Group shareholders as of Dec. 31 received a dividend of $5.68 per share. Zoley owned some 950,000 shares at the time, giving him a dividend of more than $5 million. The 700,000 shares he still owns will entitle him to about $1.4 million in dividends this year.
As adept as he is at making money, Zoley struck Plymale as selfless during his seven years on FAU’s board of trustees. Trustees are unpaid, and Plymale said Zoley took his duties seriously even as the Group 4 Falck acquisition of Wackenhut Corp. required him to travel to Europe.
“He was flying back and forth to Denmark, and I bet he didn’t miss one meeting,” she said.
In 2001, Gov. Jeb Bush appointed Zoley and 12 others to FAU’s first board of trustees. The next year, longtime FAU President Anthony Catanese resigned, and Zoley was in charge of finding a new president.
Zoley also had to deal with ethical questions raised by a $42,000 departure gift given to Catanese by the FAU Foundation.
“He became chairman at a very tumultuous time, and he just handled things so decisively,” Plymale said. “He was fair.”
Plymale said Zoley was a true believer in the power of private companies to operate more efficiently than the public sector. However, a state audit found any savings elusive. In a 2008 report, the Florida Office of Program Policy Analysis & Government Accountability looked at the state’s private prisons and concluded that operators save money by taking on fewer “special needs” prisoners with medical problems and mental health issues that make them expensive to house.
Despite the controversy surrounding GEO Group’s practices, Zoley himself isn’t a headline grabber. He has been married to the same woman for years. During company conference calls, he comes across as calm and business-like.
Pat Cannan, a former spokesman for Wackenhut Corp., said Zoley was always polite and professional. And he cared enough about the inmates in his institutions to push for job-training and other rehabilitation programs, Cannan said.
Rabbi Bruce Warshal, who served on FAU’s board of trustees with Zoley, said Zoley could overlook political differences for the good of the school.
“I’m a liberal Democrat, and he’s a conservative Republican,” Warshal said. “But I think he’s a decent human being, and he’s very devoted to FAU.”