December 6, 2006


By facsimile to (214) 880-0011 and U.S. Mail


Mr. James E. Hyman
Chairman and Chief Executive Officer
Cornell Companies, Inc.
1700 West Loop South, Suite 1500
Houston, TX 77027

Re:	Cornell Companies, Inc.
	Preliminary Proxy Statement on Schedule 14A
	Filed November 22, 2006
Annual Report on Form 10-K for the fiscal year ended December 31,
2005 and other Exchange Act reports incorporated by reference
	File No. 1-14472

Dear Mr. Hyman:

	We limited our review of the filings to those issues that we
have addressed in our comments.  Where indicated, we think that
you
should revise the documents in response to the comments.  If you
disagree, we will consider your explanation why a comment is
inapplicable or a revision is unnecessary.  Be as detailed as
necessary in your explanation.  To understand better your
disclosure,
we may ask you in some comments to provide us supplemental
information.  We may raise additional comments after reviewing
this
information.

	Our review`s purpose is to assist you in your compliance with
applicable disclosure requirements and to enhance the overall
disclosure in your documents.  We look forward to working with you
to
achieve these objectives.  We welcome any questions that you may
have
about comments or any other aspect of our review.  You may call us
at
the telephone numbers listed at the end of this letter.

Pre14A

General

1. We note that the merger is not subject to a financing
condition.
Where financing is not assured, you should provide the information
required by Item 14(c)(1) of Schedule 14A, including audited
financial statements of the acquisition vehicle, Cornell Holding
Corp.  See Instruction 2 to Item 14 of Schedule 14A.

2. A summary term sheet beginning on the first or second page of
the
document is required by Item 1001 of Regulation M-A.  See Item
14(b)(1) of Schedule 14A.  If you intend for the summary section
to
serve as the term sheet, move it forward to begin on the first or
second page of the document.

3. You repeat information in the summary section and the questions
and answers about the special meeting and the merger or Q&A
section.
The Q&A should not repeat information that appears in the summary
and
vice versa.  For purposes of eliminating redundancies and grouping
together like information, view the summary and Q&A as one
section.
For example, discuss procedural questions such as voting and
appraisal procedures specific to the merger in the Q&A, and place
disclosure of the substantive aspects of the merger in the
summary.

4. We note that provisions of the merger agreement filed as
appendix
A contemplate the filing of a Schedule 13E-3.  Tell us what
consideration you have given to whether the parties in this
transaction are affiliates, as contemplated by Rule 13e-3, such
that
a Schedule 13E-3 is required to be filed.

Questions and Answers about the Merger, page 1

5. Refer to the sixth Q&A on page 2.  Delete the words "In
general"
in the third sentence because the words may imply that
stockholders
cannot rely on the disclosure.  Please revise also the second full
paragraph`s second sentence on page 32.  Delete also the word
"generally" under material federal income tax consequences to
United
States holders on page 10 and the word "general" in the first
paragraph`s first sentence under material federal income tax
consequences to United States holders on page 32 for the same
reason.


Summary, page 4

6. Include a brief description of the risks of engaging in the
transaction.  Include more detailed disclosure in the subsection
on
pages 23-24 discussing the board`s reasons for recommending the
merger.

7. Include a brief description of the merger related litigation.
We
note the disclosure on page 38.

Voting by Proxy; Revocability of Proxy, page 12

8. Under a discrete caption or heading, explain briefly that
stockholders are being asked to vote on an adjournment of the
special
meeting, including to solicit additional votes in favor of the
merger
transaction and that a separate box on the proxy card is being
provided for this purpose.  We note the disclosure in the last
paragraph on page 13 that carries over to page 14.

Background of the Merger, page 16

9. Throughout this subsection, identify the members of senior
management who participated in the various meetings leading up to
the
proposal to engage in this transaction.

10. In the fifth paragraph on page 16, identify the legal counsel
whom the special committee engaged.

11. In the last paragraph on page 16 that carries over to page 17,
identify Cornell`s regular outside counsel.

12. In the first full paragraph on page 17, identify members of
the
governance committee who met on December 2, 2005 and also
Cornell`s
general counsel.  Explain how they determined that the composition
of
the special committee was proper, with reference to Mr. Thomas R.
Hudson, Jr.`s and Mr. Zachary R. George`s employment by Pirate as
well as the fact that Mr. George reports to Mr. Hudson at Pirate.
Discuss whether the governance committee considered whether Mr.
Hudson or Mr. George would have a conflict of interest in making
an
objective evaluation and recommendation of the transaction, given
their relationship to one another and to Pirate.

13. In the third full paragraph on page 17, explain briefly what
the
rumored "Criminal Alien Requirement VI RFP" was and what impact
the
board thought that it might have on Cornell`s business and
strategic
alternatives.

14. In the fourth full paragraph on page 18, state the number of
potential strategic buyers that signed a confidentiality
agreement.

15. Disclosure about the August 2 meeting indicates that the
special
committee determined to recommend the transaction with Bidder X,
notwithstanding that Bidder Z, a strategic buyer, proposed a range
of
$16 to $20 that exceeded both Bidder X`s bid and the current offer
by
Veritas.  Disclose why the special committee did not follow up
with
Bidder Z.  We assume that it is because Bidder Z did not comply
with
the bidding guidelines.  If that is the case, disclose what
consideration, if any, was given to extending the due diligence
period for the strategic buyers.

16. In the fourth paragraph on page 20, identify counsel retained
for
this transaction.

Reasons for the Merger; Recommendation of the Special Committee
and
Cornell`s Board of Directors, page 21

17. Elaborate on each of the bullet points on pages 21-23 as
necessary for investors to understand how consideration of the
listed
factors impacted the special committee`s determination.  For
example,
you state in the second and third bullet points on page 21 that
the
special committee believed that the merger was more favorable to
Cornell`s stockholders than the alternatives of pursuing other
strategic initiatives and the alternative of remaining a stand-
alone,
independent company.  How did each of the listed alternatives
inform
the special committee`s determination?  Review and revise, as
necessary, the factors listed in the bullet points on pages 35-36
with this comment in mind.

18. If settlement of the merger related litigation is a condition
to
Cornell`s obligation to complete the merger, discuss what
consideration, if any, the special committee and the board gave to
the risk that the litigation would not be settled in a timely
manner,
thus delaying or preventing the transaction from closing.

19. We note that at July 31 both of the financial bidders, who
were
given more time to conduct due diligence and formulate their
approach
to the transaction, were able to comply with the requirements to
provide a single price and provide merger agreement comments.
Neither of the strategic buyers, who were given less time to
conduct
due diligence, complied with these requirements.  Discuss under
"Recommendation of the Special Committee and Cornell`s Board of
Directors" what consideration the committee and board gave to the
possibility that a higher price might have been negotiated with
Bidder Z, who offered a $16 to $20 range, but for its failure to
comply with the bidding guidelines.  We note the shorter period of
time Cornell afforded to the strategic buyers to conduct their due
diligence.

20. Disclosure in the first full paragraph on page 24 states that
Cornell`s board of directors considered a variety of business,
financial, and market factors in reaching its determination.
Elaborate as necessary for investors to understand how the various
business, financial, and market factors impacted the board`s
determinations.  For example, the fourth bullet point on page 21
includes a laundry list of items such as Cornell`s business and
financial condition, free cash flow attributes debt capital
structure, competitive position, business strategy, strategic
options
and prospects.  Expand the disclosure to include a meaningful
discussion and analysis of how those items impacted the board`s
determinations.

21. Disclosure in the first full paragraph on page 24 states that
Cornell`s board of directors considered each of the factors
considered by the special committee.  Absent additional
disclosure,
it is unclear how the board considered each of the factors.
Elaborate as necessary for investors to understand how the board`s
consideration of the listed factors impacted its determinations.
For
example, how did the alternatives referenced in the second and
third
bullet points on page 21 inform the board`s determination?

Opinion of Cornell`s Financial Advisor, page 24

22. Expand the disclosure to state that Rothschild consents to the
use of its opinion and the related disclosure in this proxy
statement.  Similarly, revise the opinion attached as appendix C
to
remove the provision that "This opinion may not be disclosed
publicly
in any manner without our prior written approval and must be
treated
as confidential," and include instead a clear statement that
Rothschild consents to the use of its opinion and the related
disclosure in the proxy statement.

23. Disclose compensation paid or to be paid to Rothschild and any
of
its affiliates for any other services to Cornell or any affiliates
in
the most recent two years.  Alternatively, confirm to us that
there
was none.  See Item 14 of Schedule 14A and Item 1015(b)(4) of
Regulation M-A.

24. Provide us two copies of any outlines, summaries, reports, or
board books prepared and furnished by Rothschild to Cornell`s
board
of directors.


Selected Public Companies Analysis, page 28

25. The adult public companies table on page 28 includes a (4)
without an accompanying footnote.  Similarly, the adult public
companies table on page 29 includes (5) and (1) without
accompanying
footnotes.  Please revise.

MCF Consideration, page 31

26. Explain the meaning of the abbreviation "MCF."

27. Include appropriate quantitative data in support of the
statement
that Rothschild noted the implied transaction multiples that
Veritas
is paying for Cornell are higher if MCF is theoretically treated
on
an off-balance sheet basis as opposed to the current consolidated
GAAP accounting treatment.

Leveraged Buy-Out Analysis, page 31

28. Include appropriate quantitative data from the LBO analysis in
support of the statement that the per share merger consideration
of
$18.25 was above the midpoint of the implied share prices that
resulted from the LBO analysis.

Equity Compensation Awards, page 33

29. We note that you aggregate information relating to the
interests
of the directors as a group.  Please revise to present information
relating to the interests of each of the directors and executive
officers individually throughout the proxy statement.

Arrangements with Mr. Nieser, page 34

30. Disclosure states that assuming the merger is completed on
January 31, 2006 and Mr. John R. Nieser is terminated immediately,
he
would be entitled to receive $551,834 under the terms of his
employment/separation agreement.  Disclose also what Mr. Nieser
would
be entitled to receive if he is terminated under the scenario
outlined in the third bullet point.

Appraisal Rights, page 35

31. Revise the second sentence to clarify that the discussion
includes the material provisions of the law pertaining to
appraisal
rights under the Delaware General Corporation Law.

Merger Related Litigation, page 38

32. As appropriate, continue to update the disclosure of any
merger
related litigation.

Representations and Warranties, page 41

33. Notwithstanding the disclaimers relating to the
representations
and warranties in the second paragraph, Cornell is responsible for
considering whether additional specific disclosures in the proxy
statement are required to put into context information about the
representations and warranties so that the information in the
proxy
statement is not misleading.  We note particularly the disclosures
relating to exceptions and qualifications in the fourth full
paragraph on page 41 and in the second paragraph on page 42.
Please
confirm your understanding.

Merger Financing; Source of Funds, page 43

34. Disclose the amount of funds necessary to complete the
transaction that will come from new credit facilities and the
amount
that will come from equity contributions.  Identify the lender for
the new credit facilities.  For the equity contributions, disclose
the amount that will come from Veritas and the amount that will
come
from "co-investors," and disclose who the co-investors are.

Conditions to the Merger, page 49

35. In the second to last bullet point, you state that is a
condition
to Cornell Holding`s obligation to complete the merger that you
will
have entered into a stipulation of settlement for "a certain
litigation matter."  Elaborate on what this litigation matter is.
If
you are referring to the merger related litigation described on
page
38, you may include a cross reference to that discussion and amend
the discussion to clarify that a stipulation of settlement in that
case is a condition to closing.

Where You Can Obtain Additional Information, page 57

36. Include the Commission`s filing number for filings made by
Cornell under the Exchange Act.

Form of Proxy

37. Revise the form of proxy to identify it clearly as being
preliminary.  See Rule 14a-6(e)(1) of Regulation 14A.

8-K dated and filed October 10, 2006

Exhibit 2.1

38. File a list to identify briefly the contents of all omitted
schedules or similar supplements to the agreement and plan of
merger.
See Item 601(b)(2) of Regulation S-K.

Closing

	File a revised Pre14A and an amendment to the October 10,
2006
8-K in response to the comments.  To expedite our review, you may
wish to provide us three marked courtesy copies of the filings.
Include with the filing a cover letter tagged as correspondence
that
keys the responses to the comments and any supplemental
information
requested.  If you think that compliance with any of the comments
is
inappropriate, provide the basis in the letter.  We may have
additional comments after review of the filings, the responses to
the
comments, and any supplemental information.

	We urge all persons responsible for the accuracy and adequacy
of
the disclosures in the filings reviewed by us to make certain that
they have provided all information that investors require for an
informed decision.  Since Cornell and its management are in
possession of all facts relating to the disclosures in the
filings,
they are responsible for the adequacy and accuracy of the
disclosures
that they have made.

      When responding to our comments, provide a written statement
from Cornell acknowledging that:

* Cornell is responsible for the adequacy and accuracy of the
disclosures in the filings.

* Our comments or changes to disclosures in response to our
comments
do not foreclose the Commission from taking any action on the
filings.

* Cornell may not assert our comments as a defense in any
proceedings
initiated by the Commission or any person under the United States`
federal securities laws.

	The Commission`s Division of Enforcement has access to all
information that Cornell provides us in our review of the filings
or
in response to our comments on the filings.


You may direct questions on comments and other disclosure issues
to
Edward M. Kelly, Senior Counsel, at (202) 551-3728 or me at (202)
551-3760.

Very truly yours,





Pamela A. Long

Assistant Director

cc:	Curtis G. Carlson, Esq.
	Hunton & Williams LLP
	Energy Plaza, 30th Floor
	1601 Bryan Street
	Dallas, TX 75201-3402



Mr. James E. Hyman
December 6, 2006
Page 1








UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010

         DIVISION OF
CORPORATION FINANCE