Motivated by the public's demand to imprison more criminals for longer periods of time at the lowest possible cost, cash-strapped states have turned to the private sector for help. Private-sector, for-profit prisons, first proposed in the early 1980s, are a growth industry whose revenues came to about $1 billion in 1997, up from about $650 million in 1996. The two largest providers are Corrections Corporation of America (CCA) and Wackenhut Corrections. Sometimes these companies simply take over the management of an existing correctional facility, or they build new ones. The chart shows the growth trend in facilities opened by CCA and Wackenhut since 1984, when CCA first signed a contract with the Immigration and Naturalization Service to run detention centers for illegal aliens. By 1997, about 64,000 people were confined in about 140 privately run U.S. facilities (prisons, jails, and illegal immigrant detention centers). By 1998, the number had risen to 85,000.
In 2002, with more than 55,000 inmates under its care in about 60 facilities in 20 states and the District of Columbia, CCA was the sixth-largest corrections system in the country, behind Texas, California, the Federal Bureau of Prisons, New York, and Florida (New York Stock Exchange symbol: CXW; 2001 1-year sales growth: 214.3%). That same year, its chief rival, Wackenhut Corrections, operated more than 50 facilities with more than 40,000 beds, mostly in the United States but also in Australia, New Zealand, Puerto Rico, South Africa, and the United Kingdom (NYSE: WHC; 2001 1-year sales growth, 12.1%). Some of the country's biggest corporations are investing in the private prison business, including American Express and Goldman Sachs & Co.
On its Web site, CCA promises to try to "return a better person to our communities through programs geared to the inmate population. These programs range from substance abuse to behavior modification to life skills to education and job training." Wackenhut supplies design, security, food, health care, education, rehabilitation, and management services. Both companies (and their rivals) claim they can do all of these things cheaper than government can do them. Typically, a private company signs a contract with a state, agreeing to house and care for prisoners at a daily rate that is lower than what the state pays. In Florida, for example, each contract requires at least a 7% savings.
Studies of the cost efficiency of public versus private prisons show mixed results. The issue is complicated; costs vary from state to state and no broad generalizations can be made. After looking at the available studies, the General Accounting Office reported to Congress in 1996 that "comparisons of operational costs indicated little difference and/or mixed results," and "comparisons of quality are unclear." One looming issue: rapidly rising health care costs. As we saw earlier, this is a growing part of correctional costs.
The private prison industry has been plagued by problems, but we don't seem to hear much about them. According to Project Censored of the Sonoma State University in California, private prison expansion and the abuses associated with it were one of the top 25 neglected news stories of 1998, suggesting that prison reform is not a high national priority. The abuses mentioned included low wages for non-union, poorly trained staff; bad food; and overcrowding.7 CCA made the news on April 20, 1999, when it agreed to pay $1.65 million to settle a class action lawsuit brought by inmates of an Ohio facility; they complained of abusive guards and inadequate medical care, among other things. A report on the facility commissioned by the U.S. Department of Justice noted a "destructive pattern of extensive inmate idleness," a "lack of correctional experience on the part of almost all staff," and, after the second homicide in three weeks, the institution of a search procedure that "could fairly be described as a reign of humiliation directed indiscriminately at the entire inmate population." A bill was introduced in Congress the day after CCA agreed to pay. Known as the Public Safety Act, it provides that no applicant for funds under the violent offender incarceration and truth-in-sentencing incentive grant program (VOITIS) will be granted such funds unless the applicant agrees not to use private prison contractors. The measure was still wending its way through the legislative process at the time of writing (November 2002).
In 1999 the London Observer reported that the state of Texas terminated Wackenhut's contract to run a prison "pending the expected criminal indictment of several staff for sexually abusing inmates"; the inmates were delinquent girls. Judith Greene reported that a class action lawsuit filed against Wackenhut in Dallas alleged that the girls were "de-graded, humiliated, assaulted, harassed, and emotionally abused." One of the girls, who had been raped, committed suicide. It should be noted that this type of abuse is not limited to private prisons; we emphasize, as well, that there are many well-run private and public prisons.
In order to turn a profit, private prison companies must build prisons and fill them. Silverstein writes that corners are cut in every possible way and drug rehabilitation, counseling, and literacy programs often fall by the wayside. State Senator Cal Hobson of Oklahoma told George M. Anderson that lobbyists from four private prison firms are regularly to be found in the state capitol, "and all are after the same resource: additional incarcerants to put into their systems." Anderson writes that private prison companies profit more when an inmate's status is upgraded from minimum to medium security.
It is not just private prison companies who are looking for a piece of the prison pie. Telephone companies, for example, contract with states to supply phone service to prisons in exchange for a share of the profits. When a prisoner makes a telephone call, it must be paid for by the recipient, often at extremely high rates. States and private prisons collect millions of dollars each year through this scheme.
Our next panel looks at the issue of profits from prison labor.
Sources: Chart: Corrections Corporation of America, http://www.correctionscorp.com/index.html., and Wackenhut Corrections Corp., http://www-2.hoovers.com/co/capsule/5/0,2163,42155,00.html. Betsy Schiffman, "Profits Behind Bars," Forbes.com,forbes.com/2002. Project Censored, http://www.projectcensored.org. Blackstone, Erwin, "Privately managed prisons go before the review board," American City & County, April 1996 v111 n4 p40(7). "Report to the Attorney General: Inspection and Review of the Northeast Ohio Correctional Center, November 25, 1998, http://www.usdoj.gov/ag/youngstown.htm. Smalley, Suzanne, "A Stir Over Private Pens," National Journal, May 1, 1999 v3 i18 p1168(1). "Oregon's Inmate Work Crews," http://www.doc.state.or.us/publicaffairs/pubs/pdf/work_crews.pdf. "Government Profits From Family Misery," http://www.progress.org/prison05.htm. Gregory Palast, "Wackenhut's Free Market in Human Misery," The Observer (London), September 26, 1999, http://www.corpwatch.org/. Judith Greene, "Prison Privatization: Recent Developments in the United States," paper presented at the International Conference on Penal Abolition, May 12, 2000, http://www.oregonafscme.com/corrections/private/prison_privatization.htm. General Accounting Office, "Private and Public Prisons," GAO/GGD-96-158, http://www.gao.gov. Anderson, George M., Prisons for Profit: Some ethical and practical problems," America, Nov 18, 2000 v183 i16 p12. Ken Silverstein, "America's Private Gulag," Prison Legal News, June 1, 1997 http://www.corpwatch.org/issues/PID.jsp?articleid=867. Information retrieved November 25, 2002.
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about 1 month ago
Awesome research thank you!