Lockup for Profit

In this Nov. 3, 2005, file photo, an empty corridor in the Michigan Youth Correctional Facility in Baldwin, Mich., is shown. A private company that a federal investigation found allowed “a cesspool” of conditions to exist at a Mississippi youth prison could be in line to oversee Michigan inmates if GOP lawmakers push through a bill that could move the inmates from a state prison in Ionia to one run by GEO Group in Baldwin. — AP PHOTO/AL GOLDIS, FILE

Hundreds of thousands of inmates now in private prisons


In the last three decades, America has experienced an explosive increase in its prison population — more than 2.5 million inmates are now serving time — and that increase is attributable to a host of interrelated reasons from the failed War on Drugs to a lack of quality public education to a lack of comprehensive re-entry services and living wage jobs.

But since the late 1990s, another facet of the problem has begun to emerge — an increase in the number of private, for-profit prisons. Promising huge savings in taxpayers’ dollars, along with other financial perks, private prison corporations are becoming the alternative to expensive state facilities.

The Corrections Corporation of America, or CCA, one of the leading providers of for-profit prisons in the nation, recently sent letters to 48 states offering to buy their correctional facilities for a princely sum — $250 million towards the purchase of state prisons. In a time when the national economy is still limping and state budgets are shrinking, the state of Ohio found CCA’s “Corrections Investment Initiative” was an offer it couldn’t refuse.

The letter, sent by Harley Lappin, CCA’s chief corrections officer, and a former director of the Federal Bureau of Prisons, touted the corporation’s success with the program in Ohio and the millions in taxpayers’ money saved. The only caveat to the initiative was that the contract partner must agree to keep the handed over facilities 90 percent full. In other words, the state has the obligation to keep sending prisoners.

“CCA is earmarking $250 million for purchasing and managing government-owned corrections facilities. The program is a new opportunity for federal, state or local governments that are considering the benefits of partnership corrections,” Lappin wrote. “We’re proud to consistently deliver safe and efficient operations and high quality educational and rehabilitation programming for inmates and detainees under our care. Our decision to earmark funds for the purchase and management of existing government facilities follows our success last year in Ohio with the groundbreaking acquisition of the 1,798-bed Lake Erie Correctional Facility in Conneaut. On Jan. 1, 2012, we assumed ownership and management responsibility in a transition described by all parties as seamless. This transfer culminated a process that, according to state officials, generated more than $72.7 million in proceeds for Ohio taxpayers, about $50 million of which was allocated for the Ohio Department of Rehabilitation and Correction. Estimated annual savings in corrections operations are placed at $3 million.”

According to Lappin, CCA is also modernizing Ohio’s Lake Erie facility, retaining over 93 percent of the staff. Lappin wrote that Ohio would enjoy the full economic development of the public-private partnership that comes with a CCA-owned facility — and they want to build on that success.

“We want to build on that success and provide our existing or prospective government partners with access to the same opportunity as they manage challenging corrections budgets. Interested parties would execute the sale to CCA and enter into a long-term management contract of 20 years or more,” Lappin wrote.

Attempts by the Tribune to speak to officials at CCA were politely declined.

In order for a state facility to be eligible for CCA to purchase, it would have a 1,000-bed minimum, be no older than 25 years old, suitable for immediate occupancy or is already occupied by inmates, and “an assurance by the agency partner that the agency has sufficient inmate population to maintain a minimum 90 percent occupancy rate over the term of the contract.”

Could Pennsylvania, with Gov. Tom Corbett at the helm, be the next state to take the money and run? So far, it hasn’t happened, although according to Pennsylvania Department of Corrections spokesperson Susan McNaughton, there are a couple of counties with private facilities. Moshannon Valley Correctional Center in Clearfield County is one of them.

“Pennsylvania hasn’t gone the route of prison privatization because think we can do a better job and the cost savings, such as lower salaries, while they may be immediate, will disappear as salaries increase,” said McNaughton. “We went to Louisiana and looked at several private prisons there and came back and just decided we can do a much better job. It was that way under Governor Rendell, and remains so under Governor Corbett — we will not privatize our state facilities. Now there are some aspects of our prisons that we do privatize, such as drug and alcohol treatment, medical and mental health services — but that’s all we will consider.”

Right now, CCA manages approximately 75,000 inmates including men, women and juveniles at all security levels, in more than 60 facilities under contract for management in 19 states and the District of Columbia. The Geo Group, another private corrections corporation, manages approximately 80,000 beds and manages or owns 114 facilities.

CCA has no facilities in Delaware and only one in New Jersey, Elizabeth Detention Center in Elizabeth, New Jersey.

Experts have criticized the move to prison privatization, saying the cost savings don’t really pan out, and have raised concerns about inmate safety as well.

One guard was killed, and 19 other people including inmates were injured during a prison riot at a CCA owned facility in Natchez, Miss., on Sunday, May 20. In October 2011, 46 inmates were injured during a prison riot at another CCA run facility at the North Fork Correctional Facility in western Oklahoma. Fortunately, there were no fatalities.

Private prisons are not a new phenomenon; America has had them since the Revolution. But as the cost of incarcerating inmates continues to increase in a time of shrinking budgets and cost cuttings, the private prison industry has been expanding — holding more inmates and raking in huge profits. Private prisons for adults were non-existent until the early 1980s, but between 1990 and 2009 the number of private prisons increased by approximately 1600 percent. In 2010, the two largest private prison companies took in almost $3 billion dollars in revenue.

“Is it the new slavery? One could make an argument for that, certainly,” said attorney and former Philadelphia Prison Commissioner Leon King. “We’re talking about mass incarceration and companies like CCA are a symptom of a much larger problem. Do private prisons reduce the cost of incarceration? Perhaps over the short term, but when you look at the number of years of the contract, those costs will increase and our prisons are already overcrowded.”

Recently, the Sentencing Project released a study showing that the supposed savings generated by the utilization of private prisons was a questionable claim at best — and largely illusory.

“A 1996 report by the U.S. General Accounting Office (GAO) looked at four state-funded studies and one commissioned by the federal government,” said Chris Mason in the 2012 report, Too Good to Be True: Private Prisons in America. “The methodologies and results varied across the studies, with two showing no major difference in efficiency between private and public prisons, a third showing that private facilities resulted in savings to the state of seven percent, and the fourth finding the cost of a private facility falling somewhere between that of two similar public prisons. Another study also found significant cost savings associated with private prisons, but the GAO criticized the report for using hypothetical facilities in its comparisons. The authors noted that they could not definitively conclude that privatization would not save money, but also established that, ‘…these studies do not offer substantial evidence that savings have occurred.’”

Mason said in the report that the GAO’s critique of the methodologies used in comparisons is not unique. Former Bureau of Prisons Director of Research Gerry Gaes made similar observations when reviewing two reports that found different levels of savings when comparing the same three public prisons with a private facility. In his 2008 report for the National Institute of Justice he observed that the more favorable study for privatization did not adjust the data on the prisons to scale and failed to take into account the proper amount of overhead costs for the private prison. Gaes noted that these types of cost comparisons are deceivingly complicated and that current research is highly limited.

“We oppose prison privatization as a general matter because what a state is doing is essentially turning over control of its citizens to a private entity whose sole purpose is to make money off of human beings. Governor Tom Ridge said there would be no private prisons in Pennsylvania, ever — and we don’t have state facilities controlled or owned by private corrections companies,” said William H. DiMascio, executive director of the Pennsylvania Prison Society. “The overall problem is that generally, they can’t do a better job than the state. They’re going to have fewer staff, for less money, and usually in areas where there is no union foothold. Also, consider the fact that because they have to generate a profit for their shareholders, it’s in their interest to provide fewer programs to prevent recidivism. There is a direct correlation between prison programs and recidivism. It’s bad enough that we’re in an era of mass incarceration, but when it’s in the interest of a private entity to make a profit by incarcerating people, it then becomes the interest of the partner to be encouraged to incarcerate and criminalize offenses that would be better handled in other ways. It’s in the interest of the private entity to have high recidivism rates.”

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