Private Prisons Make Money Even When Crime Rates Fall

This Is How Private Prison Companies Make Millions Even When Crime Rates Fall

September 19, 2013

Mother Jones - We are living in boom times for the private prison industry. The Corrections Corporation of America (CCA), the nation's largest owner of private prisons, has seen its revenue climb by more than 500 percent in the last two decades. And CCA wants to get much, much bigger: Last year, the company made an offer to 48 governors to buy and operate their state-funded prisons. But what made CCA's pitch to those governors so audacious and shocking was that it included a so-called occupancy requirement, a clause demanding the state keep those newly privatized prisons at least 90 percent full at all times, regardless of whether crime was rising or falling.

Occupancy requirements, as it turns out, are common practice within the private prison industry. A new report by In the Public Interest, an anti-privatization group, reviewed 62 contracts for private prisons operating around the country at the local and state level. In the Public Interest found that 41 of those contracts included occupancy requirements mandating that local or state government keep those facilities between 80 and 100 percent full. In other words, whether crime is rising or falling, the state must keep those beds full. (The report was funded by grants from the Open Society Institute and Public Welfare, according to a spokesman.)

All the big private prison companies—CCA, GEO Group, and the Management and Training Corporation—try to include occupancy requirements in their contracts, according to the report. States with the highest occupancy requirements include Arizona (three prison contracts with 100 percent occupancy guarantees), Oklahoma (three contracts with 98 percent occupancy guarantees), and Virginia (one contract with a 95 percent occupancy guarantee). At the same time, private prison companies have supported and helped write "three-strike" and "truth-in-sentencing" laws that drive up prison populations. Their livelihoods depend on towns, cities, and states sending more people to prison and keeping them there.

You might be wondering: What happens when crime drops and prison populations dwindle in states that agreed to keep their private prisons 80 percent or 90 percent full? Consider Colorado. The state's crime rate has sunk by a third in the past decade, and since 2009, five state-run prisons have shuttered because they weren't needed. Many more prison beds remain empty in other state facilities. Yet the state chose not to fill those beds because Democratic Gov. John Hickenlooper and CCA cut a deal to instead send 3,330 prisoners to CCA's three Colorado prisons. Colorado taxpayers foot the bill for leaving those state-run prisons underused. In March, Christie Donner, executive director of the Colorado Criminal Justice Reform Coalition, estimated that the state wasted at least $2 million in taxpayer money using CCA's prisons instead of its own.

That's just one example of how private prison companies keep the dollars rolling in, whether crime is rising or waning. Not surprisingly, In the Public Interest's report calls on local and state governments to refuse to include occupancy requirements and even ban such requirements with new legislation. "With governmental priorities pulling public funds in so many different directions, it makes no financial sense for taxpayers to fund empty prison beds," the report says.

Click the article heading to read the full report.

By the Numbers: The U.S.’s Growing For-Profit Detention Industry

June 20, 2012

ProPublica - The growth of the private detention industry has long been a subject of scrutiny. A recent eight-part series in the New Orleans Times-Picayune chronicled how more than half of Louisiana’s 40,000 inmates are housed in prisons run by sheriffs or private companies as part of a broader financial incentive scheme. The detention business goes beyond just criminal prisoners.

As a Huffington Post investigation pointed out last month, nearly half of all immigrant detainees are now held in privately run detention facilities. Just this week, the New York Times delved into lax oversight at industrial-sized but privately run halfway houses in New Jersey.

We’ve taken a look at some of the numbers associated with the billion-dollar and wide-ranging for-profit detention industry—and the two companies that dominate the market:

General Statistics:

1.6 million: Total number of state and federal prisoners in the United States as of December 2010, according to the Bureau of Justice Statistics

128,195: Number of state and federal prisoners housed in private facilities as of December 2010

37: percent by which number of prisoners in private facilities increased between 2002 and 2009

217,690: Total federal inmate population as of May 2012, according to the Bureau of Prisons
 
27,970: Number of federal inmates in privately managed facilities within the Bureau of Prisons

33,330: Estimated size of detained immigrant population as of 2011, according to the U.S. Department of Homeland Security

Corrections Corporation of America

66: number of facilities owned and operated by Corrections Corporation of America, the country’s largest private prison company based on number of facilities

91,000: number of beds available in CCA facilities across 20 states and the District of Columbia

$1.7 billion: total revenue recorded by CCA in 2011

$17.4 million: lobbying expenditures in the last 10 years, according to the Center for Responsive Politics

$1.9 million: total political contributions from years 2003 to 2012, according to the National Institute on Money in State Politics

$3.7 million: executive compensation for CEO Damon T. Hininger in 2011

132: recorded number of inmate-on-inmate assaults at CCA-run Idaho Correctional Center between Sept. 2007 and Sept. 2008

42: recorded number of inmate-on-inmate assaults at the state-run Idaho State Correctional Institution in the same time frame (both prisons at the time held about 1,500 inmates)

The Geo Group, Inc., the U.S.’s second largest private detention company

$1.6 billion: total revenue in year 2011, according to its annual report

65: number of domestic correctional facilities owned and operated by Geo Group, Inc.

65,716: number of beds available in Geo Group, Inc.’s domestic correctional facilities

$2.5 million: lobbying expenditures in the last 8 years, according to the Center for Responsive Politics

$2.9 million: total political contributions from years 2003 to 2012, according to the National Institute on Money in State Politics

$5.7 million: executive compensation for CEO George C. Zoley in 2011

$6.5 million: damages awarded in a wrongful death lawsuit against the company last June for the beating death of an inmate by his cellmate at a GEO Group-run Oklahoma prison. An appeal has been filed and is pending.

$1.1 million: fine levied against the company in November 2011 by the New Mexico Department of Corrections for inadequate staffing at one of its prisons


Overall, the U.S. has approximately 25 percent of the entire global prison population even though it only has 5 percent of the total global population.  The United States has the highest incarceration rate on the entire globe by far, and no nation in the history of the world has ever locked up more of its own citizens than we have.

Are we really such a cesspool of filth and decay that we need to lock up so many of our own people?  Or are there some other factors at work?  Could part of the problem be that we have allowed companies to lock up men and women in cages for profit?  The two largest private prison companies combined to bring in close to $3,000,000,000 in revenue in 2010, and the largest private prison companies have spent tens of millions of dollars on lobbying and campaign contributions over the past decade.

Putting Americans behind bars has become very big business, and those companies have been given a perverse incentive to push for even more Americans to be locked up.  It is a system that is absolutely teeming with corruption, and it is going to get a lot worse unless someone does something about it.

And many of the largest corporations in America have rushed in to take advantage of this pool of very cheap slave labor.  Just check out some of the big names that have been exploiting prison labor...

At least 37 states have legalized the contracting of prison labor by private corporations that mount their operations inside state prisons. The list of such companies contains the cream of U.S. corporate society: IBM, Boeing, Motorola, Microsoft, AT&T, Wireless, Texas Instrument, Dell, Compaq, Honeywell, Hewlett-Packard, Nortel, Lucent Technologies, 3Com, Intel, Northern Telecom, TWA, Nordstrom’s, Revlon, Macy’s, Pierre Cardin, Target Stores, and many more. All of these businesses are excited about the economic boom generation by prison labor.

Just between 1980 and 1994, profits went up from $392 million to $1.31 billion. Inmates in state penitentiaries generally receive the minimum wage for their work, but not all; in Colorado, they get about $2 per hour, well under the minimum. And in privately-run prisons, they receive as little as 17 cents per hour for a maximum of six hours a day, the equivalent of $20 per month. The highest-paying private prison is CCA in Tennessee, where prisoners receive 50 cents per hour for what they call “highly skilled positions.” At those rates, it is no surprise that inmates find the pay in federal prisons to be very generous. There, they can earn $1.25 an hour and work eight hours a day, and sometimes overtime. They can send home $200-$300 per month.

One of the keys to success in the private prison business it to get politicians to vote your way.  That is why the big private prison companies spend so much money on lobbying and campaign contributions.

But of course some of the biggest profits for private prisons come from detaining young people.  Today, private prison companies operate more than 50 percent of all "youth correctional facilities" in the United States.

And the truth is that there seem to be endless stories of abuse in private prisons.  One private prison company reportedly charges inmates $5.00 a minute to make phone calls but only pays them $1.00 a day to work...

Last year the Corrections Corporation of America (CCA), the nation’s largest private prison company, received $74 million of taxpayers’ money to run immigration detention centers. Their largest facility in Lumpkin, Georgia, receives $200 a night for each of the 2,000 detainees it holds, and rakes in yearly profits between $35 million and $50 million.

Prisoners held in this remote facility depend on the prison’s phones to communicate with their lawyers and loved ones. Exploiting inmates’ need, CCA charges detainees here $5 per minute to make phone calls. Yet the prison only pays inmates who work at the facility $1 a day. At that rate, it would take five days to pay for just one minute. [Source]