The private-prison industry is in trouble. For close
to a decade, its business boomed and its stock prices soared because state
legislators across the country thought they could look both tough on crime and
fiscally conservative if they contracted with private companies to handle the
growing multitudes being sent to prison under the new, more severe sentencing
laws. But then reality set in: accumulating press reports about gross deficiencies
and abuses at private prisons; lawsuits; million-dollar fines. By last year, not a
single state was soliciting new private-prison contracts. Many existing contracts
were rolled back or even rescinded. The companies' stock prices went through the
Here was one experiment in the privatization of public services that
might have limped to a well-deserved close. But instead, the federal government
seems to be rushing to the industry's rescue.
Consider just the last 12 months, and just the Corrections Corporation of
America (CCA), the country's largest private-prison company.
Bartlett, Texas. State investigators found that doors had been left unlocked at
the facility. No one was watching the closed-circuit-TV surveillance monitors.
When the prisoners cut their way through the prison's perimeter fence, a security
alarm sounded, but staff in the prison's control center turned it off and did
had repeatedly beat a prisoner while he was handcuffed, shackled, and unable to
resist pleaded guilty in federal court.
disturbance that left five prisoners injured. Two days later, five guards were
stabbed and three others were injured when prisoners at a CCA prison in
Estancia, New Mexico, took them hostage.
a CCA juvenile prison had abused a youth confined there and that their use of
force was so malicious it was "repugnant to the conscience of mankind." The jury
awarded $3 million in punitive damages.
Center in New Mexico teargassed nearly 700 prisoners who had staged a daylong
nonviolent protest of conditions at the facility. The same day, in Oklahoma, the
addiction-treatment manager at CCA's Tulsa Jail resigned. The warden, she
said, had directed her to make a "sales pitch" to local judges, urging them to
sentence offenders to a treatment program in the jail even though the program
had been eviscerated in order to cut operating expenses.
Oklahoma jail, and nine guards at CCA's District of Columbia Correctional
Treatment Facility were indicted. Federal prosecutors alleged that they had
accepted money from an undercover FBI agent in exchange for smuggling two-way
pagers and cash into the prison.
after 10 Valium tablets were reportedly found hidden in his sock during an
Wheelwright, Kentucky, started a riot in the prison recreation area that spread
to four housing units before it was over, with inmates setting mattresses on fire
and tossing TVs and toilets through the windows. Two weeks later, CCA fired
the warden and his top assistant, citing "policy violations."
CCA is not the only private-prison company with a record of continuing
abuses. Prisons run by the Wackenhut Corporation in New Mexico have repeatedly
erupted in violence and disturbances. (Together, CCA and Wackenhut control 75
percent of the U.S. private-prison market.) Between December 1998 and August
1999, four inmate-on-inmate homicides were committed in Wackenhut's New Mexico
facilities; and then, in August, a guard was murdered as well. Most people think
that kind of violence is the norm in America's prisons. But the best available
data on prison homicides--compiled by the Criminal Justice Institute, publishers
of The Corrections Yearbook--show otherwise: In 1998, when American prisons
held 1.3 million prisoners, there were only 59 inmate-on-inmate homicides. That's
a rate of one murder for every 22,000 prisoners. The homicide rate in Wackenhut's
New Mexico facilities in those nine months was about one for every 400
prisoners--and that's not counting the death of Ralph Garcia, Wackenhut's guard.
But if the company changed its ways after that explosion of violence, it's
hard to tell. Just last year, its Jena Juvenile Justice Facility in Jena,
Louisiana, was shut down. A juvenile-court judge in New Orleans found that the
youngsters held there had been treated no better than animals.
The Great Escape
Industry executives will tell you that these
prison-management disasters were isolated events, confined to a handful of
"underperforming" facilities. But the available evidence suggests that the
problems are structural and widespread.
A research project I directed in 1999 compared the quality of
correctional services in a medium-security private prison run by CCA in
Minnesota with the three medium-security prisons run by the state. We found many
more operational problems in the CCA prison--from program deficiencies and
unreliable methods of classifying prisoners for security purposes to high rates
of staff turnover that resulted in inadequate numbers of experienced,
well-trained personnel. And this was in a private prison that was not notoriously
troubled--a facility that the company, in fact, considered to be exemplary.
There have been few other studies of the quality (as opposed to the cost) of
private-prison services; but evidence is mounting that serious operational
problems are not confined to just a few institutions.
a professor at George Washington University, found 49 percent more
inmate-on-staff assaults and 65 percent more inmate-on-inmate assaults in medium-
and minimum-security private facilities than in medium- and minimum-security
prisons run by government.
correctional-officer turnover was 41 percent for the private-prison industry in
1998, compared with 15 percent in publicly run prisons.
prisoners from secure private prisons that year. (This did not count escapes from
juvenile facilities, from transportation vans, or during escorted hospital
visits.) For comparison, one can look at New York's state prisons, which hold
roughly the same number of inmates as the entire system of private prisons in the
United States. Between 1995 and 1999, there were only eight escapes from secure
institutions in New York--a rate of less than two per year.
The problems seem to be endemic to the enterprise--a result, in great
part, of the private companies' mission to hold down costs. Most important, wages
and benefits substantially lower than those in government-run prisons have
resulted in significantly higher employee turnover, with dramatic ill effects. But
other kinds of corner cutting have also taken a toll. Spending on inmate health
care and on staff training also tends to be inadequate at the private
prisons--another reason why the industry has fallen behind the public-prison
system both in maintaining prisoners' basic human right to a safe and humane
environment and in protecting the safety of the prison staff and the public.
Yet for all that, it's unlikely that the states will save much, if any,
money by contracting with the private companies. Private-prison cost cutting
primarily serves to boost company profits. As early as 1996, a report of the U.S.
General Accounting Office thoroughly reviewed a series of academic and state
studies and concluded that there was no clear evidence about cost savings. The
most optimistic academic advocate of privatizing prisons, Charles Thomas, had
claimed that savings of 10 percent to 20 percent could be expected. But then it
came to light that he'd been paid $3 million in consulting fees by private-prison
corporations. He was penalized by the Florida Ethics Commission, which enforces
the state's conflict-of-interest laws, and had to shut down his research institute
at the University of Florida.
Moreover, the financial advantage that may have been most attractive to state
legislators--the private companies' ability to construct prisons unhindered by
public debt limits or by the need to get voter approval for bonds--has turned out
to be the industry's downfall. From 1991 to 1998, according to Charles Thomas's
data (unfortunately, the only data available), the growth in private adult-prison
beds averaged 36 percent per year. But with the states pulling back from the
trouble-plagued facilities and Wall Street reacting even more strongly to the
deaths and scandals, the companies have found themselves overleveraged and
undercapitalized--CCA, in particular. It built new prisons "on spec,"
assuming that contracts to fill them would follow, and by my estimate the company
now has more than 8,500 prison beds standing empty. The firm last year came close
to a financial meltdown: Its stock lost 93 percent of its value in 2000, and its
accountants reported a fourth-quarter loss of more than a third of a billion
Human rights advocates, public employee unions, prisoners' rights activists,
and student groups have not let any of this pass unnoticed. Thus, it should be no
surprise that so many states are now backing away from for-profit companies.
But while most state correctional managers are taking a hard look
at the private-prison industry, the federal government has stepped up to fill the
breach. Says Steven Logan, the ceo of Cornell Corrections: "On the federal side,
there's an unprecedented [new market]--to the tune of approximately 20,000 beds
that are expected to be set out for people to bid on over the next 24 months." If
Logan is right, the feds are poised to take up a lot of the slack--and, in fact,
to spur new construction--by showering the industry with contracts that will be
worth $4.6 billion over the next 10 years.
Until recently, the Federal Bureau of Prisons (FBOP) had moved relatively
slowly down the road to privatization. It awarded its first private-prison
contract only in 1997--to Wackenhut, to operate a 2,048-bed prison complex for
low- and minimum-security federal prisoners at Taft, California. A second
contract was awarded to CCA in 1998 for a 1,500-bed facility at Eloy, Arizona.
But as the industry's troubles escalated, Congress required the FBOP to contract
for more private beds, insisting on private prisons for at least half the
prisoners at the District of Columbia's prison complex at Lorton, Virginia, which
was scheduled to shut down. And then the FBOP launched a massive privatization
initiative of its own throughout the country.
In part this was a response to the rapid growth of the federal inmate
population. Between 1995 and 1999, while the incarceration rate nationwide grew
by 16 percent, in the federal prison system it rose by 31 percent. By June of
this year, the FBOP was responsible for some 127,000 sentenced criminals and
perhaps 25,000 other detainees; its prisons were operating at 33 percent over
their capacity. And like the state legislators before them, members of Congress
were madly building new prisons (26 are currently under construction or in the
development pipeline), searching for cheap new private-prison beds, and refusing
to consider changes in the draconian sentencing laws that were causing most of
the increase in prisoners.
In fact, the new laws have conveniently created a special population of
prisoners--immigrant prisoners--whom the feds seem comfortable segregating from
the rest of the prison population and turning over to the private companies.
Find and Deport
It's common knowledge that the harsh drug-sentencing laws
that Congress enacted in 1986 have greatly increased the federal prison
population. (In 1984 just 30 percent of federal inmates were drug offenders;
today 57 percent are.) Less known is the impact of federal immigration policies.
Since at least 1994, Congress has put enormous pressure on federal officials to
find and deport troublesome immigrants (both legal residents and undocumented
immigrants). In the 1996 Immigration Reform Act, Congress widely expanded the
list of crimes for which a noncitizen must be deported after serving his or her
sentence. These crimes, called "aggravated felonies," are now defined to include
many offenses that are neither aggravated nor even, in many other jurisdictions,
felonies. But together, the statute and the political pressure have fueled an
all-out law-enforcement campaign to find crime-committing immigrants--even
relatively small-time offenders and those whose only "crime" is attempting to
re-enter the country--and with that has come an explosion in the number of
non-U.S. citizens in federal prison, the so-called "criminal alien" population.
There were 35,629 noncitizens serving criminal sentences in federal
prisons on June 7 of this year, up from 18,929 only seven years ago. About half
of them were Mexican citizens, 10 percent Colombians, 7 percent Cubans, and the
rest an assortment of other nationalities. In addition, several thousand other
noncitizens are being held in federal prisons, not as convicts serving criminal
sentences but as pretrial or predeportation detainees. These include many
"lifers"--people who have completed their criminal sentences in state or federal
prison and are now supposed to be deported but who remain incarcerated because no
country will take them. A U.S. Supreme Court ruling in June prohibited the
indefinite detention of certain lifers, but according to Judy Rabinovitz, senior
staff counsel at the American Civil Liberties Union's Immigrants' Rights Project,
the decision is unlikely to affect most of those in FBOP facilities.
Information about the immigrant population in federal prison is difficult to
come by, but telling evidence of the federal-law-enforcement campaign that is
targeting immigrants comes from Peter H. Schuck, a professor at Yale Law School.
In 1998 Schuck found that while immigrants (legal as well as undocumented) made
up 9.3 percent of the American population and a roughly comparable 7.6 percent of
the prison population of the states, they made up a vastly disproportionate 29
percent of those in federal prisons.
The "criminal aliens" in federal prison are apparently a relatively
unthreatening group of prisoners. According to the federal Bureau of Justice
Statistics (BJS), about a third of them were sentenced for immigration
violations, and just 1.5 percent of them were sentenced for violent offenses
(compared with 15 percent of the U.S. citizens in federal prison). A BJS
research project found that even those convicted of drug sales are likely to have
played a lesser role in the transaction than did U.S. citizens convicted on
This may also help to explain why these prisoners have been singled out for
incarceration in privately run prisons. Criminal aliens typically require only
low-security prisons, federal officials say. And as Mike Janus, privatization
administrator at the FBOP, points out, they face deportation at the end of
their sentences and therefore do not require the kinds of education and
counseling programs available in regular federal prisons. Moreover, they have
little if any political clout.
Off the record, the FBOP officials say that they're confident they can
oversee the private companies better than the states have. On the record, they
say they are simply seeking "management flexibility" to deal with this burgeoning
segment of the prison population in a less program-rich environment than their
other prisoners require. But that's not far from acknowledging that they think
they can get away with providing second-class prisons for these second-class
The FBOP's first request for proposals to provide up to 7,500
low-security beds for this population was issued in September 1999. As phase one
of the plan for private contractors to meet the prison system's "criminal alien
requirements," it was called CAR-I for short. The beds were to serve
California, Arizona, New Mexico, Texas, and Oklahoma.
A CAR-I proposal by Cornell Corrections to house almost 2,000 prisoners at
a facility near Santa Fe that the company hoped to lease from the state of New
Mexico was eliminated from the competition as a result of vigorous opposition
from a local coalition of immigrant-rights advocates, civil rights and church
leaders, and prison reformers. But in June of last year, two other CAR-I
contracts were signed with CCA--one for 2,304 beds at the company's
long-empty "spec" prison at California City, California, and the other for 1,012
beds at its Cibola facility in Milan, New Mexico. (This is the facility where,
some months later, guards teargassed hundreds of prisoners who were protesting
conditions.) These contracts are for an initial three-year term, followed by
seven one-year renewal options. They will be worth about $760 million over 10
For CCA, which carried more than $1 billion in outstanding indebtedness
last year and was in violation of its credit agreements, the two contracts are
providing a virtual bailout. The company's many creditors were willing to extend
it waivers last year. But without the federal contracts, John D. Ferguson, the
company's new CEO, frankly admits, CCA would likely have been forced into
A second request for proposals--CAR-II--was issued last year for up to
1,500 beds to be located in the Alabama, Florida, Mississippi, and Georgia
region. Five private companies and one Mississippi county proposed 14 possible
CAR-II sites. The field has now been narrowed to three, and draft
environmental-impact statements have been issued for public comment. The winners
of this sweepstakes will be announced in October, but CCA appears to have the
inside track: It has proposed a "spec" prison already built by the company in
McRae, Georgia--while Cornell Corrections has two sites in the running that would
require new prison construction from the ground up.
A CAR-III solicitation was also issued late last year--for three 1,500-bed
facilities in California and Arizona. By the January 2001 deadline, six
companies, one town, and a sheriff's department had submitted 20 prospective
sites. Less than a week later, the FBOP filed public notice that it
anticipates a CAR-IV as well, for the Delaware, Kentucky, Ohio, Virginia, and
West Virginia region.
This momentum is unlikely to let up any time soon. The private-prison industry
has excellent connections with the federal government. Michael J. Quinlan, the
chief operating officer of CCA, served as the FBOP director under the first
President George Bush. Norman Carlson, a director of the FBOP under President
Ronald Reagan, sits on Wackenhut's board of directors. Meanwhile, generous
campaign contributions and the best lobbyists that money can buy have spread the
influence of private-prison companies beyond the personal networks of their
executives and board members to the halls of Congress. There are grass-roots
pressures, as well, coming from desperate pockets of rural America where prisons
are seen as a source of new jobs. And there is every reason to expect that the
current administration will go along. With 42 private prisons located within its
borders, President Bush's home state of Texas is the world capital of the
To be sure, political opposition is swelling. The private-prison industry's
record of human rights violations, violence, and inmate escapes has fueled an
unusual alliance between prison-reform advocates and correctional officers (union
members in government-run institutions), who are now standing together with
student groups and community organizations to fight any further expansion of
prisons for profit. In most states, where prison-population growth is finally
slowing or halting, the coalition appears to have turned the tide.
The same groups are now supporting the Public Safety Act, introduced in
Congress this year by Democratic Senator Russell Feingold of Wisconsin,
Democratic Congressman Ted Strickland of Ohio, Republican Congressman John E.
Sweeney of New York, and 56 other House sponsors. This measure would bar the
FBOP from contracting with private prisons and would deny federal funding for
prisons to states that contract with private facilities. But prison privatization
is unlikely to be halted in the federal system until the growth of the federal
prison population is curtailed. And that means that the effort to reform federal
sentencing and immigration laws must continue.
It's a good cause. The anti-immigrant laws adopted by Congress in 1996,
especially as they interact with federal drug laws, create particularly unfair
punishments for noncitizens, most of whom are subject to harsh and rigid
sentences for drug offenses, with no consideration of mitigating circumstances or
the offender's actual role in the crime. And then they are further punished with
deportation. The federal plan to create and expand a huge second tier of
segregated immigrant prisons--whether public or private--is an irrational and
expensive way to avoid coming to terms with those fundamental injustices.
At the end of march, despite the fact that more than 2,600 beds
Why? Perhaps because prisons are increasingly seen as engines of
Shortly after the Civil War, the Mississippi "Black Codes" were enacted to
But just when prison litigation seemed finally to be ending these abuses, the
It was a "get tough" juggernaut, and it sent the state's prison
Between June 1994 and June 2001, Mississippi's prison population grew from
So when Robert L. Johnson became corrections commissioner last fall, he
The contract-facility managers went crying directly to the legislature.
Until that point, Mississippi legislators had been consumed with apparently
Mississippi legislators also voted a $16.4-million appropriation from the
Governor Ronnie Musgrove pointed out that lawmakers were creating a multiyear
But there will no doubt be another round of lobbying next year. The
The PEER analysts uncovered almost $700,000 in "unnecessary costs" at the
A profitable local business, indeed.
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