The privatization of prisons: How Corporate America is redefining criminal justice

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Privatization is not a novel idea and has become the solution to American government waste, under-funding, corruption, and lack of response to the needs of the public.

The concept of outsourcing American prisons and many of its sub-components such as food, linen, and healthcare services has risen sharply over the past 25 years due in part to a prolific rise in the prison population brought on by tougher sentencing guidelines for non-violent and drug crimes. It is estimated that between 1970 and 2000, the United States incarceration growth rate rose from 280,000 to 2,000,000, a pace with which the public sector has had difficulty in keeping up. These numbers translate to an 11 percent increase in prison beds, nationwide. As a result, prison officials and legislative representatives both on the state and federal level have become overly burdened with finding a solution to this growing demographic, and conclude that outsourcing its medium and low security prisoners to corporately run entities is the most economically sound option.

However, those who advocate against privatizing state prisons say its bad public policy for several reasons. For one, civil and human rights groups contend that prison outsourcing brings back the concept of convict leasing which was part of the American correctional culture following the end of the Civil War, and after freed slaves escaped plantations. The system allowed freedmen to be leased out to business owners as compensation for their loss of labor, a syndrome which the Emancipation Proclamation helped to create. Additionally, the convict leasing business was wrought with one form of corruption after another and often included no system of accountability. Civil rights groups argue that not only is prison privatization detrimental to efforts to reduce recidivism rates, private prison corporations strategically build new prison complexes in geographic areas such as the South, which contains the largest population of African Americans as well as judicial districts with the most conservative judges whom are toughest on crime.

The emergence of prison outsourcing has steadily gained in popularity due to issues such as lack of public funding for new prisons and prison-related services, overcrowding, as well as concerns over deteriorating and unsafe living conditions. Along political party lines, privatization has been likened to Republican “tough on crime” ideologies and the right wing agenda to steer a profitable government service to the private sector in order to reap financial rewards. The American prison system is the largest in the world and continues to grow. As of 2011, federal inmates in private prisons accounted for 16.3 percent of all inmates within the United States, and those located in state level private prisons constituted 6.6 percent of the total inmate population. Additionally, between 2000 and 2008, the number of federal prisoners housed in private prisons rose by 110 percent. An important question in the debate over who can best handle the world’s largest prisons is, does privatizing U.S. prisons lead to improved quality?

Over the past two decades or so, prison privatization has been well-studied and highly evaluated, however proponents and opponents alike feel that they have won the argument over which sector is most qualified to manage the nation’s correctional facilities. Advocates for privatizing prisons are convinced that private contractors can manage correctional facilities more efficiently, while offering improved quality. Whereas, naysayers argue that privatization is a conduit to corruption and wrongdoings because the contract bidding process encourages unhealthy competitive practices with little oversight. Skepticism over how private prisons can manage its operations more cheaply than the public sector is deeply rooted in the notion that expenditure reductions are occurring with the salaries of essential personnel such as security guards and psychiatrists.

Supporters of private prisons contend that malfeasance found within the public sector is much lessened in the private sector, arguing that since cronyism and patronage are largely associated with public managers and administrators, the private sector is more ethically responsible when it comes to handling the business of corrections. However, many instances of fraud and abusive practices, particularly pertaining to contracts, can be found within the private prison industry, as research proves. For instance, during the mid-nineties, the former chief executive officer of one of the largest private prison corporations, U.S. Corrections, was convicted of fraud involving its contract with the local jail.

During the mid-nineties there were over 100 privately run prisons in the United States which arguably outperformed government-run prisons, particularly in terms of living conditions and safety. One research team drew comparisons to both public and private prison systems contending that the advantage in which private sector prison contractors have over the public sector is the lack of undue inner-agency political and bureaucratic influence which often overshadows and undermines policy-making processes. However, another recent study explains how private prison lobbyists are undoubtedly the biggest threat to the American corrections industry. Lobbyists for the private prison industry help keep the pockets of prison corporations lined by aiding and abetting in the push for lawmakers to pass tougher crime legislation; an almost guarantee against economic downturns in the private prison industry.

On the other hand, researcher suggests that the reason private prisons are able to provide better facilities for inmates is due to cutting expenses, even with security staff. Cost-saving measures can and do result in increased violence among inmates, and between staff and inmates due to insufficiently trained security guards and staffing shortages. For example, in 1995, a New York correctional facility run by Correctional Services Corporate experienced a riot when inmates protested deplorable living conditions. Detention center security guards were ill-equipped and lacked training to handle the situation, inevitably calling in local law enforcement, as well as state and federal law enforcement officials. A subsequent investigation into the management practices at the detention center discovered a scheme involving several state lawmakers and the unauthorized use of correctional services and gratuities.

Security staffing shortages were so severe at an Idaho correctional facility a civil lawsuit filed by the American Civil Liberties Union (ACLU) resulted in numerous sanctions imposed by a federal judge. The suit alleged that the facility, owned by Corrections Corporation of America (CCA), the largest private prison conglomerate in the United States had disproportionate levels of inmate on inmate violence in comparison to their other facilities. When reviewing a study which asked current and former inmates to compare the conditions of a private versus a government-run prison, researchers found no significant favoring of one over the other; although, the private prison was reportedly a cleaner environment. A 2005 study found that in terms of quality, there was no “significant” difference between privately or government-run prisons. The research was based on results from 17 different studies which were performed across a ten-year span and measured issues ranging from safety standards to the recidivism rates of inmates enrolled in treatment programs.

Likewise, the results of a 1991 study measuring the operations of several private prisons in Texas, Tennessee, Kentucky and Florida suggested “no overwhelming evidence to tout them as an alternative to publicly operated correctional facilities.” When handed a questionnaire and asked to rank prisons from one to five, inmates at a Minnesota prison (one private, two government) ranked the government prison overall higher than the private prison. A nationwide study examining the safety of private prisons found that “assaults on guards by inmates were 49 percent more frequent in private prisons than in government-run prisons, and assaults on fellow inmates were 65 percent more frequent in private prisons.” Each of these findings might prove the greatest evidence to support the argument that private prisons are not necessarily superior to government-owned prisons, particularly when other factors such as safety, access to quality healthcare, and recreational programs are weighed.

Critics of privatization argue that private prison contractors are simply out to turn a profit, and will decrease quality and services as well as sacrifice the safety and rehabilitation of inmates in order to maximize their profit margin. Cost is undoubtedly the major factor in determining whether or not to privatize America’s prisons and there has been much criticism over the privatization of prison operations becoming more costly due to the for-profit nature of running private enterprise. Private prison skeptics argue that skimping in areas such as security staffing and rehabilitation programs allow private prisons to pay corporate executives salaries and bonuses proportionate to blue chip executives employed in other industries. In fact, a recent study has shown that executives at GEO, one of the country’s largest private prison corporations earn millions of dollars per year on the backs of taxpayers who support government through paying taxes and electing politicians to purportedly serve in the public interest. Opponents of privatization are convinced that the private sector is no better equipped to curtail dangerous and violent prison conditions than the government. For example, in a New York Times expose into halfway houses in New Jersey, it was found that the majority of the facilities are owned by private prison contractors.

The conditions under which the residents live have been described as dangerous due in part to poorly paid, unmotivated staff. This is just one of several instances that debunk assertions that private prisons are more efficient, better funded, and boasts of greater quality security staff.  Additionally, claims by private contractors that their prisons are safer due to higher staff to inmate ratios have been loosely substantiated, as a report by Krugman reveals. Krugman stated that “privatized prisons save money by employing fewer guards and other workers, and by paying them badly. And then we get horror stories about how these prisons are run. What a surprise!” Whether or not private prisons provide for safer living conditions among inmates is largely inconclusive since scientific research has yet to significantly prove that the private sector is better than the public sector in running prisons. However, a number of studies have been conducted to determine if inmates are in fact safer under the management of private contractors, and just as much time has been spent measuring the results of such research against real safety and security issues found within American correctional facilities.

Proponents of prison privatization argue that because of financial backing from investors, private contractors have a number of advantages over the government and provide a higher quality of services and programs, across the board. However, it is suggested that profit maximization is closely linked to cutting corners. As a 1991 study found, privately run prisons often operate with spending less money by freezing positions, and eliminating job training and educational programs for inmates. Additionally, there is no empirical evidence to support that the amount of financial backing from investors lead to a better quality living environment for private prison inmates. Who can serve the public interest better when serving the public interest means less taxes and lower costs to the public? Advocates for privatization argue that they can design, build, and operate prisons more cost effectively than the government because they do so without raising taxes. However, private prisons often lack recreational areas and cells are smaller than those found in government-run prisons.

Supporters of privatization make the case that the private sector is immune to the political influences of elected officials, although evidence has shown that many private prison corporations have close political allies. In fact, a study conducted in 2013 found that “transferring a lucrative government service to a private business to ensure campaign contributions, votes, and personal riches is a favorite tool of corrupt politicians and profit-seeking entities.” During the 1990s, former Tennessee governor Lamar Alexander and his wife invested heavily in Corrections Corporation of America while the founder of the private prison served as former campaign manager for the upcoming Republican governor as well as former chair of the Republican Party in Tennessee. New Jersey governor Chris Christie has a personal stake in the operations of the state’s largest halfway houses and has sung the praises of these facilities while policymakers and citizens view them as a colossal public threat.

Contextual issues and complications: The Use of Lockup Quotas

There are a number of issues which influence the policy-making process of privatizing prisons, many political and others administrative. So, why the use of lockup quotas? The business of running a prison is none unlike any other business where the bottom line is profits, otherwise there is no business. However, the private prison business is remarkably different from traditional business due to the lack of fierce market competition and trading indices tied to profits. In other words, there will always be a market for private prisons as long as the demand for the commodity never decreases and lobbying for tougher mandatory minimum sentences continues to exist. A big part of the problem with the private prison industry is that only the top four contractors in the United States compete in the market to acquire prisons from state governments, therefore hold the power to control and influence the price of their services. Essentially, there are not enough buyers in the market for fair competition to occur, thus leading to abusive and unscrupulous business practices.

The most striking difference between government-run prisons and those which are privately run is treating inmates as human commodities. One of the newest issues to emerge with prison privatization are “lockup quotas” which require private prison corporations to lease bed space to states and demand guaranteed occupancy levels, sometimes up to 100 percent. Thanks to lockup quotas, the prison inmate has essentially become an economic commodity wherein state corrections departments pay for beds even when there are no inmates to fill the unused space. A recent study revealed that private prisons require state contracts to contain a specific clause requiring a minimum level of occupancy which must be maintained at all times, otherwise the state is forced to pay stiff penalties for any and all unoccupied beds. When explaining private prisons, one can think of the hotel industry and how its survival is based solely on occupancy with the cheaper hotels or (motels) offering less amenities and poorer service, nonetheless manage to sell out. Opponents of privatization have vehemently condemned lockup quotas further making the argument that privatizing prisons constitutes bad public policy.

Not only is the use of quotas within the prison system antithetical to criminal justice reform measures which have been implemented by many states, legislators and policymakers acknowledge that the motives of private prison contractors have little to do with serving the public interest or reducing recidivism. For example, Senator Whitmire from Texas expressed that “you don’t want a prison system operating with the goal of maximizing profits…The only thing worse is that this seeks to take advantage of some states’ troubled financial position.” A byproduct of prison privatization is the growing fear among criminal justice policy advocates that the private prison industry might turn back efforts to reduce prison populations because lockup quotas work against the push to reduce prison overcrowding, which is one of the driving forces behind the privatization phenomenon.

Research has shown that privatizing prisons can bind states into contracts with outlandish terms, in turn placing a choke-hold on the government. Contracts are presumed to protect both the outsourcer and the government, however studies reveal that long-term contracts give the private sector an upper hand over the public sector. For instance, the private prison corporation includes provisions within their contracts which demand that states maintain specific occupancy levels. Additionally, private prison corporations routinely raise costs while delivering poorer quality, and get away with such abusive practices because they are under “fixed” contracts with states. To further illustrate the problems in which some states have experienced in turning over its prisons to the private sector, North Carolina cancelled its contract with Corrections Corporation of America after only three years when the contractor failed to live up to the terms of the contract. North Carolina Department of Public Safety officials contend that CCA did not provide employment programs or psychiatrists in some facilities, even though these requirements were part of the contractual agreement. A federal judge in Utah found Corrections Corporation of America in contempt of court after discovering that the contractor had failed to staff a prison according to the terms of its contract. States parting ways with private prison corporations are steadily growing which support assertions that private prisons are only motivated by money and place very little emphasis on the rehabilitation of inmates.

Nonetheless, Corrections Corporation of America has solicited at least 48 states for the long-term management of their prisons. A recent study found that even when crimes rates decline and beds go unfilled, private corporations lock state prisons into lengthy contracts, ensuring profits. There may be very little cause for complaint since state governments are willingly entering into these contracts fully aware of the backlash from public interest groups. The bottom line for many states with growing crime is the ability to house prison inmates while lacking the budget to build enough facilities, thus the lure of private prison contractors. In California the prison population grew so quickly during the 1990s, state officials proposed that the department of corrections outsource to private prison contractors to handle its minimum security prisoners. California prison officials argued that the absence of legal red tape associated with state contracting, budget constraints, as well as the time in which it takes to build new prisons is reduced when handled by a private contractor. On the other hand, it has been suggested that developing policy towards reducing recidivism rates is a more viable solution to the problem of overcrowding and rising expenses, rather than building more prisons.  Culp, a renowned scholar, whose extensive research concerning prison privatization stated that “as incarceration is it is the most expensive of sentencing options, the smarter policy would be to invest in research and development of non-custody alternatives.”

According to the 1991 research findings, the impact of privatization on individuals employed by corporately owned prisons is “lower wages, reduced employee benefits, and higher employee turnover.” The findings compared the salaries of employees within private and government-run prisons, revealing that the public employees were paid 7.9% more than the private employees. More vacation, holiday, and sick time were also reported by those employed by the government. It is estimated that the disparity in pay is commensurate with the level of experience and education of the security guard. Researchers explain that a security guard employed by the public sector is more likely to possess a high school diploma and work toward retirement, whereas the private corporate security guard views the position as just a job, lacks motivation, and is therefore paid less.  An important aspect to the dialogue that the private sector can operate prisons cheaper than the public sector is how they are able to do so, and at what or whose expense? It is estimated that the cost to staff a private prison facility can take up to 60 percent of the operating budget, which means that in order to run the prison cheaper and offer attractive returns on investments, cost-cutting has to come from somewhere.

Critics of private prisons argue that these cost-saving measures are taking place particularly with the salaries of lower level prison staff such as security guards, not executive officers or shareholders. Private prison corporations boast of less costly management and operational systems because they reportedly only take young, healthy inmates who are much less likely to get ill, therefore require little to no health services. However, inmates who are more violent prone require more security which can strain budgets, and is a cost and responsibility that the private prisons pass onto the state-run facilities. In findings released in 2011 into private prisons in Arizona, it was found that “five of eight private prisons serving Arizona did not accept inmates with ‘limited physical capacity and stamina’ or severe physical illness or chronic conditions.”

The privatization of prisons cannot be implemented successfully without proper oversight to ensure that private prison contractors are adhering to policies and laws governing the treatment of inmates and employees, as well as the management of contracts. Since private prison contractors are essentially private corporations, chief executives presume that their business entities are immune to regulatory compliance required by the states. However, research suggests that state officials have begun to hold private prison corporations to the same standards as government-run prisons. Many states with Florida leading the way, have formed entire oversight agencies geared toward eradicating abusive contract negotiations and misconduct among private prison staff and corporate officers, while other states are deciding to end alliances with private prison contractors due to a number of reasons including lax safety measures, fraudulent contract dealings, and dangerous living conditions. States such as Kentucky, Texas, Illinois, and North Carolina have passed legislation prohibiting procurement with private prison contractors. The state of Idaho recently decided to cancel its long-term contract with Corrections Corporation of America.

Leaving the corrections business up to Wall Street backed corporations does not necessarily equate to increased responsiveness, efficiency, cost-effectiveness, or accountability. In fact, studies have shown that there are just as many deaths occurring in privately owned prisons as government-owned prisons, and the prevalence of violent assaults between inmates in both privately and publicly owned prisons do not vary significantly. However, the advantage for the government in such situations is not the fear of losing a lucrative contract or accreditation. Another advantage in which states hold over private prison corporations is the right to explore correctional options which do not include shuffling non-violent and first-time drug offenders off to private prisons to serve lengthy sentences. Many cash-strapped states are turning to alternatives centered on reforms, such as shorter sentences and boot camps as oppose to allowing corporations to redefine the criminal justice system in America. The rise in the number of non-violent offenders serving state probation sentences is also indicative of progressive criminal justice reform policies. 


Prison Legal News, In the Public Interest, Corrections Project


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