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Tennessee Prison Privatization Bill Fails to Pass

Adramatic confrontation between the private corrections industry and opponents of prison privatization played out in Tennessee earlier this year, ending in an embarrassing defeat for the prison profiteers. Similar struggles can be expected in other states as privatization continues to expand across the nation's corrections systems -- and the Tennessee scenario provides valuable insight into how advances by private prison companies can be successfully challenged.

In April 1997 Tennessee Rep. Matt Kisber announced that the legislature was taking a hard look at privatizing the state's entire prison system, and that lawmakers had been holding closed-door meetings attended by lobbyists for the Nashville-based Corrections Corporation of America (CCA). Kisber, the influential chairman of the House Finance Committee, joined L.t. Governor John Wilder in sponsoring a system-wide prison privatization bill.

The legislation was drafted by a CCA lobbyist, and CCA cited potential budget savings of up to $100 million a year. As a not-so-subtle incentive the company offered to pay an additional $100 million "franchise fee" for the privilege of operating all of Tennessee's prisons. Republican Governor Don Sundquist, a privatization proponent, endorsed the bill; he previously had stretched state law to the breaking point so CCA could operate a 2,000 bed facility located in Lt. Governor Wilder's legislative district. With bi-partisan support from state lawmakers and the governor's office the prison privatization bill looked like a done deal.

Enter the Tennessee State Employees Association (TSEA), a union representing approximately 2,000 state prison workers. The TSEA organized resistance to the proposed legislation, packing committee hearings with public employees, holding anti-privatization rallies, distributing press releases, and vowing to lobby against lawmakers who voted for the bill. The union argued that prison management was a governmental responsibility that shouldn't be sold to the lowest bidder, and criticized the private corrections industry's less- than-exemplary track record (which is ironic considering the many well-docu- mented abuses committed by public prison officials).

The media, sensing controversy, quickly focused on the close connections between private prison companies and local politicians. Corporate officers of CCA and the CCA Prison Realty Trust have included former Tennessee legislator Dana Moore, former Nashville mayor Richard Fulton, former Tennessee gubernatorial candidate Clayton McWhorter and former Tennessee Republican Party chairman Tom Beasley. CCA's lobbyists include Betty Anderson, who is married to Speaker of the House Jimmy Naifeh. And two of Governor Sundquist's top aides once worked for a law firm that represents Wackenhut, the nation's second largest private prison contractor.

In a scandalous twist it was reported that CCA chairman emeritus Tom Beasley was a business partner in the Nashville franchise of Red Hot & Blue Barbecue, a restaurant chain founded by Governor Sundquist. Other partners in the franchise included Speaker of the House Jimmy Naifeh, the governor's wife Martha, and none other than Rep. Matt Kisber the legislator who co-sponsored the bill to privatize Tennessee's prison system. Naifeh and Kisber disinvested in Red Hot & Blue after their partnership with Beasley became public knowledge.

Further, state campaign finance records revealed that Doctor Crants, CCA's C.E.O., was the largest individual contributor to Tennessee lawmakers in 1996 and 1997. The total amount of CCA-related political donations over the two-year period was $99,450, which included personal, corporate and "soft money" contributions; 84 legislative candidates received campaign funds from CCA-connected sources, including Rep. Jimmy Naifeh, who took in over $10,000.

But allegations of special interest peddling and vote buying weren't enough to sink the legislation; it took something closer to the vested interests of the lawmakers involved: taxpayer dollars. As the prison privatization bill was subjected to increased scrutiny the estimated cost savings dwindled. First to go was the "franchise fee," which, once initially offered by CCA, was never mentioned again. And after private prison companies submitted financial data (in secret, so as to protect proprietary information), the projected budget savings shrank to $40-50 million. By the time an amended bill that would permit privatization of 70% of the state's prison system was introduced in January 1998 estimated savings had dropped to $25 million.

Beyond the questionable cost savings and entrenched political connections of private prison companies, the legislation was condemned on moral and humanitarian grounds by a network of local community agencies including religious associations, student groups and an organization representing prisoners' families. Convicts incarcerated at a CCA-operated Tennessee facility provided "inside information" about for-profit prisons, and computer-savvy activists took the prison privatization debate to the Internet. Working together these prisoners' rights advocates formed an unlikely alliance with the TSEA, and coordinated phone, e-mail and letter-writing campaigns directed at state lawmakers.

As the legislation began to founder in the face of organized opposition its sponsors tried to salvage it with an amendment that restricted privatization to 25% of the prison system for the first two years. And in a last-ditch effort they considered limiting privatization to newly-constructed facilities while leaving existing prisons under state control. The amended bill passed a House subcommittee, but was stonewalled in the Senate despite strong support from the legislative leadership. It was withdrawn on April 14, 1998 following a year-long struggle that pitted the anti-privatization David against the corrections industry Goliath.

Although the defeat of the legislation was a victory for the organizations and individuals who opposed it, there's little doubt that another prison privatization bill will be introduced next year. After all, huge dollar amounts are at stake not so much in potential savings for taxpayers as in campaign donations and expenditures by lobbyists for private corrections companies. "There are always future [legislative] sessions," said CCA spokesperson Susan Hart, ominously. And prison privatization opponents, now twice as determined, will be ready and waiting for them.

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