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Tide Turns Against Prison Privatization

North Carolina, Georgia, Utah and Louisiana are among states that experimented with private prisons and because of problems encountered have eliminated them altogether or scaled back plans for future privatization.

North Carolina officials converted both of the state's private prisons to public operation, and banned future "spec" prison development and the importation of prisoners from other states.

Two private prisons were built in North Carolina by Corrections Corporation of America (CCA) in 1998 under five-year contracts with the state to house prisoners on a "pilot" basis. But the Pamlico and Mountain View Correctional Facilities were beset with problems from the day they opened. CCA was repeatedly cited by state monitors for chronic understaffing and inadequate service delivery in many vital areas: prison security and safety; prisoner work assignments; medical and mental health care; education programs; and substance abuse treatment. As a consequence of CCA's failure to live up to contract specifications, the DOC withheld $1 million in payments to the company. And on June 23, 2000, DOC Secretary Theotis Beck announced the state would terminate the CCA contracts and resume operational control of both prisons. CCA will continue to own the prisons, leasing them back to the state.

A week later, the North Carolina General Assembly enacted special legislation to ensure that in the future, private prisons cannot be built or operated in their state to house prisoners from other states.

CCA opened two prisons in Georgia in 1998, both of which were plagued with problems. A state audit found that security and health delivery positions were understaffed, security for prescription drugs was lax and tools that could be used as weapons were easily available to prisoners. Georgia officials said the company has corrected the problems, but no doubt their enthusiasm for prison privatization was dampened.

In 1999 CCA built a prison in McRae, Georgia "on speculation" that the DOC would need additional bed space by 2001. But the state lowered its projections and declared that it wouldn't need the extra bed space.

CCA announced plans to fill the empty 1,524-bed McRae prison with Hawaii state prisoners. But Georgia officials said the state has never allowed prisoners from another state to be housed in Georgia.

McRae city officials are supportive of the CCA prison because the community needs the jobs. But city officials say they are unsure they have the authority under state law to negotiate a contract with CCA that would involve bringing in out of state prisoners.

Utah terminated a contract with Cornell Corrections Corp. to build and operate a medium-security prison after promised savings failed to materialize. Instead, the state will rent bed space from expanded jails in Beaver and Millard counties.

Cornell beat out three other bidders in 1998 to build the 500-bed prison on 40 acres in Utah's West Desert, 44 miles west of Salt Lake City, at an original projected cost of $26.7 million. The community of Grantsville had lobbied hard to host the prison to bring in jobs. The town even spent $100,000 to extend a water line to the edge of the city limits in order to support the prison.

In the spring of 1998, the Utah Citizens Education Project (UCEP) was formed by a small group of veteran activists and went to work to fight prison privatization in Utah. Along the way, they gathered the support of the ACLU, the Utah chapter of CURE (Citizens United for the Rehabilitation of Errants), the Utah Sheriff's Association and the Church of Latter Day Saints. The group convinced legislative leadership to hold hearings on the privatization plan. At the same time, they initiated an aggressive press campaign that resulted in dozens of news stories raising questions about prison privatization.

As time dragged on, interest rates rose and the value of Cornell's stock nose-dived from $21.50 per share in April 1999 to $5.88 on August 1st making it impossible for the company to deliver on the amount it bid.

Cornell initially told the state it would cost $47.07 per prisoner for each day of incarceration. In the original bid, the state would also have to pay an additional $15.56 per prisoner per day to retire Cornell's debt for construction of the facility. But as the months dragged on, that amount climbed to $28.61 per day, bringing the total cost per prisoner to $75.68. Moreover, the county jails committed to charging the state $49.29 per cell.

Those numbers, along with the opposition to privatization generated by UCEP, caused the state to terminate the deal with Cornell before construction began. The state will still have to pay Cornell for some costs related to the contract. State officials say there is a "significant disagreement" about how much is owed but they hope to resolve the dispute through mediation rather than litigation.

The Utah DOC still has plans to contract with a private prison company to operate an abandoned state jail that it hopes to convert to a women's prison. And it already contracts with Ogden, Utah-based Management and Training Corp. to manage a 400-bed prison in Draper. But cancellation of the proposed Cornell prison marks a turning point. That prison was stopped dead in its tracks, by a combination of grassroots opposition and economic factors.

Another turning point was reached on October 3, 2000, Federal Judge Frank Polozola signed a $20 million dollar settlement to end litigation brought against the state of Louisiana's juvenile prisons. Although there were problems cited in all of the state's juvenile facilities, by far the worst abuse occurred in two facilities operated by private prison corporations. [See: "Louisiana Abandons Private Juvenile Prisons," PLN on page 24 of this months issue]

Under the terms of the settlement, the state resumed custody of all of its juvenile detainees and eliminated the use of private juvenile facilities altogether.

Although the state is left holding the $20 million bag, so to speak, it filed a motion in federal court against Trans-American Development Associates, Inc., and Correctional Services Corporation of Sarasota, Florida, to pay a portion of the legal fees related to the litigation.

Sources: The Associated Press, The Desert News, Justice Matters

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