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The Societal Impact of the Prison Industrial Complex, or Incarceration for Fun and Profit—Mostly Profit

At the beginning of the 1980s there were no privately-operated adult correctional facilities in the United States. As of 2009, more than 129,300 state and federal prisoners were housed in for-profit lock-ups. Prison privatization has become an acceptable practice and the private prison industry is now a multi-billion dollar business. How did this drastic expansion of incarceration-for-profit occur, and more importantly how has it rearranged the criminal justice landscape?

The prison and jail population in the United States has increased exponentially over the past several decades, from 648,000 in 1983 to more than 2.3 million as of 2010. That doesn’t include another 5 million people on parole and probation, plus millions more who were formerly incarcerated and are no longer under correctional supervision. Spending on prisons has outstripped expenditures on higher education in at least five states, including Michigan, Connecticut and California, as lawmakers engage in one-upmanship to prove who’s tougher on crime.

Why has our nation’s prison population grown to epic proportions, until the U.S. – with only 5 percent of the world’s population – now has 25 percent of the world’s prisoners?

The succinct answer is because imprisonment has become enormously profitable as a result of politically-influenced decisions as to who should be locked up and for how long. In the 1980s and 90s a series of tough-on-crime laws were enacted, spurred by the so-called War on Drugs and the corporate media’s steady and often sensationalistic coverage of violent offenses. Such laws included mandatory minimums, truth-in-sentencing statutes and three-strikes laws, which required lengthy prison terms or life sentences for certain offenders.

Consequently, more and more people were arrested, prosecuted, convicted and sent to prison where they served longer periods of time under harsher sentencing statutes.

Concurrently, prison release policies became more restrictive; for example, parole in the federal prison system was abolished in 1987. With more people entering the prison system to serve longer sentences and fewer leaving, the U.S. prison population grew rapidly – increasing over 350 percent from 1983 to the present.

This prison population boom created a market for companies that found they could profit by providing correctional services, and a multi-billion dollar industry was born to capitalize on crime and punishment. The industry, commonly referred to as the “Prison Industrial Complex,” is composed of a confluence of business, policy and special interest groups that collectively profit from incarceration. The most overt members include private prisons companies such as Corrections Corporation of America (CCA), GEO Group (formerly Wackenhut Corrections), Management and Training Corp. (MTC), Cornell Corrections (acquired by GEO in 2010) and a bevy of smaller firms that operate detention facilities.

Beyond companies that own or operate prisons there are a number of other businesses that benefit from the prison boom – ranging from corporations that provide prison and jail food services (Aramark, Canteen Services), prison medical care (e.g., Prison Health Services and Correctional Medical Services, now combined into one company, Corizon), privat-ized probation supervision (such as Sentinel Offender Services) and prisoner transportation (TransCor, PTS of America), to the banks and investment firms that provide bond financing for new prisons, the construction companies that build them, suppliers of razor wire, surveillance cameras and other security equipment, etc. In short, the expansion of the U.S. prison population created an enormously profitable market opportunity. CCA alone grossed $1.67 billion in revenue in 2010; its closest competitor, GEO Group, grossed $1.24 billion.

The private companies that comprise the Prison Industrial Complex have thus reaped substantial monetary benefits by surfing the wave of overincarceration that has swept over our nation’s criminal justice system. They are the ones that most obviously benefit from putting more people in prison for longer periods of time. But what are the collateral consequences of for-profit incarceration as social policy?

Frustrating Prison Reform Efforts

Criminal justice policies in the U.S. are based in large part on capacity – that is, the capacity of state and federal prison systems, as well as sentencing and parole policies that govern the number of people entering prison and being released. The need for bed space created by our nation’s bloated prison population has outstripped existing capacity, leading states and the federal government to go on a prison-building binge and, when that solution failed to accommodate growing numbers of prisoners, to overcrowd correctional facilities by double- or triple-bunking cells and installing beds in prison gyms, classrooms and even chapels.

However, overcrowding – which leads to increased violence, decreased access to medical care for prisoners and a host of other problems – can only go so far. At some point it becomes impossible or impractical to cram more prisoners into already-packed cells, and too expensive to build more prisons. Enter CCA, GEO Group and other companies that finance and build their own correctional facilities, which provide public prison systems with supplemental bed space capacity. Notably, if private prison firms did not provide such additional beds, then state and federal governments would be forced to address the harsh sentencing laws and prison release policies that have resulted in overincarceration and prison overcrowding.

Thus the private prison industry – the moving force behind the Prison Industrial Complex – has served to stymie criminal justice reform efforts over the past several decades, particularly in terms of sentencing and release policies. Rather than being forced to deal with the repercussions of such policies, government officials have used private prisons as a safety valve. As an analogy, if our prison system was a bucket being filled to overflowing by a steady stream of prisoners, the extra bed space provided by the private prison industry allows prisoners to be siphoned off into another bucket. So long as this additional capacity is provided by private prisons, government officials can postpone having to deal with such politically-unpopular issues as sentencing reform or decreasing the prison population.

Indeed, more sensible, socially-beneficial criminal justice policies are considered a threat to private prison firms. According to CCA’s 2010 annual report, “The demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, leniency in conviction or parole standards and sentencing practices or through the decriminalization of certain activities that are currently proscribed by our criminal laws.

For instance, any changes with respect to drugs and controlled substances or illegal immigration could affect the number of persons arrested, convicted, and sentenced, thereby potentially reducing demand for correctional facilities to house them.”

Although private prisons hold only 8 percent of state and federal prisoners, that is an important 8 percent. In 2009, private prisons were utilized by the federal government and 32 states, of which some have become dependent on privatization to accommodate their prison population levels. As of the end of 2009, ten states had 20 percent or more of their prisoners in privately-operated facilities, including New Mexico (43.3 percent), Montana (39.8 percent), Vermont (30.1 percent) and Hawaii (28.0 percent). The federal Bureau of Prisons houses 16.4 percent of its population in for-profit facilities – which does not include thousands of detainees held by Immigration and Customs Enforcement (ICE) in private detention centers. By leveraging a relatively small number of beds nationwide, the private prison industry has managed to forestall much-needed criminal justice reform that would address the problems of overincarceration and overcrowding in the U.S. prison system.

More Violence and Increased Recidivism

Another deleterious aspect of the private prison industry is that, contrary to the claims of for-profit prison companies, prisoners held in privately-operated facilities are subjected to higher levels of violence. Also, when prisoners are released from such prisons they are less likely to be rehabilitated and more likely to recidivate.

Realizing why private prisons have higher levels of violence requires an understanding of the business model of the private prison industry and how the industry generates profit. At a basic level, public and private prisons have many simi-larities; both require cell blocks, fences, security staff, medical units, etc. In terms of operating costs, approximately 70-80 percent of a prison’s expenses are related to staffing. Specifically, how many staff members are employed, how much they are paid, what benefits they receive and the amount of training provided.

Since such a high percentage of operating expenses are related to staffing, that is where private prison firms cut costs to generate profit. On average, they employ fewer staff members than comparable public prisons; they pay less than in the public sector; they offer fewer (or less costly) benefits; and they provide less training. These tactics undeniably reduce expenses for private prison firms and boost their bottom line, but at what cost?

There is substantial evidence to support the business model of the private prison industry described above. For example, according to the 2000 Corrections Yearbook, the average starting salary for private prison guards was $17,628 while the average starting salary in public prisons was $23,002. More recently, when CCA announced plans not to renew its contract to operate the Hernando County Jail in Florida effective August 2010, the sheriff said he would resume control over the jail. He also said he would increase the salaries of qualified CCA employees retained at the facility by more than $7,000 annually, to bring them in line with the salaries of the county’s corrections deputies – indicating the pay differential between the public and private sector.

In terms of training for corrections employees, CCA vice president Ron Thompson stated in June 2010 that the company provides “a minimum of 200 hours of initial training, along with at least 40 hours of annual training.” However, this is significantly less than the training that employees in some state prison systems receive. California, for example, requires “a sixteen-week, formal, comprehensive training program” consisting of 640 hours. In Alabama, state prison guards must “successfully complete 480 hours of correctional officer training at an approved Academy.” The New Jersey Dept. of Corrections requires a “14-week, in-residence NJ Police Training Commission course.”

Less training allows private prison companies to cut costs, but at the expense of employing staff who are less prepared for work in a prison setting.

In regard to job benefits, private prison employees do not enjoy government retirement plans, civil service protection or generous health insurance available in the public sector.

As a result of paying lower wages, supplying less training and providing fewer benefits, private prisons have much higher staff turnover rates than their public counterparts.

According to the last self-reported data from the private prison industry, published in the 2000 Corrections Yearbook, the average turnover rate at privately-operated facilities was 53 percent. The average rate in public prisons was 16 percent. More recently, a Texas Senate Committee on Criminal Justice report released in December 2008 found that the “correctional officer turnover rate at the seven private prisons [in Texas] was 90 percent (60 percent for the five privately-operated state jails), which in either case is higher than the 24 percent turnover rate for [state] correctional officers during FY 2008.”

High staff turnover rates, in turn, mean less experienced employees who lack institutional knowledge about the facilities where they work, which results in greater instability in private prisons. Higher turnover also leads to under-staffing, as employees who resign or are terminated leave vacant positions that are not immediately filled. The 2000 Corrections Yearbook found that public prisons had an average guard-to-prisoner ratio of 1 to 5.6, compared with a ratio of 1 to 8 in private prisons – which reflects significantly less staffing at privately-operated facilities. Private prison companies have a financial incentive to keep staff positions vacant, as vacant positions mean reduced payroll costs and thus higher profits.

Understaffing, instability and fewer experienced employees result in higher levels of violence. Several studies have shown that privately-operated prisons experience more violence, including a 2004 report in the Federal Probation Journal that found private prisons had over twice as many prisoner-on-prisoner assaults than in public prisons. A 2001 Bureau of Justice Assistance report found that private prisons had 65 percent more prisoner-on-prisoner assaults and 48 percent more prisoner-on-staff assaults than public prisons with comparable security levels. A more recent 2011 examination of private and public prisons in Tennessee revealed similar results, with privately-operated facilities having higher average numbers and rates of violent incidents than public prisons.

There is also anecdotal evidence that security problems and violence are more likely to occur at private prisons as a result of the industry’s business model, which results in high staff turnover and thus inexperienced staff and greater institutional instability. As just one example, during a four-month period from May to September 2004, CCA experienced four major riots at prisons in Colorado, Oklahoma, Mississippi and Kentucky, plus a hostage-taking at a jail in Florida.

A Department of Corrections report following the uprising in Colorado found that just 33 CCA guards were watching over 1,122 prisoners at the time of the riot – a ratio 1/7th that at Colorado state prisons (which had an average guard-to-prisoner ratio of 1 to 4.7). Some CCA employees had literally been “on the job for two days or less.” The CCA facility had a 45 percent staff turnover rate, and CCA guards were paid an average salary of $1,818 per month compared with $2,774 for state prison officers. As indicated above, these deficiencies are a direct result of the business model of the private prison industry.

Certainly public prisons experience riots, violence and other problems, too – but the frequency and severity of such incidents in private prisons imply that those facilities are more prone to unrest and instability as a consequence of how the private prison industry cuts costs in order to generate profit.

A related issue concerns the rehabilitation of prisoners in privately-operated facilities. Consider that for-profit prison firms have a vested interest in maintaining – and increasing – the number of people behind bars. The sole purpose of companies like CCA and GEO Group is to generate profit, not to ensure public safety, aid in the rehabilitation of offenders or reduce recidivism and thus decrease the amount of crime and victimization in our communities.

During CCA’s annual meeting on May 14, 2010, CCA vice president Dennis Bradby confirmed that the company had not conducted any studies to determine whether the rehabilitative programs offered at its for-profit prisons were effective in terms of reducing recidivism. Independent research, however, has found that prisoners released from privately-operated facilities may have a higher rate of reoffending.

A 2003 joint study by the Florida Dept. of Corrections, Florida State University and Correctional Privatization Commission found that while there were no significant differences in recidivism rates among prisoners in private and public facilities, “in only one of thirty-six comparisons was there evidence that private prisons were more effective than public prisons in terms of reducing recidivism.” More tellingly, a research study published in Crime and Delinquency in 2008, which tracked over 23,000 prison releasees, found that “private prison inmates had a greater hazard of recidivism in all eight models tested, six of which were statistically significant.”

Thus, another outcome of the private prison industry is that prisoners are subjected to higher levels of violence due to the way private prison firms cut staffing costs to generate profit. Further, while the private prison industry benefits by keeping prisoners behind bars, those same prisoners are more likely to reoffend following their release – resulting in greater societal costs in terms of a recurring cycle of crime and incarceration.

Institutionalizing For-Profit Imprisonment

Perhaps the most deleterious effect of the private prison industry is that it has successfully legitimized the concept of for-profit incarceration. While people might question the notion of a privatized police force that benefits financially when people are arrested, allowing companies to profit from people’s imprisonment has become an accepted and normalized part of our nation’s criminal justice system.

Private prison companies and other members of the Prison Industrial Complex do not operate in a vacuum, of course, nor are they solely responsible for crafting an industry that profits from incarceration. They certainly contribute to that state of affairs, though – sometimes literally. As with many other industries, private prison companies make campaign contributions to lawmakers and engage in political influence-peddling through lobbyists.

CCA, the nation’s largest private prison firm, spent about $1 million in both 2009 and 2010 on direct lobbying expenses on the federal level alone. The company and its Political Action Committee further gave over $812,000 in federal and state political donations in 2009 and more than $722,000 in 2010. And that is just one company among many that comprise the Prison Industrial Complex. Through such spending, the private prison industry is able to influence and obtain the support of politicians to further its goals of greater investment in incarceration and expanded privatization in the criminal justice system.

Private prison companies also wield influence by hiring former public officials, mainly from corrections and law enforcement agencies, who use their connections to grease the political wheels that drive the private prison industry machine. CCA’s executives and board members include a former director of Ohio’s prison system, the former chief of facility operations for the New York City Dept. of Corrections, two former directors of the federal Bureau of Prisons, a former deputy assistant secretary of the U.S. Department of Defense, a former U.S. Senator and Thurgood Marshall, Jr. – son of the late U.S. Supreme Court Justice, who served as Secretary to the Cabinet in the Clinton administration.

The private prison industry has further enlisted supposedly-impartial research allies to produce studies that laud the benefits of privatization. For example, the Reason Foundation, a Los Angeles-based libertarian think-tank that promotes privatization of governmental services, receives funding from private prison companies – which it conveniently neglects to mention in its research. GEO Group was listed as a Platinum-level supporter of the Reason Foundation in a 2009 donor report, while CCA was listed as a Gold-level supporter.

Discredited former University of Florida professor Charles Thomas, who operated an academic project that studied the private prison industry, also produced research favorable to private prison companies. It was subsequently discovered that Thomas owned stock in the companies he was studying, sat on the board of Prison Realty Trust (a CCA spin-off) and had been paid $3 million by Prison Realty/CCA. Thomas retired from his University position after those conflicts became known; he was fined $20,000 by the Florida Commission on Ethics.

Additionally, members of the Prison Industrial Complex have formed their own industry trade group, the Association of Private Correctional & Treatment Organizations. APTCO and CCA jointly funded a 2007 Vanderbilt University study that, not surprisingly, found benefits from prison privatization.

More disturbingly, private prison companies have been accused of working behind the scenes to promote harsh sentencing laws that result in more people going to prison for longer periods of time – which, of course, benefits the private prison industry. For instance, in the 1990s and early 2000s, CCA executives John Rees and Brad Wiggins served on the Criminal Justice Task Force of the American Legislative Exchange Council (ALEC). ALEC is a powerful free-market organization that describes itself as a “public-private partnership” between state lawmakers and private-sector businesses. ALEC claims almost 2,000 lawmakers as members – one-third of the nation’s state legislators – plus over 250 private companies and foundation members, including Wal-Mart, ExxonMobil, the American Bail Coalition and the National Rifle Association.

ALEC produces model laws that are introduced by legislative members in their home states. The organization’s Criminal Justice Task Force (which has since been folded into the Public Safety and Elections Task Force) has drafted tough-on-crime model legislation for mandatory minimum laws, truth-in-sentencing statutes, three-strike laws and habitual offender laws – all of which result in longer prison terms that directly contribute to overincarceration and prison over-crowding.

ALEC has further promoted model legislation to benefit the private prison industry, including the Private Correctional Facilities Act, which permits state governments to contract with private prison companies. CCA senior director of business development Laurie Shanblum served as a member of ALEC’s Public Safety and Elections Task Force, and in 2010 CCA was tied to ALEC model legislation introduced in Arizona, SB 1070, that is expected to result in an increase in immigrant detention. CCA operates three facilities in Arizona that house ICE detainees.

CCA has denied that it influences legislation that results in more incarceration or longer sentences. However, why would a private prison firm participate in ALEC except to influence criminal justice policy and help craft legislation beneficial to the company? The nation’s second-largest private prison operator, GEO Group, has also been a member of ALEC, though both GEO and CCA no longer have active memberships with the organization.

By currying political favor through lobbying and substantial campaign contributions, by funding academics who produce supposedly-independent private prison studies, and by hiring former public officials, creating its own industry trade group and influencing criminal justice policy-making though participation in ALEC, the private prison industry has established its own legitimacy and ensured that profit trumps public policy when it comes to our nation’s criminal justice priorities.


This, then, is the egregious and lasting legacy of the Prison Industrial Complex.

While private prisons companies comprise only a small part of the overall corrections system in the United States, they have managed to hinder much-needed criminal justice reform – particularly in the areas of sentencing and prison release policies – by supplying supplemental bed space for overcrowded public prisons.

Prisoners held in for-profit facilities are exposed to higher levels of violence due to the private prison industry’s business model of reducing staffing costs, which results in higher staff turnover rates, understaffing and instability. Prisoners released from privately-run facilities have higher recidivism rates, thus endangering public safety.

But the most harmful consequence of the private prison industry is that it has made imprisonment-for-profit politically and socially acceptable, thereby perpetuating an insidious business model that benefits from incarceration while instilling the notion that justice literally is for sale and crime does in fact pay – for private prison firms and their shareholders.

Hopefully, at some point in the future we will look back on this time when private prisons were considered sensible and wonder how such a socially-destructive concept was allowed to exist, much as we now look back on the institution of slavery. For now, though, we must deal with the harsh realities of for-profit prisons and their role in the Prison Industrial Complex, including their many flaws and harmful effects on prisoners, our justice system and society as a whole.

A footnoted version of this article is being included as a chapter in a soon-to-be-published book, “And the Criminals with Him: Essays in Honor of Will D. Campbell and All the Reconciled,” edited by Richard C. Goode (Cascade Books, forth-coming).

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