A June 2011 report by the Justice Policy Institute (JPI) reveals how for-profit private prison companies use political campaign donations, lobbyists and relationships with government officials to increase their profits by promoting policies that result in more people being incarcerated.
Even in tight budgetary times when many policymakers want to safely reduce prison populations in order to cut costs, private prison companies seek to preserve the status quo in terms of punitive criminal justice policies and high incarceration rates. Since private prison companies receive their revenue almost exclusively from the government, taxpayers are indirectly funding an industry that opposes criminal justice reforms that would benefit the public.
As of December 31, 2010 there were about 128,195 state and federal prisoners being held in private prisons in the U.S., comprising 9.1% of the federal and 3.2% of the state prison populations. This represented an increase in the use of private prisons since 2000 of approximately 120% for the federal government and 33% for the states. During that same time period, the overall U.S. state and federal prison populations increased by less than 16%.
According to the JPI report, corrections spending increased 72% between 1997 and 2007, with total corrections spending in 2007 estimated at $72 billion. In 2010 the two largest private prison companies, Corrections Corporation of America (CCA) and GEO Group, had combined gross revenue of almost $3 billion. The report uses CCA and GEO as representative examples for the private prison industry as a whole.
Private prisons are big business. And like other big businesses, private prison companies work hard to create a market for their services. Where such companies differ from other types of business is in the fact that they are dependent on the government to purchase their services, as there is no private market for incarceration. [See: PLN, Oct. 2011, p.1].
Since governments are their only customers, private prison companies spend a portion of their profits to ensure continued demand for their services by influencing policymakers and government agencies. Thus, the influence exerted by private prison companies is not only to secure contracts to incarcerate state and federal offenders, but also to increase the overall number of prisoners – thereby creating more demand for private prisons. To this end, private prison companies have been accused of supporting and even sponsoring legislation such as “three-strikes,” “truth in sentencing” and harsh immigration enforcement laws, which drive up incarceration rates.
An Industry is Formed
From their beginnings in the early 1980s, both CCA and GEO were politically-connected. CCA co-founder Tom Beasley was a former chairman of the Tennessee Republican Party and had served on a committee that selected the head of Tennessee’s prison system.
Together with Doctor Crants and Don Hutto, the then-president of the American Correctional Association, Beasley jump-started the modern private prison industry with a bold attempt to have CCA take over Tennessee’s entire state prison system in 1983.
Although that effort and a similar attempt in 1997-98 were unsuccessful, CCA went on to build an extensive network of private prisons.
By 2010, CCA managed 66 facilities – owning 45 of them – and had contracts with 19 states and the District of Columbia, with annual gross revenue of $1.67 billion that was divided almost evenly between state and federal contracts. On the federal level, private prison companies contract with Immigration and Customs Enforcement (ICE), the Bureau of Prisons and the U.S. Marshals Service.
Founded as Wackenhut Corrections Corporation in 1984, GEO Group now operates 118 prisons and residential treatment facilities with approximately 80,600 beds in the U.S., U.K., Australia and South Africa. Around 66% of GEO’s $1.27 billion in gross revenue in 2010 came from its U.S. operations, about equally divided between state and federal contracts. On August 12, 2010, GEO acquired Cornell Companies, a private prison firm with annual revenue of $400 million. [See: PLN, Feb. 2012, p.12]. This acquisition placed more than 75% of all private prison beds in the U.S. under the control of just two companies: CCA and GEO Group.
More prisoners equates to more profit for private prison companies, and their greatest success has been in the federal system where the number of prisoners held in privately-operated facilities has grown at an average annual rate of 10% between 2000 and 2009 – mainly due to increased immigration detention. Texas, Florida, Oklahoma and Mississippi had the highest number of prisoners housed in in-state private facilities. California has around 9,500 prisoners in out-of-state CCA prisons but plans to return them by 2016. [See: PLN, July 2012, p.28].
Through their Political Action Committees (PACs) and contributions by their executives and employees, private prison companies have given over $6 million to state politicians and more than $835,000 to federal lawmakers since 2000, according to the JPI report.
State-level political giving was concentrated in California, Georgia and Florida – the latter where GEO Group is headquartered. The purpose of such contributions is to gain access to lawmakers who are agreeable to passing legislation favorable to the private prison industry, and to purchase political influence.
With their campaign contributions, private prison companies pursue a strategy of not seeking out candidates who are necessarily ideologically agreeable to prison privatization, but rather political winners. They tend to make a small donation early in the campaign, then a larger one once the probable winner is clear. Thus, 75% of political contributions from private prison companies go to winning candidates.
About half of the private prison companies’ state-level political giving was to party committees and 16% went to ballot measures, while most of the remainder was directed at legislative or gubernatorial candidates.
Another strategy used by private prison companies to influence policymakers involves lobbying. Campaign contributions are subject to statutory limits and require coordination by private prison company-funded PACs. Lobbying has no such limitations. And while donations are subject to public disclosure laws, the information available on lobbying is more limited, with lobbyists not even being required to report whether they are supporting or opposing a bill when they buy a politician lunch or a round of golf at a local country club.
The private prison industry spends more than a million dollars a year on lobbying federal policymakers. CCA alone spent over $900,000 annually on federal lobbyists between 2003 and 2010, on average.
State-level lobbying is harder to track, with much lobbying taking place behind closed doors and reporting requirements varying among the states. CCA and GEO Group employ over 30 lobbyists in Florida alone to advocate for prison privatization. Even in Montana, with only 1.5% of its prison population in private prisons, CCA spent $36,666 on lobbying during a year with no legislative session.
There is no doubt that lobbying pays off for private prison companies. For example, a strong GEO lobbying effort in Florida led to a provision in the 2011 state budget requiring the privatization of all prisons in South Florida, where GEO Group happens to be headquartered. In February 2012, after a concerted campaign by private prison opponents, the state Senate narrowly rejected a bill that would have privatized the South Florida prisons. [See: PLN, April 2012, p.38; Feb. 2012, p.1].
Relationships and Associations
A third strategy that private prison companies employ to influence policymakers involves prior relationships, associations and networks. One way to achieve this strategy is to stack government agencies with former private prison employees and supporters. Private prison companies also hire former government officials and policymakers who have inside connections, known as the “revolving door” between the public and private sectors.
For example, Stacia A. Hylton was the Federal Detention Trustee when she founded a private consulting firm, Hylton Kirk & Associates, in 2010. She retired from her federal position and promptly accepted a $112,500 consulting contract from GEO Group, which holds numerous federal detention contracts. President Obama then appointed Hylton to serve as head of the U.S. Marshals Service – the federal agency that accounted for 19% of GEO’s 2010 revenue. [See: PLN, Feb. 2011, p.16].
In Maine, Governor Paul LePage appointed former CCA warden Joe Ponte as Commissioner of the state’s Department of Corrections in 2011 after receiving a $25,000 contribution from CCA. Maine has no private prisons but CCA has been negotiating with the City of Milo for the past three years to build and operate a $150 million facility.
Joe Williams, the former Secretary of Corrections for New Mexico, was a GEO Group warden before his appointment and returned to work for GEO after he left office. During his tenure he was criticized for failing to levy fines against CCA and GEO due to contract violations, mainly related to understaffing. [See: PLN, March 2011, p.42].
In Ohio, Gary C. Mohr, director of the Ohio Department of Rehabilitation and Correction, worked as a managing director for CCA before he was appointed to head the state’s prison system in 2011. That same year, Ohio became the first state to sell a prison to a private company, when CCA purchased the Lake Erie Correctional Institution. [See: PLN, May 2012, p.42].
As yet another example of the revolving door between the public sector and the private prison industry, on June 1, 2011, CCA hired former Bureau of Prisons director Harley G. Lappin as the company’s chief corrections officer. Lappin had resigned from the BOP shortly after he was arrested on a DUI charge in Maryland. [See: PLN, July 2011, p.20]. For-mer BOP director J. Michael Quinlan also works for CCA.
A more subtle approach for influencing policymakers involves professional associations. The American Legislative Exchange Council (ALEC) is a non-profit organization that brings together state legislators, business professionals and private companies.
Lawmakers pay $50 a year in membership dues but corporations pay tens of thousands of dollars each, for a total of $6 million in annual corporate dues. That money buys them access to legislators at elaborate “conferences,” as well as positions on issue-specific ALEC task forces. Both CCA and GEO Group have participated in ALEC in the past but are reportedly no longer members.
The JPI report noted that one of ALEC’s main functions is to develop model legislation that lawmakers can introduce in their home state. ALEC averages 1,000 pieces of model legislation each year, and about 20% of the bills based on model ALEC legislation are eventually passed into law.
ALEC has previously drafted model bills for mandatory minimum sentences, “truth in sentencing” (requiring prisoners to serve most or all of their sentences without an opportunity for parole) and three-strikes laws, all of which drive up incarceration rates.
ALEC is also behind some immigration enforcement laws, including Arizona’s controversial SB 1070, which are widely expected to increase the number of immigrants placed in detention. CCA participated in ALEC’s Criminal Justice Task Force (later called the Public Safety and Elections Task Force) when such model legislation was being de-veloped. [See: PLN, Jan. 2012, p.20; Nov. 2010, p.1].
Organizations such as ALEC allow private prison companies to spend large sums of money to influence lawmakers with virtually no public oversight. CCA has denied that it lobbies for harsher sentencing laws or an increased reliance on incarceration, but has failed to adequately explain why it was a member of ALEC for over a decade.
So what is so bad about private prison companies influencing policymakers and the government agencies with which they contract? In short, it causes public officials to focus on incarceration as a solution to crime – which, although profitable for private prison companies, may be more expensive for taxpayers and less effective than other approaches. Just as if defense contractors were to control foreign policy, all diplomacy would be war, should private prison companies control criminal justice policy, all prosecutions would result in lengthy imprisonment.
Since incarceration is ineffective at curtailing future criminal behavior, as evidenced by high recidivism rates, wise public policy would explore other avenues of preventing criminality – such as education, mental health treatment, substance abuse programs and community-based corrections. Additionally, keeping people in prison is expensive, averaging $78.88 per prisoner per day. Thus, increasing incarceration rates can force governments to cut spending in other important areas, such as public education, in order to pay for prison budgets. Less public education leads to more crime and more incarceration, and a vicious cycle is created.
Studies have shown there are few or no cost savings over the long-term for private prisons compared to publicly-run prisons. By cherry-picking the healthiest and easiest to manage offenders, private prisons may actually increase the average cost of operating public prisons, which must house prisoners who are more expensive to incarcerate – such as maximum security prisoners and those with serious medical and mental health needs. Thus, the government and taxpayers are losers in the private prison game.
Other losers are both the prisoners and guards at private prisons. Private prison companies pay their staff less than in the public sector in order to cut costs and generate profit.
Private prison employees also receive less training and fewer benefits, and have higher turnover rates. Underpaid and less experienced private prison guards contribute to institutional instability, which leads to higher levels of violence in private prisons. [See, e.g.: PLN, Dec. 2011, p.18].
The JPI report describes how the entire concept of prison privatization is a bad idea from a public policy perspective. Not only do prisoners and staff in private prisons suffer due to the need for private prison companies to make money, the for-profit prison industry results in a corrupting influence on policymakers and government agencies.
One of the most egregious cases of such corruption occurred in Luzerne County, Pennsylvania, where two judges sentenced thousands of juvenile offenders to serve time in facilities operated by a private prison company in exchange for millions of dollars in bribes from the company. [See: PLN, May 2012, p.28; Nov. 2011, p.14; June 2010, p.26; Nov. 2009, p.42; May 2009, p.20].
Although the media and government officials expressed outrage at this blatant corruption of the criminal justice system by the private prison industry, few have said anything about the influence that private prison companies exert through their political donations, lobbyists, and relationships and associations described in the JPI report.
This report was one of several studies on the private prison industry released in 2011. Other reports, some of which also addressed the political influence of private prison companies, were released by the ACLU of Ohio, Ohio Policy Matters, AFSCME, Detention Watch Network, the ACLU National Prison Project, the National Council on Crime and Delin-quency, and the PICO National Network and Public Campaign. [See, e.g.: PLN, Dec. 2011, p.22].
The JPI report is available at www.justicepolicy.org or on PLN’s website.
Sources: “Gaming the System: How the Political Strategies of Private Prison Companies Promote Ineffective Incarceration Policies,” Justice Policy Institute (June 2011); http://bjs.ojp.usdoj.gov
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