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Report: How Private Prison Companies Cut Corners to Generate Profit

Private prison companies like Corrections Corporation of America (CCA) and the GEO Group earn hundreds of millions of dollars each year, averaging between $2,771 and $3,366 in profit per prisoner based on 2014 data. According to In the Public Interest (ITPI), a not-for-profit organization that opposes the privatization of public services, the companies make money by cutting corners in staffing, health care, lower employee qualifications and reduced training, and substandard facility maintenance.

ITPI profiled ten case studies involving private prison firms to illustrate those shortcomings, including facilities located in Idaho, Ohio, Florida, Mississippi, California, Pennsylvania, Arizona and Michigan. The case studies included not only corporations that operate prisons and jails, but also those that provide medical and mental health care, food services and reentry programs.

At the CCA-managed Idaho Correctional Center, the company concealed staff shortages by “falsifying records that hid 4,800 hours of uncovered shifts in a seven-month period in 2012.” CCA paid $1 million to state officials in compensation, was held in contempt by a federal court, was the subject of an FBI investigation and eventually lost its contract to run the prison. [See: PLN, Oct. 2013, p.28; May 2013, p.22].

When CCA purchased the Lake Erie Correctional Facility in Ohio it cut pay and staff training, resulting in an annual staff turnover rate in excess of 20%. Unsurprisingly, assaults on staff increased, the flow of contraband became a torrent and gang activity skyrocketed. [See: PLN, Nov. 2014, p.44].

Problems at the CCA-managed Hernando County jail near Tampa, Florida involved poor building maintenance: “CCA failed to repair rusted doors, replace damaged windows, seal cracks in the walls and floors, fix damaged ceiling tiles and patch leaks in the roof.” After CCA and Hernando County parted ways, the county withheld its last payment to the company, CCA filed suit and the case eventually settled.

When GEO Group operated the East Mississippi Correctional Facility it “under invest[ed] in staffing, training, resources, and equipment” which “jeopardized the safety of prison staff,” according to the ITPI report. In 2012, OSHA fined GEO over $104,000 for numerous workplace injuries at the Mississippi prison.

“This employer knowingly put workers at risk of injury or death by failing to implement well-recognized measures that would protect employees from physical assaults by inmates,” said OSHA area director Clyde Payne. “Prisons may be inherently dangerous workplaces, but the employer is still required to take every reasonable precaution to protect corrections officers and other staff against safety and health hazards, including assaults.”

Community Education Centers (CEC) operates a halfway house in Long Beach, California, where state authorities found the company was employing unqualified staff and failing to properly supervise residents, who engaged in violence and drug and alcohol abuse. For-profit medical care provider Corizon Health was criticized for understaffing and providing substandard health care in Allegheny County, Pennsylvania’s jail system and at the Idaho State Correctional Institution. [See, e.g., PLN, March 2015, p.30].

Aramark, the subject of numerous lawsuits for providing prisoners with inferior food, was cited for serious problems at Michigan and Florida correctional facilities. In Michigan, Aramark workers were accused of having sexual relationships with prisoners, among many other serious issues [see: PLN, Dec. 2015, p.1], while the company was found in violation of its contract with the Florida Department of Corrections to provide palatable meals.

ITPI summarized its findings by noting that most of the “savings” that private prison companies tout are achieved by failing to meet their contractual obligations. Any such savings are thus at the cost of shortchanging taxpayers and providing inadequate services to prisoners – including a safe living environment, constitutional medical care and adequate food and reentry programs.

“By cutting corners, corrections companies harm prisoners, employees, communities, and taxpayers,” the report concluded.

CCA reported $222 million in net profit in 2015, while GEO Group reported $139.4 million; other companies, including MTC, CEC, Corizon and Aramark, are privately held and do not make their financial data publicly available.

Sources: “Cutting Corners in America’s Criminal Justice System,” In the Public Interest (April 2016);;

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