A June 2011 report by the Justice Policy Institute entitled "Gaming the System: How the Political Strategies of Private Prison Companies Promote Ineffective Incarceration Policies reveals how private prison companies (PPCs) use political campaign donations, political 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 reform the criminal and juvenile justice systems to safely reduce the prison population, PPCs create and fund political opposition seeking to preserve the status quo in policies and increase the incarceration rate. Since PPCs receive their revenue almost exclusively from the government, the taxpayers are indirectly funding a group that opposes the policies most favorable to the taxpaying public.
As of December 31, 2009, there were about 120,000 prisoners being held in U.S. private prisons. They comprised 16.4% of the federal and 6.8% of the state prison populations. This represented an increase in the use of private prisons since 2000 of 120% for the federal government and 33% for the states. During the same time frame, overall U.S. prison populations increased by less than 16%.
Corrections spending increased 72% between 1997 and 2007. Total corrections spending in 2007 was $72 billion. In 2010, the two largest PPCs, Corrections Corporation of America (CCA) and GEO Group had a combined revenue exceeding $2.9 billion. The report uses them to represent of the entire private prison industry.
Private prisons are big business. And like any other big businesses, PPCs work hard to create a market for their product. Where PPCs differ from any other type of business is in the fact that they are totally dependent on the government to buy their product as there is no private market for incarceration.
Since governments are their only customers, PPCs use a portion of their prodigious profit to ensure continued demand for their product by influencing politicians and government employees. Thus, the purpose of the influence exerted by PPCs is not only to secure contracts for the incarceration of state and federal prisoners, but also to increase the sheer number of state and federal prisoners and thus drive demand for their product. To this end, PPCs support, sponsor, and even draft model legislation such as "three-strikes," "truth-in-sentencing," and "immigration-enforcement" laws which drive up incarceration rates while doing little or nothing to increase public safety.
From their beginnings in the early 1980s, both CCA and GEO were politically-connected. CCA co-founder Tom Beasley was the then-chairman of the Tennessee Republican Party and had served on the committee that selected the bead of the state prison system. Together with Doctor Crants and Don Hutto, the then-president of the American Corrections Association, Beasley jump-started the modern private prison market with a bold attempt to have CCA take over the entire Tennessee state prison system in 1983. Although that attempt was unsuccessful, CCA went on to build and operate private prisons. By 2010, it managed 66 prisons, owned 45 of them, and had contracts with 19 states and the District of Columbia with an annual revenue of $1.67 billion, divided almost evenly between state and federal (Immigrations and Customs Enforcement, Bureau of Prisons and U.S. Marshalls Service) contracts.
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. 66% of GEO's $1.27 billion of revenue in 2010 came from its U.S. operations. About half of that is from state contracts and about half from federal. On August 12, 2010, GEO acquired Cornell Companies, a PPC which had an annual revenue of $400 million. This acquisition placed well over half of all U.S. private prison beds under the control of CCA or GEO.
More prisoners means more profits and that PPCs' greatest success has been in the federal arena where the number of prisoners in private prisons climbed at an annual rate of 10% between 2000 and 2009 compared to 3.7% for the states. Federal prisoners comprised 34,087 of the 129,336 prisoners in U.S. private prisons in 2009. The remaining 74% were state prisons, but not all states were equally represented. Texas (19,207), Florida (9,812), Oklahoma (5,989) and Mississippi (5,286) had the highest number of private prison inmates at that time. However, California moved strongly into the private prison market in 2010 as court orders required it to reduce prison crowding. By the end of 201, CCA was incarcerating over 10,000 California prisoners with an annual contract worth $214 million that accounted for 13% of its revenue.
Through their Political Action Committees (PACs) and contributions by their employees, PPCs gave $6,092,331 to state politicians and $835,514 to federal politicians since 2000. The contributions nearly tripled during that time period. The state-level political giving was concentrated in California, Georgia and Florida, where the headquarters of GEO is located. The purpose of the giving is to gain access to politicians who would be willing to pass legislation favorable to the private prison industry. In Florida, which has the nation's second highest private prison population, this was particularly successful. Florida now has a budgetary mandate to privatize some prison beds.
In their campaign contributions, the PPCs pursue a cynical strategy of not seeking out ideological cohorts, but rather political winners. They make a small contribution early in the campaign, then a larger one once the probable winner is clear. Thus, 75% of the PPCs' campaign contributions go to winners.
About half of the PPCs' state-level political giving was to party committees. 16% went to ballot measures while most of the remainder was given to legislative or gubernatorial candidates.
A second strategy PPCs use to influence politicians involves lobbying. Donations are subject to statutory limits and require coordination of donations by PPC-funded political action committees and PPC employees. Lobbying has no such limitations. Donations are subject to disclosure laws, the information available on lobbying is very limited with lobbyists not even required to report whether they are supporting or opposing a bill when they buy a politician's lunch or round of golf at the club.
PPCs spend hundreds of thousands of dollars a year on lobbying federal policymakers. CCA alone spent over $900,000 on federal lobbyists between 2003 and 2010.
State-level lobbying is ever harder to track with much lobbying taking place behind closed doors and reporting requirements varying among the states. CCA and GEO alone employ over 30 lobbyists in Florida as advocates for private prisons. The reported lobbying expenses in Florida from January 1 through March 31, 2011, ranged from $120,000 to $199,992 for GEO and between $10,000 and $29,998 for CCA. Even in Montana, with only 1.5% of its tiny prison population in private prisons, CCA spend $36,666 on lobbying in a year with no legislative session.
There is no doubt that lobbying pays off for PPCs. For instance, in Florida, a strong GEO lobbying effort led to the passage of a budget deal requiring all of the prisons in South Florida to be privatized. Those prisons hold about a fifth of the state's 101,000 prisoners. Other lobbying efforts include pushing "three-strikes," "mandatory-minimums," "truth-in-sentencing" and "immigration-enforcement" laws which result in more prisoners with longer sentences, a boon for the private prison industry.
The third strategy PPCs employ to influence policymakers is through prior relationships, associations, experiences and networks. This involves an intermingling of PPC employees and government officials charged with regulating them. One way to achieve this is to infiltrate the government with former PPC employees and agents. The reciprocal of this is for PPCs to hire former government officials and politicians with insider ties to the government.
For instance, Stacy Hylton was a Federal Detention Trustee when she founded a private prison consulting firm, Hylton, Kirk and Associates, in 2010. She retired from her trustee position then accepted a $112,500 consulting contract from GEO. Then President Obama appointed her head of the U.S. Marshals Service, the government agency that accounted for 19% of GEO's 2010 profits.
Governor Paul LePage of Maine appointed former CCA warden Joe Ponte as the Commissioner of the Maine Department of Corrections after receiving a $25,000 contribution from CCA. Currently, Maine has no private prisons, yet CCA has been negotiating with the City of Milo for the past three years to build a $150 million private prison there. It should be interesting to see whether Ponte provides the prisoners should that prison be constructed.
Joe Williams, the former Secretary of Corrections for New Mexico was a GEO warden before his appointment. During his tenure, he was strongly criticized for refusing to fine CCA and GEO for blatant contract violations. Clearly the ease of movement between PPCs and government agencies regulating them gives the appearance of a conflict of interest.
A more subtle approach for influencing policymakers involves professional associations. The American Legislative Exchange Council (ALEC) is a non-profit organization based in Washington, D.C. with the mission of advancing conservative principles. Members include state legislators, business professionals and private corporations. The legislators pay $50 a year in membership dues, but the corporations pay tens of thousands each, for an annual total of $6 million in corporate dues. Those millions buy them access to legislators and pay for elaborate "conferences." Both CCA and GEO are ALEC members.
ALEC's primary function is to develop model legislation to encourage privatization of government functions. It averages 1,000 pieces of model legislation each year. About 20% of the model legislation ALEC drafts is passed into law in at least one of the states. ALEC has previously drafted model legislation for mandatory minimum sentences, "truth-in-sentencing" (requiring prisoners to serve most or all of their sentences in prison without an opportunity for parole) and three-strikes laws (requiring sentences of 25 years to life for repeat offenders). Organizations such a ALEC allow PPCs to spend large sums of money to influence legislation with no public oversight.
So, what is so bad about PPCs influencing the government? In short, it causes to government to focus on a law-enforcement solution to criminality which, while being profitable for PPCS, may be more expensive and less effective than other solutions. Just as if the defense contractors were to control foreign policy, all diplomacy would be war; when the PPCs control law enforcement policy, all prosecutions result in imprisonment.
Since imprisonment has been shown to increase the risk of future criminal behavior, not reduce it, wise public safety policy would explore other avenues of preventing criminal behavior such as education and treatment programs or community-based corrections. Furthermore, imprisonment is expensive, averaging $78.88 per prisoner per day in the U.S. Thus, increasing incarceration rates can force governments to reduce spending in other vital areas, such as public education, to pay for the increasing prison budget. Less public education leads to more prisoners and a vicious cycle is created.
Studies have shown little or no cost savings over for long term for private prisons compared to government prisons. By cherry-picking the most healthy and easiest to manage prisons, private prisons may actually increase the average cost of running the remaining government-run prisons. Furthermore, when PPCs cut costs by reducing services such as medical care, the resulting litigation places the government, as well as the PPC, under potential liability. Thus, the government and the taxpayers are losers in the private prison game.
The other losers are the prisoners and guards. PPCS pay their guards less than the government pays theirs. They also receive less training and fewer benefits. These underpaid and undertrained guards are less adept at controlling violence in the prisons they are responsible for. Sometimes, they are the originators of the violence, again leading to government liability.
The report shows how the entire concept of private prisons is a bad idea from a public policy perspective. Not only do prisoners suffer when PPCs cut medical and other services to fatten the bottom line, the overall influence on government is one of corruption. The most egregious case of such direct corruption by PPCs occurred in Luzerne County, Pennsylvania, where two judges sentenced thousands of juveniles who were not represented by an attorney and had not committed any criminal offense to incarceration in private prisons owned by a PPC that was giving kickbacks to the judges. Although the media and government officials claim outrage at this direct corruption of the criminal justice system, few say anything about the influence buying via donations, lobbyists and organizations described in the report.
Other than a somewhat lackadaisical organization throughout, the weakest point of the report is in the generalized recommendations it makes for reducing the incarceration rate in general and reliably evaluating the cost of private prisons. After thoroughly documenting the corrupting influence of PPCs, no recommendation is made to prevent corruption. For instance, the easy movement between the prison-industrial complex and the government leads to a form of corruption previously seen in the military-industrial complex and Department of Defense. Rules prevent such rapid seguing between military industries and the governmental offices that procure from them. Similar rules are needed in the context of PPCs. Yet the report fails to make this simple suggestion. Otherwise, the well-footnoted report deals with an interesting and important issue of public policy and is available free online at www.justicepolicyinstitute.org.
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