With the promise of saving taxpayer dollars to house a growing prisoner population during a cyclical crime wave in the early 1990s, Florida decided to experiment with private prisons. From the start, those involved in the push to privatize were tainted with ethical conflicts, and more than two decades later politics still rule the privatization issue while cost savings have proven elusive.
State lawmakers initially created the Correctional Privatization Commission (CPC) to push an initiative that the Florida Department of Corrections (FDOC) was reluctant to pursue: privatizing prisons. The CPC helped craft Florida’s 1993 statute that established the parameters for privatization.
Consulting for the CPC was Charles Thomas, a University of Florida criminology professor who was nationally known to specialize in prison issues. He contributed significantly to developing the law’s provisions. “I certainly had a fairly heavy hand in it,” he said.
He also had a heavy hand in the coffers of Corrections Corporation of America (CCA), the nation’s largest for-profit prison firm. At the same time he was consulting for the CPC, Thomas owned private prison stock and secured a $3 million fee from CCA in connection with Prison Realty Trust, a CCA spin-off company. While Florida’s Ethics Commission later levied a $20,000 fine on Thomas, the largest ever at that time, it was a fraction of the financial benefits he received from the private prison industry. [See: PLN, Sept. 1999, p.12; Feb. 1999, p.10].
One statutory provision championed by Thomas was a requirement that private prisons receive payments for being at 90% capacity, whether they were or not. “[FDOC] could really sink the ship by keeping the prison just 20 percent full,” he said. In some cases, this resulted in the state paying for empty private prison beds.
While that requirement may be popular with private prison executives and shareholders, it is contrary to good public policy. “The notion that any prison, public or private, is guaranteed to be 90 percent filled whether crime is going up or down is absurd,” said Judith Greene, a criminal justice policy expert and director of Justice Strategies, Inc., a research and advocacy group based in New York.
“We are incentivizing imprisoning people,” added former state Senator Paula Dockery. “That is in no way good for the state.”
It has, however, been very good for private prisons operating in Florida. For example, when the Blackwater River Correctional Facility was opened in 2010 by the GEO Group, it had an average population of 324 the first month. Yet GEO, headquartered in Boca Raton, Florida, was paid more than $82,000 a day to operate the facility – the cost for 1,800 prisoners. Questions were raised as to whether the Blackwater prison was even necessary, or resulted from political machinations. [See: PLN, March 2011, p.1].
Beyond Charles Thomas, other corruption within the CPC was ultimately brought to light. At the top of the agency was C. Mark Hodges. Investigators learned a Hawaii vacation that Hodges and his wife took in 1997 occurred while he was on-duty, and a private prison firm had paid the $1,800 tab for the trip. Also while on-duty, Hodges had earned $150,000 from consulting contracts in other states related to prison privatization issues; in one case, he billed a city $7,500 for a manual that was free under Florida’s Sunshine Law. Forced to resign in April 2002, he was fined $10,000 by the Florida Ethics Commission. [See: PLN, Oct. 2003, p.21].
The next CPC director, Alan Duffee, was also corrupt. In 2006 he pleaded guilty to wire fraud, mail fraud and money laundering for embezzling over $224,000 from the private prison oversight agency, and was sentenced to 33 months in federal prison. [See: PLN, May 2006, p.11]. The aftermath of that scandal saw four new members appointed to the CPC, who had a good idea: make private prison firms rebid for their state contracts.
Instead, the companies went on the attack. “They were almost insulted by the fact that we would even question them,” said Bob Ryals, a former CPC member. “They sent their big dog lawyers down to intervene, and they had a few speeches to make.”
Private prison operators also made campaign contributions and invested in lobbying state officials. “They went behind the scenes,” said Sam Block, another former member of the CPC. “They spent a lot of money to get the ear of the governor and then the leadership of the legislature.”
Over the next two years, CCA invested $110,000 in state election campaigns. GEO put $250,000 into political coffers the next year. Their investment netted a reward of 1,086 more private prison beds by the legislature.
Then-Governor Jeb Bush soon tired of the CPC’s questions about training, recidivism and private prison contracts. He disbanded the agency in 2004, and lawmakers defunded the CPC. That led to a private prison oversight model unique to Florida.
Typically, state corrections agencies oversee all prison operations, including private prison contracts. FDOC has control of prisoner transfers and monitors the operations of the state’s privately-operated prisons. However, the department has no control over the contracts. That duty was shifted to the Department of Management Services (DMS), an agency that initially admitted it was ill-prepared to manage prisons. The Bureau of Private Prison Monitoring was established shortly afterwards to manage oversight and contractual compliance for private prisons.
The push to privatize Florida’s prisons reached its pinnacle in 2011. That year, the Florida legislature, with the support of Governor Rick Scott, introduced legislation to privatize the entire southern region of the state’s prison system. The bill was challenged in court by the Florida Police Benevolent Association, which represented FDOC guards at the time, and was found unconstitutional by a state court. [See: PLN, Feb. 2012, p.1].
GEO had nine lobbying firms on its payroll to support the privatization bill, most of which had strong political connections with Florida lawmakers. Lobbyist Bill Rubin, a longtime friend of Governor Scott, was hired by GEO, as was lobbyist Steve MacNamara, a longtime friend of the governor’s chief of staff.
Scott is a proponent of privatizing state functions, including prison-related services. In August 2013 he granted the Tennessee-based prison healthcare company Corizon, Inc. a major contract that cost almost 2,000 state workers their jobs. Corizon’s contract was put up for rebid in 2016 amid reports of deficient medical care and prisoner deaths.
The governor is also known for his close ties with GEO Group CEO George Zoley. In October 2013, Zoley gave Scott $20,000 towards renovations at the Tallahassee governor’s mansion. He also hosted a VIP fundraiser at his residence in July 2014; the proceeds went to Governor Scott and the Republican Party of Florida.
As the bill to privatize almost one-quarter of Florida’s prison system was reintroduced in 2012, Ed Buss was appointed secretary of the FDOC. While he had no role in the legislation, he was encouraged to sign off on it shortly after taking office. He expressed reservations about the private prison bill, which led to his ouster six months later.
Information regarding problems with Florida’s private prisons was withheld in reports analyzing the bill; the reports provided to lawmakers did not reflect memos that criticized “high rates of prison security violations” at two private facilities, which were more than double the incidents at state prisons. Also left out were auditor reports that found the reported savings from prison privatization were “artificially high.”
Things got heated as the legislation came to a vote. “It’s so hostile right now,” said Senator Ronda Storms. Republican Senator Don Gaetz warned lawmakers about voting against the privatization bill. “The burden lies heavy on those who vote no,” he said. Nonetheless, the bill failed to pass by just one vote in the state Senate. [See: PLN, April 2012, p.38].
Although the move to privatize large swaths of Florida’s prison system was unsuccessful, the issue did not die; in fact, prison privatization is alive and well in the Sunshine State. There are currently seven privately-operated prisons in Florida, housing about 10% of the state’s prison population at a cost of over $142 million annually.
Florida law requires private prisons to save 7% over the cost of comparable state prisons, though the method of calculating such savings has been criticized by the Florida Center for Fiscal and Economic Policy, which stated in a 2010 report, “[t]here is no compelling evidence that the privatization of prisons has actually resulted in savings.... It is very difficult to ensure that a private prison is in fact 7% less costly to operate than a comparable public prison.”
“The cost analysis is, in my opinion, flawed,” said Jack Miles, who once oversaw prison contracts as DMS’s director. “People who don’t know a lot about procurement came up with the process to do it, probably impacted by lobbyists and people in the business.”
The 1993 privatization law that Prof. Charles Thomas helped write requires private prison costs to be compared to those at state prisons. However, private prison contracts typically allow the companies to transfer prisoners who are too sick, too problematic or too mentally ill to FDOC facilities. Absent those costlier prisoners, state prisons become more expensive to operate, on average, while private prisons appear less expensive.
“The savings are a fiction,” observed former FDOC secretary Jim McDonough. Former state Senator Dockery agreed. “You can make those numbers show anything you want them to,” she said.
In conducting research for an extensive series on prison privatization in Florida, Palm Beach Post reporter Pat Beall created a database from information obtained from 21 states over a 12-year period. The one-of-a-kind database of violent incidents at private prisons is available on the newspaper’s website. It “documents only those deaths, suicides, or serious injuries linked to prison policy, mismanagement or staffing. Riots were included if they resulted in serious injury or death, damage of $100,000 or more, or involved at least 100 inmates.”
While no major injuries from riots or human rights investigations occurred at Florida’s private prisons over that 12-year period, Beall found “the arrest records of [private prison] guards rival the records of prisoners they are hired to watch.”
Some of the guards employed by CCA and GEO Group were terminated by state prison officials. “I was firing them for a reason,” said McDonough.
With thousands of empty beds in state prisons, one lawmaker raised concerns. “We mothballed prisons because the prison population has not grown as fast as we expected,” noted Senator Mike Fasano. “So, why are we getting more prisoners to private prisons when there is more than enough room in our own?”
The answer seems simple: The state is required to pay private prison companies at 90% minimum occupancy rates, which creates an incentive to keep those facilities full even when space is available in FDOC prisons. Additionally, Florida lawmakers lack the political will to stand up to private prison firms that spend heavily on lobbyists and campaign contributions, and are unable to separate their privatization ideology from the reality of what happens when prisons and related services such as prison medical care are privatized.
Currently, CCA operates one state prison in Florida, the Lake City Correctional Facility, while Management and Training Corp. (MTC) manages the Gadsden Correctional Facility and GEO Group runs five prisons – the Bay, Graceville, Blackwater River, South Bay and Moore Haven Correctional Facilities. GEO also operates the Broward Transitional Center, a federal immigration detention facility.
In March 2016, GEO acquired a $9.9 million plot of land a few blocks away from its current headquarters in Boca Raton, where the company will start building a new state-of-the-art corporate office next year. Business must be good to justify that investment, and it is: In 2015, GEO generated $1.84 billion in gross revenue and $139 million in net profit. Six percent of the company’s total revenue came from private prison contracts in Florida.
Sources: Palm Beach Post, www.dms.myflorida.com, www.geogroup.com
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