Private Prisons: Your Tax Dollars Hard At Work Lining The Corporation’s Pockets

Prison bars lockup hands

Prison bars lockup handsFor many years our state and local governments have been looking for ways to save money in their budgets. Some have turned to privatization as a way to reduce cost.  Privatization ultimately ends up costing taxpayers more money in the long run no matter how much they save up front.  The private prison industry is no different.

Private prisons have been popping up all across the country. They offer to build a new prison and then lease it back to the state.  Also part of this agreement is that the state will pay the private prison company to operate the prison.

The initial savings come from the fact that the private prison company coughs up some of the money to cover the cost of constructing a new building.  Many state’s budgets are so thin that they cannot afford to do major investments like building a new prison.  This may save the taxpayers money in the actual construction, but the private prison industry makes their money back and more on the occupancy of the prison.

In a new report released yesterday, Criminal: How Lockup Quotas and “Low-Crime Taxes” Guarantee Profits for Private Prison Corporations,” we see exactly how private prisons are actually taking extra money from the taxpayers.

The study documents the shocking prevalence of contract language between private prison companies and state and local governments that either guarantees prison occupancy rates (“lockup quotas”) or forces taxpayers to pay for empty beds if the prison population falls due to lower crime rates or other factors (“low-crime taxes”).

That’s right, you are paying a corporation for empty beds in private prisons.

Nationally we all have been working to reduce the number of prisoners in our penal system.  Reducing the number of inmates would also help reduce our state budgets, right? Wrong.  With ‘Lockup Quotas’ it does not matter how many people are in the prison, the corporation still gets a minimum fee.

In The Public Interest, who released the above report, found “nearly two-thirds (65 percent) include occupancy guarantees and force taxpayers to pay for empty prison beds if the lockup quota is not met.”

ITPI research also found that “lockup quotas in private prison contracts range between 80 percent and 100 percent; 90 percent is the most frequent occupancy guarantee requirement. Arizona, Louisiana, Oklahoma and Virginia have the highest occupancy guarantee requirements, with quotas requiring between 95 percent and 100 percent occupancy.”

Image from ITPI Report

Image from ITPI Report

Donald Cohen, Executive Director of ITPI stated: “Private prison companies are gaming the system to guarantee themselves profits at the expense of taxpayers and, worst of all, at the expense of people’s freedom.  Governments should cease working with this corrupt industry and reclaim public control of corrections.”

Alex Friedmann, Managing Editor of Prison Legal News, a project of the Human Rights Defense Center stated: “As a private prison expert who began researching the industry while incarcerated in a for-profit prison, I can tell you firsthand that private prison companies are profitable only because they are ethically bankrupt, with taxpayers footing the bill.”

You can read ITPU full report here.

The story does about the private prison industry does not stop there.  One of the largest private prison corporations, Corrections Corporation of America (CCA), uses inmates as slave labor.   Forcing inmates to work for as low as $.50 an hour.

Arizona inmates working for private agricultural companies are paid a “whopping fee” of “more than 50 cents an hour.”  Read “How US prison labour pads corporate profits at taxpayers’ expense” in The Guardian here.

Liz Iacobucci talked about these atrocities before in the NH Labor News post, “Another thing that went wrong in the Bush Economy.”  That post describes how inmates in Arizona are forced to work for $2.00 an hour while CCA takes 30% to offset their incarceration costs and the state takes another 30% for legal costs.  That means inmates are being forced to work for about $.80 cents and hour.   Do you think that CCA gives that 30% back to the state to reduce the taxpayer cost of incarceration?

What do you do with an entire prison full of slave labor; you sell it to the highest bidder.  During the G.W. Bush administration the Department of Justice teamed up with the National Corrections Industry Association to promote this idea.  They even produced a recruitment video (circa 2004) to draw manufactures to set up shop in the prisons.

Industry spokesmen describe the program as a “win-win” – but that’s from their perspective.

“I asked an NCIA spokesperson how private companies can get away with what could reasonably be described as forced labor. He explained that the PIE program classifies certain work functions as a ‘service’ rather than an actual ‘job’, and therefore is not subject to [restrictions in a 1979 federal law]. Conveniently, then, the backbreaking work of picking crops in the blistering sun counts as a ‘service’, so prisoners can be paid even less than the immigrants who have traditionally performed this work.”

It is no wonder that CCA spent over “$12 million dollars between 2002 and 2012 lobbying for policies that protect their bottom line and keep pro-privatization politicians in office”.  The AP reports, “the industry’s giants — Corrections Corporation of America (CCA), The GEO Group, and Management and Training Corp. — have spent at least $45 million combined on campaign donations and lobbyists at the state and federal level in the last decade.”

The private prison industry is very lucrative for those at the top.  CCA brought in $178 million in 2012 and GEO brought in $78 million.  Over 40% of CCA’s total revenue comes from federal contracts. That is your tax dollars lining the pockets of these companies.

It is obvious to see that the private prison industry is a loss for taxpayers.  We are overpaying for services with ‘lockup quotas’, while they collect massive profits from slave labor camps inside the prisons.

As fiscally responsible taxpayers why would we continue to let our tax dollars fuel this corporate machine?

(Related article from AATTP “Watch The Video For-Profit Prison Corporations Don’t Want You To See!“)

 

Another thing that went wrong in the Bush Economy

AZ Correctional Industries

Watch this employer-recruitment video produced back in 2004 by the National Corrections Industry Association in partnership with the US Department of Justice:

Yep, if you’re a business, that’s certainly one way to “control labor costs”.  You don’t have to pay health benefits; you don’t have to pay overtime; you don’t even have to pay minimum wage.

If you’ve been watching the American Legislative Exchange Council (ALEC) closely, this probably isn’t a big surprise.  ALEC has been pushing “prison industry enhancement” (PIE) laws at the state level for about 20 years.   Read “The Hidden History of ALEC and Prison Labor” in The Nation here.

Industry spokesmen describe the program as a “win-win” – but that’s from their perspective.

“I asked an NCIA spokesperson how private companies can get away with what could reasonably be described as forced labor. He explained that the PIE program classifies certain work functions as a ‘service’ rather than an actual ‘job’, and therefore is not subject to [restrictions in a 1979 federal law]. Conveniently, then, the backbreaking work of picking crops in the blistering sun counts as a ‘service’, so prisoners can be paid even less than the immigrants who have traditionally performed this work.”

(Yes, of course there’s a Wal-Mart connection.  Read about it in the British newspaper The Guardian, here.)

Here’s how the prison labor system works in Arizona: 

  • State law requires all able-bodied prisoners to work.
  • “Arizona statute requires that all inmates that are making $2 per hour will have deductions of 30% to offset the cost of their incarceration. In addition, thirty percent of the prisoner’s wages will be deducted for court ordered restitution.”  (Are you doing the math here?  Sounds like the inmates actually receive 80 cents an hour for their work.)
  • Nevermind the recession, the prison labor business is growing.  The number of inmate hours worked during FY12 was up 8.5% over FY11.  Room and board “contributions” were up by 9.8%.  Sales were up.  Profits were up.  Arizona Correctional Industries added new products and new customers, and “are currently working on finalizing contracts that will help grow our telemarketing and service business.”  (ACI helpfully explainsHow we do it: We provide a positive learning experience for all of our workers.  We balance our home and business life.  We continually strive to improve our quality focusing on Lean Continuous improvement.  We are passionately involved in making the customer happy.”)
  • Arizona is now leading the nation in efforts to crack down on those same immigrants who used to pick crops.  Read National Public Radio’s “Prison Economics Help Drive Arizona Immigration Law” here.

Think about that employer-recruitment video that was funded by the Bush Administration in 2004:

“I have a workforce that doesn’t have car problems, or baby sitter problems et cetera.  They’re always here, and they’re always willing to come to work.”

“The situation here allows us to be able to control costs far more than we could in the past.”

“Partnerships between correctional industries and private business are a rapidly growing segment of a multi-billion dollar industry in America.”

“Bring us your business challenge.  Chances are, there’s a nearby correctional facility that can supply dependable labor, enhance your competitiveness, and increase your profitability.”

Now, think about the growth in the non-violent inmate population.

  • As of 2008, non-violent offenders made up over 60 percent of the prison and jail population.
  • If incarceration rates had tracked violent crime rates, the incarceration rate would have fallen to less than one third of the actual 2008 level.

Don’t you think something went terribly, terribly wrong?


Related Article

New Hampshire is considering privatizing the NH correctional facilities. We cannot let that happen.