The private prison system is making massive profits by keeping people incarcerated.
The US has the largest number of people incarcerated per 100,000 than any other country in the world.
On top of all of that, CCA and other private prison companies are using inmates as cheap labor. They pay prisoners $.50 cents per day, while CCA is being paid $55 dollars a day to keep them incarcerated.
For 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
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 Guardianhere.
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.
“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?
New Hampshire will not privatize its prisons, at least not in the near future. That’s the decision announced by the state today with the release of a long-awaited analysis of bids submitted by four private firms in response to a 2011 Request for Proposals from the state.
The state’s consultant, MGT of America, found that none of the bids met the requirements spelled out in the RFP. All of them “had deficiencies from an operational standpoint.”
Specifically, according to a parallel report released by the Departments of Corrections and Administrative Services, “all were non-compliant with meeting the Department of Corrections’ legal obligations.”
“More specifically, the proposals exhibited a lack of understanding of the overarching legal requirements placed upon the DOC relating to the court orders, consent decrees and settlements which, in large part, dictate the administration and operation of their correctional facilities and attendant services to the inmate populations,” the state agencies said.
[Click here for the report from the state agencies.]
The agencies concluded, “The immediate next step, taken in conjunction with the release of this report, is the formal cancellation of the solicitation process. This decision, based upon the detail provided above, is made in the best interests of the State.”
That the private industry leaders were not able to explain how they would actually meet the state’s legal obligations should be seen as evidence that these companies can’t be trusted to operate prisons anywhere.
MGT also reported that the staff compensation levels built into the privatization proposals was “one-half of the current compensation currently paid to similar positions in the state.”
“The state should be concerned that this significantly lower wage may make it difficult to maintain a trained and experienced staff. This could result in high turnover and ultimately impact the safety and security of the correctional facilities,” MGT added.
“In prior MGT studies of private correctional facility operations,” the report elaborated, “we have found private correctional facilities with annual staff turnover rates of 42 percent compared to 13.3 percent for nearby public facilities. High turnover, which can result from non-competitive compensation levels, produces a chronically inexperienced work force with direct implications for the integrity of facility security and safety. Low compensation levels can also make staff recruitment more difficult, resulting in staff vacancies and reliance on overtime, which again has a negative impact upon facility security.”
The state’s report leaves open the possibility that the state would entertain privatization as an option at some point in the future. That would be a huge mistake. Instead, the legislature should pass HB 443, a bill that blocks the state from considering privatization. This measure has already passed the NH House and comes before the Senate Finance Committee next Tuesday.
With Governor John Lynch leaving office and a significant turnover in the membership of New Hampshire’s Executive Council, the danger that the state would turn over management of its prisons to a private firm has diminished. However, privatization foes remain vigilant until the proposal is not just really dead but really most sincerely dead.
The possibility of privatization was raised in a Request for Proposals (RFP) issued by the state a year ago. The RFP explicitly invited private firms to offer plans to build and operate a prison for women, a prison for men, or a “hybrid” facility for both men and women. Private firms were also invited to submit plans to build such facilities and lease them to the state, or renovate existing facilities for the same purpose. Four firms responded to the detailed RFP, reportedly with enough paper to fill a room in the State House Annex. None of the bids proposed to build or renovate a facility just for women, despite the fact that the existing women’s prison in Goffstown is badly over-crowded and inadequately designed.
[mantra-pullquote align=”left|center|right” textalign=”left|center|right” width=”33%”]”The consultants helping the State review the bids have deep ties to the private prison industry. CCA, GEO, and MTC also contracted with local lobbyists to help them make their cases.” [/mantra-pullquote]Corrections Corporation of America, the industry leader, revealed it would consider sites in Lancaster, Northumberland, and Hinsdale. Management and Training Corporation cast its sights on land on Hackett Hill Road in Manchester. The Hunt Group (now known as CGL) proposed to build on land already controlled by the state prison in Concord. The fourth, the GEO Group, did not reveal the location of its proposed facilities.
CCA, GEO, and MTC also contracted with local lobbyists to help them make their cases.
Due to the complexity of the request and the responses, the Departments of Administrative Services and Corrections determined they were not able to evaluate and compare the proposals by themselves. With a vote from the Executive Council, the State signed a $171,000 contract with MGT of America to help analyze the documents. MGT’s report was due October 5 and their contract was to expire October 31. Those dates have come and gone with no report yet. “It’s unlikely it’s going to be resolved this year,” Gov. Lynch said at the October 17 Executive Council breakfast.
While we wait for the consultants (who happen to have deep ties to the private prison industry) to complete their report, Gov. Lynch has not stopped talking up the possibility that the state would contract with a private firm to finance and build a prison, which it would then lease to the state. Lynch appears to be convinced that the men’s prison needs to be replaced and that the Legislature would never approve funding through the capital budget process. From his perspective, contracting out prison ownership is a way to get around the normal budgeting process. That there has been no public discussion of the need for a new men’s prison does not seem to factor into his position. Moreover, such a proposal would give a private firm a foot in the door to promise cost savings down the line if they were given full control.
The experience from other states shows clearly that privatization is not a path to cost savings. Despite anti-union policies and reduced expenses of wages, benefits, and training, private firms in other states have been unable to save money for the states. What they have accomplished is a pattern of increased violence within the walls leading to a less safe, less secure environment for prisoners and staff alike. This in turn has led to high levels of staff turnover, feeding less security. And it means prisoners — most of whom will return to the free world — will be less likely to get the support they need to live productive lives outside the prison walls.
Incoming Governor Maggie Hassan has been explicit that she has no interest in turning over the prison keys to private firms. Whether she agrees with her predecessor that the men’s prison needs to be replaced is not yet clear. What is clear is that the state does need to do something about the women’s prison, which is already the subject of a civil rights lawsuit the state is likely to lose.
What is also clear is that approaches to crime and corrections that emphasize alternatives to incarceration, provide counseling and education to those who need it, and that interrupt the school-to-prison pipeline can be more effective and save money for taxpayers. The most active anti-privatization groups — including the State Employees Association, the NH League of Women Voters, Citizens for Criminal Justice Reform, the NH Association of Criminal Defense Lawyers, the NH Civil Liberties Union, and the American Friends Service Committee — are optimistic they can claim victory soon. They are already turning attention to development of a more humane approach to corrections, one that would preserve good jobs and save the state money.