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Prison Profiteers: Who Makes Money from Mass Incarceration

Prison Profiteers: Who Makes Money from Mass Incarceration


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“No country in history has ever handed over so many inmates to private corporations. This book looks at the consequences” (Eric Schlosser, bestselling author of Fast Food Nation).
In Prison Profiteers, coeditors Tara Herivel and Paul Wright “follow the money to an astonishing constellation of prison administrators and politicians working in collusion with private parties to maximize profits” (Publishers Weekly). From investment banks, guard unions, and the makers of Taser stun guns to health care providers, telephone companies, and the US military (which relies heavily on prison labor), this network of perversely motivated interests has turned the imprisonment of 1 out of every 135 Americans into a lucrative business.
Called “an essential read for anyone who wants to understand what’s gone wrong with criminal justice in the United States” by ACLU National Prison Project director Elizabeth Alexander, this incisive and deftly researched volume shows how billions of tax dollars designated for the public good end up lining the pockets of those private enterprises dedicated to keeping prisons packed.
“An important analysis of a troubling social trend” that is sure to inform and outrage any concerned citizen, Prison Profiteers reframes the conversation by exposing those who stand to profit from the imprisonment of millions of Americans (Booklist).
“Indispensable . . . An easy and accessible read—and a necessary one.” —The San Diego Union-Tribune
“This is lucid, eye-opening reading for anyone interested in American justice.” —Publishers Weekly
“Impressive . . . A thoughtful, comprehensive and accessible analysis of the money trail behind the prison-industrial-complex.” —The Black Commentator

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Product Details

ISBN-13: 9781595584540
Publisher: New Press, The
Publication date: 05/05/2009
Edition description: Reprint
Pages: 352
Product dimensions: 5.52(w) x 8.22(h) x 0.91(d)

About the Author

Tara Herivel is an attorney in Oregon. She is a co-editor, with Paul Wright, of Prison Profiteers: Who Makes Money from Mass Incarceration (The New Press) and a co-author, also with Paul Wright, of Prison Nation: The Warehousing of America’s Poor. She lives in Portland, Oregon.

Paul Wright is the founder and editor of Prison Legal News. He is a co-editor, with Tara Herivel, of Prison Profiteers: Who Makes Money from Mass Incarceration (The New Press) and a co-author, also with Tara Herivel, of Prison Nation: The Warehousing of America’s Poor. Wright is the founder and executive director of the Human Rights Defense Center and a winner of the National Lawyers Guild Arthur Kinoy Award. He lives in Lake Worth, Florida.

Read an Excerpt


Banking on the Prison Boom

Judith Greene

August 2006

Our growth is generally dependent upon our ability to obtain new contracts to develop and manage new correctional and detention facilities. This possible growth depends on a number of factors we cannot control, including crime rates and sentencing patterns in various jurisdictions and acceptance of privatization. The demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, leniency in conviction and sentencing practices or through the decriminalization of certain activities that are currently proscribed by our criminal laws. For instance, any changes with respect to drugs and controlled substances or illegal immigration could affect the number of persons arrested, convicted, and sentenced, thereby potentially reducing demand for correctional facilities to house them. Legislation has been proposed in numerous jurisdictions that could lower minimum sentences for some non-violent crimes and make more inmates eligible for early release based on good behavior. Also, sentencing alternatives under consideration could put some offenders on probation with electronic monitoring who would otherwise be incarcerated. Similarly, reductions in crime rates could lead to reductions in arrests, convictions and sentences requiring incarceration at correctional facilities.

— Corrections Corporation of America 2005 Annual Report

Over the final quarter of the twentieth century criminal justice policies in the United States underwent a period of intense politicization and harsh transformation. Draconian sentencing laws and get-tough correctional policies led to an unprecedented increase in jail and prison populations, driving the United States' rate of incarceration head and shoulders above that of other developed nations.

The United States has — by far — the highest prison population rate in the world. The imprisonment boom that began in the late 1970s has swelled the state and federal prison system to more than 1.4 million prisoners. Adding those held in local jails and other lockups (juvenile facilities, immigration detention, etc.), the total number of people behind bars rises to almost 2.3 million. Expenditures for corrections increased by 573 percent between 1982 and 2003, with the bulk of the increase going for expansion and operation of prisons.

Prison expansion is the lifeblood of the private prison industry. In recent years the debate over privatization of prisons has been focused primarily on the relative costs and performance of private prisons compared to those operated in the public sector. But increasing attention has been paid to the role the industry appears to play in fostering growth in the number of people behind bars — political contributions made to politicians who set criminal justice policies — and the leadership position various industry executives filled over many years with the American Legislative Exchange Council, a powerful lobby for prison privatization and "get tough" penal policies. Corporations with a stake in the expansion of private prisons invested $3.3 million in candidates for state office and state political parties in forty-four states over the 2002-04 election cycle.

The Private Prison Debate

The proponents of private prisons insist that privatization will bring lower costs, higher-quality correctional services, and a higher level of accountability. They argue that lower costs and better quality will result from certain advantages they believe are inherent to privatization. Market efficiency is taken to be axiomatic by advocates for private prisons. They contend that competition between vendors for contracts creates strong incentives for managers to find innovative methods to provide improved prison administration and service delivery while at the same time "cutting the fat" from their expense budgets. Because contracts can be terminated or rebid if major performance problems arise, these proponents maintain, market discipline will keep contractors on their toes to prevent loss of business.

Proponents' arguments are often built on abstract assumptions about why privatization should work to improve correctional services. They argue that since gross operational failures — prison escapes and riots — threaten public safety and are therefore likely to attract negative media publicity, private companies that must build a marketing strategy on success will have more incentive than government to guard against security lapses and harsh treatment of prisoners. They assert that if public correctional managers hand the reins to private prison operators, they will be in a better position to demand successful performance than if they retain bureaucratic responsibility for the performance failures of their underlings. Since private firms are not encumbered with civil service and union contract requirements, proponents argue, they will assign staff more efficiently, make promotions solely on the basis of merit, and fire those who fail to perform well or abuse the human rights of the prisoners in their charge.

At the heart of the arguments for prison privatization is the notion that competition from the private sector will inevitably lead to better-quality prison services, at lower costs, across the board. The linchpin for this claim is the concept of "cross-fertilization"— the notion that innovative competition from the private sector challenges public prison managers to cut costs and improve practices, galvanizing them to introduce the modern management techniques and technology improvements claimed to be the hallmarks of the private sector.

Proponents of "managed competition" claim that public bureaucrats find the threat of privatization as potent as its implementation. The prospect that their functions may be transferred to private corporations may compel governmental agencies to improve efficiencies through innovation and may also weaken labor's bargaining power over compensation and work rules. Should public prison managers discover ways to beat the private sector at its own game, their innovations will be snapped up in turn by private sector competitors eager to win the race for government contracts.

In addition to this happy picture of ever-spiraling correctional improvement, proponents contend that private prison companies operate at a sheltered remove from the corrupting demands of the political process. And since they are also unfettered by the intricacies of public procurement, private prison managers are free to attain certain efficiencies and economies that lie beyond the reach of government agencies. They can build facilities faster and more cheaply, and save taxpayer dollars by cutting operational costs. In the private sector, cost savings can be wrung from expense categories over which public prison managers have little or no control. Salaries, fringe benefits, and overtime can be contained by private companies free from civil service rules and union contracts. Moreover, proponents point out that that contracts for correctional services sometimes require performance standards that may not apply to a state's own public prisons. Unlike governmental agencies, private contractors may be subject to sanctions for poor performance. Contracts may even be terminated when significant performance problems arise.

These assumptions do not go unchallenged. Elliott Sclar points out that market efficiencies are greatly diminished when — as has been the case in the private prison arena — the industry is dominated by a couple of giant competitors who wield powerful economic and political resources to gain contracts. "By sidestepping the issue of how concentrated economic power arises and sustains itself in the actual operation of contract markets, privatization advocacy often amounts to little more than an endorsement of changing rather than correcting the problems we face with public agency performance."

In a survey of private prisons in the United States conducted for Congress, researchers at the Federal Bureau of Prisons concluded that innovation in private sector corrections is limited due to two primary factors. First, to manage the risks associated with prison management, most contracting agencies require that private prisons be run according to policies and standards that closely resemble those developed for the state's public prisons. Second, since private prisons have been sold on the promise of lower costs, and many states require that a set percentage of cost savings be demonstrated, private prison managers face intense pressure to pare down expenditures in order to save money and produce profits at the same time. In combination, these factors leave little or no margin for the free experimentation that might breed innovative correctional practices.

From their inception, private prison management schemes have drawn criticism from penal reformers, human rights advocates, legal experts, and organized labor. Much early debate focused on assertions that prison privatization might fail to pass constitutional muster. Proponents argue that while government cannot delegate its legislative or adjudicative powers to other entities, it can generally pass along its prerogative to perform more mundane functions (including rule making) and to provide public services. This simply requires that governments create adequate statutory standards and retain oversight as well as the right to approve or disapprove rules and disciplinary actions. Opponents of privatization have argued that legal prerogatives that are well established under the "delegation doctrine" might fail if challenged in the context of prison privatization, since liberty interests (not property interests) are at stake. This theory has never advanced far in the courts.

Philosophical opposition to privatization is grounded in the argument that incarceration is a core function of government that should not be handed off to private interests. For those who hold this view, the authority to deprive citizens of liberty and to coerce them — or even kill them — simply should not rest in nongovernmental hands.

Many who oppose prison privatization on moral grounds assert that turning the operation of prisons over to organizations that are organized for the sole purpose of generating profits will inevitably produce pressure for increased incarceration — the prison contract tail will wag the correctional policy dog. Others argue that the profit motive is immoral in the context of prisons because it places financial gain foremost, over the welfare of prisoners.

The American Friends Service Committee takes the position that prison privatization is inherently unethical:

First and foremost, we oppose companies operating correctional facilities for the purpose of making a profit for their owners and investors. It is inherently unethical for a private corporation to profit from depriving human beings of their liberty. The very nature of the arrangement invites these companies to prioritize their profits over the needs of those in their custody.

Forty-three Catholic bishops from the southern region of the United States have issued a pastoral message that raises privatization of prisons as a serious moral issue:

We believe that private prisons confront us with serious moral issues, demanding a gospel response. To deprive other persons of their freedom, to restrict them from contact with other human beings, to use force against them up to and including deadly force, are the most serious of acts. To delegate such acts to institutions whose success depends on the amount of profit they generate is to invite abuse and to abdicate our responsibility to care for our sisters and brothers.

Opponents hold the view that private firms are less accountable than government agencies, pointing out that private prison firms that import prisoners from other jurisdictions have sometimes refused to inform the host-state authorities about what types of prisoners are being held in their facilities and for what offenses.

While advocates of privatization claim that public tax dollars are saved when prisons are privatized, opponents of privatization insist there is little evidence of any real cost savings. They say that many of the savings cited in cost-comparison studies are the product of faulty methodology, such as where comparisons are made to hypothetical public prisons. And while labor costs are lower, the savings primarily serve to boost executive compensation and corporate profits.

Critics of the "cross-fertilization" argument point out that there is little room for innovation in correctional practice, and that years of experience with private corrections have produced scant evidence that application of new technology or modern business methods has resulted in significant improvements in how prisons are run.

Many argue that the impact of competition on public correctional costs looks less like increased efficiency and more like a race to the bottom line. In this view, competition to cut costs serves only to lower the quality of prison services and diminish the level of security and safety.

The influence of private prison firms changes the dynamics of correctional policy development in many ways. Political scientist Barbara Stolz has examined the impact of the private sector on the "corrections subgovernment"— the small circle of individuals who steer the major decisions about correctional policy and practice in a given state. These key actors are traditionally drawn from the legislative and executive branches, typically from the subcommittees responsible for corrections authorizations and appropriations, from the executive level of correctional agencies, and from those interest groups that wield enough power to influence policy — those with business and professional interests to promote (law enforcement and district attorneys organizations, correctional unions, bar associations) as well as private groups that promote the interests of crime victims or serve as public watchdogs of the interests and rights of prisoners.

Stolz contends that with the advent of private prison companies, the balance has shifted in many states' correctional sub-governments. She argues that actors with a direct professional, bureaucratic, or financial stake in the outcomes of the policy process usually manage to wield more power in the process than those with social or public interest concerns. Private prison firms work hard to raise the ante in the political power game in ways that disadvantage or disempower other players. They bring the profit motive directly to the foreground of policy decisions, raising the stakes, shifting the goals, and changing the dynamics of the policy process.

Through contributions to political campaigns and employment of well[heeled lobbyists, private prison firms manage to pull into the subgovernment process new actors that are not typically involved: legislators, governors, and other elected officials. By dangling the prospect of lucrative employment prospects, they distort the normal reward structure for the public players.

Most disturbing of all, the ability to finance prison construction privately with municipal bonds and corporate loans loosens the normal fiscal constraints on prison expansion that serve to spur important debates about sentencing and correctional policies and rational allocation of public expenditures. Private prison executives are very adept at using political connections and lobbying power to short-circuit correctional policy deliberations with offers of new prison capacity "built at no cost to the state."

We Got By with a Little Help from our Friends

No private stakeholder has had a larger interest in the growth of the American prison system than the world's largest prison company, the Corrections Corporation of America. With a market capitalization of $2 billion, CCA runs the nation's fifth-largest penal system: sixty-three correctional, detention, and juvenile facilities with a total design capacity of approximately seventy thousand beds in nineteen states and the District of Columbia.

From the day of its founding in Nashville, Tennessee, CCA has traded on close political ties to public officials. When Lamar Alexander was elected governor of Tennessee in 1978 he appointed a Republican activist and supporter, Tom Beasley, to his transition team. Ultimately Beasley rose to be chairman of the state Republican Party. In 1983, eight days after Alexander was inaugurated for a second term, Beasley and Doc Crants (his former roommate from the U.S. Military Academy at West Point) set up a new company with the intention of running the state's prison system. CCA's initial investors included the governor's wife, Honey Alexander, and Ned McWherter, then Speaker of the Tennessee House of Representatives.

Since its founding, CCA has made two audacious bids to take over the entire Tennessee prison system — once in 1985 and again in 1997. Both bids failed, but the company has nonetheless prospered greatly in its home state, operating three prisons that hold adult prisoners from the Tennessee Department of Corrections, a fourth prison that holds detainees for various federal authorities and imports prisoners from other states, two large local jails, and one juvenile facility.


Excerpted from "Prison Profiteers"
by .
Copyright © 2007 Tara Herivel and Paul Wright.
Excerpted by permission of The New Press.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Table of Contents

Title Page,
Part I - The Political Economy of Prisons,
Banking on the Prison Boom,
The Private Prison Debate,
We Got By with a Little Help from our Friends,
If We Can't Sell a Legislator on Privatization, We'll Just Hire Him,
Don't Need Our Beds? You Still Need Our Jobs,
Crime Rates Down? Immigrant Detentions R Us,
Million-Dollar Blocks: The Neighborhood Costs of America's Prison Boom,
Doing Borrowed Time: The High Cost of Backdoor Prison Finance,
Paying for Prisons: Corrections Takes the "Public" out of Public Finance,
Cost 1: Policy Makers Binge on Easy Prison Credit,
Cost 2: Backdoor Finance Locks in Excess Prison Capacity,
Cost 3: Immigrant "Gold Rush" Creates Speculative Detention Bubble,
Why the Economics of Prison Expansion Escape the Bond Markets,
Build It and They Will Come (but Not in Time to Pay the Mortgage),
Making the "Bad Guy" Pay: Growing Use of Cost Shifting as an Economic Sanction,
An Overview of Criminal Financial Assessments,
The Growing Cost of Detention and Supervision,
Jail Fees Are Common, and Costly,
The Cost of Staying out of Jail,
The Cost of Nonpayment,
Are Economic Sanctions Sound Public Policy?,
Policy Makers Must Reconsider the Use of Cost-Recovery Sanctions,
Prisons, Politics, and the Census,
Where Prisoners are Counted Matters,
Distorting Democracy at the State Level,
Distorting Democracy in Rural Counties,
Distorting Policy Decisions in Favor of Prison Expansion,
Opposition to Census Reform,
Calls for Change,
Don't Build It Here: The Hype Versus the Reality of Prisons and Local Employment,
Do Prisons Deliver? A National Study of the Economic Impact of Prisons,
Why Have Prisons Failed to Provide Economic Benefits?,
The Cultural Commodification of Prisons,
Prison as Cultural Commodity,
The Social and Political Impact of the Cultural Commodification of Prison,
Part II - The Private Prison Industry,
Prison Labor Fuels American War Machine,
Captive Labor Force,
No Ordinary Contractor,
Unfair Competition,
Meese Versus China,
Politics of Exploitation,
On the Inside with the American Correctional Association,
Just Business,
Pain for a Price,
Wining, Dining, and Women,
Privatization, Politicians, and Payola,
Jails for Jesus,
Florida's Private Prison Industry Corporation Under Siege,
Anatomy of a Prison Industry,
A Declining Industry,
Expanding PRIDE's Umbrella,
Corporate Nepotism at Work,
Investigating the PRIDE Conglomerate,
Defining PRIDE's Mission,
Part III - Making Out Like Bandits,
Behind Closed Doors: Privatized Prisons for Youth,
"Born of Parents Named Avarice and Greed",
The Hydra Sprouts Another Head: Jena Juvenile Facility,
Growth of the Industry,
The Business of Kiddie Lock-up,
Success at a Price,
The Exception? Or the Rule?,
Conflicting Interests,
An Absence of Federal Guidance or Oversight,
The Heart of the Matter,
Sick on the Inside: Correctional HMOs and the Coming Prison Plague,
Private Health Care in Jails Can Be a Death Sentence,
A Tough Business: Taking On Headaches, and Creating Some, Too,
Cutting a Lifeline: For Parkinson's Patient, a Countdown to Death,
The Revolving Door: After Trouble in Florida, Moving On, and Up,
A Jailhouse Birth: Chaos on a Cell Floor as a Baby Is Discovered,
Connecting the Deaths: A Pattern Emerges, and a Battle Begins,
Cries from the Heart: Despite Days of Agony, "Nobody Will Help Me",
The Riot Academy: Guards Stage Mock Prison Riots to Test the Latest High-Tech Gear,
Mapping the Prison Telephone Industry,
Background and Origins,
Protest, Alternatives, and the Limits of Regulatory Action,
Shocked and Stunned: The Growing Use of Tasers,
Tasers in Prisons and Jails,
Tasering Children,
Mass Market for Tasers,
For-Profit Transportation Companies: Taking Prisoners and the Public for a Ride,
Private Prisoner Transportation as Big Business,
The History of Privatized Transport Services,
Problems in the Past: Reflections in the Rear-View Mirror,
Federal Intervention Results in Regulatory Reforms,
Effective Regulation Inherently at Odds with Industry?,
Public Transport Services Imperfect,
A Road Map for the Future: Where to Go From Here,
Author's Note,
About Prison Legal News,
Copyright Page,

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