Incarceration, Inc.

Editorial StaffMarch 1, 2012
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Private prisons profit from government contracts while touting taxpayer savings, secure facilities and superior services. But following high-profile escapes, do our corrections need correcting?On July 30, 2010, three convicted murderers – John McClusky, Daniel Renwick and Tracy Province – escaped from a privately-operated prison in Kingman, Arizona. Less than a week later, the convicts were linked to the murders of Gary and Linda Haas in New Mexico.

All three men and an accomplice were recaptured by the end of August, but their breakout triggered heavy scrutiny of privately-run prisons that ricocheted across Arizona’s corrections system.
The private prison industry has thrived nationwide for nearly 30 years, and especially in Arizona. Currently, there are ten state-run facilities and six privately-run facilities in the Arizona prison system, and another six privately-run facilities in the state that house federal and out-of-state prisoners. Combined, private prison contracts in Arizona exceed well over $500 million. At press time, the Arizona Department of Corrections was accepting bids from private corrections companies for 2,000 more medium security beds and 500 maximum security beds – the latter to be operated by the state. Initially, ADC’s forecast called for 5,000 new beds; that request was modified in December when data came in showing drops in both crime and the number of incoming inmates.

Proponents say private prison systems take some of the financial burdens of incarceration off the state; provide rehabilitative, educational, and vocational opportunities for inmates on par with or superior to state programs; and provide industry to otherwise blighted towns. Opponents say private prison systems can actually cost more than state facilities, generally provide services below the state level, suffer from security issues, selfishly press for stricter criminal climates to ensure their cash flow, and lack proper oversight and transparency. From either side, it’s clear that our prisons have been bulging beyond capacity for decades, and everybody wants a more effective corrections system that reduces recidivism. But by what means? Some say the answer lies in sentencing reform and more community-based programs. Others say the solution is creating more private prison contracts and restructuring existing ones.

Jail Baiters
The private prison industry began in 1984, when the United States Immigration and Naturalization Service started giving contracts to private corrections agencies to build and operate facilities for housing federal prisoners. It was also the height of Nancy Reagan’s “Just Say No” anti-drug campaign and the continuing “War on Drugs.” A combination of illegal-immigration crackdowns and tougher sentencing mandates over the next 25 years boosted prison populations around the country; this was particularly true in hot-bordered Arizona, which presently has the sixth highest per capita incarceration rate in the nation, according to the U.S. Department of Justice.

In 1995, there were 273 state inmates in private facilities across the state. Today, there are more than 6,000. The increase partially stems from Arizona’s “truth in sentencing” laws, which call for tougher sentences for convicted offenders.

Many of the harsher sentencing laws were ushered in around the country during the 1990s, and can be linked to lobbying efforts by private prison corporations, says Travis Pratt, a professor of criminology at Arizona State University. “The private prisons industry has a very, very heavy lobby in most states and the federal government to increase sanctions for a number of offenses. They’ve been doing this for a very long time. It’s a multi-million-dollar lobbying effort,” Pratt says. “And they’ve been exceptionally successful – longer sentences for more types of offenses means more inmates, more inmates means they have to be housed somewhere, which translates to greater profits for that industry. They have a very clear agenda there, and they’ve been unapologetic about it. They haven’t hidden that at all.”

A nonpartisan group called the Center for Responsive Politics reports the oldest private prison company in the country, Corrections Corporation of America (CCA), has spent  nearly $1.5 million on lobbying efforts nationwide since 2002. They have long-term contracts with the U.S. Marshals Service, Immigration and Customs Enforcement, and the Federal Bureau of Prisons. Another corrections company, the GEO Group, has shelled out $2.4 million since 2004. The smaller Management and Training Corporation (MTC), spent less than $350,000 on lobbying over the past ten years.

Given the returns, such lobbying dollars were a good investment. The GEO Group, which owns 116 facilities worldwide (including three prisons in Arizona contracted to the state), reported more than $406 million in revenue for the third quarter of 2011. MTC operates 20 facilities nationwide – three in Arizona, including the Kingman facility from which three inmates escaped in 2010. They’ve garnered around $466 million in corrections contracts over the past decade. Corrections Corporation of America (CCA) has more than 60 facilities nationwide. CCA does not contract with Arizona, but has six facilities across the state that house federal inmates and out-of-state offenders. Records from the Federal Bureau of Prisons show CCA has been awarded more than $315 million in federal contracts in Arizona, which houses roughly 5,200 federal prisoners.

There are approximately 45,860 state prisoners incarcerated throughout Arizona, according to Arizona Department of Corrections data. 6,457 of those inmates are housed in state-contracted private prisons.  ADC partnerships with private corporations goes back to 1993, when the state awarded its first contract to MTC to operate a prison in Marana (previous proposals for private prisons in Arizona date back to the mid-1980s; former governors Bruce Babbitt and Rose Mofford both vetoed them).

In 2009, Arizona legislators considered House Bill 2010, which would have conceded the entire Arizona state prison system – including maximum-security facilities and death row – to be run by private corrections corporations. The concession agreement was too radical even for Governor Jan Brewer and Arizona Department of Corrections Director Charles Ryan, who’ve both gone on record about the merits of public-private corrections contracts. “The governor, as well as myself, see a purpose and a utility of private prisons for specific populations in the lower custody levels in Arizona,” Ryan says. “Not the maximum security, and not the close [security]… that’s not the type of inmate we should be handing over to the private sector.”

Shackles and Oranges
One of the arguments for private prisons is that they save state governments money in construction and operating costs. When state prisons are overfilled, more beds – requiring additional structures – must be provided for the overflow, and the overhead is steep. Charles Ryan says one benefit of including state-owned land in bids for private prison contracts is that state lands are effectively leased to correctional companies but remain the property of Arizona, and “The improvements that would be made would end up being permanent improvements to the property that the department would own at the time of term of the agreement.”

The federal prison population is 40 percent larger than its design capacity. At the end of 2011, the Federal Bureau of Prisons reported sending more than 22,000 federal inmates to privately-run facilities. The Bureau also noted in a 2005 report that “When we look at facility operating costs alone, we do not predict that private management will save money in the long run.”

But there’s much more to look at than just facility operating costs when trying to compare public and private prisons. The ADC conducted a comparison study of public-versus-private prisons in Arizona in December 2011, and noted several systemic differences that make a true, hard comparison impossible.

For example, state prisons must provide health care, regardless of the cost, to inmates. Private prisons, however, do not accept inmates with serious mental and health needs, and some contracts cap health care expenses at $10,000 per inmate – after that, the inmate is transferred to a state facility. And there are other factors to consider, including the age of an infrastructure, inmate profiles (maximum security inmates cost more to house), along with costs for services provided by the state but not by private companies – things like assessing inmates’ risk levels, calculating inmate release dates, taking disciplinary actions, and approving inmate work programs. Arizona law says these functions must be performed by the state. And the state must oversee its privately-run facilities to ensure they’re in compliance with state standards – another costly function.

“Theoretically, it’s impossible to have a true apples-to-apples comparison,” Ryan says. So for the ADC’s Biennial Comparison of ‘Private Versus Public Provision of Services’ Report, Ryan factored in all the aforementioned costs. When that was done, it showed the daily cost for private prisons, per minimum-custody inmate, averaged $46.56 – three cents cheaper than the state’s cost of $46.59. But private prison cost per medium-custody inmate averaged $53.02 per day, nearly $5 more than the state’s expense of $48.42. Maximum- and close-custody inmates, who are housed exclusively in state facilities, averaged a cost of $63.93 and $60.59 per day, respectively. “The research statistically shows that there is no clear pattern of savings or more effective correctional service delivery by private agencies,” criminology professor Pratt says. “There’s very little that private agencies can do in terms of cost-cutting that public agencies cannot also do.”

The idea that privately-run prisons provide services on par with or above services provided by state facilities is also a subject of debate. Sex-offender treatment, substance abuse programs, vocational training and educational programs are provided by the state in various state-run facilities. Private prisons that contract with the state provide similar services, but have a much lower participation rate in some programs. Private prisons had higher participation percentages last year in three areas (substance abuse and sex offender treatment, self-improvement programs, and GED programs), but a significantly lower percentage of inmates in work programs (an average of 39 percent throughout Arizona’s six privately-run facilities, versus an average of 58 percent across six state-run facilities).

Such programs are important in preventing people from reoffending and returning to prison after their release, Ryan says. “Statistics have shown that there’s a 30 percent reduction in the recidivism for those people who’ve acquired a skill and worked in the shops,” Ryan says. “It’s akin to a real world experience.”

Ryan describes a partnership program with trucking company Swift Transportation at the Lewis state prison in Buckeye. Whenever one of Swift’s trucks is wrecked, it’s sent to the prison for repair. “Swift is looking for people that are committed to what they do. They’re not looking for high turnover,” Ryan says. “They’re looking for somebody in our prison setting that may have a few years to serve, but it’s an investment, so to speak, and when that person gets out, they’re much more marketable.”

The GEO Group and MTC declined to answer questions about their services, but the ADC comparison report shows both companies offer some types of educational, vocational, substance abuse and sex offender programs in their Arizona facilities.

Corrections Corporation of America spokesman Steve Owen says CCA offers “vocational training, substance abuse programming, life skills, parenting skills, academic programs – all the way from basic literacy programs for inmates that are completely illiterate all the way up to earning their GEDs and post-secondary course work through partnerships we have with area colleges.”

CCA also has construction training programs for its inmates accredited by the National Center for Construction Education and Research (NCCER), a nonprofit foundation that standardizes training for  construction trades. When inmates at CCA facilities complete a construction training program, they receive a transcript from NCCER showing their training and qualifications. “So they can actually go out in this world when they’re released, and they can get a job on any construction site around the country, and those construction companies will recognize from this transcript what his competencies are,” Owen says.

But critics of privatized systems say private facilities aren’t offering anything better than what public facilities do. “There’s no rigorously reviewed, methodologically reviewed study that’s been published in a peer-reviewed journal that demonstrates that private agencies can do [anything better],” Pratt says. “In terms of providing rehabilitative services, substance abuse counseling, mental health counseling, re-entry services, things like that – again, there’s nothing the private sphere can’t do that the public sphere can’t also do.”

Behind the Bars
Following the escapes from the privately-run Kingman prison, ADC director Charles Ryan sent a cure notice to MTC Senior Vice President Odie Washington on December 29, 2010, in which he listed 31 “areas of concern” to be remedied within 90 days, including malfunctioning perimeter lights, inmates not wearing required ID cards, improperly-labeled emergency keys, and uncontrolled inmate movement during counts. He also noted MTC staff were unable to name their complex administrator, “did not have the presence of mind to dial 911” during an October riot, and gave “incorrect” responses to security questions (when asked what he’d do in the event of an escape, one MTC employee said he would shoot at the inmate “if he were coming at me,” but would “shoot in the dirt, if he were running away from me.”).

MTC e-mailed this response to inquiries about Ryan’s cure notice: “MTC has addressed all deficiencies identified in the December 29, 2010 letter from the Arizona Department of Corrections (ADC). ADC began returning inmates to the Kingman facility in March 2011. Both MTC and ADC conduct frequent audits of Kingman’s operations. We are confident the Kingman facility is safe, secure, and complies with ADC standards.”

Nevertheless, the issue of security remains a big concern for critics of privatized corrections systems. In 2010, there were 26 weapons violations throughout Arizona’s six private prisons, much more than the 10 weapons violations throughout comparable state prisons. But state facilities had more instances of violations for drugs and “use of force.”

Security concerns are one reason not every community wants a prison in its backyard, but there are also economic benefits to consider. When Tommy Chong (of stoner comedy duo Cheech & Chong) was incarcerated in the GEO Group-operated Taft Prison in California, he saw how private prisons bring industry to the communities in which they’re planted. Chong, who served nine months in 2003-2004 for selling mail order bongs, was interviewed in prison for the 2007 documentary American Drug War: The Last White Hope. “The private prison business is big… It provides employment for depressed, rural areas,” Chong said. “So you get a place like Taft – if it wasn’t for the prison, there would be no industry here. The oil industry is long gone. There’s nothing else here, except maybe the ground squirrel industry.”

When the ADC announced last December it was dropping plans for 5,000 new prison beds and seeking bids for 2,500 beds instead, politicians in areas being considered for the new prison vocalized their disappointment. Coolidge Mayor Tom Shope told media, “We still want the prison… We are open for anyone who wants to come to Coolidge. We are still trying to attract that activity.”

“CCA is the main employer for all of Pinal County,” says Caroline Isaacs, director of the Arizona office of American Friends Service Committee (AFSC), a Quaker group that sued the state in September 2011 to block Arizona from awarding the proposed 5,000-bed contract. “Certainly, that’s another piece that holds towns back from holding these companies accountable [for security and operational issues], because they’re concerned. What can we do to hold them accountable? We can threaten to cancel the contract. Well, the people in these towns are not going to want to do that, because that means jobs, that means tax revenue, and they’re going to push back against that.”

Isaacs and others say there’s a lack of accountability in the private prison system. “These corporations are not subject to the laws that mandate transparency in reporting the way state governments are,” she says.

Since CCA contracts with federal agencies and not with Arizona, the state does not oversee their facilities here. But Steve Owen points out that all CCA’s Arizona facilities are accredited by the American Correctional Association. “That’s an independent team of auditors that comes in, and they spend about a week going through the facility – not only auditing files and paperwork, but they’re also inspecting approximately 500 standards that covers every aspect of operating correctional and detention facilities,” Owen says. “They interview staff, they interview inmates – so they’re not just taking our word for it, either on paper or otherwise, that we know the standards and follow them, but they’re actually coming out and witnessing first-hand.”

In addition, Owen says their facilities are closely monitored by the government agencies they contract with. “Our facilities have contract monitors from our government partners, and they come out to the sites, and they inspect on a daily basis,” he says. “At most of our facilities, we have contract monitors that actually have an office, and they’re in our facilities every single day.”

Private prisons that contract with the state must answer to the state. ADC director Charles Ryan has a small staff on-site at each private prison, which consists of a minimum of three people: a deputy warden, a captain, and a correctional officer. “Privatization is about making a profit. That said, policy compliance is where the rubber meets the road for us,” Ryan says. “This is the importance of monitoring. What we learned from the escape, it applies to state facilities as well as privates.”

And what Ryan says he learned from the escape at the MTC-owned Kingman unit, among other things, was that each site should have a seasoned deputy warden who had previously managed a state unit (prior to the escapes, each site had only an assistant deputy warden), and that there would henceforth be tight restrictions on the types of inmates admitted to that facility: no inmates with murder convictions, life sentences, escape history, or more than 20 years left to serve.

Down with Recidivism
“The only way this industry makes more money is if more people are in prison,” says Paul Ashton, a researcher at nonprofit think tank Justice Policy Institute, which published a study last year titled Gaming the System: How the Political Strategies of Private Prison Companies Promote Ineffective Incarceration Policies. “For me, that’s the most troubling piece of the private prison industry.”

In November 2011, the American Civil Liberties Union published a similar report titled Banking on Bondage: Private Prisons and Mass Incarceration, which posits “the private prison industry helped to create the mass incarceration crisis and feeds off of this social ill.”

Steve Owen says that’s a misconception. “The anti-privatization crowd likes to beat this drum – and it’s an emotional argument but not a factual argument – that we’re somehow in competition with rehabilitation, that [rehabilitation] is kind of counterintuitive to what we do, that we only profit if the sentencing laws are stricter and there are more people going to prison, and that’s just not the case,” he says. “We are in the business of providing safe, secure facilities and inmate rehabilitation programs… It certainly is a goal of ours to want to provide these inmates with meaningful opportunity for change.”

When discussing solutions to overcrowding that don’t involve private prisons, sentencing reform and community re-entry programs are often touted as viable alternatives. “We talk a lot about re-entry and probation and parole, especially for non-violent folks,” Ashton says. “Why is it that we have to keep someone who did a non-violent drug offense in prison for 25 years?”

Opponents of privatization often say prisons are overcrowded because of lengthy sentences for non-violent, first-time drug offenders. “Most drug offenders are addicts who are stealing or doing whatever to support their habit. These people are not a major threat to society,” Caroline Isaacs says. “What they need is to get their habit taken care of, and they can do that in the community for a fraction of the cost of locking them up.”

ADC statistics from December 2011 showed that 7,920 inmates were incarcerated throughout Arizona for drug offenses – roughly 20 percent of the state’s total prison population. Of the 39,949 inmates listed in ADC’s statistics, 28,324 (71 percent) have a history of violent offenses. “Most of the people in our prison system, this is not their first rodeo in the criminal justice system,” Ryan says. “The people that are in our system are here because they failed the other opportunities, or with the offense they committed, probation wasn’t an option. So even though there’s people that would want you to believe there’s a bunch of non-violent, first-time offenders in the department of corrections…that’s just not so.”

Leonard Gilroy is the Director of Government Reform for the Reason Foundation, a nonprofit think tank that researches privatization in numerous sectors of society, including corrections. He was also appointed by Governor Brewer to the Arizona Commission on Privatization and Efficiency in 2010 and 2011. Gilroy advocates “a continuum of care” system within private corrections and sees recidivism stemming from a fragmented system, where inmates may move from one facility to another, potentially without good communication between facilities and with interruptions to rehabilitative programs.

“The idea would be to give the private sector the ability to customize their programs for each inmate and follow that inmate across the continuum, to essentially link those things that are fragmented now, to essentially ensure that inmates are in the right place at the right time for the right programs,” Gilroy says.

He also points to recent “payment by results” contracts for private prisons in the United Kingdom, in which the government requires private prisons to reduce recidivism by five percentage points in order to receive the full payment in their contracts. “You’re tying incentives for the operator to the goal of keeping people from coming back to prison,” Gilroy says. “You often hear folks that aren’t fans of correctional privatization say, ‘It’s all about making money off keeping people in prison.’ I would argue that what I’m describing here – payment by results – is exactly the opposite.”

The only thing everyone seems to agree on is that we all want a better corrections system, and there’s no single-shot solution. “You need it all. You need drug courts, you need sentencing reform. We really need to look at all those issues,” Gilroy says. “I’ve seen a convergence pushing toward ‘Well, at a minimum, we can all agree that we need better performance out of our system, and that we’re doing too much.’… That bodes well for solutions in the future.”


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