Will Tough Economy Be The Downfall Of The Private Prison Industry?

A new report details how the private prison industry is responsible for the large number of Americans living behind bars.
By @katierucke |
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    Pam Anders, from Clermont, Florida, participates in a rally against private prisons held at the 2012 United Methodist General Conference in Tampa, Florida. (Photo/UMNS/Paul Jeffrey)

    Pam Anders, from Clermont, Florida, participates in a rally against private prisons held at the 2012 United Methodist General Conference in Tampa, Florida. (Photo/UMNS/Paul Jeffrey)

    The hacktivist group Anonymous released a 40-page report on Tuesday detailing how and why the private prison industry should be held responsible for the large number of Americans living behind bars.

    While the report acknowledges that the increase in the number of prisoners in the U.S. is tied to the launch of Richard Nixon’s war on drugs in the 1970s and states’ decisions to adopt “tough-on-crime” laws, Anonymous says the multibillion-dollar private prison industry has worked to prevent states from reforming the criminal justice sector in order to safeguard their large profits.

    But as cash-strapped state governments and the U.S. federal government struggle financially, the private prison industry has been targeted for drastic cuts, with officials declining to renew prison contracts and reducing prison sentences for certain crimes.

    The U.S. incarcerates more of its people than any other nation in the world. The nation with the second-highest incarceration rate is Rwanda, followed by Cuba and Russia. Though the U.S. is home to less than 5 percent of the world’s population, 25 percent of the world’s incarcerated population are in the U.S., according to Anonymous.

    Created after the federal and state governments ran out of room to keep prisoners, private prisons first emerged in the U.S. in the 1980s. The two biggest for-profit prisons in the U.S. are the Corrections Corporation of America and The Geo Group. Together these two corporations have a combined market value of about $6 billion.

    “For a democratic country that espouses individual freedoms and civil liberties as vehemently as the U.S., allowing a place for profiteers in its justice system is the greatest national disgrace since slavery,” the report says. “The private prison industry’s rapid ascent can be attributed to a move towards mass incarceration, and legislation that supported longer and harsher sentences – many which were lobbied for by interest groups financed by the private prison industry itself.”

    CCA currently operates about 67 correctional and detention facilities in 20 states and Washington, D.C. With the capacity to hold about 92,500 prisoners, the company is responsible for housing roughly 4 percent of the U.S. prison population.

    Since money for the private industry has largely dried up, companies like CCA are offering to buy and run state correctional facilities — with the help of taxpayer dollars. But since shrinking budgets are making it hard for governments to keep first responders on the job and public schools open, and a growing chorus is demanding prison reform, no state has taken up CCA’s offer.


    Prison population skyrockets

    The U.S. hasn’t always been so keen to lock up its citizens. According to the report by Anonymous, prior to the 1970s, the U.S. incarceration rate was consistent with the rest of the world — around 150 people per 100,000 people. Now the rate is around 716 people for every 100,000.

    As opponents of the private prison industry stress, most people behind bars have committed low-level, non-violent crimes, particularly drug and property offenses. In 1980, there were about 5,000 drug offenders behind bars, which amounted to about 20 percent of the total prison population. In 2010, however, there were about 100,000 drug offenders in federal prison, which was about 50 percent of the prison population.

    Jack Cowley, a prison warden at the Oklahoma Department of Corrections who was quoted in the Anonymous report, said that the war on drugs is a failure. The effort has not stopped people from using drugs, but it has been successful economically for those in the criminal justice sector, he said.

    The war on drugs is “the best economic boom that we have ever seen,” he said, adding, “It’s provided jobs for people like me, for policemen, for lawyers, for judges, people that make guns and belly chains, people that run prisons now – the private prison industry.”

    Though prison reform is historically viewed as a liberal issue, it has also attracted the support of many conservatives in recent years, including Newt Gingrich, who wrote in an op-ed, “There is an urgent need to address the astronomical growth in the prison population, with its huge costs in dollars and lost human potential.”

    While some conservatives are now on board with prison reform, liberals still stress that it is a social issue and not just a financial one.

    Since 2011, 29 states have reduced their imprisonment rate and, according to a report from Pew Charitable Trusts, the reduction in prison sentencing did not affect public safety.


    Higher costs, higher profits

    Last year, the Corrections Corporation of America reported a record $1.76 billion in revenue. According to the Anonymous report, correctional spending is one of the fastest-growing expenses for state governments, second only to Medicaid.

    Though the U.S. prison population has increased in recent years, Ohio state Sen. Bill Seitz says it’s not because the crime rate has increased. Instead, he says, the blame lies with legislation that adds time to the average prison sentence.

    “I’d hate to get to the point where, like many other states, we are spending more on prisons than we are on higher education,” Seitz told the Dayton Daily News.

    California is CCA’s largest customer, accounting for about 12.2 percent of the company’s total revenue in 2012. The state is often used as an example of why prison reform is needed, since in 2006 the state’s prisons housed more than twice the number of inmates they were designed to hold. As news of the overcrowded prisons broke — including accounts of inmates placed in cages without toilets and forced to stand in their own urine — the U.S. Supreme Court ordered the state to reduce its prison population to about 138 percent of its intended capacity.

    While California could have addressed the situation by opening more prisons, the state was unable to do so in the wake of the 2007 financial crisis that plunged the economy into recession and state budgets into deep deficits. On average, California taxpayers spend more than $47,000 per inmate every year — about $7.9 billion total. That amounts to more than 7 percent of the state’s entire budget.

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