Crime Down? No Problem: Private Prison Industry Still Makes Guaranteed Profit

Advocates for the privatization of public services promise that market forces will provide improved, more efficient service at a better price for taxpayers. That’s the idea at any rate. In practice, it is almost always nothing more than a transfer of public funds to private profits in exchange for a lower quality of service. A new report out today from In The Public Interest (ITPI) details how the private prison industry not only rakes in money for private business, operates sub-par facilities, and ends up costing more than state-run prisons, but actually hampers the development of effective criminal justice policy.

The last couple decades have been boom times for the U.S. prison population, what with the “war on drugs”, mandatory minimum sentencing, three strikes laws, and tough parole regulations. Privately run prisons have sprung up to meet this need, and the result has not been pretty. (Unless you are a CEO or shareholder in one of these for-profit operators.)

The ITPI report, Criminal: How Lockup Quotas and “Low-Crime Taxes” Guarantee Profits for Private Prison Corporations, details how state contracts with for-profit prisons often contain occupancy quotas of as high as 80, 90, even 100%. This results in a “low-crime tax” states are required to pay if occupancy falls below that quota. This in turn incentivizes states to keep prison populations high.

It almost seems a quaint notion these days, but the over-riding mission of the criminal justice system has always been to protect the public interest by rehabilitating offenders safely back into society. The warped values of a for-profit prison industry instead prioritize locking up more people for longer periods of time, doing very little in terms of rehabilitation, doing next-to-nothing to help reintegrate them into their communities upon release, and sitting back and waiting for them to reoffend. It’s a vicious cycle .

The private prison industry has promoted policies and practices that increase the number of people who enter and stay in prison. It is no surprise that the two major private prison companies, CCA and GEO Group, have had a hand in shaping and pushing for criminal justice policies such as mandatory minimum sentences that favor increased incarceration. In the past, they have supported laws like California’s three-strikes law, and policies aimed at continuing the War on Drugs… The industry’s reliance on a harsh criminal justice system is summed up in a statement from CCA’s 2010 annual report: “The demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, leniency in conviction or parole standards and sentencing practices or through the decriminalization of certain activities that are currently proscribed by our criminal laws.”

There’s just one problem. Many states are seeing significant declines in crime, and thus declines in prison population. Colorado, for instance, has seen such a significant decline, that five state-run prisons have been closed since 2009. Elsewhere, there is movement to eliminate or soften the war on drugs, and to rethink draconian policies like three-strikes laws. Enter the occupancy quota:

Bed guarantee provisions are also costly for state and local governments. As examples in the report show, these clauses can force corrections departments to pay thousands, sometimes millions, for unused beds — a “low-crime tax” that penalizes taxpayers when they achieve what should be a desired goal of lower incarceration rates. The private prison industry often claims that prison privatization saves states money. Numerous studies and audits have shown these claims of cost savings to be illusory, and bed occupancy requirements are one way that private prison companies lock in inflated costs after the contract is signed.

Of the contracts reviewed by ITPI, nearly two-thirds contain such clauses. In other cases, such as Colorado, the provision was added outside of the contract process through state budget legislation. Occupancy quotas put the squeeze on state budgets and corrupt public policy.”If lawmakers pass rules that have the effect of decreasing the prison population, if law enforcement officials take action that results in a reduced prison population, or if the crime rate simply drops, the government might be responsible for funding empty prison beds.”

The result in many states has been that private prisons take priority for inmate placement, while public prison beds go empty. This, despite the fact that for-profit prisons are notorious for over-crowding, unsafe conditions, and lax security. This pernicious system of corporate hand-outs at the expense of the public good is the worst kind of “free-market” solution.

By: Sandi Behrns

Sandi Behrns is a noted policy nerd, new media & web developer, and consultant to progressive organizations and campaigns. She is a senior contributor to Liberaland, and the Executive Editor of Progressive Congress News.