Private Prison Industry Panics as States Rethink Costs of Mass Incarceration

Friday, October 05, 2012
Damon Hininger, President and CEO of CCA

Shrinking state budgets have forced policymakers to consider alternatives to incarceration for convicted criminals, which in turn has forced private prison operators to try a risky new strategy to stay in business.


Until now, companies like the Corrections Corporation of America (CCA), the nation’s largest private prison business, concentrated on running state- or locally-owned jails and facilities. This approach left the capital costs associated with penitentiaries in government hands and allowed CCA to make money off manning prisons and keeping watch over inmate populations.


But with state budgets in the red, many legislatures are gauging ways to deal with criminals other than just locking them up, in order to cut down on expenditures for corrections. Instead of continuing to allocate more than $50 billion a year on prisons, lawmakers—including those long espousing tough-on-crime platforms—are open to shifting monies to support drug treatment and mental health services, as well as beefing up parole and probation programs.


Fearful that these changes could mean the loss of contracts, CCA earlier this year went outside its business model and offered to buy a state prison in Ohio. The deal meant $72 million for the state, which the company hoped would prove too enticing for policymakers to turn down.


The company wasn’t done, however. It said it was willing to spend $250 million to purchase prisons in other states struggling to close deficits. In return, CCA sought long-term contracts—20 to 30 years in length—but only if states guaranteed that they would keep the correctional facilities nearly full (90% or higher).


Judith Greene, director of the nonprofit Justice Strategies, told the ABA Journal that CCA’s “corrections investment initiative” represents an attempt “to sustain its once-again-threatened business model” and avoid a serious drop in revenues. In 2010, half of CCA’s revenue of $1.67 billion came from the states and 43% came from the federal government as a result of contract with the U.S. Marshals Service, the Federal Bureau of Prisons and U.S. Immigration and Customs Enforcement (ICE).

-Noel Brinkerhoff


To Learn More:

Prison Break: Budget Crises Drive Reform, But Private Jails Press On (by Terry Carter, ABA Journal)

How Lawmakers and Lobbyists Keep a Lock on the Private Prison Business (by Sadhbh Walshe, The Guardian)

$2 Billion a Year Industry: Housing Illegal Immigrants (by Noel Brinkerhoff, AllGov)

Private Prison Company to Demand 90% Occupancy (by Noel Brinkerhoff and David Wallechinsky, AllGov)

Private Prison Industry Helped Create Anti-Immigrant Law in Arizona  (by Noel Brinkerhoff and David Wallechinsky, AllGov)


Mark Godfrey 11 years ago
These private prisons are modern-day flesh traders. There is no English available to describe how disgusting and depraved these criminals are.
Alhassan 11 years ago
I don't think it's simply Qwest but do beleive something changed a couple of years ago. It was on the Cottonwood and ICC (don't know about SICI or others) but the only way to make contact was the family had to prepay PCS Daily Dial. They are based in California and maintain many prisons the same as ICC associates do. You can sign up on line but have to pay a minimal of $50 by credit card but there is a $6 fee to do this. Or you can send them a money order which is a minimum of $25 and no service fee. The rate has been at $3.45 or so for 30 minutes. Or the inmate can by a Prepaid card. No idea who services these cards but it's pretty much the same rate. I still beleive this is a state capitalizing on long distance calls the same as they jack the prices in excess for commissary.Now my issue was initially that many times we get receive the call and it's a prepaid call. So you think you have contact and many times you are able to complete the 30 minutes however so many times you might get cut off in 10 minutes or 20 minutes. PCS charges you the full $3.45. However with observation when I was disconnected my family notice that if the person next to him hung up his phone then we were disconnected as well. When you talk to ICC then they say it's PCS, when you talk - if you can get a person and have a lot of time - they state it's ICC. These disconnections with others using the phones and see the pattern would tell me that ICC is in denial and not interested. So whom and what would anyone suggest? Yes, it is rape and prositution of funding this system that doesn't give a flip but they have to be making a profit off the calls if they have contracted PCS just as the vending machine companys.

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