Examining the Alleged Savings and Benefits of Private Prisons

March 9, 2012

by Joseph Jerome

After the Supreme Court barred inmates in for-profit private prisons from lodging federal lawsuits alleging constitutional violations against individual corporate employees, the costs and purported benefits of our increasing reliance on private prisons warrant careful consideration.  

As one local report by the Monmouth County, N.J., Correctional Facility Evaluation Task Force concluded, the legal implications alone question the appeal of private prisons. However, rather than look at the greater legal or policy ramifications of prison privatization, public officials are too quick to embrace private prisons, assuming they will save their states money. 

For example, Florida Governor Rick Scott (R) recently pushed for the largest private prison plan in the nation with the argument that it was “an opportunity to save money.” Republicans and Democrats in the state senate, however, joined together to defeat the measure. The legislators were dismayed that private prisons already operating in Florida actually cost more money than their state-run counterparts. “They need to start acting like any business in the private sector would and stop using imaginary numbers,” Senator Paula Dockery (R-Lakeland) complained.

So are private prisons cheaper than state-run alternatives? According to a report last fall by the ACLU, evidence of cost-savings is “mixed at best.” While Corrections Corporation of America (CCA) and the GEO Group tout the cost-savings of their prisons, many studies by localities, states, and the General Accounting Office have questioned the veracity of such claims. 

Even if it can be proven that private prisons save money, the larger concern is whether these savings truly come from productivity innovations only the private sector can provide or from cutting corners on safety, security, and rehabilitation. Adequately overseeing the inner-workings of our prisons is often a challenge, but the issue becomes especially salient with respect to private prisons. 

“Private prisons have repeatedly demonstrated they are unwilling to respond to FOIA and public record requests,” Alex Friedman of Prison Legal News testified to Congress in 2008. At a Feb. 23 panel event sponsored by the ACLU and Congressman Bobby Scott (D-Va.), representatives from the ACLU, Justice Policy Institute, and the American Federation of State, County, and Municipal Employees all lamented the lack of transparency of private prisons.

The group encouraged Congress to take the simple step of expanding the Freedom of Information Act to private prisons. “It just doesn’t make any sense to have different regimes apply to prisons that are doing the same things,” argued David Shapiro, staff attorney at the ACLU’s National Prison Project. According to Shapiro, policy makers will be better positioned to evaluate the efficacy of private prisons “once we have a better sense of what’s actually going on in these facilities.”

In the meantime, The Huffington Post’s Chris Kirkham uncovered a recent effort to shift more prisoners into the private prison system by buying public prisons from cash-strapped states. CCA offered states $250 million to buy existing facilities in exchange for lengthy 20 year management contracts and assurances that states will keep a “sufficient inmate population to maintain a minimum 90 percent occupancy rate.” 

Tracy Velázquez, executive director of the Justice Policy Institute, who is scheduled to participate at “Still Dreaming: Continuing the Legacy of the Civil Rights Movement through Criminal Justice Reform,” an ACS event on March 13, disputes the notion that private prisons are only interested in shifting people from public to private facilities. “For decades, [these companies] have been behind some of the most harmful criminal justice policies . . . which have created the demand for the ‘quick fix’ of private prisons,” she said.

For example, in 2010, NPR reported that CCA and the GEO Group pushed hard for the enactment of Arizona’s anti-immigrant law, SB 1070, which is now before the Supreme Court. Speaking to investors in 2010, Wayne Calabrese, then an executive at GEO Group, noted that the detention of illegal immigrants provided “enhanced opportunities for what we do.” 

According to Velázquez, “We will not end mass incarceration in the United States while there are those that profit by it.” The fundamental problem is that most proposed criminal justice reforms stand to cut into the profit margins of private prisons. CCA admitted as much in its 2010 Annual Report: “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.” 

For cash-strapped states, criminal justice reform may promise more cost-savings than embracing the private prison industry’s efforts to increase its bottom line.