25. Federal Government Bails Out Failing Private Prisons

by Project Censored
Published: Updated:


The American Prospect
September 10, 2001
Title: Bailing Out Private Jails”
Author: Judith Greene

Faculty evaluator: Pat Jackson
Student researchers Erich Lehmann, Michelle Oliva

Corporate media coverage:
The Wall Street Journal, 11/6/01

For close to a decade the private prison industry was booming because state legislators thought they could be both tough on crime and fiscally conservative by contracting with private prisons. However, private prisons have been rife with more abuse and lawsuits than state run prisons, leading to a decline in state level support. By last year not a single state solicited private contracts and many contracts were rolled back or even rescinded as a result of inefficiency and abuses.

The largest private prison in the US, The Corrections Corporation of America (CCA), has been criticized for widespread abuses and high rates of escape. In April of 2001, prison guards at Cibola county Correctional Center in New Mexico tear-gassed 700 inmates who had staged a daylong nonviolent protest of conditions at the facility. Additionally a score of lawsuits have been filed for beatings of prisoners, lack of proper medical treatment, and corruption among staff. Other private companies have similar records. Wackenhut prisons, the second largest private-prison company, has had many similar problems and repeated breakouts of violence.

Problems are often the consequence of companies’ attempts to hold down costs. Prisons for profit have resulted in low pay for guards and a high turnover rate of under-qualified staff. Whereas guards who work for state run prisons receive benefits and are usually union members, private prisons tend to hire less-qualified, lower-cost personnel.

While most state correctional officials are aware of the problems, the federal government continues to expand contracts with the private prison industry. Private prison industry officials make significant campaign contributions and their lobbyists have spread their influence widely in Congress. High-ranking private prison company officials have served as directors of the Federal Bureau of Prisons under former presidents Reagan and Bush. U.S. government pending private prison contracts are up to over $4.6 billion for the next ten years. With the new federal contracts, CCA, which carried more than $1 billion in outstanding debt, was able to avoid bankruptcy and continue in business.

Harsh drug laws have increased the federal prison population but federal immigration polices are less known. The 1996 Immigration Reform Act expanded the list of crimes for which non-citizens could be deported after serving their sentences. About 36,000 non-citizens are now in federal prisons. This is close to double what it was only seven years ago. Immigrants make up 9.3 percent of the US population, but disproportionately compose 29 percent of the federal prison population. About half of federal prisoners are Mexican, 10 percent Colombian, 7 percent Cuban, and the rest are a mix of other nationalities. Only 1.5 percent were sentenced for violent offenses compared with 15 percent in state prisons.

The Federal Bureau of Prisons (FBOP) is now proposing up to 7,500 low security beds in California, Arizona, New Mexico, Texas, and Oklahoma. Additionally several thousand are being proposed elsewhere in the nation. The private, for-profit prison industry is deemed most likely to receive these upcoming contracts.

Prison reform advocates and correctional officers are fighting the expansion of private prisons. Democratic Congressman Ted Strickland of Ohio, and Republican Congressman John E. Sweeney of New York have introduced federal legislation that would deny contracts with private prisons from the Federal Bureau Of Prisons or by states who contract with private prisons. Nevertheless, the federal government is making sure the private prison industry continues

UPDATE BY AUTHOR JUDITH GREENE: “Bailing Out Private Jails” questioned the appropriateness of a federal contracting initiative for private prisons designed to segregate immigrant prisoners convicted of low-level, non-violent offenses who face deportation once their sentences are served out. The article raised issues about the deficient track-record of the private prison industry, detailed how bungled management and shoddy operations had brought the Corrections Corporation of America to the brink of bankruptcy, and charged that lucrative federal contracts were bailing the company out of the financial consequences of their mismanagement. Two months after publication of “Bailing Out Private Jails” in The American Prospect, these concerns were echoed in a front page story in the Wall Street Journal.

After public exposure of the critical issues surrounding the immigrant prison contracting initiative, the Federal Bureau of Prisons awarded one last contract to CCA, but the agency cancelled four more in-the-pipeline contract solicitations that had been slated for awards during 2002. At the state level, the market for new private prisons remained stalled. Facing severe budget constraints, public officials in California and Ohio targeted a number of private prisons for closure. Anti-privatization activists won a hard-fought battle to stop Cornell Companies from obtaining legislative approval for a 1,200-bed private prison they proposed to build in that state. Correctional authorities in Puerto Rico ended two prison management contracts with CCA and slated a third for termination, after they determined that public operation of the prisons would be more cost-effective.

By the summer of 2002, CCA continued to struggle to regain its financial footing, but with 8,500 empty prison beds, the company still had far to go. In the wake of the events of September 11, 2001, private prison company executives expressed hopes that a large-scale increase in detention of undocumented immigrants (if it materialized) would serve to boost the federal market for detention beds, with the Immigration and Naturalization Service replacing the Federal Bureau of Prisons as the new target of opportunity.

Prison activists, students, immigration rights advocates, and unionists continue to organize opposition to the spread of private prisons and detention centers, and to diminish the role these companies play in fueling the prison-industrial complex. Some of the key organizations and contacts include:

Kate Rhee
Prison Moratorium Project
388 Atlantic Avenue 3rd Floor
Brooklyn, NY 11217
Phone: (718) 260-8805


Rose Braz
Critical Resistance
1212 Broadway, Suite 1400
Oakland, CA 94612
Phone: (510) 444-0484
Fax: (510) 444-2177

For further information contact:

Judy Greene
Justice Strategies
199 Washington Avenue
Brooklyn, NY 11205
Phone: (718) 857-3316
Fax: (718) 857-3315