Those Profiting From the Prison-Industrial Complex

The internet was recently enraged at the COVID-related release of Michael Conahan – former Pennsylvania judge convicted of sending kids to jail for cash kickbacks. He and former judge Mark Ciavarella were accused of receiving over $2.8 million from a commercial builder and an attorney, and the four schemed to construct and increase the occupancy of private juvenile detention centers. Their case sheds light on the conflicts of interest rooted in the private prison industry, which housed 8.5% of convicted criminals and 73% of detained illegal immigrants in 2017. This article explores those fundamental flaws.

The U.S. has begun distancing itself from private prisons, but the private prison industry has found growth among immigrant detention facilities. The U.S. incarceration rate per 100,000 people increased from 310 in 1980 to 1000 in 2008 – often attributed to The War on Drugs and harsher sentencing laws. As of May 2020, that rate has fallen down to 655 - partially influenced by the Justice Department’s official instruction to substantially reduce private prison contract renewals as well as public criticisms of private prisons and a consequential capital squeeze by investors. The average daily population of detained immigrants in private facilities, however, increased gradually from roughly 7,000 in 1994 to an estimated 47,000 by 2019 with quick upticks in 2007 and 2016. With decreasing incarceration rates and the current transition away from private prisons, we should be asking whether we want to see the private prison industry bolstered by immigration detention facilities.

Private Prisons

The demand for private prisons arose from a rapid increase in prisoners. In fact, the incarceration rate had more than tripled between 1980 and 2008 (Shapiro, 2011). Even in 2016, 14 states and the Federal Bureau of Prisons met or exceeded their maximum prisoner capacity (Carson & Anderson, 2018). Within this increase, the percentage of prisoners in private prisons between only 1990 and 2009 increased by approximately 1600% (Shapiro, 2011). Benefiting most from this are the industry’s two largest players - Corrections Corporation of America (CCA) and GEO Group - which account for 85% of all private prison beds (Mumford, Schanzenbach, & Nunn, 2016); these two corporations earned a combined $3 billion in revenue in 2010 and paid their top executives packages worth $3 million (Shapiro, 2011). The industry’s massive consolidation lowers the incentive to achieve lower costs or offer higher quality services, and it greatly incentivizes market leaders to lobby for favorable legislation.

Federal lobbying records show that, between 1999 and 2009, private prison corporations have spent almost $20.5 million on lobbying – 98% of which came from CCA and GEO Group. On top of that, among 16 states with available lobbying expenditure data, the private prison industry has spent an additional $26.2 million between 2012 and 2018. The industry mainly targets politicians with harsh stances against crime. The American Legislative Exchange Council (ALEC) is an organization of state legislators who favor harsher sentencing and detention laws. Corporate participants representing prisons often pay thousands in membership fees to attend ALEC conferences and push for harsher legislation such as the “truth in sentencing” and “three strikes” legislations (Shapiro, 2011).

In addition to the historic need to quickly build prisons, industry advocates claim private prisons offer cost savings. Private prisons, however, are not required to release many operational details, so it can be difficult comparing private and public prison costs; several studies have attempted to do so with mixed results (Mumford, Schanzenbach, & Nunn, 2016). Private prisons, like any business, seek profits and, therefore, try to minimize costs. Correctional officer salaries make up 65% – 70% of prison operating costs (Ashcroft, 2016), so private prisons often hire fewer correctional officers and pay them less as compared to public prisons (Mumford, Schanzenbach, & Nunn, 2016). Such issues lead to much higher turnover rates (Mumford, Schanzenbach, & Nunn, 2016) and perhaps increased prison violence (Shapiro, 2011), which present additional costs (injured staff, lawsuits, training, etc.).

Immigrant Detention Facilities

In 1996, Congress passed the Illegal Immigrant Reform and Immigrant Responsibility Act (IIRIRA), massively expanding the detention of immigrants. Again, nearly 73% of those detained are held in private detention facilities. These private facilities differ from private prisons, as illegal immigrants are often held in separate facilities where they receive lower qualities of care while waiting for their cases to be processed through immigration courts, though they can also be held in federal prisons when there are capacity constraints.

Given that government contracts require little public disclosure, insights into private detention facilities are rather sparse, but we do know GEO Group and CoreCivic have contracts to operate the largest portion of ICE’s detention facilities. A quarter of their combined $4.1 billion 2018 revenues came from detention contracts. Notice that GEO Group was one of the largest two players among private prisons as well as immigrant detention facilities, mitigating legislative risks by operating within two sub-industries. GEO Group’s annual expenditures on lobbying increased sharply after 2015 – averaging nearly $1.5 million since 2017 – likely due to the White House’s harsher stance against illegal immigrants. While the industry spends millions in lobbying, it still faces criticism for keeping detainees in poor conditions and sometimes spends as low as $30 a day per detainee (compared to an average cost of $129.64 across all facilities).

The Detention Watch Center’s analysis of the July 2017 U.S. Immigration and Customs Enforcement (ICE) facility list suggests there are problems in our public immigration enforcement as well. The analysis casts doubts on ICE’s FY18 claim of facing higher costs per detention bed despite it also aiming to decrease detention standards. Another major issue is that 24% of local governments to which ICE granted Intergovernmental Service Agreement (IGSA) contracts to operate detention facilities also signed 287(g) agreements, which gives them control over immigration enforcement. Such municipalities are inherently incentivized to keep their detention facilities occupied to make their IGSA contracts more profitable through harsher policing. On top of that, ICE has failed to adequately maintain standards among authorized facilities – allowing every facility to pass inspections since 2012. Worse, 79% of detention facilities do not have expiration dates – further disincentivizing facilities from maintaining regulated standards.

The Broader Look

The U.S. has major correctional flaws beyond private prisons, including many cities’ and counties’ propensity to invest in the processing and punishment of minor offenses rather than community-driven safety initiatives (Sawyer & Wagner, 2019) as well as the War on Drugs, which contributed to roughly 47% of prisoners serving time for a drug-offense (Carson & Anderson, 2018) – almost half of which were nonviolent (Sawyer & Wagner, 2019). These issues deserve their own analysis and reform, but we must address the current prison industry.

While costs are debatable, transitioning away from private prisons can waste fewer tax dollars on lobbying our own politicians and increasing the bottom lines of publicly-traded prison corporations that value profits over prisoner rehabilitation and safety. Doing so would also decrease areas in which conflicts of interests arise between courts and such corporations. The issue, however, is that the alternative (public facilities) must be sufficient in scale. As for immigration, private immigrant detention centers squeeze profits out of and endanger detainees, but poorly operated government organizations like ICE can do their own harm and cause conflicts of interest among local governments. Perhaps the imprisonment of criminals and illegal immigrants should be a more centralized, federal responsibility: not one to be contracted or outsourced.

 Works Cited:

Ashcroft, J. (2016). Emerging Issues on Privatized Prisons.

Carson, E. A., & Anderson, E. (2018). Prisoners in 2016. US Department of Justice, Office of Justice Programs, Bureau of Justice Statistics, NCJ, 247282, 2.

Mumford, M., Schanzenbach, D. W., & Nunn, R. (2016). The economics of private prisons. The Hamilton Project at the Brookings Institution.

Sawyer, W., & Wagner, P. (2019). Mass incarceration: The whole pie 2019. Prison Policy Initiative, 19.

Shapiro, D. (2011). Banking on Bondage: Private prisons and mass incarceration. American Civil Liberties Union.