A look at prison privatization - acluohio.org Foundations of Prisons for Profit Prison privatization has a long and troubled history in the United States — a history that offers

A look at prisonprivatization

Introduction........................... page 1

Executive Summary............... page 2

Overview of Private Prisons.. pages 3-5

Costs and Savings ................. pages 6-8

Community Costs .................. pages 9-12

Safety .................................... pages 13-14

This report was compiled and drafted by senior staff at theAmerican Civil Liberties Union of Ohio. The ACLU of Ohio wouldespecially like to thank the following staff and volunteers fortheir contributions to this report:

Christine Link, executive directorJames L. Hardiman, legal director

Mike Brickner, director of communications and public policyGary Daniels, associate director

Carrie L. Davis, staff counselShakyra Diaz, policy directorAnn Rowlett, deputy director

Geoff Schotter, research assistant

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Table of Contents

The economic downturn hasresulted in a budget crisis forOhio, as it has for other states,and out-of-control prison costshave emerged as a key concern.

The ACLU of Ohio has been aforceful proponent of sentencingreform where policymakers maysave taxpayer dollars and helpcreate a more just society.

Governor John Kasich’s newbudget plan includes a sweepingoverhaul of Ohio’s Departmentof Rehabilitation & Correction.The proposal includes common-sense sentencing reforms thatwould help ease ourovercrowded prison system.Unfortunately, the proposedbudget also includes a plan tosell five state correctionalfacilities to “prison for profit”operators like CorrectionsCorporation of America andcontract with those companiesto house inmates in them.1

Privatizing state prisons may infact undermine sentencingreform’s goal to remove low-level offenders from the justice

system.Prisons for profit are different

from public institutions becausethey must generate revenues fortheir shareholders. As a result, theyhave a direct interest in ensuringthat Ohio’s prison system stays fullto maximize its profitability.

This is not the first time prisonprivatization has been proposed asa cost-saving measure for Ohiotaxpayers. In the 1990s, Ohioexperimented with a privatepenitentiary in Youngstown thatresulted in serious safety and fiscalconcerns. Currently, the state has

limited private facilities toNorthcoast Correctional Facilityand Lake Erie Correctional Facility,which hold inmates with minimalhealth and behavioral issues.

Legislators are taking stepsto correct our broken prisonsystem, but privatization willnegate this important work. Thisreport seeks to explore themany problems that plagueprisons for profit, in the areas offiscal efficiency, safety,contributions to the community,accountability and effect onrecidivism.

Rehabilitation .................... pages 15-16

Transparency ............................ page 17

Sentencing Reform............. pages 18-20

References ........................ pages 21-22

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Executive Summary

Current State of Incarceration

• Between 1987 and 2007, thenational prison populationtripled to 1,596,127. Ninepercent of the nationalprison population is housedin a private prison.

• Private prisons have evolvedsince the 1980s into apermanent Americanindustry grossing billions ofdollars in revenues everyyear. CorrectionsCorporation of America(CCA), the nation’s leadingprivate prison operator,reported revenues of $1.675billion in 2010.

Costs and Savings

• Many states have recentlybegun ending theircontractual relationshipswith private prisonoperators, concluding thatthe costs and risks ofprivatization far outweigh anyshort-term benefits.

• Ohio’s proposal of selling fiveprisons will only yield ashort-term infusion of cash.The state will lose all futurerevenue.

• Studies conducted by the U.S.Department of Justice andthe U.S. General AccountingOffice have shown that privateprisons yield little or nolong-term savings.

• Cost comparison studies ofstate-run and privately-run

prisons are plagued not onlyby difficulties in controllingfor variables like securitylevel, gender, and age, butalso “hidden” costsassociated with contractwriting, financial liability,and monitoring.

Community Costs

• Privatization willundermine sentencingreform. Prisons for profithave a different mission thanpublic prisons: they mustearn revenue. This meansthey have an inherentinterest in ensuring prisonsstay filled, even at theexpense of taxpayers.

• When a state governmententers into a contract with aprivate prison company, itlegally binds the taxpayer topay the company a certaindollar amount per inmateper day. This has led to over-incarceration and violence atprivate facilities in Ohio andnationwide.

• The profit motive drivesprivate prison operators topay as little of their fair shareof state and federal taxes aspossible, and they often getaway with shifting the costsof their prisons’ failuresdirectly onto the backs oftaxpayers. In 2002, the IRShad to sue CCA to get it topay $54 million in backtaxes.

Safety

• A 2004 report found thatprivate prisons had 50percent more inmate oninmate assaults and almost50 percent more inmate onstaff assaults.

• Private prison companies cutcosts by hiring cheaper,lower-skilled staff and fewerof them. The result is avicious cycle where poorlytrained and poorlydisciplined correctionsofficers are incapable ofadequately responding toprison emergencies. Prisonsafety conditions deteriorate,and more staff quit,increasing the turnover rate.

Rehabilitation

• Of the top five states inpercentage of privatizedprison beds, each has ahigher three-yearrecidivism rate than Ohio.

• Ohio’s two private prisonfacilities offer fewerrehabilitation and trainingcourses than their publiccounterparts.

Transparency

• Ohio case law is mixed as towhether private prisons aresubject to public recordsrequests and otherimportant transparencymeasures. Without theseprotections, private prisonsare ripe for abuse.

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Foundations of Prisons forProfit

Prison privatization has a longand troubled history in the UnitedStates — a history that offers astark warning about theincentives motivating those whowould turn punishment into aprivate, for-profit business. TheThirteenth Amendment to theU.S. Constitution was passedimmediately after the end of theCivil War to formally abolishslavery throughout the country,but it contained an exception for“punishment for crime whereofthe party shall have been dulyconvicted.”1 In the followingdecades, many states,particularly in the south,contracted out prison inmatesas cheap farm, railroad, andmining laborers under what wascalled the Convict LeaseSystem. Growing politicalopposition to the Convict LeaseSystem during the ProgressiveEra of the 1920s led to itsdemise. Beginning in the 1980s,the War on Drugs, theintroduction of mandatoryminimum sentencing, and ageneral political climate acrossthe country that looked toincarceration as the one andonly solution to all aspects ofcrime combined during thatdecade to turn incarceration intoan investment opportunity forprivate speculators.2

States increasingly began tosell off their correctionalfacilities to private operatorsand then enter into contracts

with those operators to housetheir inmates as a means ofcoping with a suddenlyskyrocketing prison population.

Since then, private prisonshave evolved into a permanentAmerican industry. Today, theoverwhelming majority of the 264private prisons in the UnitedStates are operated either byCorrections Corporation ofAmerica (CCA) or the GEO Group(formerly Wackenhut Securities,Inc.).3 As of June 2010, 126,000state and federal prisoners, 9percent of the national inmatepopulation, were housed inprivately run prisons.4

But state after state in recentyears has ended its contractswith private operators,concluding that the costs andrisks of privatization are just toohigh compared to any benefitprivatization provides totaxpayers.5 Texas, Oklahoma,California, Idaho, and Nevada

are among the states that haveterminated or seriouslyconsidered terminating theircontractual relationships withprivate prison operators.6

Current Privatization in Ohio’sPrisons

Ohio Department ofRehabilitation and Correctionoutsources various services inits many public prisons toprivate contractors. Forexample, inmates have collect-call telephone funds that areadministered by Global Tel*Link,a private communicationscompany that caters to prisoninmates.6

In addition, a 1996 state lawrequires Ohio to contract for twoprivate prisons as long as thoseprisons show annual costsavings of at least five percent incomparison to state-runprisons.

Ohio’s two privately owned

Overview of PrisonsFor Profit

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state prisons include the NorthCoast Correctional TreatmentFacility in Grafton, which isowned by the Management andTraining Corporation (MTC) andhosts 700 minimum-securityinmates, and the Lake ErieCorrectional Institution inConneaut, which is also ownedby MTC and hosts 1,509minimum-to-medium-securityinmates.7 In addition, Ohio hosts2,016 out-of-state federalprisoners at the Northeast OhioCorrectional Center, a CCA-owned facility in Youngstown.8

The John Kasichadministration, however, hasindicated that it intends topursue privatization as a majorcomponent of its correctionalbudget reforms. Kasich’sappointment of private prisonindustry insider Gary C. Mohr asthe new director of ODRC alsosignals a willingness to privatizethe prisons. Mohr was CCA’smanaging director from 2007 to2009, and “CCA was a client ofMohr’s consulting firm beforeand after his employment with

the company.”9

Kasich’s biennial budgetproposal would transferownership of the Lake Erie andNorth Coast facilities from MTCto another private company, sellthe currently state-run Graftonand North Central facilities to aprivate company, and reopen theMarion juvenile facility as anadult prison and sell it to aprivate company.

Privatization versus reformGovernor Kasich says he is

implementing both sentencingreform and privatizing prisons inorder to save resources. Whilesentencing reform will lessenthe overcrowding of Ohio’sprisons, prison privatization maynot have a substantial financialimpact.

The budget crisis in Ohio isnot trivial, and the cost ofprisons is indeed out of control,but privatizing state-run prisonswill not fix the gapingcorrections-related hole in thestate budget, and will morelikely than not make it even

worse.State prisons are public

assets. Selling them off willonly yield a one-time infusionof cash.

It is highly disputed whetherthe promised savings from aprivate prison’s reducedoperational costs will evermaterialize, but even the mostgenerous estimates of suchsavings are trivial in comparisonto costs of housing an ever-expanding inmate population inthe first place. As of October2009, Ohio taxpayers spent anaverage of $25,254 per year foreach inmate housed in Ohioprisons. In June of that year, theOhio prison system held a totalof 51,113 inmates, and ODRCprojects that the number willgrow to 52,546 in 2011.10 Themost generous estimates ofoperational cost savings atprivate prisons compared topublic prisons range from 5 to15 percent, and even thesefigures are highly disputed byimpartial, reputable sources.11 IfOhio’s prison populationcontinues to grow, neither ofthese dubious cost savingsprojections, nor the promisedextra corporate tax revenue12

will amount to anything morethan a monetary drop in thebucket for Ohio’s budget crisis.

Short-Term Savings and Long-Term Costs

While taxpayers have aninterest in saving funds andrehabilitating inmates, prison-for-profit companies like CCA


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only have an interest in theirbottom line. It is in their bestinterests to charge taxpayers asmuch as they can per inmateper day and cut programming. Itis the profit motive that drivesprivate prison operators toengage in cost-cuttingmeasures. Since a company’sprofit is the difference betweenits costs and revenues, thosemeasures will always benefit theshareholder when it comes timeto pay out the dividends. But anycost savings that the taxpayermight realize as a result of suchmeasures can quickly be eatenup by an increase in the numberof inmate-occupied privateprison beds within the state.Thus, even if we assumed themost generous cost-comparisonfigures to be the most accurate,it wouldn’t change the fact that,the interests of a private prisoncompany’s shareholders and theinterests of taxpayers in statesthat have contracts with thatcompany are fundamentallyopposed.

Private prison firms have anatural incentive to maximizeboth the number of inmates theyimprison and the amount oftime for which they imprisoneach inmate, because the statepays them for their service ofhousing convicts on a per-inmate per-day basis.

The prison populationcontinues to swell both in Ohio13

and nationally. 14 However, crimerates have also decreasedsubstantially over the pastseveral years. Prisons for profitwill only exacerbate thisproblem as they have a vestedinterest in more peopleremaining incarcerated.15

Governor Kasich is not doingthe taxpayers of Ohio any favorsby selling off state prisons to aprivate prison company likeCCA. Doing so will not onlyworsen the strain on Ohio’sbudget; it will also work stronglyagainst the rehabilitation of low-level offenders and jeopardizethe safety of ordinary Ohioans.

Only sentencing reforms andguidelines that systematicallyidentify and invest in therehabilitation of such inmatescan reverse Ohio’shemorrhaging correctionsbudget because only these typesof reforms will actually reducethe number of inmatesincarcerated in Ohio. Ratherthan rewarding private prisonoperators like CCA withcontracts that bind Ohiotaxpayers, Ohio’s correctionspolicy ought to try as hard aspossible to end the cycle of

incarceration by enactingsentencing reforms that reversethe mushrooming of the prisonpopulation that has continuedunabated for decades.


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Cost ComparisonsThe idea that outsourcing

traditional public-sectorfunctions will lead to thosefunctions being carried out moreefficiently and less expensively isrooted in the philosophy that“the government which governsbest is that which governsleast.” Those who supportprison privatization believe thatopening up the operation ofprisons to the competitive freemarket will result not only inthose prisons being run at alower cost than public prisonsbut also in those prisonsshowing improved “quality,flexibility, and innovation.”16 Thisis the position of theconservative Reason Institute,one of the country’s leadingvoices for privatization.

Even if one were to assumethis argument to be true, thesheer number of inmates whoare currently locked up in Ohiocalls into question the wisdomof incarcerating many of them inthe first place. 73.5 percent ofmales and 85 percent offemales in the Ohio prisonsystem were classified as low-to-medium-security in 2009,and the majority of Ohioprisoners were incarcerated forlow-level, nonviolent offenses.17

Taxpayer money could be betterspent providing addictiontreatment, job training, and jobdevelopment programs outsideof prison for many of theseinmates than keeping themlocked up. Paying a privatecontractor to house them in a

more “flexible” or “innovative”way than the state is capable ofdoing is hardly the best deal forthe taxpayer.

Countless studies byindependent agencies, stategovernments, and the federalgovernment have compared thecost-effectiveness of public andprivate prisons since themodern era of prisonprivatization began in the1980s.18 Each of them seriouslycalls into question the argumentthat privatizing a correctionalfacility makes it significantlycheaper or more efficient to run.

One recent study of note wasa performance audit of theArizona Department ofCorrections conducted by thestate’s Office of the AuditorGeneral in 2010.19 The auditnoted that “Arizona’s prisonpopulation has grown fasterthan most states’ prisonpopulations” and that the state

“has expanded [its] prisonsystem to accommodategrowth,” relying heavily onprivatization in order to containcosts.20 In particular, theDepartment has:

• contracted for services (suchas food, health, and work-based education) with privateorganizations andcommunity colleges;

• downsized administrativeoffice staff;

• placed responsibility formore costs on the inmates;

• taken advantage of volunteersupport;

• replaced typical mattresseswith ones made fromrecycled materials; and,

• used inmate labor andinmate-produced products

COSTs & PrisonsFor Profit

whenever feasible, amongnumerous otherefficiencies.21

Yet the audit cautions that eventhough the Department ofCorrections “has taken steps tokeep the per-inmate daily cost (percapita rate) low,” “State spendingon the Department’s operationshas increased significantly” and“continued expansion will requiresignificant spending.”22 TheDepartment’s Operating PerCapita Cost Report found that“the state paid private prisons ahigher per inmate rate than itspent on equivalent services atstate-operated facilities in fiscalyear 2009.”23

The Arizona audit onlyconfirms decades of studiesinquiring into wisdom and cost-effectiveness of prisonprivatization. Back in 1988, JohnDonahue of Harvard’s KennedySchool of Governmentconducted a study of thebenefits and drawbacks ofprison privatization for theEconomic Policy Institute. Heconcluded that “the evidence onpotential cost savings is tooweak and too questionable towarrant so radical and risky anexperiment.”24 Since then, theevidence has not gotten anystronger or more certain.

A 1996 review by the U.S.General Accounting Officesurveyed studies conductedbetween 1991 and 1995 in fivestates — Texas, California,Tennessee, New Mexico, andWashington — comparing

operational costs at public andprivate facilities.25 It found that eachstudy “reported little difference”and “could not conclude whetherprivatization saved money.”26

In 2001, the U.S. Departmentof Justice’s Bureau of JusticeStatistics published an evenmore comprehensive survey ofcost-comparison studies andconcluded that private prisonsoffered only modest costsavings. “[R]ather than theprojected 20 percent savings,”the survey concluded, theaverage savings fromprivatization was only about onepercent, and most of that wasachieved through lower laborcosts.”27 The minimal costsavings that were achievedthrough lower staffing levels didnot come without a price — theywere accompanied by “asignificantly higher rate ofassaults” on inmates and staff.28

The credibility of studieswhich do show cost savings at

private prisons is complicatedby the less-than-scientificconditions in which they wereconducted. Two analysts fromthe Federal Bureau of Prisonspublished a paper in 1999 whichconcluded that “proponents ofprivatization make global,unsubstantiated, speculativeclaims which are rarelyaddressed with concreteevidence.”29 In order to controlproperly for such studies, theresearcher ideally would be able tolook at two prisons that wereidentical in their design, inmatepopulation, and inmatecharacteristics.30 It is typically veryhard to find such a perfectcomparison, and many of the cost-comparative studies that haveyielded pro-privatization resultshave suffered from this problem.

In 2008, the NationalInstitute of Justice found thatprivate prisons tend tounderestimate the cost ofoversight, health care, and

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background checks in theirproposals and that states endup paying more than they weretold they would be paying. Oneof the key reasons for sucherrors, the study found, was theinherent differences in the wayprison performance in the publicand private sectors is measured.Private prisons’ performance ismeasured by their compliancewith the terms of theirparticular contracts (which, ofcourse, may vary). Publicly-runprisons, by contrast, measureperformance through auditingprocedures.31

A 2009 “meta-analysis” ofcost-comparative studies by fiveUniversity of Utah researchersconsciously took into accountthese methodological issues andsurveyed only “high-quality”

cost-comparison studies—studies that “directly compared .. . specific, identifiable, privateprison[s] with . . . closelymatched, identifiable publicprison[s].”32 ‘Cost savings fromprivatizing prisons,” the studyconcluded, “are not guaranteedand appear minimal.”33

In addition to controldifficulties, there are often“’hidden’ or indirect costsassociated with contract writing,

financial liability, andmonitoring that may or may notbe included in the costanalysis.”34 Whenever a statecontracts with a for-profitcorrections company, it puts theresponsibility of living up tostate operational standards inprivate hands. While thecontract may state that theprivate company has to meetthose standards, doing so putspressure on the company’sbottom line that the companywill naturally be compelled toresist.

One telling example of thisproblem happened at Ohio’s ownNorth Coast CorrectionalTreatment Facility in 2000. Twomonths after it opened, a judgecited contract violations at thefacility.35 Over the following year,“[a] pattern of contractviolations, safety problems, andother issues continued to plaguethe institution.” Fourconsecutive wardens resigned,“one of whom had to serve attwo different points to substitutefor sudden departures.”36

Sometimes, the language ofthe contract itself ends upcosting more money for thestate than it saves. The NorthCoast facility was designed onlyto house drunk-drivingoffenders, but the ODRC’scontract with CiviGenics, thenthe private company operatingthe facility, contained a clausecommitting ODRC to payCiviGenics for 95 percent inmatecapacity regardless of the actualnumber of inmates being held at

the facility. When the state foundit was unable to fill North Coastsolely with DUI offenders,however, it sent prisoners to the

facility who had been convicted ofserious felony offenses such assexual battery, assault, arson,manslaughter, and robbery. InDecember 2000, ODRC withheld$74,499 from its monthlypayment to the company torecover part of its cost and thendeclined to renew the contractwhen it came up for renewal.After Ohio failed to receive bidsfrom other companies that werefive percent below the state’sestimated costs for North Coast,ODRC raised the per-prisonerper-day rate it allowed privatecompanies to charge from $53.11to $62.88.37

It is little wonder, then, thatthe 2010 Arizona audit suggestedrepealing the state’s harshmandatory sentencing laws andexpanding communitycorrections as “fiscally sound”compared to building newprisons.38

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“[R]ather than theprojected 20 percentsavings,” the surveyconcluded, “theaverage savings fromprivatization was onlyabout one percent, andmost of that wasachieved through lowerlabor costs.”

State prisons arepublic assets. Sellingthem off will only yielda one-time infusion ofcash.


Two Ways of Looking at CostAs taxpayers we all want our

government to provide us withthe best possible prisons toeffectively rehabilitate andreform those who will one dayre-enter our communities. Wealso want our government touse our tax dollars efficientlyand effectively.

The private prison industrypromises taxpayers thatprivately owned, for-profitprisons will both save on prisonoperating costs and generatepublic revenue from corporatetaxes the industry pays to thestates in which it operates.39

Both of these promises,however, are empty.

CCA and other major privateprison operators are publiclytraded corporations. As such,their primary responsibility bylaw is not to the states whocontract with them but to theirshareholders. Since investorscan sell their shares at any time,the managers and executives ofprivate prison companies haveimmense pressure on them toconsistently turn a profit. Theargument that privately runprisons are more efficient andcompetitive than state-runprisons fails to take account ofthe very peculiar type of“competition” that exists withinthe private incarcerationbusiness.

Competition in most private-sector industries means theconsumer gets to choose amongcompeting providers of goodsand services. Inmates in

privately run facilities, however,are no more able to choose adifferent prison if they aredissatisfied with the conditionsof their confinement than areinmates at state-run facilities.

Like firms in any for-profitindustry, private prisoncompanies are compelled toexpand and capture an evergreater market share. CCA’scurrent near total domination ofthe U.S. private prison industrydates from the second half ofthe 1990s, a time when theacceleration of prisonconstruction was at its historicalpeak.

Between 1987 and 2007, thenational prison populationtripled to 1,596,127. CCAcapitalized on this trend byacquiring their smaller rivalsand lobbying states — withmixed success — to take overincreasing portions of theirprison systems.

In 1990, CCA’s reportedannual revenues were $50million. By 1997, they hadballooned to $462 million,40 andby 2006 they had reached $1.675billion.41 The company’sreported revenues and profitshave been steadily growing eversince.42 In the words of one NewMexico county commissioner,“It’s terrible to say, butprisoners and trash are bigbusiness.”43

If companies in the privatecorrections industry seem toachieve greater success in themarketplace the more they failat providing state taxpayers with

any substantial cost savings, thereason why is prettystraightforward. From theperspective of these companies’shareholders cost savingsmeans something completelydifferent than what it meansfrom the perspective of thetaxpaying citizens of the statesin which private prisons operate.

The shareholder does notcare whether the company’sprofits result from cutting costsin half while maintaining thesame revenue inflow or frommaintaining the same costoutflow but increasing revenuesby expanding the number ofoccupied prison beds. As long asthe value of his or her stock inthe company continues to grow,it is not relevant to them howthis is achieved.

But to the taxpayers of thestate in which the companyoperates this prison, it is

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Community COSTs & PrisonsFor Profit

extremely important in which ofthese two ways the companymaximizes its profit. All of theabstract, quantitative talk aboutcost savings obscures the basicfact that the taxpayer does notstop paying for a prison’soperation after it becomesprivatized. When the stategovernment enters into acontract with a private prisoncompany, it legally binds thetaxpayer to pay that company acertain dollar amount per-inmate per-day. There istherefore a direct correlationbetween the company’srevenues and the taxpayer’sexpenses. Privatized prisons arenot intended to make a profit fortaxpayers — they generaterevenue for shareholders.

A privately-operatedcorrectional facility is nothingmore than a barbed-wire-enclosed building filled withcells and beds; it only becomescapital — that is, a source of realeconomic value to thecompany’s shareholders —when its cells and beds are filledwith human beings at thetaxpayer’s expense. It is thisprison’s status as capital thatprison privatization supporterspoint to when trying to persuadethe taxpayer of its superior cost-effectiveness in comparison toits supposedly bureaucratic andcumbersome state-runcounterpart.44 But in reality, thisis a comparison of apples tooranges, because the taxpayerdoes not measure prisons andother public services by how

profitable they are to him or herpersonally but by how usefulthey are to his or hercommunity.

A 1992 study by the NewMexico CorrectionsDepartment showed that guardsat a private CCA-run women’scorrectional facility werepressured to issue disciplinaryinfractions to inmates thatresulted in prolonging theirincarceration out of a desire onthe part of CCA executives tomaximize quarterly dividends

and satisfy shareholders. As aresult, “inmates at the women’sprison run by CCA lost goodtime at a rate nearly eight timeshigher than their malecounterparts at a state-runlockup.”45

Yet private prison firms arehardly indifferent as to whichinmates they house. All thingsbeing equal, there would be aone-to-one correlation betweena correction firm’s profits for agiven time period and thenumber of inmates it housesduring that time period.

However, inmates who areunusually violent and difficult tocontrol or who have unusualmedical needs cost prisonoperators more to house thaninmates who are compliant andhealthy. In addition to having anatural financial incentive tomaximize inmate capacity andtime incarcerated, private prisonoperators have a simultaneousincentive to “cherry pick” thoseinmates who are the least costlyfor them to house.46

A 2001 report by PolicyMatters Ohio found that LakeErie Correctional Facilityartificially inflated its costsavings by receiving onlyhealthy, well-behaved inmates,and thereby demonstrated the 5percent cost savings required ofit by Ohio law.47 Thisdemonstrates one way thatprivate prisons remain profitableto their shareholders. Aftercutting their operational costs,they aim to fill as many beds aspossible with the most docile,healthy, and thereforeinexpensive inmates they canfind.

Alongside the rise of privateprisons in America has been thegrowing practice of “interstatecommerce” in prison inmates.On the eve of the mid-1980sbirth of modern prisonprivatization, the U.S. SupremeCourt held that “[j]ust as aninmate has no justifiableexpectation that he will beincarcerated in any particularprison within a State, he has nojustifiable expectation that he

10

Alongside the rise ofprivate prisons inAmerica has beenthe growing practiceof “interstatecommerce” in prisoninmates.


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will be incarcerated in anyparticular State.”48

Private prison operatorshave therefore benefitted sincethe industry’s very beginningfrom a national market ininmates, enabling them tocompensate for convict“shortages” in the states inwhich they operate prisons bysiphoning inmates from otherstates with convict “gluts” intothose prisons and thereby fillthem to capacity.

A 1972 study by theCalifornia Department ofCorrections found “a strong andconsistent positive relationship...between parole success andmaintaining strong family tieswhile in prison.”49 In this context,private prison firms have adoubly perverse incentive. Thecompulsion of these firms to“import” prisoners from faraway localities to fill emptyprison beds imposes the“external” cost on society ofmore unrehabilitated offenders.This social cost ultimately fallson the state’s taxpayers. Itprovides at the same time,however, yet another benefit tothe private prison industry,because rehabilitated offendersdo not fill private prison bedsand therefore do not generateprofits.

Prisons for Profit and TaxesWhen it comes to the

question of private prisoncorporations paying taxes for theprivilege of operating in thatstate, the interests of taxpayers

and private prison shareholdersare similarly opposed. Taxes arean expense to privatecorporations that cut into theirprofits, and the managers anddirectors of private prisoncompanies therefore owe a dutyto their shareholders tominimize the company’s taxliability as much as possible.

The taxpayers of the state

where these companies operatetheir prisons, however, naturallywant these companies to paytheir state governments asmuch as possible in corporatetaxes, because taxing outsidecorporations relieves thetaxpayers of the burden offunding basic governmentservices. While private prison

Sometimes private prisonoperators are so greedy forrevenue-generating humanbeings to fill their cells thatthey bribe judges to sentencechildren to serious jail time forthe most minor and trivial ofoffenses. In February 2011, ajuvenile court judge in LuzerneCounty, Pennsylvania wasconvicted of racketeering inconnection with a “kids forcash” scheme. The judgeaccepted money from a privateprison operator in exchangefor handing down ridiculouslyharsh sentences that wouldguarantee prisons were full toprofit-maximizing capacity.50

This scandal led to thereversal of thousands ofjuvenile convictions andbrought nationalembarrassment to the county.The conspiracy “lasted from2003 to 2008” and involved asmany as 6,500 juvenile casesand 4,000 individual children,over 50 percent of whom didnot have an attorney.51 One

youth was “sent to a bootcamp for five months in 2004for being a lookout for a friendwho was stealing DVDs from aWal-Mart.” Another was “sentto a detention center forseveral days in 2006 for failingto appear at a hearing as awitness to a fight, eventhough his family had neverbeen notified about thehearing and he had alreadytold school officials that hehad not seen anything.” Astate audit of the Pennsylvaniajuvenile facilities involved inthe “cash for kids” scandalfound that those facilities“were systematicallyoverbilling the county and . . .had fallen behind in their billsand begun receiving shut-offnotices from utilitycompanies.”52 In his closingargument at the disgracedjudge’s trial, the prosecutorsaid he had “turned his officeinto a cash-cow, into amoney-making machine.”53

“Cash for Kids” Scandal Rocks Pennsylvania


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companies publicly promisetaxpayers that their presencein the state will generaterevenue, they lobby behind thescenes and otherwise doeverything they can to minimizethe taxes they actually pay.CCA, for example, pulled out ofits contract at a Clevelandfacility it operated in the 1990sbecause it refused to pay itsshare of local taxes.54 In 1998 theindustry even persuaded Arizonato pass a law retroactivelyprohibiting the state from taxingincome derived from thedetention or incarceration ofprisoners by privatecompanies.55

Real estate tax shelters areanother way private prisoncompanies avoid paying theirshare. A federal tax loopholeallows such shelters to avoidtaxation at the company level.Although this exemption “wasestablished for legitimate realestate companies,” CCA tried tofunnel revenue generated by itsprison operations into theloophole shelter in order toavoid paying taxes on it.56 Theloophole, while part of the

federal tax code, shieldscompanies from tax liability atboth the state and federallevels.57 The IRS sued CCA in2002 after its audit of thecompany suggested it wasabusing tax loopholes to avoidpaying its share of federaltaxes.58 CCA settled with the IRSin 2002, agreeing to pay $54million in back taxes.59 WhileCCA’s lawyers “continue[d] toappeal the IRS’ findings,” theIRS “questioned the validity of aprevious tax avoidancestructure, and CCA was forcedto pay delinquent taxes.”60

Tax-exempt bonds issuedthrough partnerships with localgovernments and municipalitiesare another way private prisoncompanies avoid tax liability.These “backdoor taxpayersubsidies” can cost the taxpayermore than public financingwould because the localgovernment might issue higher-interest securities than would bethe case with ordinary publicfinancing.

Tax-exempt bonds can alsoshift the responsibility ofeconomic failure from theprivate prison company to thetaxpayer, leaving the taxpayerand the government completelyliable for the company’s failure.

This happened in Texas in1988 when Dallas-basedDetention Services, Inc.convinced the government ofZavala County to finance one ofits facilities with county bonds.The company was supposed torepay its debt to the county from

its prison revenues. But after itcancelled another contract ithad with the District ofColumbia on account ofexcessive prisoner violence andstaff corruption, the companyhad no revenue, and the ZavalaCounty government had nochoice but to make bondpayments out of its operatingfund, which sent it into deficitand default on the bonds.61

When private prisoncompanies market their“services” to state governments,they often promise to “fullyindemnify” those governmentsfrom liability for their failures. Inother words, the companiespromise to take totalresponsibility for all of the debtsand other obligations that thestate’s taxpayers wouldordinarily be stuck with in theevent of failure.

Such promises, however, canbe exceedingly difficult toenforce. CCA, for example,promised to indemnify theDistrict of Columbia from liabilityarising from its operation of theNortheast Ohio CorrectionalFacility, a private facility for DCprisoners in Youngstown, Ohio.But when the District sued CCAto enforce its contract with thecompany, CCA “refused toindemnify District officials andfailed to obtain the requiredinsurance policy naming theDistrict as insured.”62


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Safety & TrainingThe fundamental economic

tension between the privateprison company shareholderand the state taxpayer is furtherreflected in various socialconsequences of prisonprivatization that reverse thevery public benefits that prisonsare supposed to provide to thecommunity. Chief among thesebenefits is public safety. A studyby a professor at GeorgeWashington University foundthat private prisons had a 50percent higher incidence of

inmate on staff assaults andtwo-thirds higher incidence ofinmate on inmate assaults thanstate-run prisons.63 A 2004report by the Federal ProbationJournal that specificallycontrolled for prison securitylevel found that private prisonshad 50 percent more inmate oninmate assaults and almost 50percent more inmate on staffassaults.64

These dangerous conditionscreate a difficult workingenvironment for prison staff,resulting in a far higher staff

turnover rate at private prisonscompared to public prisons. Theprivate prison industry’s ownstatistics show that at privateprisons the turn-over rate was53 percent, while at publicprisons it was a mere 16percent.

Prison safety depends on astable workforce. The morefrequently a larger number ofemployees quit, the moredangerous prisons become.High turnover rates meanexisting staff are fewer innumber and less experienced.

In 1999 the University ofMinnesota Law School’sInstitute of Criminal Justiceinterviewed 106 prisoners inMinnesota, 57 of whom werehoused in a public prison runby the Minnesota Departmentof Corrections (DOC) and 49 ofwhom were housed at theprivate, CCA-owned PrairieCorrectional Facility (PCF).66

Each prisoner was interviewedabout his opinion on theprofessionalism of the prisonstaff, and security and safetyinside the facility. Theexperiences and perceptions ofthe prisoners confirmedprevious studies that showedthe problems of lower wages,higher turnover, and poorerstaff training in privateprisons.67The study found:

• Prison-for-profit inmatescomplained about the lack ofprofessionalism of the staff.“The staff attitude here –they treat you like acommodity,” one inmatereported, “its all about themoney.”68

• Prison-for-profit inmateswere more likely to report alack of structure in their day.The difference stems fromthe fact that public prisonsforce its inmates toparticipate in rehabilitationactivities while the prison-for-profit does little topromote these programs.

• Prison for profit inmatesconsistently reported living ina more dangerous and poorlysupervised environment thanpublic prison inmates. Many

inmates used words like“unstable” and“disorganized” whendescribing their livingconditions.69

Many of these inmates werehighly aware of the two primarycauses of this dangerousenvironment: the cost-cuttingmeasure of hiring a low-paid,poorly-trained staff, many ofwhom quit after the first majordisturbance, and the revenue-raising measure of “re-classifying” maximum-securityinmates as minimum ormedium-security in order to fillempty bed space.70

Inmates feel effects of less trained staff: Minnesota case study

Safety & PrisonsFor Profit

14

Workforce instability at privateprisons has resulted in riots,rapes, assaults and escapes.65

The instability of privateprison staffs is a directconsequence of the fierce cutsin labor costs that privateprisons resort to in order tomaintain short-termprofitability. Containing laborcosts “is the crux of theprivatization movement.”71

Running a prison is anincredibly labor-intensiveendeavor. Not only do you needenough adequately trainedguards to keep order andprevent escapes, you also need astaff to provide a wide variety ofinmate services, includingmeals, health care, counselingand vocational assistance, andlaw library services.72

Private prison operatorscontrol their labor costs byreducing the number of staff,hiring low-wage, non-unionlabor, and eliminating fringebenefits.73 Prison guards hiredby private facilities often havelittle to no training or experience,and in some instances are barelyout of high school.74

The result is a labor forcethat is ill-prepared for theviolent crises that may erupt atany moment. Cost-cutting onlabor at private prisonsperpetuates a vicious cycle:poorly trained and poorlydisciplined staff are incapable ofadequately responding to prisonemergencies, which createsextremely dangerous conditionsat the facility, which then forces

a good many employees to quit,and raises the turnover rate.

Youngstown Prison for ProfitThreatened Community Safety

Vividly illustrating theconsequesces this combinationof cost-cutting and revenue-generating measures is anincident that occurred in 1999 atthe private Northeast OhioCorrectional Facility inYoungstown, Ohio. Upon openingthe facility in 1997, CCA staffed it“with guards who had little or no

experience in corrections — andthen imported 1,700 of the mostviolent inmates fromWashington, DC, to fill what wassupposed to be a medium-security prison.”75

In its first 14 months ofoperation the facilityexperienced 13 stabbings, twomurders, and six escapes.76 Whenlocal residents complained to CCAabout the dangers posed to theircommunity, officials respondeddismissively. “It’s nice if yourcommunity is happy with you —that’s an extra,” the company’sfounder remarked, “[b]ut the

business is built around providinga valuable service to ourcustomers.”77

In March of 1998, the City ofYoungstown sued CCA on behalfof the inmates at the prison,“alleging that prisoners wereput at risk by being shelteredwith maximum-securityprisoners in a facility notdesigned for containing them.”77

The court ordered the 113“reclassified” maximum-security inmates be removedfrom the prison. The litigation,cost of reclassifying inmates,and changes in securityprocedures posed extra costs tothe state.

What the Youngstownincident shows is that evenwhere a private prisondemonstrates short term costsavings, “[i]t only takes onemajor disturbance for suchcosts to greatly accelerate.”78

More specifically, Youngstownoffers a vivid example of how thevery same short-term measuresprivate prisons use to show costsavings — such as hiring cheaplabor and cutting staff numbers— produce the conditions inwhich dangerous, violentincidents can occur. Theseincidents result in additionalcosts that could have beenavoided had the facility beenstaffed with enough properlytrained officers.

Safety & PrisonsFor Profit

A 2004 report by theFederal ProbationJournal found thatprivate prisons had 50percent more inmateon inmate assaults andalmost 50 percent moreinmate on staffassaults.

15

Rehabilitation andConditions of Confinement

Another benefit prisonsshould provide the community isinmate rehabilitation. Not onlydoes it cost the taxpayer directlyto keep an inmate in prison, italso costs the taxpayer moreindirectly when inmates arereleased back into society withoutany ability to survive and functionas productive, law-abidingcitizens.

Supporters of prisonprivatization sometimes claimthat privately operated prisonshave more of an incentive thanstate-run prisons to maintain thequality of the environment inwhich they keep their inmatesand to develop rehabilitationprograms that will reduce inmaterecidivism. They reason thisbecause private prisons risklosing the state contract tooperate the facility if it fails toshow results.80 Studiescomparing the recidivism ratesof inmates in public and privateprisons, have been inconclusive.

However, states with themost private prisons do not havethe lowest recidivism rates.

Ohio’s prisons are, with theexception of two facilities, entirelystate-operated. Only 4.4% of Ohioinmates are in private beds.81

States with much higherpercentages of inmates in privatebeds have significantly higherrecorded recidivism rates.

The five states with thehighest percentage of privatizedprisons are New Mexico,Montana, Alaska, Vermont, and

Hawaii.82 According to 2005statistics, four out of the fivestates had higher three-yearrecidivism rates than Ohio. 2005data was not available from NewMexico, but its 2007 three-yearrecidivism rate of 43% was higherthan Ohio’s 2007 rate of 34%.

Privatizing more of Ohio’sprisons will likely increaseOhio’s comparatively lowrecidivism rates becauseprivately run prisons haveconsistently proven not to investin the types of programs andservices that public prisonsinvest in order to enable theirinmates to function in societyupon their release. The sameMinnesota study that interviewedinmates at public and privatefacilities about prison safety andstaff training also interviewedthem about the programs andservices the facilities offeredthem. Seventy percent of thestate-run DOC inmates reportedhaving received HIV/AIDSeducation compared to zero ofthe private, CCA-run PCFinmates.90 DOC inmates “weremore likely [than PCF inmates] toreport that participation ineducational classes had provedvery helpful to them, personally”and “gave significantly higheroverall ratings to the educationalprograms available in theirfacilities” than PCF inmates.91

The drug and alcohol treatmentprograms at PCF consisted of 1-3 hour counseling sessions thatoccurred weekly, while most ofthe DOC prisoners reportedbenefitting from “full-time,

highly structured ‘therapeuticcommunity’ treatmentprograms.”92 Typical of the DOCexperience is one inmate’sreport that the DOC prison“taught me how to read, how toevaluate my anger, how tounderstand myself — it hasmade big changes andimprovements in my life.”93

Typical of the PCF experiencewas one inmate’s statement that“I have learned nothing here.”

Effect of Rehabilitation onRecidivism

A comparison of the programsand services available to inmatesat Ohio’s two private facilities with

Rehabilitation & PrisonsFor Profit

Percentage of prisonbeds that are privatizedNew Mexico 43.4%Montana 39.8%Alaska 30.8%Vermont 30.1%Hawaii 28%Ohio 4.4%

Three-Year RecidivismRates, 2005New Mexico 43%*83

Montana 37.6%84

Alaska 66%*85

Vermont 50%86

Hawaii 52.5%87

Ohio 36.23%88

*No 2005 data was availablefor New Mexico and Alaska,so 2007 data is provided.Ohio’s 2007 recidivism ratewas 34%.89

16

those available to inmates at itsstate-run facilities suggests asimilar dynamic at play andunderscores the importance ofhealth care — both physical andmental — in providing inmatesthe treatment necessary for theirsuccessful reintegration intosociety.

Lake Erie CorrectionalInstitute and North CoastCorrectional Treatment Facilityhave no trauma recoveryprograms, no contract or grant-funded job-training programs,and no programs addressingmental illness, diseasemanagement, general health, orsex offender issues.94

More troubling is the fact that,despite the many requests byinmates at these facilities for

medical attention by a licensedphysician (as opposed to a nurse),none of them were sent off-site tothe Ohio State Universityemergency room, whereasinmates in other, state-runfacilities were.95

It is possible that the twofacilities have been seeking tocut costs by relying on“telemedicine,” a privatetechnological service that publicand private prisons alike in Ohiohave been using since the 1990s.With telemedicine, inmatesreceive medical treatment fromnurses or non-specialist doctorswho receive treatmentinstructions from off-sitespecialists via a videoteleconferencing device.96

It is important to remember

the elemental fact that recidivismis good for private prisons. Themore people are returned toprison, the more businessprivate prisons get. A 2008 studypublished by Crime andDelinquency found that “privateprison inmates had a greaterhazard of recidivism in all eightmodels tested, six of which werestatistically significant.”97 A 2005study of juvenile prisonspublished in the Journal of Lawand Economics found that privateprisons increased costs bypromoting recidivism. Juvenilesin private prisons were morelikely to commit further crimesand be imprisoned again.

In purely financial terms –without giving any weight to thesocial harm caused by increasedrecidivism – the additional costsof increased future confinementalone exceeded any short-termsavings offered by privateprisons.98 The study found thatprivate prisons had “nocontractual incentive to providerehabilitation opportunities oreducational/vocational trainingthat might benefit inmates afterrelease, except insofar as theseservices act to decrease thecurrent cost of confinement.”99

Rehabilitation & PrisonsFor Profit

17

Public Accountability and theTaxpayer’s Right to Know

Prisons for profit alsoweaken the public’s right toknow. Governors’ have lessexecutive authority over theprison’s management when it isprivatized. The governor cannot,for example, fire a warden at aprivately-run prison for poormanagement the way he couldat a state-run prison.100 Wheregovernors are ultimatelyaccountable to the people of thestate, private prison managersand executives are accountableonly to their shareholders.Privatizing prisons removeresponsibility from the state’selected representatives andmakes it more difficult for thefacilities to be held accountableby the public.

The public has far lessoversight of the operation ofprivate prisons. In many states,private prisons are exempt frompublic records laws. This adds alayer of secrecy to theiroperations and makes it moredifficult to learn aboutmisconduct.101

Some states are also grantedonly partial information oninmates held in private prisonsin their state. In Arizona, forexample, private prisons are notrequired to provide the statewith escape data or details ofthe crimes inmatescommitted.102

Because the operation of for-profit prisons is in private hands,states often face considerablelegal hurdles when they try to

monitor the operation of thoseprisons.

For instance, in 1987 an Ohiostate auditor tried to audit aSummit County correctionalfacility that was operated by theprivate contractor OrianaHouse, Inc.103 Oriana Houserefused to cooperate with the

audit, and when the state sued, itclaimed “that it was not requiredto produce the requestedrecords because it is not apublic office as defined in”Ohio’s Public Records Act.104

The case reached the OhioSupreme Court, which ruledagainst the state’s right toaccess the records, reasoningthat “[a] private business doesnot open its records to publicscrutiny merely by performingservices on behalf of the state ora municipal government.”105

While the courts have not ruledon prisons for profit specifically,the decision in the Oriana Housecase poses serious questionsover whether private prisons willbe accountable to the public.

Even the most strenuous

proponents of prisons for profitargue for full publictransparency. Countless studiesof the pros and cons ofprivatizing prisons — includingmany that favor privatization —mention the necessity of publicmonitoring and oversight ofprivate prison operations.106 Butif privatization shields for-profitprison operators fromcomprehensive state oversight,then Ohio’s system will lackeven the low thresholdsproponents claim is necessaryfor its success.

Transparency & PrisonsFor Profit

The public has far lessoversight of theoperation of privateprisons. In manystates, private prisonsare exempt from publicrecords laws.

Sentencing Reform: The Real Solution

18

Sentencing Reform: The RealSolution to Ohio’s BallooningCorrections Budget

Prison overcrowding is theunderlying cause of Ohio’sbloated corrections budget. Thestate’s prison population hasquintupled since 1975.107 Butwhile prison overcrowding isobviously bad news for the Ohiotaxpayer, it is good news forMTC, CCA, and other privateprison companies operating inthe state. The idea thatprivatizing any more of Ohio’salready overcrowded prisons willhelp reverse this overwhelmingburden on the state treasury iscontrary to the nature of prisonsfor profit.

The prospect of simplyreleasing massive numbers ofprisoners back into society orchanging sentencing laws sothat fewer convicts areimprisoned raises legitimatepublic safety concerns. However,the current policy of harshsentencing and prisonovercrowding results in 60percent of Ohio prisoners beingincarcerated for low-level,nonviolent offenses. Sentencingreforms that are carefullydesigned and correctlyimplemented will save taxpayerdollars and improve publicsafety whereas increasedprivatization will do the oppositeon both fronts.

Legislation introducedduring the 129th Ohio GeneralAssembly presents a clear firststep toward criminal justice

reform in Ohio. One of thecentral innovations of thisproposed legislation is toincrease earned creditprograms.

Unlike traditional “time offfor good behavior,” whereinmates’ sentences are reducedsimply because they did notmisbehave while serving theirtime, earned credit allows theinmate to shave time off of hisor her sentence by“successful[ly] participat[ing] ineducation, vocational training,penal industries employment, or

substance abuse treatment.”108

The maximum time off theinmate can earn under thelegislation would be 8 percent ofthe sentence.109

Inmates would thereforehave the incentive to participatein rehabilitative programmingthat will help them reintegrateinto society while holding themaccountable. Ohio’s BuckeyeInstitute estimates that theearned credit provision, would“eliminate the need for 1,270beds, resulting in annualsavings of $5.48 million.”110

Thirty-three states have earnedcredit laws on the books.

An increase in the use ofcommunity-based corrections isanother feature of the bill thatwould save Ohio taxpayersmoney. In 1979, Ohio passed theCommunity Corrections Act,which established a system ofprisoner diversion programs. In2008, “more than 5,500offenders were diverted intocommunity-based correctionsfacilities (CBCF),” which aredormitory-style residentialfacilities “that receive capitaland operations funding from thestate.”111

CBCFs offer suchrehabilitative programming asdrug treatment, education, andjob training. The typical length ofstay at these facilities is sixmonths. The Ohio CriminalSentencing Commission “hasdetermined that CBCFs savetaxpayers money because ofshorter periods of confinement

and reduced recidivism rateswhen compared with prison.”112

Other notable features of thebill include a provision thatrevises marijuana penalties andeliminates the sentencingdisparity between crack andpowder cocaine and a provisionthat narrows the definition of“escape” as it applies toprisoners on supervisedrelease.113

Both of these reformscorrect the excesses of failed“tough-on-crime” policies thathave fueled the costly explosionin prison population in Ohio andnationwide over the pastgeneration. The majority of Ohioprisoners are incarcerated forlow-level, nonviolent offenses,114

and if only a fraction of thoseprisoners were diverted intotreatment programs, Ohiotaxpayers would already besaving millions. But mandatorydrug sentencing laws preventthis from happening.

Likewise, many probationersand parolees are re-incarcerated for the crime of“escape” simply because of

honest mistakes ormisunderstandings that theyhave “absconded” supervision.The new escape provision“would allow the Adult ParoleAuthority to utilize varioussanctions at their disposal, thusavoiding new felony charges”and would “eliminate the needfor more beds, thus creatingadditional incarceration costsavings.”115

Finally, the bill would expandeligibility for medical paroleamong geriatric inmates. Elderlyprisoners with serious medicalconditions rarely if ever pose aserious threat to public safety.The provision would give paroleboards the option of committingthese inmates to nursing homesin lieu of releasing them.

Geriatric inmates “consumea disproportionate share ofOhio’s growing correctionalmedical costs.”116 An April 2010study by the Vera Institute ofJustice found that “between1999 and 2007 the number ofpeople 55 or older in state andfederal prisons grew 76.9percent” and that “prisonsspend about two to three timesmore to incarcerate geriatricindividuals than youngerinmates.”117 Removing theseinmates from the prison system“could significantly reduceinmate health care costs”118

without posing any substantialrisk to public safety.

Studies on paroleerecidivism find the probability ofparole violations also decreaseswith age, with older parolees the


19

Privatizing stateprisons may in factunderminesentencing reform’sgoal to remove low-level offenders fromthe justice system.


20

least likely group to be re-incarcerated.”119

In fiscal year 2010, ODRCspent $225,829,929 in medicalcosts. Thirty-nine states havelaws providing for medicalparole.

Reforms like these will onlywork if they are implementedcorrectly. Ohio will have to putforth clear criteria to guide theselection of inmates who willparticipate, provide adequatepost-release supervision ofthose inmates who doparticipate, and establish acoordinated statewide system ofadministering these alternativesentencing programs.121 Bydoing so, Ohio will be able to“focus supervision resources on

those people who pose thegreatest danger to thecommunity” and “systematizehow people are assigned toservices in the community,which maximizes the value ofthese scarce program slots.”122

All of these sentencingreforms save the taxpayermoney by reducing the numberof inmates occupying prisonbeds in Ohio at any given time.Prisons for profit underminethese reforms, because thereforms directly cut into theirprofit margins and threaten toput them out of business. Themore a state privatizes its prisonsystem, the less control andauthority it will have toimplement these reforms. True

ACLU leads the callfor sentencing reform

In August 2010, the ACLUof Ohio released “ReformCannot Wait”, an analysis ofover 20 years of studies ofOhio’s criminal justice sys-tem. The ACLU concluded thestate needs to implementcommon sense sentencingreforms in order to alleviateovercrowded prisons, saveresources, and create a morejust society.

Leaders across the statehave cited the ACLU’s reportas the calls for reform havecontinued.

If you would like to download a free electroniccopy of the report, go to www.acluohio.org.

sentencing reform requiresstatewide coordination and acommon set of centralguidelines about inmateclassification that private prisonoperators would have a naturaleconomic incentive to resist.

It is troubling enough thatthe profit motive compelsprivate prison companies to cuttheir costs by eliminating thevery programs that would allowinmates to participate, forexample, in earned creditactivities. But the fact that suchcost-cutting provides a furthereconomic windfall for thesecompanies by ensuring thatinmates stay incarcerated (andgenerating revenue) as long aspossible is obscene.Privatization, therefore, is not asensible component of a“package” of cost-savingreforms to address a budgetcrisis; it will likely offset anysavings derived from sentencingreforms and other budget-balancing measures.

Bibliography

21

1 U.S. Const. Amend XIII, § 1.

2 Robert Perkinson, Texas Tough: The Rise ofAmerica's Prison Empire (New York:Metropolitan Books, 2010), pps. 320-21.

3 Leonard Gilroy and Harris Kenny, TheReason Institute, Annual Privatization Report2010: Corrections, pp. 1, 10, available at http://reason.org/files/corrections_annual_privatization_report_2010.pdf

4 http://www.newsweek.com/2010/06/30/how-the-recession-hurts-private-prisons.html

5 AFSCME, Five Empty Promises, available at:http://www.afscme.org/publications/2539.cfm.

6 http://www.texasprisonbidness.org/moneyfinancial-interests/texas-2011-budget-plan-includes-private-prison-cuts-tdcj; http://www.ccpoa.org/news/entry/oklahoma_seeks_exit_clause_in_private_prison_deal/; http://www.freerepublic.com/focus/f-news/1336331/posts; http://www.idahopress.com/opinion/article_c79ec0a2-1963-11e0-8031-001cc4c002e0.html; see also generally http://www.soros.org/initiatives/usprograms/focus/justice/articles_publications/publications/jailbreaks_20011001/jbch1.pdf.

7 http://www.drc.ohio.gov/web/prisprog.htm

8 http://www.correctionscorp.com/facility/northeast-ohio-correctional-center/

9 Joe Guillen, Plain Dealer, “Gov.-elect JohnKasich picks private corrections consultantand former warden to run Ohio's prisonssystem,” 1/4/11 available at http://www.cleveland.com/open/index.ssf/2011/01/gov-elect_kasich_picks_private.html

10 Buckeye Institute, “Smart on Crime,”available at http://www.opd.ohio.gov/RC_Reports/BuckeyeInstituteSmartOnCrimeReport.pdf

11 U.S. Department of Justice, Office of JusticePrograms, Bureau of Justice Assistance,Emerging Issues on Privatized Prisons(2011)

12 Jeffrey E. Golon, Ohio Legislative BudgetOffice, Fiscal Pressure Pushes PrisonPrivatization, p. 162, available at http://www.lsc.state.oh.us/fiscal/special/ohioissues/issue-09.pdf; John Jarvis, "Sale of two Marionprisons could boost tax revenue," Marion Star,Mar. 19, 2011, available at http://www.marionstar.com/article/20110319/NEWS01/103190302/Sale-two-Marion-prisons-could-boost-tax-revenue

13 http://www.ucrdatatool.gov/Search/Crime/State/RunCrimeStatebyState.cfm

14 http://www.fbi.gov/about-us/cjis/ucr/crime-in-the-u.s/2010/preliminary-crime-in-the-us-2009

15 http://www.infowars.com/private-prison-industry-experiences-boom/;

16 Reason Institute, Watching the WatchmenPart II, Policy Study No. 290

17 http://www.drc.ohio.gov/web/Reports/Annual/Annual%20Report%202009.pdf, pps. 21, 24

18 Lundahl, et al., “A Meta-analysis of Costand Quality of Confinement Indicators,”Research on Social Work Practice: July 2009;vol. 19, no. 4, pps. 383-394 .

19 Arizona Dept. of Corrections, Audit, http://www.azauditor.gov/Reports/State_Agencies/Agencies/Corrections_Department_of/Performance/10-08/10-08.pdf

20 Ibid., pps. 6-12.

28 Ibid., pp. 15

22 Ibid.

23 Ibid., pp. 19.

24 http://epi.3cdn.net/e6e28612a19ac589e8_ozm6ibbye.pdf, pp. 24.

25 http://www.gao.gov/archive/1996/gg96158.pdf

26 Ibid., pp. 7.

28 Bureau of Justice Assistance, pp. iii.

29 Bureau of Justice Assistance report

30 http://www.bop.gov/news/research_projects/published_reports/pub_vs_priv/oreprcampgaes.pdf, pp. 2.

30 Bureau of Justice Assistance report, pp. 25

31 http://www.ncjrs.gov/pdffiles1/nij/221507.pdf, at 35

32 Lundahl, et al., 2009

33 Ibid., 383.

34 Perrone & Pratt, Comparing the Quality ofConfinement and Cost-Effectiveness of Public

Versus Private Prisons, available online athttp://www.sagepub.com/stohrstudy/articles/11/Perrone.pdf, pps. 311-312

35 Ohio Policy Matters, pp. 5

36 Ibid.

37 Ibid., pp. 6

38 Arizona audit, pps. 23, 37, 46.

39 http://www.afscme.org/publications/2556.cfm

40http://www.soros.org/initiatives/usprograms/focus/justice/articles_publications/publications/cca_20_years_20031201/CCA_Report.pdf, pp.15.

41 http://www.sourcewatch.org/index.php?title=Corrections_Corporation_of_America.

42 http://www.businessofdetention.com/?p=71

43 Cibola County Manager Joe Murrietta asquoted in Mark Oswald, “Cibola County:Transfers Might Doom Jail,” The Santa FeNew Mexican, January 27, 1996, pp.B-3.

44 Richard P. Seiter, Corrections Corporation ofAmerica, Inc., Private Corrections: A Review ofthe Issues, available at http://www.cca.com/static/assets/Private_Corr_Review_of_Issues.pdf

45 http://www.prop1.org/legal/prisons/980105a.htm

46 http://www.policymattersohio.org/pdf/prisrpt.pdf

47 Ibid.

48 Olim v. Wakinekona, 461 U.S. 238, 245(1983).

49 Presbyterian Church (USA), ResolutionCalling for the Abolition of For-ProfitPrisons(2003)

50 Craig R. McCoy. Jury finds judge guilty incash for kids case, The Philadelphia Inquirer,Feb 18 2011, http://www.philly.com/philly/news/breaking/20110218_Jury_finds_judge_guilty_in_kids_for_cash_case.html.

51 http://www.jlc.org/luzerne/

52 http://www.nytimes.com/2009/03/28/us/28judges.html?pagewanted=3&_r=2

53 McCoy, 2011

54 Cindy Horswell, “Private Prison Firm PullingOut After Dispute With School District,”Houston Chronicle, September 3, 1998, pp. 32.

55 National Conference of State Legislatures,State Crime Legislation: 1998, November1998, Vol. 23, No. 19, pp. 13.


57 John R. Honovich, “Corrections IndustryFinancing Options,” presentation at 4thAnnual Privatizing Correctional Facilities,sponsored by World Research Group, LasVegas, Nevada, September 23, 1999.

References

22

58 http://www.contractormisconduct.org/ass/contractors/170/cases/1077/1477/corrections-corp-of-america-irs-audit_8k.pdf


60 Ibid.

61 Todd Mason, “Its A Bust: Many For-ProfitJails Hold No Profits — Nor Even AnyInmates; Still Promoters Keep PushingPrivately Run Prisons to Job-Hungry Towns;Texas Rent-A-Cell-Breakout,” The Wall StreetJournal, June 18, 1991

62 http://www.afscme.org/publications/2556.cfm; Cheryl W. Thompson, “D.C. SuesPrivate Prison Firm in Contract Dispute; CCAFailed to Protect and Defend the City in TwoLawsuits, Complaint Contends,” TheWashington Post, December, 19, 1998, pp.B07.

63 AFSCME, The Five Empty Promises

64 Curtis R. Blakely and Vic W. Bomphus,Private and Public Sector Prisons: A Comparisonof Selected Characteristics 68 Fed. Probation27, 29 (2004) available at http://heinonline.org/HOL/Page?collection=journals&handle=hein.journals/fedpro68&id=27.

65 Private Corrections Institute, Inc., QuickFacts About Prison Privatization (2009)

66 University of Minnesota study, http://archive.epinet.org/real_media/010111/materials/greene.pdf

67 Ibid., pp. 37

68 Ibid., pp. 29

69 Ibid., pp. 33

70 Ibid., pp. 35


72 W. G. Archambeault, "Management Theory Z -Its Implications for Managing the Labor IntensiveNature of Work in Prison," Prison Journal 62 No.2 (Autumn/Winter 1982) pp.58-67


74 Edward J. Clarke, Deviant Behavior: AText-Reader in the Sociology of Deviance(New York: Worth Publishers, 2008), pp. 354

75 http://motherjones.com/politics/2000/05/steel-town-lockdown

76 http://www.sentencingproject.org/doc/publications/inc_prisonprivatization.pdf, pp 3.

77 http://motherjones.com/politics/2000/05/steel-town-lockdown

78 http://www.sentencingproject.org/doc/publications/inc_prisonprivatization.pdf, at 3.

79 Bureau of Justice Assistance report 29

80 Bureau of Justice Assistance report, 32-33;Bales Fla. Study, 2003, pp. 2

81 http://www.progressivestates.org/files/privatization/PrivatizationReport.pdf

82 Reason Foundation, Annual PrivatizationReport 2010

83 http://www.corrections.state.nm.us/news/2008-2009_Annual_Report.pdf

84 http://sentencingproject.org/doc/publications/inc_StateRecidivismFinalPaginated.pdf

85 Ibid.

86 http://justicereinvestment.org/states/vermont

87 http://hawaii.gov/icis/documents/copy_of_SARA-DVSI%20Exploratory%20Study%20%28Oct%202008%29.pdf

88 http://www.drc.ohio.gov/web/Reports/reports29.asp

89 http://www.drc.ohio.gov/Public/press/press397.htm

90 University of Minnesota study, 15

91 Ibid., pp. 20

92 Ibid., pp. 23

93 Ibid., pp. 24

94 Corrections Institution InspectionCommittee, March 2011 report

95 Ibid.

96 http://www.drc.ohio.gov/web/telemed.htm.

97 Andrew L. Spivak and Susan F Sharp,Inmate Recidivism as a Measure of Private PrisonPerformance, 45 Crime and Delinq. 482 (2008).

98 Patrick Bayer & David E. Pozen, TheEffectiveness of Juvenile Correctional Facilities:Public Versus Private Management, 48 J. L. &Econ. 549 (2005).

99 Ibid., 557.

100 James Austin and Garry Coventry, Bureauof Justice Assistance, Emerging Issues onPrivatized Prisons (2001), pp. 14.

101Private Corrections Institute, Inc., QuickFacts About Prison Privatization (2009).

102 Casey Newton et al., Arizona Inmate EscapePuts Spotlight on State Private Prisons, TheArizona Republic, Aug 22 2010, http://www.azcentral.com/news/articles/2010/08/22/20100822arizona-private-prisons.html.

103 http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2006/2006-Ohio-4854.pdf, pp. 4

104 Ibid.

105 Ibid., pp. 14

106 Ohio Policy Matters; Pozen; Raher; BJA

107 ACLU of Ohio, Reform Cannot Wait, pp. 8.

108 Buckeye Institute, Smart on Crime, pp 12.

109 Ibid.

110 Ibid., pp. 12-13.

111 Ibid., pp. 10.

112 Ibid., pp. 10-11.

113 ACLU of Ohio, Reform Cannot Wait, pp. 7.

114 http://www.drc.ohio.gov/web/Reports/Annual/Annual%20Report%202009.pdf, pp. 24.

115 Joseph Rogers, Ohio Legislative ServiceCommission, Fiscal Note and ImpactStatement on S.B. 10 of the 129th G.A.,February 22, 2011., pp. 5.

116 Buckeye Institute, Smart on Crime

117 Vera Institute report, http://www.vera.org/download?file=2973/Its-about-time-aging-prisoners-increasing-costs-and-geriatric-release.pdf, pp. 4-5.

118 Buckeye Institute, Smart on Crime, pp. 13

119 Vera Institure report, pp. 5.

120Justice and Public Systems, Ohio Facts2010 Julian Rodgers OHIO LSC, pg 75available at http://www.lsc.state.oh.us/fiscal/ohiofacts/sep2010/justiceandpublicsafetysystems.pdf

121 Justice Center, The Council of StateGovernments, Justice Reinvestment in Ohio:Policy Framework to Reduce CorrectionSpending & Reinvest Savings in Strategies thatCan Reduce Crime (2011), pp. 2, available athttp://justicereinvestment.org/states/ohio/pubmaps-oh.

122 Ibid., pp. 9.

References

American Civil Liberties Union of Ohio4506 Chester Ave.Cleveland, OH 44103P: (216)472-2200F: (216)[email protected] Published April 2011

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