Private Prisons Equal Big Business

Private Prisons Equal Big Business


By Stacy Brown of the Washington Informer

While newly appointed Federal Communications Commission Acting Chair Mignon Clyburn and members of the Congressional Black Caucus continue their fight to reduce the costs for inmates to make telephone calls, a battle against privately run prisons is heating up.

Officials at various civil rights and watchdog organizations claim that private prison operators are using their political clout to help increase the prison population and to deny the release of many who are eligible for parole.

“For profit companies exercise their political influence to protect their market share,” said Tracy Velazquez, the former executive director of the Justice Policy Institute in Northwest Washington, D.C.

“We need to take a hard look at what the cost of this influence is, both to taxpayers and to the community as a whole, in terms of the polices being lobbied for and the outcomes for people put in private prisons,” she said.

Meanwhile, Clyburn and Rep. Marcia Fudge, D-Ohio, of the Congressional Black Caucus (CBC), have continued their push to reduce exorbitant telephone call rates that inmates face when calling home.

In most prisons a $3.95 connection fee is required for all calls and inmates pay an additional 89 cents per minute.

However, in private prisons, the calls can be as much as $5 per minute, a fee required of the 2,000 prisoners at the Stewart Prison in Lumpkin, Ga.

That high fee helps Correction Corp. of America (CCA), the prison’s private operator, rake in between $30 million and $50 million a year, according to the Northwest Washington, D.C.-based government watchdog, Think Progress.

Private prison operators have cumulatively reported profits of almost $200 million annually, according to a 2013 March edition of Bloomberg Businessweek.

The operators, like CCA, average between 42 and 66 percent commissions, which result in millions of dollars in revenue for the corporations, the Federal Communications Commission (FCC) reported in a 2012 filing.

“This is [the telephone rates] something that I’ve been advocating for years,” said Clyburn, 51. “It’s important that families have that contact with their incarcerated loved ones.”

Fudge, who heads the CBC, said it’s imperative that the costs are reduced.

“If (inmates) can communicate with their families, the odds are much better that they will not be repeat offenders,” said Fudge, 60, who asked the FCC to eliminate the per-call charges and establish a reasonable and permanent cap on telephone rates in all prisons.

The financial windfall that privately managed prison operators reap from telephone calls is only a small fraction of their overall income, which reaches into the billions.

The country has three types of lock-up facilities; local or county jail, state and federal prison. However, instead of operating specific prisons, many local, state and federal authorities have opted to contract with various private corporations to manage the facilities.

Since 2003, the number of private prisons has grown from five to 100 nationwide while prisoners in those facilities have increased from 2,000 to about 130,000.

The two largest private prison operators – CCA and The Geo Group (GEO) – report revenues approaching $3 billion annually, according to financial documents posted on the New York Stock Exchange, where they are publicly traded.

CCA is currently trading on the Big Board at $38.90 a share while stocks for GEO are listed at $38.81.

“The emergence of CCA as a leading prison profiteer is a result of a thoughtful promulgation of laws and policies on a federal and state level,” said Seema Sadanandan, of the American Civil Liberties Union (ACLU) of the Nation’s Capital in Northwest Washington, D.C.

Sadanandan, 31, organized a rally on May 7 at the Central Detention Facility on 19th Street in Southeast Washington, D.C., to protest the way CCA operates that jail and its other prison facilities.

“Through tactics like pushing for minimum occupancy guarantees in its prisons, CCA has both contributed to and benefited from the explosion in incarceration,” Sadanandan said.

Private prison operators are also making a fortune off of prisoners, who are primarily immigrants and African Americans. About half of all immigrants detained by federal officials are held in facilities run by private companies, at an average cost per inmate of approximately $200 a night. Many prisoners are paid about $2 a day for labor.

Ten years ago, more than 3,300 immigrants were sent to private prisons under two 10-year contracts the Federal Bureau of Prisons signed with CCA worth $760 million.

Now, more than 23,000 immigrants are housed in private prisons in the U.S. The incarceration rate for African Americans is about 3,074 per 100,000 residents, which is more than six times as high as the national average.

CCA raked in $162 million in net income in 2011, in large part because of federal contracts. The Geo Group saw its net income rise from $16.9 million in 2000 to $78.6 million in 2011. Two years ago, The Geo Group finalized a merger with Cornell Companies, Inc., that was valued by Wall Street at $730 million.

CCA pays its chief executive officer more than $3.2 million a year while The Geo Group’s top executive earns $3.4 million annually.

“Companies that house prisoners for profit have a perverse incentive to increase the prison population … there is no motivation to rehabilitate prisoners,” said Lisa Wade, a cultural critic and associate professor at Occidental College in Los Angeles, Calif.

State-run prisons are much more likely than privately-run prisons to offer programs to help prisoners, including psychological interventions, drug and alcohol counseling, and course work toward a college degree, said Wade, 38.

“What is good for private prisons, in other words, is what is bad for individuals, their families, their communities, and our country,” she said.

A 2011 report by the Justice Policy Institute in Northwest Washington, D.C., disclosed that private prison operators allegedly paid judges to sentence juveniles with minor offenses to disproportionately longer terms in their correctional facilities.

Two Pennsylvania judges were sentenced to prison in 2011 for illegally sending teenagers to jail in a scam that came to be known as, “Kids for Cash.”

Over a five year period, at least 5,000 teenagers appeared before Luzerne County, Pennsylvania, President Judge Mark Ciavarella and the county’s Senior Judge Michael Conahan.

The judges illegally sentenced many of them to prison in exchange for nearly $3 million in kickbacks, prosecutors said. Ciavarella, 58, ultimately was sentenced to 28 years in federal prison. Conahan, 56, received more than 17 years.

Prosecutors said the judges created the potential for an increased number of young offenders to be sent to juvenile detention facilities.

“Somebody is going to make more money by holding more kids, there is a pretty good predictable profit motive,” said criminal justice consultant Judith Greene, who heads a nonprofit group called Justice Strategies in New York.

In a 2010 Securities and Exchange Commission filing, CCA officials stated that, “The demand for our facilities and services could be adversely affected by leniency in conviction or parole standards and sentencing practices.”

Private prison operators, who spend a total of $45 million annually on lobbying lawmakers for tougher and longer sentences, should be carefully scrutinized by the government, ACLU officials said.

“Privatizing prisons may undermine cost effective sentencing reforms and increase recidivism rates,” said ACLU policy director, Shakyra Diaz. “Despite these well-documented concerns, private prison companies continue to promote policies that put money in their pockets and people behind bars,” Diaz said.


  1. very well written and interesting article. I learned a lot and will be more informed now when I speak to others about GEO since I am near their HQ

  2. Racial Injustice and Prison Population is ruining Our Families and Our Society in a Big Way…Black Men, Hispanic Men and Our Young,Black and Brown Youth are being Unfairly Targeted…There are many cases where Women are Pregnant and not receiving the Proper-Pre-Natal Care…As well as Men getting Sick and Dying in these Filthy Prisons…Something has to be done to Stop this Outrageous Injustice….Racial Injustice in North Carolina; the North Carolina Legislature repealed the State’s Racial Justice Act this week,and The Republican Governor,Pat McCory,is expected to sign the bill…But The State cannot erase the detailed and irrefutable proof of Ugly Racial Bias that led a State Trial Judge to Resentence Four Death-Row Inmates to Life Without Parole because of this Statute a Statistical Study by the Michigan State University College of Law,that showed Racial Bias in Removing Blacks from Juries in Death Penalty Cases in all but[4] of The State’s[100] counties and that Prosecutors were more than Twice as likely to Strike Qualified Blacks from a Jury as Members of other Races in the[20] year period from[ 1990 – 2010]…In the Second Trial, the Judge found that Words and Deeds of the Prosecutors showed Racial Bias in Jury Selection….Prosecutors in at least One Case used a’ Cheat Sheet” with Pretexts for Striking Black Jurors without Mentioning Race’…A prospective Black Juror with No Criminal Record was ‘Struck’ because she was said to’Live in a ‘Bad Area,” where a White Juror who had been a Drug Dealer was Picked in part because he”was a Fine Guy.” The number of Death Sentences issued in The State declined from[33] in[1993 – to- 1] so far This Year,and North Carolina has Executed No One since[2006]…The persistence of Racial Bias in Death Penalty Prosecutions makes Abolishing Capital Punishment even More Urgent.