Montpelier, Vermont

State House

25 January 2013

Testimony on H.28 (bill banning private prisons)

Christopher Petrella

Good afternoon Representative Wizowaty and other distinguished members of the Vermont

House Progressive Democratic Caucus. I truly appreciate your invitation and this opportunity to

offer testimony on H.28. I’d like to begin by saying that I unhesitatingly support H.28—a bill

whose passage would prohibit the transfer of Vermont inmates to a privately owned or

operated out-of-state correctional facility unless living conditions at that facility meet or exceed

those in Vermont. http://www.leg.state.vt.us/docs/2014/bills/Intro/H-028.pdf The success of

H.28, in my view, will be contingent on how well you’re able to frame policy discussions in your

own terms, that is, in terms un-inherited from the private prison industry. Historically, the

private prison industry has been expert in crafting policy discussions that consign us—its

critics—to a certain reactionary politics that the public finds distasteful.

We critics of “prison privatization” far too often undermine our own arguments by working

within policy parameters dictated to us by apologists of the industry. The time has come to flip

the script.

My chief intention today isn’t necessarily to insist that public prisons are better than private

prisons, but to demonstrate that the burden of proof for evaluating correctional services on the

basis of “efficiency” rests not with us but rather with advocates of privatization. The industry

has had over thirty years to demonstrate that it can provide better services more efficiently

than its public counterparts and yet to date there isn’t a single, independent, and

methodologically transparent national study that suggests it can. Nevertheless, the for-profit

prison industry insists that privatization—or extending the reach and influence of the “free

market”—will generate efficiencies as companies respond to market pressures.

In the early 1990’s Corrections Corporation of America (or CCA)—now the nation’s largest for-

profit corrections firm (and the firm with which Vermont presently contracts)—predicted that it

would operate around 20 percent of the U.S. corrections market by the year 2000.

http://www.privateci.org/ That today it barely operates 4 percent legitimately calls into

question the “market value” of its services. http://www.bjs.gov/content/pub/pdf/p11.pdf In

some senses the private corrections industry falls victim to its own performance metrics: its

relatively sluggish historical growth rate actually suggests that it responds inefficiently to

market pressures. This is precisely why large private prison companies spend millions of dollars

each year encouraging lawmakers to establish artificial markets for their services.

Unfortunately, much of the irony is lost on the public.

I mention these contradictions because they’re worth exploiting in political debate, particularly

as the country begins to lock its eyes on Vermont. I’ve gotten no less than fifty e-mails over the

last few days on the subject of H.28. The nation is curious and concerned and everything in

between. If this bill is enacted, Vermont will join a short list of states—three—that effectively

statutorily ban “private prisons.” http://www.mintpress.net/kids-for-cash-scandal-exposes-

more-corruption-in-private-prison-system/ Part of the politics of this process, I think, is

underscoring the reality that private prison companies have yet to prove their worth in the

market, in court, and as Dr. King might say, “in the court of public opinion.” This argument is

best made by demonstrating to Vermonters that prison privatization inherently compromises

the state D.O.C.s ability to meet its fundamental aims, that is, to show that CCA’s business

objectives stand at cross-purposes with the D.O.C.’s four-part strategic mission of 1) prioritizing

offender safety, 2) offender rehabilitation, 3) community safety, and 4) community involvement

and restoration. http://www.doc.state.vt.us/news-info/news-files/plan-1/view The imperative

to generate shareholder value intrinsically situates safety, rehabilitation, and community

building as ancillary concerns. Underscoring this hierarchy of values as often as possible is

paramount.

Many ask, “…but where’s the proof?” Perhaps you’re aware that CCA (and the GEO Group, for

that matter) is in the process of reclassifying itself with the IRS from a traditional “class-c”

corporation whose mission is “correctional solutions” to a Real Estate Investment Trust, or a

REIT. According to the Securities and Exchange Commission, a REIT is a company that owns -

and typically operates - income-producing real estate or real estate-related assets as its primary

business. To qualify as a REIT, a company must have the majority of its assets and income

tethered to real estate investment. A REIT distributes at least 90 percent of its taxable income

to shareholders annually in the form of dividends in exchange for a federal and state corporate

income tax rate of zero. That is, companies organized as REITs don’t pay corporate taxes.

http://truth-out.org/news/item/9499-how-americas-largest-private-prison-operator-plans-to-

beat-corporate-income-tax CCA’s quest for REIT a status designation shows that the company

primarily sees itself as a real estate firm that incidentally dabbles in corrections, not as an

agency whose primary objective is rehabilitation, safety, or community restoration. This

emerging REIT conversion narrative is chronically underreported but I believe it’s worth

highlighting in the context of H.28 deliberation.

As a short aside, the language of “real estate” here is particularly troubling in light of the fact

that people of color—specifically African Americans who were once legally reduced to chattel,

that is, to real estate—are over-represented in CCA’s facilities around the country.

http://thesocietypages.org/socimages/2013/01/25/race-rehabilitation-and-the-private-prison-

industry/

Though private prison companies like CCA and the GEO Group—the second largest firm—often

advertise themselves over and against the supposed inefficiencies of “bureaucratic, big

government” they heavily rely on contracts from “big government agencies” likes the Bureau of

Prisons, ICE, and USMS to expand their margins. Over 40 percent of both CCA

http://ir.correctionscorp.com/phoenix.zhtml?c=117983&p=irol-reportsannual and GEO Group’s

http://phx.corporate-ir.net/phoenix.zhtml?c=91331&p=irol-reportsannual revenue last year

originated in “big government,” taxpayer-funded contracts.

In debating ideas like cost-effectiveness, efficiency, safety, and rehabilitation it’s vitally

important that decision makers can access impartial and methodologically transparent

information about the real costs and benefits of privatization. I’d love nothing more than to

provide you with a national independent analysis of the performance of private and public

prisons in the categories of cost-effectiveness, recidivism, and transparency. Unfortunately, I

cannot. Why? Well, because they don’t exist. Why? Because it’s very difficult—nearly

impossible, I might add based on personal experience—to access information pertaining to

privatized corrections when they aren’t obligated to collect or reveal such data upon request.

Though the private prison industry routinely vaunts its record on measures of efficiency and

safety relative to public agencies, it nonetheless refuses to disclose the very information

required to substantiate its most basic claims of success. Given that private prison corporations

are not required to make their records public, it’s impossible to offer a full, national

quantitative comparison of public and private prisons housing similar types of offenders. And

this is key: “similar types of offenders.” This, for example, is precisely why I’m spearheaded a

national campaign aimed at urging Texas Congresswoman Sheila Jackson Lee to reintroduce the

Private Prison Information Act this Congressional session. If enacted, the bill would require that

private prison companies contracting with federal agencies comply with Freedom of

Information Act transparency requirements like their public counterparts. This is the first step

in supporting the type of data collection necessary to make accurate national public/private

comparisons. http://privateprisoninformationactof2013.blogspot.com/

If a company like CCA believes it’s more efficient than Vermont’s D.O.C., then why has it spent

over $8 million lobbying against the passage of the Private Prison Information Act since its

initial introduction in 2005? http://www.opensecrets.org/pacs/lookup2.php?strID=C00366468

There’s little evidence to suggest that taxpayers and lawmakers can access the type of data

necessary for evaluating the performance of private corrections firms in comparison to the

public sector. The fact that these reports are so difficult to obtain reveals a dangerous lack of

transparency and accountability among private prison companies that have and/or currently

contract with the state of Vermont. Such an analysis is long overdue given that the state has

invested millions of taxpayer dollars into this industry for over a decade.

As you know, behind only New Mexico, Hawai’i, and Montana, the state of Vermont now

houses the largest proportion of its inmates—28 percent—in prisons owned or operated by for-

profit corrections firms. http://www.nationofchange.org/truth-about-private-prison-contracts-

1348147617 Vermont, in fact, recently renewed its two-year, $24.9 million contract with CCA.

According to the terms of the agreement, CCA will house nearly 600 of Vermont’s youngest and

healthiest inmates in Kentucky and Arizona-based facilities from July 2011 to July 2013. It’s

difficult to accept the Vermont D.O.C.’s claim that out-of-state, private prisons cost $30,000 less

per inmate, per year, without asking follow-up questions.

http://www.doc.state.vt.us/about/reports I, for one, have been unable to access the

methodology on which the study is based. CCA has long been known for “cherry picking”

prisoners to house that are low cost, specifically excluding elderly prisoners, maximum-security

prisoners, death row prisoners, juveniles sentenced to adult prisons, female prisoners and,

more generally, those prisoners with chronic medical conditions. Each of these inmate

categories are more expensive to incarcerate, usually due to increased medical and security

costs. Inconsistent selection criteria make reasonable, empirical cost comparisons

extraordinarily difficult.

Vermont actually acknowledged this fact in a report entitled Plan to Reduce Correctional Costs

and Achieve Savings for Reinvestment presented to the Joint Correction Oversight Committee

on 12 December 2007. Page 49 of the report reads: “The criteria for inmates accepted for

housing at CCA are not likely to change. The CCA facilities do not accept seriously physically or

mentally ill offenders, or offenders whose behavior is exceptionally disruptive or who cannot

conform to rules. In many of CCA’s facilities, the classification system is influenced by host state

departments of correction, and has increased levels of criteria for exclusion.”

http://www.doc.state.vt.us/news-info/news-files/plan-1/view

However, because state prison systems must incarcerate all such offenders, the per-diem cost

for public prisons is skewed upwards while the per diem rate for private prisons is kept

artificially low. Whereas publicly chartered D.O.C.s are responsible for ensuring the safety and

well-being of every type of prisoner, CCA simply circumvents such obligations by requiring the

states with which it contracts to retain the least compliant, and, therefore, the most financially

burdensome individuals. Private prison firms essentially shift such risk back to state D.O.C.s and

taxpayers. How efficient is a privatized system of corrections that willfully omits inmates for

whom medical care—especially mental health care—will be most costly? Effectively requiring

state departments of corrections to provide reasonable mental health care to vulnerable

populations represents a significant externality that private prisons regularly refuse to absorb.

Not only is contractually pre-selecting inmates worthy of mental health care services in

privatized facilities morally opprobrious, but it’s a tacit admission that arguments of efficiency

advanced by the for-profit corrections industry fail to account for externalities assumed by the

public. Drawing equal linkages between unequal circumstances is an exercise in illogic.

Though current national comparative studies are non-existent as a result of the current FOIA

exemption enjoyed by private prison companies, a number of state-by-state studies do exist.

This is because it’s sometimes possible to circumvent FOIA exemptions by requesting

information through various state public records acts. To this end, studies published by state

D.O.C.s in Kentucky, Hawai’i, Ohio, Tennessee, and Oklahoma each found that private prisons

are “no more expensive than public facilities in those states on the basis of the same evaluative

criteria. And similar efficiency studies in Arizona and Florida actually found private prisons to be

more expensive than publicly operated facilities.

http://www.azjournal.com/2012/01/04/corrections-evaluates-both-private-and-public-prisons/

When the New York Times asked CCA spokesman Steve Owen back in 2011 to comment on

Arizona’s landmark study he said, (and this is a direct quote), ““There is a mixed bag of research

out there. … It’s not as black and white and cut and dried as we would like.”

www.nytimes.com/2011/05/19/us/19prisons.html?pagewanted=all

Again, the burden of proof for contract correctional services rests not with us, but with the

private prison industry.

http://afsc.org/sites/afsc.civicactions.net/files/documents/AFSC_Arizona_Prison_Report.pdf

Beyond cost-effectiveness, how do private prisons fare on the sort of scales of comparison

articulated by the Vermont D.O.C. like safety, rehabilitation, and community involvement? I’ll

very briefly address each criterion.

Let’s begin with offender safety: The only national comparative research on offender safety is

from a 2001 Bureau of Justice Assistance study which found a significantly higher rate of

prisoner-on-prisoner assault in private prisons (66% more) than in public prisons. The same

study suggested that inmate-on-staff assaults were 49% higher in the private prisons.

http://afsc.org/sites/afsc.civicactions.net/files/documents/AFSC_Arizona_Prison_Report.pdf In

2011 the state of Tennessee found that “incident rates” (assaults, escapes, etc.) were

consistently higher at the state’s three private prisons, all operated by CCA. This was in spite of

the fact that the state prisons housed higher security prisoners. Also in 2011, an Associated

Press report found that one CCA facility in Idaho had more assaults than all other Idaho state

prisons combined.

http://afsc.org/sites/afsc.civicactions.net/files/documents/AFSC_Arizona_Prison_Report.pdf

This is often attributable to staffing challenges. Because private corrections companies achieve

their profits by winning low-bid contracts, they generally preserve their bottom line by making

significant cuts in staff pay and training. Private prison companies consistently pay staff less

than states or the federal government. They often offer minimal staff training, which can leave

employees frustrated and unprepared to handle crises, thereby compromising inmate, staff,

and community safety.

As a result, privately operated facilities frequently have very high employee turnover rates and

are chronically understaffed. The combination of these factors not only produces a challenging

work environment, it can also make these facilities genuinely unsafe for staff, inmates, and the

community. In Florida, which, unlike Vermont, tracks staff turnover rates at private prisons,

GEO and CCA had a 34 percent turnover last year, compared with 12 percent in Florida state

prisons. The Texas Senate Criminal Justice Committee's interim report on private prisons in

2009 found that the seven private prisons contracting with the Texas Department of Criminal

Justice had a 90 percent turnover rate, compared with the 24 percent rate at state-operated

prisons.

http://afsc.org/sites/afsc.civicactions.net/files/documents/AFSC_Arizona_Prison_Report.pdf

The report stated: "The wages and benefits paid to employees of private contractors are

generally lower than that paid to employees of state-operated facilities... Correctional officer

salaries in the private prisons vary among facilities, with the highest peaking at slightly more

than $24,000 annually."

http://afsc.org/sites/afsc.civicactions.net/files/documents/AFSC_Arizona_Prison_Report.pdf

Anyone with an appreciation for economics will acknowledge that a high employee turnover

rate indicates a serious management problem. In the case of a prison, the impact of these

management problems can extend far beyond a few disgruntled employees. Corrections is a

field in which good training and solid experience can literally mean the difference between life

and death—for the employee, inmates or even members of the surrounding community.

Let’s move on to rehabilitation. The most common measurement of the efficacy of a prison is

its ability to reduce recidivism, that is, the likelihood that a recently released offender will

return to prison in a given time period, usually three years. Unfortunately, private prison

corporations flatly refuse to measure their recidivism rates, yet it’s critical that the people of

Vermont and elected representatives have solid data on which to base important decisions

about the future of your state’s prisons. Over thirty non-partisan university studies since 2000

have found that access to and participation in educational programming reduces recidivism

rates by 6-30 percent depending on how far projections are extended.

http://www.wsipp.wa.gov/

Unfortunately, around the same time a BJS publication demonstrated that significantly fewer

educational opportunities are available to inmates in private prisons relative to their public

counterparts. Whereas 79.6 percent of state facilities offered basic adult education in 2000,

only 56.4 percent of private facilities offered equivalent programming during the same year. In

contrast, public departments of corrections, taken in aggregate, have enjoyed a consistent

downtick in their recidivism rate since 1999.

http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/sentencing_and_correcti

ons/State_Recidivism_Revolving_Door_America_Prisons%20.pdf

And finally, how do private prisons fare in the area of community safety and involvement? Well,

shipping prisoners out of state (regardless of the type of prison in which they’re contained)

inherently compromises the DOC’s objective of meeting its own articulated community

involvement and restoration standards. In early 2012 the Center on Juvenile and Criminal

Justice published a report entitled Collateral Consequences of Interstate Transfer of Prisoners

finding that regular family visitation reduces recidivism by up to 25 percent, and thus improves

long-term public safety. http://www.cjcj.org/files/Out_of_state_transfers.pdf,

http://www.ipcaworldwide.org/resources/Articles/ARTICLE_BlessedBeSocialTieBinds.pdf

To be fair, CCA combats much of the non-partisan research I’ve cited by publicizing two high

profile studies which both conclude that private prisons are more cost effective than their

public counterparts. The first is a 2010 study conducted by the Reason Foundation, a libertarian

think-tank strongly in favor of privatization of government services, including prison

privatization. http://reason.org/files/private_prisons_california_policy_summary.pdf Politics

aside, the Reason Foundation has received funding from private prison companies since 1994.

And most recently, according to the Foundation’s 2009 “Carrying the Torch of Freedom” list of

donors, the GEO Group was listed as a Platinum Level supporter while CCA was listed at the

Gold Level. Reason Foundation studies are not peer-reviewed, and the organization doesn’t

disclose in its research that it accepts money from private prison companies.

http://privateci.org/private_pics/Reason2009.pdf CCA also regularly cites a December 2007

Vanderbilt University study titled Do Government Agencies Respond to Market Pressures?:

Evidence from Private Prisons. The study, however, was jointly funded by CCA and the

Association for Private Correctional and Treatment Organizations (APTCTO), a now-defunct

trade group for private prison companies.

https://www.prisonlegalnews.org/%28S%28ou4tagii3nnjzx550fyx0p45%29%29/displayListServ.

aspx?listid=5320&AspxAutoDetectCookieSupport=1

Unsurprisingly, CCA hasn’t publicized its very latest audit report conducted by Ohio’s Bureau of

Internal Audits and Standards Compliance from last September. The team “evaluated

compliance levels with audit standards by reviewing both prepared accreditation files and

observing institution operations throughout the facility.” According to the review, CCA’s Lake

Erie facility in Ohio achieved a compliance level of 66.7 percent on Ohio’s state-based

corrections guidelines. http://www.citybeat.com/cincinnati/blog-4028-

private_prison_violates_state_rules.html In scholastic terms, a 66.7 translates to a “D.” And a

“D” indicates deficiency.

Ohio’s audit report serves as a distillation of this entire discussion because it unassailably

underscores the basic structural flaw endemic to private corrections. A private firm whose

principal aim is market capitalization inherently transforms the fundamental mission of

corrections from public safety and rehabilitation to profit. Widespread procedural violations,

chronic employee turnover, few educational opportunities, dubious inmate selection criteria,

and medical negligence demonstrate CCA’s continued inability to ensure the welfare and safety

of the prisoners they serve, and by consequence, the public on whose funding the company

exclusively relies. I know you’ll make the best choice for Vermont and I support your efforts

entirely and without reservation. Thank you.