private prisons - home - followthemoney.org...margins higher than most private industries. in 2014,...
TRANSCRIPT
Private Prisons
Hiding Behind a Veil of Democracy
Bianca Tylek
POPULAR CRIMINALISM PROFESSOR ANDREW CRESPO
MAY 7 2015
Contents Introduction 1
Part I The Emergence of For-Profit Prisons 4
Part II Threatening Growth Strategies 7
Maximizing Revenue 7
Minimizing Expenses 10
Part III Undermining Democracy 12
Legislative Lobbying 13
Campaign Financing 14
Conclusion 16
1
Introduction With the highest incarceration rate in the world
1 the United States is facing incarceration levels
that present substantial ethical and fiscal challenges Many Americans are losing their liberty with limited
benefit to public safety at a cost that constrained government budgets cannot sustain Consequently
democrats and republicans are now teaming up to tackle the issue of mass incarceration forming unlikely
partnerships such as the Coalition for Public Safety which brings together adversaries like the Koch
Brothers and the American Civil Liberties Union2 However there is one interest group enjoying a huge
windfall from the American incarceration crisis and sparing no expense to protect and expand it the
private prison industry
Individual features of prison operations have been privatized for quite some time A host of for-
profit companies provide services such as telecommunications and products such as commissary items
to correctional facilities However in the past few decades the comprehensive management of these
facilities has also emerged as a privatization target In fact given the capitalist underpinnings of
American culture the exponential growth of incarceration stemming from the War on Drugs announced
in 1971 and subsequent ldquotough on crimerdquo political regimes did everything short of draft an invitation to
for-profit prison owners and operators
Today more than 8 of the 16 million people serving time in federal or state prisons are held in
private facilities3 generating considerable income for half a dozen private prison companies In 2014 the
two leading private prison companies Corrections Corporation of America (CCA) and The GEO Group
(GEO) reported combined revenues of $28 billion4 These revenues translated to $22 million in
1 International Centre for Prison Studies Highest to Lowest - Prison Population Rate The US has the highest incarceration rate
for any country with a population over 100000 Seychelles is the only country with an incarceration rate higher than that of the
United States but its population is less than 90000 2 Carl Hulse ldquoUnlikely Cause Unites the Left and the Right Justice Reformrdquo The New York Times February 18 2015 3 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 1 14 4 Corrections Corporation of America 2014 Annual Report Form 10-K F-4 The GEO Group Inc 2014 Annual Report Form
10-K 62 Includes only revenue from The GEO Grouprsquos US Corrections amp Detention business unit
2
executive compensation representing an 18 increase from the previous year5 But insiders are not the
only beneficiaries For these publicly held companies these revenues have also produced millions in
shareholder dividends6 Yet many of these shareholders may not even know they have an ownership
stake in a private prison company7 Vanguard and Fidelity are the nationrsquos top 401(k) providers and also
the combined owners of 19 of CCA and 11 of GEO8 One index fund managed by Vanguard alone
owns nearly 8 of both CCA and GEO shares9
Private prison companies present such an attractive financial investment because they enjoy profit
margins higher than most private industries In 2014 CCA had a net profit margin nearly double that of
the average private company in the United States10
Even more impressively both CCA and GEO
reported operating margins north of 30 for the facilities they owned and managed11
margins higher than
that reported by Apple in 201412
And indeed the investments panned out the way investors would have
liked with CCArsquos stock price growing 74 and GEOrsquos growing 82 over the past five years13
Together CCA and GEO account for approximately 75 of the $74 billion private prison
market14
Other private prison companies include Management amp Training Corporation LaSalle
Southwest Corrections Community Education Centers and Emerald Companies Figure 1 provides more
detail on the scale clientele and geographic presence of private prison companies in America
5 Morningstar Corrections Corporation of America Chart Morningstar The GEO Group Chart 6 Corrections Corporation of America 2014 Annual Report Form 10-K F-5 The GEO Group Inc 2014 Annual Report Form
10-K 94 7 Ray Downs ldquoWhorsquos Getting Rich off the Prison-Industrial Complexrdquo Vice May 17 2013 8 Morningstar Corrections Corporation of America Ownership Major Owners Morningstar The GEO Group Ownership
Major Owners 9 Id 10 Corrections Corporation of America 2014 Annual Report Form 10-K F-4 Sageworks The Private Company Report
(Raleigh NC Sageworks March 30 2015) 1 11 Corrections Corporation of America 2014 Annual Report Form 10-K 59 Refers only to the operating margin of The GEO
Grouprsquos US Corrections amp Detention business unit 12 Apple Inc 2014 Annual Report Form 10-K 45 13 Morningstar Corrections Corporation of America Insiders Executive Compensation Morningstar The GEO Group Insiders
Executive Compensation 14 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015
3
Figure 1 Leading Private Prison Owners and Operators
Source Correctional Corporation of America Locations The GEO Group Inc 2014 Annual Report Form 10-K 13-16 The
GEO Group Inc Locations MTC Management amp Training Corporation Corrections Locations LaSalle Corrections Our
Locations Community Education Centers Facilities CEC Corrections Emerald Companies Company Locations
This paper will discuss the relationship between private prison companies and criminal law and
policy Part I will offer a brief overview of the modern history of for-profit prisons Part II will provide
more detail on the profit model of private prison companies and their accompanying growth strategies
Part III will then discuss the ways in which these strategies undermine democratic processes within the
criminal justice sphere Throughout the paper we will also address the leading alternative explanation for
the correlation between high incarceration rates and the presence of for-profit prisonsmdashthat private
prisons offer a less expensive solution to incarceration for budget constrained states
15 Refers only to The GEO Grouprsquos US Corrections amp Detention business unit and includes facilities recently acquired from
LSC Corrections Services 16 Includes LaSalle Corrections Community Education Centers and Emerald Companies 17 Does not include leased out or non-correctional facilities
Corrections
Corporation
of America
The GEO
Group15
Management
amp Training
Corporation
Other Owners
Operators16
Facilities17
() 59 61 22 29
LeasedOwned amp Managed 47 37 -- --
Managed Only 12 24 -- --
Beds () 85297 69697 26425 19129
Contract Agency
Immigration 12 12 2 7
Federal 17 18 3 12
StateLocal 34 34 17 21
Region
Northeast 2 2 0 1
Midwest 5 3 1 1
West 9 18 3 1
Southeast 19 16 5 11
Southwest 24 22 13 15
4
Part I The Emergence of For-Profit Prisons The modern age of prison privatization began in 1983 after the prison population grew more than
10 in consecutive years18
with the incorporation of CCA19
The company received its first federal
contract in Texas later that year and its first state contract in Tennessee the following year20
In 1984
CCA also opened the very first privately owned prison the Houston Processing Center in Texas21
In the
same year Wackenhut Corrections Corporation (WCC) was formed under the parent company of The
Wackenhut Corporation22
Just two years later in 1986 CCA leaped into an initial public offering on the
NASDAQ (WCC would follow suit in 1994)23
The following year WCC was awarded its first contract
over the Aurora Processing Center in Colorado24
Over the next five years these private prison conglomerates continued to expand operations while
a number of smaller private prison companies also emerged presenting an early opportunity for industry
consolidation In just 1995 CCA acquired TransCor America Concept and Corrections Partners25
In
1998 CCA acquired the third largest private prison company at the time US Corrections Corporation
for $10 million26
Years later in 2005 WCC would change its name to The GEO Group and embark on a
similar acquisition strategy27
Between 2005 and 2010 GEO acquired Correctional Services Corporation
CentraCore Properties Trust and Cornell Companies28
In 2014 GEO also acquired LSC Corrections
Services29
18 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 1986 (Washington DC
Government Printing Office May 1987) 1 19 Correctional Corporation of America About Us Who We Are Our History 20 Correctional Corporation of America About Us Who We Are Our History The Sentencing Project Prison Privatization and
the Use of Incarceration (Washington DC The Sentencing Project 2004) 1 21 Correctional Corporation of America About Us Who We Are Our History 22 The GEO Group Inc About Us History 23 Correctional Corporation of America About Us Who We Are Our History The GEO Group Inc About Us History 24 The GEO Group Inc About Us History 25 Correctional Corporation of America About Us Who We Are Our History 26 Corrections Corporation of America Corrections Corporation of America and CCA Prison Realty Trust to Merge In $4 Billion
Transaction Companies Acquire US Corrections Corporation [Press Release] April 20 1998 27 The GEO Group Inc About Us History 28 Id 29 The GEO Group The GEO Group Announces Acquisition of Eight Correctional and Detention Facilities Totaling More Than
6500 Beds [Press Release] January 26 2015
5
Throughout the maturation of the private prison industry the number of people incarcerated grew
260 from 437248 in 1983 to 1574741 in 201330
Still the number of prisoners held in for-profit
prisons grew at a rate that significantly outpaced the already dramatic growth rate of incarceration more
generally31
By 2013 there were 133044 prisoners or 8 of the total prison population housed in for-
profit prisons32
Though the majority of these prisoners are state prisoners for-profit prisons account for a
larger segment of the federal prison population than the state prison population33
In fact federal agencies
make up more than 40 of CCArsquos client base34
The US Marshals Service (USMS) accounts for 17
and the Federal Bureau of Prisons (BOP) and Immigration and Customs Enforcement (ICE) each account
for another 1335
ICE is also GEOrsquos largest client36
Thus not surprisingly
there is a cluster of for-profit
prisons in the states along the
Mexican-American border Texas
New Mexico Arizona and
California However with more
than 40 of for-profit prisons
located in the southwest and
another 30 in the southeast37
the prevalence of immigration detention cannot be the only factor driving private prison companies to
concentrate their operations in the south Southern states also offer the highest incarceration rates in the
30 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 1986 (Washington DC
Government Printing Office May 1987) 1 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics
Prisoners in 2013 by E Ann Carson (Washington DC Government Printing Office September 2014) 2 31 American Civil Liberties Union Banking on Bondage Private Prisons and Mass Incarceration (New York NY American
Civil Liberties Union November 2011) 5 32 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 33 Id 34 Corrections Corporation of America 2014 Annual Report Form 10-K 9 35 Id 36 Aviva Shen ldquoPrivate Prisons Spend $45 Million On Lobbying Rake In $51 Billion For Immigrant Detention Alonerdquo
ThinkProgress August 3 2012 37 See Figure 1
Figure 2 Regional State Prison Incarceration Rates
Source Peter Wagner ldquoTracking State Prison Growth in 50 Statesrdquo Prison
Policy Initiative May 28 2014
6
nation and a conservative political climate that has endorsed the ldquotough on crimerdquo policies that have
allowed them to persist over the years (see Figure 2) Furthermore their overwhelming republican
governments favor private sector expansion thus encouraging private prison companies to directly exploit
these ballooned incarceration rates Figure 3 provides more detail on the geographic concentration of four
of the leading private prison companies
Figure 3 Geographic Landscape of Private Prison Beds
Source US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann
Carson (Washington DC Government Printing Office September 2014) 7 Community Education Centers Facilities CEC
Corrections Correctional Corporation of America Locations MTC Management amp Training Corporation Corrections
Locations The GEO Group Inc 2014 Annual Report Form 10-K 13-16
While it is no coincidence that the geographic expansion of for-profit prisons has directly
correlated with regional incarceration rates it is difficult to determine whether private prison companies
are simply capitalizing on favorable conditions or driving them Surely private prison companies cannot
7
be blamed for creating the current incarceration crisis that began in the 1970s prior to their emergence or
even the conservative ideologies that contributed to their later success in certain regions However these
private prison companies have taken proactive steps to reinforce the conditions favorable to their success
and thus have fashioned a vicious feedback loop that encourages incarceration
Part II Threatening Growth Strategies The revenue model of private prison owners and operators depends on a per diem per prisoner
pay structure With per diem rates limited by existing operational costs at public facilities the profitability
of for-profit prisons relies on increasing man-days38
to maximize revenue and lowering operational costs
to minimize expenses The former approach promotes incarceration with no upward boundary while the
latter threatens prison conditions with at least some downward limit In this section we will discuss the
benefits and limits of these growth strategies and their implications on incarceration rates
Maximizing Revenue With a per diem revenue model increasing compensated man-days is critically important to the
profit growth of private prison companies These companies can increase their man-days in number of
ways First they can increase their companyrsquos market share of the existing private prison market through
mergers and acquisitions Second they can increase the private prison market share of the broader prison
market by increasing the number of privately contracted beds andor their occupancy rates Third they
can increase the overall utilization of prisons by increasing incarceration more generally In this section
we will touch on each of these strategies in more detail
Corporate Expansion Private prison companies can increase their share of the existing private
prison market by acquiring existing private prisons from competitors GEO took this approach when they
recently bought out LSC Corrections Services for approximately $312 million39
The acquisition added
38 Man-days are calculated by multiplying the number of prisoners by the number of days each serves 39 The GEO Group The GEO Group Announces Acquisition of Eight Correctional and Detention Facilities Totaling More Than
6500 Beds [Press Release] January 26 2015
8
eight facilities or 6500 beds to the companyrsquos portfolio40
Though both CCA and GEO have expanded
their market shares in this way in the past there are two rather substantial limitations to this growth
strategy current levels of privatization and the small number of players in the market In fact by 2007
there were only six players left41
Thus this is unlikely to be the dominant growth strategy for these
private prison companies going forward
Prison Privatization Private prison companies can increase their man-days by increasing the
market share of for-profit prisons in corrections more broadly This approach is dependent on the
industryrsquos ability to gain government and public support for the privatization of corrections While private
prison companies have noted the opposition of certain groups such as labor unions and criminal justice
reform organizations42
they have nevertheless seen an expansion in their populations In fact the number
of prisoners held in for-profit prisons increased more than 1600 between 1990 and 200943
While contracting for additional beds private prison companies also make an effort to include
occupancy guarantees in their management contracts Sixty-five percent of management contracts have
such guarantee clauses44
These clauses typically promise occupancy rates between 80 and 100 and
offer to pay for unused prison beds below the delineated guarantee45
For example in 2012 CCA secured
a management contract from the Arizona Department of Corrections to incarcerate 1000 prisoners at the
Red Rock Correctional Center46
The contract included an occupancy guarantee of 90 for the contracted
beds47
As a result of such contracts in 2014 CCA and GEO enjoyed occupancy rates as high as 84 and
96 respectively48
This growth strategy holds a lot of promise since more than 90 of prisoners are still
40 Id 41 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 16 42 Corrections Corporation of America 2014 Annual Report Form 10-K 26 43 American Civil Liberties Union Banking on Bondage Private Prisons and Mass Incarceration (New York NY American
Civil Liberties Union November 2011) 5 44 In the Public Interest Criminal How Lockup Quotas and ldquoLow-Crime Taxesrdquo Guarantee Profits for Private Prison
Corporations (Washington DC In the Public Interest September 2013) 6 45 Id at 3-6 46 Corrections Corporation of America 2014 Annual Report Form 10-K F-20 47 Id 48 Corrections Corporation of America 2014 Annual Report Form 10-K 6 The GEO Group Inc 2014 Annual Report Form
10-K 54 For Corrections Corporation of American data includes idle facilities but excludes facilities marked for
discontinuation For The GEO Group data excludes idle facilities
9
held in public prisons49
However there is still an absolute ceiling set by the number of people
incarcerated and a lower practical ceiling set by correctional systems and their policies about what types
of populations can be housed in for-profit prisons
Prison Utilization Private prisons are relied upon to relieve strains on government budgets and
concerns of overcrowding50
Accordingly private prison companies fair best when incarceration is high
enough to create such burdens Thus these companies can grow their man-days by increasing the overall
number of people incarcerated This approach undoubtedly raises the greatest number of ethical issues
but it also the only uncapped growth strategy And not only is the strategy recognized by private prison
companies but efforts made to reduce incarceration are viewed as threats to profitability In fact both
CCA and GEO cite leniency in conviction and sentencing decriminalization of drug and immigration
offenses and even reductions in crime as business risks In its 2014 Annual Report CCA states
growth depends on a number of factors we cannot control including crime rates and
sentencing patterns in various jurisdictions The demand for our facilities and services could
be adversely affected by the relaxation of enforcement efforts leniency in conviction or parole
standards and sentencing practices or through the decriminalization of certain activities that are
currently proscribed by criminal laws For instance any changes with respect to drugs and
controlled substances or illegal immigration could affect the number of persons arrested
convicted and sentenced thereby potentially reducing demand for correctional facilities to house
them Legislation has also been proposed in numerous jurisdictions that could lower minimum
sentences for some non-violent crimes and 25 make more inmates eligible for early release based
on good behavior Also sentencing alternatives under consideration could put some offenders on
probation with electronic monitoring who would otherwise be incarcerated Similarly reductions
in crime rates or resources dedicated to prevent and enforce crime could lead to reductions in
arrests convictions and sentences requiring incarceration at correctional facilities51
Similarly in its 2014 Annual Report GEO states
The demand for our correctional and detention facilities and services could be adversely
affected by changes in existing criminal or immigration laws crime rates in jurisdictions in which
we operate the relaxation of criminal or immigration enforcement efforts leniency in conviction
sentencing or deportation practices and the decriminalization of certain activities that are
currently proscribed by criminal laws or the loosening of immigration laws For example any
changes with respect to the decriminalization of drugs and controlled substances could affect the
number of persons arrested convicted sentenced and incarcerated thereby potentially reducing
49 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 50 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 3 51 Corrections Corporation of America 2014 Annual Report Form 10-K 27-28
10
demand for correctional facilities to house them Similarly reductions in crime rates could lead to
reductions in arrests convictions and sentences requiring incarceration at correctional facilities52
In summary the profitability of private prison companies comes at the expense of public safety and
personal liberty It may not be surprising then that the recidivism rates of privately held prisons are higher
than those of publicly run prisons53
After all it is within the best interest of private prison companies to
have a revolving door at their facilities
Minimizing Expenses Another way private prison companies seek to increase profitability is by reducing their
operational expensesmdashthe less they spend the more they pocket With approximately 65-70 of prison
expenditures going to staff54
private prison companies save the most in operational costs by avoiding
unionized labor and the associated personnel services55
Consequently the correctional staff at for-profit
prisons tend to be inadequately trained and poorly paid56
Not surprisingly private prisons have been
condemned for higher rates of violence and abuse57
Private prisons also cut costs related to food
healthcare and programs58
While lowering these expenses may not directly influence incarceration rates
it may have an indirect impact by worsening prison conditions and thus putting prisoners in poorer mental
and physical health for release Indeed as already noted studies have showed that recidivism rates are
higher for private prisons than public prisons59
Interestingly financial efficiency is also the primary alternative explanation for the expansion of
for-profit prisons in highly incarcerative states If true the interests of the public and private sectors
would in some way be aligned With lower operational costs private prison companies can still promise
savings for federal and state systems while charging profit premiums There is indeed some truth to these
52 The GEO Group Inc 2014 Annual Report Form 10-K 36 53 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015 54 US Department of Justice Office of Justice Programs Bureau of Justice Assistance Emerging Issues on Privatized Prisons
by James Austin and Garry Coventry (Washington DC Government Printing Office February 2001) 16 55 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 23-24 56 Brendan Fischer ldquoViolence Abuse and Death at For-Profit Prisons A GEO Group Rap Sheetrdquo The Center for Media and
Democracyrsquos PR Watch September 26 2013 57 US Department of Justice Office of Justice Programs Bureau of Justice Assistance Emerging Issues on Privatized Prisons
by James Austin and Garry Coventry (Washington DC Government Printing Office February 2001) 36-37 48 58 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015 59 Id
11
claims with short-run savings averaging about 19 and long-run savings averaging about 2960
Some
states even require private prison companies to offer a specified discount to public per-diem costs For
example Texas Kentucky and Mississippi have contract stipulations that require a 10 savings61
Moreover a recent study found that the cost savings of for-profit prisons is often underestimated because
they fail to account for savings on personnel services such as pensions and healthcare for retirees which
may not be attributed directly to state correctional departments62
Finally with operating margins as high
as 30 and per diem costs still lower than those in public prisons63
some might consider for-profit
prisons much more financially efficient However comparing private and public operational costs is not
as straight forward as private prison companies might like the public to believe There are in fact hidden
costs that private prison companies either unfairly avoid or perhaps even create for public prisons
First for-profit prisons can cherry-pick the most desirable or profitable prisoners from the
general prison population Generally this means that for-profit prisons house healthy minimum security
prisoners who are cheaper to incarcerate States are left to run maximum security prisons that require
ldquomore intensive security systems and proceduresrdquo64
Public prisons also typically house specialized
populations such as sex offenders that are more expensive due to higher treatment and administrative
needs65
Finally public prisons also tend to be responsible for prisoners with moderate to high mental or
physical healthcare needs These population differences allow private prison companies to demonstrate
artificial savings for states
60 Id Short-run costs are those associated with the day-to-day operation of prison facilities Long-run costs include short-run
costs plus the capital expenditures associated with maintaining and building prisons 61 Id 62 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 3 63 Association of State Correctional Administrators Inmate Cost Per Day Follow Up Survey (September 2011) 64 Harris Kenny and Leonard Gilroy The Challenge of Comparing Public and Private Correctional Costs (Reason Foundation
December 2013) 4-5 65 Id
12
Second as already mentioned studies have shown that for-profit prisons have marginally higher
rates of recidivism than their public counterparts66
Ethical concerns aside higher recidivism rates burden
states with additional incarceration expenses in the future Though a differential of 3-4 may seem
negligible a difference of even one
percentage point can amount to
considerable costs particularly in states
with high incarceration costs For
example in New York where the
annual cost of incarcerating one person
is more than $60000 recidivism comes
at a very high price Figure 4 provides
further detail on the annual costs of
incarceration by state
In their efforts to maximize revenues and minimize expenses private prison companies rely
heavily on growth strategies that promote incarceration Given the obvious ethical implications private
prison companies are less than public about their expansion intentions Consequently they employ
growth tactics that manipulate political elections and criminal lawmaking weakening the influence of
popular democracy on criminal law and policy
Part III Undermining Democracy With most private prison contracts executed by federal state and local policymakers the for-
profit prison industry relies heavily on political relationships Accordingly the industry has a dual-
pronged political strategy that undermines democratic legitimacy in its dependence on legislative
lobbying and campaign financing
66 Spivak Andrew L and Susan F Sharp ldquoInmate Recidivism As a Measure of Private Prison Performancerdquo Crime amp
Delinquency Vol 54 (Washington DC SAGE Publications July 2008) 482-508
Figure 4 Annual Cost of Incarceration per Prisoner
Source Theirry Godard ldquoThe Economics of the American Prison Systemrdquo
SmartAsset January 23 2015
13
Legislative Lobbying Despite denying lobbying involvement in the past ten years the three leading private prison
operators have spent over $45 million on lobbying67
According to the companyrsquos own literature CCA
has an explicit policy prohibiting it from ldquoengaging in lobbying or advocacy efforts that would influence
enforcement efforts parole standards criminal laws and sentencing policiesrdquo68
Yet over the past decade
CCA like its competitors has spent more than $900000 annually on lobbying69
In fact not only do
private prison operators utilize the services of lobbying firms they also employ their own in-house
lobbyists
Since 2002 alone CCA has employed nearly 400 lobbyists across 30 states70
In 2014 the
company had 36 active lobbyists in 10 states focusing heavily on Florida Vermont Tennessee
California Pennsylvania Kentucky and Minnesota71
Over the same time frame GEO has employed
more than 200 lobbyists across 11 states focusing heavily on Florida California Texas Pennsylvania
and Virginia72
In 2014 the company had 15 active lobbyists across 5 states73
Attention to these specific states has been a successful strategy play for private prison operators
Aside from being the home to the headquarters of GEO Florida also has the second largest private prison
population and the market share of these for-profit prisons is only increasing74
Between 2012 and 2013
the private prison population in Florida grew 1 while the private prison population across all states
decreased 575
Lobbying centered on California has also produced strong results With the second
largest prison population in the country and a judicial order to remedy overcrowding76
California has
67 Aviva Shen ldquoPrivate Prisons Spend $45 Million On Lobbying Rake In $51 Billion For Immigrant Detention Alonerdquo
ThinkProgress August 3 2012 68 Corrections Corporation of America 2014 Annual Report Form 10-K 28 69 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 22 70 National Institute on Money in State Politics Corrections Corporation of America April 29 2015 71 Id 72 National Institute on Money in State Politics GEO Group April 29 2015 73 Id 74 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 75 Id 76 Id at 5
14
largely embraced private prisons Accordingly between 2012 and 2013 the private prison population in
California grew 23377
Both CCA and GEO are private sector members of American Legislative Exchange Council
(ALEC) a nonpartisan organization aimed at advancing ldquolimited government free markets and
federalism at the state levelrdquo78
The organization utilizes a public-private partnership structure to bring
together state legislators members of the private sector and the general public to draft and introduce
model legislation ALEC has played a role in the passing of mandatory minimum three strikes and truth-
in-sentencing laws all of which have contributed to the rapid growth of incarceration since the 1970s79
Unfortunately further detail about the
lobbying efforts of private prison
operators is lacking since lobbyists are
not required to report the direction in
which they lobbied on any particular
piece of legislation80
Campaign Financing Since 1990 the private prison
operators have made nearly $15 million in
political contributions at the state and
local level81
These contributions have
seen a dramatic uptick in recent years
77 Id at 14 78 American Legislative Exchange Council About Us 79 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 29 80 Id at 21 81 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
$2650346
$-
$500000
$1000000
$1500000
$2000000
$2500000
$3000000
Figure 5 State and Local Political Contributions of
Private Prison Companies by Year
Source National Institute on Money in State Politics Correctional
facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
15
with 2014 representing the highest amount yet at $27 million82
CCA and GEO along with their
acquisitions have accounted for 72 of these political contributions over the years83
The two companies
also made combined political contributions of nearly $1 million at the federal level since just 201084
Moreover these company-specific figures under estimate their political influence because they fail to
capture the individual political contributions of the companiesrsquo executive leadership and board of
directors In fact the Chief Executive Officer of GEO George Zoley and one of the founding partners of
CCA Doctor Crants have each made approximately $90000 in political contributions85
Approximately half of all state and local political contributions are made to party committees the
largest beneficiary of which is the Florida Republican Party which has received more than $4 million86
Another substantial proportion of
these contributions are made
directly to state and local
candidates87
Finally the remaining
3 of these contributions are made
to ballot measure committees88
Similar to lobbying
spending these contributions have
been relatively clustered in a few
states Florida California Texas
Tennessee and Virginia have all
82 Id 83 Id 84 Id 85 Id 86 Id 87 Id 88 Id
Figure 6 State and Local Political Contributions of
Private Prison Companies by State
Source National Institute on Money in State Politics Correctional facilities
construction amp managementfor-profit contributions to candidates and
committees April 29 2015
16
scene contributions in excess of $50000089
GEO is by far the largest correctional contributor in Florida
at $34 million and CCA has an equally substantial lead as the largest correctional contributor in
California at $15 million90
Though republican candidates tend to be the recipients of campaign contributions from private
prison operators nearly a third of contributions are made to democratic candidates91
Researchers have
taken this to suggest that private prison operators are less concerned with supporting particular political
beliefs than general access to political power92
In fact nearly 80 of campaign contributions support
winning candidates93
Even the timing of these contributions is strategically nuanced Private prison
operators tend to give in the early and late stages of political campaigns in order to establish a strong
rapport early and then reinforce a positive relationship with the candidate expected to win94
Conclusion Though private prison companies tend to tout financial efficiency as their great contribution to
corrections their incentives are in many ways diametrically opposed to those of a safe and free society
Their financial success depends on increasing crime law enforcement and liberty infractions
Accordingly they succumb to undercutting popular democracy to feed their bottom lines They rely on
the questionable practices of private sector lobbying and campaign financing to secure political support
for their business ventures They do so with as much secrecy as possible to stay out of the direct attack of
ethically minded opposition
Thus it seems only fitting that the fastest growing client for private prison companies is one that
intends to fly under the radar and enjoys the fewest protections illegal immigrants targeted by
Immigration and Customs Enforcement Both CCA and GEO highlighted the importance of the recent
89 Id 90 Id 91 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 19 92 Id at 18 93 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015 94 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 18
17
focus on immigration laws at the federal state and local level in their annual reports But they are not idle
players in the space they are well-prepared to protect and expand their enterprises For example 30 of the
36 legislators who co-sponsored Arizonarsquos immigration bill that would undoubtedly place more
immigrants in detention received campaign contributions from private prison companies95
If we are not
careful and perhaps even if we are federal state and local immigration policies will be dictated by a few
parties interested in further immigrant detention
Unfortunately business interests run high in politics and consistently undermine the legitimacy of
popular democracy To rein in the legislative lobbying and campaign financing of private prison
companies additional limitation would have to be made on such practices Alternatively the privatization
of prisons could be outlawed or at least more closely regulated For example legislation could be passed
that forbids private prison companies from relying on a revenue model that encourages incarceration or
prohibits states from paying owners and operators on a per diem per person basis Private prison
companies could instead offer the public sector better recidivism rates in exchange for higher payouts
similar to the social impact bond model It may not be entirely prudent to dismiss privatization within
corrections or any other public sector However as it currently stands the privatization of prisons
threatens all efforts to reduce mass incarceration
95 Andre N Sanchez ldquoPrivate Prisons Spend Millions On Lobbying To Put More People In Jailrdquo Think Progress June 23 2011
Contents Introduction 1
Part I The Emergence of For-Profit Prisons 4
Part II Threatening Growth Strategies 7
Maximizing Revenue 7
Minimizing Expenses 10
Part III Undermining Democracy 12
Legislative Lobbying 13
Campaign Financing 14
Conclusion 16
1
Introduction With the highest incarceration rate in the world
1 the United States is facing incarceration levels
that present substantial ethical and fiscal challenges Many Americans are losing their liberty with limited
benefit to public safety at a cost that constrained government budgets cannot sustain Consequently
democrats and republicans are now teaming up to tackle the issue of mass incarceration forming unlikely
partnerships such as the Coalition for Public Safety which brings together adversaries like the Koch
Brothers and the American Civil Liberties Union2 However there is one interest group enjoying a huge
windfall from the American incarceration crisis and sparing no expense to protect and expand it the
private prison industry
Individual features of prison operations have been privatized for quite some time A host of for-
profit companies provide services such as telecommunications and products such as commissary items
to correctional facilities However in the past few decades the comprehensive management of these
facilities has also emerged as a privatization target In fact given the capitalist underpinnings of
American culture the exponential growth of incarceration stemming from the War on Drugs announced
in 1971 and subsequent ldquotough on crimerdquo political regimes did everything short of draft an invitation to
for-profit prison owners and operators
Today more than 8 of the 16 million people serving time in federal or state prisons are held in
private facilities3 generating considerable income for half a dozen private prison companies In 2014 the
two leading private prison companies Corrections Corporation of America (CCA) and The GEO Group
(GEO) reported combined revenues of $28 billion4 These revenues translated to $22 million in
1 International Centre for Prison Studies Highest to Lowest - Prison Population Rate The US has the highest incarceration rate
for any country with a population over 100000 Seychelles is the only country with an incarceration rate higher than that of the
United States but its population is less than 90000 2 Carl Hulse ldquoUnlikely Cause Unites the Left and the Right Justice Reformrdquo The New York Times February 18 2015 3 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 1 14 4 Corrections Corporation of America 2014 Annual Report Form 10-K F-4 The GEO Group Inc 2014 Annual Report Form
10-K 62 Includes only revenue from The GEO Grouprsquos US Corrections amp Detention business unit
2
executive compensation representing an 18 increase from the previous year5 But insiders are not the
only beneficiaries For these publicly held companies these revenues have also produced millions in
shareholder dividends6 Yet many of these shareholders may not even know they have an ownership
stake in a private prison company7 Vanguard and Fidelity are the nationrsquos top 401(k) providers and also
the combined owners of 19 of CCA and 11 of GEO8 One index fund managed by Vanguard alone
owns nearly 8 of both CCA and GEO shares9
Private prison companies present such an attractive financial investment because they enjoy profit
margins higher than most private industries In 2014 CCA had a net profit margin nearly double that of
the average private company in the United States10
Even more impressively both CCA and GEO
reported operating margins north of 30 for the facilities they owned and managed11
margins higher than
that reported by Apple in 201412
And indeed the investments panned out the way investors would have
liked with CCArsquos stock price growing 74 and GEOrsquos growing 82 over the past five years13
Together CCA and GEO account for approximately 75 of the $74 billion private prison
market14
Other private prison companies include Management amp Training Corporation LaSalle
Southwest Corrections Community Education Centers and Emerald Companies Figure 1 provides more
detail on the scale clientele and geographic presence of private prison companies in America
5 Morningstar Corrections Corporation of America Chart Morningstar The GEO Group Chart 6 Corrections Corporation of America 2014 Annual Report Form 10-K F-5 The GEO Group Inc 2014 Annual Report Form
10-K 94 7 Ray Downs ldquoWhorsquos Getting Rich off the Prison-Industrial Complexrdquo Vice May 17 2013 8 Morningstar Corrections Corporation of America Ownership Major Owners Morningstar The GEO Group Ownership
Major Owners 9 Id 10 Corrections Corporation of America 2014 Annual Report Form 10-K F-4 Sageworks The Private Company Report
(Raleigh NC Sageworks March 30 2015) 1 11 Corrections Corporation of America 2014 Annual Report Form 10-K 59 Refers only to the operating margin of The GEO
Grouprsquos US Corrections amp Detention business unit 12 Apple Inc 2014 Annual Report Form 10-K 45 13 Morningstar Corrections Corporation of America Insiders Executive Compensation Morningstar The GEO Group Insiders
Executive Compensation 14 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015
3
Figure 1 Leading Private Prison Owners and Operators
Source Correctional Corporation of America Locations The GEO Group Inc 2014 Annual Report Form 10-K 13-16 The
GEO Group Inc Locations MTC Management amp Training Corporation Corrections Locations LaSalle Corrections Our
Locations Community Education Centers Facilities CEC Corrections Emerald Companies Company Locations
This paper will discuss the relationship between private prison companies and criminal law and
policy Part I will offer a brief overview of the modern history of for-profit prisons Part II will provide
more detail on the profit model of private prison companies and their accompanying growth strategies
Part III will then discuss the ways in which these strategies undermine democratic processes within the
criminal justice sphere Throughout the paper we will also address the leading alternative explanation for
the correlation between high incarceration rates and the presence of for-profit prisonsmdashthat private
prisons offer a less expensive solution to incarceration for budget constrained states
15 Refers only to The GEO Grouprsquos US Corrections amp Detention business unit and includes facilities recently acquired from
LSC Corrections Services 16 Includes LaSalle Corrections Community Education Centers and Emerald Companies 17 Does not include leased out or non-correctional facilities
Corrections
Corporation
of America
The GEO
Group15
Management
amp Training
Corporation
Other Owners
Operators16
Facilities17
() 59 61 22 29
LeasedOwned amp Managed 47 37 -- --
Managed Only 12 24 -- --
Beds () 85297 69697 26425 19129
Contract Agency
Immigration 12 12 2 7
Federal 17 18 3 12
StateLocal 34 34 17 21
Region
Northeast 2 2 0 1
Midwest 5 3 1 1
West 9 18 3 1
Southeast 19 16 5 11
Southwest 24 22 13 15
4
Part I The Emergence of For-Profit Prisons The modern age of prison privatization began in 1983 after the prison population grew more than
10 in consecutive years18
with the incorporation of CCA19
The company received its first federal
contract in Texas later that year and its first state contract in Tennessee the following year20
In 1984
CCA also opened the very first privately owned prison the Houston Processing Center in Texas21
In the
same year Wackenhut Corrections Corporation (WCC) was formed under the parent company of The
Wackenhut Corporation22
Just two years later in 1986 CCA leaped into an initial public offering on the
NASDAQ (WCC would follow suit in 1994)23
The following year WCC was awarded its first contract
over the Aurora Processing Center in Colorado24
Over the next five years these private prison conglomerates continued to expand operations while
a number of smaller private prison companies also emerged presenting an early opportunity for industry
consolidation In just 1995 CCA acquired TransCor America Concept and Corrections Partners25
In
1998 CCA acquired the third largest private prison company at the time US Corrections Corporation
for $10 million26
Years later in 2005 WCC would change its name to The GEO Group and embark on a
similar acquisition strategy27
Between 2005 and 2010 GEO acquired Correctional Services Corporation
CentraCore Properties Trust and Cornell Companies28
In 2014 GEO also acquired LSC Corrections
Services29
18 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 1986 (Washington DC
Government Printing Office May 1987) 1 19 Correctional Corporation of America About Us Who We Are Our History 20 Correctional Corporation of America About Us Who We Are Our History The Sentencing Project Prison Privatization and
the Use of Incarceration (Washington DC The Sentencing Project 2004) 1 21 Correctional Corporation of America About Us Who We Are Our History 22 The GEO Group Inc About Us History 23 Correctional Corporation of America About Us Who We Are Our History The GEO Group Inc About Us History 24 The GEO Group Inc About Us History 25 Correctional Corporation of America About Us Who We Are Our History 26 Corrections Corporation of America Corrections Corporation of America and CCA Prison Realty Trust to Merge In $4 Billion
Transaction Companies Acquire US Corrections Corporation [Press Release] April 20 1998 27 The GEO Group Inc About Us History 28 Id 29 The GEO Group The GEO Group Announces Acquisition of Eight Correctional and Detention Facilities Totaling More Than
6500 Beds [Press Release] January 26 2015
5
Throughout the maturation of the private prison industry the number of people incarcerated grew
260 from 437248 in 1983 to 1574741 in 201330
Still the number of prisoners held in for-profit
prisons grew at a rate that significantly outpaced the already dramatic growth rate of incarceration more
generally31
By 2013 there were 133044 prisoners or 8 of the total prison population housed in for-
profit prisons32
Though the majority of these prisoners are state prisoners for-profit prisons account for a
larger segment of the federal prison population than the state prison population33
In fact federal agencies
make up more than 40 of CCArsquos client base34
The US Marshals Service (USMS) accounts for 17
and the Federal Bureau of Prisons (BOP) and Immigration and Customs Enforcement (ICE) each account
for another 1335
ICE is also GEOrsquos largest client36
Thus not surprisingly
there is a cluster of for-profit
prisons in the states along the
Mexican-American border Texas
New Mexico Arizona and
California However with more
than 40 of for-profit prisons
located in the southwest and
another 30 in the southeast37
the prevalence of immigration detention cannot be the only factor driving private prison companies to
concentrate their operations in the south Southern states also offer the highest incarceration rates in the
30 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 1986 (Washington DC
Government Printing Office May 1987) 1 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics
Prisoners in 2013 by E Ann Carson (Washington DC Government Printing Office September 2014) 2 31 American Civil Liberties Union Banking on Bondage Private Prisons and Mass Incarceration (New York NY American
Civil Liberties Union November 2011) 5 32 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 33 Id 34 Corrections Corporation of America 2014 Annual Report Form 10-K 9 35 Id 36 Aviva Shen ldquoPrivate Prisons Spend $45 Million On Lobbying Rake In $51 Billion For Immigrant Detention Alonerdquo
ThinkProgress August 3 2012 37 See Figure 1
Figure 2 Regional State Prison Incarceration Rates
Source Peter Wagner ldquoTracking State Prison Growth in 50 Statesrdquo Prison
Policy Initiative May 28 2014
6
nation and a conservative political climate that has endorsed the ldquotough on crimerdquo policies that have
allowed them to persist over the years (see Figure 2) Furthermore their overwhelming republican
governments favor private sector expansion thus encouraging private prison companies to directly exploit
these ballooned incarceration rates Figure 3 provides more detail on the geographic concentration of four
of the leading private prison companies
Figure 3 Geographic Landscape of Private Prison Beds
Source US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann
Carson (Washington DC Government Printing Office September 2014) 7 Community Education Centers Facilities CEC
Corrections Correctional Corporation of America Locations MTC Management amp Training Corporation Corrections
Locations The GEO Group Inc 2014 Annual Report Form 10-K 13-16
While it is no coincidence that the geographic expansion of for-profit prisons has directly
correlated with regional incarceration rates it is difficult to determine whether private prison companies
are simply capitalizing on favorable conditions or driving them Surely private prison companies cannot
7
be blamed for creating the current incarceration crisis that began in the 1970s prior to their emergence or
even the conservative ideologies that contributed to their later success in certain regions However these
private prison companies have taken proactive steps to reinforce the conditions favorable to their success
and thus have fashioned a vicious feedback loop that encourages incarceration
Part II Threatening Growth Strategies The revenue model of private prison owners and operators depends on a per diem per prisoner
pay structure With per diem rates limited by existing operational costs at public facilities the profitability
of for-profit prisons relies on increasing man-days38
to maximize revenue and lowering operational costs
to minimize expenses The former approach promotes incarceration with no upward boundary while the
latter threatens prison conditions with at least some downward limit In this section we will discuss the
benefits and limits of these growth strategies and their implications on incarceration rates
Maximizing Revenue With a per diem revenue model increasing compensated man-days is critically important to the
profit growth of private prison companies These companies can increase their man-days in number of
ways First they can increase their companyrsquos market share of the existing private prison market through
mergers and acquisitions Second they can increase the private prison market share of the broader prison
market by increasing the number of privately contracted beds andor their occupancy rates Third they
can increase the overall utilization of prisons by increasing incarceration more generally In this section
we will touch on each of these strategies in more detail
Corporate Expansion Private prison companies can increase their share of the existing private
prison market by acquiring existing private prisons from competitors GEO took this approach when they
recently bought out LSC Corrections Services for approximately $312 million39
The acquisition added
38 Man-days are calculated by multiplying the number of prisoners by the number of days each serves 39 The GEO Group The GEO Group Announces Acquisition of Eight Correctional and Detention Facilities Totaling More Than
6500 Beds [Press Release] January 26 2015
8
eight facilities or 6500 beds to the companyrsquos portfolio40
Though both CCA and GEO have expanded
their market shares in this way in the past there are two rather substantial limitations to this growth
strategy current levels of privatization and the small number of players in the market In fact by 2007
there were only six players left41
Thus this is unlikely to be the dominant growth strategy for these
private prison companies going forward
Prison Privatization Private prison companies can increase their man-days by increasing the
market share of for-profit prisons in corrections more broadly This approach is dependent on the
industryrsquos ability to gain government and public support for the privatization of corrections While private
prison companies have noted the opposition of certain groups such as labor unions and criminal justice
reform organizations42
they have nevertheless seen an expansion in their populations In fact the number
of prisoners held in for-profit prisons increased more than 1600 between 1990 and 200943
While contracting for additional beds private prison companies also make an effort to include
occupancy guarantees in their management contracts Sixty-five percent of management contracts have
such guarantee clauses44
These clauses typically promise occupancy rates between 80 and 100 and
offer to pay for unused prison beds below the delineated guarantee45
For example in 2012 CCA secured
a management contract from the Arizona Department of Corrections to incarcerate 1000 prisoners at the
Red Rock Correctional Center46
The contract included an occupancy guarantee of 90 for the contracted
beds47
As a result of such contracts in 2014 CCA and GEO enjoyed occupancy rates as high as 84 and
96 respectively48
This growth strategy holds a lot of promise since more than 90 of prisoners are still
40 Id 41 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 16 42 Corrections Corporation of America 2014 Annual Report Form 10-K 26 43 American Civil Liberties Union Banking on Bondage Private Prisons and Mass Incarceration (New York NY American
Civil Liberties Union November 2011) 5 44 In the Public Interest Criminal How Lockup Quotas and ldquoLow-Crime Taxesrdquo Guarantee Profits for Private Prison
Corporations (Washington DC In the Public Interest September 2013) 6 45 Id at 3-6 46 Corrections Corporation of America 2014 Annual Report Form 10-K F-20 47 Id 48 Corrections Corporation of America 2014 Annual Report Form 10-K 6 The GEO Group Inc 2014 Annual Report Form
10-K 54 For Corrections Corporation of American data includes idle facilities but excludes facilities marked for
discontinuation For The GEO Group data excludes idle facilities
9
held in public prisons49
However there is still an absolute ceiling set by the number of people
incarcerated and a lower practical ceiling set by correctional systems and their policies about what types
of populations can be housed in for-profit prisons
Prison Utilization Private prisons are relied upon to relieve strains on government budgets and
concerns of overcrowding50
Accordingly private prison companies fair best when incarceration is high
enough to create such burdens Thus these companies can grow their man-days by increasing the overall
number of people incarcerated This approach undoubtedly raises the greatest number of ethical issues
but it also the only uncapped growth strategy And not only is the strategy recognized by private prison
companies but efforts made to reduce incarceration are viewed as threats to profitability In fact both
CCA and GEO cite leniency in conviction and sentencing decriminalization of drug and immigration
offenses and even reductions in crime as business risks In its 2014 Annual Report CCA states
growth depends on a number of factors we cannot control including crime rates and
sentencing patterns in various jurisdictions The demand for our facilities and services could
be adversely affected by the relaxation of enforcement efforts leniency in conviction or parole
standards and sentencing practices or through the decriminalization of certain activities that are
currently proscribed by criminal laws For instance any changes with respect to drugs and
controlled substances or illegal immigration could affect the number of persons arrested
convicted and sentenced thereby potentially reducing demand for correctional facilities to house
them Legislation has also been proposed in numerous jurisdictions that could lower minimum
sentences for some non-violent crimes and 25 make more inmates eligible for early release based
on good behavior Also sentencing alternatives under consideration could put some offenders on
probation with electronic monitoring who would otherwise be incarcerated Similarly reductions
in crime rates or resources dedicated to prevent and enforce crime could lead to reductions in
arrests convictions and sentences requiring incarceration at correctional facilities51
Similarly in its 2014 Annual Report GEO states
The demand for our correctional and detention facilities and services could be adversely
affected by changes in existing criminal or immigration laws crime rates in jurisdictions in which
we operate the relaxation of criminal or immigration enforcement efforts leniency in conviction
sentencing or deportation practices and the decriminalization of certain activities that are
currently proscribed by criminal laws or the loosening of immigration laws For example any
changes with respect to the decriminalization of drugs and controlled substances could affect the
number of persons arrested convicted sentenced and incarcerated thereby potentially reducing
49 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 50 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 3 51 Corrections Corporation of America 2014 Annual Report Form 10-K 27-28
10
demand for correctional facilities to house them Similarly reductions in crime rates could lead to
reductions in arrests convictions and sentences requiring incarceration at correctional facilities52
In summary the profitability of private prison companies comes at the expense of public safety and
personal liberty It may not be surprising then that the recidivism rates of privately held prisons are higher
than those of publicly run prisons53
After all it is within the best interest of private prison companies to
have a revolving door at their facilities
Minimizing Expenses Another way private prison companies seek to increase profitability is by reducing their
operational expensesmdashthe less they spend the more they pocket With approximately 65-70 of prison
expenditures going to staff54
private prison companies save the most in operational costs by avoiding
unionized labor and the associated personnel services55
Consequently the correctional staff at for-profit
prisons tend to be inadequately trained and poorly paid56
Not surprisingly private prisons have been
condemned for higher rates of violence and abuse57
Private prisons also cut costs related to food
healthcare and programs58
While lowering these expenses may not directly influence incarceration rates
it may have an indirect impact by worsening prison conditions and thus putting prisoners in poorer mental
and physical health for release Indeed as already noted studies have showed that recidivism rates are
higher for private prisons than public prisons59
Interestingly financial efficiency is also the primary alternative explanation for the expansion of
for-profit prisons in highly incarcerative states If true the interests of the public and private sectors
would in some way be aligned With lower operational costs private prison companies can still promise
savings for federal and state systems while charging profit premiums There is indeed some truth to these
52 The GEO Group Inc 2014 Annual Report Form 10-K 36 53 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015 54 US Department of Justice Office of Justice Programs Bureau of Justice Assistance Emerging Issues on Privatized Prisons
by James Austin and Garry Coventry (Washington DC Government Printing Office February 2001) 16 55 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 23-24 56 Brendan Fischer ldquoViolence Abuse and Death at For-Profit Prisons A GEO Group Rap Sheetrdquo The Center for Media and
Democracyrsquos PR Watch September 26 2013 57 US Department of Justice Office of Justice Programs Bureau of Justice Assistance Emerging Issues on Privatized Prisons
by James Austin and Garry Coventry (Washington DC Government Printing Office February 2001) 36-37 48 58 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015 59 Id
11
claims with short-run savings averaging about 19 and long-run savings averaging about 2960
Some
states even require private prison companies to offer a specified discount to public per-diem costs For
example Texas Kentucky and Mississippi have contract stipulations that require a 10 savings61
Moreover a recent study found that the cost savings of for-profit prisons is often underestimated because
they fail to account for savings on personnel services such as pensions and healthcare for retirees which
may not be attributed directly to state correctional departments62
Finally with operating margins as high
as 30 and per diem costs still lower than those in public prisons63
some might consider for-profit
prisons much more financially efficient However comparing private and public operational costs is not
as straight forward as private prison companies might like the public to believe There are in fact hidden
costs that private prison companies either unfairly avoid or perhaps even create for public prisons
First for-profit prisons can cherry-pick the most desirable or profitable prisoners from the
general prison population Generally this means that for-profit prisons house healthy minimum security
prisoners who are cheaper to incarcerate States are left to run maximum security prisons that require
ldquomore intensive security systems and proceduresrdquo64
Public prisons also typically house specialized
populations such as sex offenders that are more expensive due to higher treatment and administrative
needs65
Finally public prisons also tend to be responsible for prisoners with moderate to high mental or
physical healthcare needs These population differences allow private prison companies to demonstrate
artificial savings for states
60 Id Short-run costs are those associated with the day-to-day operation of prison facilities Long-run costs include short-run
costs plus the capital expenditures associated with maintaining and building prisons 61 Id 62 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 3 63 Association of State Correctional Administrators Inmate Cost Per Day Follow Up Survey (September 2011) 64 Harris Kenny and Leonard Gilroy The Challenge of Comparing Public and Private Correctional Costs (Reason Foundation
December 2013) 4-5 65 Id
12
Second as already mentioned studies have shown that for-profit prisons have marginally higher
rates of recidivism than their public counterparts66
Ethical concerns aside higher recidivism rates burden
states with additional incarceration expenses in the future Though a differential of 3-4 may seem
negligible a difference of even one
percentage point can amount to
considerable costs particularly in states
with high incarceration costs For
example in New York where the
annual cost of incarcerating one person
is more than $60000 recidivism comes
at a very high price Figure 4 provides
further detail on the annual costs of
incarceration by state
In their efforts to maximize revenues and minimize expenses private prison companies rely
heavily on growth strategies that promote incarceration Given the obvious ethical implications private
prison companies are less than public about their expansion intentions Consequently they employ
growth tactics that manipulate political elections and criminal lawmaking weakening the influence of
popular democracy on criminal law and policy
Part III Undermining Democracy With most private prison contracts executed by federal state and local policymakers the for-
profit prison industry relies heavily on political relationships Accordingly the industry has a dual-
pronged political strategy that undermines democratic legitimacy in its dependence on legislative
lobbying and campaign financing
66 Spivak Andrew L and Susan F Sharp ldquoInmate Recidivism As a Measure of Private Prison Performancerdquo Crime amp
Delinquency Vol 54 (Washington DC SAGE Publications July 2008) 482-508
Figure 4 Annual Cost of Incarceration per Prisoner
Source Theirry Godard ldquoThe Economics of the American Prison Systemrdquo
SmartAsset January 23 2015
13
Legislative Lobbying Despite denying lobbying involvement in the past ten years the three leading private prison
operators have spent over $45 million on lobbying67
According to the companyrsquos own literature CCA
has an explicit policy prohibiting it from ldquoengaging in lobbying or advocacy efforts that would influence
enforcement efforts parole standards criminal laws and sentencing policiesrdquo68
Yet over the past decade
CCA like its competitors has spent more than $900000 annually on lobbying69
In fact not only do
private prison operators utilize the services of lobbying firms they also employ their own in-house
lobbyists
Since 2002 alone CCA has employed nearly 400 lobbyists across 30 states70
In 2014 the
company had 36 active lobbyists in 10 states focusing heavily on Florida Vermont Tennessee
California Pennsylvania Kentucky and Minnesota71
Over the same time frame GEO has employed
more than 200 lobbyists across 11 states focusing heavily on Florida California Texas Pennsylvania
and Virginia72
In 2014 the company had 15 active lobbyists across 5 states73
Attention to these specific states has been a successful strategy play for private prison operators
Aside from being the home to the headquarters of GEO Florida also has the second largest private prison
population and the market share of these for-profit prisons is only increasing74
Between 2012 and 2013
the private prison population in Florida grew 1 while the private prison population across all states
decreased 575
Lobbying centered on California has also produced strong results With the second
largest prison population in the country and a judicial order to remedy overcrowding76
California has
67 Aviva Shen ldquoPrivate Prisons Spend $45 Million On Lobbying Rake In $51 Billion For Immigrant Detention Alonerdquo
ThinkProgress August 3 2012 68 Corrections Corporation of America 2014 Annual Report Form 10-K 28 69 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 22 70 National Institute on Money in State Politics Corrections Corporation of America April 29 2015 71 Id 72 National Institute on Money in State Politics GEO Group April 29 2015 73 Id 74 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 75 Id 76 Id at 5
14
largely embraced private prisons Accordingly between 2012 and 2013 the private prison population in
California grew 23377
Both CCA and GEO are private sector members of American Legislative Exchange Council
(ALEC) a nonpartisan organization aimed at advancing ldquolimited government free markets and
federalism at the state levelrdquo78
The organization utilizes a public-private partnership structure to bring
together state legislators members of the private sector and the general public to draft and introduce
model legislation ALEC has played a role in the passing of mandatory minimum three strikes and truth-
in-sentencing laws all of which have contributed to the rapid growth of incarceration since the 1970s79
Unfortunately further detail about the
lobbying efforts of private prison
operators is lacking since lobbyists are
not required to report the direction in
which they lobbied on any particular
piece of legislation80
Campaign Financing Since 1990 the private prison
operators have made nearly $15 million in
political contributions at the state and
local level81
These contributions have
seen a dramatic uptick in recent years
77 Id at 14 78 American Legislative Exchange Council About Us 79 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 29 80 Id at 21 81 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
$2650346
$-
$500000
$1000000
$1500000
$2000000
$2500000
$3000000
Figure 5 State and Local Political Contributions of
Private Prison Companies by Year
Source National Institute on Money in State Politics Correctional
facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
15
with 2014 representing the highest amount yet at $27 million82
CCA and GEO along with their
acquisitions have accounted for 72 of these political contributions over the years83
The two companies
also made combined political contributions of nearly $1 million at the federal level since just 201084
Moreover these company-specific figures under estimate their political influence because they fail to
capture the individual political contributions of the companiesrsquo executive leadership and board of
directors In fact the Chief Executive Officer of GEO George Zoley and one of the founding partners of
CCA Doctor Crants have each made approximately $90000 in political contributions85
Approximately half of all state and local political contributions are made to party committees the
largest beneficiary of which is the Florida Republican Party which has received more than $4 million86
Another substantial proportion of
these contributions are made
directly to state and local
candidates87
Finally the remaining
3 of these contributions are made
to ballot measure committees88
Similar to lobbying
spending these contributions have
been relatively clustered in a few
states Florida California Texas
Tennessee and Virginia have all
82 Id 83 Id 84 Id 85 Id 86 Id 87 Id 88 Id
Figure 6 State and Local Political Contributions of
Private Prison Companies by State
Source National Institute on Money in State Politics Correctional facilities
construction amp managementfor-profit contributions to candidates and
committees April 29 2015
16
scene contributions in excess of $50000089
GEO is by far the largest correctional contributor in Florida
at $34 million and CCA has an equally substantial lead as the largest correctional contributor in
California at $15 million90
Though republican candidates tend to be the recipients of campaign contributions from private
prison operators nearly a third of contributions are made to democratic candidates91
Researchers have
taken this to suggest that private prison operators are less concerned with supporting particular political
beliefs than general access to political power92
In fact nearly 80 of campaign contributions support
winning candidates93
Even the timing of these contributions is strategically nuanced Private prison
operators tend to give in the early and late stages of political campaigns in order to establish a strong
rapport early and then reinforce a positive relationship with the candidate expected to win94
Conclusion Though private prison companies tend to tout financial efficiency as their great contribution to
corrections their incentives are in many ways diametrically opposed to those of a safe and free society
Their financial success depends on increasing crime law enforcement and liberty infractions
Accordingly they succumb to undercutting popular democracy to feed their bottom lines They rely on
the questionable practices of private sector lobbying and campaign financing to secure political support
for their business ventures They do so with as much secrecy as possible to stay out of the direct attack of
ethically minded opposition
Thus it seems only fitting that the fastest growing client for private prison companies is one that
intends to fly under the radar and enjoys the fewest protections illegal immigrants targeted by
Immigration and Customs Enforcement Both CCA and GEO highlighted the importance of the recent
89 Id 90 Id 91 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 19 92 Id at 18 93 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015 94 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 18
17
focus on immigration laws at the federal state and local level in their annual reports But they are not idle
players in the space they are well-prepared to protect and expand their enterprises For example 30 of the
36 legislators who co-sponsored Arizonarsquos immigration bill that would undoubtedly place more
immigrants in detention received campaign contributions from private prison companies95
If we are not
careful and perhaps even if we are federal state and local immigration policies will be dictated by a few
parties interested in further immigrant detention
Unfortunately business interests run high in politics and consistently undermine the legitimacy of
popular democracy To rein in the legislative lobbying and campaign financing of private prison
companies additional limitation would have to be made on such practices Alternatively the privatization
of prisons could be outlawed or at least more closely regulated For example legislation could be passed
that forbids private prison companies from relying on a revenue model that encourages incarceration or
prohibits states from paying owners and operators on a per diem per person basis Private prison
companies could instead offer the public sector better recidivism rates in exchange for higher payouts
similar to the social impact bond model It may not be entirely prudent to dismiss privatization within
corrections or any other public sector However as it currently stands the privatization of prisons
threatens all efforts to reduce mass incarceration
95 Andre N Sanchez ldquoPrivate Prisons Spend Millions On Lobbying To Put More People In Jailrdquo Think Progress June 23 2011
1
Introduction With the highest incarceration rate in the world
1 the United States is facing incarceration levels
that present substantial ethical and fiscal challenges Many Americans are losing their liberty with limited
benefit to public safety at a cost that constrained government budgets cannot sustain Consequently
democrats and republicans are now teaming up to tackle the issue of mass incarceration forming unlikely
partnerships such as the Coalition for Public Safety which brings together adversaries like the Koch
Brothers and the American Civil Liberties Union2 However there is one interest group enjoying a huge
windfall from the American incarceration crisis and sparing no expense to protect and expand it the
private prison industry
Individual features of prison operations have been privatized for quite some time A host of for-
profit companies provide services such as telecommunications and products such as commissary items
to correctional facilities However in the past few decades the comprehensive management of these
facilities has also emerged as a privatization target In fact given the capitalist underpinnings of
American culture the exponential growth of incarceration stemming from the War on Drugs announced
in 1971 and subsequent ldquotough on crimerdquo political regimes did everything short of draft an invitation to
for-profit prison owners and operators
Today more than 8 of the 16 million people serving time in federal or state prisons are held in
private facilities3 generating considerable income for half a dozen private prison companies In 2014 the
two leading private prison companies Corrections Corporation of America (CCA) and The GEO Group
(GEO) reported combined revenues of $28 billion4 These revenues translated to $22 million in
1 International Centre for Prison Studies Highest to Lowest - Prison Population Rate The US has the highest incarceration rate
for any country with a population over 100000 Seychelles is the only country with an incarceration rate higher than that of the
United States but its population is less than 90000 2 Carl Hulse ldquoUnlikely Cause Unites the Left and the Right Justice Reformrdquo The New York Times February 18 2015 3 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 1 14 4 Corrections Corporation of America 2014 Annual Report Form 10-K F-4 The GEO Group Inc 2014 Annual Report Form
10-K 62 Includes only revenue from The GEO Grouprsquos US Corrections amp Detention business unit
2
executive compensation representing an 18 increase from the previous year5 But insiders are not the
only beneficiaries For these publicly held companies these revenues have also produced millions in
shareholder dividends6 Yet many of these shareholders may not even know they have an ownership
stake in a private prison company7 Vanguard and Fidelity are the nationrsquos top 401(k) providers and also
the combined owners of 19 of CCA and 11 of GEO8 One index fund managed by Vanguard alone
owns nearly 8 of both CCA and GEO shares9
Private prison companies present such an attractive financial investment because they enjoy profit
margins higher than most private industries In 2014 CCA had a net profit margin nearly double that of
the average private company in the United States10
Even more impressively both CCA and GEO
reported operating margins north of 30 for the facilities they owned and managed11
margins higher than
that reported by Apple in 201412
And indeed the investments panned out the way investors would have
liked with CCArsquos stock price growing 74 and GEOrsquos growing 82 over the past five years13
Together CCA and GEO account for approximately 75 of the $74 billion private prison
market14
Other private prison companies include Management amp Training Corporation LaSalle
Southwest Corrections Community Education Centers and Emerald Companies Figure 1 provides more
detail on the scale clientele and geographic presence of private prison companies in America
5 Morningstar Corrections Corporation of America Chart Morningstar The GEO Group Chart 6 Corrections Corporation of America 2014 Annual Report Form 10-K F-5 The GEO Group Inc 2014 Annual Report Form
10-K 94 7 Ray Downs ldquoWhorsquos Getting Rich off the Prison-Industrial Complexrdquo Vice May 17 2013 8 Morningstar Corrections Corporation of America Ownership Major Owners Morningstar The GEO Group Ownership
Major Owners 9 Id 10 Corrections Corporation of America 2014 Annual Report Form 10-K F-4 Sageworks The Private Company Report
(Raleigh NC Sageworks March 30 2015) 1 11 Corrections Corporation of America 2014 Annual Report Form 10-K 59 Refers only to the operating margin of The GEO
Grouprsquos US Corrections amp Detention business unit 12 Apple Inc 2014 Annual Report Form 10-K 45 13 Morningstar Corrections Corporation of America Insiders Executive Compensation Morningstar The GEO Group Insiders
Executive Compensation 14 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015
3
Figure 1 Leading Private Prison Owners and Operators
Source Correctional Corporation of America Locations The GEO Group Inc 2014 Annual Report Form 10-K 13-16 The
GEO Group Inc Locations MTC Management amp Training Corporation Corrections Locations LaSalle Corrections Our
Locations Community Education Centers Facilities CEC Corrections Emerald Companies Company Locations
This paper will discuss the relationship between private prison companies and criminal law and
policy Part I will offer a brief overview of the modern history of for-profit prisons Part II will provide
more detail on the profit model of private prison companies and their accompanying growth strategies
Part III will then discuss the ways in which these strategies undermine democratic processes within the
criminal justice sphere Throughout the paper we will also address the leading alternative explanation for
the correlation between high incarceration rates and the presence of for-profit prisonsmdashthat private
prisons offer a less expensive solution to incarceration for budget constrained states
15 Refers only to The GEO Grouprsquos US Corrections amp Detention business unit and includes facilities recently acquired from
LSC Corrections Services 16 Includes LaSalle Corrections Community Education Centers and Emerald Companies 17 Does not include leased out or non-correctional facilities
Corrections
Corporation
of America
The GEO
Group15
Management
amp Training
Corporation
Other Owners
Operators16
Facilities17
() 59 61 22 29
LeasedOwned amp Managed 47 37 -- --
Managed Only 12 24 -- --
Beds () 85297 69697 26425 19129
Contract Agency
Immigration 12 12 2 7
Federal 17 18 3 12
StateLocal 34 34 17 21
Region
Northeast 2 2 0 1
Midwest 5 3 1 1
West 9 18 3 1
Southeast 19 16 5 11
Southwest 24 22 13 15
4
Part I The Emergence of For-Profit Prisons The modern age of prison privatization began in 1983 after the prison population grew more than
10 in consecutive years18
with the incorporation of CCA19
The company received its first federal
contract in Texas later that year and its first state contract in Tennessee the following year20
In 1984
CCA also opened the very first privately owned prison the Houston Processing Center in Texas21
In the
same year Wackenhut Corrections Corporation (WCC) was formed under the parent company of The
Wackenhut Corporation22
Just two years later in 1986 CCA leaped into an initial public offering on the
NASDAQ (WCC would follow suit in 1994)23
The following year WCC was awarded its first contract
over the Aurora Processing Center in Colorado24
Over the next five years these private prison conglomerates continued to expand operations while
a number of smaller private prison companies also emerged presenting an early opportunity for industry
consolidation In just 1995 CCA acquired TransCor America Concept and Corrections Partners25
In
1998 CCA acquired the third largest private prison company at the time US Corrections Corporation
for $10 million26
Years later in 2005 WCC would change its name to The GEO Group and embark on a
similar acquisition strategy27
Between 2005 and 2010 GEO acquired Correctional Services Corporation
CentraCore Properties Trust and Cornell Companies28
In 2014 GEO also acquired LSC Corrections
Services29
18 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 1986 (Washington DC
Government Printing Office May 1987) 1 19 Correctional Corporation of America About Us Who We Are Our History 20 Correctional Corporation of America About Us Who We Are Our History The Sentencing Project Prison Privatization and
the Use of Incarceration (Washington DC The Sentencing Project 2004) 1 21 Correctional Corporation of America About Us Who We Are Our History 22 The GEO Group Inc About Us History 23 Correctional Corporation of America About Us Who We Are Our History The GEO Group Inc About Us History 24 The GEO Group Inc About Us History 25 Correctional Corporation of America About Us Who We Are Our History 26 Corrections Corporation of America Corrections Corporation of America and CCA Prison Realty Trust to Merge In $4 Billion
Transaction Companies Acquire US Corrections Corporation [Press Release] April 20 1998 27 The GEO Group Inc About Us History 28 Id 29 The GEO Group The GEO Group Announces Acquisition of Eight Correctional and Detention Facilities Totaling More Than
6500 Beds [Press Release] January 26 2015
5
Throughout the maturation of the private prison industry the number of people incarcerated grew
260 from 437248 in 1983 to 1574741 in 201330
Still the number of prisoners held in for-profit
prisons grew at a rate that significantly outpaced the already dramatic growth rate of incarceration more
generally31
By 2013 there were 133044 prisoners or 8 of the total prison population housed in for-
profit prisons32
Though the majority of these prisoners are state prisoners for-profit prisons account for a
larger segment of the federal prison population than the state prison population33
In fact federal agencies
make up more than 40 of CCArsquos client base34
The US Marshals Service (USMS) accounts for 17
and the Federal Bureau of Prisons (BOP) and Immigration and Customs Enforcement (ICE) each account
for another 1335
ICE is also GEOrsquos largest client36
Thus not surprisingly
there is a cluster of for-profit
prisons in the states along the
Mexican-American border Texas
New Mexico Arizona and
California However with more
than 40 of for-profit prisons
located in the southwest and
another 30 in the southeast37
the prevalence of immigration detention cannot be the only factor driving private prison companies to
concentrate their operations in the south Southern states also offer the highest incarceration rates in the
30 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 1986 (Washington DC
Government Printing Office May 1987) 1 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics
Prisoners in 2013 by E Ann Carson (Washington DC Government Printing Office September 2014) 2 31 American Civil Liberties Union Banking on Bondage Private Prisons and Mass Incarceration (New York NY American
Civil Liberties Union November 2011) 5 32 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 33 Id 34 Corrections Corporation of America 2014 Annual Report Form 10-K 9 35 Id 36 Aviva Shen ldquoPrivate Prisons Spend $45 Million On Lobbying Rake In $51 Billion For Immigrant Detention Alonerdquo
ThinkProgress August 3 2012 37 See Figure 1
Figure 2 Regional State Prison Incarceration Rates
Source Peter Wagner ldquoTracking State Prison Growth in 50 Statesrdquo Prison
Policy Initiative May 28 2014
6
nation and a conservative political climate that has endorsed the ldquotough on crimerdquo policies that have
allowed them to persist over the years (see Figure 2) Furthermore their overwhelming republican
governments favor private sector expansion thus encouraging private prison companies to directly exploit
these ballooned incarceration rates Figure 3 provides more detail on the geographic concentration of four
of the leading private prison companies
Figure 3 Geographic Landscape of Private Prison Beds
Source US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann
Carson (Washington DC Government Printing Office September 2014) 7 Community Education Centers Facilities CEC
Corrections Correctional Corporation of America Locations MTC Management amp Training Corporation Corrections
Locations The GEO Group Inc 2014 Annual Report Form 10-K 13-16
While it is no coincidence that the geographic expansion of for-profit prisons has directly
correlated with regional incarceration rates it is difficult to determine whether private prison companies
are simply capitalizing on favorable conditions or driving them Surely private prison companies cannot
7
be blamed for creating the current incarceration crisis that began in the 1970s prior to their emergence or
even the conservative ideologies that contributed to their later success in certain regions However these
private prison companies have taken proactive steps to reinforce the conditions favorable to their success
and thus have fashioned a vicious feedback loop that encourages incarceration
Part II Threatening Growth Strategies The revenue model of private prison owners and operators depends on a per diem per prisoner
pay structure With per diem rates limited by existing operational costs at public facilities the profitability
of for-profit prisons relies on increasing man-days38
to maximize revenue and lowering operational costs
to minimize expenses The former approach promotes incarceration with no upward boundary while the
latter threatens prison conditions with at least some downward limit In this section we will discuss the
benefits and limits of these growth strategies and their implications on incarceration rates
Maximizing Revenue With a per diem revenue model increasing compensated man-days is critically important to the
profit growth of private prison companies These companies can increase their man-days in number of
ways First they can increase their companyrsquos market share of the existing private prison market through
mergers and acquisitions Second they can increase the private prison market share of the broader prison
market by increasing the number of privately contracted beds andor their occupancy rates Third they
can increase the overall utilization of prisons by increasing incarceration more generally In this section
we will touch on each of these strategies in more detail
Corporate Expansion Private prison companies can increase their share of the existing private
prison market by acquiring existing private prisons from competitors GEO took this approach when they
recently bought out LSC Corrections Services for approximately $312 million39
The acquisition added
38 Man-days are calculated by multiplying the number of prisoners by the number of days each serves 39 The GEO Group The GEO Group Announces Acquisition of Eight Correctional and Detention Facilities Totaling More Than
6500 Beds [Press Release] January 26 2015
8
eight facilities or 6500 beds to the companyrsquos portfolio40
Though both CCA and GEO have expanded
their market shares in this way in the past there are two rather substantial limitations to this growth
strategy current levels of privatization and the small number of players in the market In fact by 2007
there were only six players left41
Thus this is unlikely to be the dominant growth strategy for these
private prison companies going forward
Prison Privatization Private prison companies can increase their man-days by increasing the
market share of for-profit prisons in corrections more broadly This approach is dependent on the
industryrsquos ability to gain government and public support for the privatization of corrections While private
prison companies have noted the opposition of certain groups such as labor unions and criminal justice
reform organizations42
they have nevertheless seen an expansion in their populations In fact the number
of prisoners held in for-profit prisons increased more than 1600 between 1990 and 200943
While contracting for additional beds private prison companies also make an effort to include
occupancy guarantees in their management contracts Sixty-five percent of management contracts have
such guarantee clauses44
These clauses typically promise occupancy rates between 80 and 100 and
offer to pay for unused prison beds below the delineated guarantee45
For example in 2012 CCA secured
a management contract from the Arizona Department of Corrections to incarcerate 1000 prisoners at the
Red Rock Correctional Center46
The contract included an occupancy guarantee of 90 for the contracted
beds47
As a result of such contracts in 2014 CCA and GEO enjoyed occupancy rates as high as 84 and
96 respectively48
This growth strategy holds a lot of promise since more than 90 of prisoners are still
40 Id 41 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 16 42 Corrections Corporation of America 2014 Annual Report Form 10-K 26 43 American Civil Liberties Union Banking on Bondage Private Prisons and Mass Incarceration (New York NY American
Civil Liberties Union November 2011) 5 44 In the Public Interest Criminal How Lockup Quotas and ldquoLow-Crime Taxesrdquo Guarantee Profits for Private Prison
Corporations (Washington DC In the Public Interest September 2013) 6 45 Id at 3-6 46 Corrections Corporation of America 2014 Annual Report Form 10-K F-20 47 Id 48 Corrections Corporation of America 2014 Annual Report Form 10-K 6 The GEO Group Inc 2014 Annual Report Form
10-K 54 For Corrections Corporation of American data includes idle facilities but excludes facilities marked for
discontinuation For The GEO Group data excludes idle facilities
9
held in public prisons49
However there is still an absolute ceiling set by the number of people
incarcerated and a lower practical ceiling set by correctional systems and their policies about what types
of populations can be housed in for-profit prisons
Prison Utilization Private prisons are relied upon to relieve strains on government budgets and
concerns of overcrowding50
Accordingly private prison companies fair best when incarceration is high
enough to create such burdens Thus these companies can grow their man-days by increasing the overall
number of people incarcerated This approach undoubtedly raises the greatest number of ethical issues
but it also the only uncapped growth strategy And not only is the strategy recognized by private prison
companies but efforts made to reduce incarceration are viewed as threats to profitability In fact both
CCA and GEO cite leniency in conviction and sentencing decriminalization of drug and immigration
offenses and even reductions in crime as business risks In its 2014 Annual Report CCA states
growth depends on a number of factors we cannot control including crime rates and
sentencing patterns in various jurisdictions The demand for our facilities and services could
be adversely affected by the relaxation of enforcement efforts leniency in conviction or parole
standards and sentencing practices or through the decriminalization of certain activities that are
currently proscribed by criminal laws For instance any changes with respect to drugs and
controlled substances or illegal immigration could affect the number of persons arrested
convicted and sentenced thereby potentially reducing demand for correctional facilities to house
them Legislation has also been proposed in numerous jurisdictions that could lower minimum
sentences for some non-violent crimes and 25 make more inmates eligible for early release based
on good behavior Also sentencing alternatives under consideration could put some offenders on
probation with electronic monitoring who would otherwise be incarcerated Similarly reductions
in crime rates or resources dedicated to prevent and enforce crime could lead to reductions in
arrests convictions and sentences requiring incarceration at correctional facilities51
Similarly in its 2014 Annual Report GEO states
The demand for our correctional and detention facilities and services could be adversely
affected by changes in existing criminal or immigration laws crime rates in jurisdictions in which
we operate the relaxation of criminal or immigration enforcement efforts leniency in conviction
sentencing or deportation practices and the decriminalization of certain activities that are
currently proscribed by criminal laws or the loosening of immigration laws For example any
changes with respect to the decriminalization of drugs and controlled substances could affect the
number of persons arrested convicted sentenced and incarcerated thereby potentially reducing
49 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 50 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 3 51 Corrections Corporation of America 2014 Annual Report Form 10-K 27-28
10
demand for correctional facilities to house them Similarly reductions in crime rates could lead to
reductions in arrests convictions and sentences requiring incarceration at correctional facilities52
In summary the profitability of private prison companies comes at the expense of public safety and
personal liberty It may not be surprising then that the recidivism rates of privately held prisons are higher
than those of publicly run prisons53
After all it is within the best interest of private prison companies to
have a revolving door at their facilities
Minimizing Expenses Another way private prison companies seek to increase profitability is by reducing their
operational expensesmdashthe less they spend the more they pocket With approximately 65-70 of prison
expenditures going to staff54
private prison companies save the most in operational costs by avoiding
unionized labor and the associated personnel services55
Consequently the correctional staff at for-profit
prisons tend to be inadequately trained and poorly paid56
Not surprisingly private prisons have been
condemned for higher rates of violence and abuse57
Private prisons also cut costs related to food
healthcare and programs58
While lowering these expenses may not directly influence incarceration rates
it may have an indirect impact by worsening prison conditions and thus putting prisoners in poorer mental
and physical health for release Indeed as already noted studies have showed that recidivism rates are
higher for private prisons than public prisons59
Interestingly financial efficiency is also the primary alternative explanation for the expansion of
for-profit prisons in highly incarcerative states If true the interests of the public and private sectors
would in some way be aligned With lower operational costs private prison companies can still promise
savings for federal and state systems while charging profit premiums There is indeed some truth to these
52 The GEO Group Inc 2014 Annual Report Form 10-K 36 53 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015 54 US Department of Justice Office of Justice Programs Bureau of Justice Assistance Emerging Issues on Privatized Prisons
by James Austin and Garry Coventry (Washington DC Government Printing Office February 2001) 16 55 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 23-24 56 Brendan Fischer ldquoViolence Abuse and Death at For-Profit Prisons A GEO Group Rap Sheetrdquo The Center for Media and
Democracyrsquos PR Watch September 26 2013 57 US Department of Justice Office of Justice Programs Bureau of Justice Assistance Emerging Issues on Privatized Prisons
by James Austin and Garry Coventry (Washington DC Government Printing Office February 2001) 36-37 48 58 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015 59 Id
11
claims with short-run savings averaging about 19 and long-run savings averaging about 2960
Some
states even require private prison companies to offer a specified discount to public per-diem costs For
example Texas Kentucky and Mississippi have contract stipulations that require a 10 savings61
Moreover a recent study found that the cost savings of for-profit prisons is often underestimated because
they fail to account for savings on personnel services such as pensions and healthcare for retirees which
may not be attributed directly to state correctional departments62
Finally with operating margins as high
as 30 and per diem costs still lower than those in public prisons63
some might consider for-profit
prisons much more financially efficient However comparing private and public operational costs is not
as straight forward as private prison companies might like the public to believe There are in fact hidden
costs that private prison companies either unfairly avoid or perhaps even create for public prisons
First for-profit prisons can cherry-pick the most desirable or profitable prisoners from the
general prison population Generally this means that for-profit prisons house healthy minimum security
prisoners who are cheaper to incarcerate States are left to run maximum security prisons that require
ldquomore intensive security systems and proceduresrdquo64
Public prisons also typically house specialized
populations such as sex offenders that are more expensive due to higher treatment and administrative
needs65
Finally public prisons also tend to be responsible for prisoners with moderate to high mental or
physical healthcare needs These population differences allow private prison companies to demonstrate
artificial savings for states
60 Id Short-run costs are those associated with the day-to-day operation of prison facilities Long-run costs include short-run
costs plus the capital expenditures associated with maintaining and building prisons 61 Id 62 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 3 63 Association of State Correctional Administrators Inmate Cost Per Day Follow Up Survey (September 2011) 64 Harris Kenny and Leonard Gilroy The Challenge of Comparing Public and Private Correctional Costs (Reason Foundation
December 2013) 4-5 65 Id
12
Second as already mentioned studies have shown that for-profit prisons have marginally higher
rates of recidivism than their public counterparts66
Ethical concerns aside higher recidivism rates burden
states with additional incarceration expenses in the future Though a differential of 3-4 may seem
negligible a difference of even one
percentage point can amount to
considerable costs particularly in states
with high incarceration costs For
example in New York where the
annual cost of incarcerating one person
is more than $60000 recidivism comes
at a very high price Figure 4 provides
further detail on the annual costs of
incarceration by state
In their efforts to maximize revenues and minimize expenses private prison companies rely
heavily on growth strategies that promote incarceration Given the obvious ethical implications private
prison companies are less than public about their expansion intentions Consequently they employ
growth tactics that manipulate political elections and criminal lawmaking weakening the influence of
popular democracy on criminal law and policy
Part III Undermining Democracy With most private prison contracts executed by federal state and local policymakers the for-
profit prison industry relies heavily on political relationships Accordingly the industry has a dual-
pronged political strategy that undermines democratic legitimacy in its dependence on legislative
lobbying and campaign financing
66 Spivak Andrew L and Susan F Sharp ldquoInmate Recidivism As a Measure of Private Prison Performancerdquo Crime amp
Delinquency Vol 54 (Washington DC SAGE Publications July 2008) 482-508
Figure 4 Annual Cost of Incarceration per Prisoner
Source Theirry Godard ldquoThe Economics of the American Prison Systemrdquo
SmartAsset January 23 2015
13
Legislative Lobbying Despite denying lobbying involvement in the past ten years the three leading private prison
operators have spent over $45 million on lobbying67
According to the companyrsquos own literature CCA
has an explicit policy prohibiting it from ldquoengaging in lobbying or advocacy efforts that would influence
enforcement efforts parole standards criminal laws and sentencing policiesrdquo68
Yet over the past decade
CCA like its competitors has spent more than $900000 annually on lobbying69
In fact not only do
private prison operators utilize the services of lobbying firms they also employ their own in-house
lobbyists
Since 2002 alone CCA has employed nearly 400 lobbyists across 30 states70
In 2014 the
company had 36 active lobbyists in 10 states focusing heavily on Florida Vermont Tennessee
California Pennsylvania Kentucky and Minnesota71
Over the same time frame GEO has employed
more than 200 lobbyists across 11 states focusing heavily on Florida California Texas Pennsylvania
and Virginia72
In 2014 the company had 15 active lobbyists across 5 states73
Attention to these specific states has been a successful strategy play for private prison operators
Aside from being the home to the headquarters of GEO Florida also has the second largest private prison
population and the market share of these for-profit prisons is only increasing74
Between 2012 and 2013
the private prison population in Florida grew 1 while the private prison population across all states
decreased 575
Lobbying centered on California has also produced strong results With the second
largest prison population in the country and a judicial order to remedy overcrowding76
California has
67 Aviva Shen ldquoPrivate Prisons Spend $45 Million On Lobbying Rake In $51 Billion For Immigrant Detention Alonerdquo
ThinkProgress August 3 2012 68 Corrections Corporation of America 2014 Annual Report Form 10-K 28 69 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 22 70 National Institute on Money in State Politics Corrections Corporation of America April 29 2015 71 Id 72 National Institute on Money in State Politics GEO Group April 29 2015 73 Id 74 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 75 Id 76 Id at 5
14
largely embraced private prisons Accordingly between 2012 and 2013 the private prison population in
California grew 23377
Both CCA and GEO are private sector members of American Legislative Exchange Council
(ALEC) a nonpartisan organization aimed at advancing ldquolimited government free markets and
federalism at the state levelrdquo78
The organization utilizes a public-private partnership structure to bring
together state legislators members of the private sector and the general public to draft and introduce
model legislation ALEC has played a role in the passing of mandatory minimum three strikes and truth-
in-sentencing laws all of which have contributed to the rapid growth of incarceration since the 1970s79
Unfortunately further detail about the
lobbying efforts of private prison
operators is lacking since lobbyists are
not required to report the direction in
which they lobbied on any particular
piece of legislation80
Campaign Financing Since 1990 the private prison
operators have made nearly $15 million in
political contributions at the state and
local level81
These contributions have
seen a dramatic uptick in recent years
77 Id at 14 78 American Legislative Exchange Council About Us 79 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 29 80 Id at 21 81 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
$2650346
$-
$500000
$1000000
$1500000
$2000000
$2500000
$3000000
Figure 5 State and Local Political Contributions of
Private Prison Companies by Year
Source National Institute on Money in State Politics Correctional
facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
15
with 2014 representing the highest amount yet at $27 million82
CCA and GEO along with their
acquisitions have accounted for 72 of these political contributions over the years83
The two companies
also made combined political contributions of nearly $1 million at the federal level since just 201084
Moreover these company-specific figures under estimate their political influence because they fail to
capture the individual political contributions of the companiesrsquo executive leadership and board of
directors In fact the Chief Executive Officer of GEO George Zoley and one of the founding partners of
CCA Doctor Crants have each made approximately $90000 in political contributions85
Approximately half of all state and local political contributions are made to party committees the
largest beneficiary of which is the Florida Republican Party which has received more than $4 million86
Another substantial proportion of
these contributions are made
directly to state and local
candidates87
Finally the remaining
3 of these contributions are made
to ballot measure committees88
Similar to lobbying
spending these contributions have
been relatively clustered in a few
states Florida California Texas
Tennessee and Virginia have all
82 Id 83 Id 84 Id 85 Id 86 Id 87 Id 88 Id
Figure 6 State and Local Political Contributions of
Private Prison Companies by State
Source National Institute on Money in State Politics Correctional facilities
construction amp managementfor-profit contributions to candidates and
committees April 29 2015
16
scene contributions in excess of $50000089
GEO is by far the largest correctional contributor in Florida
at $34 million and CCA has an equally substantial lead as the largest correctional contributor in
California at $15 million90
Though republican candidates tend to be the recipients of campaign contributions from private
prison operators nearly a third of contributions are made to democratic candidates91
Researchers have
taken this to suggest that private prison operators are less concerned with supporting particular political
beliefs than general access to political power92
In fact nearly 80 of campaign contributions support
winning candidates93
Even the timing of these contributions is strategically nuanced Private prison
operators tend to give in the early and late stages of political campaigns in order to establish a strong
rapport early and then reinforce a positive relationship with the candidate expected to win94
Conclusion Though private prison companies tend to tout financial efficiency as their great contribution to
corrections their incentives are in many ways diametrically opposed to those of a safe and free society
Their financial success depends on increasing crime law enforcement and liberty infractions
Accordingly they succumb to undercutting popular democracy to feed their bottom lines They rely on
the questionable practices of private sector lobbying and campaign financing to secure political support
for their business ventures They do so with as much secrecy as possible to stay out of the direct attack of
ethically minded opposition
Thus it seems only fitting that the fastest growing client for private prison companies is one that
intends to fly under the radar and enjoys the fewest protections illegal immigrants targeted by
Immigration and Customs Enforcement Both CCA and GEO highlighted the importance of the recent
89 Id 90 Id 91 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 19 92 Id at 18 93 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015 94 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 18
17
focus on immigration laws at the federal state and local level in their annual reports But they are not idle
players in the space they are well-prepared to protect and expand their enterprises For example 30 of the
36 legislators who co-sponsored Arizonarsquos immigration bill that would undoubtedly place more
immigrants in detention received campaign contributions from private prison companies95
If we are not
careful and perhaps even if we are federal state and local immigration policies will be dictated by a few
parties interested in further immigrant detention
Unfortunately business interests run high in politics and consistently undermine the legitimacy of
popular democracy To rein in the legislative lobbying and campaign financing of private prison
companies additional limitation would have to be made on such practices Alternatively the privatization
of prisons could be outlawed or at least more closely regulated For example legislation could be passed
that forbids private prison companies from relying on a revenue model that encourages incarceration or
prohibits states from paying owners and operators on a per diem per person basis Private prison
companies could instead offer the public sector better recidivism rates in exchange for higher payouts
similar to the social impact bond model It may not be entirely prudent to dismiss privatization within
corrections or any other public sector However as it currently stands the privatization of prisons
threatens all efforts to reduce mass incarceration
95 Andre N Sanchez ldquoPrivate Prisons Spend Millions On Lobbying To Put More People In Jailrdquo Think Progress June 23 2011
2
executive compensation representing an 18 increase from the previous year5 But insiders are not the
only beneficiaries For these publicly held companies these revenues have also produced millions in
shareholder dividends6 Yet many of these shareholders may not even know they have an ownership
stake in a private prison company7 Vanguard and Fidelity are the nationrsquos top 401(k) providers and also
the combined owners of 19 of CCA and 11 of GEO8 One index fund managed by Vanguard alone
owns nearly 8 of both CCA and GEO shares9
Private prison companies present such an attractive financial investment because they enjoy profit
margins higher than most private industries In 2014 CCA had a net profit margin nearly double that of
the average private company in the United States10
Even more impressively both CCA and GEO
reported operating margins north of 30 for the facilities they owned and managed11
margins higher than
that reported by Apple in 201412
And indeed the investments panned out the way investors would have
liked with CCArsquos stock price growing 74 and GEOrsquos growing 82 over the past five years13
Together CCA and GEO account for approximately 75 of the $74 billion private prison
market14
Other private prison companies include Management amp Training Corporation LaSalle
Southwest Corrections Community Education Centers and Emerald Companies Figure 1 provides more
detail on the scale clientele and geographic presence of private prison companies in America
5 Morningstar Corrections Corporation of America Chart Morningstar The GEO Group Chart 6 Corrections Corporation of America 2014 Annual Report Form 10-K F-5 The GEO Group Inc 2014 Annual Report Form
10-K 94 7 Ray Downs ldquoWhorsquos Getting Rich off the Prison-Industrial Complexrdquo Vice May 17 2013 8 Morningstar Corrections Corporation of America Ownership Major Owners Morningstar The GEO Group Ownership
Major Owners 9 Id 10 Corrections Corporation of America 2014 Annual Report Form 10-K F-4 Sageworks The Private Company Report
(Raleigh NC Sageworks March 30 2015) 1 11 Corrections Corporation of America 2014 Annual Report Form 10-K 59 Refers only to the operating margin of The GEO
Grouprsquos US Corrections amp Detention business unit 12 Apple Inc 2014 Annual Report Form 10-K 45 13 Morningstar Corrections Corporation of America Insiders Executive Compensation Morningstar The GEO Group Insiders
Executive Compensation 14 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015
3
Figure 1 Leading Private Prison Owners and Operators
Source Correctional Corporation of America Locations The GEO Group Inc 2014 Annual Report Form 10-K 13-16 The
GEO Group Inc Locations MTC Management amp Training Corporation Corrections Locations LaSalle Corrections Our
Locations Community Education Centers Facilities CEC Corrections Emerald Companies Company Locations
This paper will discuss the relationship between private prison companies and criminal law and
policy Part I will offer a brief overview of the modern history of for-profit prisons Part II will provide
more detail on the profit model of private prison companies and their accompanying growth strategies
Part III will then discuss the ways in which these strategies undermine democratic processes within the
criminal justice sphere Throughout the paper we will also address the leading alternative explanation for
the correlation between high incarceration rates and the presence of for-profit prisonsmdashthat private
prisons offer a less expensive solution to incarceration for budget constrained states
15 Refers only to The GEO Grouprsquos US Corrections amp Detention business unit and includes facilities recently acquired from
LSC Corrections Services 16 Includes LaSalle Corrections Community Education Centers and Emerald Companies 17 Does not include leased out or non-correctional facilities
Corrections
Corporation
of America
The GEO
Group15
Management
amp Training
Corporation
Other Owners
Operators16
Facilities17
() 59 61 22 29
LeasedOwned amp Managed 47 37 -- --
Managed Only 12 24 -- --
Beds () 85297 69697 26425 19129
Contract Agency
Immigration 12 12 2 7
Federal 17 18 3 12
StateLocal 34 34 17 21
Region
Northeast 2 2 0 1
Midwest 5 3 1 1
West 9 18 3 1
Southeast 19 16 5 11
Southwest 24 22 13 15
4
Part I The Emergence of For-Profit Prisons The modern age of prison privatization began in 1983 after the prison population grew more than
10 in consecutive years18
with the incorporation of CCA19
The company received its first federal
contract in Texas later that year and its first state contract in Tennessee the following year20
In 1984
CCA also opened the very first privately owned prison the Houston Processing Center in Texas21
In the
same year Wackenhut Corrections Corporation (WCC) was formed under the parent company of The
Wackenhut Corporation22
Just two years later in 1986 CCA leaped into an initial public offering on the
NASDAQ (WCC would follow suit in 1994)23
The following year WCC was awarded its first contract
over the Aurora Processing Center in Colorado24
Over the next five years these private prison conglomerates continued to expand operations while
a number of smaller private prison companies also emerged presenting an early opportunity for industry
consolidation In just 1995 CCA acquired TransCor America Concept and Corrections Partners25
In
1998 CCA acquired the third largest private prison company at the time US Corrections Corporation
for $10 million26
Years later in 2005 WCC would change its name to The GEO Group and embark on a
similar acquisition strategy27
Between 2005 and 2010 GEO acquired Correctional Services Corporation
CentraCore Properties Trust and Cornell Companies28
In 2014 GEO also acquired LSC Corrections
Services29
18 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 1986 (Washington DC
Government Printing Office May 1987) 1 19 Correctional Corporation of America About Us Who We Are Our History 20 Correctional Corporation of America About Us Who We Are Our History The Sentencing Project Prison Privatization and
the Use of Incarceration (Washington DC The Sentencing Project 2004) 1 21 Correctional Corporation of America About Us Who We Are Our History 22 The GEO Group Inc About Us History 23 Correctional Corporation of America About Us Who We Are Our History The GEO Group Inc About Us History 24 The GEO Group Inc About Us History 25 Correctional Corporation of America About Us Who We Are Our History 26 Corrections Corporation of America Corrections Corporation of America and CCA Prison Realty Trust to Merge In $4 Billion
Transaction Companies Acquire US Corrections Corporation [Press Release] April 20 1998 27 The GEO Group Inc About Us History 28 Id 29 The GEO Group The GEO Group Announces Acquisition of Eight Correctional and Detention Facilities Totaling More Than
6500 Beds [Press Release] January 26 2015
5
Throughout the maturation of the private prison industry the number of people incarcerated grew
260 from 437248 in 1983 to 1574741 in 201330
Still the number of prisoners held in for-profit
prisons grew at a rate that significantly outpaced the already dramatic growth rate of incarceration more
generally31
By 2013 there were 133044 prisoners or 8 of the total prison population housed in for-
profit prisons32
Though the majority of these prisoners are state prisoners for-profit prisons account for a
larger segment of the federal prison population than the state prison population33
In fact federal agencies
make up more than 40 of CCArsquos client base34
The US Marshals Service (USMS) accounts for 17
and the Federal Bureau of Prisons (BOP) and Immigration and Customs Enforcement (ICE) each account
for another 1335
ICE is also GEOrsquos largest client36
Thus not surprisingly
there is a cluster of for-profit
prisons in the states along the
Mexican-American border Texas
New Mexico Arizona and
California However with more
than 40 of for-profit prisons
located in the southwest and
another 30 in the southeast37
the prevalence of immigration detention cannot be the only factor driving private prison companies to
concentrate their operations in the south Southern states also offer the highest incarceration rates in the
30 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 1986 (Washington DC
Government Printing Office May 1987) 1 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics
Prisoners in 2013 by E Ann Carson (Washington DC Government Printing Office September 2014) 2 31 American Civil Liberties Union Banking on Bondage Private Prisons and Mass Incarceration (New York NY American
Civil Liberties Union November 2011) 5 32 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 33 Id 34 Corrections Corporation of America 2014 Annual Report Form 10-K 9 35 Id 36 Aviva Shen ldquoPrivate Prisons Spend $45 Million On Lobbying Rake In $51 Billion For Immigrant Detention Alonerdquo
ThinkProgress August 3 2012 37 See Figure 1
Figure 2 Regional State Prison Incarceration Rates
Source Peter Wagner ldquoTracking State Prison Growth in 50 Statesrdquo Prison
Policy Initiative May 28 2014
6
nation and a conservative political climate that has endorsed the ldquotough on crimerdquo policies that have
allowed them to persist over the years (see Figure 2) Furthermore their overwhelming republican
governments favor private sector expansion thus encouraging private prison companies to directly exploit
these ballooned incarceration rates Figure 3 provides more detail on the geographic concentration of four
of the leading private prison companies
Figure 3 Geographic Landscape of Private Prison Beds
Source US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann
Carson (Washington DC Government Printing Office September 2014) 7 Community Education Centers Facilities CEC
Corrections Correctional Corporation of America Locations MTC Management amp Training Corporation Corrections
Locations The GEO Group Inc 2014 Annual Report Form 10-K 13-16
While it is no coincidence that the geographic expansion of for-profit prisons has directly
correlated with regional incarceration rates it is difficult to determine whether private prison companies
are simply capitalizing on favorable conditions or driving them Surely private prison companies cannot
7
be blamed for creating the current incarceration crisis that began in the 1970s prior to their emergence or
even the conservative ideologies that contributed to their later success in certain regions However these
private prison companies have taken proactive steps to reinforce the conditions favorable to their success
and thus have fashioned a vicious feedback loop that encourages incarceration
Part II Threatening Growth Strategies The revenue model of private prison owners and operators depends on a per diem per prisoner
pay structure With per diem rates limited by existing operational costs at public facilities the profitability
of for-profit prisons relies on increasing man-days38
to maximize revenue and lowering operational costs
to minimize expenses The former approach promotes incarceration with no upward boundary while the
latter threatens prison conditions with at least some downward limit In this section we will discuss the
benefits and limits of these growth strategies and their implications on incarceration rates
Maximizing Revenue With a per diem revenue model increasing compensated man-days is critically important to the
profit growth of private prison companies These companies can increase their man-days in number of
ways First they can increase their companyrsquos market share of the existing private prison market through
mergers and acquisitions Second they can increase the private prison market share of the broader prison
market by increasing the number of privately contracted beds andor their occupancy rates Third they
can increase the overall utilization of prisons by increasing incarceration more generally In this section
we will touch on each of these strategies in more detail
Corporate Expansion Private prison companies can increase their share of the existing private
prison market by acquiring existing private prisons from competitors GEO took this approach when they
recently bought out LSC Corrections Services for approximately $312 million39
The acquisition added
38 Man-days are calculated by multiplying the number of prisoners by the number of days each serves 39 The GEO Group The GEO Group Announces Acquisition of Eight Correctional and Detention Facilities Totaling More Than
6500 Beds [Press Release] January 26 2015
8
eight facilities or 6500 beds to the companyrsquos portfolio40
Though both CCA and GEO have expanded
their market shares in this way in the past there are two rather substantial limitations to this growth
strategy current levels of privatization and the small number of players in the market In fact by 2007
there were only six players left41
Thus this is unlikely to be the dominant growth strategy for these
private prison companies going forward
Prison Privatization Private prison companies can increase their man-days by increasing the
market share of for-profit prisons in corrections more broadly This approach is dependent on the
industryrsquos ability to gain government and public support for the privatization of corrections While private
prison companies have noted the opposition of certain groups such as labor unions and criminal justice
reform organizations42
they have nevertheless seen an expansion in their populations In fact the number
of prisoners held in for-profit prisons increased more than 1600 between 1990 and 200943
While contracting for additional beds private prison companies also make an effort to include
occupancy guarantees in their management contracts Sixty-five percent of management contracts have
such guarantee clauses44
These clauses typically promise occupancy rates between 80 and 100 and
offer to pay for unused prison beds below the delineated guarantee45
For example in 2012 CCA secured
a management contract from the Arizona Department of Corrections to incarcerate 1000 prisoners at the
Red Rock Correctional Center46
The contract included an occupancy guarantee of 90 for the contracted
beds47
As a result of such contracts in 2014 CCA and GEO enjoyed occupancy rates as high as 84 and
96 respectively48
This growth strategy holds a lot of promise since more than 90 of prisoners are still
40 Id 41 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 16 42 Corrections Corporation of America 2014 Annual Report Form 10-K 26 43 American Civil Liberties Union Banking on Bondage Private Prisons and Mass Incarceration (New York NY American
Civil Liberties Union November 2011) 5 44 In the Public Interest Criminal How Lockup Quotas and ldquoLow-Crime Taxesrdquo Guarantee Profits for Private Prison
Corporations (Washington DC In the Public Interest September 2013) 6 45 Id at 3-6 46 Corrections Corporation of America 2014 Annual Report Form 10-K F-20 47 Id 48 Corrections Corporation of America 2014 Annual Report Form 10-K 6 The GEO Group Inc 2014 Annual Report Form
10-K 54 For Corrections Corporation of American data includes idle facilities but excludes facilities marked for
discontinuation For The GEO Group data excludes idle facilities
9
held in public prisons49
However there is still an absolute ceiling set by the number of people
incarcerated and a lower practical ceiling set by correctional systems and their policies about what types
of populations can be housed in for-profit prisons
Prison Utilization Private prisons are relied upon to relieve strains on government budgets and
concerns of overcrowding50
Accordingly private prison companies fair best when incarceration is high
enough to create such burdens Thus these companies can grow their man-days by increasing the overall
number of people incarcerated This approach undoubtedly raises the greatest number of ethical issues
but it also the only uncapped growth strategy And not only is the strategy recognized by private prison
companies but efforts made to reduce incarceration are viewed as threats to profitability In fact both
CCA and GEO cite leniency in conviction and sentencing decriminalization of drug and immigration
offenses and even reductions in crime as business risks In its 2014 Annual Report CCA states
growth depends on a number of factors we cannot control including crime rates and
sentencing patterns in various jurisdictions The demand for our facilities and services could
be adversely affected by the relaxation of enforcement efforts leniency in conviction or parole
standards and sentencing practices or through the decriminalization of certain activities that are
currently proscribed by criminal laws For instance any changes with respect to drugs and
controlled substances or illegal immigration could affect the number of persons arrested
convicted and sentenced thereby potentially reducing demand for correctional facilities to house
them Legislation has also been proposed in numerous jurisdictions that could lower minimum
sentences for some non-violent crimes and 25 make more inmates eligible for early release based
on good behavior Also sentencing alternatives under consideration could put some offenders on
probation with electronic monitoring who would otherwise be incarcerated Similarly reductions
in crime rates or resources dedicated to prevent and enforce crime could lead to reductions in
arrests convictions and sentences requiring incarceration at correctional facilities51
Similarly in its 2014 Annual Report GEO states
The demand for our correctional and detention facilities and services could be adversely
affected by changes in existing criminal or immigration laws crime rates in jurisdictions in which
we operate the relaxation of criminal or immigration enforcement efforts leniency in conviction
sentencing or deportation practices and the decriminalization of certain activities that are
currently proscribed by criminal laws or the loosening of immigration laws For example any
changes with respect to the decriminalization of drugs and controlled substances could affect the
number of persons arrested convicted sentenced and incarcerated thereby potentially reducing
49 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 50 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 3 51 Corrections Corporation of America 2014 Annual Report Form 10-K 27-28
10
demand for correctional facilities to house them Similarly reductions in crime rates could lead to
reductions in arrests convictions and sentences requiring incarceration at correctional facilities52
In summary the profitability of private prison companies comes at the expense of public safety and
personal liberty It may not be surprising then that the recidivism rates of privately held prisons are higher
than those of publicly run prisons53
After all it is within the best interest of private prison companies to
have a revolving door at their facilities
Minimizing Expenses Another way private prison companies seek to increase profitability is by reducing their
operational expensesmdashthe less they spend the more they pocket With approximately 65-70 of prison
expenditures going to staff54
private prison companies save the most in operational costs by avoiding
unionized labor and the associated personnel services55
Consequently the correctional staff at for-profit
prisons tend to be inadequately trained and poorly paid56
Not surprisingly private prisons have been
condemned for higher rates of violence and abuse57
Private prisons also cut costs related to food
healthcare and programs58
While lowering these expenses may not directly influence incarceration rates
it may have an indirect impact by worsening prison conditions and thus putting prisoners in poorer mental
and physical health for release Indeed as already noted studies have showed that recidivism rates are
higher for private prisons than public prisons59
Interestingly financial efficiency is also the primary alternative explanation for the expansion of
for-profit prisons in highly incarcerative states If true the interests of the public and private sectors
would in some way be aligned With lower operational costs private prison companies can still promise
savings for federal and state systems while charging profit premiums There is indeed some truth to these
52 The GEO Group Inc 2014 Annual Report Form 10-K 36 53 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015 54 US Department of Justice Office of Justice Programs Bureau of Justice Assistance Emerging Issues on Privatized Prisons
by James Austin and Garry Coventry (Washington DC Government Printing Office February 2001) 16 55 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 23-24 56 Brendan Fischer ldquoViolence Abuse and Death at For-Profit Prisons A GEO Group Rap Sheetrdquo The Center for Media and
Democracyrsquos PR Watch September 26 2013 57 US Department of Justice Office of Justice Programs Bureau of Justice Assistance Emerging Issues on Privatized Prisons
by James Austin and Garry Coventry (Washington DC Government Printing Office February 2001) 36-37 48 58 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015 59 Id
11
claims with short-run savings averaging about 19 and long-run savings averaging about 2960
Some
states even require private prison companies to offer a specified discount to public per-diem costs For
example Texas Kentucky and Mississippi have contract stipulations that require a 10 savings61
Moreover a recent study found that the cost savings of for-profit prisons is often underestimated because
they fail to account for savings on personnel services such as pensions and healthcare for retirees which
may not be attributed directly to state correctional departments62
Finally with operating margins as high
as 30 and per diem costs still lower than those in public prisons63
some might consider for-profit
prisons much more financially efficient However comparing private and public operational costs is not
as straight forward as private prison companies might like the public to believe There are in fact hidden
costs that private prison companies either unfairly avoid or perhaps even create for public prisons
First for-profit prisons can cherry-pick the most desirable or profitable prisoners from the
general prison population Generally this means that for-profit prisons house healthy minimum security
prisoners who are cheaper to incarcerate States are left to run maximum security prisons that require
ldquomore intensive security systems and proceduresrdquo64
Public prisons also typically house specialized
populations such as sex offenders that are more expensive due to higher treatment and administrative
needs65
Finally public prisons also tend to be responsible for prisoners with moderate to high mental or
physical healthcare needs These population differences allow private prison companies to demonstrate
artificial savings for states
60 Id Short-run costs are those associated with the day-to-day operation of prison facilities Long-run costs include short-run
costs plus the capital expenditures associated with maintaining and building prisons 61 Id 62 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 3 63 Association of State Correctional Administrators Inmate Cost Per Day Follow Up Survey (September 2011) 64 Harris Kenny and Leonard Gilroy The Challenge of Comparing Public and Private Correctional Costs (Reason Foundation
December 2013) 4-5 65 Id
12
Second as already mentioned studies have shown that for-profit prisons have marginally higher
rates of recidivism than their public counterparts66
Ethical concerns aside higher recidivism rates burden
states with additional incarceration expenses in the future Though a differential of 3-4 may seem
negligible a difference of even one
percentage point can amount to
considerable costs particularly in states
with high incarceration costs For
example in New York where the
annual cost of incarcerating one person
is more than $60000 recidivism comes
at a very high price Figure 4 provides
further detail on the annual costs of
incarceration by state
In their efforts to maximize revenues and minimize expenses private prison companies rely
heavily on growth strategies that promote incarceration Given the obvious ethical implications private
prison companies are less than public about their expansion intentions Consequently they employ
growth tactics that manipulate political elections and criminal lawmaking weakening the influence of
popular democracy on criminal law and policy
Part III Undermining Democracy With most private prison contracts executed by federal state and local policymakers the for-
profit prison industry relies heavily on political relationships Accordingly the industry has a dual-
pronged political strategy that undermines democratic legitimacy in its dependence on legislative
lobbying and campaign financing
66 Spivak Andrew L and Susan F Sharp ldquoInmate Recidivism As a Measure of Private Prison Performancerdquo Crime amp
Delinquency Vol 54 (Washington DC SAGE Publications July 2008) 482-508
Figure 4 Annual Cost of Incarceration per Prisoner
Source Theirry Godard ldquoThe Economics of the American Prison Systemrdquo
SmartAsset January 23 2015
13
Legislative Lobbying Despite denying lobbying involvement in the past ten years the three leading private prison
operators have spent over $45 million on lobbying67
According to the companyrsquos own literature CCA
has an explicit policy prohibiting it from ldquoengaging in lobbying or advocacy efforts that would influence
enforcement efforts parole standards criminal laws and sentencing policiesrdquo68
Yet over the past decade
CCA like its competitors has spent more than $900000 annually on lobbying69
In fact not only do
private prison operators utilize the services of lobbying firms they also employ their own in-house
lobbyists
Since 2002 alone CCA has employed nearly 400 lobbyists across 30 states70
In 2014 the
company had 36 active lobbyists in 10 states focusing heavily on Florida Vermont Tennessee
California Pennsylvania Kentucky and Minnesota71
Over the same time frame GEO has employed
more than 200 lobbyists across 11 states focusing heavily on Florida California Texas Pennsylvania
and Virginia72
In 2014 the company had 15 active lobbyists across 5 states73
Attention to these specific states has been a successful strategy play for private prison operators
Aside from being the home to the headquarters of GEO Florida also has the second largest private prison
population and the market share of these for-profit prisons is only increasing74
Between 2012 and 2013
the private prison population in Florida grew 1 while the private prison population across all states
decreased 575
Lobbying centered on California has also produced strong results With the second
largest prison population in the country and a judicial order to remedy overcrowding76
California has
67 Aviva Shen ldquoPrivate Prisons Spend $45 Million On Lobbying Rake In $51 Billion For Immigrant Detention Alonerdquo
ThinkProgress August 3 2012 68 Corrections Corporation of America 2014 Annual Report Form 10-K 28 69 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 22 70 National Institute on Money in State Politics Corrections Corporation of America April 29 2015 71 Id 72 National Institute on Money in State Politics GEO Group April 29 2015 73 Id 74 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 75 Id 76 Id at 5
14
largely embraced private prisons Accordingly between 2012 and 2013 the private prison population in
California grew 23377
Both CCA and GEO are private sector members of American Legislative Exchange Council
(ALEC) a nonpartisan organization aimed at advancing ldquolimited government free markets and
federalism at the state levelrdquo78
The organization utilizes a public-private partnership structure to bring
together state legislators members of the private sector and the general public to draft and introduce
model legislation ALEC has played a role in the passing of mandatory minimum three strikes and truth-
in-sentencing laws all of which have contributed to the rapid growth of incarceration since the 1970s79
Unfortunately further detail about the
lobbying efforts of private prison
operators is lacking since lobbyists are
not required to report the direction in
which they lobbied on any particular
piece of legislation80
Campaign Financing Since 1990 the private prison
operators have made nearly $15 million in
political contributions at the state and
local level81
These contributions have
seen a dramatic uptick in recent years
77 Id at 14 78 American Legislative Exchange Council About Us 79 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 29 80 Id at 21 81 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
$2650346
$-
$500000
$1000000
$1500000
$2000000
$2500000
$3000000
Figure 5 State and Local Political Contributions of
Private Prison Companies by Year
Source National Institute on Money in State Politics Correctional
facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
15
with 2014 representing the highest amount yet at $27 million82
CCA and GEO along with their
acquisitions have accounted for 72 of these political contributions over the years83
The two companies
also made combined political contributions of nearly $1 million at the federal level since just 201084
Moreover these company-specific figures under estimate their political influence because they fail to
capture the individual political contributions of the companiesrsquo executive leadership and board of
directors In fact the Chief Executive Officer of GEO George Zoley and one of the founding partners of
CCA Doctor Crants have each made approximately $90000 in political contributions85
Approximately half of all state and local political contributions are made to party committees the
largest beneficiary of which is the Florida Republican Party which has received more than $4 million86
Another substantial proportion of
these contributions are made
directly to state and local
candidates87
Finally the remaining
3 of these contributions are made
to ballot measure committees88
Similar to lobbying
spending these contributions have
been relatively clustered in a few
states Florida California Texas
Tennessee and Virginia have all
82 Id 83 Id 84 Id 85 Id 86 Id 87 Id 88 Id
Figure 6 State and Local Political Contributions of
Private Prison Companies by State
Source National Institute on Money in State Politics Correctional facilities
construction amp managementfor-profit contributions to candidates and
committees April 29 2015
16
scene contributions in excess of $50000089
GEO is by far the largest correctional contributor in Florida
at $34 million and CCA has an equally substantial lead as the largest correctional contributor in
California at $15 million90
Though republican candidates tend to be the recipients of campaign contributions from private
prison operators nearly a third of contributions are made to democratic candidates91
Researchers have
taken this to suggest that private prison operators are less concerned with supporting particular political
beliefs than general access to political power92
In fact nearly 80 of campaign contributions support
winning candidates93
Even the timing of these contributions is strategically nuanced Private prison
operators tend to give in the early and late stages of political campaigns in order to establish a strong
rapport early and then reinforce a positive relationship with the candidate expected to win94
Conclusion Though private prison companies tend to tout financial efficiency as their great contribution to
corrections their incentives are in many ways diametrically opposed to those of a safe and free society
Their financial success depends on increasing crime law enforcement and liberty infractions
Accordingly they succumb to undercutting popular democracy to feed their bottom lines They rely on
the questionable practices of private sector lobbying and campaign financing to secure political support
for their business ventures They do so with as much secrecy as possible to stay out of the direct attack of
ethically minded opposition
Thus it seems only fitting that the fastest growing client for private prison companies is one that
intends to fly under the radar and enjoys the fewest protections illegal immigrants targeted by
Immigration and Customs Enforcement Both CCA and GEO highlighted the importance of the recent
89 Id 90 Id 91 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 19 92 Id at 18 93 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015 94 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 18
17
focus on immigration laws at the federal state and local level in their annual reports But they are not idle
players in the space they are well-prepared to protect and expand their enterprises For example 30 of the
36 legislators who co-sponsored Arizonarsquos immigration bill that would undoubtedly place more
immigrants in detention received campaign contributions from private prison companies95
If we are not
careful and perhaps even if we are federal state and local immigration policies will be dictated by a few
parties interested in further immigrant detention
Unfortunately business interests run high in politics and consistently undermine the legitimacy of
popular democracy To rein in the legislative lobbying and campaign financing of private prison
companies additional limitation would have to be made on such practices Alternatively the privatization
of prisons could be outlawed or at least more closely regulated For example legislation could be passed
that forbids private prison companies from relying on a revenue model that encourages incarceration or
prohibits states from paying owners and operators on a per diem per person basis Private prison
companies could instead offer the public sector better recidivism rates in exchange for higher payouts
similar to the social impact bond model It may not be entirely prudent to dismiss privatization within
corrections or any other public sector However as it currently stands the privatization of prisons
threatens all efforts to reduce mass incarceration
95 Andre N Sanchez ldquoPrivate Prisons Spend Millions On Lobbying To Put More People In Jailrdquo Think Progress June 23 2011
3
Figure 1 Leading Private Prison Owners and Operators
Source Correctional Corporation of America Locations The GEO Group Inc 2014 Annual Report Form 10-K 13-16 The
GEO Group Inc Locations MTC Management amp Training Corporation Corrections Locations LaSalle Corrections Our
Locations Community Education Centers Facilities CEC Corrections Emerald Companies Company Locations
This paper will discuss the relationship between private prison companies and criminal law and
policy Part I will offer a brief overview of the modern history of for-profit prisons Part II will provide
more detail on the profit model of private prison companies and their accompanying growth strategies
Part III will then discuss the ways in which these strategies undermine democratic processes within the
criminal justice sphere Throughout the paper we will also address the leading alternative explanation for
the correlation between high incarceration rates and the presence of for-profit prisonsmdashthat private
prisons offer a less expensive solution to incarceration for budget constrained states
15 Refers only to The GEO Grouprsquos US Corrections amp Detention business unit and includes facilities recently acquired from
LSC Corrections Services 16 Includes LaSalle Corrections Community Education Centers and Emerald Companies 17 Does not include leased out or non-correctional facilities
Corrections
Corporation
of America
The GEO
Group15
Management
amp Training
Corporation
Other Owners
Operators16
Facilities17
() 59 61 22 29
LeasedOwned amp Managed 47 37 -- --
Managed Only 12 24 -- --
Beds () 85297 69697 26425 19129
Contract Agency
Immigration 12 12 2 7
Federal 17 18 3 12
StateLocal 34 34 17 21
Region
Northeast 2 2 0 1
Midwest 5 3 1 1
West 9 18 3 1
Southeast 19 16 5 11
Southwest 24 22 13 15
4
Part I The Emergence of For-Profit Prisons The modern age of prison privatization began in 1983 after the prison population grew more than
10 in consecutive years18
with the incorporation of CCA19
The company received its first federal
contract in Texas later that year and its first state contract in Tennessee the following year20
In 1984
CCA also opened the very first privately owned prison the Houston Processing Center in Texas21
In the
same year Wackenhut Corrections Corporation (WCC) was formed under the parent company of The
Wackenhut Corporation22
Just two years later in 1986 CCA leaped into an initial public offering on the
NASDAQ (WCC would follow suit in 1994)23
The following year WCC was awarded its first contract
over the Aurora Processing Center in Colorado24
Over the next five years these private prison conglomerates continued to expand operations while
a number of smaller private prison companies also emerged presenting an early opportunity for industry
consolidation In just 1995 CCA acquired TransCor America Concept and Corrections Partners25
In
1998 CCA acquired the third largest private prison company at the time US Corrections Corporation
for $10 million26
Years later in 2005 WCC would change its name to The GEO Group and embark on a
similar acquisition strategy27
Between 2005 and 2010 GEO acquired Correctional Services Corporation
CentraCore Properties Trust and Cornell Companies28
In 2014 GEO also acquired LSC Corrections
Services29
18 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 1986 (Washington DC
Government Printing Office May 1987) 1 19 Correctional Corporation of America About Us Who We Are Our History 20 Correctional Corporation of America About Us Who We Are Our History The Sentencing Project Prison Privatization and
the Use of Incarceration (Washington DC The Sentencing Project 2004) 1 21 Correctional Corporation of America About Us Who We Are Our History 22 The GEO Group Inc About Us History 23 Correctional Corporation of America About Us Who We Are Our History The GEO Group Inc About Us History 24 The GEO Group Inc About Us History 25 Correctional Corporation of America About Us Who We Are Our History 26 Corrections Corporation of America Corrections Corporation of America and CCA Prison Realty Trust to Merge In $4 Billion
Transaction Companies Acquire US Corrections Corporation [Press Release] April 20 1998 27 The GEO Group Inc About Us History 28 Id 29 The GEO Group The GEO Group Announces Acquisition of Eight Correctional and Detention Facilities Totaling More Than
6500 Beds [Press Release] January 26 2015
5
Throughout the maturation of the private prison industry the number of people incarcerated grew
260 from 437248 in 1983 to 1574741 in 201330
Still the number of prisoners held in for-profit
prisons grew at a rate that significantly outpaced the already dramatic growth rate of incarceration more
generally31
By 2013 there were 133044 prisoners or 8 of the total prison population housed in for-
profit prisons32
Though the majority of these prisoners are state prisoners for-profit prisons account for a
larger segment of the federal prison population than the state prison population33
In fact federal agencies
make up more than 40 of CCArsquos client base34
The US Marshals Service (USMS) accounts for 17
and the Federal Bureau of Prisons (BOP) and Immigration and Customs Enforcement (ICE) each account
for another 1335
ICE is also GEOrsquos largest client36
Thus not surprisingly
there is a cluster of for-profit
prisons in the states along the
Mexican-American border Texas
New Mexico Arizona and
California However with more
than 40 of for-profit prisons
located in the southwest and
another 30 in the southeast37
the prevalence of immigration detention cannot be the only factor driving private prison companies to
concentrate their operations in the south Southern states also offer the highest incarceration rates in the
30 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 1986 (Washington DC
Government Printing Office May 1987) 1 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics
Prisoners in 2013 by E Ann Carson (Washington DC Government Printing Office September 2014) 2 31 American Civil Liberties Union Banking on Bondage Private Prisons and Mass Incarceration (New York NY American
Civil Liberties Union November 2011) 5 32 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 33 Id 34 Corrections Corporation of America 2014 Annual Report Form 10-K 9 35 Id 36 Aviva Shen ldquoPrivate Prisons Spend $45 Million On Lobbying Rake In $51 Billion For Immigrant Detention Alonerdquo
ThinkProgress August 3 2012 37 See Figure 1
Figure 2 Regional State Prison Incarceration Rates
Source Peter Wagner ldquoTracking State Prison Growth in 50 Statesrdquo Prison
Policy Initiative May 28 2014
6
nation and a conservative political climate that has endorsed the ldquotough on crimerdquo policies that have
allowed them to persist over the years (see Figure 2) Furthermore their overwhelming republican
governments favor private sector expansion thus encouraging private prison companies to directly exploit
these ballooned incarceration rates Figure 3 provides more detail on the geographic concentration of four
of the leading private prison companies
Figure 3 Geographic Landscape of Private Prison Beds
Source US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann
Carson (Washington DC Government Printing Office September 2014) 7 Community Education Centers Facilities CEC
Corrections Correctional Corporation of America Locations MTC Management amp Training Corporation Corrections
Locations The GEO Group Inc 2014 Annual Report Form 10-K 13-16
While it is no coincidence that the geographic expansion of for-profit prisons has directly
correlated with regional incarceration rates it is difficult to determine whether private prison companies
are simply capitalizing on favorable conditions or driving them Surely private prison companies cannot
7
be blamed for creating the current incarceration crisis that began in the 1970s prior to their emergence or
even the conservative ideologies that contributed to their later success in certain regions However these
private prison companies have taken proactive steps to reinforce the conditions favorable to their success
and thus have fashioned a vicious feedback loop that encourages incarceration
Part II Threatening Growth Strategies The revenue model of private prison owners and operators depends on a per diem per prisoner
pay structure With per diem rates limited by existing operational costs at public facilities the profitability
of for-profit prisons relies on increasing man-days38
to maximize revenue and lowering operational costs
to minimize expenses The former approach promotes incarceration with no upward boundary while the
latter threatens prison conditions with at least some downward limit In this section we will discuss the
benefits and limits of these growth strategies and their implications on incarceration rates
Maximizing Revenue With a per diem revenue model increasing compensated man-days is critically important to the
profit growth of private prison companies These companies can increase their man-days in number of
ways First they can increase their companyrsquos market share of the existing private prison market through
mergers and acquisitions Second they can increase the private prison market share of the broader prison
market by increasing the number of privately contracted beds andor their occupancy rates Third they
can increase the overall utilization of prisons by increasing incarceration more generally In this section
we will touch on each of these strategies in more detail
Corporate Expansion Private prison companies can increase their share of the existing private
prison market by acquiring existing private prisons from competitors GEO took this approach when they
recently bought out LSC Corrections Services for approximately $312 million39
The acquisition added
38 Man-days are calculated by multiplying the number of prisoners by the number of days each serves 39 The GEO Group The GEO Group Announces Acquisition of Eight Correctional and Detention Facilities Totaling More Than
6500 Beds [Press Release] January 26 2015
8
eight facilities or 6500 beds to the companyrsquos portfolio40
Though both CCA and GEO have expanded
their market shares in this way in the past there are two rather substantial limitations to this growth
strategy current levels of privatization and the small number of players in the market In fact by 2007
there were only six players left41
Thus this is unlikely to be the dominant growth strategy for these
private prison companies going forward
Prison Privatization Private prison companies can increase their man-days by increasing the
market share of for-profit prisons in corrections more broadly This approach is dependent on the
industryrsquos ability to gain government and public support for the privatization of corrections While private
prison companies have noted the opposition of certain groups such as labor unions and criminal justice
reform organizations42
they have nevertheless seen an expansion in their populations In fact the number
of prisoners held in for-profit prisons increased more than 1600 between 1990 and 200943
While contracting for additional beds private prison companies also make an effort to include
occupancy guarantees in their management contracts Sixty-five percent of management contracts have
such guarantee clauses44
These clauses typically promise occupancy rates between 80 and 100 and
offer to pay for unused prison beds below the delineated guarantee45
For example in 2012 CCA secured
a management contract from the Arizona Department of Corrections to incarcerate 1000 prisoners at the
Red Rock Correctional Center46
The contract included an occupancy guarantee of 90 for the contracted
beds47
As a result of such contracts in 2014 CCA and GEO enjoyed occupancy rates as high as 84 and
96 respectively48
This growth strategy holds a lot of promise since more than 90 of prisoners are still
40 Id 41 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 16 42 Corrections Corporation of America 2014 Annual Report Form 10-K 26 43 American Civil Liberties Union Banking on Bondage Private Prisons and Mass Incarceration (New York NY American
Civil Liberties Union November 2011) 5 44 In the Public Interest Criminal How Lockup Quotas and ldquoLow-Crime Taxesrdquo Guarantee Profits for Private Prison
Corporations (Washington DC In the Public Interest September 2013) 6 45 Id at 3-6 46 Corrections Corporation of America 2014 Annual Report Form 10-K F-20 47 Id 48 Corrections Corporation of America 2014 Annual Report Form 10-K 6 The GEO Group Inc 2014 Annual Report Form
10-K 54 For Corrections Corporation of American data includes idle facilities but excludes facilities marked for
discontinuation For The GEO Group data excludes idle facilities
9
held in public prisons49
However there is still an absolute ceiling set by the number of people
incarcerated and a lower practical ceiling set by correctional systems and their policies about what types
of populations can be housed in for-profit prisons
Prison Utilization Private prisons are relied upon to relieve strains on government budgets and
concerns of overcrowding50
Accordingly private prison companies fair best when incarceration is high
enough to create such burdens Thus these companies can grow their man-days by increasing the overall
number of people incarcerated This approach undoubtedly raises the greatest number of ethical issues
but it also the only uncapped growth strategy And not only is the strategy recognized by private prison
companies but efforts made to reduce incarceration are viewed as threats to profitability In fact both
CCA and GEO cite leniency in conviction and sentencing decriminalization of drug and immigration
offenses and even reductions in crime as business risks In its 2014 Annual Report CCA states
growth depends on a number of factors we cannot control including crime rates and
sentencing patterns in various jurisdictions The demand for our facilities and services could
be adversely affected by the relaxation of enforcement efforts leniency in conviction or parole
standards and sentencing practices or through the decriminalization of certain activities that are
currently proscribed by criminal laws For instance any changes with respect to drugs and
controlled substances or illegal immigration could affect the number of persons arrested
convicted and sentenced thereby potentially reducing demand for correctional facilities to house
them Legislation has also been proposed in numerous jurisdictions that could lower minimum
sentences for some non-violent crimes and 25 make more inmates eligible for early release based
on good behavior Also sentencing alternatives under consideration could put some offenders on
probation with electronic monitoring who would otherwise be incarcerated Similarly reductions
in crime rates or resources dedicated to prevent and enforce crime could lead to reductions in
arrests convictions and sentences requiring incarceration at correctional facilities51
Similarly in its 2014 Annual Report GEO states
The demand for our correctional and detention facilities and services could be adversely
affected by changes in existing criminal or immigration laws crime rates in jurisdictions in which
we operate the relaxation of criminal or immigration enforcement efforts leniency in conviction
sentencing or deportation practices and the decriminalization of certain activities that are
currently proscribed by criminal laws or the loosening of immigration laws For example any
changes with respect to the decriminalization of drugs and controlled substances could affect the
number of persons arrested convicted sentenced and incarcerated thereby potentially reducing
49 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 50 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 3 51 Corrections Corporation of America 2014 Annual Report Form 10-K 27-28
10
demand for correctional facilities to house them Similarly reductions in crime rates could lead to
reductions in arrests convictions and sentences requiring incarceration at correctional facilities52
In summary the profitability of private prison companies comes at the expense of public safety and
personal liberty It may not be surprising then that the recidivism rates of privately held prisons are higher
than those of publicly run prisons53
After all it is within the best interest of private prison companies to
have a revolving door at their facilities
Minimizing Expenses Another way private prison companies seek to increase profitability is by reducing their
operational expensesmdashthe less they spend the more they pocket With approximately 65-70 of prison
expenditures going to staff54
private prison companies save the most in operational costs by avoiding
unionized labor and the associated personnel services55
Consequently the correctional staff at for-profit
prisons tend to be inadequately trained and poorly paid56
Not surprisingly private prisons have been
condemned for higher rates of violence and abuse57
Private prisons also cut costs related to food
healthcare and programs58
While lowering these expenses may not directly influence incarceration rates
it may have an indirect impact by worsening prison conditions and thus putting prisoners in poorer mental
and physical health for release Indeed as already noted studies have showed that recidivism rates are
higher for private prisons than public prisons59
Interestingly financial efficiency is also the primary alternative explanation for the expansion of
for-profit prisons in highly incarcerative states If true the interests of the public and private sectors
would in some way be aligned With lower operational costs private prison companies can still promise
savings for federal and state systems while charging profit premiums There is indeed some truth to these
52 The GEO Group Inc 2014 Annual Report Form 10-K 36 53 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015 54 US Department of Justice Office of Justice Programs Bureau of Justice Assistance Emerging Issues on Privatized Prisons
by James Austin and Garry Coventry (Washington DC Government Printing Office February 2001) 16 55 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 23-24 56 Brendan Fischer ldquoViolence Abuse and Death at For-Profit Prisons A GEO Group Rap Sheetrdquo The Center for Media and
Democracyrsquos PR Watch September 26 2013 57 US Department of Justice Office of Justice Programs Bureau of Justice Assistance Emerging Issues on Privatized Prisons
by James Austin and Garry Coventry (Washington DC Government Printing Office February 2001) 36-37 48 58 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015 59 Id
11
claims with short-run savings averaging about 19 and long-run savings averaging about 2960
Some
states even require private prison companies to offer a specified discount to public per-diem costs For
example Texas Kentucky and Mississippi have contract stipulations that require a 10 savings61
Moreover a recent study found that the cost savings of for-profit prisons is often underestimated because
they fail to account for savings on personnel services such as pensions and healthcare for retirees which
may not be attributed directly to state correctional departments62
Finally with operating margins as high
as 30 and per diem costs still lower than those in public prisons63
some might consider for-profit
prisons much more financially efficient However comparing private and public operational costs is not
as straight forward as private prison companies might like the public to believe There are in fact hidden
costs that private prison companies either unfairly avoid or perhaps even create for public prisons
First for-profit prisons can cherry-pick the most desirable or profitable prisoners from the
general prison population Generally this means that for-profit prisons house healthy minimum security
prisoners who are cheaper to incarcerate States are left to run maximum security prisons that require
ldquomore intensive security systems and proceduresrdquo64
Public prisons also typically house specialized
populations such as sex offenders that are more expensive due to higher treatment and administrative
needs65
Finally public prisons also tend to be responsible for prisoners with moderate to high mental or
physical healthcare needs These population differences allow private prison companies to demonstrate
artificial savings for states
60 Id Short-run costs are those associated with the day-to-day operation of prison facilities Long-run costs include short-run
costs plus the capital expenditures associated with maintaining and building prisons 61 Id 62 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 3 63 Association of State Correctional Administrators Inmate Cost Per Day Follow Up Survey (September 2011) 64 Harris Kenny and Leonard Gilroy The Challenge of Comparing Public and Private Correctional Costs (Reason Foundation
December 2013) 4-5 65 Id
12
Second as already mentioned studies have shown that for-profit prisons have marginally higher
rates of recidivism than their public counterparts66
Ethical concerns aside higher recidivism rates burden
states with additional incarceration expenses in the future Though a differential of 3-4 may seem
negligible a difference of even one
percentage point can amount to
considerable costs particularly in states
with high incarceration costs For
example in New York where the
annual cost of incarcerating one person
is more than $60000 recidivism comes
at a very high price Figure 4 provides
further detail on the annual costs of
incarceration by state
In their efforts to maximize revenues and minimize expenses private prison companies rely
heavily on growth strategies that promote incarceration Given the obvious ethical implications private
prison companies are less than public about their expansion intentions Consequently they employ
growth tactics that manipulate political elections and criminal lawmaking weakening the influence of
popular democracy on criminal law and policy
Part III Undermining Democracy With most private prison contracts executed by federal state and local policymakers the for-
profit prison industry relies heavily on political relationships Accordingly the industry has a dual-
pronged political strategy that undermines democratic legitimacy in its dependence on legislative
lobbying and campaign financing
66 Spivak Andrew L and Susan F Sharp ldquoInmate Recidivism As a Measure of Private Prison Performancerdquo Crime amp
Delinquency Vol 54 (Washington DC SAGE Publications July 2008) 482-508
Figure 4 Annual Cost of Incarceration per Prisoner
Source Theirry Godard ldquoThe Economics of the American Prison Systemrdquo
SmartAsset January 23 2015
13
Legislative Lobbying Despite denying lobbying involvement in the past ten years the three leading private prison
operators have spent over $45 million on lobbying67
According to the companyrsquos own literature CCA
has an explicit policy prohibiting it from ldquoengaging in lobbying or advocacy efforts that would influence
enforcement efforts parole standards criminal laws and sentencing policiesrdquo68
Yet over the past decade
CCA like its competitors has spent more than $900000 annually on lobbying69
In fact not only do
private prison operators utilize the services of lobbying firms they also employ their own in-house
lobbyists
Since 2002 alone CCA has employed nearly 400 lobbyists across 30 states70
In 2014 the
company had 36 active lobbyists in 10 states focusing heavily on Florida Vermont Tennessee
California Pennsylvania Kentucky and Minnesota71
Over the same time frame GEO has employed
more than 200 lobbyists across 11 states focusing heavily on Florida California Texas Pennsylvania
and Virginia72
In 2014 the company had 15 active lobbyists across 5 states73
Attention to these specific states has been a successful strategy play for private prison operators
Aside from being the home to the headquarters of GEO Florida also has the second largest private prison
population and the market share of these for-profit prisons is only increasing74
Between 2012 and 2013
the private prison population in Florida grew 1 while the private prison population across all states
decreased 575
Lobbying centered on California has also produced strong results With the second
largest prison population in the country and a judicial order to remedy overcrowding76
California has
67 Aviva Shen ldquoPrivate Prisons Spend $45 Million On Lobbying Rake In $51 Billion For Immigrant Detention Alonerdquo
ThinkProgress August 3 2012 68 Corrections Corporation of America 2014 Annual Report Form 10-K 28 69 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 22 70 National Institute on Money in State Politics Corrections Corporation of America April 29 2015 71 Id 72 National Institute on Money in State Politics GEO Group April 29 2015 73 Id 74 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 75 Id 76 Id at 5
14
largely embraced private prisons Accordingly between 2012 and 2013 the private prison population in
California grew 23377
Both CCA and GEO are private sector members of American Legislative Exchange Council
(ALEC) a nonpartisan organization aimed at advancing ldquolimited government free markets and
federalism at the state levelrdquo78
The organization utilizes a public-private partnership structure to bring
together state legislators members of the private sector and the general public to draft and introduce
model legislation ALEC has played a role in the passing of mandatory minimum three strikes and truth-
in-sentencing laws all of which have contributed to the rapid growth of incarceration since the 1970s79
Unfortunately further detail about the
lobbying efforts of private prison
operators is lacking since lobbyists are
not required to report the direction in
which they lobbied on any particular
piece of legislation80
Campaign Financing Since 1990 the private prison
operators have made nearly $15 million in
political contributions at the state and
local level81
These contributions have
seen a dramatic uptick in recent years
77 Id at 14 78 American Legislative Exchange Council About Us 79 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 29 80 Id at 21 81 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
$2650346
$-
$500000
$1000000
$1500000
$2000000
$2500000
$3000000
Figure 5 State and Local Political Contributions of
Private Prison Companies by Year
Source National Institute on Money in State Politics Correctional
facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
15
with 2014 representing the highest amount yet at $27 million82
CCA and GEO along with their
acquisitions have accounted for 72 of these political contributions over the years83
The two companies
also made combined political contributions of nearly $1 million at the federal level since just 201084
Moreover these company-specific figures under estimate their political influence because they fail to
capture the individual political contributions of the companiesrsquo executive leadership and board of
directors In fact the Chief Executive Officer of GEO George Zoley and one of the founding partners of
CCA Doctor Crants have each made approximately $90000 in political contributions85
Approximately half of all state and local political contributions are made to party committees the
largest beneficiary of which is the Florida Republican Party which has received more than $4 million86
Another substantial proportion of
these contributions are made
directly to state and local
candidates87
Finally the remaining
3 of these contributions are made
to ballot measure committees88
Similar to lobbying
spending these contributions have
been relatively clustered in a few
states Florida California Texas
Tennessee and Virginia have all
82 Id 83 Id 84 Id 85 Id 86 Id 87 Id 88 Id
Figure 6 State and Local Political Contributions of
Private Prison Companies by State
Source National Institute on Money in State Politics Correctional facilities
construction amp managementfor-profit contributions to candidates and
committees April 29 2015
16
scene contributions in excess of $50000089
GEO is by far the largest correctional contributor in Florida
at $34 million and CCA has an equally substantial lead as the largest correctional contributor in
California at $15 million90
Though republican candidates tend to be the recipients of campaign contributions from private
prison operators nearly a third of contributions are made to democratic candidates91
Researchers have
taken this to suggest that private prison operators are less concerned with supporting particular political
beliefs than general access to political power92
In fact nearly 80 of campaign contributions support
winning candidates93
Even the timing of these contributions is strategically nuanced Private prison
operators tend to give in the early and late stages of political campaigns in order to establish a strong
rapport early and then reinforce a positive relationship with the candidate expected to win94
Conclusion Though private prison companies tend to tout financial efficiency as their great contribution to
corrections their incentives are in many ways diametrically opposed to those of a safe and free society
Their financial success depends on increasing crime law enforcement and liberty infractions
Accordingly they succumb to undercutting popular democracy to feed their bottom lines They rely on
the questionable practices of private sector lobbying and campaign financing to secure political support
for their business ventures They do so with as much secrecy as possible to stay out of the direct attack of
ethically minded opposition
Thus it seems only fitting that the fastest growing client for private prison companies is one that
intends to fly under the radar and enjoys the fewest protections illegal immigrants targeted by
Immigration and Customs Enforcement Both CCA and GEO highlighted the importance of the recent
89 Id 90 Id 91 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 19 92 Id at 18 93 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015 94 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 18
17
focus on immigration laws at the federal state and local level in their annual reports But they are not idle
players in the space they are well-prepared to protect and expand their enterprises For example 30 of the
36 legislators who co-sponsored Arizonarsquos immigration bill that would undoubtedly place more
immigrants in detention received campaign contributions from private prison companies95
If we are not
careful and perhaps even if we are federal state and local immigration policies will be dictated by a few
parties interested in further immigrant detention
Unfortunately business interests run high in politics and consistently undermine the legitimacy of
popular democracy To rein in the legislative lobbying and campaign financing of private prison
companies additional limitation would have to be made on such practices Alternatively the privatization
of prisons could be outlawed or at least more closely regulated For example legislation could be passed
that forbids private prison companies from relying on a revenue model that encourages incarceration or
prohibits states from paying owners and operators on a per diem per person basis Private prison
companies could instead offer the public sector better recidivism rates in exchange for higher payouts
similar to the social impact bond model It may not be entirely prudent to dismiss privatization within
corrections or any other public sector However as it currently stands the privatization of prisons
threatens all efforts to reduce mass incarceration
95 Andre N Sanchez ldquoPrivate Prisons Spend Millions On Lobbying To Put More People In Jailrdquo Think Progress June 23 2011
4
Part I The Emergence of For-Profit Prisons The modern age of prison privatization began in 1983 after the prison population grew more than
10 in consecutive years18
with the incorporation of CCA19
The company received its first federal
contract in Texas later that year and its first state contract in Tennessee the following year20
In 1984
CCA also opened the very first privately owned prison the Houston Processing Center in Texas21
In the
same year Wackenhut Corrections Corporation (WCC) was formed under the parent company of The
Wackenhut Corporation22
Just two years later in 1986 CCA leaped into an initial public offering on the
NASDAQ (WCC would follow suit in 1994)23
The following year WCC was awarded its first contract
over the Aurora Processing Center in Colorado24
Over the next five years these private prison conglomerates continued to expand operations while
a number of smaller private prison companies also emerged presenting an early opportunity for industry
consolidation In just 1995 CCA acquired TransCor America Concept and Corrections Partners25
In
1998 CCA acquired the third largest private prison company at the time US Corrections Corporation
for $10 million26
Years later in 2005 WCC would change its name to The GEO Group and embark on a
similar acquisition strategy27
Between 2005 and 2010 GEO acquired Correctional Services Corporation
CentraCore Properties Trust and Cornell Companies28
In 2014 GEO also acquired LSC Corrections
Services29
18 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 1986 (Washington DC
Government Printing Office May 1987) 1 19 Correctional Corporation of America About Us Who We Are Our History 20 Correctional Corporation of America About Us Who We Are Our History The Sentencing Project Prison Privatization and
the Use of Incarceration (Washington DC The Sentencing Project 2004) 1 21 Correctional Corporation of America About Us Who We Are Our History 22 The GEO Group Inc About Us History 23 Correctional Corporation of America About Us Who We Are Our History The GEO Group Inc About Us History 24 The GEO Group Inc About Us History 25 Correctional Corporation of America About Us Who We Are Our History 26 Corrections Corporation of America Corrections Corporation of America and CCA Prison Realty Trust to Merge In $4 Billion
Transaction Companies Acquire US Corrections Corporation [Press Release] April 20 1998 27 The GEO Group Inc About Us History 28 Id 29 The GEO Group The GEO Group Announces Acquisition of Eight Correctional and Detention Facilities Totaling More Than
6500 Beds [Press Release] January 26 2015
5
Throughout the maturation of the private prison industry the number of people incarcerated grew
260 from 437248 in 1983 to 1574741 in 201330
Still the number of prisoners held in for-profit
prisons grew at a rate that significantly outpaced the already dramatic growth rate of incarceration more
generally31
By 2013 there were 133044 prisoners or 8 of the total prison population housed in for-
profit prisons32
Though the majority of these prisoners are state prisoners for-profit prisons account for a
larger segment of the federal prison population than the state prison population33
In fact federal agencies
make up more than 40 of CCArsquos client base34
The US Marshals Service (USMS) accounts for 17
and the Federal Bureau of Prisons (BOP) and Immigration and Customs Enforcement (ICE) each account
for another 1335
ICE is also GEOrsquos largest client36
Thus not surprisingly
there is a cluster of for-profit
prisons in the states along the
Mexican-American border Texas
New Mexico Arizona and
California However with more
than 40 of for-profit prisons
located in the southwest and
another 30 in the southeast37
the prevalence of immigration detention cannot be the only factor driving private prison companies to
concentrate their operations in the south Southern states also offer the highest incarceration rates in the
30 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 1986 (Washington DC
Government Printing Office May 1987) 1 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics
Prisoners in 2013 by E Ann Carson (Washington DC Government Printing Office September 2014) 2 31 American Civil Liberties Union Banking on Bondage Private Prisons and Mass Incarceration (New York NY American
Civil Liberties Union November 2011) 5 32 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 33 Id 34 Corrections Corporation of America 2014 Annual Report Form 10-K 9 35 Id 36 Aviva Shen ldquoPrivate Prisons Spend $45 Million On Lobbying Rake In $51 Billion For Immigrant Detention Alonerdquo
ThinkProgress August 3 2012 37 See Figure 1
Figure 2 Regional State Prison Incarceration Rates
Source Peter Wagner ldquoTracking State Prison Growth in 50 Statesrdquo Prison
Policy Initiative May 28 2014
6
nation and a conservative political climate that has endorsed the ldquotough on crimerdquo policies that have
allowed them to persist over the years (see Figure 2) Furthermore their overwhelming republican
governments favor private sector expansion thus encouraging private prison companies to directly exploit
these ballooned incarceration rates Figure 3 provides more detail on the geographic concentration of four
of the leading private prison companies
Figure 3 Geographic Landscape of Private Prison Beds
Source US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann
Carson (Washington DC Government Printing Office September 2014) 7 Community Education Centers Facilities CEC
Corrections Correctional Corporation of America Locations MTC Management amp Training Corporation Corrections
Locations The GEO Group Inc 2014 Annual Report Form 10-K 13-16
While it is no coincidence that the geographic expansion of for-profit prisons has directly
correlated with regional incarceration rates it is difficult to determine whether private prison companies
are simply capitalizing on favorable conditions or driving them Surely private prison companies cannot
7
be blamed for creating the current incarceration crisis that began in the 1970s prior to their emergence or
even the conservative ideologies that contributed to their later success in certain regions However these
private prison companies have taken proactive steps to reinforce the conditions favorable to their success
and thus have fashioned a vicious feedback loop that encourages incarceration
Part II Threatening Growth Strategies The revenue model of private prison owners and operators depends on a per diem per prisoner
pay structure With per diem rates limited by existing operational costs at public facilities the profitability
of for-profit prisons relies on increasing man-days38
to maximize revenue and lowering operational costs
to minimize expenses The former approach promotes incarceration with no upward boundary while the
latter threatens prison conditions with at least some downward limit In this section we will discuss the
benefits and limits of these growth strategies and their implications on incarceration rates
Maximizing Revenue With a per diem revenue model increasing compensated man-days is critically important to the
profit growth of private prison companies These companies can increase their man-days in number of
ways First they can increase their companyrsquos market share of the existing private prison market through
mergers and acquisitions Second they can increase the private prison market share of the broader prison
market by increasing the number of privately contracted beds andor their occupancy rates Third they
can increase the overall utilization of prisons by increasing incarceration more generally In this section
we will touch on each of these strategies in more detail
Corporate Expansion Private prison companies can increase their share of the existing private
prison market by acquiring existing private prisons from competitors GEO took this approach when they
recently bought out LSC Corrections Services for approximately $312 million39
The acquisition added
38 Man-days are calculated by multiplying the number of prisoners by the number of days each serves 39 The GEO Group The GEO Group Announces Acquisition of Eight Correctional and Detention Facilities Totaling More Than
6500 Beds [Press Release] January 26 2015
8
eight facilities or 6500 beds to the companyrsquos portfolio40
Though both CCA and GEO have expanded
their market shares in this way in the past there are two rather substantial limitations to this growth
strategy current levels of privatization and the small number of players in the market In fact by 2007
there were only six players left41
Thus this is unlikely to be the dominant growth strategy for these
private prison companies going forward
Prison Privatization Private prison companies can increase their man-days by increasing the
market share of for-profit prisons in corrections more broadly This approach is dependent on the
industryrsquos ability to gain government and public support for the privatization of corrections While private
prison companies have noted the opposition of certain groups such as labor unions and criminal justice
reform organizations42
they have nevertheless seen an expansion in their populations In fact the number
of prisoners held in for-profit prisons increased more than 1600 between 1990 and 200943
While contracting for additional beds private prison companies also make an effort to include
occupancy guarantees in their management contracts Sixty-five percent of management contracts have
such guarantee clauses44
These clauses typically promise occupancy rates between 80 and 100 and
offer to pay for unused prison beds below the delineated guarantee45
For example in 2012 CCA secured
a management contract from the Arizona Department of Corrections to incarcerate 1000 prisoners at the
Red Rock Correctional Center46
The contract included an occupancy guarantee of 90 for the contracted
beds47
As a result of such contracts in 2014 CCA and GEO enjoyed occupancy rates as high as 84 and
96 respectively48
This growth strategy holds a lot of promise since more than 90 of prisoners are still
40 Id 41 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 16 42 Corrections Corporation of America 2014 Annual Report Form 10-K 26 43 American Civil Liberties Union Banking on Bondage Private Prisons and Mass Incarceration (New York NY American
Civil Liberties Union November 2011) 5 44 In the Public Interest Criminal How Lockup Quotas and ldquoLow-Crime Taxesrdquo Guarantee Profits for Private Prison
Corporations (Washington DC In the Public Interest September 2013) 6 45 Id at 3-6 46 Corrections Corporation of America 2014 Annual Report Form 10-K F-20 47 Id 48 Corrections Corporation of America 2014 Annual Report Form 10-K 6 The GEO Group Inc 2014 Annual Report Form
10-K 54 For Corrections Corporation of American data includes idle facilities but excludes facilities marked for
discontinuation For The GEO Group data excludes idle facilities
9
held in public prisons49
However there is still an absolute ceiling set by the number of people
incarcerated and a lower practical ceiling set by correctional systems and their policies about what types
of populations can be housed in for-profit prisons
Prison Utilization Private prisons are relied upon to relieve strains on government budgets and
concerns of overcrowding50
Accordingly private prison companies fair best when incarceration is high
enough to create such burdens Thus these companies can grow their man-days by increasing the overall
number of people incarcerated This approach undoubtedly raises the greatest number of ethical issues
but it also the only uncapped growth strategy And not only is the strategy recognized by private prison
companies but efforts made to reduce incarceration are viewed as threats to profitability In fact both
CCA and GEO cite leniency in conviction and sentencing decriminalization of drug and immigration
offenses and even reductions in crime as business risks In its 2014 Annual Report CCA states
growth depends on a number of factors we cannot control including crime rates and
sentencing patterns in various jurisdictions The demand for our facilities and services could
be adversely affected by the relaxation of enforcement efforts leniency in conviction or parole
standards and sentencing practices or through the decriminalization of certain activities that are
currently proscribed by criminal laws For instance any changes with respect to drugs and
controlled substances or illegal immigration could affect the number of persons arrested
convicted and sentenced thereby potentially reducing demand for correctional facilities to house
them Legislation has also been proposed in numerous jurisdictions that could lower minimum
sentences for some non-violent crimes and 25 make more inmates eligible for early release based
on good behavior Also sentencing alternatives under consideration could put some offenders on
probation with electronic monitoring who would otherwise be incarcerated Similarly reductions
in crime rates or resources dedicated to prevent and enforce crime could lead to reductions in
arrests convictions and sentences requiring incarceration at correctional facilities51
Similarly in its 2014 Annual Report GEO states
The demand for our correctional and detention facilities and services could be adversely
affected by changes in existing criminal or immigration laws crime rates in jurisdictions in which
we operate the relaxation of criminal or immigration enforcement efforts leniency in conviction
sentencing or deportation practices and the decriminalization of certain activities that are
currently proscribed by criminal laws or the loosening of immigration laws For example any
changes with respect to the decriminalization of drugs and controlled substances could affect the
number of persons arrested convicted sentenced and incarcerated thereby potentially reducing
49 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 50 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 3 51 Corrections Corporation of America 2014 Annual Report Form 10-K 27-28
10
demand for correctional facilities to house them Similarly reductions in crime rates could lead to
reductions in arrests convictions and sentences requiring incarceration at correctional facilities52
In summary the profitability of private prison companies comes at the expense of public safety and
personal liberty It may not be surprising then that the recidivism rates of privately held prisons are higher
than those of publicly run prisons53
After all it is within the best interest of private prison companies to
have a revolving door at their facilities
Minimizing Expenses Another way private prison companies seek to increase profitability is by reducing their
operational expensesmdashthe less they spend the more they pocket With approximately 65-70 of prison
expenditures going to staff54
private prison companies save the most in operational costs by avoiding
unionized labor and the associated personnel services55
Consequently the correctional staff at for-profit
prisons tend to be inadequately trained and poorly paid56
Not surprisingly private prisons have been
condemned for higher rates of violence and abuse57
Private prisons also cut costs related to food
healthcare and programs58
While lowering these expenses may not directly influence incarceration rates
it may have an indirect impact by worsening prison conditions and thus putting prisoners in poorer mental
and physical health for release Indeed as already noted studies have showed that recidivism rates are
higher for private prisons than public prisons59
Interestingly financial efficiency is also the primary alternative explanation for the expansion of
for-profit prisons in highly incarcerative states If true the interests of the public and private sectors
would in some way be aligned With lower operational costs private prison companies can still promise
savings for federal and state systems while charging profit premiums There is indeed some truth to these
52 The GEO Group Inc 2014 Annual Report Form 10-K 36 53 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015 54 US Department of Justice Office of Justice Programs Bureau of Justice Assistance Emerging Issues on Privatized Prisons
by James Austin and Garry Coventry (Washington DC Government Printing Office February 2001) 16 55 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 23-24 56 Brendan Fischer ldquoViolence Abuse and Death at For-Profit Prisons A GEO Group Rap Sheetrdquo The Center for Media and
Democracyrsquos PR Watch September 26 2013 57 US Department of Justice Office of Justice Programs Bureau of Justice Assistance Emerging Issues on Privatized Prisons
by James Austin and Garry Coventry (Washington DC Government Printing Office February 2001) 36-37 48 58 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015 59 Id
11
claims with short-run savings averaging about 19 and long-run savings averaging about 2960
Some
states even require private prison companies to offer a specified discount to public per-diem costs For
example Texas Kentucky and Mississippi have contract stipulations that require a 10 savings61
Moreover a recent study found that the cost savings of for-profit prisons is often underestimated because
they fail to account for savings on personnel services such as pensions and healthcare for retirees which
may not be attributed directly to state correctional departments62
Finally with operating margins as high
as 30 and per diem costs still lower than those in public prisons63
some might consider for-profit
prisons much more financially efficient However comparing private and public operational costs is not
as straight forward as private prison companies might like the public to believe There are in fact hidden
costs that private prison companies either unfairly avoid or perhaps even create for public prisons
First for-profit prisons can cherry-pick the most desirable or profitable prisoners from the
general prison population Generally this means that for-profit prisons house healthy minimum security
prisoners who are cheaper to incarcerate States are left to run maximum security prisons that require
ldquomore intensive security systems and proceduresrdquo64
Public prisons also typically house specialized
populations such as sex offenders that are more expensive due to higher treatment and administrative
needs65
Finally public prisons also tend to be responsible for prisoners with moderate to high mental or
physical healthcare needs These population differences allow private prison companies to demonstrate
artificial savings for states
60 Id Short-run costs are those associated with the day-to-day operation of prison facilities Long-run costs include short-run
costs plus the capital expenditures associated with maintaining and building prisons 61 Id 62 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 3 63 Association of State Correctional Administrators Inmate Cost Per Day Follow Up Survey (September 2011) 64 Harris Kenny and Leonard Gilroy The Challenge of Comparing Public and Private Correctional Costs (Reason Foundation
December 2013) 4-5 65 Id
12
Second as already mentioned studies have shown that for-profit prisons have marginally higher
rates of recidivism than their public counterparts66
Ethical concerns aside higher recidivism rates burden
states with additional incarceration expenses in the future Though a differential of 3-4 may seem
negligible a difference of even one
percentage point can amount to
considerable costs particularly in states
with high incarceration costs For
example in New York where the
annual cost of incarcerating one person
is more than $60000 recidivism comes
at a very high price Figure 4 provides
further detail on the annual costs of
incarceration by state
In their efforts to maximize revenues and minimize expenses private prison companies rely
heavily on growth strategies that promote incarceration Given the obvious ethical implications private
prison companies are less than public about their expansion intentions Consequently they employ
growth tactics that manipulate political elections and criminal lawmaking weakening the influence of
popular democracy on criminal law and policy
Part III Undermining Democracy With most private prison contracts executed by federal state and local policymakers the for-
profit prison industry relies heavily on political relationships Accordingly the industry has a dual-
pronged political strategy that undermines democratic legitimacy in its dependence on legislative
lobbying and campaign financing
66 Spivak Andrew L and Susan F Sharp ldquoInmate Recidivism As a Measure of Private Prison Performancerdquo Crime amp
Delinquency Vol 54 (Washington DC SAGE Publications July 2008) 482-508
Figure 4 Annual Cost of Incarceration per Prisoner
Source Theirry Godard ldquoThe Economics of the American Prison Systemrdquo
SmartAsset January 23 2015
13
Legislative Lobbying Despite denying lobbying involvement in the past ten years the three leading private prison
operators have spent over $45 million on lobbying67
According to the companyrsquos own literature CCA
has an explicit policy prohibiting it from ldquoengaging in lobbying or advocacy efforts that would influence
enforcement efforts parole standards criminal laws and sentencing policiesrdquo68
Yet over the past decade
CCA like its competitors has spent more than $900000 annually on lobbying69
In fact not only do
private prison operators utilize the services of lobbying firms they also employ their own in-house
lobbyists
Since 2002 alone CCA has employed nearly 400 lobbyists across 30 states70
In 2014 the
company had 36 active lobbyists in 10 states focusing heavily on Florida Vermont Tennessee
California Pennsylvania Kentucky and Minnesota71
Over the same time frame GEO has employed
more than 200 lobbyists across 11 states focusing heavily on Florida California Texas Pennsylvania
and Virginia72
In 2014 the company had 15 active lobbyists across 5 states73
Attention to these specific states has been a successful strategy play for private prison operators
Aside from being the home to the headquarters of GEO Florida also has the second largest private prison
population and the market share of these for-profit prisons is only increasing74
Between 2012 and 2013
the private prison population in Florida grew 1 while the private prison population across all states
decreased 575
Lobbying centered on California has also produced strong results With the second
largest prison population in the country and a judicial order to remedy overcrowding76
California has
67 Aviva Shen ldquoPrivate Prisons Spend $45 Million On Lobbying Rake In $51 Billion For Immigrant Detention Alonerdquo
ThinkProgress August 3 2012 68 Corrections Corporation of America 2014 Annual Report Form 10-K 28 69 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 22 70 National Institute on Money in State Politics Corrections Corporation of America April 29 2015 71 Id 72 National Institute on Money in State Politics GEO Group April 29 2015 73 Id 74 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 75 Id 76 Id at 5
14
largely embraced private prisons Accordingly between 2012 and 2013 the private prison population in
California grew 23377
Both CCA and GEO are private sector members of American Legislative Exchange Council
(ALEC) a nonpartisan organization aimed at advancing ldquolimited government free markets and
federalism at the state levelrdquo78
The organization utilizes a public-private partnership structure to bring
together state legislators members of the private sector and the general public to draft and introduce
model legislation ALEC has played a role in the passing of mandatory minimum three strikes and truth-
in-sentencing laws all of which have contributed to the rapid growth of incarceration since the 1970s79
Unfortunately further detail about the
lobbying efforts of private prison
operators is lacking since lobbyists are
not required to report the direction in
which they lobbied on any particular
piece of legislation80
Campaign Financing Since 1990 the private prison
operators have made nearly $15 million in
political contributions at the state and
local level81
These contributions have
seen a dramatic uptick in recent years
77 Id at 14 78 American Legislative Exchange Council About Us 79 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 29 80 Id at 21 81 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
$2650346
$-
$500000
$1000000
$1500000
$2000000
$2500000
$3000000
Figure 5 State and Local Political Contributions of
Private Prison Companies by Year
Source National Institute on Money in State Politics Correctional
facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
15
with 2014 representing the highest amount yet at $27 million82
CCA and GEO along with their
acquisitions have accounted for 72 of these political contributions over the years83
The two companies
also made combined political contributions of nearly $1 million at the federal level since just 201084
Moreover these company-specific figures under estimate their political influence because they fail to
capture the individual political contributions of the companiesrsquo executive leadership and board of
directors In fact the Chief Executive Officer of GEO George Zoley and one of the founding partners of
CCA Doctor Crants have each made approximately $90000 in political contributions85
Approximately half of all state and local political contributions are made to party committees the
largest beneficiary of which is the Florida Republican Party which has received more than $4 million86
Another substantial proportion of
these contributions are made
directly to state and local
candidates87
Finally the remaining
3 of these contributions are made
to ballot measure committees88
Similar to lobbying
spending these contributions have
been relatively clustered in a few
states Florida California Texas
Tennessee and Virginia have all
82 Id 83 Id 84 Id 85 Id 86 Id 87 Id 88 Id
Figure 6 State and Local Political Contributions of
Private Prison Companies by State
Source National Institute on Money in State Politics Correctional facilities
construction amp managementfor-profit contributions to candidates and
committees April 29 2015
16
scene contributions in excess of $50000089
GEO is by far the largest correctional contributor in Florida
at $34 million and CCA has an equally substantial lead as the largest correctional contributor in
California at $15 million90
Though republican candidates tend to be the recipients of campaign contributions from private
prison operators nearly a third of contributions are made to democratic candidates91
Researchers have
taken this to suggest that private prison operators are less concerned with supporting particular political
beliefs than general access to political power92
In fact nearly 80 of campaign contributions support
winning candidates93
Even the timing of these contributions is strategically nuanced Private prison
operators tend to give in the early and late stages of political campaigns in order to establish a strong
rapport early and then reinforce a positive relationship with the candidate expected to win94
Conclusion Though private prison companies tend to tout financial efficiency as their great contribution to
corrections their incentives are in many ways diametrically opposed to those of a safe and free society
Their financial success depends on increasing crime law enforcement and liberty infractions
Accordingly they succumb to undercutting popular democracy to feed their bottom lines They rely on
the questionable practices of private sector lobbying and campaign financing to secure political support
for their business ventures They do so with as much secrecy as possible to stay out of the direct attack of
ethically minded opposition
Thus it seems only fitting that the fastest growing client for private prison companies is one that
intends to fly under the radar and enjoys the fewest protections illegal immigrants targeted by
Immigration and Customs Enforcement Both CCA and GEO highlighted the importance of the recent
89 Id 90 Id 91 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 19 92 Id at 18 93 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015 94 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 18
17
focus on immigration laws at the federal state and local level in their annual reports But they are not idle
players in the space they are well-prepared to protect and expand their enterprises For example 30 of the
36 legislators who co-sponsored Arizonarsquos immigration bill that would undoubtedly place more
immigrants in detention received campaign contributions from private prison companies95
If we are not
careful and perhaps even if we are federal state and local immigration policies will be dictated by a few
parties interested in further immigrant detention
Unfortunately business interests run high in politics and consistently undermine the legitimacy of
popular democracy To rein in the legislative lobbying and campaign financing of private prison
companies additional limitation would have to be made on such practices Alternatively the privatization
of prisons could be outlawed or at least more closely regulated For example legislation could be passed
that forbids private prison companies from relying on a revenue model that encourages incarceration or
prohibits states from paying owners and operators on a per diem per person basis Private prison
companies could instead offer the public sector better recidivism rates in exchange for higher payouts
similar to the social impact bond model It may not be entirely prudent to dismiss privatization within
corrections or any other public sector However as it currently stands the privatization of prisons
threatens all efforts to reduce mass incarceration
95 Andre N Sanchez ldquoPrivate Prisons Spend Millions On Lobbying To Put More People In Jailrdquo Think Progress June 23 2011
5
Throughout the maturation of the private prison industry the number of people incarcerated grew
260 from 437248 in 1983 to 1574741 in 201330
Still the number of prisoners held in for-profit
prisons grew at a rate that significantly outpaced the already dramatic growth rate of incarceration more
generally31
By 2013 there were 133044 prisoners or 8 of the total prison population housed in for-
profit prisons32
Though the majority of these prisoners are state prisoners for-profit prisons account for a
larger segment of the federal prison population than the state prison population33
In fact federal agencies
make up more than 40 of CCArsquos client base34
The US Marshals Service (USMS) accounts for 17
and the Federal Bureau of Prisons (BOP) and Immigration and Customs Enforcement (ICE) each account
for another 1335
ICE is also GEOrsquos largest client36
Thus not surprisingly
there is a cluster of for-profit
prisons in the states along the
Mexican-American border Texas
New Mexico Arizona and
California However with more
than 40 of for-profit prisons
located in the southwest and
another 30 in the southeast37
the prevalence of immigration detention cannot be the only factor driving private prison companies to
concentrate their operations in the south Southern states also offer the highest incarceration rates in the
30 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 1986 (Washington DC
Government Printing Office May 1987) 1 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics
Prisoners in 2013 by E Ann Carson (Washington DC Government Printing Office September 2014) 2 31 American Civil Liberties Union Banking on Bondage Private Prisons and Mass Incarceration (New York NY American
Civil Liberties Union November 2011) 5 32 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 33 Id 34 Corrections Corporation of America 2014 Annual Report Form 10-K 9 35 Id 36 Aviva Shen ldquoPrivate Prisons Spend $45 Million On Lobbying Rake In $51 Billion For Immigrant Detention Alonerdquo
ThinkProgress August 3 2012 37 See Figure 1
Figure 2 Regional State Prison Incarceration Rates
Source Peter Wagner ldquoTracking State Prison Growth in 50 Statesrdquo Prison
Policy Initiative May 28 2014
6
nation and a conservative political climate that has endorsed the ldquotough on crimerdquo policies that have
allowed them to persist over the years (see Figure 2) Furthermore their overwhelming republican
governments favor private sector expansion thus encouraging private prison companies to directly exploit
these ballooned incarceration rates Figure 3 provides more detail on the geographic concentration of four
of the leading private prison companies
Figure 3 Geographic Landscape of Private Prison Beds
Source US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann
Carson (Washington DC Government Printing Office September 2014) 7 Community Education Centers Facilities CEC
Corrections Correctional Corporation of America Locations MTC Management amp Training Corporation Corrections
Locations The GEO Group Inc 2014 Annual Report Form 10-K 13-16
While it is no coincidence that the geographic expansion of for-profit prisons has directly
correlated with regional incarceration rates it is difficult to determine whether private prison companies
are simply capitalizing on favorable conditions or driving them Surely private prison companies cannot
7
be blamed for creating the current incarceration crisis that began in the 1970s prior to their emergence or
even the conservative ideologies that contributed to their later success in certain regions However these
private prison companies have taken proactive steps to reinforce the conditions favorable to their success
and thus have fashioned a vicious feedback loop that encourages incarceration
Part II Threatening Growth Strategies The revenue model of private prison owners and operators depends on a per diem per prisoner
pay structure With per diem rates limited by existing operational costs at public facilities the profitability
of for-profit prisons relies on increasing man-days38
to maximize revenue and lowering operational costs
to minimize expenses The former approach promotes incarceration with no upward boundary while the
latter threatens prison conditions with at least some downward limit In this section we will discuss the
benefits and limits of these growth strategies and their implications on incarceration rates
Maximizing Revenue With a per diem revenue model increasing compensated man-days is critically important to the
profit growth of private prison companies These companies can increase their man-days in number of
ways First they can increase their companyrsquos market share of the existing private prison market through
mergers and acquisitions Second they can increase the private prison market share of the broader prison
market by increasing the number of privately contracted beds andor their occupancy rates Third they
can increase the overall utilization of prisons by increasing incarceration more generally In this section
we will touch on each of these strategies in more detail
Corporate Expansion Private prison companies can increase their share of the existing private
prison market by acquiring existing private prisons from competitors GEO took this approach when they
recently bought out LSC Corrections Services for approximately $312 million39
The acquisition added
38 Man-days are calculated by multiplying the number of prisoners by the number of days each serves 39 The GEO Group The GEO Group Announces Acquisition of Eight Correctional and Detention Facilities Totaling More Than
6500 Beds [Press Release] January 26 2015
8
eight facilities or 6500 beds to the companyrsquos portfolio40
Though both CCA and GEO have expanded
their market shares in this way in the past there are two rather substantial limitations to this growth
strategy current levels of privatization and the small number of players in the market In fact by 2007
there were only six players left41
Thus this is unlikely to be the dominant growth strategy for these
private prison companies going forward
Prison Privatization Private prison companies can increase their man-days by increasing the
market share of for-profit prisons in corrections more broadly This approach is dependent on the
industryrsquos ability to gain government and public support for the privatization of corrections While private
prison companies have noted the opposition of certain groups such as labor unions and criminal justice
reform organizations42
they have nevertheless seen an expansion in their populations In fact the number
of prisoners held in for-profit prisons increased more than 1600 between 1990 and 200943
While contracting for additional beds private prison companies also make an effort to include
occupancy guarantees in their management contracts Sixty-five percent of management contracts have
such guarantee clauses44
These clauses typically promise occupancy rates between 80 and 100 and
offer to pay for unused prison beds below the delineated guarantee45
For example in 2012 CCA secured
a management contract from the Arizona Department of Corrections to incarcerate 1000 prisoners at the
Red Rock Correctional Center46
The contract included an occupancy guarantee of 90 for the contracted
beds47
As a result of such contracts in 2014 CCA and GEO enjoyed occupancy rates as high as 84 and
96 respectively48
This growth strategy holds a lot of promise since more than 90 of prisoners are still
40 Id 41 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 16 42 Corrections Corporation of America 2014 Annual Report Form 10-K 26 43 American Civil Liberties Union Banking on Bondage Private Prisons and Mass Incarceration (New York NY American
Civil Liberties Union November 2011) 5 44 In the Public Interest Criminal How Lockup Quotas and ldquoLow-Crime Taxesrdquo Guarantee Profits for Private Prison
Corporations (Washington DC In the Public Interest September 2013) 6 45 Id at 3-6 46 Corrections Corporation of America 2014 Annual Report Form 10-K F-20 47 Id 48 Corrections Corporation of America 2014 Annual Report Form 10-K 6 The GEO Group Inc 2014 Annual Report Form
10-K 54 For Corrections Corporation of American data includes idle facilities but excludes facilities marked for
discontinuation For The GEO Group data excludes idle facilities
9
held in public prisons49
However there is still an absolute ceiling set by the number of people
incarcerated and a lower practical ceiling set by correctional systems and their policies about what types
of populations can be housed in for-profit prisons
Prison Utilization Private prisons are relied upon to relieve strains on government budgets and
concerns of overcrowding50
Accordingly private prison companies fair best when incarceration is high
enough to create such burdens Thus these companies can grow their man-days by increasing the overall
number of people incarcerated This approach undoubtedly raises the greatest number of ethical issues
but it also the only uncapped growth strategy And not only is the strategy recognized by private prison
companies but efforts made to reduce incarceration are viewed as threats to profitability In fact both
CCA and GEO cite leniency in conviction and sentencing decriminalization of drug and immigration
offenses and even reductions in crime as business risks In its 2014 Annual Report CCA states
growth depends on a number of factors we cannot control including crime rates and
sentencing patterns in various jurisdictions The demand for our facilities and services could
be adversely affected by the relaxation of enforcement efforts leniency in conviction or parole
standards and sentencing practices or through the decriminalization of certain activities that are
currently proscribed by criminal laws For instance any changes with respect to drugs and
controlled substances or illegal immigration could affect the number of persons arrested
convicted and sentenced thereby potentially reducing demand for correctional facilities to house
them Legislation has also been proposed in numerous jurisdictions that could lower minimum
sentences for some non-violent crimes and 25 make more inmates eligible for early release based
on good behavior Also sentencing alternatives under consideration could put some offenders on
probation with electronic monitoring who would otherwise be incarcerated Similarly reductions
in crime rates or resources dedicated to prevent and enforce crime could lead to reductions in
arrests convictions and sentences requiring incarceration at correctional facilities51
Similarly in its 2014 Annual Report GEO states
The demand for our correctional and detention facilities and services could be adversely
affected by changes in existing criminal or immigration laws crime rates in jurisdictions in which
we operate the relaxation of criminal or immigration enforcement efforts leniency in conviction
sentencing or deportation practices and the decriminalization of certain activities that are
currently proscribed by criminal laws or the loosening of immigration laws For example any
changes with respect to the decriminalization of drugs and controlled substances could affect the
number of persons arrested convicted sentenced and incarcerated thereby potentially reducing
49 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 50 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 3 51 Corrections Corporation of America 2014 Annual Report Form 10-K 27-28
10
demand for correctional facilities to house them Similarly reductions in crime rates could lead to
reductions in arrests convictions and sentences requiring incarceration at correctional facilities52
In summary the profitability of private prison companies comes at the expense of public safety and
personal liberty It may not be surprising then that the recidivism rates of privately held prisons are higher
than those of publicly run prisons53
After all it is within the best interest of private prison companies to
have a revolving door at their facilities
Minimizing Expenses Another way private prison companies seek to increase profitability is by reducing their
operational expensesmdashthe less they spend the more they pocket With approximately 65-70 of prison
expenditures going to staff54
private prison companies save the most in operational costs by avoiding
unionized labor and the associated personnel services55
Consequently the correctional staff at for-profit
prisons tend to be inadequately trained and poorly paid56
Not surprisingly private prisons have been
condemned for higher rates of violence and abuse57
Private prisons also cut costs related to food
healthcare and programs58
While lowering these expenses may not directly influence incarceration rates
it may have an indirect impact by worsening prison conditions and thus putting prisoners in poorer mental
and physical health for release Indeed as already noted studies have showed that recidivism rates are
higher for private prisons than public prisons59
Interestingly financial efficiency is also the primary alternative explanation for the expansion of
for-profit prisons in highly incarcerative states If true the interests of the public and private sectors
would in some way be aligned With lower operational costs private prison companies can still promise
savings for federal and state systems while charging profit premiums There is indeed some truth to these
52 The GEO Group Inc 2014 Annual Report Form 10-K 36 53 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015 54 US Department of Justice Office of Justice Programs Bureau of Justice Assistance Emerging Issues on Privatized Prisons
by James Austin and Garry Coventry (Washington DC Government Printing Office February 2001) 16 55 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 23-24 56 Brendan Fischer ldquoViolence Abuse and Death at For-Profit Prisons A GEO Group Rap Sheetrdquo The Center for Media and
Democracyrsquos PR Watch September 26 2013 57 US Department of Justice Office of Justice Programs Bureau of Justice Assistance Emerging Issues on Privatized Prisons
by James Austin and Garry Coventry (Washington DC Government Printing Office February 2001) 36-37 48 58 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015 59 Id
11
claims with short-run savings averaging about 19 and long-run savings averaging about 2960
Some
states even require private prison companies to offer a specified discount to public per-diem costs For
example Texas Kentucky and Mississippi have contract stipulations that require a 10 savings61
Moreover a recent study found that the cost savings of for-profit prisons is often underestimated because
they fail to account for savings on personnel services such as pensions and healthcare for retirees which
may not be attributed directly to state correctional departments62
Finally with operating margins as high
as 30 and per diem costs still lower than those in public prisons63
some might consider for-profit
prisons much more financially efficient However comparing private and public operational costs is not
as straight forward as private prison companies might like the public to believe There are in fact hidden
costs that private prison companies either unfairly avoid or perhaps even create for public prisons
First for-profit prisons can cherry-pick the most desirable or profitable prisoners from the
general prison population Generally this means that for-profit prisons house healthy minimum security
prisoners who are cheaper to incarcerate States are left to run maximum security prisons that require
ldquomore intensive security systems and proceduresrdquo64
Public prisons also typically house specialized
populations such as sex offenders that are more expensive due to higher treatment and administrative
needs65
Finally public prisons also tend to be responsible for prisoners with moderate to high mental or
physical healthcare needs These population differences allow private prison companies to demonstrate
artificial savings for states
60 Id Short-run costs are those associated with the day-to-day operation of prison facilities Long-run costs include short-run
costs plus the capital expenditures associated with maintaining and building prisons 61 Id 62 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 3 63 Association of State Correctional Administrators Inmate Cost Per Day Follow Up Survey (September 2011) 64 Harris Kenny and Leonard Gilroy The Challenge of Comparing Public and Private Correctional Costs (Reason Foundation
December 2013) 4-5 65 Id
12
Second as already mentioned studies have shown that for-profit prisons have marginally higher
rates of recidivism than their public counterparts66
Ethical concerns aside higher recidivism rates burden
states with additional incarceration expenses in the future Though a differential of 3-4 may seem
negligible a difference of even one
percentage point can amount to
considerable costs particularly in states
with high incarceration costs For
example in New York where the
annual cost of incarcerating one person
is more than $60000 recidivism comes
at a very high price Figure 4 provides
further detail on the annual costs of
incarceration by state
In their efforts to maximize revenues and minimize expenses private prison companies rely
heavily on growth strategies that promote incarceration Given the obvious ethical implications private
prison companies are less than public about their expansion intentions Consequently they employ
growth tactics that manipulate political elections and criminal lawmaking weakening the influence of
popular democracy on criminal law and policy
Part III Undermining Democracy With most private prison contracts executed by federal state and local policymakers the for-
profit prison industry relies heavily on political relationships Accordingly the industry has a dual-
pronged political strategy that undermines democratic legitimacy in its dependence on legislative
lobbying and campaign financing
66 Spivak Andrew L and Susan F Sharp ldquoInmate Recidivism As a Measure of Private Prison Performancerdquo Crime amp
Delinquency Vol 54 (Washington DC SAGE Publications July 2008) 482-508
Figure 4 Annual Cost of Incarceration per Prisoner
Source Theirry Godard ldquoThe Economics of the American Prison Systemrdquo
SmartAsset January 23 2015
13
Legislative Lobbying Despite denying lobbying involvement in the past ten years the three leading private prison
operators have spent over $45 million on lobbying67
According to the companyrsquos own literature CCA
has an explicit policy prohibiting it from ldquoengaging in lobbying or advocacy efforts that would influence
enforcement efforts parole standards criminal laws and sentencing policiesrdquo68
Yet over the past decade
CCA like its competitors has spent more than $900000 annually on lobbying69
In fact not only do
private prison operators utilize the services of lobbying firms they also employ their own in-house
lobbyists
Since 2002 alone CCA has employed nearly 400 lobbyists across 30 states70
In 2014 the
company had 36 active lobbyists in 10 states focusing heavily on Florida Vermont Tennessee
California Pennsylvania Kentucky and Minnesota71
Over the same time frame GEO has employed
more than 200 lobbyists across 11 states focusing heavily on Florida California Texas Pennsylvania
and Virginia72
In 2014 the company had 15 active lobbyists across 5 states73
Attention to these specific states has been a successful strategy play for private prison operators
Aside from being the home to the headquarters of GEO Florida also has the second largest private prison
population and the market share of these for-profit prisons is only increasing74
Between 2012 and 2013
the private prison population in Florida grew 1 while the private prison population across all states
decreased 575
Lobbying centered on California has also produced strong results With the second
largest prison population in the country and a judicial order to remedy overcrowding76
California has
67 Aviva Shen ldquoPrivate Prisons Spend $45 Million On Lobbying Rake In $51 Billion For Immigrant Detention Alonerdquo
ThinkProgress August 3 2012 68 Corrections Corporation of America 2014 Annual Report Form 10-K 28 69 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 22 70 National Institute on Money in State Politics Corrections Corporation of America April 29 2015 71 Id 72 National Institute on Money in State Politics GEO Group April 29 2015 73 Id 74 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 75 Id 76 Id at 5
14
largely embraced private prisons Accordingly between 2012 and 2013 the private prison population in
California grew 23377
Both CCA and GEO are private sector members of American Legislative Exchange Council
(ALEC) a nonpartisan organization aimed at advancing ldquolimited government free markets and
federalism at the state levelrdquo78
The organization utilizes a public-private partnership structure to bring
together state legislators members of the private sector and the general public to draft and introduce
model legislation ALEC has played a role in the passing of mandatory minimum three strikes and truth-
in-sentencing laws all of which have contributed to the rapid growth of incarceration since the 1970s79
Unfortunately further detail about the
lobbying efforts of private prison
operators is lacking since lobbyists are
not required to report the direction in
which they lobbied on any particular
piece of legislation80
Campaign Financing Since 1990 the private prison
operators have made nearly $15 million in
political contributions at the state and
local level81
These contributions have
seen a dramatic uptick in recent years
77 Id at 14 78 American Legislative Exchange Council About Us 79 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 29 80 Id at 21 81 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
$2650346
$-
$500000
$1000000
$1500000
$2000000
$2500000
$3000000
Figure 5 State and Local Political Contributions of
Private Prison Companies by Year
Source National Institute on Money in State Politics Correctional
facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
15
with 2014 representing the highest amount yet at $27 million82
CCA and GEO along with their
acquisitions have accounted for 72 of these political contributions over the years83
The two companies
also made combined political contributions of nearly $1 million at the federal level since just 201084
Moreover these company-specific figures under estimate their political influence because they fail to
capture the individual political contributions of the companiesrsquo executive leadership and board of
directors In fact the Chief Executive Officer of GEO George Zoley and one of the founding partners of
CCA Doctor Crants have each made approximately $90000 in political contributions85
Approximately half of all state and local political contributions are made to party committees the
largest beneficiary of which is the Florida Republican Party which has received more than $4 million86
Another substantial proportion of
these contributions are made
directly to state and local
candidates87
Finally the remaining
3 of these contributions are made
to ballot measure committees88
Similar to lobbying
spending these contributions have
been relatively clustered in a few
states Florida California Texas
Tennessee and Virginia have all
82 Id 83 Id 84 Id 85 Id 86 Id 87 Id 88 Id
Figure 6 State and Local Political Contributions of
Private Prison Companies by State
Source National Institute on Money in State Politics Correctional facilities
construction amp managementfor-profit contributions to candidates and
committees April 29 2015
16
scene contributions in excess of $50000089
GEO is by far the largest correctional contributor in Florida
at $34 million and CCA has an equally substantial lead as the largest correctional contributor in
California at $15 million90
Though republican candidates tend to be the recipients of campaign contributions from private
prison operators nearly a third of contributions are made to democratic candidates91
Researchers have
taken this to suggest that private prison operators are less concerned with supporting particular political
beliefs than general access to political power92
In fact nearly 80 of campaign contributions support
winning candidates93
Even the timing of these contributions is strategically nuanced Private prison
operators tend to give in the early and late stages of political campaigns in order to establish a strong
rapport early and then reinforce a positive relationship with the candidate expected to win94
Conclusion Though private prison companies tend to tout financial efficiency as their great contribution to
corrections their incentives are in many ways diametrically opposed to those of a safe and free society
Their financial success depends on increasing crime law enforcement and liberty infractions
Accordingly they succumb to undercutting popular democracy to feed their bottom lines They rely on
the questionable practices of private sector lobbying and campaign financing to secure political support
for their business ventures They do so with as much secrecy as possible to stay out of the direct attack of
ethically minded opposition
Thus it seems only fitting that the fastest growing client for private prison companies is one that
intends to fly under the radar and enjoys the fewest protections illegal immigrants targeted by
Immigration and Customs Enforcement Both CCA and GEO highlighted the importance of the recent
89 Id 90 Id 91 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 19 92 Id at 18 93 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015 94 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 18
17
focus on immigration laws at the federal state and local level in their annual reports But they are not idle
players in the space they are well-prepared to protect and expand their enterprises For example 30 of the
36 legislators who co-sponsored Arizonarsquos immigration bill that would undoubtedly place more
immigrants in detention received campaign contributions from private prison companies95
If we are not
careful and perhaps even if we are federal state and local immigration policies will be dictated by a few
parties interested in further immigrant detention
Unfortunately business interests run high in politics and consistently undermine the legitimacy of
popular democracy To rein in the legislative lobbying and campaign financing of private prison
companies additional limitation would have to be made on such practices Alternatively the privatization
of prisons could be outlawed or at least more closely regulated For example legislation could be passed
that forbids private prison companies from relying on a revenue model that encourages incarceration or
prohibits states from paying owners and operators on a per diem per person basis Private prison
companies could instead offer the public sector better recidivism rates in exchange for higher payouts
similar to the social impact bond model It may not be entirely prudent to dismiss privatization within
corrections or any other public sector However as it currently stands the privatization of prisons
threatens all efforts to reduce mass incarceration
95 Andre N Sanchez ldquoPrivate Prisons Spend Millions On Lobbying To Put More People In Jailrdquo Think Progress June 23 2011
6
nation and a conservative political climate that has endorsed the ldquotough on crimerdquo policies that have
allowed them to persist over the years (see Figure 2) Furthermore their overwhelming republican
governments favor private sector expansion thus encouraging private prison companies to directly exploit
these ballooned incarceration rates Figure 3 provides more detail on the geographic concentration of four
of the leading private prison companies
Figure 3 Geographic Landscape of Private Prison Beds
Source US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann
Carson (Washington DC Government Printing Office September 2014) 7 Community Education Centers Facilities CEC
Corrections Correctional Corporation of America Locations MTC Management amp Training Corporation Corrections
Locations The GEO Group Inc 2014 Annual Report Form 10-K 13-16
While it is no coincidence that the geographic expansion of for-profit prisons has directly
correlated with regional incarceration rates it is difficult to determine whether private prison companies
are simply capitalizing on favorable conditions or driving them Surely private prison companies cannot
7
be blamed for creating the current incarceration crisis that began in the 1970s prior to their emergence or
even the conservative ideologies that contributed to their later success in certain regions However these
private prison companies have taken proactive steps to reinforce the conditions favorable to their success
and thus have fashioned a vicious feedback loop that encourages incarceration
Part II Threatening Growth Strategies The revenue model of private prison owners and operators depends on a per diem per prisoner
pay structure With per diem rates limited by existing operational costs at public facilities the profitability
of for-profit prisons relies on increasing man-days38
to maximize revenue and lowering operational costs
to minimize expenses The former approach promotes incarceration with no upward boundary while the
latter threatens prison conditions with at least some downward limit In this section we will discuss the
benefits and limits of these growth strategies and their implications on incarceration rates
Maximizing Revenue With a per diem revenue model increasing compensated man-days is critically important to the
profit growth of private prison companies These companies can increase their man-days in number of
ways First they can increase their companyrsquos market share of the existing private prison market through
mergers and acquisitions Second they can increase the private prison market share of the broader prison
market by increasing the number of privately contracted beds andor their occupancy rates Third they
can increase the overall utilization of prisons by increasing incarceration more generally In this section
we will touch on each of these strategies in more detail
Corporate Expansion Private prison companies can increase their share of the existing private
prison market by acquiring existing private prisons from competitors GEO took this approach when they
recently bought out LSC Corrections Services for approximately $312 million39
The acquisition added
38 Man-days are calculated by multiplying the number of prisoners by the number of days each serves 39 The GEO Group The GEO Group Announces Acquisition of Eight Correctional and Detention Facilities Totaling More Than
6500 Beds [Press Release] January 26 2015
8
eight facilities or 6500 beds to the companyrsquos portfolio40
Though both CCA and GEO have expanded
their market shares in this way in the past there are two rather substantial limitations to this growth
strategy current levels of privatization and the small number of players in the market In fact by 2007
there were only six players left41
Thus this is unlikely to be the dominant growth strategy for these
private prison companies going forward
Prison Privatization Private prison companies can increase their man-days by increasing the
market share of for-profit prisons in corrections more broadly This approach is dependent on the
industryrsquos ability to gain government and public support for the privatization of corrections While private
prison companies have noted the opposition of certain groups such as labor unions and criminal justice
reform organizations42
they have nevertheless seen an expansion in their populations In fact the number
of prisoners held in for-profit prisons increased more than 1600 between 1990 and 200943
While contracting for additional beds private prison companies also make an effort to include
occupancy guarantees in their management contracts Sixty-five percent of management contracts have
such guarantee clauses44
These clauses typically promise occupancy rates between 80 and 100 and
offer to pay for unused prison beds below the delineated guarantee45
For example in 2012 CCA secured
a management contract from the Arizona Department of Corrections to incarcerate 1000 prisoners at the
Red Rock Correctional Center46
The contract included an occupancy guarantee of 90 for the contracted
beds47
As a result of such contracts in 2014 CCA and GEO enjoyed occupancy rates as high as 84 and
96 respectively48
This growth strategy holds a lot of promise since more than 90 of prisoners are still
40 Id 41 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 16 42 Corrections Corporation of America 2014 Annual Report Form 10-K 26 43 American Civil Liberties Union Banking on Bondage Private Prisons and Mass Incarceration (New York NY American
Civil Liberties Union November 2011) 5 44 In the Public Interest Criminal How Lockup Quotas and ldquoLow-Crime Taxesrdquo Guarantee Profits for Private Prison
Corporations (Washington DC In the Public Interest September 2013) 6 45 Id at 3-6 46 Corrections Corporation of America 2014 Annual Report Form 10-K F-20 47 Id 48 Corrections Corporation of America 2014 Annual Report Form 10-K 6 The GEO Group Inc 2014 Annual Report Form
10-K 54 For Corrections Corporation of American data includes idle facilities but excludes facilities marked for
discontinuation For The GEO Group data excludes idle facilities
9
held in public prisons49
However there is still an absolute ceiling set by the number of people
incarcerated and a lower practical ceiling set by correctional systems and their policies about what types
of populations can be housed in for-profit prisons
Prison Utilization Private prisons are relied upon to relieve strains on government budgets and
concerns of overcrowding50
Accordingly private prison companies fair best when incarceration is high
enough to create such burdens Thus these companies can grow their man-days by increasing the overall
number of people incarcerated This approach undoubtedly raises the greatest number of ethical issues
but it also the only uncapped growth strategy And not only is the strategy recognized by private prison
companies but efforts made to reduce incarceration are viewed as threats to profitability In fact both
CCA and GEO cite leniency in conviction and sentencing decriminalization of drug and immigration
offenses and even reductions in crime as business risks In its 2014 Annual Report CCA states
growth depends on a number of factors we cannot control including crime rates and
sentencing patterns in various jurisdictions The demand for our facilities and services could
be adversely affected by the relaxation of enforcement efforts leniency in conviction or parole
standards and sentencing practices or through the decriminalization of certain activities that are
currently proscribed by criminal laws For instance any changes with respect to drugs and
controlled substances or illegal immigration could affect the number of persons arrested
convicted and sentenced thereby potentially reducing demand for correctional facilities to house
them Legislation has also been proposed in numerous jurisdictions that could lower minimum
sentences for some non-violent crimes and 25 make more inmates eligible for early release based
on good behavior Also sentencing alternatives under consideration could put some offenders on
probation with electronic monitoring who would otherwise be incarcerated Similarly reductions
in crime rates or resources dedicated to prevent and enforce crime could lead to reductions in
arrests convictions and sentences requiring incarceration at correctional facilities51
Similarly in its 2014 Annual Report GEO states
The demand for our correctional and detention facilities and services could be adversely
affected by changes in existing criminal or immigration laws crime rates in jurisdictions in which
we operate the relaxation of criminal or immigration enforcement efforts leniency in conviction
sentencing or deportation practices and the decriminalization of certain activities that are
currently proscribed by criminal laws or the loosening of immigration laws For example any
changes with respect to the decriminalization of drugs and controlled substances could affect the
number of persons arrested convicted sentenced and incarcerated thereby potentially reducing
49 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 50 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 3 51 Corrections Corporation of America 2014 Annual Report Form 10-K 27-28
10
demand for correctional facilities to house them Similarly reductions in crime rates could lead to
reductions in arrests convictions and sentences requiring incarceration at correctional facilities52
In summary the profitability of private prison companies comes at the expense of public safety and
personal liberty It may not be surprising then that the recidivism rates of privately held prisons are higher
than those of publicly run prisons53
After all it is within the best interest of private prison companies to
have a revolving door at their facilities
Minimizing Expenses Another way private prison companies seek to increase profitability is by reducing their
operational expensesmdashthe less they spend the more they pocket With approximately 65-70 of prison
expenditures going to staff54
private prison companies save the most in operational costs by avoiding
unionized labor and the associated personnel services55
Consequently the correctional staff at for-profit
prisons tend to be inadequately trained and poorly paid56
Not surprisingly private prisons have been
condemned for higher rates of violence and abuse57
Private prisons also cut costs related to food
healthcare and programs58
While lowering these expenses may not directly influence incarceration rates
it may have an indirect impact by worsening prison conditions and thus putting prisoners in poorer mental
and physical health for release Indeed as already noted studies have showed that recidivism rates are
higher for private prisons than public prisons59
Interestingly financial efficiency is also the primary alternative explanation for the expansion of
for-profit prisons in highly incarcerative states If true the interests of the public and private sectors
would in some way be aligned With lower operational costs private prison companies can still promise
savings for federal and state systems while charging profit premiums There is indeed some truth to these
52 The GEO Group Inc 2014 Annual Report Form 10-K 36 53 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015 54 US Department of Justice Office of Justice Programs Bureau of Justice Assistance Emerging Issues on Privatized Prisons
by James Austin and Garry Coventry (Washington DC Government Printing Office February 2001) 16 55 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 23-24 56 Brendan Fischer ldquoViolence Abuse and Death at For-Profit Prisons A GEO Group Rap Sheetrdquo The Center for Media and
Democracyrsquos PR Watch September 26 2013 57 US Department of Justice Office of Justice Programs Bureau of Justice Assistance Emerging Issues on Privatized Prisons
by James Austin and Garry Coventry (Washington DC Government Printing Office February 2001) 36-37 48 58 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015 59 Id
11
claims with short-run savings averaging about 19 and long-run savings averaging about 2960
Some
states even require private prison companies to offer a specified discount to public per-diem costs For
example Texas Kentucky and Mississippi have contract stipulations that require a 10 savings61
Moreover a recent study found that the cost savings of for-profit prisons is often underestimated because
they fail to account for savings on personnel services such as pensions and healthcare for retirees which
may not be attributed directly to state correctional departments62
Finally with operating margins as high
as 30 and per diem costs still lower than those in public prisons63
some might consider for-profit
prisons much more financially efficient However comparing private and public operational costs is not
as straight forward as private prison companies might like the public to believe There are in fact hidden
costs that private prison companies either unfairly avoid or perhaps even create for public prisons
First for-profit prisons can cherry-pick the most desirable or profitable prisoners from the
general prison population Generally this means that for-profit prisons house healthy minimum security
prisoners who are cheaper to incarcerate States are left to run maximum security prisons that require
ldquomore intensive security systems and proceduresrdquo64
Public prisons also typically house specialized
populations such as sex offenders that are more expensive due to higher treatment and administrative
needs65
Finally public prisons also tend to be responsible for prisoners with moderate to high mental or
physical healthcare needs These population differences allow private prison companies to demonstrate
artificial savings for states
60 Id Short-run costs are those associated with the day-to-day operation of prison facilities Long-run costs include short-run
costs plus the capital expenditures associated with maintaining and building prisons 61 Id 62 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 3 63 Association of State Correctional Administrators Inmate Cost Per Day Follow Up Survey (September 2011) 64 Harris Kenny and Leonard Gilroy The Challenge of Comparing Public and Private Correctional Costs (Reason Foundation
December 2013) 4-5 65 Id
12
Second as already mentioned studies have shown that for-profit prisons have marginally higher
rates of recidivism than their public counterparts66
Ethical concerns aside higher recidivism rates burden
states with additional incarceration expenses in the future Though a differential of 3-4 may seem
negligible a difference of even one
percentage point can amount to
considerable costs particularly in states
with high incarceration costs For
example in New York where the
annual cost of incarcerating one person
is more than $60000 recidivism comes
at a very high price Figure 4 provides
further detail on the annual costs of
incarceration by state
In their efforts to maximize revenues and minimize expenses private prison companies rely
heavily on growth strategies that promote incarceration Given the obvious ethical implications private
prison companies are less than public about their expansion intentions Consequently they employ
growth tactics that manipulate political elections and criminal lawmaking weakening the influence of
popular democracy on criminal law and policy
Part III Undermining Democracy With most private prison contracts executed by federal state and local policymakers the for-
profit prison industry relies heavily on political relationships Accordingly the industry has a dual-
pronged political strategy that undermines democratic legitimacy in its dependence on legislative
lobbying and campaign financing
66 Spivak Andrew L and Susan F Sharp ldquoInmate Recidivism As a Measure of Private Prison Performancerdquo Crime amp
Delinquency Vol 54 (Washington DC SAGE Publications July 2008) 482-508
Figure 4 Annual Cost of Incarceration per Prisoner
Source Theirry Godard ldquoThe Economics of the American Prison Systemrdquo
SmartAsset January 23 2015
13
Legislative Lobbying Despite denying lobbying involvement in the past ten years the three leading private prison
operators have spent over $45 million on lobbying67
According to the companyrsquos own literature CCA
has an explicit policy prohibiting it from ldquoengaging in lobbying or advocacy efforts that would influence
enforcement efforts parole standards criminal laws and sentencing policiesrdquo68
Yet over the past decade
CCA like its competitors has spent more than $900000 annually on lobbying69
In fact not only do
private prison operators utilize the services of lobbying firms they also employ their own in-house
lobbyists
Since 2002 alone CCA has employed nearly 400 lobbyists across 30 states70
In 2014 the
company had 36 active lobbyists in 10 states focusing heavily on Florida Vermont Tennessee
California Pennsylvania Kentucky and Minnesota71
Over the same time frame GEO has employed
more than 200 lobbyists across 11 states focusing heavily on Florida California Texas Pennsylvania
and Virginia72
In 2014 the company had 15 active lobbyists across 5 states73
Attention to these specific states has been a successful strategy play for private prison operators
Aside from being the home to the headquarters of GEO Florida also has the second largest private prison
population and the market share of these for-profit prisons is only increasing74
Between 2012 and 2013
the private prison population in Florida grew 1 while the private prison population across all states
decreased 575
Lobbying centered on California has also produced strong results With the second
largest prison population in the country and a judicial order to remedy overcrowding76
California has
67 Aviva Shen ldquoPrivate Prisons Spend $45 Million On Lobbying Rake In $51 Billion For Immigrant Detention Alonerdquo
ThinkProgress August 3 2012 68 Corrections Corporation of America 2014 Annual Report Form 10-K 28 69 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 22 70 National Institute on Money in State Politics Corrections Corporation of America April 29 2015 71 Id 72 National Institute on Money in State Politics GEO Group April 29 2015 73 Id 74 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 75 Id 76 Id at 5
14
largely embraced private prisons Accordingly between 2012 and 2013 the private prison population in
California grew 23377
Both CCA and GEO are private sector members of American Legislative Exchange Council
(ALEC) a nonpartisan organization aimed at advancing ldquolimited government free markets and
federalism at the state levelrdquo78
The organization utilizes a public-private partnership structure to bring
together state legislators members of the private sector and the general public to draft and introduce
model legislation ALEC has played a role in the passing of mandatory minimum three strikes and truth-
in-sentencing laws all of which have contributed to the rapid growth of incarceration since the 1970s79
Unfortunately further detail about the
lobbying efforts of private prison
operators is lacking since lobbyists are
not required to report the direction in
which they lobbied on any particular
piece of legislation80
Campaign Financing Since 1990 the private prison
operators have made nearly $15 million in
political contributions at the state and
local level81
These contributions have
seen a dramatic uptick in recent years
77 Id at 14 78 American Legislative Exchange Council About Us 79 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 29 80 Id at 21 81 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
$2650346
$-
$500000
$1000000
$1500000
$2000000
$2500000
$3000000
Figure 5 State and Local Political Contributions of
Private Prison Companies by Year
Source National Institute on Money in State Politics Correctional
facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
15
with 2014 representing the highest amount yet at $27 million82
CCA and GEO along with their
acquisitions have accounted for 72 of these political contributions over the years83
The two companies
also made combined political contributions of nearly $1 million at the federal level since just 201084
Moreover these company-specific figures under estimate their political influence because they fail to
capture the individual political contributions of the companiesrsquo executive leadership and board of
directors In fact the Chief Executive Officer of GEO George Zoley and one of the founding partners of
CCA Doctor Crants have each made approximately $90000 in political contributions85
Approximately half of all state and local political contributions are made to party committees the
largest beneficiary of which is the Florida Republican Party which has received more than $4 million86
Another substantial proportion of
these contributions are made
directly to state and local
candidates87
Finally the remaining
3 of these contributions are made
to ballot measure committees88
Similar to lobbying
spending these contributions have
been relatively clustered in a few
states Florida California Texas
Tennessee and Virginia have all
82 Id 83 Id 84 Id 85 Id 86 Id 87 Id 88 Id
Figure 6 State and Local Political Contributions of
Private Prison Companies by State
Source National Institute on Money in State Politics Correctional facilities
construction amp managementfor-profit contributions to candidates and
committees April 29 2015
16
scene contributions in excess of $50000089
GEO is by far the largest correctional contributor in Florida
at $34 million and CCA has an equally substantial lead as the largest correctional contributor in
California at $15 million90
Though republican candidates tend to be the recipients of campaign contributions from private
prison operators nearly a third of contributions are made to democratic candidates91
Researchers have
taken this to suggest that private prison operators are less concerned with supporting particular political
beliefs than general access to political power92
In fact nearly 80 of campaign contributions support
winning candidates93
Even the timing of these contributions is strategically nuanced Private prison
operators tend to give in the early and late stages of political campaigns in order to establish a strong
rapport early and then reinforce a positive relationship with the candidate expected to win94
Conclusion Though private prison companies tend to tout financial efficiency as their great contribution to
corrections their incentives are in many ways diametrically opposed to those of a safe and free society
Their financial success depends on increasing crime law enforcement and liberty infractions
Accordingly they succumb to undercutting popular democracy to feed their bottom lines They rely on
the questionable practices of private sector lobbying and campaign financing to secure political support
for their business ventures They do so with as much secrecy as possible to stay out of the direct attack of
ethically minded opposition
Thus it seems only fitting that the fastest growing client for private prison companies is one that
intends to fly under the radar and enjoys the fewest protections illegal immigrants targeted by
Immigration and Customs Enforcement Both CCA and GEO highlighted the importance of the recent
89 Id 90 Id 91 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 19 92 Id at 18 93 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015 94 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 18
17
focus on immigration laws at the federal state and local level in their annual reports But they are not idle
players in the space they are well-prepared to protect and expand their enterprises For example 30 of the
36 legislators who co-sponsored Arizonarsquos immigration bill that would undoubtedly place more
immigrants in detention received campaign contributions from private prison companies95
If we are not
careful and perhaps even if we are federal state and local immigration policies will be dictated by a few
parties interested in further immigrant detention
Unfortunately business interests run high in politics and consistently undermine the legitimacy of
popular democracy To rein in the legislative lobbying and campaign financing of private prison
companies additional limitation would have to be made on such practices Alternatively the privatization
of prisons could be outlawed or at least more closely regulated For example legislation could be passed
that forbids private prison companies from relying on a revenue model that encourages incarceration or
prohibits states from paying owners and operators on a per diem per person basis Private prison
companies could instead offer the public sector better recidivism rates in exchange for higher payouts
similar to the social impact bond model It may not be entirely prudent to dismiss privatization within
corrections or any other public sector However as it currently stands the privatization of prisons
threatens all efforts to reduce mass incarceration
95 Andre N Sanchez ldquoPrivate Prisons Spend Millions On Lobbying To Put More People In Jailrdquo Think Progress June 23 2011
7
be blamed for creating the current incarceration crisis that began in the 1970s prior to their emergence or
even the conservative ideologies that contributed to their later success in certain regions However these
private prison companies have taken proactive steps to reinforce the conditions favorable to their success
and thus have fashioned a vicious feedback loop that encourages incarceration
Part II Threatening Growth Strategies The revenue model of private prison owners and operators depends on a per diem per prisoner
pay structure With per diem rates limited by existing operational costs at public facilities the profitability
of for-profit prisons relies on increasing man-days38
to maximize revenue and lowering operational costs
to minimize expenses The former approach promotes incarceration with no upward boundary while the
latter threatens prison conditions with at least some downward limit In this section we will discuss the
benefits and limits of these growth strategies and their implications on incarceration rates
Maximizing Revenue With a per diem revenue model increasing compensated man-days is critically important to the
profit growth of private prison companies These companies can increase their man-days in number of
ways First they can increase their companyrsquos market share of the existing private prison market through
mergers and acquisitions Second they can increase the private prison market share of the broader prison
market by increasing the number of privately contracted beds andor their occupancy rates Third they
can increase the overall utilization of prisons by increasing incarceration more generally In this section
we will touch on each of these strategies in more detail
Corporate Expansion Private prison companies can increase their share of the existing private
prison market by acquiring existing private prisons from competitors GEO took this approach when they
recently bought out LSC Corrections Services for approximately $312 million39
The acquisition added
38 Man-days are calculated by multiplying the number of prisoners by the number of days each serves 39 The GEO Group The GEO Group Announces Acquisition of Eight Correctional and Detention Facilities Totaling More Than
6500 Beds [Press Release] January 26 2015
8
eight facilities or 6500 beds to the companyrsquos portfolio40
Though both CCA and GEO have expanded
their market shares in this way in the past there are two rather substantial limitations to this growth
strategy current levels of privatization and the small number of players in the market In fact by 2007
there were only six players left41
Thus this is unlikely to be the dominant growth strategy for these
private prison companies going forward
Prison Privatization Private prison companies can increase their man-days by increasing the
market share of for-profit prisons in corrections more broadly This approach is dependent on the
industryrsquos ability to gain government and public support for the privatization of corrections While private
prison companies have noted the opposition of certain groups such as labor unions and criminal justice
reform organizations42
they have nevertheless seen an expansion in their populations In fact the number
of prisoners held in for-profit prisons increased more than 1600 between 1990 and 200943
While contracting for additional beds private prison companies also make an effort to include
occupancy guarantees in their management contracts Sixty-five percent of management contracts have
such guarantee clauses44
These clauses typically promise occupancy rates between 80 and 100 and
offer to pay for unused prison beds below the delineated guarantee45
For example in 2012 CCA secured
a management contract from the Arizona Department of Corrections to incarcerate 1000 prisoners at the
Red Rock Correctional Center46
The contract included an occupancy guarantee of 90 for the contracted
beds47
As a result of such contracts in 2014 CCA and GEO enjoyed occupancy rates as high as 84 and
96 respectively48
This growth strategy holds a lot of promise since more than 90 of prisoners are still
40 Id 41 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 16 42 Corrections Corporation of America 2014 Annual Report Form 10-K 26 43 American Civil Liberties Union Banking on Bondage Private Prisons and Mass Incarceration (New York NY American
Civil Liberties Union November 2011) 5 44 In the Public Interest Criminal How Lockup Quotas and ldquoLow-Crime Taxesrdquo Guarantee Profits for Private Prison
Corporations (Washington DC In the Public Interest September 2013) 6 45 Id at 3-6 46 Corrections Corporation of America 2014 Annual Report Form 10-K F-20 47 Id 48 Corrections Corporation of America 2014 Annual Report Form 10-K 6 The GEO Group Inc 2014 Annual Report Form
10-K 54 For Corrections Corporation of American data includes idle facilities but excludes facilities marked for
discontinuation For The GEO Group data excludes idle facilities
9
held in public prisons49
However there is still an absolute ceiling set by the number of people
incarcerated and a lower practical ceiling set by correctional systems and their policies about what types
of populations can be housed in for-profit prisons
Prison Utilization Private prisons are relied upon to relieve strains on government budgets and
concerns of overcrowding50
Accordingly private prison companies fair best when incarceration is high
enough to create such burdens Thus these companies can grow their man-days by increasing the overall
number of people incarcerated This approach undoubtedly raises the greatest number of ethical issues
but it also the only uncapped growth strategy And not only is the strategy recognized by private prison
companies but efforts made to reduce incarceration are viewed as threats to profitability In fact both
CCA and GEO cite leniency in conviction and sentencing decriminalization of drug and immigration
offenses and even reductions in crime as business risks In its 2014 Annual Report CCA states
growth depends on a number of factors we cannot control including crime rates and
sentencing patterns in various jurisdictions The demand for our facilities and services could
be adversely affected by the relaxation of enforcement efforts leniency in conviction or parole
standards and sentencing practices or through the decriminalization of certain activities that are
currently proscribed by criminal laws For instance any changes with respect to drugs and
controlled substances or illegal immigration could affect the number of persons arrested
convicted and sentenced thereby potentially reducing demand for correctional facilities to house
them Legislation has also been proposed in numerous jurisdictions that could lower minimum
sentences for some non-violent crimes and 25 make more inmates eligible for early release based
on good behavior Also sentencing alternatives under consideration could put some offenders on
probation with electronic monitoring who would otherwise be incarcerated Similarly reductions
in crime rates or resources dedicated to prevent and enforce crime could lead to reductions in
arrests convictions and sentences requiring incarceration at correctional facilities51
Similarly in its 2014 Annual Report GEO states
The demand for our correctional and detention facilities and services could be adversely
affected by changes in existing criminal or immigration laws crime rates in jurisdictions in which
we operate the relaxation of criminal or immigration enforcement efforts leniency in conviction
sentencing or deportation practices and the decriminalization of certain activities that are
currently proscribed by criminal laws or the loosening of immigration laws For example any
changes with respect to the decriminalization of drugs and controlled substances could affect the
number of persons arrested convicted sentenced and incarcerated thereby potentially reducing
49 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 50 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 3 51 Corrections Corporation of America 2014 Annual Report Form 10-K 27-28
10
demand for correctional facilities to house them Similarly reductions in crime rates could lead to
reductions in arrests convictions and sentences requiring incarceration at correctional facilities52
In summary the profitability of private prison companies comes at the expense of public safety and
personal liberty It may not be surprising then that the recidivism rates of privately held prisons are higher
than those of publicly run prisons53
After all it is within the best interest of private prison companies to
have a revolving door at their facilities
Minimizing Expenses Another way private prison companies seek to increase profitability is by reducing their
operational expensesmdashthe less they spend the more they pocket With approximately 65-70 of prison
expenditures going to staff54
private prison companies save the most in operational costs by avoiding
unionized labor and the associated personnel services55
Consequently the correctional staff at for-profit
prisons tend to be inadequately trained and poorly paid56
Not surprisingly private prisons have been
condemned for higher rates of violence and abuse57
Private prisons also cut costs related to food
healthcare and programs58
While lowering these expenses may not directly influence incarceration rates
it may have an indirect impact by worsening prison conditions and thus putting prisoners in poorer mental
and physical health for release Indeed as already noted studies have showed that recidivism rates are
higher for private prisons than public prisons59
Interestingly financial efficiency is also the primary alternative explanation for the expansion of
for-profit prisons in highly incarcerative states If true the interests of the public and private sectors
would in some way be aligned With lower operational costs private prison companies can still promise
savings for federal and state systems while charging profit premiums There is indeed some truth to these
52 The GEO Group Inc 2014 Annual Report Form 10-K 36 53 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015 54 US Department of Justice Office of Justice Programs Bureau of Justice Assistance Emerging Issues on Privatized Prisons
by James Austin and Garry Coventry (Washington DC Government Printing Office February 2001) 16 55 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 23-24 56 Brendan Fischer ldquoViolence Abuse and Death at For-Profit Prisons A GEO Group Rap Sheetrdquo The Center for Media and
Democracyrsquos PR Watch September 26 2013 57 US Department of Justice Office of Justice Programs Bureau of Justice Assistance Emerging Issues on Privatized Prisons
by James Austin and Garry Coventry (Washington DC Government Printing Office February 2001) 36-37 48 58 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015 59 Id
11
claims with short-run savings averaging about 19 and long-run savings averaging about 2960
Some
states even require private prison companies to offer a specified discount to public per-diem costs For
example Texas Kentucky and Mississippi have contract stipulations that require a 10 savings61
Moreover a recent study found that the cost savings of for-profit prisons is often underestimated because
they fail to account for savings on personnel services such as pensions and healthcare for retirees which
may not be attributed directly to state correctional departments62
Finally with operating margins as high
as 30 and per diem costs still lower than those in public prisons63
some might consider for-profit
prisons much more financially efficient However comparing private and public operational costs is not
as straight forward as private prison companies might like the public to believe There are in fact hidden
costs that private prison companies either unfairly avoid or perhaps even create for public prisons
First for-profit prisons can cherry-pick the most desirable or profitable prisoners from the
general prison population Generally this means that for-profit prisons house healthy minimum security
prisoners who are cheaper to incarcerate States are left to run maximum security prisons that require
ldquomore intensive security systems and proceduresrdquo64
Public prisons also typically house specialized
populations such as sex offenders that are more expensive due to higher treatment and administrative
needs65
Finally public prisons also tend to be responsible for prisoners with moderate to high mental or
physical healthcare needs These population differences allow private prison companies to demonstrate
artificial savings for states
60 Id Short-run costs are those associated with the day-to-day operation of prison facilities Long-run costs include short-run
costs plus the capital expenditures associated with maintaining and building prisons 61 Id 62 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 3 63 Association of State Correctional Administrators Inmate Cost Per Day Follow Up Survey (September 2011) 64 Harris Kenny and Leonard Gilroy The Challenge of Comparing Public and Private Correctional Costs (Reason Foundation
December 2013) 4-5 65 Id
12
Second as already mentioned studies have shown that for-profit prisons have marginally higher
rates of recidivism than their public counterparts66
Ethical concerns aside higher recidivism rates burden
states with additional incarceration expenses in the future Though a differential of 3-4 may seem
negligible a difference of even one
percentage point can amount to
considerable costs particularly in states
with high incarceration costs For
example in New York where the
annual cost of incarcerating one person
is more than $60000 recidivism comes
at a very high price Figure 4 provides
further detail on the annual costs of
incarceration by state
In their efforts to maximize revenues and minimize expenses private prison companies rely
heavily on growth strategies that promote incarceration Given the obvious ethical implications private
prison companies are less than public about their expansion intentions Consequently they employ
growth tactics that manipulate political elections and criminal lawmaking weakening the influence of
popular democracy on criminal law and policy
Part III Undermining Democracy With most private prison contracts executed by federal state and local policymakers the for-
profit prison industry relies heavily on political relationships Accordingly the industry has a dual-
pronged political strategy that undermines democratic legitimacy in its dependence on legislative
lobbying and campaign financing
66 Spivak Andrew L and Susan F Sharp ldquoInmate Recidivism As a Measure of Private Prison Performancerdquo Crime amp
Delinquency Vol 54 (Washington DC SAGE Publications July 2008) 482-508
Figure 4 Annual Cost of Incarceration per Prisoner
Source Theirry Godard ldquoThe Economics of the American Prison Systemrdquo
SmartAsset January 23 2015
13
Legislative Lobbying Despite denying lobbying involvement in the past ten years the three leading private prison
operators have spent over $45 million on lobbying67
According to the companyrsquos own literature CCA
has an explicit policy prohibiting it from ldquoengaging in lobbying or advocacy efforts that would influence
enforcement efforts parole standards criminal laws and sentencing policiesrdquo68
Yet over the past decade
CCA like its competitors has spent more than $900000 annually on lobbying69
In fact not only do
private prison operators utilize the services of lobbying firms they also employ their own in-house
lobbyists
Since 2002 alone CCA has employed nearly 400 lobbyists across 30 states70
In 2014 the
company had 36 active lobbyists in 10 states focusing heavily on Florida Vermont Tennessee
California Pennsylvania Kentucky and Minnesota71
Over the same time frame GEO has employed
more than 200 lobbyists across 11 states focusing heavily on Florida California Texas Pennsylvania
and Virginia72
In 2014 the company had 15 active lobbyists across 5 states73
Attention to these specific states has been a successful strategy play for private prison operators
Aside from being the home to the headquarters of GEO Florida also has the second largest private prison
population and the market share of these for-profit prisons is only increasing74
Between 2012 and 2013
the private prison population in Florida grew 1 while the private prison population across all states
decreased 575
Lobbying centered on California has also produced strong results With the second
largest prison population in the country and a judicial order to remedy overcrowding76
California has
67 Aviva Shen ldquoPrivate Prisons Spend $45 Million On Lobbying Rake In $51 Billion For Immigrant Detention Alonerdquo
ThinkProgress August 3 2012 68 Corrections Corporation of America 2014 Annual Report Form 10-K 28 69 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 22 70 National Institute on Money in State Politics Corrections Corporation of America April 29 2015 71 Id 72 National Institute on Money in State Politics GEO Group April 29 2015 73 Id 74 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 75 Id 76 Id at 5
14
largely embraced private prisons Accordingly between 2012 and 2013 the private prison population in
California grew 23377
Both CCA and GEO are private sector members of American Legislative Exchange Council
(ALEC) a nonpartisan organization aimed at advancing ldquolimited government free markets and
federalism at the state levelrdquo78
The organization utilizes a public-private partnership structure to bring
together state legislators members of the private sector and the general public to draft and introduce
model legislation ALEC has played a role in the passing of mandatory minimum three strikes and truth-
in-sentencing laws all of which have contributed to the rapid growth of incarceration since the 1970s79
Unfortunately further detail about the
lobbying efforts of private prison
operators is lacking since lobbyists are
not required to report the direction in
which they lobbied on any particular
piece of legislation80
Campaign Financing Since 1990 the private prison
operators have made nearly $15 million in
political contributions at the state and
local level81
These contributions have
seen a dramatic uptick in recent years
77 Id at 14 78 American Legislative Exchange Council About Us 79 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 29 80 Id at 21 81 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
$2650346
$-
$500000
$1000000
$1500000
$2000000
$2500000
$3000000
Figure 5 State and Local Political Contributions of
Private Prison Companies by Year
Source National Institute on Money in State Politics Correctional
facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
15
with 2014 representing the highest amount yet at $27 million82
CCA and GEO along with their
acquisitions have accounted for 72 of these political contributions over the years83
The two companies
also made combined political contributions of nearly $1 million at the federal level since just 201084
Moreover these company-specific figures under estimate their political influence because they fail to
capture the individual political contributions of the companiesrsquo executive leadership and board of
directors In fact the Chief Executive Officer of GEO George Zoley and one of the founding partners of
CCA Doctor Crants have each made approximately $90000 in political contributions85
Approximately half of all state and local political contributions are made to party committees the
largest beneficiary of which is the Florida Republican Party which has received more than $4 million86
Another substantial proportion of
these contributions are made
directly to state and local
candidates87
Finally the remaining
3 of these contributions are made
to ballot measure committees88
Similar to lobbying
spending these contributions have
been relatively clustered in a few
states Florida California Texas
Tennessee and Virginia have all
82 Id 83 Id 84 Id 85 Id 86 Id 87 Id 88 Id
Figure 6 State and Local Political Contributions of
Private Prison Companies by State
Source National Institute on Money in State Politics Correctional facilities
construction amp managementfor-profit contributions to candidates and
committees April 29 2015
16
scene contributions in excess of $50000089
GEO is by far the largest correctional contributor in Florida
at $34 million and CCA has an equally substantial lead as the largest correctional contributor in
California at $15 million90
Though republican candidates tend to be the recipients of campaign contributions from private
prison operators nearly a third of contributions are made to democratic candidates91
Researchers have
taken this to suggest that private prison operators are less concerned with supporting particular political
beliefs than general access to political power92
In fact nearly 80 of campaign contributions support
winning candidates93
Even the timing of these contributions is strategically nuanced Private prison
operators tend to give in the early and late stages of political campaigns in order to establish a strong
rapport early and then reinforce a positive relationship with the candidate expected to win94
Conclusion Though private prison companies tend to tout financial efficiency as their great contribution to
corrections their incentives are in many ways diametrically opposed to those of a safe and free society
Their financial success depends on increasing crime law enforcement and liberty infractions
Accordingly they succumb to undercutting popular democracy to feed their bottom lines They rely on
the questionable practices of private sector lobbying and campaign financing to secure political support
for their business ventures They do so with as much secrecy as possible to stay out of the direct attack of
ethically minded opposition
Thus it seems only fitting that the fastest growing client for private prison companies is one that
intends to fly under the radar and enjoys the fewest protections illegal immigrants targeted by
Immigration and Customs Enforcement Both CCA and GEO highlighted the importance of the recent
89 Id 90 Id 91 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 19 92 Id at 18 93 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015 94 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 18
17
focus on immigration laws at the federal state and local level in their annual reports But they are not idle
players in the space they are well-prepared to protect and expand their enterprises For example 30 of the
36 legislators who co-sponsored Arizonarsquos immigration bill that would undoubtedly place more
immigrants in detention received campaign contributions from private prison companies95
If we are not
careful and perhaps even if we are federal state and local immigration policies will be dictated by a few
parties interested in further immigrant detention
Unfortunately business interests run high in politics and consistently undermine the legitimacy of
popular democracy To rein in the legislative lobbying and campaign financing of private prison
companies additional limitation would have to be made on such practices Alternatively the privatization
of prisons could be outlawed or at least more closely regulated For example legislation could be passed
that forbids private prison companies from relying on a revenue model that encourages incarceration or
prohibits states from paying owners and operators on a per diem per person basis Private prison
companies could instead offer the public sector better recidivism rates in exchange for higher payouts
similar to the social impact bond model It may not be entirely prudent to dismiss privatization within
corrections or any other public sector However as it currently stands the privatization of prisons
threatens all efforts to reduce mass incarceration
95 Andre N Sanchez ldquoPrivate Prisons Spend Millions On Lobbying To Put More People In Jailrdquo Think Progress June 23 2011
8
eight facilities or 6500 beds to the companyrsquos portfolio40
Though both CCA and GEO have expanded
their market shares in this way in the past there are two rather substantial limitations to this growth
strategy current levels of privatization and the small number of players in the market In fact by 2007
there were only six players left41
Thus this is unlikely to be the dominant growth strategy for these
private prison companies going forward
Prison Privatization Private prison companies can increase their man-days by increasing the
market share of for-profit prisons in corrections more broadly This approach is dependent on the
industryrsquos ability to gain government and public support for the privatization of corrections While private
prison companies have noted the opposition of certain groups such as labor unions and criminal justice
reform organizations42
they have nevertheless seen an expansion in their populations In fact the number
of prisoners held in for-profit prisons increased more than 1600 between 1990 and 200943
While contracting for additional beds private prison companies also make an effort to include
occupancy guarantees in their management contracts Sixty-five percent of management contracts have
such guarantee clauses44
These clauses typically promise occupancy rates between 80 and 100 and
offer to pay for unused prison beds below the delineated guarantee45
For example in 2012 CCA secured
a management contract from the Arizona Department of Corrections to incarcerate 1000 prisoners at the
Red Rock Correctional Center46
The contract included an occupancy guarantee of 90 for the contracted
beds47
As a result of such contracts in 2014 CCA and GEO enjoyed occupancy rates as high as 84 and
96 respectively48
This growth strategy holds a lot of promise since more than 90 of prisoners are still
40 Id 41 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 16 42 Corrections Corporation of America 2014 Annual Report Form 10-K 26 43 American Civil Liberties Union Banking on Bondage Private Prisons and Mass Incarceration (New York NY American
Civil Liberties Union November 2011) 5 44 In the Public Interest Criminal How Lockup Quotas and ldquoLow-Crime Taxesrdquo Guarantee Profits for Private Prison
Corporations (Washington DC In the Public Interest September 2013) 6 45 Id at 3-6 46 Corrections Corporation of America 2014 Annual Report Form 10-K F-20 47 Id 48 Corrections Corporation of America 2014 Annual Report Form 10-K 6 The GEO Group Inc 2014 Annual Report Form
10-K 54 For Corrections Corporation of American data includes idle facilities but excludes facilities marked for
discontinuation For The GEO Group data excludes idle facilities
9
held in public prisons49
However there is still an absolute ceiling set by the number of people
incarcerated and a lower practical ceiling set by correctional systems and their policies about what types
of populations can be housed in for-profit prisons
Prison Utilization Private prisons are relied upon to relieve strains on government budgets and
concerns of overcrowding50
Accordingly private prison companies fair best when incarceration is high
enough to create such burdens Thus these companies can grow their man-days by increasing the overall
number of people incarcerated This approach undoubtedly raises the greatest number of ethical issues
but it also the only uncapped growth strategy And not only is the strategy recognized by private prison
companies but efforts made to reduce incarceration are viewed as threats to profitability In fact both
CCA and GEO cite leniency in conviction and sentencing decriminalization of drug and immigration
offenses and even reductions in crime as business risks In its 2014 Annual Report CCA states
growth depends on a number of factors we cannot control including crime rates and
sentencing patterns in various jurisdictions The demand for our facilities and services could
be adversely affected by the relaxation of enforcement efforts leniency in conviction or parole
standards and sentencing practices or through the decriminalization of certain activities that are
currently proscribed by criminal laws For instance any changes with respect to drugs and
controlled substances or illegal immigration could affect the number of persons arrested
convicted and sentenced thereby potentially reducing demand for correctional facilities to house
them Legislation has also been proposed in numerous jurisdictions that could lower minimum
sentences for some non-violent crimes and 25 make more inmates eligible for early release based
on good behavior Also sentencing alternatives under consideration could put some offenders on
probation with electronic monitoring who would otherwise be incarcerated Similarly reductions
in crime rates or resources dedicated to prevent and enforce crime could lead to reductions in
arrests convictions and sentences requiring incarceration at correctional facilities51
Similarly in its 2014 Annual Report GEO states
The demand for our correctional and detention facilities and services could be adversely
affected by changes in existing criminal or immigration laws crime rates in jurisdictions in which
we operate the relaxation of criminal or immigration enforcement efforts leniency in conviction
sentencing or deportation practices and the decriminalization of certain activities that are
currently proscribed by criminal laws or the loosening of immigration laws For example any
changes with respect to the decriminalization of drugs and controlled substances could affect the
number of persons arrested convicted sentenced and incarcerated thereby potentially reducing
49 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 50 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 3 51 Corrections Corporation of America 2014 Annual Report Form 10-K 27-28
10
demand for correctional facilities to house them Similarly reductions in crime rates could lead to
reductions in arrests convictions and sentences requiring incarceration at correctional facilities52
In summary the profitability of private prison companies comes at the expense of public safety and
personal liberty It may not be surprising then that the recidivism rates of privately held prisons are higher
than those of publicly run prisons53
After all it is within the best interest of private prison companies to
have a revolving door at their facilities
Minimizing Expenses Another way private prison companies seek to increase profitability is by reducing their
operational expensesmdashthe less they spend the more they pocket With approximately 65-70 of prison
expenditures going to staff54
private prison companies save the most in operational costs by avoiding
unionized labor and the associated personnel services55
Consequently the correctional staff at for-profit
prisons tend to be inadequately trained and poorly paid56
Not surprisingly private prisons have been
condemned for higher rates of violence and abuse57
Private prisons also cut costs related to food
healthcare and programs58
While lowering these expenses may not directly influence incarceration rates
it may have an indirect impact by worsening prison conditions and thus putting prisoners in poorer mental
and physical health for release Indeed as already noted studies have showed that recidivism rates are
higher for private prisons than public prisons59
Interestingly financial efficiency is also the primary alternative explanation for the expansion of
for-profit prisons in highly incarcerative states If true the interests of the public and private sectors
would in some way be aligned With lower operational costs private prison companies can still promise
savings for federal and state systems while charging profit premiums There is indeed some truth to these
52 The GEO Group Inc 2014 Annual Report Form 10-K 36 53 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015 54 US Department of Justice Office of Justice Programs Bureau of Justice Assistance Emerging Issues on Privatized Prisons
by James Austin and Garry Coventry (Washington DC Government Printing Office February 2001) 16 55 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 23-24 56 Brendan Fischer ldquoViolence Abuse and Death at For-Profit Prisons A GEO Group Rap Sheetrdquo The Center for Media and
Democracyrsquos PR Watch September 26 2013 57 US Department of Justice Office of Justice Programs Bureau of Justice Assistance Emerging Issues on Privatized Prisons
by James Austin and Garry Coventry (Washington DC Government Printing Office February 2001) 36-37 48 58 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015 59 Id
11
claims with short-run savings averaging about 19 and long-run savings averaging about 2960
Some
states even require private prison companies to offer a specified discount to public per-diem costs For
example Texas Kentucky and Mississippi have contract stipulations that require a 10 savings61
Moreover a recent study found that the cost savings of for-profit prisons is often underestimated because
they fail to account for savings on personnel services such as pensions and healthcare for retirees which
may not be attributed directly to state correctional departments62
Finally with operating margins as high
as 30 and per diem costs still lower than those in public prisons63
some might consider for-profit
prisons much more financially efficient However comparing private and public operational costs is not
as straight forward as private prison companies might like the public to believe There are in fact hidden
costs that private prison companies either unfairly avoid or perhaps even create for public prisons
First for-profit prisons can cherry-pick the most desirable or profitable prisoners from the
general prison population Generally this means that for-profit prisons house healthy minimum security
prisoners who are cheaper to incarcerate States are left to run maximum security prisons that require
ldquomore intensive security systems and proceduresrdquo64
Public prisons also typically house specialized
populations such as sex offenders that are more expensive due to higher treatment and administrative
needs65
Finally public prisons also tend to be responsible for prisoners with moderate to high mental or
physical healthcare needs These population differences allow private prison companies to demonstrate
artificial savings for states
60 Id Short-run costs are those associated with the day-to-day operation of prison facilities Long-run costs include short-run
costs plus the capital expenditures associated with maintaining and building prisons 61 Id 62 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 3 63 Association of State Correctional Administrators Inmate Cost Per Day Follow Up Survey (September 2011) 64 Harris Kenny and Leonard Gilroy The Challenge of Comparing Public and Private Correctional Costs (Reason Foundation
December 2013) 4-5 65 Id
12
Second as already mentioned studies have shown that for-profit prisons have marginally higher
rates of recidivism than their public counterparts66
Ethical concerns aside higher recidivism rates burden
states with additional incarceration expenses in the future Though a differential of 3-4 may seem
negligible a difference of even one
percentage point can amount to
considerable costs particularly in states
with high incarceration costs For
example in New York where the
annual cost of incarcerating one person
is more than $60000 recidivism comes
at a very high price Figure 4 provides
further detail on the annual costs of
incarceration by state
In their efforts to maximize revenues and minimize expenses private prison companies rely
heavily on growth strategies that promote incarceration Given the obvious ethical implications private
prison companies are less than public about their expansion intentions Consequently they employ
growth tactics that manipulate political elections and criminal lawmaking weakening the influence of
popular democracy on criminal law and policy
Part III Undermining Democracy With most private prison contracts executed by federal state and local policymakers the for-
profit prison industry relies heavily on political relationships Accordingly the industry has a dual-
pronged political strategy that undermines democratic legitimacy in its dependence on legislative
lobbying and campaign financing
66 Spivak Andrew L and Susan F Sharp ldquoInmate Recidivism As a Measure of Private Prison Performancerdquo Crime amp
Delinquency Vol 54 (Washington DC SAGE Publications July 2008) 482-508
Figure 4 Annual Cost of Incarceration per Prisoner
Source Theirry Godard ldquoThe Economics of the American Prison Systemrdquo
SmartAsset January 23 2015
13
Legislative Lobbying Despite denying lobbying involvement in the past ten years the three leading private prison
operators have spent over $45 million on lobbying67
According to the companyrsquos own literature CCA
has an explicit policy prohibiting it from ldquoengaging in lobbying or advocacy efforts that would influence
enforcement efforts parole standards criminal laws and sentencing policiesrdquo68
Yet over the past decade
CCA like its competitors has spent more than $900000 annually on lobbying69
In fact not only do
private prison operators utilize the services of lobbying firms they also employ their own in-house
lobbyists
Since 2002 alone CCA has employed nearly 400 lobbyists across 30 states70
In 2014 the
company had 36 active lobbyists in 10 states focusing heavily on Florida Vermont Tennessee
California Pennsylvania Kentucky and Minnesota71
Over the same time frame GEO has employed
more than 200 lobbyists across 11 states focusing heavily on Florida California Texas Pennsylvania
and Virginia72
In 2014 the company had 15 active lobbyists across 5 states73
Attention to these specific states has been a successful strategy play for private prison operators
Aside from being the home to the headquarters of GEO Florida also has the second largest private prison
population and the market share of these for-profit prisons is only increasing74
Between 2012 and 2013
the private prison population in Florida grew 1 while the private prison population across all states
decreased 575
Lobbying centered on California has also produced strong results With the second
largest prison population in the country and a judicial order to remedy overcrowding76
California has
67 Aviva Shen ldquoPrivate Prisons Spend $45 Million On Lobbying Rake In $51 Billion For Immigrant Detention Alonerdquo
ThinkProgress August 3 2012 68 Corrections Corporation of America 2014 Annual Report Form 10-K 28 69 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 22 70 National Institute on Money in State Politics Corrections Corporation of America April 29 2015 71 Id 72 National Institute on Money in State Politics GEO Group April 29 2015 73 Id 74 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 75 Id 76 Id at 5
14
largely embraced private prisons Accordingly between 2012 and 2013 the private prison population in
California grew 23377
Both CCA and GEO are private sector members of American Legislative Exchange Council
(ALEC) a nonpartisan organization aimed at advancing ldquolimited government free markets and
federalism at the state levelrdquo78
The organization utilizes a public-private partnership structure to bring
together state legislators members of the private sector and the general public to draft and introduce
model legislation ALEC has played a role in the passing of mandatory minimum three strikes and truth-
in-sentencing laws all of which have contributed to the rapid growth of incarceration since the 1970s79
Unfortunately further detail about the
lobbying efforts of private prison
operators is lacking since lobbyists are
not required to report the direction in
which they lobbied on any particular
piece of legislation80
Campaign Financing Since 1990 the private prison
operators have made nearly $15 million in
political contributions at the state and
local level81
These contributions have
seen a dramatic uptick in recent years
77 Id at 14 78 American Legislative Exchange Council About Us 79 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 29 80 Id at 21 81 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
$2650346
$-
$500000
$1000000
$1500000
$2000000
$2500000
$3000000
Figure 5 State and Local Political Contributions of
Private Prison Companies by Year
Source National Institute on Money in State Politics Correctional
facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
15
with 2014 representing the highest amount yet at $27 million82
CCA and GEO along with their
acquisitions have accounted for 72 of these political contributions over the years83
The two companies
also made combined political contributions of nearly $1 million at the federal level since just 201084
Moreover these company-specific figures under estimate their political influence because they fail to
capture the individual political contributions of the companiesrsquo executive leadership and board of
directors In fact the Chief Executive Officer of GEO George Zoley and one of the founding partners of
CCA Doctor Crants have each made approximately $90000 in political contributions85
Approximately half of all state and local political contributions are made to party committees the
largest beneficiary of which is the Florida Republican Party which has received more than $4 million86
Another substantial proportion of
these contributions are made
directly to state and local
candidates87
Finally the remaining
3 of these contributions are made
to ballot measure committees88
Similar to lobbying
spending these contributions have
been relatively clustered in a few
states Florida California Texas
Tennessee and Virginia have all
82 Id 83 Id 84 Id 85 Id 86 Id 87 Id 88 Id
Figure 6 State and Local Political Contributions of
Private Prison Companies by State
Source National Institute on Money in State Politics Correctional facilities
construction amp managementfor-profit contributions to candidates and
committees April 29 2015
16
scene contributions in excess of $50000089
GEO is by far the largest correctional contributor in Florida
at $34 million and CCA has an equally substantial lead as the largest correctional contributor in
California at $15 million90
Though republican candidates tend to be the recipients of campaign contributions from private
prison operators nearly a third of contributions are made to democratic candidates91
Researchers have
taken this to suggest that private prison operators are less concerned with supporting particular political
beliefs than general access to political power92
In fact nearly 80 of campaign contributions support
winning candidates93
Even the timing of these contributions is strategically nuanced Private prison
operators tend to give in the early and late stages of political campaigns in order to establish a strong
rapport early and then reinforce a positive relationship with the candidate expected to win94
Conclusion Though private prison companies tend to tout financial efficiency as their great contribution to
corrections their incentives are in many ways diametrically opposed to those of a safe and free society
Their financial success depends on increasing crime law enforcement and liberty infractions
Accordingly they succumb to undercutting popular democracy to feed their bottom lines They rely on
the questionable practices of private sector lobbying and campaign financing to secure political support
for their business ventures They do so with as much secrecy as possible to stay out of the direct attack of
ethically minded opposition
Thus it seems only fitting that the fastest growing client for private prison companies is one that
intends to fly under the radar and enjoys the fewest protections illegal immigrants targeted by
Immigration and Customs Enforcement Both CCA and GEO highlighted the importance of the recent
89 Id 90 Id 91 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 19 92 Id at 18 93 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015 94 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 18
17
focus on immigration laws at the federal state and local level in their annual reports But they are not idle
players in the space they are well-prepared to protect and expand their enterprises For example 30 of the
36 legislators who co-sponsored Arizonarsquos immigration bill that would undoubtedly place more
immigrants in detention received campaign contributions from private prison companies95
If we are not
careful and perhaps even if we are federal state and local immigration policies will be dictated by a few
parties interested in further immigrant detention
Unfortunately business interests run high in politics and consistently undermine the legitimacy of
popular democracy To rein in the legislative lobbying and campaign financing of private prison
companies additional limitation would have to be made on such practices Alternatively the privatization
of prisons could be outlawed or at least more closely regulated For example legislation could be passed
that forbids private prison companies from relying on a revenue model that encourages incarceration or
prohibits states from paying owners and operators on a per diem per person basis Private prison
companies could instead offer the public sector better recidivism rates in exchange for higher payouts
similar to the social impact bond model It may not be entirely prudent to dismiss privatization within
corrections or any other public sector However as it currently stands the privatization of prisons
threatens all efforts to reduce mass incarceration
95 Andre N Sanchez ldquoPrivate Prisons Spend Millions On Lobbying To Put More People In Jailrdquo Think Progress June 23 2011
9
held in public prisons49
However there is still an absolute ceiling set by the number of people
incarcerated and a lower practical ceiling set by correctional systems and their policies about what types
of populations can be housed in for-profit prisons
Prison Utilization Private prisons are relied upon to relieve strains on government budgets and
concerns of overcrowding50
Accordingly private prison companies fair best when incarceration is high
enough to create such burdens Thus these companies can grow their man-days by increasing the overall
number of people incarcerated This approach undoubtedly raises the greatest number of ethical issues
but it also the only uncapped growth strategy And not only is the strategy recognized by private prison
companies but efforts made to reduce incarceration are viewed as threats to profitability In fact both
CCA and GEO cite leniency in conviction and sentencing decriminalization of drug and immigration
offenses and even reductions in crime as business risks In its 2014 Annual Report CCA states
growth depends on a number of factors we cannot control including crime rates and
sentencing patterns in various jurisdictions The demand for our facilities and services could
be adversely affected by the relaxation of enforcement efforts leniency in conviction or parole
standards and sentencing practices or through the decriminalization of certain activities that are
currently proscribed by criminal laws For instance any changes with respect to drugs and
controlled substances or illegal immigration could affect the number of persons arrested
convicted and sentenced thereby potentially reducing demand for correctional facilities to house
them Legislation has also been proposed in numerous jurisdictions that could lower minimum
sentences for some non-violent crimes and 25 make more inmates eligible for early release based
on good behavior Also sentencing alternatives under consideration could put some offenders on
probation with electronic monitoring who would otherwise be incarcerated Similarly reductions
in crime rates or resources dedicated to prevent and enforce crime could lead to reductions in
arrests convictions and sentences requiring incarceration at correctional facilities51
Similarly in its 2014 Annual Report GEO states
The demand for our correctional and detention facilities and services could be adversely
affected by changes in existing criminal or immigration laws crime rates in jurisdictions in which
we operate the relaxation of criminal or immigration enforcement efforts leniency in conviction
sentencing or deportation practices and the decriminalization of certain activities that are
currently proscribed by criminal laws or the loosening of immigration laws For example any
changes with respect to the decriminalization of drugs and controlled substances could affect the
number of persons arrested convicted sentenced and incarcerated thereby potentially reducing
49 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 50 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 3 51 Corrections Corporation of America 2014 Annual Report Form 10-K 27-28
10
demand for correctional facilities to house them Similarly reductions in crime rates could lead to
reductions in arrests convictions and sentences requiring incarceration at correctional facilities52
In summary the profitability of private prison companies comes at the expense of public safety and
personal liberty It may not be surprising then that the recidivism rates of privately held prisons are higher
than those of publicly run prisons53
After all it is within the best interest of private prison companies to
have a revolving door at their facilities
Minimizing Expenses Another way private prison companies seek to increase profitability is by reducing their
operational expensesmdashthe less they spend the more they pocket With approximately 65-70 of prison
expenditures going to staff54
private prison companies save the most in operational costs by avoiding
unionized labor and the associated personnel services55
Consequently the correctional staff at for-profit
prisons tend to be inadequately trained and poorly paid56
Not surprisingly private prisons have been
condemned for higher rates of violence and abuse57
Private prisons also cut costs related to food
healthcare and programs58
While lowering these expenses may not directly influence incarceration rates
it may have an indirect impact by worsening prison conditions and thus putting prisoners in poorer mental
and physical health for release Indeed as already noted studies have showed that recidivism rates are
higher for private prisons than public prisons59
Interestingly financial efficiency is also the primary alternative explanation for the expansion of
for-profit prisons in highly incarcerative states If true the interests of the public and private sectors
would in some way be aligned With lower operational costs private prison companies can still promise
savings for federal and state systems while charging profit premiums There is indeed some truth to these
52 The GEO Group Inc 2014 Annual Report Form 10-K 36 53 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015 54 US Department of Justice Office of Justice Programs Bureau of Justice Assistance Emerging Issues on Privatized Prisons
by James Austin and Garry Coventry (Washington DC Government Printing Office February 2001) 16 55 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 23-24 56 Brendan Fischer ldquoViolence Abuse and Death at For-Profit Prisons A GEO Group Rap Sheetrdquo The Center for Media and
Democracyrsquos PR Watch September 26 2013 57 US Department of Justice Office of Justice Programs Bureau of Justice Assistance Emerging Issues on Privatized Prisons
by James Austin and Garry Coventry (Washington DC Government Printing Office February 2001) 36-37 48 58 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015 59 Id
11
claims with short-run savings averaging about 19 and long-run savings averaging about 2960
Some
states even require private prison companies to offer a specified discount to public per-diem costs For
example Texas Kentucky and Mississippi have contract stipulations that require a 10 savings61
Moreover a recent study found that the cost savings of for-profit prisons is often underestimated because
they fail to account for savings on personnel services such as pensions and healthcare for retirees which
may not be attributed directly to state correctional departments62
Finally with operating margins as high
as 30 and per diem costs still lower than those in public prisons63
some might consider for-profit
prisons much more financially efficient However comparing private and public operational costs is not
as straight forward as private prison companies might like the public to believe There are in fact hidden
costs that private prison companies either unfairly avoid or perhaps even create for public prisons
First for-profit prisons can cherry-pick the most desirable or profitable prisoners from the
general prison population Generally this means that for-profit prisons house healthy minimum security
prisoners who are cheaper to incarcerate States are left to run maximum security prisons that require
ldquomore intensive security systems and proceduresrdquo64
Public prisons also typically house specialized
populations such as sex offenders that are more expensive due to higher treatment and administrative
needs65
Finally public prisons also tend to be responsible for prisoners with moderate to high mental or
physical healthcare needs These population differences allow private prison companies to demonstrate
artificial savings for states
60 Id Short-run costs are those associated with the day-to-day operation of prison facilities Long-run costs include short-run
costs plus the capital expenditures associated with maintaining and building prisons 61 Id 62 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 3 63 Association of State Correctional Administrators Inmate Cost Per Day Follow Up Survey (September 2011) 64 Harris Kenny and Leonard Gilroy The Challenge of Comparing Public and Private Correctional Costs (Reason Foundation
December 2013) 4-5 65 Id
12
Second as already mentioned studies have shown that for-profit prisons have marginally higher
rates of recidivism than their public counterparts66
Ethical concerns aside higher recidivism rates burden
states with additional incarceration expenses in the future Though a differential of 3-4 may seem
negligible a difference of even one
percentage point can amount to
considerable costs particularly in states
with high incarceration costs For
example in New York where the
annual cost of incarcerating one person
is more than $60000 recidivism comes
at a very high price Figure 4 provides
further detail on the annual costs of
incarceration by state
In their efforts to maximize revenues and minimize expenses private prison companies rely
heavily on growth strategies that promote incarceration Given the obvious ethical implications private
prison companies are less than public about their expansion intentions Consequently they employ
growth tactics that manipulate political elections and criminal lawmaking weakening the influence of
popular democracy on criminal law and policy
Part III Undermining Democracy With most private prison contracts executed by federal state and local policymakers the for-
profit prison industry relies heavily on political relationships Accordingly the industry has a dual-
pronged political strategy that undermines democratic legitimacy in its dependence on legislative
lobbying and campaign financing
66 Spivak Andrew L and Susan F Sharp ldquoInmate Recidivism As a Measure of Private Prison Performancerdquo Crime amp
Delinquency Vol 54 (Washington DC SAGE Publications July 2008) 482-508
Figure 4 Annual Cost of Incarceration per Prisoner
Source Theirry Godard ldquoThe Economics of the American Prison Systemrdquo
SmartAsset January 23 2015
13
Legislative Lobbying Despite denying lobbying involvement in the past ten years the three leading private prison
operators have spent over $45 million on lobbying67
According to the companyrsquos own literature CCA
has an explicit policy prohibiting it from ldquoengaging in lobbying or advocacy efforts that would influence
enforcement efforts parole standards criminal laws and sentencing policiesrdquo68
Yet over the past decade
CCA like its competitors has spent more than $900000 annually on lobbying69
In fact not only do
private prison operators utilize the services of lobbying firms they also employ their own in-house
lobbyists
Since 2002 alone CCA has employed nearly 400 lobbyists across 30 states70
In 2014 the
company had 36 active lobbyists in 10 states focusing heavily on Florida Vermont Tennessee
California Pennsylvania Kentucky and Minnesota71
Over the same time frame GEO has employed
more than 200 lobbyists across 11 states focusing heavily on Florida California Texas Pennsylvania
and Virginia72
In 2014 the company had 15 active lobbyists across 5 states73
Attention to these specific states has been a successful strategy play for private prison operators
Aside from being the home to the headquarters of GEO Florida also has the second largest private prison
population and the market share of these for-profit prisons is only increasing74
Between 2012 and 2013
the private prison population in Florida grew 1 while the private prison population across all states
decreased 575
Lobbying centered on California has also produced strong results With the second
largest prison population in the country and a judicial order to remedy overcrowding76
California has
67 Aviva Shen ldquoPrivate Prisons Spend $45 Million On Lobbying Rake In $51 Billion For Immigrant Detention Alonerdquo
ThinkProgress August 3 2012 68 Corrections Corporation of America 2014 Annual Report Form 10-K 28 69 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 22 70 National Institute on Money in State Politics Corrections Corporation of America April 29 2015 71 Id 72 National Institute on Money in State Politics GEO Group April 29 2015 73 Id 74 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 75 Id 76 Id at 5
14
largely embraced private prisons Accordingly between 2012 and 2013 the private prison population in
California grew 23377
Both CCA and GEO are private sector members of American Legislative Exchange Council
(ALEC) a nonpartisan organization aimed at advancing ldquolimited government free markets and
federalism at the state levelrdquo78
The organization utilizes a public-private partnership structure to bring
together state legislators members of the private sector and the general public to draft and introduce
model legislation ALEC has played a role in the passing of mandatory minimum three strikes and truth-
in-sentencing laws all of which have contributed to the rapid growth of incarceration since the 1970s79
Unfortunately further detail about the
lobbying efforts of private prison
operators is lacking since lobbyists are
not required to report the direction in
which they lobbied on any particular
piece of legislation80
Campaign Financing Since 1990 the private prison
operators have made nearly $15 million in
political contributions at the state and
local level81
These contributions have
seen a dramatic uptick in recent years
77 Id at 14 78 American Legislative Exchange Council About Us 79 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 29 80 Id at 21 81 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
$2650346
$-
$500000
$1000000
$1500000
$2000000
$2500000
$3000000
Figure 5 State and Local Political Contributions of
Private Prison Companies by Year
Source National Institute on Money in State Politics Correctional
facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
15
with 2014 representing the highest amount yet at $27 million82
CCA and GEO along with their
acquisitions have accounted for 72 of these political contributions over the years83
The two companies
also made combined political contributions of nearly $1 million at the federal level since just 201084
Moreover these company-specific figures under estimate their political influence because they fail to
capture the individual political contributions of the companiesrsquo executive leadership and board of
directors In fact the Chief Executive Officer of GEO George Zoley and one of the founding partners of
CCA Doctor Crants have each made approximately $90000 in political contributions85
Approximately half of all state and local political contributions are made to party committees the
largest beneficiary of which is the Florida Republican Party which has received more than $4 million86
Another substantial proportion of
these contributions are made
directly to state and local
candidates87
Finally the remaining
3 of these contributions are made
to ballot measure committees88
Similar to lobbying
spending these contributions have
been relatively clustered in a few
states Florida California Texas
Tennessee and Virginia have all
82 Id 83 Id 84 Id 85 Id 86 Id 87 Id 88 Id
Figure 6 State and Local Political Contributions of
Private Prison Companies by State
Source National Institute on Money in State Politics Correctional facilities
construction amp managementfor-profit contributions to candidates and
committees April 29 2015
16
scene contributions in excess of $50000089
GEO is by far the largest correctional contributor in Florida
at $34 million and CCA has an equally substantial lead as the largest correctional contributor in
California at $15 million90
Though republican candidates tend to be the recipients of campaign contributions from private
prison operators nearly a third of contributions are made to democratic candidates91
Researchers have
taken this to suggest that private prison operators are less concerned with supporting particular political
beliefs than general access to political power92
In fact nearly 80 of campaign contributions support
winning candidates93
Even the timing of these contributions is strategically nuanced Private prison
operators tend to give in the early and late stages of political campaigns in order to establish a strong
rapport early and then reinforce a positive relationship with the candidate expected to win94
Conclusion Though private prison companies tend to tout financial efficiency as their great contribution to
corrections their incentives are in many ways diametrically opposed to those of a safe and free society
Their financial success depends on increasing crime law enforcement and liberty infractions
Accordingly they succumb to undercutting popular democracy to feed their bottom lines They rely on
the questionable practices of private sector lobbying and campaign financing to secure political support
for their business ventures They do so with as much secrecy as possible to stay out of the direct attack of
ethically minded opposition
Thus it seems only fitting that the fastest growing client for private prison companies is one that
intends to fly under the radar and enjoys the fewest protections illegal immigrants targeted by
Immigration and Customs Enforcement Both CCA and GEO highlighted the importance of the recent
89 Id 90 Id 91 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 19 92 Id at 18 93 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015 94 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 18
17
focus on immigration laws at the federal state and local level in their annual reports But they are not idle
players in the space they are well-prepared to protect and expand their enterprises For example 30 of the
36 legislators who co-sponsored Arizonarsquos immigration bill that would undoubtedly place more
immigrants in detention received campaign contributions from private prison companies95
If we are not
careful and perhaps even if we are federal state and local immigration policies will be dictated by a few
parties interested in further immigrant detention
Unfortunately business interests run high in politics and consistently undermine the legitimacy of
popular democracy To rein in the legislative lobbying and campaign financing of private prison
companies additional limitation would have to be made on such practices Alternatively the privatization
of prisons could be outlawed or at least more closely regulated For example legislation could be passed
that forbids private prison companies from relying on a revenue model that encourages incarceration or
prohibits states from paying owners and operators on a per diem per person basis Private prison
companies could instead offer the public sector better recidivism rates in exchange for higher payouts
similar to the social impact bond model It may not be entirely prudent to dismiss privatization within
corrections or any other public sector However as it currently stands the privatization of prisons
threatens all efforts to reduce mass incarceration
95 Andre N Sanchez ldquoPrivate Prisons Spend Millions On Lobbying To Put More People In Jailrdquo Think Progress June 23 2011
10
demand for correctional facilities to house them Similarly reductions in crime rates could lead to
reductions in arrests convictions and sentences requiring incarceration at correctional facilities52
In summary the profitability of private prison companies comes at the expense of public safety and
personal liberty It may not be surprising then that the recidivism rates of privately held prisons are higher
than those of publicly run prisons53
After all it is within the best interest of private prison companies to
have a revolving door at their facilities
Minimizing Expenses Another way private prison companies seek to increase profitability is by reducing their
operational expensesmdashthe less they spend the more they pocket With approximately 65-70 of prison
expenditures going to staff54
private prison companies save the most in operational costs by avoiding
unionized labor and the associated personnel services55
Consequently the correctional staff at for-profit
prisons tend to be inadequately trained and poorly paid56
Not surprisingly private prisons have been
condemned for higher rates of violence and abuse57
Private prisons also cut costs related to food
healthcare and programs58
While lowering these expenses may not directly influence incarceration rates
it may have an indirect impact by worsening prison conditions and thus putting prisoners in poorer mental
and physical health for release Indeed as already noted studies have showed that recidivism rates are
higher for private prisons than public prisons59
Interestingly financial efficiency is also the primary alternative explanation for the expansion of
for-profit prisons in highly incarcerative states If true the interests of the public and private sectors
would in some way be aligned With lower operational costs private prison companies can still promise
savings for federal and state systems while charging profit premiums There is indeed some truth to these
52 The GEO Group Inc 2014 Annual Report Form 10-K 36 53 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015 54 US Department of Justice Office of Justice Programs Bureau of Justice Assistance Emerging Issues on Privatized Prisons
by James Austin and Garry Coventry (Washington DC Government Printing Office February 2001) 16 55 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 23-24 56 Brendan Fischer ldquoViolence Abuse and Death at For-Profit Prisons A GEO Group Rap Sheetrdquo The Center for Media and
Democracyrsquos PR Watch September 26 2013 57 US Department of Justice Office of Justice Programs Bureau of Justice Assistance Emerging Issues on Privatized Prisons
by James Austin and Garry Coventry (Washington DC Government Printing Office February 2001) 36-37 48 58 Theirry Godard ldquoThe Economics of the American Prison Systemrdquo SmartAsset January 23 2015 59 Id
11
claims with short-run savings averaging about 19 and long-run savings averaging about 2960
Some
states even require private prison companies to offer a specified discount to public per-diem costs For
example Texas Kentucky and Mississippi have contract stipulations that require a 10 savings61
Moreover a recent study found that the cost savings of for-profit prisons is often underestimated because
they fail to account for savings on personnel services such as pensions and healthcare for retirees which
may not be attributed directly to state correctional departments62
Finally with operating margins as high
as 30 and per diem costs still lower than those in public prisons63
some might consider for-profit
prisons much more financially efficient However comparing private and public operational costs is not
as straight forward as private prison companies might like the public to believe There are in fact hidden
costs that private prison companies either unfairly avoid or perhaps even create for public prisons
First for-profit prisons can cherry-pick the most desirable or profitable prisoners from the
general prison population Generally this means that for-profit prisons house healthy minimum security
prisoners who are cheaper to incarcerate States are left to run maximum security prisons that require
ldquomore intensive security systems and proceduresrdquo64
Public prisons also typically house specialized
populations such as sex offenders that are more expensive due to higher treatment and administrative
needs65
Finally public prisons also tend to be responsible for prisoners with moderate to high mental or
physical healthcare needs These population differences allow private prison companies to demonstrate
artificial savings for states
60 Id Short-run costs are those associated with the day-to-day operation of prison facilities Long-run costs include short-run
costs plus the capital expenditures associated with maintaining and building prisons 61 Id 62 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 3 63 Association of State Correctional Administrators Inmate Cost Per Day Follow Up Survey (September 2011) 64 Harris Kenny and Leonard Gilroy The Challenge of Comparing Public and Private Correctional Costs (Reason Foundation
December 2013) 4-5 65 Id
12
Second as already mentioned studies have shown that for-profit prisons have marginally higher
rates of recidivism than their public counterparts66
Ethical concerns aside higher recidivism rates burden
states with additional incarceration expenses in the future Though a differential of 3-4 may seem
negligible a difference of even one
percentage point can amount to
considerable costs particularly in states
with high incarceration costs For
example in New York where the
annual cost of incarcerating one person
is more than $60000 recidivism comes
at a very high price Figure 4 provides
further detail on the annual costs of
incarceration by state
In their efforts to maximize revenues and minimize expenses private prison companies rely
heavily on growth strategies that promote incarceration Given the obvious ethical implications private
prison companies are less than public about their expansion intentions Consequently they employ
growth tactics that manipulate political elections and criminal lawmaking weakening the influence of
popular democracy on criminal law and policy
Part III Undermining Democracy With most private prison contracts executed by federal state and local policymakers the for-
profit prison industry relies heavily on political relationships Accordingly the industry has a dual-
pronged political strategy that undermines democratic legitimacy in its dependence on legislative
lobbying and campaign financing
66 Spivak Andrew L and Susan F Sharp ldquoInmate Recidivism As a Measure of Private Prison Performancerdquo Crime amp
Delinquency Vol 54 (Washington DC SAGE Publications July 2008) 482-508
Figure 4 Annual Cost of Incarceration per Prisoner
Source Theirry Godard ldquoThe Economics of the American Prison Systemrdquo
SmartAsset January 23 2015
13
Legislative Lobbying Despite denying lobbying involvement in the past ten years the three leading private prison
operators have spent over $45 million on lobbying67
According to the companyrsquos own literature CCA
has an explicit policy prohibiting it from ldquoengaging in lobbying or advocacy efforts that would influence
enforcement efforts parole standards criminal laws and sentencing policiesrdquo68
Yet over the past decade
CCA like its competitors has spent more than $900000 annually on lobbying69
In fact not only do
private prison operators utilize the services of lobbying firms they also employ their own in-house
lobbyists
Since 2002 alone CCA has employed nearly 400 lobbyists across 30 states70
In 2014 the
company had 36 active lobbyists in 10 states focusing heavily on Florida Vermont Tennessee
California Pennsylvania Kentucky and Minnesota71
Over the same time frame GEO has employed
more than 200 lobbyists across 11 states focusing heavily on Florida California Texas Pennsylvania
and Virginia72
In 2014 the company had 15 active lobbyists across 5 states73
Attention to these specific states has been a successful strategy play for private prison operators
Aside from being the home to the headquarters of GEO Florida also has the second largest private prison
population and the market share of these for-profit prisons is only increasing74
Between 2012 and 2013
the private prison population in Florida grew 1 while the private prison population across all states
decreased 575
Lobbying centered on California has also produced strong results With the second
largest prison population in the country and a judicial order to remedy overcrowding76
California has
67 Aviva Shen ldquoPrivate Prisons Spend $45 Million On Lobbying Rake In $51 Billion For Immigrant Detention Alonerdquo
ThinkProgress August 3 2012 68 Corrections Corporation of America 2014 Annual Report Form 10-K 28 69 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 22 70 National Institute on Money in State Politics Corrections Corporation of America April 29 2015 71 Id 72 National Institute on Money in State Politics GEO Group April 29 2015 73 Id 74 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 75 Id 76 Id at 5
14
largely embraced private prisons Accordingly between 2012 and 2013 the private prison population in
California grew 23377
Both CCA and GEO are private sector members of American Legislative Exchange Council
(ALEC) a nonpartisan organization aimed at advancing ldquolimited government free markets and
federalism at the state levelrdquo78
The organization utilizes a public-private partnership structure to bring
together state legislators members of the private sector and the general public to draft and introduce
model legislation ALEC has played a role in the passing of mandatory minimum three strikes and truth-
in-sentencing laws all of which have contributed to the rapid growth of incarceration since the 1970s79
Unfortunately further detail about the
lobbying efforts of private prison
operators is lacking since lobbyists are
not required to report the direction in
which they lobbied on any particular
piece of legislation80
Campaign Financing Since 1990 the private prison
operators have made nearly $15 million in
political contributions at the state and
local level81
These contributions have
seen a dramatic uptick in recent years
77 Id at 14 78 American Legislative Exchange Council About Us 79 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 29 80 Id at 21 81 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
$2650346
$-
$500000
$1000000
$1500000
$2000000
$2500000
$3000000
Figure 5 State and Local Political Contributions of
Private Prison Companies by Year
Source National Institute on Money in State Politics Correctional
facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
15
with 2014 representing the highest amount yet at $27 million82
CCA and GEO along with their
acquisitions have accounted for 72 of these political contributions over the years83
The two companies
also made combined political contributions of nearly $1 million at the federal level since just 201084
Moreover these company-specific figures under estimate their political influence because they fail to
capture the individual political contributions of the companiesrsquo executive leadership and board of
directors In fact the Chief Executive Officer of GEO George Zoley and one of the founding partners of
CCA Doctor Crants have each made approximately $90000 in political contributions85
Approximately half of all state and local political contributions are made to party committees the
largest beneficiary of which is the Florida Republican Party which has received more than $4 million86
Another substantial proportion of
these contributions are made
directly to state and local
candidates87
Finally the remaining
3 of these contributions are made
to ballot measure committees88
Similar to lobbying
spending these contributions have
been relatively clustered in a few
states Florida California Texas
Tennessee and Virginia have all
82 Id 83 Id 84 Id 85 Id 86 Id 87 Id 88 Id
Figure 6 State and Local Political Contributions of
Private Prison Companies by State
Source National Institute on Money in State Politics Correctional facilities
construction amp managementfor-profit contributions to candidates and
committees April 29 2015
16
scene contributions in excess of $50000089
GEO is by far the largest correctional contributor in Florida
at $34 million and CCA has an equally substantial lead as the largest correctional contributor in
California at $15 million90
Though republican candidates tend to be the recipients of campaign contributions from private
prison operators nearly a third of contributions are made to democratic candidates91
Researchers have
taken this to suggest that private prison operators are less concerned with supporting particular political
beliefs than general access to political power92
In fact nearly 80 of campaign contributions support
winning candidates93
Even the timing of these contributions is strategically nuanced Private prison
operators tend to give in the early and late stages of political campaigns in order to establish a strong
rapport early and then reinforce a positive relationship with the candidate expected to win94
Conclusion Though private prison companies tend to tout financial efficiency as their great contribution to
corrections their incentives are in many ways diametrically opposed to those of a safe and free society
Their financial success depends on increasing crime law enforcement and liberty infractions
Accordingly they succumb to undercutting popular democracy to feed their bottom lines They rely on
the questionable practices of private sector lobbying and campaign financing to secure political support
for their business ventures They do so with as much secrecy as possible to stay out of the direct attack of
ethically minded opposition
Thus it seems only fitting that the fastest growing client for private prison companies is one that
intends to fly under the radar and enjoys the fewest protections illegal immigrants targeted by
Immigration and Customs Enforcement Both CCA and GEO highlighted the importance of the recent
89 Id 90 Id 91 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 19 92 Id at 18 93 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015 94 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 18
17
focus on immigration laws at the federal state and local level in their annual reports But they are not idle
players in the space they are well-prepared to protect and expand their enterprises For example 30 of the
36 legislators who co-sponsored Arizonarsquos immigration bill that would undoubtedly place more
immigrants in detention received campaign contributions from private prison companies95
If we are not
careful and perhaps even if we are federal state and local immigration policies will be dictated by a few
parties interested in further immigrant detention
Unfortunately business interests run high in politics and consistently undermine the legitimacy of
popular democracy To rein in the legislative lobbying and campaign financing of private prison
companies additional limitation would have to be made on such practices Alternatively the privatization
of prisons could be outlawed or at least more closely regulated For example legislation could be passed
that forbids private prison companies from relying on a revenue model that encourages incarceration or
prohibits states from paying owners and operators on a per diem per person basis Private prison
companies could instead offer the public sector better recidivism rates in exchange for higher payouts
similar to the social impact bond model It may not be entirely prudent to dismiss privatization within
corrections or any other public sector However as it currently stands the privatization of prisons
threatens all efforts to reduce mass incarceration
95 Andre N Sanchez ldquoPrivate Prisons Spend Millions On Lobbying To Put More People In Jailrdquo Think Progress June 23 2011
11
claims with short-run savings averaging about 19 and long-run savings averaging about 2960
Some
states even require private prison companies to offer a specified discount to public per-diem costs For
example Texas Kentucky and Mississippi have contract stipulations that require a 10 savings61
Moreover a recent study found that the cost savings of for-profit prisons is often underestimated because
they fail to account for savings on personnel services such as pensions and healthcare for retirees which
may not be attributed directly to state correctional departments62
Finally with operating margins as high
as 30 and per diem costs still lower than those in public prisons63
some might consider for-profit
prisons much more financially efficient However comparing private and public operational costs is not
as straight forward as private prison companies might like the public to believe There are in fact hidden
costs that private prison companies either unfairly avoid or perhaps even create for public prisons
First for-profit prisons can cherry-pick the most desirable or profitable prisoners from the
general prison population Generally this means that for-profit prisons house healthy minimum security
prisoners who are cheaper to incarcerate States are left to run maximum security prisons that require
ldquomore intensive security systems and proceduresrdquo64
Public prisons also typically house specialized
populations such as sex offenders that are more expensive due to higher treatment and administrative
needs65
Finally public prisons also tend to be responsible for prisoners with moderate to high mental or
physical healthcare needs These population differences allow private prison companies to demonstrate
artificial savings for states
60 Id Short-run costs are those associated with the day-to-day operation of prison facilities Long-run costs include short-run
costs plus the capital expenditures associated with maintaining and building prisons 61 Id 62 Simon Hakim and Erwin A Blackstone Prison Break A New Approach to Public Cost and Safety (Oakland CA The
Independent Institute June 2014) 3 63 Association of State Correctional Administrators Inmate Cost Per Day Follow Up Survey (September 2011) 64 Harris Kenny and Leonard Gilroy The Challenge of Comparing Public and Private Correctional Costs (Reason Foundation
December 2013) 4-5 65 Id
12
Second as already mentioned studies have shown that for-profit prisons have marginally higher
rates of recidivism than their public counterparts66
Ethical concerns aside higher recidivism rates burden
states with additional incarceration expenses in the future Though a differential of 3-4 may seem
negligible a difference of even one
percentage point can amount to
considerable costs particularly in states
with high incarceration costs For
example in New York where the
annual cost of incarcerating one person
is more than $60000 recidivism comes
at a very high price Figure 4 provides
further detail on the annual costs of
incarceration by state
In their efforts to maximize revenues and minimize expenses private prison companies rely
heavily on growth strategies that promote incarceration Given the obvious ethical implications private
prison companies are less than public about their expansion intentions Consequently they employ
growth tactics that manipulate political elections and criminal lawmaking weakening the influence of
popular democracy on criminal law and policy
Part III Undermining Democracy With most private prison contracts executed by federal state and local policymakers the for-
profit prison industry relies heavily on political relationships Accordingly the industry has a dual-
pronged political strategy that undermines democratic legitimacy in its dependence on legislative
lobbying and campaign financing
66 Spivak Andrew L and Susan F Sharp ldquoInmate Recidivism As a Measure of Private Prison Performancerdquo Crime amp
Delinquency Vol 54 (Washington DC SAGE Publications July 2008) 482-508
Figure 4 Annual Cost of Incarceration per Prisoner
Source Theirry Godard ldquoThe Economics of the American Prison Systemrdquo
SmartAsset January 23 2015
13
Legislative Lobbying Despite denying lobbying involvement in the past ten years the three leading private prison
operators have spent over $45 million on lobbying67
According to the companyrsquos own literature CCA
has an explicit policy prohibiting it from ldquoengaging in lobbying or advocacy efforts that would influence
enforcement efforts parole standards criminal laws and sentencing policiesrdquo68
Yet over the past decade
CCA like its competitors has spent more than $900000 annually on lobbying69
In fact not only do
private prison operators utilize the services of lobbying firms they also employ their own in-house
lobbyists
Since 2002 alone CCA has employed nearly 400 lobbyists across 30 states70
In 2014 the
company had 36 active lobbyists in 10 states focusing heavily on Florida Vermont Tennessee
California Pennsylvania Kentucky and Minnesota71
Over the same time frame GEO has employed
more than 200 lobbyists across 11 states focusing heavily on Florida California Texas Pennsylvania
and Virginia72
In 2014 the company had 15 active lobbyists across 5 states73
Attention to these specific states has been a successful strategy play for private prison operators
Aside from being the home to the headquarters of GEO Florida also has the second largest private prison
population and the market share of these for-profit prisons is only increasing74
Between 2012 and 2013
the private prison population in Florida grew 1 while the private prison population across all states
decreased 575
Lobbying centered on California has also produced strong results With the second
largest prison population in the country and a judicial order to remedy overcrowding76
California has
67 Aviva Shen ldquoPrivate Prisons Spend $45 Million On Lobbying Rake In $51 Billion For Immigrant Detention Alonerdquo
ThinkProgress August 3 2012 68 Corrections Corporation of America 2014 Annual Report Form 10-K 28 69 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 22 70 National Institute on Money in State Politics Corrections Corporation of America April 29 2015 71 Id 72 National Institute on Money in State Politics GEO Group April 29 2015 73 Id 74 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 75 Id 76 Id at 5
14
largely embraced private prisons Accordingly between 2012 and 2013 the private prison population in
California grew 23377
Both CCA and GEO are private sector members of American Legislative Exchange Council
(ALEC) a nonpartisan organization aimed at advancing ldquolimited government free markets and
federalism at the state levelrdquo78
The organization utilizes a public-private partnership structure to bring
together state legislators members of the private sector and the general public to draft and introduce
model legislation ALEC has played a role in the passing of mandatory minimum three strikes and truth-
in-sentencing laws all of which have contributed to the rapid growth of incarceration since the 1970s79
Unfortunately further detail about the
lobbying efforts of private prison
operators is lacking since lobbyists are
not required to report the direction in
which they lobbied on any particular
piece of legislation80
Campaign Financing Since 1990 the private prison
operators have made nearly $15 million in
political contributions at the state and
local level81
These contributions have
seen a dramatic uptick in recent years
77 Id at 14 78 American Legislative Exchange Council About Us 79 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 29 80 Id at 21 81 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
$2650346
$-
$500000
$1000000
$1500000
$2000000
$2500000
$3000000
Figure 5 State and Local Political Contributions of
Private Prison Companies by Year
Source National Institute on Money in State Politics Correctional
facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
15
with 2014 representing the highest amount yet at $27 million82
CCA and GEO along with their
acquisitions have accounted for 72 of these political contributions over the years83
The two companies
also made combined political contributions of nearly $1 million at the federal level since just 201084
Moreover these company-specific figures under estimate their political influence because they fail to
capture the individual political contributions of the companiesrsquo executive leadership and board of
directors In fact the Chief Executive Officer of GEO George Zoley and one of the founding partners of
CCA Doctor Crants have each made approximately $90000 in political contributions85
Approximately half of all state and local political contributions are made to party committees the
largest beneficiary of which is the Florida Republican Party which has received more than $4 million86
Another substantial proportion of
these contributions are made
directly to state and local
candidates87
Finally the remaining
3 of these contributions are made
to ballot measure committees88
Similar to lobbying
spending these contributions have
been relatively clustered in a few
states Florida California Texas
Tennessee and Virginia have all
82 Id 83 Id 84 Id 85 Id 86 Id 87 Id 88 Id
Figure 6 State and Local Political Contributions of
Private Prison Companies by State
Source National Institute on Money in State Politics Correctional facilities
construction amp managementfor-profit contributions to candidates and
committees April 29 2015
16
scene contributions in excess of $50000089
GEO is by far the largest correctional contributor in Florida
at $34 million and CCA has an equally substantial lead as the largest correctional contributor in
California at $15 million90
Though republican candidates tend to be the recipients of campaign contributions from private
prison operators nearly a third of contributions are made to democratic candidates91
Researchers have
taken this to suggest that private prison operators are less concerned with supporting particular political
beliefs than general access to political power92
In fact nearly 80 of campaign contributions support
winning candidates93
Even the timing of these contributions is strategically nuanced Private prison
operators tend to give in the early and late stages of political campaigns in order to establish a strong
rapport early and then reinforce a positive relationship with the candidate expected to win94
Conclusion Though private prison companies tend to tout financial efficiency as their great contribution to
corrections their incentives are in many ways diametrically opposed to those of a safe and free society
Their financial success depends on increasing crime law enforcement and liberty infractions
Accordingly they succumb to undercutting popular democracy to feed their bottom lines They rely on
the questionable practices of private sector lobbying and campaign financing to secure political support
for their business ventures They do so with as much secrecy as possible to stay out of the direct attack of
ethically minded opposition
Thus it seems only fitting that the fastest growing client for private prison companies is one that
intends to fly under the radar and enjoys the fewest protections illegal immigrants targeted by
Immigration and Customs Enforcement Both CCA and GEO highlighted the importance of the recent
89 Id 90 Id 91 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 19 92 Id at 18 93 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015 94 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 18
17
focus on immigration laws at the federal state and local level in their annual reports But they are not idle
players in the space they are well-prepared to protect and expand their enterprises For example 30 of the
36 legislators who co-sponsored Arizonarsquos immigration bill that would undoubtedly place more
immigrants in detention received campaign contributions from private prison companies95
If we are not
careful and perhaps even if we are federal state and local immigration policies will be dictated by a few
parties interested in further immigrant detention
Unfortunately business interests run high in politics and consistently undermine the legitimacy of
popular democracy To rein in the legislative lobbying and campaign financing of private prison
companies additional limitation would have to be made on such practices Alternatively the privatization
of prisons could be outlawed or at least more closely regulated For example legislation could be passed
that forbids private prison companies from relying on a revenue model that encourages incarceration or
prohibits states from paying owners and operators on a per diem per person basis Private prison
companies could instead offer the public sector better recidivism rates in exchange for higher payouts
similar to the social impact bond model It may not be entirely prudent to dismiss privatization within
corrections or any other public sector However as it currently stands the privatization of prisons
threatens all efforts to reduce mass incarceration
95 Andre N Sanchez ldquoPrivate Prisons Spend Millions On Lobbying To Put More People In Jailrdquo Think Progress June 23 2011
12
Second as already mentioned studies have shown that for-profit prisons have marginally higher
rates of recidivism than their public counterparts66
Ethical concerns aside higher recidivism rates burden
states with additional incarceration expenses in the future Though a differential of 3-4 may seem
negligible a difference of even one
percentage point can amount to
considerable costs particularly in states
with high incarceration costs For
example in New York where the
annual cost of incarcerating one person
is more than $60000 recidivism comes
at a very high price Figure 4 provides
further detail on the annual costs of
incarceration by state
In their efforts to maximize revenues and minimize expenses private prison companies rely
heavily on growth strategies that promote incarceration Given the obvious ethical implications private
prison companies are less than public about their expansion intentions Consequently they employ
growth tactics that manipulate political elections and criminal lawmaking weakening the influence of
popular democracy on criminal law and policy
Part III Undermining Democracy With most private prison contracts executed by federal state and local policymakers the for-
profit prison industry relies heavily on political relationships Accordingly the industry has a dual-
pronged political strategy that undermines democratic legitimacy in its dependence on legislative
lobbying and campaign financing
66 Spivak Andrew L and Susan F Sharp ldquoInmate Recidivism As a Measure of Private Prison Performancerdquo Crime amp
Delinquency Vol 54 (Washington DC SAGE Publications July 2008) 482-508
Figure 4 Annual Cost of Incarceration per Prisoner
Source Theirry Godard ldquoThe Economics of the American Prison Systemrdquo
SmartAsset January 23 2015
13
Legislative Lobbying Despite denying lobbying involvement in the past ten years the three leading private prison
operators have spent over $45 million on lobbying67
According to the companyrsquos own literature CCA
has an explicit policy prohibiting it from ldquoengaging in lobbying or advocacy efforts that would influence
enforcement efforts parole standards criminal laws and sentencing policiesrdquo68
Yet over the past decade
CCA like its competitors has spent more than $900000 annually on lobbying69
In fact not only do
private prison operators utilize the services of lobbying firms they also employ their own in-house
lobbyists
Since 2002 alone CCA has employed nearly 400 lobbyists across 30 states70
In 2014 the
company had 36 active lobbyists in 10 states focusing heavily on Florida Vermont Tennessee
California Pennsylvania Kentucky and Minnesota71
Over the same time frame GEO has employed
more than 200 lobbyists across 11 states focusing heavily on Florida California Texas Pennsylvania
and Virginia72
In 2014 the company had 15 active lobbyists across 5 states73
Attention to these specific states has been a successful strategy play for private prison operators
Aside from being the home to the headquarters of GEO Florida also has the second largest private prison
population and the market share of these for-profit prisons is only increasing74
Between 2012 and 2013
the private prison population in Florida grew 1 while the private prison population across all states
decreased 575
Lobbying centered on California has also produced strong results With the second
largest prison population in the country and a judicial order to remedy overcrowding76
California has
67 Aviva Shen ldquoPrivate Prisons Spend $45 Million On Lobbying Rake In $51 Billion For Immigrant Detention Alonerdquo
ThinkProgress August 3 2012 68 Corrections Corporation of America 2014 Annual Report Form 10-K 28 69 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 22 70 National Institute on Money in State Politics Corrections Corporation of America April 29 2015 71 Id 72 National Institute on Money in State Politics GEO Group April 29 2015 73 Id 74 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 75 Id 76 Id at 5
14
largely embraced private prisons Accordingly between 2012 and 2013 the private prison population in
California grew 23377
Both CCA and GEO are private sector members of American Legislative Exchange Council
(ALEC) a nonpartisan organization aimed at advancing ldquolimited government free markets and
federalism at the state levelrdquo78
The organization utilizes a public-private partnership structure to bring
together state legislators members of the private sector and the general public to draft and introduce
model legislation ALEC has played a role in the passing of mandatory minimum three strikes and truth-
in-sentencing laws all of which have contributed to the rapid growth of incarceration since the 1970s79
Unfortunately further detail about the
lobbying efforts of private prison
operators is lacking since lobbyists are
not required to report the direction in
which they lobbied on any particular
piece of legislation80
Campaign Financing Since 1990 the private prison
operators have made nearly $15 million in
political contributions at the state and
local level81
These contributions have
seen a dramatic uptick in recent years
77 Id at 14 78 American Legislative Exchange Council About Us 79 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 29 80 Id at 21 81 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
$2650346
$-
$500000
$1000000
$1500000
$2000000
$2500000
$3000000
Figure 5 State and Local Political Contributions of
Private Prison Companies by Year
Source National Institute on Money in State Politics Correctional
facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
15
with 2014 representing the highest amount yet at $27 million82
CCA and GEO along with their
acquisitions have accounted for 72 of these political contributions over the years83
The two companies
also made combined political contributions of nearly $1 million at the federal level since just 201084
Moreover these company-specific figures under estimate their political influence because they fail to
capture the individual political contributions of the companiesrsquo executive leadership and board of
directors In fact the Chief Executive Officer of GEO George Zoley and one of the founding partners of
CCA Doctor Crants have each made approximately $90000 in political contributions85
Approximately half of all state and local political contributions are made to party committees the
largest beneficiary of which is the Florida Republican Party which has received more than $4 million86
Another substantial proportion of
these contributions are made
directly to state and local
candidates87
Finally the remaining
3 of these contributions are made
to ballot measure committees88
Similar to lobbying
spending these contributions have
been relatively clustered in a few
states Florida California Texas
Tennessee and Virginia have all
82 Id 83 Id 84 Id 85 Id 86 Id 87 Id 88 Id
Figure 6 State and Local Political Contributions of
Private Prison Companies by State
Source National Institute on Money in State Politics Correctional facilities
construction amp managementfor-profit contributions to candidates and
committees April 29 2015
16
scene contributions in excess of $50000089
GEO is by far the largest correctional contributor in Florida
at $34 million and CCA has an equally substantial lead as the largest correctional contributor in
California at $15 million90
Though republican candidates tend to be the recipients of campaign contributions from private
prison operators nearly a third of contributions are made to democratic candidates91
Researchers have
taken this to suggest that private prison operators are less concerned with supporting particular political
beliefs than general access to political power92
In fact nearly 80 of campaign contributions support
winning candidates93
Even the timing of these contributions is strategically nuanced Private prison
operators tend to give in the early and late stages of political campaigns in order to establish a strong
rapport early and then reinforce a positive relationship with the candidate expected to win94
Conclusion Though private prison companies tend to tout financial efficiency as their great contribution to
corrections their incentives are in many ways diametrically opposed to those of a safe and free society
Their financial success depends on increasing crime law enforcement and liberty infractions
Accordingly they succumb to undercutting popular democracy to feed their bottom lines They rely on
the questionable practices of private sector lobbying and campaign financing to secure political support
for their business ventures They do so with as much secrecy as possible to stay out of the direct attack of
ethically minded opposition
Thus it seems only fitting that the fastest growing client for private prison companies is one that
intends to fly under the radar and enjoys the fewest protections illegal immigrants targeted by
Immigration and Customs Enforcement Both CCA and GEO highlighted the importance of the recent
89 Id 90 Id 91 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 19 92 Id at 18 93 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015 94 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 18
17
focus on immigration laws at the federal state and local level in their annual reports But they are not idle
players in the space they are well-prepared to protect and expand their enterprises For example 30 of the
36 legislators who co-sponsored Arizonarsquos immigration bill that would undoubtedly place more
immigrants in detention received campaign contributions from private prison companies95
If we are not
careful and perhaps even if we are federal state and local immigration policies will be dictated by a few
parties interested in further immigrant detention
Unfortunately business interests run high in politics and consistently undermine the legitimacy of
popular democracy To rein in the legislative lobbying and campaign financing of private prison
companies additional limitation would have to be made on such practices Alternatively the privatization
of prisons could be outlawed or at least more closely regulated For example legislation could be passed
that forbids private prison companies from relying on a revenue model that encourages incarceration or
prohibits states from paying owners and operators on a per diem per person basis Private prison
companies could instead offer the public sector better recidivism rates in exchange for higher payouts
similar to the social impact bond model It may not be entirely prudent to dismiss privatization within
corrections or any other public sector However as it currently stands the privatization of prisons
threatens all efforts to reduce mass incarceration
95 Andre N Sanchez ldquoPrivate Prisons Spend Millions On Lobbying To Put More People In Jailrdquo Think Progress June 23 2011
13
Legislative Lobbying Despite denying lobbying involvement in the past ten years the three leading private prison
operators have spent over $45 million on lobbying67
According to the companyrsquos own literature CCA
has an explicit policy prohibiting it from ldquoengaging in lobbying or advocacy efforts that would influence
enforcement efforts parole standards criminal laws and sentencing policiesrdquo68
Yet over the past decade
CCA like its competitors has spent more than $900000 annually on lobbying69
In fact not only do
private prison operators utilize the services of lobbying firms they also employ their own in-house
lobbyists
Since 2002 alone CCA has employed nearly 400 lobbyists across 30 states70
In 2014 the
company had 36 active lobbyists in 10 states focusing heavily on Florida Vermont Tennessee
California Pennsylvania Kentucky and Minnesota71
Over the same time frame GEO has employed
more than 200 lobbyists across 11 states focusing heavily on Florida California Texas Pennsylvania
and Virginia72
In 2014 the company had 15 active lobbyists across 5 states73
Attention to these specific states has been a successful strategy play for private prison operators
Aside from being the home to the headquarters of GEO Florida also has the second largest private prison
population and the market share of these for-profit prisons is only increasing74
Between 2012 and 2013
the private prison population in Florida grew 1 while the private prison population across all states
decreased 575
Lobbying centered on California has also produced strong results With the second
largest prison population in the country and a judicial order to remedy overcrowding76
California has
67 Aviva Shen ldquoPrivate Prisons Spend $45 Million On Lobbying Rake In $51 Billion For Immigrant Detention Alonerdquo
ThinkProgress August 3 2012 68 Corrections Corporation of America 2014 Annual Report Form 10-K 28 69 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 22 70 National Institute on Money in State Politics Corrections Corporation of America April 29 2015 71 Id 72 National Institute on Money in State Politics GEO Group April 29 2015 73 Id 74 US Department of Justice Officer of Justice Programs Bureau of Justice Statistics Prisoners in 2013 by E Ann Carson
(Washington DC Government Printing Office September 2014) 14 75 Id 76 Id at 5
14
largely embraced private prisons Accordingly between 2012 and 2013 the private prison population in
California grew 23377
Both CCA and GEO are private sector members of American Legislative Exchange Council
(ALEC) a nonpartisan organization aimed at advancing ldquolimited government free markets and
federalism at the state levelrdquo78
The organization utilizes a public-private partnership structure to bring
together state legislators members of the private sector and the general public to draft and introduce
model legislation ALEC has played a role in the passing of mandatory minimum three strikes and truth-
in-sentencing laws all of which have contributed to the rapid growth of incarceration since the 1970s79
Unfortunately further detail about the
lobbying efforts of private prison
operators is lacking since lobbyists are
not required to report the direction in
which they lobbied on any particular
piece of legislation80
Campaign Financing Since 1990 the private prison
operators have made nearly $15 million in
political contributions at the state and
local level81
These contributions have
seen a dramatic uptick in recent years
77 Id at 14 78 American Legislative Exchange Council About Us 79 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 29 80 Id at 21 81 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
$2650346
$-
$500000
$1000000
$1500000
$2000000
$2500000
$3000000
Figure 5 State and Local Political Contributions of
Private Prison Companies by Year
Source National Institute on Money in State Politics Correctional
facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
15
with 2014 representing the highest amount yet at $27 million82
CCA and GEO along with their
acquisitions have accounted for 72 of these political contributions over the years83
The two companies
also made combined political contributions of nearly $1 million at the federal level since just 201084
Moreover these company-specific figures under estimate their political influence because they fail to
capture the individual political contributions of the companiesrsquo executive leadership and board of
directors In fact the Chief Executive Officer of GEO George Zoley and one of the founding partners of
CCA Doctor Crants have each made approximately $90000 in political contributions85
Approximately half of all state and local political contributions are made to party committees the
largest beneficiary of which is the Florida Republican Party which has received more than $4 million86
Another substantial proportion of
these contributions are made
directly to state and local
candidates87
Finally the remaining
3 of these contributions are made
to ballot measure committees88
Similar to lobbying
spending these contributions have
been relatively clustered in a few
states Florida California Texas
Tennessee and Virginia have all
82 Id 83 Id 84 Id 85 Id 86 Id 87 Id 88 Id
Figure 6 State and Local Political Contributions of
Private Prison Companies by State
Source National Institute on Money in State Politics Correctional facilities
construction amp managementfor-profit contributions to candidates and
committees April 29 2015
16
scene contributions in excess of $50000089
GEO is by far the largest correctional contributor in Florida
at $34 million and CCA has an equally substantial lead as the largest correctional contributor in
California at $15 million90
Though republican candidates tend to be the recipients of campaign contributions from private
prison operators nearly a third of contributions are made to democratic candidates91
Researchers have
taken this to suggest that private prison operators are less concerned with supporting particular political
beliefs than general access to political power92
In fact nearly 80 of campaign contributions support
winning candidates93
Even the timing of these contributions is strategically nuanced Private prison
operators tend to give in the early and late stages of political campaigns in order to establish a strong
rapport early and then reinforce a positive relationship with the candidate expected to win94
Conclusion Though private prison companies tend to tout financial efficiency as their great contribution to
corrections their incentives are in many ways diametrically opposed to those of a safe and free society
Their financial success depends on increasing crime law enforcement and liberty infractions
Accordingly they succumb to undercutting popular democracy to feed their bottom lines They rely on
the questionable practices of private sector lobbying and campaign financing to secure political support
for their business ventures They do so with as much secrecy as possible to stay out of the direct attack of
ethically minded opposition
Thus it seems only fitting that the fastest growing client for private prison companies is one that
intends to fly under the radar and enjoys the fewest protections illegal immigrants targeted by
Immigration and Customs Enforcement Both CCA and GEO highlighted the importance of the recent
89 Id 90 Id 91 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 19 92 Id at 18 93 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015 94 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 18
17
focus on immigration laws at the federal state and local level in their annual reports But they are not idle
players in the space they are well-prepared to protect and expand their enterprises For example 30 of the
36 legislators who co-sponsored Arizonarsquos immigration bill that would undoubtedly place more
immigrants in detention received campaign contributions from private prison companies95
If we are not
careful and perhaps even if we are federal state and local immigration policies will be dictated by a few
parties interested in further immigrant detention
Unfortunately business interests run high in politics and consistently undermine the legitimacy of
popular democracy To rein in the legislative lobbying and campaign financing of private prison
companies additional limitation would have to be made on such practices Alternatively the privatization
of prisons could be outlawed or at least more closely regulated For example legislation could be passed
that forbids private prison companies from relying on a revenue model that encourages incarceration or
prohibits states from paying owners and operators on a per diem per person basis Private prison
companies could instead offer the public sector better recidivism rates in exchange for higher payouts
similar to the social impact bond model It may not be entirely prudent to dismiss privatization within
corrections or any other public sector However as it currently stands the privatization of prisons
threatens all efforts to reduce mass incarceration
95 Andre N Sanchez ldquoPrivate Prisons Spend Millions On Lobbying To Put More People In Jailrdquo Think Progress June 23 2011
14
largely embraced private prisons Accordingly between 2012 and 2013 the private prison population in
California grew 23377
Both CCA and GEO are private sector members of American Legislative Exchange Council
(ALEC) a nonpartisan organization aimed at advancing ldquolimited government free markets and
federalism at the state levelrdquo78
The organization utilizes a public-private partnership structure to bring
together state legislators members of the private sector and the general public to draft and introduce
model legislation ALEC has played a role in the passing of mandatory minimum three strikes and truth-
in-sentencing laws all of which have contributed to the rapid growth of incarceration since the 1970s79
Unfortunately further detail about the
lobbying efforts of private prison
operators is lacking since lobbyists are
not required to report the direction in
which they lobbied on any particular
piece of legislation80
Campaign Financing Since 1990 the private prison
operators have made nearly $15 million in
political contributions at the state and
local level81
These contributions have
seen a dramatic uptick in recent years
77 Id at 14 78 American Legislative Exchange Council About Us 79 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 29 80 Id at 21 81 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
$2650346
$-
$500000
$1000000
$1500000
$2000000
$2500000
$3000000
Figure 5 State and Local Political Contributions of
Private Prison Companies by Year
Source National Institute on Money in State Politics Correctional
facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015
15
with 2014 representing the highest amount yet at $27 million82
CCA and GEO along with their
acquisitions have accounted for 72 of these political contributions over the years83
The two companies
also made combined political contributions of nearly $1 million at the federal level since just 201084
Moreover these company-specific figures under estimate their political influence because they fail to
capture the individual political contributions of the companiesrsquo executive leadership and board of
directors In fact the Chief Executive Officer of GEO George Zoley and one of the founding partners of
CCA Doctor Crants have each made approximately $90000 in political contributions85
Approximately half of all state and local political contributions are made to party committees the
largest beneficiary of which is the Florida Republican Party which has received more than $4 million86
Another substantial proportion of
these contributions are made
directly to state and local
candidates87
Finally the remaining
3 of these contributions are made
to ballot measure committees88
Similar to lobbying
spending these contributions have
been relatively clustered in a few
states Florida California Texas
Tennessee and Virginia have all
82 Id 83 Id 84 Id 85 Id 86 Id 87 Id 88 Id
Figure 6 State and Local Political Contributions of
Private Prison Companies by State
Source National Institute on Money in State Politics Correctional facilities
construction amp managementfor-profit contributions to candidates and
committees April 29 2015
16
scene contributions in excess of $50000089
GEO is by far the largest correctional contributor in Florida
at $34 million and CCA has an equally substantial lead as the largest correctional contributor in
California at $15 million90
Though republican candidates tend to be the recipients of campaign contributions from private
prison operators nearly a third of contributions are made to democratic candidates91
Researchers have
taken this to suggest that private prison operators are less concerned with supporting particular political
beliefs than general access to political power92
In fact nearly 80 of campaign contributions support
winning candidates93
Even the timing of these contributions is strategically nuanced Private prison
operators tend to give in the early and late stages of political campaigns in order to establish a strong
rapport early and then reinforce a positive relationship with the candidate expected to win94
Conclusion Though private prison companies tend to tout financial efficiency as their great contribution to
corrections their incentives are in many ways diametrically opposed to those of a safe and free society
Their financial success depends on increasing crime law enforcement and liberty infractions
Accordingly they succumb to undercutting popular democracy to feed their bottom lines They rely on
the questionable practices of private sector lobbying and campaign financing to secure political support
for their business ventures They do so with as much secrecy as possible to stay out of the direct attack of
ethically minded opposition
Thus it seems only fitting that the fastest growing client for private prison companies is one that
intends to fly under the radar and enjoys the fewest protections illegal immigrants targeted by
Immigration and Customs Enforcement Both CCA and GEO highlighted the importance of the recent
89 Id 90 Id 91 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 19 92 Id at 18 93 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015 94 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 18
17
focus on immigration laws at the federal state and local level in their annual reports But they are not idle
players in the space they are well-prepared to protect and expand their enterprises For example 30 of the
36 legislators who co-sponsored Arizonarsquos immigration bill that would undoubtedly place more
immigrants in detention received campaign contributions from private prison companies95
If we are not
careful and perhaps even if we are federal state and local immigration policies will be dictated by a few
parties interested in further immigrant detention
Unfortunately business interests run high in politics and consistently undermine the legitimacy of
popular democracy To rein in the legislative lobbying and campaign financing of private prison
companies additional limitation would have to be made on such practices Alternatively the privatization
of prisons could be outlawed or at least more closely regulated For example legislation could be passed
that forbids private prison companies from relying on a revenue model that encourages incarceration or
prohibits states from paying owners and operators on a per diem per person basis Private prison
companies could instead offer the public sector better recidivism rates in exchange for higher payouts
similar to the social impact bond model It may not be entirely prudent to dismiss privatization within
corrections or any other public sector However as it currently stands the privatization of prisons
threatens all efforts to reduce mass incarceration
95 Andre N Sanchez ldquoPrivate Prisons Spend Millions On Lobbying To Put More People In Jailrdquo Think Progress June 23 2011
15
with 2014 representing the highest amount yet at $27 million82
CCA and GEO along with their
acquisitions have accounted for 72 of these political contributions over the years83
The two companies
also made combined political contributions of nearly $1 million at the federal level since just 201084
Moreover these company-specific figures under estimate their political influence because they fail to
capture the individual political contributions of the companiesrsquo executive leadership and board of
directors In fact the Chief Executive Officer of GEO George Zoley and one of the founding partners of
CCA Doctor Crants have each made approximately $90000 in political contributions85
Approximately half of all state and local political contributions are made to party committees the
largest beneficiary of which is the Florida Republican Party which has received more than $4 million86
Another substantial proportion of
these contributions are made
directly to state and local
candidates87
Finally the remaining
3 of these contributions are made
to ballot measure committees88
Similar to lobbying
spending these contributions have
been relatively clustered in a few
states Florida California Texas
Tennessee and Virginia have all
82 Id 83 Id 84 Id 85 Id 86 Id 87 Id 88 Id
Figure 6 State and Local Political Contributions of
Private Prison Companies by State
Source National Institute on Money in State Politics Correctional facilities
construction amp managementfor-profit contributions to candidates and
committees April 29 2015
16
scene contributions in excess of $50000089
GEO is by far the largest correctional contributor in Florida
at $34 million and CCA has an equally substantial lead as the largest correctional contributor in
California at $15 million90
Though republican candidates tend to be the recipients of campaign contributions from private
prison operators nearly a third of contributions are made to democratic candidates91
Researchers have
taken this to suggest that private prison operators are less concerned with supporting particular political
beliefs than general access to political power92
In fact nearly 80 of campaign contributions support
winning candidates93
Even the timing of these contributions is strategically nuanced Private prison
operators tend to give in the early and late stages of political campaigns in order to establish a strong
rapport early and then reinforce a positive relationship with the candidate expected to win94
Conclusion Though private prison companies tend to tout financial efficiency as their great contribution to
corrections their incentives are in many ways diametrically opposed to those of a safe and free society
Their financial success depends on increasing crime law enforcement and liberty infractions
Accordingly they succumb to undercutting popular democracy to feed their bottom lines They rely on
the questionable practices of private sector lobbying and campaign financing to secure political support
for their business ventures They do so with as much secrecy as possible to stay out of the direct attack of
ethically minded opposition
Thus it seems only fitting that the fastest growing client for private prison companies is one that
intends to fly under the radar and enjoys the fewest protections illegal immigrants targeted by
Immigration and Customs Enforcement Both CCA and GEO highlighted the importance of the recent
89 Id 90 Id 91 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 19 92 Id at 18 93 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015 94 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 18
17
focus on immigration laws at the federal state and local level in their annual reports But they are not idle
players in the space they are well-prepared to protect and expand their enterprises For example 30 of the
36 legislators who co-sponsored Arizonarsquos immigration bill that would undoubtedly place more
immigrants in detention received campaign contributions from private prison companies95
If we are not
careful and perhaps even if we are federal state and local immigration policies will be dictated by a few
parties interested in further immigrant detention
Unfortunately business interests run high in politics and consistently undermine the legitimacy of
popular democracy To rein in the legislative lobbying and campaign financing of private prison
companies additional limitation would have to be made on such practices Alternatively the privatization
of prisons could be outlawed or at least more closely regulated For example legislation could be passed
that forbids private prison companies from relying on a revenue model that encourages incarceration or
prohibits states from paying owners and operators on a per diem per person basis Private prison
companies could instead offer the public sector better recidivism rates in exchange for higher payouts
similar to the social impact bond model It may not be entirely prudent to dismiss privatization within
corrections or any other public sector However as it currently stands the privatization of prisons
threatens all efforts to reduce mass incarceration
95 Andre N Sanchez ldquoPrivate Prisons Spend Millions On Lobbying To Put More People In Jailrdquo Think Progress June 23 2011
16
scene contributions in excess of $50000089
GEO is by far the largest correctional contributor in Florida
at $34 million and CCA has an equally substantial lead as the largest correctional contributor in
California at $15 million90
Though republican candidates tend to be the recipients of campaign contributions from private
prison operators nearly a third of contributions are made to democratic candidates91
Researchers have
taken this to suggest that private prison operators are less concerned with supporting particular political
beliefs than general access to political power92
In fact nearly 80 of campaign contributions support
winning candidates93
Even the timing of these contributions is strategically nuanced Private prison
operators tend to give in the early and late stages of political campaigns in order to establish a strong
rapport early and then reinforce a positive relationship with the candidate expected to win94
Conclusion Though private prison companies tend to tout financial efficiency as their great contribution to
corrections their incentives are in many ways diametrically opposed to those of a safe and free society
Their financial success depends on increasing crime law enforcement and liberty infractions
Accordingly they succumb to undercutting popular democracy to feed their bottom lines They rely on
the questionable practices of private sector lobbying and campaign financing to secure political support
for their business ventures They do so with as much secrecy as possible to stay out of the direct attack of
ethically minded opposition
Thus it seems only fitting that the fastest growing client for private prison companies is one that
intends to fly under the radar and enjoys the fewest protections illegal immigrants targeted by
Immigration and Customs Enforcement Both CCA and GEO highlighted the importance of the recent
89 Id 90 Id 91 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 19 92 Id at 18 93 National Institute on Money in State Politics Correctional facilities construction amp managementfor-profit contributions to
candidates and committees April 29 2015 94 Justice Policy Institute Gaming the System How the Political Strategies of Private Prison Companies Promote Ineffective
Incarceration Policies (Washington DC Justice Policy Institute June 2011) 18
17
focus on immigration laws at the federal state and local level in their annual reports But they are not idle
players in the space they are well-prepared to protect and expand their enterprises For example 30 of the
36 legislators who co-sponsored Arizonarsquos immigration bill that would undoubtedly place more
immigrants in detention received campaign contributions from private prison companies95
If we are not
careful and perhaps even if we are federal state and local immigration policies will be dictated by a few
parties interested in further immigrant detention
Unfortunately business interests run high in politics and consistently undermine the legitimacy of
popular democracy To rein in the legislative lobbying and campaign financing of private prison
companies additional limitation would have to be made on such practices Alternatively the privatization
of prisons could be outlawed or at least more closely regulated For example legislation could be passed
that forbids private prison companies from relying on a revenue model that encourages incarceration or
prohibits states from paying owners and operators on a per diem per person basis Private prison
companies could instead offer the public sector better recidivism rates in exchange for higher payouts
similar to the social impact bond model It may not be entirely prudent to dismiss privatization within
corrections or any other public sector However as it currently stands the privatization of prisons
threatens all efforts to reduce mass incarceration
95 Andre N Sanchez ldquoPrivate Prisons Spend Millions On Lobbying To Put More People In Jailrdquo Think Progress June 23 2011
17
focus on immigration laws at the federal state and local level in their annual reports But they are not idle
players in the space they are well-prepared to protect and expand their enterprises For example 30 of the
36 legislators who co-sponsored Arizonarsquos immigration bill that would undoubtedly place more
immigrants in detention received campaign contributions from private prison companies95
If we are not
careful and perhaps even if we are federal state and local immigration policies will be dictated by a few
parties interested in further immigrant detention
Unfortunately business interests run high in politics and consistently undermine the legitimacy of
popular democracy To rein in the legislative lobbying and campaign financing of private prison
companies additional limitation would have to be made on such practices Alternatively the privatization
of prisons could be outlawed or at least more closely regulated For example legislation could be passed
that forbids private prison companies from relying on a revenue model that encourages incarceration or
prohibits states from paying owners and operators on a per diem per person basis Private prison
companies could instead offer the public sector better recidivism rates in exchange for higher payouts
similar to the social impact bond model It may not be entirely prudent to dismiss privatization within
corrections or any other public sector However as it currently stands the privatization of prisons
threatens all efforts to reduce mass incarceration
95 Andre N Sanchez ldquoPrivate Prisons Spend Millions On Lobbying To Put More People In Jailrdquo Think Progress June 23 2011