Beyond the Highest Bidder

Is prison privatization the way to solve California's budget woes?


Overcrowding, violence and substandard healthcare along with dwindling access to rehabilitation are just a sampling of the issues currently plaguing California prisons. In January 2010, during his final State of the State speech, Gov. Schwarzenegger set forth a proposal to privatize California’s prisons as a way of repairing the system, arguing that privatization would free up “billions of dollars that could go back into higher education.”

It’s no surprise that the governor employed the rhetorical trick of intimately connecting two hot-button issues. A 32 percent fee hike, approved in fall 2009 by the UC Board of Regents, and mandatory furlough days for faculty at schools like Sonoma State University have led to rousing discontent among students and faculty. There is no doubt that something must be done about the failure of both education and the prisons, but is turning to privatization the best way to solve the budget crisis?

According to figures released by the California Postsecondary Education Commission, last year the state spent 10 percent of the general fund on corrections and a little under 6 percent on higher education, a stark contrast to 1970, when only 3 percent of the general fund went to corrections and 14 percent to higher education.

In August 2009, a panel of three federal judges ordered that the state’s prison population be reduced by more than 40,000 over the next two years, a ruling driven by constitutional violations resulting from overcrowding as prisons bulge to nearly twice their 80,000 capacity. With these figures in mind, it’s no surprise that California has entered into a prison crisis of unprecedented proportions.

Privatization proponents argue that contracting out to corrections businesses like Cornell Companies and the GEO Group (which runs facilities formerly owned by controversy-laden Wackenhut) is a smart way for states to save money while maintaining public safety. At the same time, organizations like the Washington, D.C.&–based Sentencing Project that work to promote reforms in sentencing law and practice while promoting alternatives to incarceration believe that states should be taking a hard look at why the overcrowding is happening before farming out prisoners to the corrections industry.

Louise Grant, vice-president of marketing and communications at the Corrections Corporation of America (CCA), the largest “private corrections management provider” in the country, asserts that there are many benefits to public-private partnerships, including cost savings and improved services to inmates.

“Because we are a business, we don’t have the depth of red tape that government often does in the procurement process,” says Grant, on the phone from the company’s Tennessee headquarters. “We can build [prisons] quickly because we’ve built a lot of them. Over the last 10 years, we might be building a prison every year.”

The modern private-prison industry in United States first emerged in 1984 when CCA was awarded a contract to take over a facility in Hamilton County, Tenn., marking the first time the government had handed over the operations of a jail to a private contractor. Corrections Corporation has grown exponentially since the 1980s, now managing facilities in 20 states, according to Grant.

California has been contracting with CCA since 2006, when the state sent 1,000 inmates to five out-of-state facilities. The value of those contracts has risen from $23 million to almost $197 million annually, with potential earnings of $700 million over the course of several years—this without any competitive bidding, and after the company made their single largest campaign contribution of $100,000 to a failed budget-reform package pushed by Gov. Schwarzenegger. Assemblyman Hector De La Torre, D-South Gate, chair of the Assembly Committee on Accountability and Administrative Review, has called for hearings focusing on the contract with CCA in the coming months.

Grant says that states like New Mexico, where 40 percent of the prison population is housed in for-profit facilities, turn to private corrections providers mainly as a way to save precious budget dollars. “Most figures show that the average cost per inmate per day in California is $130. Our costs are about $63 a day,” she says.

Grant explains that CCA keeps costs down by offering salaries competitive with the local marketplace rather than offering a standard salary across the state to a mainly nonunionized staff. She also cites building cost, saying that while it might cost the state $200 million and three years to build a prison, CCA can complete the same task for $100 million in about 12 months.

“Healthy competition is what has made America such a great country,” asserts Grant in an echo of a quote from Schwarzenegger’s State of the State speech in which he said “competition and choice are always good.” Grant continues: “States have found [these partnerships] to be beneficial, because it makes their own publicly operated system more competitive, more efficient, work smarter and work harder.”

While initial costs for building private prisons may be cheaper when the contract is first signed, the evidence is mixed on whether the companies are actually able to fulfill that pledge. As with any building project, the expense can end up being higher than expected at the outset. Another concern is the high staff turnover and security issues that have arisen at some prisons. Data collected by the Texas Senate Criminal Justice Committee documented the rate of correctional officer turnover at Texas’s seven private prisons (not necessarily owned by CCA) as 90 percent in 2008, compared to 24 percent at the state’s public prisons.

The Bureau of Justice Assistance reported that private facilities experienced 49 percent more assaults on staff and 65 percent more inmate-on-inmate assaults than public facilities. Without adequate accountability mechanisms in place, even the low-security prisoners that tend to be housed in private prisons can fall prey to violence at the hands of corrections officers and each other.

“Part of the problem is that private prison companies are not unionized, so the staff tend to be less well-paid, less well-trained and to have lower entrance requirements,” says Sharon Dolovich, a UCLA law professor specializing in the law, policy and theory of prisons and punishment.

“The biggest concern for me is the quality and conditions of confinement. It intuitively makes sense that if you are trying to make a profit then you are going to want to run the facility for less than the contract price. That’s just standard operating procedure. The state will only contract with you if you can do it for less,” Dolovich says. According to studies by Grassroots Leadership, a nonprofit that would like to see the abolition of for-profit prisons, the inherent profit-motive leads to a negative effect on everything from the quality of the staff to the food and healthcare provided.

In testimony presented at the Commission on Safety and Abuse in America’s Prisons on November 2005, Dolovich argued that there are troublesome aspects of private prisons, mainly revolving around inadequate accountability mechanisms and allowing private corrections companies to influence sentencing policy. Corrections Corporation and Wackenhut have historically been major contributors to the American Legislative Exchange Council, a conservative and privatization-friendly public policy organization that helped develop and successfully implement the “truth in sentencing” and “three strikes” laws across the country. A CCA vice-president actually served as co-chair of the Criminal Task Justice Force, which drafted so-called “tough on crime” legislation in at least one state.

But Dolovich says that the real issue is the way incarceration is practiced by both public agencies and private providers. She argues that too much energy is spent trying to identify the differences between public and private, when in fact there are all kinds of failures in both systems. “When push comes to shove, it seems to me, given the obstacles to running safe and humane prisons, we should be more concerned with identifying how to fix the public prisons than trying to farm them out to another provider who has the same kinds of problems and obstacles to running adequate facilities, and in some cases has more obstacles because they are trying to make a profit.”

Others who are working to challenge current assumptions about the prison system agree. Jonathan Simon, co-chair of the Berkeley Center for Criminal Justice and author of Governing Through Crime: How the War on Crime Transformed American Democracy and Created a Culture of Fear, says that while the governor’s proposal to privatize prisons was more of a show of “rhetorical pizzazz” than anything substantive, it still brings up important issues for taxpayers.

“What Californians really have to think about is, should the goal be to make prison as cheap as possible or to reduce the scale of our imprisonment, which is mammoth by historic measures,” Simon says by phone from Berkeley. “The governor seems to proceed as if the only way to deal with that is to try to make prisons as cheap as possible, rather than talking about whether public safety is really being advanced by such a heavy usage of prisons.”

While Simon does give credit to the governor for trying to take steps toward solving the prison crisis and for bringing attention to the connection to higher education funding, he thinks a closer look should be taken at the sentencing laws that have lead to the overcrowding in the first place.

“The governor got our attention on the relationship between higher education and prisons. Those issues haven’t been put together enough,” he says. “That resolve to actually do something about the prison system so that we can spend the money where we know it is better spent needs to have follow-through. I hope citizens will stay tuned and maybe press the next governor to be a little more serious.”

Groups like the Sentencing Project insist that policy makers should be looking at the inevitable effect of tough sentencing laws passed in the 1990s. “We are looking at who is in California correctional facilities, how long they are serving their sentences, what policies can be applied to affect the number of people who are incarcerated and the amount of time they are serving,” says Nicole Porter, state advocacy coordinator for the Sentencing Project.

In California, the infamous “three strikes” bill set into motion legislature that can potentially send people to long prison sentences for minor infractions. For example, Leandro Andrade was sentenced to life in prison with the possibility of parole after 50 years for stealing $153 worth of videotapes from two Kmart stores. With previous convictions for a residential burglary and drug possession, and since the videotapes were stolen from two different stores, the crime counted as two separate third strikes, resulting in a half-century sentence for what amounts to shoplifting.

It’s not only Andrade and prisoners with similar stories who suffer; the average cost to house an inmate in California is $49,000 a year, or $134 a day, most of which is paid for with taxpayer money.

For this reason, many insist that the California State Legislature should seriously consider looking out of the box when it comes to the prison crisis.

“We don’t think that privatization is the ultimate solution,” Porter says. “We want to make sure that public safety is maintained, but there are an awful lot of people serving prison sentences in California, not necessarily because Californians tend to be more violent and dangerous than in other parts of the country. As the state continues to explore ways to cut costs, we continue to think that sentencing reform and looking at ways to ease the prison population will be beneficial to helping the state address its budget problems.”

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