The cold hard facts about America's private prison system

(AP Photo/Matt York)

After binge-watching “Orange is the New Black” on Netflix and then hearing about prison reform in the news, I started to wonder about the real numbers behind the business of prisons.

Here are the facts:

The United States has more prisoners per population than any country in the world. In fact, about 1 in every 110 U.S. adults is currently incarcerated and 1 in every 38 U.S. adults is under some form of correctional supervision. These are big numbers, and whenever there are large numbers of people, business comes calling.

The privatization of prisons in America can be traced back to before the Civil War when in 1852, a facility now known as San Quentin opened in Marin County on the San Francisco Bay. More recently, in the 1980s, the private prison industry began booming, fueled by the War on Drugs. As of 2016, about 19 percent of federal prisoners are held in private prisons.

Private prisons are a multibillion-dollar industry – and growing. Take for example CoreCivic (formerly Corrections Corporation of America), the largest operator of private prisons in the U.S. In fewer than 20 years, it’s seen its revenue increase by more than 500 percent, from roughly $280 million in 2000, to $1.77 billion in 2017.

With the government paying private prison operators about $23,000 per year per inmate (keep in mind, the minimum wage is $15,000 per year), it’s a lucrative business. CoreCivic’s reported 2017 revenue was close to $1.8 billion, and a back-of-the-envelope calculation shows that with 80,000 beds supported by the government to the tune of $23,000 per inmate per year, it’s collecting about $1.8 billion annually from the government. Business is booming indeed – thanks to the American taxpayers.

To boot, with most private prison contracts, if the prison beds aren’t full, the government has to pay for them anyway. For example, in 2011, Arizona paid Management and Training Corporation (MTC) $3 million when a 97 percent quota wasn’t met. (By the way, this payout came a year after three prisoners convicted of homicide escaped Kingman – an Arizona state prison run by MTC – after workers ignored alarms indicating a breach. The escaped prisoners murdered a retired Oklahoma couple before being apprehended.)

Not only are your tax dollars funding these private prison operators, but you might also be investing in them without even knowing it. As of 2016, Wells Fargo, Bank of America, JP Morgan Chase, BNP and U.S. Bancorp, all played a role in bankrolling private prison companies. And I can see why. Including the three main private prison companies – CoreCivic, The GEO Group and MTC – the industry rakes in about $5 billion in revenue a year.

And a lot of that cash is used to make sure that business keeps booming.

The Sentencing Project found that from 1999-2010, CoreCivic spent on average $1.4 million per year on lobbying at the federal level, and employed over 70 lobbyists at the state level. In addition, the largest private prison companies are members of the American Legislative Exchange Council (ALEC) – a public policy organization that has developed model bills for state legislators to use when proposing “tough on crime” initiatives.

This means that private prison companies, which benefit from having more prisoners, inevitably influence legislation for longer sentences, like the 1994 “three-strikes law” which imposed a mandatory life sentence on anyone convicted of more than two serious crimes. Not surprisingly, between 1992 and 2003, the number of people serving life sentences increased by more than 80 percent.

Private prisons are certainly direct beneficiaries of more prisoners and longer sentences. But are they good for our society?

The entire argument for private prisons rests on cost-savings. Private prison companies claim they can do the work of the government for less money. But do they?

The truth is, probably not.

There is no evidence that they actually save taxpayers any money. In fact, the U.S. Bureau of Justice Statistics reported in 2016 that the cost-savings promised by private prisons have simply not materialized. Some research even indicates that private prisons often refuse to accept inmates that cost a lot to house (i.e. the violent offenders), making the statistics they report highly misleading.

More worrisome, we have seen private prisons hit by scandal after scandal. For example, in 2016 the Walnut Grove correctional facility (run by the aforementioned MTC) was shut down after a federal judge disclosed that it “paints a picture of such horror as should be unrealized anywhere in the civilized world,” including rape of younger inmates by older prisoners and guards denying medical care to and having sexual relationships with prisoners.

A 2016 report by the U.S. Department of Justice (DOJ) said that privately operated federal facilities are less secure, less safe, and drastically more punitive than publicly operated federal prisons. Inmate on inmate assaults were almost 30 percent higher in private prisons, and new inmates were often automatically placed in solitary confinement due to overcrowding.

In 2016, following this report, the Justice Department announced that it intended to end its contracts with private prison operators as it deemed the facilities to be both less safe and less effective.

Later in 2016, when President Trump was elected, the stock prices of private prison companies CoreCivic and GEO soared. A year later, in 2017, the DOJ under Attorney General Jeff Sessions overturned the decision not to use private prisons. And in 2018, private prison companies donated $1.6 million in federally disclosed contributions to the midterm elections.

This private prison cycle of lobbying, donating money to campaigns, and getting more prisoners with longer sentences in order to squeeze out as many taxpayer dollars as possible, is a perversion of our judicial system. And it doesn’t even take into account the cheap labor many of these American companies receive from prisoners for as little as 17 cents per hour.

The economics are on the side of keeping as many people as possible in prison, for as long as possible. Is this what America wants?

With the Senate's passage of the First Step Act this week, which reforms the way incarcerated prisoners are rehabilitated, let’s hope that America’s use of private prisons is next on our criminal justice reform agenda. After all, the question isn’t should we have private prisons, but why do we still have them?