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Profits, Politics, and Private Prisons
Kendra Barnes
San Jose State University, Department of Social Work
SCWK 204: Social Policy Analysis
Dr. Ann Wrixon
June 30, 2020
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Terms
Before attempting to analyze the integration of for-profit incarceration facilities with the
American criminal justice system we must first understand the terminology used when
describing prison privatization. The “private prison industry” is a broad term which is used to
describe companies and individuals, which profit or benefit from the establishment of private
prisons (American Civil Liberties Union, 2011). This industry is vast and includes a large array
of companies including entities with indirect involvement, such as businesses that provide
consulting services in relation to for profit prison construction (American Civil Liberties Union,
2011). A facet of the “private prison industry” is composed of companies which own and operate
incarceration facilities for federal and state prisons, jails, and immigration detention centers
(American Civil Liberties Union, 2011). The terminology used to describe these actors are
“private prison operators” and “private prison companies” (American Civil Liberties Union,
2011). The focus of this paper will predominantly be on the private prison companies and private
prison operators, and the delivery of public correctional and rehabilitative services.
Causes of Prison Privatization
In America, integrating the private market into the public sector is not a new
phenomenon. Since as early as the 1800s, governments at all levels in America have utilized
private enterprises to provide public services, such as garbage collection, road construction, or
airport operations (Eisen, 2017). However, private prison companies did not begin to emerge
and take hold of the American prison system until the 1980’s (Siegler, 2010). To fully
understand the popularity and perceived need of private prisons, it is first necessary to recognize
and evaluate policies enacted in the United States, which initiated and perpetuated mass
incarceration and privatization of the prison industry (American Civil Liberties Union, 2011).
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This is imperative because prison privatization originated as a solution to help reduce the
economic burden, which the influx of incarcerated individuals had on the government’s budget.
Sentencing Reforms
Laws such as the truth-in-sentencing and mandatory minimums, in conjunction with other
sentence reform policies, positioned the nation to enter a phase of mass incarceration. These
criminal justice reforms adopted between the mid-1970s through 1990s, caused a vast increase in
the number of incarcerated individuals and lengthened the time an inmate spent imprisoned
(Eisen, 2017). Additionally, these criminal sentencing reforms unduly targeted and affected poor
and marginalized communities, which caused Black and Latinx inmates to be overrepresented in
the prison system (Eisen, 2017). The unprecedented mass incarceration of vulnerable
communities exploded the prison population across the nation; and, public correctional facilities
were not equipped to handle the surge in the number of inmates (Eisen, 2017). Eventually, in
consequence to the exponential growth of the incarcerated population, governments had to
develop and operate prison facilities while attempting to maintain a balanced budget.
Prison Construction Grants
In the year 1994, during the Clinton Presidency, the United States Congress passed the
Violent Crime Control and Law Enforcement Act (Eisen, 2017). This piece of legislation
allocated billions of dollars towards grants, which funded the construction of prison facilities
(Eisen, 2017). In 1996, the Violent Crime Control and Law Enforcement Act was amended to
allow for states to use the funding from the prison construction grants to outsource correctional
services to private entities (Eisen, 2017). Predictably, profit incentivized companies to enter and
establish a competitive market for private prison services. With governments drawn to the appeal
of cost savings, the private prison industry grew dramatically in popularity (Surprenant, 2019).
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This can be illustrated when considering that between the years 1990 through 2009, individuals
incarcerated by private prisons grew by 1600 percent, increasing from 7,000 inmates to
approximately 129,000 respectively (Eisen, 2017).
Goals and Objectives of Private Prisons
When comparing the objectives of private prison companies and operators with the goal
of the American correctional system there is a fundamental difference between the motives of the
two entities. The private prison industry exists to maximize profits and be financially lucrative
for investors and shareholders (Eisen, 2018). By nature of their business model, private prison
companies and operators can only expand by retaining more contracts, or in other words –
incarcerating more individuals (American Civil Liberties Union, 2011). Conversely, in recent
years the American correctional system has attempted to reduce recidivism and focus its efforts
on preventing inmates from re-offending by integrating rehabilitative programs (U.S.
Department of Justice, 2017). Therefore, private prison companies and operators must reconcile
the competing goals of decreasing recidivism and increasing profits, which are inherently at odds
with one another (Eisen, 2018). Predictably, severe and dynamic consequences result from
administering a system of criminal justice, which conflates punishment with profit and prioritizes
monetary gains over public interest. (Montes, 2020; Appleman, 2018).
Defining the Problem and Magnitude
Today in America, there are approximately 190 private prisons and detention centers
across the nation in operation (Jay, 2019). Two major for-profit companies control 75% of the
private prison industry, the GEO Group and CoreCivic (Appleman, 2018). CoreCivic is the
largest private prison company, owning and operating 61 correctional facilities across America
(Appleman, 2018). These companies are publicly traded on the stock exchange and have a
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combined market capitalization of approximately $5.8 billion dollars (Appleman, 2018). In 2016
alone, the GEO Group and CoreCivic earned $382 million dollars in profits, which is more than
the combined profits of Airbnb, Snapchat, Pandora, and the Dallas Cowboys (American Civil
Liberties Union, 2011; Appleman, 2018).
Unsurprisingly, private prison profits and the exorbitant financial compensation for the
executives of these companies grow in unison. In the year 2019, the CEO of the GEO Group was
paid an annual salary of $5.3 million dollars, in conjunction with a $37.2 million-dollar
retirement package (GEO Group Inc, 2019). It is imperative to emphasize that the GEO Group
and CoreCivic’s extreme wealth accumulation was achieved through governmental contracts,
which funneled taxpayer dollars into private prison companies and operators (American Civil
Liberties Union, 2011). Together the GEO Group and CoreCivic manage over half of the private
prison contracts across the United States, which account for the dominant stream of revenue for
both companies (American Civil Liberties Union, 2011).
Private prison companies excessively profit from administering a public service by
prioritizing cost savings over the quality of the facilities conditions and safety of those
incarnated. As a result, incarcerated individuals at private prisons are subjected to unsafe,
unsanitary, and inhumane living conditions. In fact, when compared to government run facilities,
inmates at private prisons face greater threats of violence, as there are twice the number of
inmate-on-inmate and inmate-on-staff assaults (American Civil Liberties Union, 2011).
Moreover, 21 investigations conducted by state, local, and federal governments revealed that
private prison companies have a pattern of employees assaulting inmates, both sexually and
physically (Appleman, 2018). The higher rate of violence at private prisons may be attributed to
the fact that correctional officers at private prisons are minimally staffed, receive less pay, and
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have fewer benefits when considering employees working public facilities (American Civil
Liberties Union, 2011). This demonstrates how private prison companies' objective to maximize
profits inadvertently cause prison services to be delivered in a manner which is inefficient and
dangerous.
Underlying Values of Prison Privatization
Electing to privatize the prison industry for financial benefits is rooted in elitist and
racially prejudiced beliefs, which perpetuates the notion that individuals who have committed a
criminal offense are unworthy of investment and undeserving of government support (Appleman,
2018). Instead of recognizing the needs and supporting the prison population, the economic elite
influence policy to benefit their personal wealth or interests at the expense of inmates (Mitchell
& Butz, 2019). Furthermore, allowing private companies, which are predominately controlled by
affluent white men, to profit millions from a system that targets minorities and devastates
communities illustrates how white supremacist ideals are engrained into and expressed
throughout institutions of power.
Consequences of Prison Privation
Although there are many adverse repercussions of prison privatization, the gravest
consequence concerns the influence which these companies have on future criminal justice
reforms. Indisputably, private prisons are deeply invested and financially motivated to influence
policy and advocate for reforms, which align with the financial interests of the company (Sigler,
2010). Although private prisons companies publicly deny lobbying for criminal reforms, which
contribute to mass incarceration, the GEO Group and CoreCivic do acknowledge hiring lobby
groups to advocate for federal and state policies, which directly benefit or affect their economic
interest (Appleman, 2018). Since the year 1989, private prison companies have spent upwards of
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$25 million on advocacy efforts for legislation, which promote the use of private prisons or take
punitive measures on crime (Eisen, 2017). Moreover, during the 2016 election cycle, private
prison companies contributed $135 thousand to the democratic party, and $1.1 million to the
republican party (Flora, 2019). Troublingly, private prison companies have extensive financial
resources and political connections to thwart progressive criminal justice reforms, which focus
on reducing mass incarceration and finding alternative interventions to imprisonment (Eisen,
2017).
Theoretical Framework
When evaluating private prisons, it is important to regard the industry as a system in
society which interacts with both individuals and communities at large. This is commonly known
as systems theory and, within the field of social work, it is used to describe and study human
behavior by analyzing social and institutional interactions within their respective environments
(Connolly, 2015). When applying this concept to private prisons, it is crucial to acknowledge
that the system develops from the influence and interactions of actors in various segments of
industry (Pycroft & Bartollas, 2014). Meaning, the integration of financial incentives into prison
operations alters how agents within the system behave and companies deliver inmate services
(Pycroft & Bartollas, 2014). Ultimately, this changes the relationship between correctional
facilities and those affected or trapped in the prison system (Pycroft & Bartollas, 2014).
Moreover, systems theory is rooted in the notion that the “whole is more than the sum of
its parts” (Connolly, 2015). This idea can be reflected when considering private prisons are only
a singular part of the criminal justice system. The motivation of profit not only changes inmate
services and prison facilities but fundamentally shifts how the prison industry behaves and
influences other institutions (Pycroft & Bartollas, 2014). This profoundly affects the role and
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function of criminal justice because the prison industry interacts with every political, social, and
economic system in society. Therefore, when adopting the perspective of systems theory, it is
evident that prison privatization consequently changes the fabric of society; because, the prison
industry is deeply interdependent and interconnected with all systems, communities, and
individuals in America (Pycroft & Bartollas, 2014).
Private Prison Reforms
In response to the inherent flaws, grave limitations, and severe shortcomings of the forprofit prison industry, multifarious policy reforms and solutions have been proposed. These
policies primarily establish changes to the contracts between private prison companies and
governments as a method of restructuring the relationship between the two entities (Eisen, 2018).
Allowing governments to construct “performance-based contracts” with private companies and
operators has become one popular suggestion as a mode to improve inmate outcomes and
institute accountability standards (Eisen, 2018). Modifying prison contracts to becoming
performance based includes crafting prison contracts to be synchronistic with public goals
(Eisen, 2018). To exemplify, performance-based contracts may award cash bonuses to leaders of
private prison companies for reducing recidivism among inmates at their facilities (Eisen, 2018).
Dejectedly, despite the intent, no adjustment can be made to a prison contract which will
eliminate, or effectively counteract, the private company’s motivation to maximize profit. For
this reason, it is not enough to merely change the design of prison contracts, but rather
governments should be prohibited from entering into a contract for prison services with any
private company.
Although the idea of eradicating private companies from the prison system may seem
radical, California was able to successfully enact a law which banned the State from utilizing for-
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profit prison services. This piece of legislation, previously known as Assembly Bill 32 (A.B. 32),
only recently passed in the year 2019 and originally was introduced by Assemblymember Rob
Bonta (A.B. 32, 2019). Essentially, this bill phased out the use of private prison companies by
implementing three central restrictions, which limited the ability for California to engage with
for-profit prison operators (A.B. 32, 2019). These three restrictions included: (1) prohibiting the
government from entering into or renewing a contract with a private prison facility, (2) requiring
state prisoners incarcerated in private facilities to be transferred to a public prison, and (3)
forbidding individuals in California from operating or owning a private prisons (A.B. 32, 2019).
It is vital to note that the prohibition of contracts between governments and private
prisons, as described in A.B. 32, is not expected to unfold instantaneously. The bill was signed
into law in October during 2019, by Governor Gavin Newsom, and took effect on January 1st,
2020 (A.B. 32, 2019). Any private prison contracts already in existence prior to the enactment
date were not affected by A.B. 32 (A.B. 32, 2019). However, after January 2020, these
preexisting private prison contracts are unable to be renewed (A.B. 32, 2019). The inability to
renew these contracts would effectively end the use of all private prisons by the year 2028, as
every government contract would have expired (A.B. 32, 2019). Moreover, to prevent loopholes,
A.B. 32 stipulates that banning state contracts with private prison companies also extends to forprofit facilities located outside of California (A.B. 32, 2019). It is imperative to phase out private
prisons in a manner that is responsible and will not shock or overload the current prison
infrastructure.
Additionally, A.B. 32 mandates that by 2028 all state prisoners must be transferred out of
private prisons and placed into government-run institutions (A.B. 32, 2019). This includes
individuals who are prisoners of California but are incarcerated in for-profit facilities in another
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state (A.B. 32, 2019). The purpose of this piece of the legislation is to ensure that no state
inmate, even if imprisoned outside of California, is forced to endure inhumane treatment while
being incarcerated in a private prison. Furthermore, A.B. 32 makes it unlawful for private prison
facilities to be operated in the State of California by 2028 (A.B. 32, 2019). By integrating this
final caveat, A.B. 32 attempts to eradicate the private prison industry from the market in
California. Not only are private prisons in California unable to enter into government contracts
or jail state prisoners, these for-profit companies are also blocked from incarcerating individuals
from outside the State. This successfully decimates any opportunity for private prison companies
to generate revenue while in California.
This California law clearly illustrates a policy reform which effectively responds to the
for-profit prison industry at the state level. By phasing out these contracts over a span of time,
the prison industry can be responsibly withdrawn from the market and a transition plan can be
developed to incrementally move inmates into state facilities. Additionally, A.B. 32
demonstrates the necessity to ensure that loopholes for private companies to enter the market
through a different avenue, such as housing inmates from outside states, are closed. Ultimately,
ending private contracts will readjust the relationship between prisons and society and lead to a
correctional system which focuses on rehabilitation over profit.
Policy Analysis
To properly analyze legislation which abolishes the usage of private prison contracts,
such as A.B. 32, it is crucial to understand how this policy addresses the issues associated with
the for-profit prison industry. The purpose of A.B. 32, and similar legislation, is to remove the
motive of profit from the delivery and operation of prison services (A.B. 32, 2019). Although
California is the first State to eliminate prison contracts, the exclusion of financial gains from the
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prison industry can be demonstrated when considering the economic ramifications of ending the
contracts. For example, according to the GEO Group, the termination of the government
contracts will cause the company a loss of $250 million per year in revenue (Geo Group, Inc. v.
Newsom et. al., 2020). Significantly, instead of $250 million dollars in profit going into the
pockets of executives of the GEO Group, this money can be spent by the public to provide
inmates restorative services (Appleman, 2018). Additionally, by phasing out government
contracts with private prison companies, correctional institutions are no longer bound to
stakeholders and investors, incentivized to cut operational costs, or motivated to increase rates of
incarceration (Appleman, 2018). This effectively illustrates how A.B. 32 eliminates the
opportunity for private companies to profiteer off prisoners, while simultaneously reallocating
funds to public institutions to invest in inmate services which promote rehabilitation, recidivism
reductions, and re-entry success (Senate Safety Committee, 2019).
Efficiency / Cost
When evaluating the elimination of private prison contracts, it is necessary to understand
the financial implications this has on government budgets. Proponents of private prisons claim
that private prison contracts should exist because they offer inmate services at a cheaper rate,
thus saving taxpayer dollars. However, these cost savings provided by private prisons companies
are highly contested and at times unsubstantiated (ACLU, 2011). This is because the cost of
housing an inmate at a private versus a public facility differs depending on the state (Hakim &
Blackstone, 2014). Essentially, varying cost factors (such as, prison construction, labor,
employee pension, and medical care for inmates, food, utilities) influences the amount of savings
that is attained when contracting with private companies (Hakim & Blackstone, 2014). Meaning,
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the degree of cost-savings resulting from the termination of private prison contracts will range
across states (Hakim & Blackstone, 2014).
To elucidate, several states in America have documented evidence that private companies
provide prison services at an equal, or more expensive cost, in comparison to public alternatives.
For example, Hakim & Blackstone (2014) found that, housing an individual in a privately
contracted facility in Arizona cost $53.02 an inmate per day, while it was only $52.49 in a public
prison (Hakim & Blackstone, 2014). Moreover, in Oklahoma incarcerating an inmate at a private
versus a public institution was $43.02 and $42.11, respectively (Hakim & Blackstone, 2014).
This indicates that private prisons cost the public approximately one to two percent more than
public facilities (Hakim & Blackstone, 2014). In these scenarios private prison contracts are
exceptionally inefficient and contradict the intent behind utilizing for-profit companies.
Effectively, this depicts how at government-run prison facilities are more cost-effective than
contracting out these duties to private companies.
In contrast, states such as California face an undeniable cost increase when housing
inmates in public-run prison facilities. To elaborate, the annual cost of housing a California
inmate at a for-profit facility is between $26,462 and $35,232, comparatively annual inmate
expenses at public prisons amount to $75,000 (Assembly Appropriations Committee, 2019). The
California Department of Corrections and Rehabilitation (CDCR), estimates that phasing out
private prisons will cost the state upwards of $196 million annually (Assembly Appropriations
Committee, 2019). However, it is crucial to note that these estimates do not reflect the potential
savings associated with eradicating for-profit prisons from the market. For example, an
approximate 22 percent increase in the reduction of recidivism is expected to result from
transitioning inmates to public prison facilities (Assembly Appropriations Committee, 2019).
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Decreasing the number of criminal reoffenders will consequently cut expenses associated with
law enforcement, court proceedings, and other aspects of the criminal justice system (Appleman,
2018). Additionally, through economic actions, such as providing labor or consuming products,
former inmates make unquantifiable financial contributions to the communities they live in.
Although shifting away from private prisons may initially be costly, in the long-term California
will reap incalculable economic benefits from the reduction in recidivism.
Acceptability
Another critical factor to consider when evaluating legislation proposing the elimination
of public-private prison contracts is the response from stakeholders when their means to
exorbitantly accumulate wealth is threatened. Unsurprisingly, many invested in the for-profit
prison industry actively oppose contract reforms and make large financial contributions to
politicians to ensure the livelihood of private prisons. Meaning, the beneficiaries of for-profit
prison contracts expend mass amounts of monetary resources on lobbyist to propagate policies
that favor the utilization of private prison services, contribute to increased rates of incarceration,
or obstruct the implementation of prison accountability measures (ACLU, 2011; Eisen, 2018). In
consequence to the influence of the prison industry on the political arena, governments
frequently are unable to successfully pass laws which terminate prison contracts with for-profit
companies (Eisen, 2018). If miraculously a piece of legislation ending public contracts with
private prisons is passed, stakeholders attempt to thwart the policy from being implemented by
pursuing legal discourse. Unsettlingly, stakeholders fund these political purists with revenues
private companies generated from mass incarceration.
This exact scenario can be depicted when reflecting on the barriers which materialized in
retaliation to California passing A.B. 32. Specifically, on December 30th, 2019, one day prior to
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the enactment of A.B. 32, the GEO Group filed legal action against California alleging that the
law was unconstitutional and discriminatory (Geo Group, Inc. v. Newsom et. al., 2020). In a 31page court document, the GEO Group detailed how the implementation of A.B. 32 was an overt
overextension of state authority. Perhaps more importantly, Geo Group, Inc. v. Newsom et. al.
(2020) documented the GEO Groups concerns of losing over $4 billion dollars in future revenues
over the next 15 years. The author of A.B. 32, Assemblymember Bonta, responded to the lawsuit
by describing it as, “a desperate attempt by a dying industry to demonstrate its viability to
shareholders” (Castillo, 2020). Although the motion put forth by GEO Group was promptly
dismissed, this demonstrates how private companies would rather engage in concerted lobbing
tactics or instigate legal battles with government entities before surrendering billions of dollars in
profits (Geo Group, Inc. v. Newsom et al, 2020).
Ultimately, since those invested in the prison industry are unaccepting of legislation
which propose to end public-private contracts, adopting prison reforms will be excessively
challenging. Nevertheless, meaningful policy changes can be actualized when external forces,
such as public advocacy, places pressure on governments to no longer contract with for-profit
prisons. When politicians disentangle themselves from the financial contributions offered by
private prison stakeholders, the incentive for political actors to favor legislation which benefits
the prison industry is minimized. Therefore, it can be deduced that passing and implementing
contract reforms which eradicate private prisons will require individuals in society to instigate a
change in the relationship between elected officials and the for-profit prison industry.
Final Assessment
Overall, A.B. 32 successfully accomplishes the goal of abolishing the for-profit prison
market within the borders of California by phasing out prison contracts; however, this legislation
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also has unintended consequences which could potentially cause harm to various prisoner
populations. The two inmate populations which are most adversely affected by the end of prison
contracts in California are non-state inmates and federally detained immigrants, who are jailed in
California facilities operated by private prison companies (U.S.A. v. Newsom et al, 2020). With
the implementation of A.B. 32, these inmates will be forced to relocate to facilities outside of
California, resulting in the loss of access to family support, legal assistance, and community
resources (U.S.A. v. Newsom et al, 2020). This is particularly detrimental for undocumented
individuals in Immigration and Customs Enforcement (ICE) detention facilities, as California is
the home to numerous immigrant advocacy groups and organizations (U.S.A. v. Newsom et. al.,
2020). Currently, the United Stated Department of Justice is taking California to court over the
legality of A.B. 32, stating that the legislation, “directly regulates federal operations by
restricting the United States’ ability to enter agreements with its chosen contractor” (U.S.A. v.
Newsom et. al., 2020). The decision of the court on this matter will dramatically impact the
states implementation of A.B. 32, as well as the lives of federal prisoners and undocumented
immigrants housed in California.
In addition to having unintended consequences, A.B. 32 also contains a loophole which
allows for-profit companies to still maintain involvement in California’s criminal justice process.
Specifically, A.B. 32 does not apply to private prison companies providing “rehabilitative,
counseling, treatment, mental health, educational, or medical services to a juvenile,” or,
“educational, vocational, medical, or other ancillary services to an inmate [over the age of 18]”
(A.B. 32, 2019). Meaning, for-profit prison companies can still offer services to inmates in forms
of halfway-homes, substance abuse programs, mental health treatments, or other services
adjacent to corrections (Eisen, 2018). This loophole embedded within A.B. 32 allows private
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companies to continue to profit off the criminal justice system in California, only not directly
through the operation of prison facilities.
In response to the noted shortcomings of A.B. 32, few policy modifications should be
considered for future legislative proposals which tackle private prison contracts. First, to prevent
inmates from being separated from their support systems proposed legislation should try to
include language allowing individuals to be transferred to a nearby institution (Appleman, 2018).
Although, this may be challenging considering states do not have control over federal prisoners,
out-of-state inmates, or detained immigrants. Next, the most obvious adjustment needed is the
removal of the loophole allowing private companies to provide external inmate services.
Unfortunately, private companies, such as the GEO Group, have been preparing for prison
reforms by expanding to meet inmate needs throughout the “entire corrections lifecycle” (Eisen,
2018). However, given that private companies are still motivated by profit, a conflict of interest
still exists (Appleman, 2018; Eisen, 2018). Ultimately, if combined these adjustments will, (1)
provide safeguards for various populations housed within a private prison and (2) prevent forprofit companies from entering other segments of the criminal justice process. This would
effectively remove private prisons from the industry of public corrections and ensure a smoother
transition for inmates held in for-profit facilities.
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