Texas Prison Bid'ness

On Tuesday, I participated in an Austin protest against Wells Fargo's holdings in private prison corporations GEO Group and Corrections Corporation of America.  The coalition of immigrant rights groups (including Grassroots Leadership and Texans United for Families) called on Wells Fargo to divest of their holdings in the for-profit private prison industry.

Nearly half of the more than 33,000 immigration detention beds in the United States are operated by private prison corporations, and the detention system will cost taxpayers more than $1.7 billion this year. Benefiting from this practice are companies like GEO Group and Corrections Corporation of America, as well a companies like Wells Fargo, that have invested in the growth of the private prison industry.

For more on the Austin protests, see the Grassroots Leadership or Texans United for Families facebook pages.  And, for more photos and videos from other Wells Fargo protests around the country, check out the National Prison Divestment Campaign, coordinated by Enlace. 

The Sentencing Project* recently published a new report on private prisons titled, Too Good to be True: Private Prisons in America authored by Cody Mason.  The publication details the history of private prisons in America and documents the increase in their use.  The major findings include:

• Texas prisoners in private facilities grew by 55% from 1999 thru 2010.
• From 1999 to 2010 the use of private prisons increased by 40% at the state level and by 784% in the federal system.
• In 2010 seven states housed more than 25% of their prison population in private facilities. 
• Savings associated with investing in private prisons appear dubious.

Over the next several days, Texas Prison Bid'ness will be highlighting the top 5 private prison stories of 2011, and looking forward to the new year.   The 2011 Texas legislature's attempt to increase privatization of state jails and prisons is our #5 story of the year.  

Texas lawmakers met in 2011 and considered legislation that had major implications for private prisons in the state.  According to the Texas Tribune, one such measure could have privatized all of Texas' state jails for low-level felony offenders. While ulitmately rescinded, the proposal was representative of bad policies that may be seen again in Texas in the future.

Nationwide there has been some success in moving state law makers to reconsider policies that have contributed to mass incarceration.  This year, conservative stakeholders led by the Texas-based Right on Crime coalition, cemented a foundation of support among lawmakers in Texas and around the country to support criminal justice reforms.

But as that foundation was laid, a space was also created that strengthened opportunities for prison privatization.  In Texas, lawmakers that supported privatization continue claims that private companies can manage state services better, despite evidence to the contrary.  One lawmaker filed an amendment to the House budget bill (page 272) earlier this year that sought private bids for the operation of all state jails.  The Texas Department of Criminal Justice would have been required to turn over jail operations to private if the result is at least 10 percent savings to the state, regardless of long-term savings or operations outcomes.  

We reported earlier this year that while recent policy reforms have stabilized the prison population, lawmakers have also increased private contract capacity.  The relationship between reform and privatization is something that lawmakers and advocates should pay close attention to and was definately a top story of 2011.

The Corrections Corporation of America held its third quarter invCCA Logoestor call in early November.  The company reported an increase in revenue primarily due to an increase in federal contracts with various agencies.

"revenue for the third quarter of 2011 increased 1.9% to $433.5 million from $425.3 million during the third quarter of 2010, primarily driven by a 2.3% increase in average daily inmate populations... The increase in federal revenue primarily resulted from per diem increases associated with certain management contracts, higher populations primarily from the U.S. Marshals Service (USMS) as well as the commencement in October 2010 of a new contract with the USMS at [the] Nevada Southern Detention Center. These increases were partially offset by the September 30, 2010 expiration of the contract with the Federal Bureau of Prisons (BOP) at [the] California City facility, which contained a 95% guarantee through the expiration date."

The company is adding capacity to it’s overall system -- none in Texas -- at the Lake Erie Correctional Institution (Ohio), Jenkins Correctional Center (Georgia), and is expanding capacity under its McRae Correctional Facility (Georgia) with the BOP.  The prison profiteers reported an increase in  daily compensated population by 2.3% to 80,851 in the third quarter of 2011 from 79,053 during the same time last year. 

Despite expanded contracts and new capacity, company officials reported an excess inventory of 10,500 beds.  The excess capacity has the private prison profiteers looking for new contracts.  One potential customer is Harris County (Houston) where there are have been discussions about privatizing the jail system.  While we know there are better approaches that county officials can look too, it’s important to keep an eye on CCA and any negotiations that company is engaging in the bayou city.  Something to pay attention to in 2012.