Money/Financial Interests

NY Times: Private Prisons Offer Little in Cost Savings

NY TimesNY TimesIn a front-page article in today's New York Times ("Private Prisons Found to Offer Little in Savings," May 19th), reporter Richard Oppel lays out a fairly  devastating case against the claims by the private prison industry that it offers states significant cost-savings.  According to the article,

"The conviction that private prisons save money helped drive more than 30 states to turn to them for housing inmates. But Arizona shows that popular wisdom might be wrong: Data there suggest that privately operated prisons can cost more to operate than state-run prisons — even though they often steer clear of the sickest, costliest inmates.  ...

Despite a state law stipulating that private prisons must create “cost savings,” the state’s own data indicate that inmates in private prisons can cost as much as $1,600 more per year, while many cost about the same as they do in state-run prisons.

The research, by the Arizona Department of Corrections, also reveals a murky aspect of private prisons that helps them appear less expensive: They often house only relatively healthy inmates."

This is pretty damning evidence in Arizona.  The article goes on to say that results in other states have also not found much in the way of cost-savings. 

 

Detention Watch Network releases date on private prison influence on immigration detention

TSource: Detention Watch NetworkSource: Detention Watch Networkhe Detention Watch Network has released some terrific data and graphs on the private prison industry's role in the United States' immigrant detention system.  (Full disclosure: I'm on the Steering Committee of DWN, and Grassroots Leadership helped compile this research).  Amongst the interesting findings, 49% of all immigrant detention beds in the United States are operated by private prison corporations. That is higher percentage of privatized beds than nearly any other state or federal agency.

Texas has more private immigrant detention beds - more than 10,000 - than any other state.  Furthermore, some of the largest immigrant detention centers in the country are in Texas, including MTC's Willacy County Processing Center and GEO Group's South Texas Detention Center. The report includes a complete breakdown of every major private detention center by average daily population.

Furthermore, the report tracks the federal lobbying and influence exerted by the private prison industry to ensure its  interests are met.  According to the report:

"Between the five corporations with ICE contracts for which official federal lobbying records are currently available, the total expenditure on lobbying for 1999-2009 was $20,432,000.(1) In general, corporations lobbied both the House of Representatives and the Senate. Most companies also lobbied the Department of Homeland Security, the agency that oversees Immigration and Customs Enforcement. The larger corporations (CCA and GEO) lobbied a variety of entities related to immigration policy, including the Department of Justice, the Bureau of Prisons, and the Office of Management and Budget. Both CCA and GEO reported lobbying ICE directly."

The full report and data are well worth a read.  Check them out here.

GEO will hold 2011 Q1 earnings call on Wednesday

GEO Protestor at Val VerdeGEO Protestor at Val VerdeReaders of Texas Prison Bid'ness are well aware of the some of the major problems that private prison contractor GEO Group has had in Texas.  Still, the company has continued to expand by winning contracts, buying competitors, and expanding into new markets. The company holds quarterly conference calls to discuss its earnings and outlook.  The next GEO call will be this Wednesday, May 4, at 2pm EST/1pm in most of Texas.  According to the company's press release:

The GEO Group, Inc. (NYSE:GEO) ("GEO") will release its first quarter 2011 financial results on Wednesday, May 4, 2011 before the market opens. GEO has scheduled a conference call and simultaneous webcast for 2:00 PM (Eastern Time) on Wednesday, May 4, 2011.

Hosting the call for GEO will be George C. Zoley, Chairman, Chief Executive Officer and Founder, Brian R. Evans, Senior Vice President and Chief Financial Officer, John M. Hurley, President, GEO Detention & Corrections, and Jorge A. Dominicis, President, GEO Care.

To participate in the teleconference on Wednesday, May 4, 2011 at 2:00 PM (Eastern Time), please contact one of the following numbers 5 minutes prior to the scheduled start time.

1-800-659-2056 (U.S.)
1-617-614-2714 (International)
Conference Call Participant Pass-code: 65944659

Anyone can call in to listen to the call, and it's often archived online after it occurs.  It's well worth listening to these calls to get a glimpse of how the private prison industry views increased incarceration and detention as a business opportunity.  We'll provide analysis of the call on Wednesday.

NPR covers financial problems with speculative lock-ups in Texas, and the background is even more troubling

NPR's John Burnett has an excellent piece today ("Private Prison Promises Leave Texas Towns In Trouble," March 28) about several Texas communities that have been left high and dry by private prison deals gone bad.  The story is the second part of a two-part series on private prisons - Friday's story chronicled the GEO Group's extremely troubled Walnut Grove youth prison in Mississippi.

Today's story follows the fortunes of Littlefield, home to the Bill Clayton Detention Center, formerly operated by GEO Group.  That community has been paying back loans it floated to build the prison facility before its closure in 2008.  According to the story:

"For the past two years, Littlefield has had to come up with $65,000 a month to pay the note on the prison. That's $10 per resident of this little city.

...  To avoid defaulting on the loan, Littlefield has raised property taxes, increased water and sewer fees, laid off city employees and held off buying a new police car. Still, the city's bond rating has tanked.

The village elders drinking coffee at the White Kitchen cafe are not happy about the way things have turned out. 'It was never voted on by the citizens of Littlefield; [it] is stuck in their craw,' says Carl Enloe, retired from Atmos Energy. 'They have to pay for it. And the people who's got it going are all up and gone and they left us...'

'...Holdin' the bag!' says Tommy Kelton, another Atmos retiree, completing the sentence."

The backstory to the Bill Clayton Detention Center is no less troubling. The state of Idaho pulled its prisoners after the suicide of Randall McCullough, who, according to news reports, had spent more than a year in solitary confinement.  GEO was later hit with a massive lawsuit over in the McCullough case. Since the facility's closure, Littlefield has had its bond ratings dropped and turned to two different private prison companies in an effort to fill the prison beds.   Idaho had pulled its prisoners from another GEO-operated facility in Texas - the Dickens County Correctional Center - in 2007 after an investigation of the suicide of Idaho prisoner Scot Noble Payne found "squalid" conditions.

And Littlefield is certainly not alone in troubles brought about after private prison deals went bad.  The NPR story today tells of how the CEC-operated Jack Harwell Detention Center in McLennan County sits half-empty after county spent $49 million to build it.  The sitting McLennan County Sheriff was on the payroll of CEC at the time the county voted to finance the construction of the facility. 

And, Scot Henson over at Grits for Breakfast recently chronicled a long list of privately operated jails that are seriously under-capacity due to a declining prison population.  Of course, there is an obvious public interest in declining prison populations and low crime rates.  However, private prison corporations are always looking for new groups of people to put behind bars.  Right now, companies like CCA and GEO Group are betting on increased immigrant detention, but the trend hasn't carried far enough to save towns with speculative prisons like Littlefield.

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