Texas Prison Bid'ness

We missed this story when it came out.  Despite an Attorney General ruling that seemingly says that Sheriffs cannot accept salary enhancements from private prison corporations, McLennan County officials don't think the ruling applies to their relationship with CEC/CiviGenics.

According to a Waco Tribune ("McLennan County officials say attorney general opinion on sheriff's salary supplement won't affect Lynch," February 19) article from last month,

McLennan County Judge Jim Lewis and McLennan County District Attorney John Segrest said the opinion will not affect operations here because the salary supplement Lynch is paid comes from the county, not CEC.

Segrest said “this opinion has no bearing whatsoever on the situation in McLennan County,” based on his knowledge of the CEC contract and from his discussions with county officials, including county auditor Steve Moore and county attorney Mike Dixon. “The private contractor does not pay the county anything,” Segrest said. “The county pays them. So clearly, there is no administrative fee paid by the private contractor who runs the jail.

The Combined Law Enforcement Association of Texas (CLEAT), the union who has battled the McLennan County Sheriff over a new private jail operated by Community Education Centers, was having none of it.

Charley Wilkison, political and legislative director for CLEAT, challenged Lynch, based on the AG’s opinion, to write a check today and give the money back to the private contractor....

“This opinion is a great victory for the regular people of Texas, and the reason is that this goes to the cornerstone, to the fish bait, that private jail companies use to get into a community and get their hooks into the taxpayers and get their hands into their pockets,” Wilkison said.

There doesn't seem to be any resolution to this story, but we'll keep you posted when we hear something new. 

State lawmakers continue to review the budget and ways to cut costs and private prison contracts are on the table.  Scott Henson at Grits for Breakfast covered a recent House Appropriations hearing where Corrections Chairman Jim McReynolds asked about private prison contract renewals.  According to Grits:

At a House Appropriations Committee meeting today, House Corrections Chairman Jim McReynolds asked TDCJ chief Brad Livingston if private prison-contracts up for renewal might increase their rates and increase costs for the state.

Livingston said that was possible, since contracts covering the 12,000 or so private beds for which TDCJ contracts are 5-7 years old. Most of these are up within the coming year and all new contracts should be negotiated by mid-2011. Livingston said that in general, for every dollar increase in per-inmate costs represented a $4.5 million cost increase to TDCJ.

How the state will deal with it's budget in 2011 may certainly impact these contracts.  We will continue to monitor the situation and post developments.

Previous coverage:

• Grits Explores which Private Prison Contracts could be Terminated
• State Budget Problems may Lead to Private Prison Closure

The Corrections Corporation of America held an investor conference call last month.  During the call, CCA officials discussed current capacity issues and how they were profiteering from incarcerating thousands of men, women, and children in private prison beds.  

According to CCA reports, the private prison company continues to be the largest private prison profiteer by controlling 45% of all private prison beds in the nation.  CCA reported that they have 12,000 empty beds.  Additionally, the nation’s largest private prison company stated they have lost or terminated contracts totaling more than 7,500-beds in the past 16 months and expect to lose over 3,600-beds in 2010. 

During the investor call, CCA reps mentioned they have lobbyists working in six states trying to identify new contracts.  CCA reps stated that those states are about 14,000 persons over current capacity and are not planning to build any new prisons.  While they didn’t mention Texas specifically, CCA was reported to have spent $2 million lobbying elected officials – presumably to identify the profiteering activities they outlined on the call. 

A majority of the company’s revenue is from state clients at 60%; with Texas contracts representing 5.39% of CCA business.  Federal contracts comprise about 40% of CCA’s business; specifically consisting of contracts from United States Marshall Service (USMS), Immigration Custom and Enforcement (ICE), and the Bureau of Prisons (BOP). 

CCA still reports that their average per diem rates have declined because of the change in population at the T. Don Hutto prison in Taylor, Texas.  Folks will remember that ICE ended family detention at Hutto last year, and currently detains women in that correctional facility.  That change in population impacts CCA’s ability to charge a higher per diem and affects the company’s bottom line.

"Downscaling Prisons: Lessons from Four States," a new report from Justice Strategies and the Sentencing Project anaylzes the trend in down-sizing prisons.  The report

finds that four states - Kansas, Michigan, New Jersey, and New York - have reduced their prison populations by 5-20% since 1999 without any increases in crime. This came about at a time when the national prison population increased by 12%; and in six states it increased by more than 40%.  The reductions were achieved through a mix of legislative reforms and changes in practice by corrections and parole agencies.

On the call, CCA profiteers mentioned they are monitoring current state reforms.  What continues to be disconcerting is that they talked about those policy reforms in terms of risk to their business.  We will continue to monitor CCA as they watch these reforms.  Stay tuned. 

Our pal Scott at Grits for Breakfast, posted a list of private prison contract term obligations earlier this month.  Grits post was further exploration of a story we posted a few weeks ago regarding the Texas Department of Criminal Justice (TDC) looking to terminate private prison contracts.  Scott adds this analysis:

A couple of notable contracts stand out as potential candidates for cuts. For starters, the Mineral Wells facility was the one unit state Senate Criminal Justice Committee Chairman John Whitmire is interested in closing, and for security reasons, not because of the budget. The contract for that troubled facility ends conveniently around a month after the next legislative session starts, meaning there's a lot of time for budget pressures to build between now and then. What's more, the Board of Pardons and Parole hasn't really been using the Mineral Wells facility the way it was intended, so there's no special reason to keep it opened compared to, say, Intermediate Sanctions Facilities on the list.

Equally interesting to me is the fact that the Dawson State Jail's contract with Corrections Corporation of America is up for renewal next January. This ill-placed facility is located in downtown Dallas on the banks of the Trinity River in prime real estate the city hopes to redevelop. So the fact that Dawson's contract ends on January 15, 2011 is a significant date for the city of Dallas: If the state renews the contract, the proposed riverfront redevelopment could be put on hold indefinitely. It's possible, then, we may see members of the Dallas delegation and related development interests pushing for non-renewal, though certainly CCA will have its own lobbyists on the other side.

Hopefully, lawmakers will continue to consider the possibility of terminating contracts as they figure out what to do with unused prison beds.