Corrections Corporation of America

Big Stories of 2011 - #3 - ALEC and Private Prison Lobbying Exposed

Over the next several days, Texas Prison Bid'ness will be highlighting the top five private prison stories of 2011, and looking forward to the new year.   Our #3 story is the increased exposure of the American Legislative Exchange Council and the role of private prison lobbyists in influencing legislation.

Earlier this year, The Nation and The Center for Media and Democracy released ALEC Exposed.  ALEC Exposed brought to light the actions of the American Legislative Exchange Council (ALEC), an organization that unites corporations with state legislators to “discuss” public policy and draft model legislation.  One of the most concerning areas of this public/private partnership is in the realm of criminal justice and prisons.  In fact, criminal injustice may be a more appropriate phrase.  Thanks to ALEC, the for-profit prison industry has a lot to be thankful for during this holiday season.

As The Nation reported, “ALEC helped pioneer some of the toughest sentencing laws on the books today, like mandatory minimums for non-violent drug offenders, ‘three strikes’ laws, and ‘truth in sentencing’ laws.”  According to the proponents, these laws are designed to reduce crime.  In reality, as California saw first hand, instead of reducing recidivism these laws lead to severe overcrowding.  In the end, public safety is undermined (at the expense of taxpayers) while the for-profit prison industry makes out like a bandit.  Corrections Corporation of America (CCA), the largest private prison company, played a lead role on the ALEC task force developing some of this legislation.  NPR reported last year that through its membership in ALEC, CCA was actually able to help draft model anti-immigrant legislation like Arizona's noxious SB 1070.   

Unfortunately, the negative influence of the for-profit prison industry is not limited to ALEC.  As the ACLU reported, CCA and The Geo Group, Inc. have engaged in a multi-state lobbying effort to fight smart on crime reforms.  These two corporations hired 271 lobbyists in over 32 states between 2003-2011.  Between 1999 and 2009, CCA alone spent over $18 million on lobbying, just at the federal level.  To understand their need for this army of lobbyists you do not need to read any further than Geo’s Securities and Exchange Commission filings (CCA’s is similar):

“Our growth depends on our ability to secure contracts to develop and manage new correctional, detention and mental health facilities, the demand for which is outside our control …. [A]ny changes with respect to the decriminalization of drugs and controlled substances could affect the number of persons arrested, convicted, sentenced and incarcerated, thereby potentially reducing demand for correctional facilities to house them. Similarly, reductions in crime rates could lead to reductions in arrests, convictions and sentences requiring incarceration at correctional facilities. Immigration reform laws which are currently a focus for legislators and politicians at the federal, state and local level also could materially adversely impact us.”

 The U.S. has the highest rate of imprisonment in the world, and the private prison industry clearly wants to make sure it stays that way. While taxpayer and civil rights advocates have been working to reform archaic and ineffective criminal justice laws, working to ensure that our laws reflect current research on effective ways to reduce crime and protect human rights, for-profit prison corporations are headed in the opposite direction.  To these corporations, societal impact and public safety don’t matter.  The only thing that is relevant is maximizing the bottom line.

CCA Investor Call; Reports 12,000 Empty Beds

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. 

Grits Explores which Private Prison Contracts could be Terminated

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.

State Budget Problems may Lead to Private Prison Closure

There is one fact that may impact prison capacity over the coming years – like other states -- Texas is dealing with serious budget problems. The Governor has issued his typical mandate -- asking state agencies to find ways to reduce their budgets by five-percent.  Additionally, legislative leaders in the state House and the Senate have suggested that closing prisons is definitely on the table as they work to manage the state’s correction budget.

"Closing prisons? It's absolutely on the table," said House Corrections Committee Chairman Jim McReynolds of Lufkin. "As tight as our budget situation looks, we cannot unravel the fledgling system of diversion and treatment programs that are paying big dividends now for the states. And there's only one other place to look prison operations."

The state's pending budget shortfall in 2011 may result in the closure of the privately run units.  Senator John Whitmire, who chairs the Criminal Justice Committee, has specifically mentioned the Mineral Wells lockup which is managed by the Corrections Corporation of America.

In recent weeks, Whitmire has publicly suggested that the state consider closing the privately run, 2,100-bed Mineral Wells Unit and perhaps aging prisons that are much more expensive to operate and maintain than newer ones.

The Texas Department of Criminal Justice submitted their plan for reducing the agency’s annual budget to the Governor.  The plan does not call for the closing of prison units – private or otherwise.  Rather the focus on cutting costs targets eliminating job positions and reallocating the community supervision funding that was appropriated in 2007 and has contributed to the flat prison population that makes closing prisons a possibility. 

However, according to an analysis by The Statesman, some $10.7 million in funding for 817 beds in privately run prisons would be eliminated, reducing the state’s prison capacity. 

Advocates that promote alternatives to incarceration are asking agency officials and state policymakers to close prisons rather than reduce community corrections funding. 

Looks like this may shape up to be quite a battle in the 2011 legislature.  Time will tell if there is political viability that will lead in the actual closing of state prison units.  We will keep y’all posted as talks develop. 

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