Jailing Americans for Profit: The Rise of the Prison Industrial Complex

By John W. Whitehead

In an age when freedom is fast becoming the exception rather than the rule, imprisoning Americans in private prisons run by mega-corporations has turned into a cash cow for big business. At one time, the American penal system operated under the idea that dangerous criminals needed to be put under lock and key in order to protect society. Today, as states attempt to save money by outsourcing prisons to private corporations, the flawed yet retributive American “system of justice” is being replaced by an even more flawed and insidious form of mass punishment based upon profit and expediency.

As author Adam Gopnik reports for the New Yorker:

[A] growing number of American prisons are now contracted out as for-profit businesses to for-profit companies. The companies are paid by the state, and their profit depends on spending as little as possible on the prisoners and the prisons. It’s hard to imagine any greater disconnect between public good and private profit: the interest of private prisons lies not in the obvious social good of having the minimum necessary number of inmates but in having as many as possible, housed as cheaply as possible.

Consider this: despite the fact that violent crime in America has been on the decline, the nation’s incarceration rate has tripled since 1980. Approximately 13 million people are introduced to American jails in any given year. Incredibly, more than six million people are under “correctional supervision” in America, meaning that one in fifty Americans are working their way through the prison system, either as inmates, or while on parole or probation. According to the Federal Bureau of Prisons, the majority of those being held in federal prisons are convicted of drug offenses—namely, marijuana. Presently, one out of every 100 Americans is serving time behind bars.

Little wonder, then, that public prisons are overcrowded. Yet while providing security, housing, food, medical care, etc., for six million Americans is a hardship for cash-strapped states, to profit-hungry corporations such as Corrections Corp of America (CCA) and GEO Group, the leaders in the partnership corrections industry, it’s a $70 billion gold mine. Thus, with an eye toward increasing its bottom line, CCA has floated a proposal to prison officials in 48 states offering to buy and manage public prisons at a substantial cost savings to the states. In exchange, and here’s the kicker, the prisons would have to contain at least 1,000 beds and states would have agree to maintain a 90% occupancy rate in the privately run prisons for at least 20 years.

The problem with this scenario, as Roger Werholtz, former Kansas secretary of corrections, recognizes is that while states may be tempted by the quick infusion of cash, they “would be obligated to maintain these (occupancy) rates and subtle pressure would be applied to make sentencing laws more severe with a clear intent to drive up the population.” Unfortunately, that’s exactly what has happened. Among the laws aimed at increasing the prison population and growing the profit margins of special interest corporations like CCA are three-strike laws (mandating sentences of 25 years to life for multiple felony convictions) and “truth-in-sentencing” legislation (mandating that those sentenced to prison serve most or all of their time).

“And this is where it gets creepy,” observes reporter Joe Weisenthal for Business Insider, “because as an investor you’re pulling for scenarios where more people are put in jail.” In making its pitch to potential investors, CCA points out that private prisons comprise a unique, recession-resistant investment opportunity, with more than 90% of the market up for grabs, little competition, high recidivism among prisoners, and the potential for “accelerated growth in inmate populations following the recession.” In other words, caging humans for profit is a sure bet, because the U.S. population is growing dramatically and the prison population will grow proportionally as well, and more prisoners equal more profits.

However, while a flourishing privatized prison system is a financial windfall for corporate investors, it bodes ill for any measures aimed at reforming prisoners and reducing crime. CCA understands this. As it has warned investors, efforts to decriminalize certain activities, such as drug use (principally possession of marijuana), could cut into their profits. So too would measures aimed at reducing the prison system’s disproportionately racist impact on minorities, given that the incarceration rate for blacks is seven times that of whites. Immigrants are also heavily impacted, with roughly 2.5 million people having been through the immigration detention system since 2003. As private prisons begin to dominate, the many troubling characteristics of our so-called criminal justice system today—racism, economic inequality, inadequate access to legal representation, lack of due process, etc.—will only become more acute.

Doubtless, a system already riddled by corruption will inevitably become more corrupt, as well. For example, consider the “kids for cash” scandal which rocked Luzerne County, Penn., in 2009. For ten years, the Mid Atlantic Youth Service Corporation, which specializes in private prisons for juvenile offenders, paid two judges to jail youths and send them to private prison facilities. The judges, who made over $2.6 million in the scam, had more than 5,000 kids come through their courtrooms and sent many of them to prison for petty crimes such as stealing DVDs from Wal-Mart and trespassing in vacant buildings. When the scheme finally came to light, one judge was sentenced to 17.5 years in prison and the other received 28 years, but not before thousands of young lives had been ruined.

No matter what the politicians or corporate heads might say, prison privatization is neither fiscally responsible nor in keeping with principles of justice. It simply encourages incarceration for the sake of profits, while causing millions of Americans, most of them minor, nonviolent criminals, to be handed over to corporations for lengthy prison sentences which do nothing to protect society or prevent recidivism. This perverse notion of how prisons should be run, that they should be full at all times, and full of minor criminals, is evil.

Constitutional attorney and author John W. Whitehead is founder and president of The Rutherford Institute. He can be contacted at johnw@rutherford.org. Information about the Institute is available at http://www.rutherford.org.

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