For-Profit Justice: How the Private Prison Industry and the Criminal Justice System Benefit from Mass Incarceration

AMANDA ATWELL

Although scholars and activists have long demonstrated biases in the criminal justice system by social class, Atwell highlights a relatively new trend in criminal justice that serves to exacerbate these biases: the privatization of prison facilities, services, and goods. Atwell shows how the relationship between the private corporations (which seek to profit from crime and punishment) and government (which ostensibly seeks to administer punishment in a just way) disproportionately disadvantages vulnerable populations and contributes to increasing prison populations around the country. She questions whether financial incentives based in the profit motive act as an incentive to bring people into the system, where they serve as a commodity, reducing any inherent fairness in the system.
Mass incarceration and the use of prisons to re- dress social and economic problems have become ubiquitous features of contemporary U.S. society. Although popular crime and drama television shows such as Law and Order help to normalize high incarceration rates, the United States is quite the anomaly when it comes to the criminal justice system. The United States im- prisons approximately 760 people per 100,000 citizens, or 2.3 million individuals, a rate higher than any other country in the world including germany, Japan, South Korea, Russia, China, a Iran (Shapiro, 2011). Put another way, the United States represents 5 percent of the world's total population, yet contains 25 percent of the World’s total prison population (Liptak, 2008b).
The United States is also the only country that actively sentences youth to life in prison without the possibility of parole (The Sentencing Project, 2014). Since the 1980s, states across the country have been contracting with private corporations that operate on a for-profit basis to house, feed, and care for the exploding prison population (Cheung, 2004; Shapiro, 2011). In this reading, I trace the origins of mass incarceration in the United States (or “prison boom”) to the war on drugs and analyze the subsequent privatization of prison facilities, services, and goods as an exploitative partnership between the state and private corporations.
The 1980s marked the decade in which the government began to deregulate its responses to mental health issues (like drug addiction) while simultaneously implementing private prisons across the country for the first time. In fact, the first private prison contract was awarded to the Corrections Corporation of America (CCA) by the state of Tennessee in 1984 (Cheung, 2004). The incentive to imprison rather than to rehabilitate drug users was fueled by federal initiatives such as the “war on drugs” (coined by President Nixon and intensified by President Reagan), which has helped the U.S. prison rate to more than quadruple since 1980 (Klein and Soltas, 2013). Since the official launch of the war on drugs in 1982, the United States has experienced a 500 percent overall surge in its incarceration rate, and the length of sentences has simultaneously increased (The Sentencing Project, 2013). This trend is evidenced, in particular, by drug conviction sentences. For example, in 1986 the average time spent behind bars for a drug conviction was twenty-two months; by 2004 this figure jumped to an average of sixty- two months (The Sentencing Project, 2013). As evidenced by the Clinton and Obama presidential administrations, the war on drugs has truly been a bipartisan effort, championed by Democrats and Republicans alike. Currently, more than half of those in prison are serving time for drug convictions. In 1980 there were 41,000 people incarcerated for drug offenses and by 2011 that number had skyrocketed to more than half a million (501,500) (The Sentencing Project, 2013). While diligently filling prisons, the war on drugs does not seem to have curbed Americans' appetite for drugs. According to the White House Office of National Drug Control Policy, drug use remains a relatively stable feature of U.S. society; in 1985, 34.4 percent of those polled reported illegal drug use at least once during their lifetime, and by 2001 that number had increased to 41.7 percent of those polled (Lloyd, 2002).
American Civil Liberties Union (ACLU) staff attorney David Shapiro (2011) and Amy Cheung (2004) of the Sentencing Project argue that the relatively recent trend of private prison expansion further exacerbates the preexisting
moral failings of the criminal justice system by financially incentivizing mass incarceration. In other words, when arresting and imprisoning people are profitable enterprises, high incarceration rates become a self-fulfilling prophecy. As states across the country have faced an exploding prison population along with rapidly increasing crime-control and law enforcement costs over the past thirty years, legislatures turned to the private sector in an attempt to defray some of their financial burden and, in some cases, even generate income. The burgeoning private prison industry is composed of multiple layers of shareholders and stakeholders who have a vested interest in maintaining or increasing incarceration rates because their profits are dependent on keeping prison beds full (or meeting “occupancy requirements”), regardless of actual crime rates (Cheung, 2004; Shapiro, 2011; Kroll, 2013). In fact, the private prison incarceration rate increased by 1,600 percent between 1990 and 2009 (Shapiro, 2011), reaping huge profits for two of the largest private prison companies, CCA and the GEO Group. In 2012, CCA reported revenue of $1.7 billion (Takei, 2013). During the same year, the chief executive officer from CCA took home $3.7 million and that of the GEO Group took home $5.7 million (Lee, 2012). Private prison corporations profit not only from their contracts with states, but also from unmet occupancy quotas (e.g., unfilled beds). These quotas create an incentive for the state to maintain and increase arrest rates to avoid financial penalties, regardless of crime rates (Kirkham, 2013).
The economic burden of operating prisons in the era of mass incarceration increasingly falls on taxpayers, although the private prison model has been adopted to help defray the costs of incarceration to states. More than half (fortyone of sixty-two) of the private prison contracts across the country require that prison beds remain 90 to 100 percent full or the state will face a financial penalty, which ultimately must be paid by the taxpayers (Kirkham, 2013). The taxpayers of the state of Arizona recently paid the private prison company Management and Training Corporation $3 million in fees because the state failed to maintain the 97 percent occupancy requirement (Hall and Diehm, 2013). In states such as Arizona, the cost of operating a private prison cost the taxpayers $3.5 million more than the cost to operate a state-run facility (Shen, 2012).
Analyzing the racial makeup of private prisons reveals another layer of inequality that is difficult to ignore. In 2013, approximately 130,000 people were held in for-profit prisons run by corporations such as CCA, the vast majority of whom were people of color (Wade, 2013a, Quandt, 2014). Although the increasingly popular trend of privatizing the criminal justice system may seem like a common-sense, efficient way to handle social problems in our society, the consequences that result from these systems being privatized are disastrous and far reaching. Although illegal drug use remains slightly higher among white Americans (Knafo, 2013), men and women of color are disproportionately targeted for arrest and convicted of drug crimes. In 2009, for example, 79 percent of those convicted in crack cocaine cases were black (Kurtz- leben, 2010). According to the Bureau of Justice Statistics, black women are arrested at a rate three times higher than white women and two times higher than Latina women. These stark numbers reveal that people of color are disproportionately represented in the profitable private prison industry (Wade, 2013a; Quandt, 2014).
Privatization is also a particularly prominent feature of detention centers for youths and immigrants. Forty percent of all juvenile offenders are committed to private facilities, which have been found to be rife with corruption and dangerous conditions ranging from unsanitary food to cases of sexual abuse by prison staff against the youth prisoners (Kirkham, 2013). The public-private partnership between government and prison corporations is also clearly evident in recent anti-immigration backlash. A statement from the National Network for Immigrant and Refugee Rights (2010) explains that “Arizona's controversial immigration law SB1070' was developed by lawmakers in collaboration with corporations that build private jails to incarcerate immigrants; these companies stand to earn considerable profits from the growing trend of detaining immigrants for enforcement and deterrence.” Research demonstrates that people of color (Wade, 2013a), youth (Kirkham, 2013), immigrants (National Network for Immigrant and Refugee Rights, 2010), and the poor (Liptak, 2008a) are particularly vulnerable to exploitation by the private prison industry.
The current state of mass incarceration also poses troubling implications for people and institutions that are, at least theoretically, beyond the scope of the criminal justice system. In addition to the private prison subsidies that burden taxpayers, the restructuring of state and local government budgets that accompany private prison expansion tend to prioritize the funding of incarceration over education. According to a recent report by the Center on Budget and Policy Priorities, between 1986 and 2013 state spending on prisons increased by 140 percent, whereas state spending on K-12 education increased by only 69 percent (Klein, 2014). During this same time period, state spending on higher education increased by just 6 percent (Klein, 2014). Across the nation, states utilize more public funds for housing prisoners than for educating public school students. For instance, the state of Georgia spends an average of $10,805 per public school student annually, compared to an average of $21,039 per inmate (Klein, 2014). This disparity is even greater in states like California, which spends an average of $11,420 per public school student each year, compared to an average of $44,421 per inmate annually (Klein, 2014).
In addition to the profit gained from arresting, booking, and housing prisoners, some of America's most iconic companies (Nordstrom, Eddie Bauer, Motorola, Microsoft, Victoria's Secret, Compaq, IBM, Boeing, AT&T, Texas Instruments, Revlon, Macy's, Target stores, Nortel, Hewlett Packard, Intel, Honeywell, etc.) contract with prison factories such as UNICOR that employ prisoners in both state and private facilities to manufacture some of our most coveted consumer items for pennies an hour (Seandel, 2013; Wade, 2013b). In fact, UNICOR is the country's largest prison factory corporation, operating 110 factories across 79 federal prisons, with the Department of Defense representing the company's most profitable contract (Sean del, 2013). It is estimated that prisoners working for UNICOR manufacture 100 percent of military identification tags, helmets, ammunition belts, and bulletproof vests, among other national defense equipment (Seandel, 2013). Furthermore, trading private prison stock has become profitable for those on Wall Street, with corporations such as Allstate, American Express, General Electric, Goldman Sachs & Co., and Merrill Lynch investing millions annually in the top private prison corporations (Silverstein, 2000; Pelaez, 2014). Even the Gates Foundation, the world's largest private foundation that awards grants for initiatives based in education, health, and world population, invested $2.2 million in the GEO Group (Park, 2014).
Moreover, companies such as the Dial Corporation also bid to win contracts for their products to be used or sold within prisons, whereas companies like AT&T charge exorbitant rates for phone calls made from prison, sometimes resulting in phone bills up to $20,000 for family and friends of prisoners (Martin, 2013). Reporting for the New York Times, Clifford and Silver- Greenberg (2014) found that business arrangements between state detention centers and private companies are a common feature of the criminal justice system in nearly every state. Private companies such as JPay and Global Tel-Link control phone, Internet, and money order services in prisons across the country, where prisoners are beyond the reach of consumer protection laws and are viewed as business opportunities, and prisons are regarded as money-making ventures rather than as places for rehabilitation or retribution (Clifford and Silver-Greenberg, 2014). Telephone calls commonly start at $3.15, sending an email outside of prison walls costs $0.33 or more, and transferring money to prisoners for their commissary needs begins at $4.95 (Clifford and Silver-Greenberg, 2014). States profit from these partnerships as well. For instance, in Baldwin County, Alabama, 84 percent of the gross revenue from all telephone calls made in jail is given back to the Sheriff's Department (Clifford and Silver-Greenberg, 2014). Of course, attaching high fees to the most basic services places the heaviest burden on prisoners who are poor, as well as their families, who struggle to find the resources to remain connected to them.
The privatization of justice even begins prior to imprisonment and is a core feature of the commercial bail bond system. Although private prisons clearly exacerbate the financial troubles that prisoners and their families must cope with, the bail bond industry presents incarcerated individuals with unique challenges. In exchange for a fee or some type of collateral, a bonds person agrees to post bail. Even if the defendant is found “not guilty” at trial, he or she still has to pay bail and the various fees the bonds person decides to charge (Eligon, 2011). In most countries outside of the United States, paying someone else's bail in exchange for a fee is illegal (Liptak, | 2008a), but for the vast majority of poor and middle-class defendants, posting bail through a bonds person means the difference between temporary freedom or remaining jailed until trial. In one Texas town, judges and bonds people were found to be colluding to ensure high bails for defendants and high profits for the local bail bond owners (Liptak, 2008b). This system disproportionately harms those without assets, most likely working-class and poor individuals, because collateral, often in the form of property, such as a house or vehicle, is required to cover the bond fees. Although our criminal justice system is founded on ideals of fairness and assumed innocence, the current structure of the system seems stacked against those without means-at every stage in the process. These unequal relationships challenge the core ideals of democracy in this nation, particularly that citizenship guarantees liberty and justice for all.
Other problems related to wealth and poverty abound in the criminal justice system. In a recent NPR special series, “Guilty and Charged,” investigative reporter Joseph Shapiro (2014) found that states across the nation are passing on court operating costs to those convicted of to those convicted of and felony charges. In addition to receiving the sentence commensurate with the crime they committed, defendants are burdened with an average fee of $2,500 (the cost associated with operating the court), because legislators fear the political backlash that could ensue from raising taxes to cover these costs. Defendants who cannot afford their court fees are typically given a longer prison sentence than those who are able to pay the fees up front because the in- ability to pay these types of fees is increasingly becoming criminalized (Shapiro, 2014). In certain cases, judges have been willing to extend a payment plan for offenders who cannot pay the full amount; however, one missed payment can result directly in jail time because this infraction is considered a violation of probation. Although some of the money collected from the fees is dispersed to victims' advocacy groups, forty-three states charge an administrative fee for court-appointed attorneys (also known as public defenders) that are typically conceived of as being a free service for indigent defendants (Shapiro, 2014). However, the incentive for states to continue charging defendants the cost of running the court system remains high because states like Michigan bring in an average $345 million a year in revenue from fees. Similarly, a recent Human Rights Watch (2014) report titled “Profiting from Probation: America's Offender Funded Probation Industry” found that across Mississippi, Alabama, and Georgia, state courts require people found guilty of misdemeanor crimes to pay their probation fees to private companies. In some cases, the only reason people are sentenced to probation is because they lack the means to pay their court fines at the time of sentencing. In addition to collecting debt owed to the court, private probation companies charge a monthly "supervision” fee, so those who take longer to pay off their debt, most often the poor, pay disproportionately more than those who have the ability to pay their fees up front (Human Rights up front (Human Rights Watch, 2014). Those who cannot afford to keep up with payments face going into debt, vehicle repossession, and abusive threats and potential jail time (Human Rights Watch, 2014). Charging defendants for the cost of operating the court system and then punishing those who cannot pay-challenges one of the basic tenants of the criminal justice system, that all people should be treated equally before the law. At each stage of the incarceration process, from posting bail, to the trial and sentencing court hearings, to prison facilities and the corporations that invest in and operate within them, the privatization of the criminal justice system contributes greatly to the exploitation of our society's most marginalized communities.
Reform advocates such as ACLU staff attorney David Shapiro (2011), along with organizations such as the National Public Service Council to Abolish Private Prisons, the Anti-Recidivism Coalition, and the National Association for the Advancement of Colored People, recommend abolishing the practice of privatizing prisons and prison services while simultaneously investing in an effort to reduce the number of people targeted for imprisonment each year. Considering that the nationwide private prison population is disproportionately representative of marginalized communities, such as youth, people of color, immigrants, and the poor, coalitions among activist groups may be particularly successful at creating viable solutions to mass incarceration. A comparative example of prison phone calls from two different states provides some insight into the effect that deprivatizing prison services may have for those burdened with rising costs. In New Jersey, where the state has a contract with a private company, a fifteen minute phone call costs $8.50; in New York, where the state does not accept commissions from telephone service providers, a fifteen minute phone call costs just $0.72. In general, evidence suggests that defendants and prisoners are at greater risk for exploitation and violence when the state attempts to defer the costs associated with operating the criminal justice system by striking deals to contract with private corporations whose central motive is profit, rather than the rehabilitation of its inmates. Investing in rehabilitation rather than incarceration may reduce recidivism and subsequently reduce the rising costs of running the world's busiest court and prison system.
Considering the pervasive nature of the private prison industry, the simultaneous implementation of several reform strategies may be necessary to effectively reduce the harm caused by the privatization of the criminal justice system. For instance, in 2013 Californians voted to amend their three-strikes law that previously mandated that individuals convicted of their third felony charge would be sentenced from twenty-five years to life in prison, no matter the severity of the crime. The amendments to this law now allow for nonviolent third-time offenders to be treated as if they were second-time offenders, potentially cutting the time spent behind bars in half (Laird, 2013). Since the law has gone into effect, nearly 200 nonviolent prisoners have been released after being allowed to petition the court for a resentencing hearing (Laird, 2013). Additionally, Washington, Colorado, Alaska, Oregon, and the District of Columbia have recently legalized recreational marijuana, creating the potential to further reduce the number of people funneled through the criminal justice system each year. Efforts to reform marijuana laws are part of a greater mission to end the war on drugs and thus have direct implications for lessening the private sector's grip on the criminal justice system. Experts from a range of disciplines, including Nobel Prize-winning economists of the London School of Economics' IDEAS Center, have realized the widespread negative outcomes that these draconian practices have caused and advocate a swift end to this endless war (Ferner, 2014). Overall, any effort aimed at reducing the current state of mass incarceration is likely to negatively impact the private prison industry and improve the life chances of some of those caught in the profit driven criminal justice system.