No Easy End to Prison Profiteering
Aug 25, 2016
5 Min read time
The DOJ says it will stop using private prisons. The truth is more complicated.
Last week a string of ten words nearly broke the Internet: “Justice Department says it will end use of private prisons.” Within minutes pundits from across the political spectrum—from FOX News to MSNBC—lauded the announcement as historic and unprecedented.
I was pleased, and skeptical.
In her policy memo “Phasing Out Our Use of Private Prisons,” Department of Justice (DOJ) Deputy Attorney General Sally Yates directed the Federal Bureau of Prisons (BOP) to “decline to renew [agreements] or substantially reduce [their] scope” as each private prison contract expires. The policy, according to Yates, represents “the first step in the process of reducing—and ultimately ending—our use of privately operated prisons.”
Some incisive commentators quickly and rightly noted that Yates’s directive only affects 13 BOP facilities owned and/or operated by Corrections Corporation of America (CCA), The GEO Group (GEO), and Management and Training Corporation (MTC), which altogether hold roughly 22,000 individuals and account for 11 percent of the BOP’s total prisoner population. Many also correctly observed that the DOJ memo is not inclusive of state and local jurisdictions or of other federal agencies, including Immigration and Customs Enforcement (ICE)—the government body that relies most heavily on CCA, GEO, and MTC—or the U.S. Marshal Service (USMS).
In short, Yates’s memo calls for the prospective relocation of 22,000 prisoners—a figure that represents approximately 1 percent of the entire U.S. prison population—from “private” facilities to “public” facilities over the next several years as contracts expire. The memo does not recommend that any government agency pursue the objective of prisoner population reduction.
As an advocate for the wholesale eradication of companies like CCA, GEO, and MTC, I certainly welcome such an announcement. The DOJ’s directive, at the very least, is a symbolically meaningful move; the gravity of it was not lost on investors, whose anxious trading caused the value of CCA and GEO stock to plummet by close to 40 percent following the memo’s release. I worry, though, about the Internet’s disproportionate celebration relative to the memo’s probable policy outcome and, perhaps more importantly, the latent misunderstanding about “private” prisons that seems to lurk behind all of this.
Public and private prisons are both driven by profit. Private prisons simply expand the state’s capacity to make money from punishment.
A close reading of the August 2016 Office of Inspector General (OIG) report entitled “Review of the Federal Bureau of Prisons’ Monitoring of Contract Prisons,” on which Yates’s directive is based, yields conclusions less “damning” than suggested by many headlines. The authors of the report conclude that in six of the eight categories examined—contraband, reports of incidents, lockdowns, prisoner discipline, telephone monitoring, selected grievances, urinalysis drug testing, and sexual misconduct—“contract prisons incurred more safety and security incidents per capita than comparable BOP institutions.” However, a systematic review of the report’s data reveals that—with the exception of cell phone confiscations, lockdowns, and telephone monitoring—CCA, GEO, and MTC-operated facilities are chillingly similar to BOP facilities. In fact, the report shows a significantly higher death rate at BOP facilities relative to contract facilities.
To be clear, I am in no way defending “private” prison companies or their practices. I am no friend of the industry. My argument, rather, is that in order to believe that Yates’s directive represents a sea change in U.S. carceral policy, as many contend, one would have to believe in a deep material distinction between “public” and “private” prisons. In reality, this boundary does not exist.
In fact, I suggest purging notions of “private” and “for-profit” prisons from our scholarly, journalistic, and activist lexicon. Why? Because “public” and “private” prisons are not politically or economically discrete, as they ineluctably commingle the state with the marketplace, and partake in similar profit-generating, extortionist schemes. So-called “public” prisons are often governed by dictates of profit generation that run perpendicular to the goal of prison-population reduction. Such a truth forcibly challenges any hard-and-fast distinction between “public” and “private” prison models. “Private” prisons, therefore, are not problematic because they are radically different in kind, but rather because they dramatically expand and extend the state’s capacity to criminalize and to punish.
Moreover, so-called “public” prisons often contract significant services, including construction, to private companies, and even receive funding from private investors, further muddying distinctions between “public” and “private.” That is, government agencies routinely utilize sophisticated private, anti-democratic financing instruments to borrow billions of dollars to build prison facilities that the public neither wants nor can afford. Though this practice is fairly common, California provides an illustrative canvas for the examination of the private (read: corporate) financing of “public” prisons.
In the early 1990s California voters began rejecting proposals to finance prison construction with general obligation (GO) bonds, a type of debt issuance that almost always requires voter approval via referendum. In response, state treasurers, corporate lawyers, and investment bankers created a new financial instrument—the lease revenue (LR) bond—under which one state agency borrows money to construct prisons, then “leases” them back to the prison system, all while circumventing the will of the people, since lease revenue bonds do not require voter approval.
Since the late 1990s the California State Treasurer’s Office has packaged and sold roughly $3 billion in lease revenue bonds for local jail and prison construction and renovations. And since just 2014 $800 million in California’s prison bonds has been underwritten and purchased by Morgan Stanley, Goldman Sachs, and Barclays.Unlike profit-generating prison operators such as CCA, GEO, and MTC, investment banks make money whether or not the prisons they fund are “useful” or solvent. In fact, according to a 2009 investigative report by Tom Barry, “these [arrangements] are speculative ventures only for bondholders . . . because agreements signed with federal agencies do not guarantee prisoners.” That is, their pockets will grow whether or not prison facilities are occupied.
It is against this backdrop that my skepticism of the DOJ’s announcement, and of the subsequent celebration, emerges. While I welcome the DOJ’s directive not to renew BOP contracts with CCA, GEO, and MTC, real progress depends on rejecting the false and unhelpful distinction between “public” and “private”/“for-profit” prisons. Dramatically expanding the category of “private”/“for-profit” prisons to include “public” facilities funded by and contracted with corporations implodes the seductive claim that prisons operated by CCA, GEO, and MTC are fundamentally worse than—or even functionally different from—prisons operated by federal, state, and municipal agencies.
Neither the DOJ’s elimination of contracts with publicly-traded prison operating companies, nor the resulting relocation of some prisoners, will reduce our prison population or engender a national conversation about who, why, and to what end we punish. Our prison population can only be reduced by a collective commitment to reorienting every element of our criminal-processing pipeline—life conditions and access to public services, policing, interrogation and investigation, pretrial, detention, trial, conviction, sentencing, incarceration, and release—toward the explicit goal of population reduction. In the words of scholar and activist Ruthie Wilson Gilmore, if we’re going to fight, then we better fight to win.
August 25, 2016
5 Min read time