Trends in US Incarceration

Privatization of Prisons

Prisons should no longer be like "Holiday Inns" and prisoners should be required to work 10 hours per day, declared presidential candidate Senator Phil Gramm (R-TX) to rounds of applause on the campaign trail (Lacayo, 1995: 2).

That's not to say that hotels cannot become prisons. Enterprising business people (including former sheriffs, prison wardens and FBI agents) have put their market know-how into private sector ventures, converting former military bases and hotels into for-profit prisons. Some specialize in housing prisoners from states with overcrowding problems, sending out marketing representatives to pitch their facilities and lobby legislators in states where private facilities are still not legal (Bryce, 1993: 8). In March 1984, for example, the New Mexico Legislature legalized the right of counties to contract with private jails after Colorado oil and cattle magnate O. Wesley Box orchestrated a lobbying campaign. Following the change in law, Box had takers in seven rural counties (Bryce, 1993: 8).

"Virtually unknown a decade ago," by 1993 private prison facilities could be found in 16 states (Bryce, 1993: 8). The private prison population is increasing faster than those housed by the government: In 1993 while the overall prison population grew at 8%, the number of privately-run prison beds climbed 30% (Univ. of Florida, Private Prisons Project, cited in Bryce, 1993: 8). "...As of March 1996, a total of 47 private correctional facilities ... were being operated or being planned for operation by private companies in various states. These ... facilities are located in 12 states. However, the most use (actual or planned) of privatized correctional facilities is in 3 states--Texas, with 21 facilities; Florida, with 7 facilities; and California, with 5 facilities" (GAO, 1996: 32). By 1993 25 states, the District of Columbia, and Puerto Rico enacted legislation allowing contractors to run correctional facilities. 'That means that since 1980, the number of areas where prison contracting is legal has grown from zero to half the nation. I don't think anybody knows how big this industry can get" (Univ. of Florida, Private Prisons Project, cited in Bryce, 1993: 8). The growth potential has been alluring to investors. In 1997 90 private prisons were reportedly housing 50,000 inmates (ACLU, 1997). Privatization of the juvenile corrections sector has occurred at the fastest rate (Feeley, 1991, cited in Christie, 1993: 99).

A 1993 comparative, cost-efficiency study of three privately operated facilities, which found them to be operating more efficiently than those publicly run, described the trend:

"Most proponents of the privatization of prisons are pressing for the production of prison services (management of entire facilities) to be shared with the private sector and the responsibility for provision of prison services to remain with the government" (Sellers, 1993: 16).

Privatization is portrayed as a means of creating a cheaper, more efficient system. A direct path to private industry is also perceived as a way to put idle prisoners, directly in the hands of people experienced in putting people to work (Sellers, 1993: 47). Historically there has been a link between private industry and prisons, going back to the British workhouses where "a tradition of confinement at productive labor" was established (Sellers, 1993: 48). (Work programs for inmates will be discussed in detail below.)

Skeptics worry that "the delegation by government, to private business, of the power to imprison and, necessarily, the power to use force to maintain order, prevent escape... raises troublesome legal and ethical questions. Worrisome too is the creation of an entire industry with pecuniary interest in maintaining, or even increasing, the number of people incarcerated" (Morris, 1995: 255). Observers find only "...there is mixed evidence as to whether they are fulfilling their initial promise of less-expensive, more efficient service" (Morris, 1995: 256). Nevertheless, privatization continues to be seen as a remedy for inefficiency, though obtaining liability insurance has been a problem in some cases, as in Kentucky and New Mexico where private contractors had to pull out of negotiations following their failure to secure such coverage (Sellers, 1993: 61).

In 1995 the Illinois Legislature's Commerce and Industry Committee passed a bill to privatize the state's prisons. "...The legislation...would have had the prisoners themselves erecting their own jail. Proponents claim that taxpayers can save 25 percent on construction costs, but 'there's only one place they're getting that kind of money, and that's from the workers' paychecks," said Illinois AFL-CIO President Donald Johnson. "Passage of this bill would be devastating to those who construct, repair and maintain our prisons, as well as to the correction officers" (quoted in Kameras, 1995: 3). The Florida legislature is currently debating whether or not to privatize the state's entire prison system. Currently state law only allows new facilities the option of privatization (AP, 1997c: 5).

California, Texas and Florida--incarceration's Big Three provide examples of the ethical problems and conflict of interest issues presented by a "growth industry" based on deprivation of rights and free movement. As in any for-profit industry "questionable" business practices employed to boost venues come into question, as well (Fitzgerald 1988, cited in Sellers, 1993: 59).

An example of private interests at odds with taxpayer demands for price-cutting and efficiency is the case of Jacksonville, Florida developer William McArthur, who donated 468 acres of land assessed at $292,000 to the state for use as a prison because he "always tried to be a pretty good corporate citizen." McArthur, interested in developing the adjoining 1,000 acres, stipulated that a $1.2 million 5-mile road be built to access the site. He was then paid $2 million by the state toward the construction of a private water and sewer plant, which would serve the prison (and his own property). At that time the state agreed to purchase water and sewer services from McArthur's Winco, Inc. for at least $258,000 a year for 20 years, based on an occupancy rate of 1,200--five times more than 250 inmates currently housed in the facility that opened three years after construction began, at a cost of $12 million over budget. "For about $300,000 in free land, taxpayers are going to give millions of dollars worth of financial benefit," remarked an environmental lobbyist who lives near the prison site (quoted in Fineout, 1997: 4B). CCA, the industry leader, has also been investigated for alleged bribes and kickbacks paid in conjunction with being awarded a million-dollar contract to operate a Tennessee facility (Smith, 1993b: 1).

Standards of training and conduct of employees at private facilities, where the emphasis has been on cost cutting and efficiency have also come into question. Critics of private prisons say that cost-cutting leads to dangerous and unsanitary conditions for inmates and guards. After just five months Eloy Detention Center, a 1,000-bed, medium-security facility located in the Arizona desert, run by Louisville, KY-based Concept Inc. for the Federal government, was the scene of riots two months in a row. Dennis Palumbo, Arizona State University criminal justice professor, notes that the long term costs of private prisons, in terms of taxpayer dollars (local, state and federal agencies were sent into Eloy during the riots) and with regard to the health and safety of the staff might be higher (cited in Davidson, 1994: 1).

In 1997, privately-run facilities again came under scrutiny when a training videotape was publicly aired, showing guards, employed by Capital Correctional Resources Inc., using stun guns and dogs on inmates. The prisoners came from Missouri, a state looking to alleviate overcrowding in its own prisons. With space to spare, the Brazoria County, Texas Detention Center rented out part of its facility to Capital Correctional Resources. Following the scandal, Missouri recalled all of its 415 inmates, leaving Brazoria County to lament the loss of $1.8 million in revenue and contemplate a property tax hike to make up the difference. Meanwhile, eight inmates filed suit against the state of Missouri, Missouri's top prison official Dora Schriro, Capital Correctional Resources and one of the guards, charging excessive use of force and cruel and unusual punishment. With no out-of-state prisoners to guard, 100 employees at the facility were immediately laid off (CNN, 1997a, 1997b, 1997c, 1997d).

Though the potential for problems always exists once prisoners arrive, problems can also arise when prisons stand empty. Such was the case in West Texas where a prison was built and no prisoners turned up. Ray Hutchinson, the husband of Senator Kay Bailey Hutchinson (R-TX) "is a defendant in a $70 million lawsuit that alleges he and others were part of a conspiracy to defraud bondholders. The bonds were issued in 1989 to build private prisons in six Texas counties. But the state refused to use the prisons after they were built. The bond debt went unpaid" (Bryce, 1993: 8). In Pecos, Texas inmates came (from Washington, D.C.) but proved to be too unruly for the Diversified Municipal Services (DMS)-operated facility where the jail was reportedly "unmanageable" as "gangs of baseball-bat-wielding inmates" roved throughout the facility, while others brewed alcohol in the showers or opted to escape. When the D.C. authorities did not pick up their option to renew the contract DMS moved on. The county was left with an empty jail and $4.5 million in defaulted construction bonds (Smith, 1993d: 1). So much for economic development.

As discussed in Chapter Two, a characteristic of the internationalization of capital has been the emergence of a global assembly line, as production is spread across various locales. Most maquiladoras along the border are owned by foreign multinationals. This characteristic would seem to distinguish the EPZ factory from the prison industry's (i.e., state facilities) relationship to the economy. But, as the prison industry in the U.S. becomes a site for privatization it has spawned the emergence of incarceration MNCs, and a role for U.S. inmates in an emerging global security industry. For example: Wackenhut Corrections Corp., the second largest private prison corporation, controlled 18% of the private U.S. prison beds in 1993 (Bryce, 1993: 8), is in fact a global security conglomerate (earnings of $630.3 million in 1992). In addition to the 11 facilities in five U.S. states and one in Puerto Rico, Wackenhut operates two medium security prisons in Australia, two facilities in the UK and a youthful offender center in Canada, and reports "prospects for additional facilities in the U.S. South America, Europe, and the Pacific Rim." Corrections Corporation of America, the largest of the private prison companies, operates 21 detention facilities, housing over 9,000 prisoners in six states, the UK. and Australia (Smith, 1993: 4, Bryce, 1993: 8). Industry "insiders say that half of Britain's prisons may ultimately be run by private concerns" (Bryce, 1993: 8).

Factories with Fences

"Prisons aren't an industry. They're an opportunity for industry. Choosing the right industrial program can turn your correctional institution into a productive revenue center." Indiana Chair Frame advertisement, Correctional Industries Association Newsletter, Summer 1997:18

The legality of using prison labor in the U.S. can be traced back to the formation of the nation itself. The 13th Amendment to the U.S. Constitution states that, "Neither slavery nor involuntary servitude, except as punishment for crimes whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction."

Though not immediately recognizable as a prized industrial bastion, prisons have an historical link to industrialization in the United States. "The Newgate Prison in New York, using the Auburn System, in 1802 accrued a surplus of funds by contracting with outside manufacturers to use prison labor to produce various goods. In 1825, Auburn, Wethersfield, Charlestown, and Baltimore prisons were declaring profits from prison-contracted labor industries (McKelvey 1968). In 1828, Auburn and other prisons proclaimed themselves self-sufficient (Lewis 1967). The chief product of the New Jersey State prison was nail-making. Proceeds from nails sold by the keeper were used to make the prison self-sufficient (Barnes 1965)" (Kuchel, 1975, cited in Lightman, 1982; Sellers, 1993: 50). In Oklahoma, the first attempt at industrialization took place in the state's prisons, an example that illustrates how "production and profit were the cornerstones of penal policy" (Conley, 1980: 259, 257).

In the early 1800s as the Vermont state prison system grew, inmates in Windsor were supplied with looms and soon made the prison self-supporting, even turning a profit (Smith, 1996: 103). "Between 1841 and 1858 the contract labor method flourished and enriched the coffers of most prisons" (Sellers, 1993: 50). The Civil War put a damper on the use of contracted prison labor, as the system was likened to slavery. The growth of unions resulted in restrictions on inmate production (Sellers, 1993: 50). Indeed, it was the 1887 congressional ban on leasing federal prisoners to private industry which made federal convicts less lucrative tenants for state officials, and gave rise to a separate federal prison system (Rotman, 1995: 186). According to the American Correctional Association prison industries "...were sharply curtailed during the depression. High unemployment prompted 33 states to pass laws prohibiting the public sale of convict-made goods. Such prohibitions resulted in wardens losing a significant source of revenue to run their prisons. More than ever, they became dependent on state legislatures for funds" (Bencivenga, 1984: 18). In 1929 the Hawes-Cooper Bill imposed a ban on the intrastate transport of prison-made goods and the 1935 Ashurst-Summers Act outlined criminal sanctions for the interstate sale of prison goods.

Opposition to prison labor in the contemporary era confined prison industries to a "state use" system whereby prison goods and services could only be offered to government agencies (Morris, 1995: 246). This was criticized by those who perceived private industry to be the best at organizing, implementing and managing work schemes (the argument used to support prison privatization, as outlined above). "Restrictions of this nature have also hindered the development of vocational training programs, which work best when they can be linked to productive employment," writes Morris, who believes that correctional administrators and prisoners both agree on the need for productive employment (1995: 246). Nevertheless, state-use systems quietly maintained a hefty hold on the market, in some states literally a monopoly, as legislation required public agencies to buy their products. In 1934 Congress created the Federal Prison Industries Inc. "to employ and train Federal inmates through a diversified program providing products and services to other federal agencies" (Budget of the U.S. Government, Fiscal Year 1997: 10). "During World War II, the federal prison industries were greatly expanded to make goods for the war effort, including shoes, mattresses, bomb racks, and bomb fins" (Rotman, 1995: 188). By the early 1970s Federal Prison Industries Inc. was reported to be "...far and away the most profitable line of business in the country. Profits on sales in 1970 were 17 percent (next highest is the mining industry with 11 percent)--the average for all U.S. industries is 4.5 percent" (Mitford, 1974: 215).

By 1996 Federal Prison Industries, Inc. had returned $82 million to the Treasury. It operates as a self-sustaining corporation with revenues "derived entirely from the sale of products and services to other Federal agencies (That year UNICOR, the government agency that runs the Federal prison industries, employed 20% of the 104,000 federal inmates, making "25 percent of the federal government's office chairs, 50 percent of the federal government's brooms and paintbrushes, 20 percent of its electrical harnesses, 20 percent of the electrical wiring used by Federal contractors" (Parenti, 1996c: 2). With a swelling inmate population state-use industries have grown to such an extent that, at the federal level, the number of trade shows they stage each year has doubled (Parenti, 1996a: 2).

To clarify: Prison industries fall into four categories: (1) private sector employer (2) state-use industries (such as UNICOR); (3) private-industry customer (state-owned factory); and (4) state-owned, privately-operated (such as the PRIDE program discussed below). In 1992, about 81,000 inmates were employed in prison industries (CURENY, 1997). Meanwhile, "...nearly all prisoners already work--91% in the federal system, 70% in the state, according to a 1991 report by the Bureau of Justice Statistics. Those who don't work typically include the medically or mentally unfit, as well as the most dangerous offenders...The average prisoner's workweek is 34.5 hours. Federal inmates put in 37.5 hours..." (emphasis added, BJS, 1993: 4).

Just as privatization is perceived as a sensible route toward more efficient, cheaper and better-managed prisons, it is also seen as a way to improve prison industries. In a 1996 report on the Prison Industry Authority (PIA), the semi-autonomous authority that runs California's prison enterprises, the state's Legislative Analyst's office called for privatization. Though privatization of PIA would mean giving up the monopoly on state government business, such a move was recommended as a way to encourage a more entrepreneurial spirit and pave the way for more private-sector partnerships (LAO, 1996:1).

In Florida, inmates who work in institutional work and roadwork are unpaid, but those working in the PRIDE program (57 industries), the first self-supporting prison industry in the nation to be managed and operated by the private sector (private non-profit organization), earn about 50 cents per hour. This model is being considered in California for its PIA program. In 1997, 4900 of Florida's 65,000 inmates were participating in the PRIDE program (40,000 inmates are eligible for work) (Tallahassee Democrat, 1997; Associated Press, 1997b). Proponents stress that the PRIDE program is not funded by taxpayer dollars, it "returns an average of $1 million to the state and contributes about $40 million a year to Florida's economy. Products are sold to the state, but the state legislature is being pressured to ease such restrictions. "Our market place in the past has been tax entities--cities, counties, the state and school boards," explains PRIDE business manager Brian Connett. "We see the market actually shrinking and since the number of inmates is increasing we need to find other avenues to put inmates to work" (quoted in Tallahassee Democrat, 1997). A joint venture with a furniture manufacturer is now in the pilot stages (Associated Press, 1997b).

Meanwhile, private sector use of inmate labor has gradually grown as legal barriers have been removed.

In 1979 Congress enacted "Public Law 96-157...creating the Private Sector/Prison Industry Enhancement Certification Program (PS/PIEC). The program authorizes correctional agencies to engage in the interstate shipment of prison-made goods for private business use if: (a) Inmates working in private sector prison industries are paid at a rate not less than the rate paid for work of a similar nature in the locality in which the work takes place; (b) Prior to the initiation of a project local unions are consulted; and (c) The employment of inmates does not result in the displacement of employed workers outside the prison, does not occur in occupations in which there is a surplus of labor in the locality and does not impair existing contracts for services" (Sexton, 1995: 3).

Currently there are 38 certified PIE jurisdictions (35 states, 3 counties) employing 2,280 inmates (PIE quarterly report, March 1997). The purpose of the program is to "encourage States and units of local government to establish employment opportunities for prisoners that approximate private sector work opportunities" (BJA, 1995: 1). This is done by exempting "State and local certified departments of corrections from normal restrictions on the sale of prisoner-made goods in interstate commerce....the program lifts existing restrictions on these certified corrections departments, permitting them to sell prisoner-made goods to the Federal government ... exceeding the $10,000 maximum normally imposed on such transactions" (BJA, 1995: 1).

PIE inmate workers "...are volunteers and all earn at least minimum wage, from which they pay state and federal taxes, contribute to a victim restitution fund, and help pay for their room and board. The leftover money is then put into a savings account, from which inmates can send money to their families or use...when they are released" (Bryce, 1993: 9). Prisoners benefit from developing job skills while providing employers with "a stable and readily available workforce" and "manufacturing space at greatly reduced rates." The public benefits, as PIE is "a way to reduce the escalating cost of crime" (BJA, 1995: 2). These joint ventures follow three models: (1) the Manpower model (named for the nationwide temp agency, mentioned in Chapter Two) where inmates are employed and trained by the prison, but supervised by the company; (2) the employer model, in which the inmates are trained, employed and supervised by the company (an example of a PIE program following this model is the airline TWA's use of California inmates as reservation agents; which in turn was based on Best Western's use of female inmates in Arizona to do similar work); and (3) the customer model, in which the prison employs, supervises and trains the inmate workers (least risk for the company, most risk for the prison) (Sexton, 1995:11). Note that while there are 106 PIE-certified joint ventures, there are many more--1,224 ventures, with 74,168 work assignments--that are not certified (Mumola, 1997a). While PIE programs stipulate a prevailing wage and the provision of workers benefits, non-PIE programs may differ.

The first partnership between a private prison and private industry started in 1994 in Louisiana, when a CCA prison teamed up with Company Apparel Safety Items (CASI), a work-clothes manufacturer, in a PIE-certified venture that currently employs 23 inmates (Parenti, 1996b: 29; PIE Quarterly Report, 1997: 7). In California in November 1990 voters approved Proposition 139, the Inmate Work Initiative that allows for private sector joint ventures that use prison inmates. Today California uses more inmates (335) in PIE-certified joint ventures than any other state.