Private Prison Management Offers to Buy Prisons in Exchange for Occupancy Rates

Our four-year foray into the changes in correctional policies since the fiscal crisis has taught us that various states are scaling back their correctional apparatus to respond to money difficulties. California is no different. But as is the case with every regime, there are always folks who would benefit and make a quick buck from a broad social and economic problem.

This astonishing recent story in USA Today is a case in point. Many states are working on closing down their prisons for fiscal considerations. So, Corrections Corporation of America, of which we’ve written here before, is angling to purchase said prisons and operate them. But therein lies the rub:

The $250 million proposal, circulated by the Nashville-based Corrections Corporation of America to prison officials in 48 states, has been blasted by some state officials who suggest such a program could pressure criminal justice officials to seek harsher sentences to maintain the contractually required occupancy rates.


“You don’t want a prison system operating with the goal of maximizing profits,” says Texas state Sen. John Whitmire, a Houston Democrat and advocate for reducing prison populations through less costly diversion programs. “The only thing worse is that this seeks to take advantage of some states’ troubled financial position.”


Corrections Corporation spokesman Steve Owen defended the company’s “investment initiative,” describing it as “an additional option” for cash-strapped states to consider.


The proposal seeks to build upon a deal reached last fall in which the company purchased the 1,798-bed Lake Erie Correctional Institution from the state of Ohio for $72.7 million. Ohio officials lauded the September transaction, saying that private management of the facility would save a projected $3 million annually.


Linda Janes, chief of staff for the Ohio Department of Rehabilitation and Correction, said the purchase came at time when the state was facing a $8 billion shortfall. The $72.7 million prison purchase was aimed at helping to fill a $188 million deficit within the corrections agency.
Ohio’s deal requires the state to maintain a 90% occupancy rate, but Janes said that provision remains in effect for 18 months — not 20 years — before it can be renegotiated. As part of the deal, Ohio pays the company a monthly fee, totaling $3.8 million per year.

This is not new. CCA had AB 1070 passed in Arizona to guarantee prison occupancy, and built a prison on speculation in California. But it’s astonishing to see the machinations presented so matter-of-factly out in the open.

In these days of dire straits and realignment from state prisons to county jails, is it conceivable that California could cut a similar deal? I very much doubt it. CCPOA, the prison guards’ union, would object it with all their might, and might win the battle again, as they have before. But it’s a somber reminder that prisons are, above all, an industry, and subject to cynical manipulation by profiteers.

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Props to David Greenberg for bringing this to my attention.