John Ehrlichman, a member of Nixon’s White House staff, came clean in 1994 to journalist Dan Baum about Nixon’s cultural gerrymander:
“The Nixon White House… had two enemies: the antiwar left and black people. You understand what I’m saying? We knew we couldn’t make it illegal to be either against the war or black, but by getting the public to associate the hippies with marijuana and blacks with heroin, and then criminalizing both heavily, we could disrupt those communities. We could arrest their leaders, raid their homes, break up their meetings, and vilify them night after night on the evening news. Did we know we were lying about the drugs? Of course we did.”
Nixon’s war on “drugs” (i.e. liberals and Black people) started the explosion in the US prison population. Ehrlichman also contributed directly, if modestly, to it during the 18 months he served in the Federal Correctional Institution, Safford, AZ, for his part in the Watergate affair. The number of inmates in Federal and State prisons rose every year for 37 years after Nixon’s re-election in 1972:
In 1983, Thomas Beasley, a former Chairman of the Tennessee Republican Party, formed Corrections Corporation of America together with his former West Point room-mate, Doctor R. Crants (the “Doctor” here being a given name, not a professional title). CCA was not the first private prison company in America – that goes back to the 17th century – but it was the first of modern times, at least in housing non-juveniles.
“The market is limitless,” Beasley declared, adding that he intended to “solve the prison problem and make a lot of money at the same time.”
By “solving the prison problem” he apparently did not mean what everybody else might take it to mean: reducing the number of inmates. As the most recent 10-K filing of the leading private prison company, The GEO Group, Inc., says: “…most of our revenues are generated under facility management contracts which provide for per diem payments based upon daily occupancy.”
In other words, the more people we can detain, and the longer we can detain them for, the better it is for Beasley, Crants and all the other honchos who have lobbied private prisons into a multibillion-dollar business over the past 35 years, a business that thrives here as nowhere else because America, self-styled Land Of The Free, imprisons more of its citizens, as a percentage of the population, than any other country on earth.
And it doesn’t stop at incarceration. There are many other opportunities for profit.
As Geo puts it:
“…our diverse and complementary service offerings enable us to meet the growing demand from our clients for comprehensive services throughout the entire corrections lifecycle.”
The “entire corrections lifecycle” includes housing people who are detained without being charged (up to 60 days in, for example, Louisiana) or can’t make bail, ferrying prisoners about (“secure transportation services for offender and detainee populations“), “community supervision services for … offenders and pretrial defendants, including … an array of technology products including radio frequency, GPS, and alcohol monitoring devices,” halfway houses (“community based reentry facilities“) and “evidence-based supervision and treatment programs for community-based parolees, probationers and pretrial defendants.“
When you add in probation and parole, you get a much bigger “market”:
And then, of course, there are immigrants.
This is still a relatively small part of the “market” for private prison companies, but it is, no one will be surprised to hear, growing. Successive budgets since the arrival of the latest administration increase the intended “beds” for immigrant detention from about 35,000 to a proposed 52,000 for FY 2019, and the budget request for ICE’s Custody operations in FY 2019 is about 55% above its level five years previously. In April 2017, GEO won a 10-year ICE contract at a 1,000-bed “Processing Center” in Montgomery County, Texas, with a value in potential revenues of $457,361,488. (GEO says $44mm a year, which works out to around $120 per bed per day. A more recent emergency ICE contract in Idaho is $17 million a year for 250 beds, which is about $185 a day).
But once again, accommodation is just the beginning. As with regular old American citizens, there is a whole “lifecycle” involving not only ICE (U.S. Immigration & Customs Enforcement) but also Customs and Border Patrol (CBP) and the US Marshal Service (eg, in “secure transportation services”). Detention has grown with the termination of so-called “catch and release”, but there is also the ISAP (Intensive Supervision of Appearance) program – ankle-bracelet tracking, among other things, which The GEO Group conducts in its entirety through its tenderly-named Geo Care division (“…the utilization of this program has been increasing rapidly since the beginning of 2016.”)
There are about 70,000 such caught-and-released immigrant fish in the ISAP pool currently, up from about 22,000 four years ago.
The claim behind what GEO calls its “public-private partnership” is the same as with all privatizations: bumbling, bureaucratic governments are inherently inefficient whereas hungry, savvy, lean-and-mean, innovative, profit-seeking entrepreneurs can do it better and at a lower cost.
There are at least two objections to this: first, it naturally creates a conflict of interest when profit comes before other considerations more important to society; second, it’s not true. After 35 years, except in one study, nobody has found any significant difference between the costs of government-run and privately-run institutions. The one study that did find privately-run institutions achieved lower costs was – surprise! – funded by privately-run correctional institutions.
After all, there’s no inherent reason why operating expenses should be different. And on top of the expenses you have to make provision for the entrepreneurs to take a profit. As for capital costs, you would expect governments, borrowing at the risk-free rate, to have the edge there.
There is one obvious place where private companies might have an advantage: if they employ a lower proportion of unionized workers they will have lower labor costs (including pension costs). What this amounts to is spending the same amount of money on the system, but taking some of it away from the prison staff and giving it instead to shareholders.
There is another argument, that the existence of private prisons keeps the publicly-run institutions on their toes. In other words, that competition gives the government an incentive to run its institutions more efficiently. Even as long as 20 years ago, however, two companies accounted for 78% of private prison capacity – Corrections Corporation of America (recently re-branded CoreCivic) and Wackenhut Corrections Corporation (now called The GEO Group). Since that time, the two large players have been regularly gobbling up their smaller brethren. After all, as noted in the Risk Factors in CoreCivic’s 10-K,“Competition may adversely affect the profitability of our business.”
Privatizing prisons creates incentives to maximize the prison population. Nixon had a private incentive to put certain people in jail. The prison population has exploded since Thomas Beasley and Doctor Crants formed Corrections Corporation of America, to a per capita level higher than in any other country. Is that a coincidence? Maybe contribution-hungry congressmen might be tempted to criminalize, say, begging, littering, loitering or sleeping in the public streets.
According to CoreCivic:
Our company does not, under longstanding policy, lobby for or against policies or legislation that would determine the basis for, or duration of, an individual’s incarceration or detention.
But, do we really know what the plutocrats are saying to the politicians (other than “Here’s a check”)?
George C. Zoley, PhD, CEO of The GEO Group, was a Bush pioneer (i.e. raised more than $100,000 for the campaign) in the 2004 election. In August 2016, GEO and its PAC donated $200,000 to Rebuild America Now, a super-PAC organized by Trump’s friend Tom Barrack, not long after the Justice Department announced that it would be phasing out the use of private prisons by the Federal Bureau of Prisons; a decision which was decisively reversed by the new administration.
From ITEM 1A. RISK FACTORS in the CoreCivic 10-K:
Increased public resistance to the use of public-private partnerships for correctional, detention and community based facilities in any of the markets in which we operate… could have a material adverse effect on our business, financial condition and results of operations.
Oliver Corlett, oeconoclast
