WMNews: End of Private Prisons in the US
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VOICE OVER: Rebecca Brayton
Script written by Sean Harris
For decades, corporations have made cash out of crime, but in 2016, that could all be about to change in the US. In this instalment, we're counting down 10 crucial facts you should know about the end of private prisons in the US.
For decades, corporations have made cash out of crime, but in 2016, that could all be about to change in the US. In this instalment, we're counting down 10 crucial facts you should know about the end of private prisons in the US.
Script written by Sean Harris
For decades, corporations have made cash out of crime, but in 2016, that could all be about to change in the US. Welcome toWatchMojo News, the weekly series from WatchMojo.com where we break down news stories that might be on your radar. In this instalment, we’re counting down 10 crucial facts you should know about the end of private prisons in the US.
#10: What Is a Private Prison?
Otherwise known as a for-profit prison, a private prison is run by a non-government third party. Fundamentally, its purpose – tohouse prisoners securely – is the same as a federal prison, but its income comes from governmental contracts with rates usually based on the amount of prisoners incarcerated at a particular facility, or the space available regardless of whether every cell is occupied. Private prisons are a controversial topic in the US and around the world, as protestors believe that corporate money shouldn’t be made out of the criminal justice system.
#9: How Prevalent Are Private Prisons in the United States?
As of August 2016, there were 13 private prisons in operation in the US, located across eight states – including five in Texas alone. Inmate populations range between 1,000 and 3,200 per facility, with just over 22,000 people held in private prisons – a little over 10% of the total number of prisoners overall in the US, which is just short of 200,000. Private prison populations reached a high point in 2014 when for-profit sites held around 40,000 inmates. According to reports, 25% of the world’s prisoners were incarcerated in the US in 2015, despite the country comprising of just 5% of the global population. This has led some analysts to tiethe spike in private prison use with an imbalance in prisoner/population ratio.
#8: How Prevalent Are Private Prisons Around the World?
The UK was the first European country to introduce privately run prisons in modern times, when Wolds Prison opened in 1992. As of2016, there are 16 private prisons across England, Scotland and Wales, all operated by either Serco, Sodexo or G4S. Canada has only ever had two private prisons (both of which are now under government control), and there are seven private sites in Australia withthe first opening in 1990s. There was an attempt to introduce private prisons in Israel in the mid-2000s, but the first facilities were deemed unconstitutional in 2009 - a panel found that privately run complexes were in danger of depriving prisoners of their basic human rights.
#7: What Are Criticisms of the Private Prison System?
Opponents of for-profit prisons argue that money is the main drive for private owners, not prison management. The US has seen a sharp rise in the amount of people incarcerated since the turn of the century, a trend that many attribute to so-called prison-profiteers driven by greed. There are also concerns about the welfare of inmates and staff at private prisons, with accusations ranging from neglect to abuse. According to a 2016 report issued by the Inspector General of the Justice Department, there are more safety and security issues at private prisons than at federal jails. Problems include “extensive property damage”, bodily injury” and the report also listed details of the 2012 incident at Adams County Correctional Centre in Mississippi – a riot in which one Correctional Officer was killed.
#6: Who Runs the Private Prisons?
The majority of America’s private prisons are run by two major corporations; Corrections Corporation of America and the GEO Group. The CCA is the country’s largest private prison group, with over 110 million shares and a market cap of $4.05 billion as of July 2015; GEO weighs in with around 75 million shares, with value of its shares approximately worth $2.75 billion. CCA is seen as thefirst of the modern prison privatisation firms, after it gained a contract for a Tennessee facility in 1984. Ever since then it has seen finances boom, with profits increasing by more than 500% in the last 20 years. Today, it has over 65 correctional and detention facilities under its management. According to reports, CCA and GEO show combined annual revenue of $3.3 billion.
#5: What Has the Department of Justice Done to Get Rid of Private Prisons in the US?
On August 18th, 2016, the US Department of Justice made the first significant steps toward shutting down private prisons and wresting control of the system back to the government. As part of a 2-page memo from the DOJ Deputy Attorney General, thereasons for potential closure were listed. The report told how prison population had risen by almost 800% between 1980 and 2013, and that the Federal Bureau of Prisons had once needed privatised help to deal with the numbers. However, the prison population has since declined and though “private prisons served an important role during a difficult period,” they are now surplus torequirements. The memo also drew on the Inspector General’s report, stating that private prisons do not offer the “same level ofcorrectional services,” while it also notes that they do not substantially cut costs, nor are they as safe or secure as government facilities.
#4: What Was the Immediate Aftermath of the Department of Justice’s Memo?
As the DOJ memo revealed plans to reduce – ‘and ultimately end’ – private prisons, the industry immediately suffered dramatic falls on the stock market. GEO Group stock fell 39% to $19.51, while CCA plummeted 35% to $17.57. Both groups have since respondedto events, in an effort to calm the market. GEO reminded shareholders that significant change wasn’t imminent, as some contracts would not expire for another five years. CCA suggested that the corporation was strong enough to withstand the plans put forward by the DOJ, as the private prisons they affected only accounted for 7% of the overall business. CCA also held issue with the Inspector General’s report, labelling it as flawed.
#3: What Kind of Resistance Could This Effort Face?
While the DOJ’s plans are sure to be met unfavorably by those involved with the privatisation of prisons, the decision to phase them out could yet cause issues for the Federal Bureau. For-profit prisons were first introduced partly as a cost-cutting measure and partly as a method to prevent overcrowding, with the aim to reduce the pressure on the government generated by rising numbers ofprisoners. Were a similar situation and rise to occur again, then the US might once more require a privatised resource. There is alsothe question of cost, and whether the eventual closure of America’s 13 private prisons could impact government budgets. The DOJ has conceded that the long-term outcomes are difficult to predict, but also that it doesn’t anticipate having to invest too heavily toabsorb the absence of privatised sites.
#2: What Effects Will This Have on the Justice System in the United States?
The Director of the American Civil Liberties Union’s National Prison Project, David Fathi, has called the DOJ memo a ‘ground-breaking decision’. He also explained how the ACLU applauds the move, and asked other agencies to follow suit soon. The taking ofpower from private organisations would reportedly allow for greater uniformity in the prison system, and more transparency. Themove could also help lower prisoner numbers, a long time goal of the Obama administration, and it could feature heavily in Hillary Clinton’s campaign for presidency, as she promises large-scale criminal justice reform.
#1: Is This the End of Private Prisons in the United States?
If the DOJ’s plans are realised and no private contracts are renewed, then the last for-profit prisons will have disappeared by 2021. However, some analysts are sceptical that the change is even feasible. According to Height Securities industry expert, Daniel Hanson, the plans are “aspirational” but not necessarily “attainable” – the financial impact could yet prove too much to burden. And even if the government is able to comfortably lose the 13 private facilities currently contracted, privatised services will still feature heavily in the US justice system – immigrant-only centers are set to remain privately run, for example. For supporters of reform it’s a step in the right direction, but only the first of many toward a fairer, more effective prison system.
WMNews: End of Private Prisons in the US
For decades, corporations have made cash out of crime, but in 2016, that could all be about to change in the US. Welcome toWatchMojo News, the weekly series from WatchMojo.com where we break down news stories that might be on your radar. In this instalment, we’re counting down 10 crucial facts you should know about the end of private prisons in the US.
#10: What Is a Private Prison?
Prison for Hire
Otherwise known as a for-profit prison, a private prison is run by a non-government third party. Fundamentally, its purpose – tohouse prisoners securely – is the same as a federal prison, but its income comes from governmental contracts with rates usually based on the amount of prisoners incarcerated at a particular facility, or the space available regardless of whether every cell is occupied. Private prisons are a controversial topic in the US and around the world, as protestors believe that corporate money shouldn’t be made out of the criminal justice system.#9: How Prevalent Are Private Prisons in the United States?
The For-Profit System
As of August 2016, there were 13 private prisons in operation in the US, located across eight states – including five in Texas alone. Inmate populations range between 1,000 and 3,200 per facility, with just over 22,000 people held in private prisons – a little over 10% of the total number of prisoners overall in the US, which is just short of 200,000. Private prison populations reached a high point in 2014 when for-profit sites held around 40,000 inmates. According to reports, 25% of the world’s prisoners were incarcerated in the US in 2015, despite the country comprising of just 5% of the global population. This has led some analysts to tiethe spike in private prison use with an imbalance in prisoner/population ratio.#8: How Prevalent Are Private Prisons Around the World?
Use in Other Countries
The UK was the first European country to introduce privately run prisons in modern times, when Wolds Prison opened in 1992. As of2016, there are 16 private prisons across England, Scotland and Wales, all operated by either Serco, Sodexo or G4S. Canada has only ever had two private prisons (both of which are now under government control), and there are seven private sites in Australia withthe first opening in 1990s. There was an attempt to introduce private prisons in Israel in the mid-2000s, but the first facilities were deemed unconstitutional in 2009 - a panel found that privately run complexes were in danger of depriving prisoners of their basic human rights.#7: What Are Criticisms of the Private Prison System?
Privatized Justice
Opponents of for-profit prisons argue that money is the main drive for private owners, not prison management. The US has seen a sharp rise in the amount of people incarcerated since the turn of the century, a trend that many attribute to so-called prison-profiteers driven by greed. There are also concerns about the welfare of inmates and staff at private prisons, with accusations ranging from neglect to abuse. According to a 2016 report issued by the Inspector General of the Justice Department, there are more safety and security issues at private prisons than at federal jails. Problems include “extensive property damage”, bodily injury” and the report also listed details of the 2012 incident at Adams County Correctional Centre in Mississippi – a riot in which one Correctional Officer was killed.#6: Who Runs the Private Prisons?
The Corporations
The majority of America’s private prisons are run by two major corporations; Corrections Corporation of America and the GEO Group. The CCA is the country’s largest private prison group, with over 110 million shares and a market cap of $4.05 billion as of July 2015; GEO weighs in with around 75 million shares, with value of its shares approximately worth $2.75 billion. CCA is seen as thefirst of the modern prison privatisation firms, after it gained a contract for a Tennessee facility in 1984. Ever since then it has seen finances boom, with profits increasing by more than 500% in the last 20 years. Today, it has over 65 correctional and detention facilities under its management. According to reports, CCA and GEO show combined annual revenue of $3.3 billion.#5: What Has the Department of Justice Done to Get Rid of Private Prisons in the US?
The Memo
On August 18th, 2016, the US Department of Justice made the first significant steps toward shutting down private prisons and wresting control of the system back to the government. As part of a 2-page memo from the DOJ Deputy Attorney General, thereasons for potential closure were listed. The report told how prison population had risen by almost 800% between 1980 and 2013, and that the Federal Bureau of Prisons had once needed privatised help to deal with the numbers. However, the prison population has since declined and though “private prisons served an important role during a difficult period,” they are now surplus torequirements. The memo also drew on the Inspector General’s report, stating that private prisons do not offer the “same level ofcorrectional services,” while it also notes that they do not substantially cut costs, nor are they as safe or secure as government facilities.#4: What Was the Immediate Aftermath of the Department of Justice’s Memo?
The Stock Drop
As the DOJ memo revealed plans to reduce – ‘and ultimately end’ – private prisons, the industry immediately suffered dramatic falls on the stock market. GEO Group stock fell 39% to $19.51, while CCA plummeted 35% to $17.57. Both groups have since respondedto events, in an effort to calm the market. GEO reminded shareholders that significant change wasn’t imminent, as some contracts would not expire for another five years. CCA suggested that the corporation was strong enough to withstand the plans put forward by the DOJ, as the private prisons they affected only accounted for 7% of the overall business. CCA also held issue with the Inspector General’s report, labelling it as flawed.#3: What Kind of Resistance Could This Effort Face?
The Pushback
While the DOJ’s plans are sure to be met unfavorably by those involved with the privatisation of prisons, the decision to phase them out could yet cause issues for the Federal Bureau. For-profit prisons were first introduced partly as a cost-cutting measure and partly as a method to prevent overcrowding, with the aim to reduce the pressure on the government generated by rising numbers ofprisoners. Were a similar situation and rise to occur again, then the US might once more require a privatised resource. There is alsothe question of cost, and whether the eventual closure of America’s 13 private prisons could impact government budgets. The DOJ has conceded that the long-term outcomes are difficult to predict, but also that it doesn’t anticipate having to invest too heavily toabsorb the absence of privatised sites.#2: What Effects Will This Have on the Justice System in the United States?
The Precedent
The Director of the American Civil Liberties Union’s National Prison Project, David Fathi, has called the DOJ memo a ‘ground-breaking decision’. He also explained how the ACLU applauds the move, and asked other agencies to follow suit soon. The taking ofpower from private organisations would reportedly allow for greater uniformity in the prison system, and more transparency. Themove could also help lower prisoner numbers, a long time goal of the Obama administration, and it could feature heavily in Hillary Clinton’s campaign for presidency, as she promises large-scale criminal justice reform. #1: Is This the End of Private Prisons in the United States?
Moving Forward
If the DOJ’s plans are realised and no private contracts are renewed, then the last for-profit prisons will have disappeared by 2021. However, some analysts are sceptical that the change is even feasible. According to Height Securities industry expert, Daniel Hanson, the plans are “aspirational” but not necessarily “attainable” – the financial impact could yet prove too much to burden. And even if the government is able to comfortably lose the 13 private facilities currently contracted, privatised services will still feature heavily in the US justice system – immigrant-only centers are set to remain privately run, for example. For supporters of reform it’s a step in the right direction, but only the first of many toward a fairer, more effective prison system.