The Prison Industry

Not since the Cold War increases in defense spending has any sector of government experienced such dramatic increases in expenditure as those in the criminal justice arena. During the last twenty years, corrections spending has escalated three times as fast as defense expenditures.

In the 132 years between 1852 and 1984, the state of California only built a total of twelve prisons. In the eleven-year period between 1985 and 1996, the state built sixteen more.

Supplying goods and services to prisoners, guards, and police has become a massive market at more than $100 billion annually. Today’s prison industry has its own trade shows, mail-order catalogs, newsletters, and conventions. “Justice” trade shows are no different than a gathering sponsored by the computer or auto industries – a combination of showbiz, commerce, and party.

Many rural communities have become major players in the new prison industry. In an effort to lure badly needed jobs to their communities, many a rural county has turned to prisons as a “recession-proof” economic resource. They don’t pollute, they don’t go out of business, they don’t get downsized.

At last count there were twenty-six private prison corporations, that number is shrinking quickly as the incarceration business is consolidated.

Corrections Corporation of America -- Wackenhut     

The largest of these prison companies in Corrections Corporation of America, which was founded in 1983 and now constitutes the sixth-largest prison system in the nation, trailing only the federal system and the state of Texas, California, Florida, and New York. The largest shareholder in CCA is Sodexho, a multinational corporation with headquarters in Paris, France.

The second largest private prison company is Wackenhut, a corporation that also specializes in private security. Wackenhut has annual revenues of over $1 billion derived from its prison and security ventures. Wackenhut is a subsidiary of Group 4 Securicor which forms the largest global network of security operations worldwide, with 430,000 full and part-time employees.

Together, CCA and Wackenhut are will on their way to establishing a near monopoly in the private-prison industry. The management for CCA and Wackenhut is largely composed of former high-ranking corrections and law-enforcement officials – including a former head of the FBI, a former CIA director, a former CIA deputy director, a previous head of the Secret Service, a former attorney general, a former head of the Federal Bureau of Prisons, the former chairman of the Tennessee Republican Party, and the former director of the Virginia Department of Corrections, to name a few.

Wackenhut Recruits from Army

http://www.wackenhut.com/db/files/wackenhut_us_army_release_05_31_2.doc

Group 4 Securicor

http://www.g4s.com/

Our strong growth record continued in 2005 with overall organic growth of 7%, significantly stronger than the 6.2% achieved in 2004. The highlights in growth terms were North America manned security which grew 8.5%, the cash services division which achieved 6.2% and New Markets overall which continue to grow strongly at more than 20%.

We expect future growth to continue across all product areas towards our medium-term targets. New Markets continue to grow strongly overall and, as our cash services businesses in different countries move through the phases of development from pure cash-in-transit to cash management and ATM outsourcing, there are further opportunities for the businesses to grow.

Corrections Corporation of America

http://www.correctionscorp.com/

Since its founding in 1983, CCA has been the clear leader of the private corrections industry. We have sustained this position through our emphasis on quality operations, our strong financial underpinnings and the ability to quickly react to our customers’ changing needs. These unique qualities, combined with the efforts of our dedicated employees, enabled us to register another successful year in 2005, a year in which we registered strong earnings and cash flow growth, delivered approximately 2,300 new prison beds and further strengthened our balance sheet.

Sodexho

http://www.sodexho.com/SodexhoCorp/en/the_group/home/

Federal Prison Industry –Unicorp

Prison labor is another area where both the public and private sector are cashing in on America’s 2 million prisoners. Unicorp, the government entity that produces products with prison labor, now has annual sales of over $500 million a year. Prisoners are generally paid between $.20 and $1.20 per hour – less at private prisons and a little more in some federal and state run facilities. 

http://www.unicor.gov/  [Unicorp - When the prisoners work, so does the system]

Investors’ Report issued by Equitable Securities Research , 1997

“At-Risk Youth: A Growth Industry.”

http://www.corpwatch.org/article.php?id=865

In 1997 Equitable Securities Research released a report entitled "At-Risk Youth: A Growth Industry," which indicates there are 10,000 to 15,000 private juvenile justice service providers. Publicly traded juvenile corrections companies made $75 million in net profit in 1996 alone. An estimated $3 billion is spent each year on services for juvenile offenders at the federal, state and local levels, and up to $50 billion is spent annually on programs for at-risk youth. Private companies that primarily provide adult corrections services are jumping on the "jails for juveniles" bandwagon: The Corrections Corporation of America (CCA) and Wackenhut operate seven juvenile facilities each, and the Corrections Services Corp. operates six.

Shareholders and Wall Street

There is no conspiracy afoot designed to further the growth of the prison population. The corporations involved in the dispensing of justice simply operate in the best interest of their shareholders and the prison population grows naturally as a result of this pursuit.

The shareholder’s best interest – regardless of a corporation’s function – is to maximize the return on investment. Any business plan designed to maximize shareholder profits must include strategies that will guarantee the company is able to maintain growth over the long haul. Such an emphasis on growth and profit may be acceptable in the computer, furniture, or automobile industries; however, this is a wholly destructive force when applied to the administration of justice.

Wall Street analysts now watch the crime figures reported by the FBI and the Justice Department in the same way the monitor unemployment rate or quarterly earnings reports. These crime-rate figures have become leading indicators for private-prison stocks. It seems the old adage “Crime doesn’t pay” has been rendered obsolete.

Stock analysts steer their clients into the half dozen or so companies that are expected to emerge as the only prison corporations. Wackenhut and CCA already control over half the entire prison market, which makes the concept of free-market competition as much a myth in the prison business as it is within the military-industrial complex.

Private Prison Financing

During the 1980s, nearly every state in the union began to reach the economic limits of its ability to build new prisons. Hard-on-crime changes to the sentencing guidelines had filled prisons and jails to overflowing. States had exhausted their corrections budgets to build and operate nearly 600 new facilities.

All across the nation, bond issues earmarked for prison construction were being placed on the ballots. Voters in one jurisdiction after another began to make it clear that the expansion would have to be greatly curtailed or even stopped. They made their opinion known by defeating an ever-increasing number of the prison bond issues at the polls. The majority of Americans may still have been emotionally, even intellectually, supportive of hard-on-crime measures, but concern over their pocketbooks had apparently become an equal or even more important priority.

If the states couldn’t afford to continue to build new prisons because the majority of their taxpaying voters were unwilling to support the sale of bonds for that purpose, then the prison-industrial complex kept the expansion going by paying to construct the new facilities itself. Private prisons underwrite the cost of prison construction through the sale of bond-like financial instruments that don’t require voter approval. The use of private prisons renders voters incapable of stopping the flow of their tax dollars into the prison expansion.

Once the corporations have spent their own money to build the prisons, they then charge a hefty fee per inmate in exchange for allowing a jurisdiction to use their facilities and thereby comply with court ordered limits on overcrowding.

Diverting Funds

The market intrusion into the justice system means that politicians divert tax dollars out of existing programs such as education, child welfare, mental-health care, housing, and substance abuse programs to repay the market and its investors for having put up the money to construct the prison facilities.

Although all taxpayers, rich and poor, are paying their share of this massive increase in expenditures in proportion to their overall tax bill, those who constitute the upper third of the economy, a.k.a, the investor class, are having their tax burden more of less subsidized by their ability to profit as shareholders in corporations.

Because much of the funding for corrections is now coming at the expense of social programs that have been shown to deter people from criminal behavior in the first place, the more future prisoners we create.

Public education is being gutted to fund prisons. Those at the top of the economy don’t send their children to public schools anyway. Consequently, the decay of public education resulting from increased corrections spending is occurring most rapidly in urban districts and has virtually no impact on those benefiting from the prison expansion.

The way to expand the prison system without raising taxes is by diverting a larger and larger portion of the tax money already being collected and used for other programs into prisons. This means that since the cost of corrections has gone up $20 billion a year, a good portion of this $20 billion annual expenditure is being culled from the social wealth.

Media Coverage

The majority of Americans now base their worldview more on the mediated messages offered by television than upon their own firsthand observations. As a result, nearly 80 percent of the public now believes crime to be one of the biggest problems confronting America, despite the fact that most of us are safer now than we were in the 1970s.

The anxiety over crime that is driving a hard-on-crime direction is not based in reality. The war on crime is not rooted in rising crime rates but is rather the result of the rise in the public’s concern over crime, which has been wrought not by the criminals in the real world but by the images of the criminals who now break into our living rooms nightly through the window of television.

TV Nation

Research tells us that the vast majority of us – 95 percent – shape our impression of crime and criminal justice primarily from the mass media, of which television is the most influential. Television has become our nation’s most powerful structure when it comes to communicating a common message to all strata of society. The images being pumped into our homes by way of the tube have not been left to chance. They provide us with the image of who we should be and then sell us all the trappings to match the picture. Nothing we see through the TV window is by accident, including its violent images.

Advertising has become a science. Corporations hire experts who can give them the keys to America’s malleable subconscious – red cars make twice as many people buy; a pretty blond in a low-cut dress is worth an extra 10 percent; and violence draws an audience like nothing else.

Behavioral scientists have unlocked the mysteries of the mind only to sell their knowledge to the controllers of the image, who do not care if their market-driven tampering with our psyche retards our culture, our democracy, or our vision of justice. They do not care if sensational images of violence have made us believe that we are living in the midst of a crime wave that does not exist. They do not care so long as we buy.

Distorted Crime Coverage

The news business makes a lot of money by increasing its ratings with sensationalized news coverage of violent crime. Sex- and violence- filled media offerings have become the second largest U.S. export in dollar amount. The majority of all television programs contain violence, much of it related to crime. The public’s belief in the “crime gap” is being inspired more by the quantity of our exposure to the images of crime in the media than by anything else.

Using violence to increase revenues in television and newspapers has been implemented across all media genres. Violent-crime coverage increases the number of viewers and readers for a TV station or newspaper. Ratings skyrocketed during the sensationalized Columbine barrage, and a single rating point can be worth hundreds of thousands of dollars to a station. Sensational murders draw far more viewers/readers than the “usual” murder of a transient, a dope dealer, or a typical working stiff.

Based upon the chasm that now exists between what we believe about crime as a society and the facts regarding crime, America has entered into a new and dangerous age where communications technology has become more powerful than reality itself when it comes to shaping our attitudes and beliefs.

Fear of Crime – Societal Impact

There is a consensus in the scientific and public health fields that there are three primary harmful effects of viewing violence: [1] Learning aggressive attitudes and behaviors; [2] Emotional desensitization toward real world violence; and [3] Increased fear of being victimized by violence, resulting in self-protective behaviors and mistrust of others.

News and entertainment programming present a false image of the overall character and quantity of crime. In response to this constant and misleading crime message, the majority of Americans have been persuaded they are living in a much more dangerous and crime-infested world than they really are, and such an attitude is causing the nation to alter its behavior in a variety of ways.

Our growing fear – fear generated as a result of technologically experiencing crime on a daily basis –destroys the opportunity for justice by way of our endorsing hard-on-crime politics at the ballot box. Desiring to toughen the laws and increase the punishment for criminals is an understandable response for people living in a place where they witness dozens of heinous crimes every day – a place like, say, your living room, your den, or wherever you keep your television.

Politicizing the Fear of Crime

Politicians know that we are afraid of crime. Politicians from both parties fully embrace the politically expedient “hard-on-crime” position.

Political consultants use the research of behavioral scientists and advertising agencies to help them create an anticrime argument to persuade us to vote for them. They simply follow the formula described in Petty and Cacioppo’s book Attitudes and Persuasion: [1] it is no longer safe for our women and children to walk our streets; [2] if we do not stop coddling criminals and start punishing them, there will be more and more victims, and next time, it could be your wife, your daughter, or your elderly mother; and finally, [3] if you elect me, I will work to put an end to “country-club” prisons, and I will vote for the three-strikes law that will keep the most dangerous criminals off our streets forever.

In today’s political world, our elected representatives often make their important decisions, such as how to deal with crime, based upon the opinion of the masses, who admittedly base their opinions regarding crime on the distorted coverage of this issue provided by television and therefore have little or no knowledge of the facts of the issue.

Since we are never presented with the root causes of crime [poverty, and so on] as a part of the crime message, we do not hear or see anything regarding criminals that might elicit any emotional response other than fear, anger, and contempt. As a result of this chain reaction of ignorance, politicians have restructured the justice system in a manner that would be more appropriate for dealing with the quantity and type of crime in the world that we observe through our television window – an imaginary world hundreds of times more violent and crime laden than the real world.

If politicians were out to tell us the truth about their war on crime, they probably wouldn’t’ be getting our votes. The only way that the war on crime can maintain its political appeal to the targeted electorate is if it continues to be masked in the illusion that it is being waged primarily against the violent criminals whose actions are greatly exaggerated by their sensationalized depiction of TV and in the movies.

Because the polls taken by the consultants of both Republicans and Democrats reflect the same public opinions and because the reason for taking such polls for both parties is to allow politicians to shape their positions toward this public opinion, it has to follow that Republicans and Democrats would increasingly be putting forward nearly identical platforms in the areas where the public’ opinion is the strongest. This helps to explain why the issue of crime – where the public’ opinion is perhaps more unified than on any other issue – is the most common theme found in the campaign ads of both parties.

Transcript” 2007 State of the State Address

As Delivered by Gov. Arnold Schwarzenegger

Tuesday, Jan 9, 2007

Public safety is the first priority of government. Our prisons are in crisis. We have inherited a problem that was put off year after year after year. Last year I called a special session to address the crisis. That session was not successful, so I declared a state of emergency. It is still an emergency. Our prison system is a powder keg. It poses a danger to the prisoners, a danger to the officers... and a danger to the well-being of the public if -- as the federal courts have threatened -- we are forced to release prisoners because of overcrowding. We have thousands of prisoners housed in gymnasiums, TV rooms, dining rooms, hallways, anywhere there is space. You all know 172,000 prisoners in facilities designed to hold about 100,000. That is a danger and that is a disgrace.
Here are the court-ordered choices we face: We build more prisons or we release criminals. We build more prisons or the court takes the money from education and health care and builds the prisons itself. Now I am not in favor of releasing criminals. Nor am I in favor of taking money from classrooms and emergency rooms to build cells. Where do you stand? We must act. And we must act this year. Which is why on December 21st, I stood with Senator Gloria Romero and Senator George Runner and Assemblyman Greg Aghazarian to introduce comprehensive prison reform. We need a justice system that is fair, that is tough and that offers hope for those who can still turn their lives around.

Poverty and Crime

Living in poverty is the most important factor in determining who is most likely to wind up in prison. America’s prison population is being harvested from our growing fields of urban poverty. Since these fields are disproportionately composed of minority citizens, so too is the new prison population. By 1992, one out of every three black men in the United States between the ages of twenty and twenty-nine was under the supervision of the criminal-justice system.

Information about poverty’s role as the major influence on most criminals is almost never discussed by the press, nor are the demographic realities of violent crime, such as the facts that violent crime is extremely rare, that it occurs for the most part in isolated low-income communities, and that, as a rule, the victim and the perpetrator knew each other.

We have created political and economic circumstances that guarantee that a large number of people of color will live in an environment that breeds crime. We have then surrounded these same people with an overwhelming police presence far beyond what exists in other, lighter-skinned communities. And finally, when the citizens in these occupied neighborhoods succumb to the temptation dangled before them, we lock them away for incredibly long periods of time. – periods much longer than those prescribed for white people who commit the same crimes.

Institutionalized Prison Racism

The current prison expansion is financially benefiting investors in the upper one-third of the economy, a demographic group that is overwhelmingly white, while impoverished blacks, Hispanics, and other ethnic minorities are being incarcerated at a greatly disproportionate rate to whites.

 “It troubles the commission that the size of the American prison population and the number of people living in poverty both increased dramatically in the 1980s. Worse, the growth of each seemed to feed off of the growth of the other. This is because funding for prison expansion came largely at the expense of programs designed to alleviate poverty.” Nations Criminal Justice Commission, 1995

America’s prison population is 94 percent male. A full 65 percent of prisoners never completed high school. Thirty-three percent were unemployed and another 32 percent were making less than $5,000 per year at the time of their arrest. Seventy-one percent of all prisoners have been convicted of nonviolent crimes, mostly for drug related and property-offense violations. Poverty is the single greatest influence over criminal behavior.

African Americans constitute only 13 percent of all monthly drug users, yet they account for 35 percent of all arrests for the possession of drugs, 55 percent of all drug convictions, and a shocking 74 percent of all those receiving drug-related prison sentences. Some states already have as many as five black males in prison for every one in college, and this differential is increasing.

Prison Rehabilitation – “Prisonization”

“Prisonization” is a term used to describe the central truth of prison life – namely, that in order to survive in prison, an inmate must comply with prison-society structure above all else. Behavioral scientists refer to the unwritten rules that govern this violent prison structure as the “prisoner code,” and they have found that the life-or-death pressure to live by this code is far more powerful than any other force behind prison walls, including efforts at reform.

Sexual assaults, race wars, extortion, rival-gang conflicts, guard abuse, random violence, and the demand for absolute loyalty to an inmate’s fellow prisoners are all factors in the prisonization effect. Prison is a place where survival quickly becomes the only thing that matters. It is nearly impossible for an inmate to make rehabilitation a priority under such stressful conditions.

In America, thousands of men and women who have been thrown into the prison environment for minor nonviolent offenses such as drug use have been forced to choose between being a victim of rape, beatings, extortion, and murder or becoming a rapist, batterer, extortionist, or murderer. Many have chosen the latter because their instinct to survive made it a rational choice.

Many of those released will exhibit some behavior resulting from their prisonization scars such as alcohol and drug abuse, wife and child battery, rape, or an overall escalation in their willingness to use violence as a first resort.

The longer a prison corporation holds an inmate, the more money the company makes. The worse they do the job of reforming the inmate, the more likely the prisoner will continue to recidivate and produce future profits for the company. This backward system has turned the prisonization effect into a windfall, a valuable process that transforms prisoners serving a short sentence into annuities.

Inmates who receive frequent visits and support from parents, spouses, and children are much more likely to make it on the outside once released. When jurisdictions ship inmates halfway across the country to a private prison, this reform-aiding family support is destroyed. Since the vast majority of prisoners are from low-income demographic groups, their families cannot possibly afford to travel great distances to maintain this vital contact. After years of being held in out-of-state private prisons, many inmates are returned to their home-state facilities or are released only to find that their loved ones have remarried or no longer desire to maintain contact. Once this occurs, the chances that someone else will eventually be victimized by the inmate are increased dramatically.

Reversing such trends will not be easy, considering factors such as recidivism and the increased odds that the children of a prisoner will turn to crime themselves someday due to their having been raised in a one-parent home in poverty, as most are.

Recommended Remedies

Policies that would impede prison growth:

• Eliminate mandatory sentences for nonviolent offenders
• For nonviolent offenders, use less expensive and more effective prison alternatives such as substance abuse programs, supervised probation and community service
• Level the racial profiling in sentencing
• Impose a moratorium on prison construction
• Require voter approval of all and any financing for future prison and jail construction
• Decriminalize marijuana
• Wage war on poverty