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.