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CAPTIVE MARKET
Why we won’t get prison reform
By Michael Ames
I
t’s possible that
Michael Dukakis
didn’t understand
the question.
“If Kitty Dukakis
were raped a nd
murdered,” CNN
a nchor B er na rd
Shaw asked the
Democratic candidate on live national television near
the start of the second 1988 presidential debate, “would
you favor an irrevocable death penalty
for the killer?”
What Dukakis
could not have known at the time,
amid the lights and the electric
hum, was that the whole doomed
history of the American left had
quite suddenly come to rest on his
answer. His rote reply—“No, I don’t,
Bernard . . . ”—marked the end of
more than just Dukakis’s own career. The response seemed to confirm the suspicions at the heart of
arguably the most devastating attack ad in presidential-campaign
history: George H. W. Bush’s Willie
Horton spot. The parable that
emerged in 1988—liberal politician
goes soft on crime, black criminal
Michael Ames’s last article for Harper’s
Magazine, “The Awakening,” appeared in
the April 2013 issue.
34 HARPER’S MAGAZINE / FEBRUARY 2015
goes on violent rampage, liberal politician loses election—quickly hardened into political truism. For Dukakis’s woebegone party, loser of
three straight national elections, his
strategic failure was what our current Democratic president might
call a “teachable moment.”
Four years later, Bill Clinton, who
was then the governor of Arkansas,
pointedly flew home to Little Rock in
the middle of his own presidential
campaign to oversee the execution of
a man named Ricky Ray Rector. There
was no doubt that Rector was a killer.
But he was also handicapped—
lobotomized by his own botched
suicide—and there were profound legal and moral questions about execut-
ing a man who
possessed the
awareness of a dim
young child. The
case had dragged
on for more than a
decade, and in
Rector’s final days,
Clinton heard pleas
from various Democratic stalwarts,
including one of
the candidates from
1988, Jesse Jackson,
to commute the
sentence and simply leave the diminished man in jail
for life. But Clinton did not budge. His fortitude suggested a new breed: a Democrat who
was more intent on winning elections than upholding bygone virtues,
and who was willing to make the
necessary corrections. As president,
Clinton followed through on this
promise: his crime agenda, the New
York Times wrote in 1996, gave him
“conservative credentials and threatened the Republicans’ lock
on law and order.”
I
n the late Eighties and early Nineties, violent crime was unrelenting.
For rich and poor alike, life in America’s big cities was marred by unprecedented numbers of murders, rapes,
assaults, and robberies. Crime was a
Illustration by Taylor Callery
top voter concern, and a sizable majority of Americans supported the death
penalty. Given the realities of the day,
some Democratic posturing was unavoidable. But Clinton and his party
stuck to the hard line through the
mid-Nineties, even after crime rates
began their dramatic decline. The
1994 Violent Crime Control and Law
Enforcement Act—authored by Joe
Biden, then chairman of the Senate
Judiciary Committee—was one of the
broadest expansions of the criminaljustice system in national history. “One
of my objectives, quite frankly,” Biden
said, “is to lock Willie Horton up in
jail.” The bill devoted nearly $10 billion
to new prisons, instituted a federal
“three strikes, you’re out” rule, and created sixty new capital crimes and more
than half a dozen new mandatory minimum sentences.1 It imposed mandatory drug testing on parolees, ended
Pell-grant eligibility for prisoners—and
with it most inmate-education funding—and established the Community
Oriented Policing Services (COPS)
program, which by 1996 was funneling
nearly $1.5 billion per year to police
departments nationwide.
Today, the crime epidemic is a
cultural relic, no less a throwback
than The Bonfire of the Vanities,
crack babies, and the Willie Horton
ad itself. Fear of random violence
lives on, but the reality is that
violent-crime rates have dropped to
levels not seen since the early Seventies. Some criminologists and politicians, Biden chief among them, argue that our newfound safety is the
logical outcome of harsher laws and
increased spending on law enforcement. But that point is debatable—
at the state level there has been little
correlation between crime reduction
and changes in incarceration rates.
Whether we credit society’s better
behavior to the legacy of Clinton-era
policies or to the spiritual evolution
of the species, the paradigm has
shifted dramatically. Today’s urgent
social problems no longer center on
criminals and the depravity of their
crimes, but on police, courts, prisons, and the system’s routine abuses
1
Clinton would later champion a “one
strike, you’re out” policy to keep criminals,
including drug users, out of public housing.
of power. We traded grim murder,
rape, and assault statistics for asset
forfeiture, police militarization, and
mass incarceration.
However often cited, the numbers
bear repeating. The United States
currently holds about 2.3 million
men, women, and children inside secure concrete and metal boxes from
which they will almost certainly not
escape. Our nation is exceptional in
this way, with incarceration rates
that far surpass those in Russia, Iran,
or any other country on earth. One
in twenty-eight American children
has a parent in jail. African Americans have for decades been arrested
for narcotics at more than three
times the rate of white Americans,
despite using drugs at roughly the
same rate. There are more black
men in the prison system right now
then there were male slaves in the
antebellum South. Counting parolees and probationers, the corrections system controls the lives of
nearly 7 million people. Half of all
federal inmates are in prison for drug
offenses, and post-9/11 immigration
roundups have provided a new human-inventory stream. Between
2001 and 2011, the number of detainees held each year by Immigration and Customs Enforcement
(ICE) more than doubled—from
209,000 to at least 429,000—making
foreign migrants one of the largest
demographics in federal custody.
The feeling that we overcorrected,
that it isn’t the drugs or the crime but
the efforts to defeat them that now
cause the greatest social harm, is widely held across the political spectrum.
It is repeated in a streaming harmony
of newspaper columns, blog posts, radio shows, academic symposia, documentary films, and casual conversations. The shooting of Michael Brown,
an unarmed teenager, by police officer
Darren Wilson in Ferguson, Missouri,
last summer and the months of civil
unrest it sparked focused the country’s
attention on the new dynamic. The
militarization of our police and the
institutionalized exploitation of black
and poor people was suddenly crystallized in the image of small-town cops
facing down their own community
with sniper rifles and mine-resistant
armored vehicles. In New York City,
where violent-crime rates are approaching the lowest levels on record,
an officer was caught on tape choking
Eric Garner while attempting to arrest
him for selling loose cigarettes. Garner, who died an hour later, can be
heard on the recording saying, “I can’t
breathe.” In the span of nine days,
grand juries in St. Louis and Staten
Island declined to indict
the officers in both cases.
W
ith the election of Barack
Obama as the country’s first AfricanAmerican president—and his appointment of Eric Holder, the first
African-American attorney general—
liberals might have expected a frank
reappraisal of the policies that have
devastated generations of minority
Americans. Instead, they’re stuck
with a party that still isn’t ready to
get over Willie Horton. In the weeks
after the grand-jury decisions, most
prominent Democrats played it safe.
Obama struck the necessary presidential notes, but he made no significant
policy suggestions. This failure is
particularly difficult to understand if
one accepts the established story line:
that the Democratic lurch to the right
on criminal justice was driven by mere
electoral expediency. It would be one
thing—shameful in its own way, but
at least explicable—if criminaljustice reform were too politically
radical for the average voter. But the
excesses of mass incarceration have
become so apparent that there is little
risk in speaking out against them. At
the start of Obama’s second term,
Holder stepped forward as one of the
chief critics of the very system he oversaw. He made criminal-justice reform
a signature cause and issued a stream
of public critiques and Department of
Justice memos that called on prosecutors to argue for shorter sentences and
encouraged thousands of federal inmates convicted of nonviolent crimes
to appeal for commutation. Holder’s
words carried political freight, and
news headlines heralded the dawn of
a reformist era. But executive memos
are non-binding. The drug war wages
on, and the laws that put petty offenders in prison for twenty years
remain unchanged.
As we enter the final quarter of the
Obama presidency, neither the White
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House nor the Democratic Party has
backed comprehensive reform.2 The
party’s 2012 platform cited the ongoing need to “combat and prevent
drug crime” and called for increased
funding for the Byrne Justice Assistance Grant Program, a main source
of funding for prosecuting drug
crimes. It made no mention of
criminal-justice reform. These facts
raise a troubling question: if the New
Democratic tough-on-crime attitude
was entirely a matter of cynical,
short-term tactics—merely the first
and best Clintonian triangulation—
why has it proved so difficult to
undo? More to the point, how is it
possible that libertarian conservatives like Kentucky senator Rand
Paul have captured the moral high
ground on the issue, while establishment Democrats seem content
to hold the empty bag of a status
quo that is not merely unjust but
also, for a party that counts on the
support of minority votes,
politically untenable?
L
ast spring, I traveled to Washington, D.C., to seek out politicians of either party who would speak on the record about criminal-justice reform.
Rand Paul was the highest-ranking official who wanted to talk. Paul has introduced five pieces of reform legislation
in the Senate in the past two years,
which addressed issues ranging from
felon voting rights to civil asset forfeiture. He also signed on to three other
bills, making him the only member of
any party to attach his name to all
eight. In his effort to make prison reform a Washington priority, Paul has
rounded up an ideologically diverse
coalition that includes several young
conservative Republican lawmakers, all
loosely affiliated with the Tea Party, and
2
Two bills that passed in recent years made
incremental reforms. The 2008 Second
Chance Act, a faith-based initiative signed
by President Bush, aimed at reducing
recidivism and releasing some elderly
prisoners convicted of nonviolent crimes.
Of the roughly 850 federal inmates who
applied for clemency under the law,
seventy-one were let out and sentenced to
house confinement. The Fair Sentencing
Act, passed by a unanimous Senate vote
and signed by Obama in 2010, reduced but
did not eliminate the disparity between
crack-rock and powder-cocaine sentences.
800-324-4934 davidmorgan.com
11812 N Creek Pkwy N, Ste 103•Bothell, WA 98011
36
HARPER’S MAGAZINE / FEBRUARY 2015
Cory Booker, the young Democratic
senator from New Jersey. When he
speaks about the issue, Paul often refers
to Michelle Alexander’s book The New
Jim Crow (2010), the bible of reformists
on the left, which argues that racial
disparities in the corrections system are
a form of state-sanctioned oppression
that follow directly from segregation
and slavery.
“I think Eric Holder is sincerely for
[reform],” Paul told me in an antechamber of his Senate office last year.3
“I’ve had lunch with him, and I think
he sincerely does favor these bills. I
think the president does as well.” But
even the most popular reform measures remain stalled in the Senate’s
purgatory. “The height of irony,” Paul
said, “the epitome of what’s wrong
with this place, is even when we agree,
we can’t pass anything.”
Paul isn’t the first independently
minded lawmaker to run into this
roadblock. Jim Webb, a Democrat from
Virginia—and now a member of this
magazine’s board—devoted much of
his single Senate term, which ended in
2013, to his National Criminal Justice
Commission Act, which would have
named a bipartisan commission to
study the issue and make recommendations. The Obama White House never
endorsed the bill, and in 2011 the
N.C.J.C.A. failed to pass the Senate by
three votes. Auditing the nation’s
criminal-justice system, Republican
Kay Bailey Hutchison said, was “not a
priority in these tight-budget times.”
“Washington is dysfunctional, you
may have heard,” Paul said with a grin.
His conference room had the justmoved-in feel of a campaign office
with more important things to worry
about than décor. High on the wall,
two oil-on-canvas portraits, one of
Loretta Lynch, the U.S. attorney for the
Eastern District of New York, who, at the
time this article went to press, was expected
to replace Holder as attorney general,
would be the first African-American
woman to hold the position. Lynch has
spoken out against racial disparities in the
corrections system, but she has also been
questioned about her reported affinity for
civil-forfeiture laws, which allow law
enforcement to seize money and property
from private individuals. In November, the
Wall Street Journal described her Brooklyn
office as “a major forfeiture operation” that
raked in “$113 million in civil actions from
123 cases between 2011 and 2013.”
3
Paul and one of his father, Ron Paul,
the former Texas congressman, smile
at each other. The paintings are unframed, too small for the wall they
hang on. Each is unfinished, left by
the artist with swatches of raw canvas
showing through the places where the
politicians’ jackets should be.
To the dismay of many Republicans
and Democrats, Paul has spent a year
leading the polls for the G.O.P. presidential nomination. Early in his rise,
after he united liberals and libertarians with a thirteen-hour filibuster
against the Obama Administration’s
drone program, many Republican elders regarded him as a passing fad. But
as the reality of his staying power set
in, and after he announced the formation of what appears to be a serious
fifty-state campaign, a neat symmetry
emerged from Washington’s center.
Democrats call him crazy, a creature
from the right wing’s lunatic fringe,
while hawkish Republicans use the
reverse tactic, painting Paul as an impostor and a dangerous liberal mole.
That strategy may prove effective, and
on some issues, namely the re-reescalation of the war in Iraq, the attacks have caused Paul to vacillate.
But on criminal justice he has remained consistent.
In picking up where Webb stalled,
Paul has brought several conservatives
along with him. “It’s not about whether or not we’re going to be tough on
crime,” Utah senator Mike Lee told
the Salt Lake Tribune. “It’s first and
foremost about restoring justice to our
justice system.” Idaho congressman
Raúl Labrador, an unofficial leader of
the rebel faction of House Republicans
and a coauthor of the House’s version
of the Smarter Sentencing Act—the
more limited of the two mandatoryminimum reform bills introduced last
year—frames the issue in terms of basic American values: “The Founding
Fathers did not want states to have an
easy job putting people in prison for a
long time,” he told me.
These dissident Republicans have
mounted an organized, three-pronged
critique of the system’s failings: fiscal
(prisons are too expensive), religious
(criminals deserve forgiveness), and
libertarian (the system is an authoritarian nightmare). Left–right coalitions have been passing criminal-
justice reforms in red states for more
than a decade, but Texas is the conservatives’ shining example. In the midNineties, the state led the country in
per capita incarceration, but in 2007,
as Governor Rick Perry and the
Republican-controlled statehouse were
facing $2 billion in prison-construction
and operating costs, they passed more
than a dozen reforms that saved money
and shrank prison rolls. The state shut
down three juvenile-detention centers,
cut the youth prison population by
53 percent, and allocated $241 million
to alternative drug-treatment programs. Crime rates in Texas are at
their lowest levels since 1968.
For Republicans in Washington,
Texas offered more than an example
of good policy; it offered political cover with conservatives. “If these ideas
had been thought up in Vermont,
they wouldn’t go anywhere,” Grover
Norquist, the antitax activist, told
me. Norquist helped found an informal Washington reform group that
included David Keene, a former
chairman of the American Conservative Union and later a president of
the NRA; Edwin Meese, an attorney
general under Ronald Reagan; and
Pat Nolan, a former G.O.P. leader of
the California State Assembly and
the vice president of Prison Fellowship, the prison ministry founded by
Nixon aide Chuck Colson after his
Watergate-related incarceration. Republicans voting in lockstep may
have defeated Webb’s bill, but Paul’s
anti-establishment coterie sees an opportunity in the vacuum left by the
Democratic Party’s passivity. “Our
movement is showing that prisons, after all, are just another bureaucracy,”
Nolan told me.
“Society is changing,” Paul said. “I
think almost everybody, from Christian evangelicals to the far left, believe
that people deserve a second chance
and that putting people in jail for a decade for smoking pot or selling pot is
not the appropriate penalty.”
The polls back him up, but polls
don’t move legislation. Last month,
Iowa Republican Chuck Grassley replaced the congressional reform movement’s most powerful ally, Vermont
Democrat Patrick Leahy, as the chairman of the Senate Judiciary Committee. In a May speech on the Senate
REPORT
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created new twenty-year minimum
sentences for purveyors of synthetic
drugs. When Paul didn’t budge,
Schumer’s office worked the press.
“The grieving mother of a teenager
who was killed after smoking synthetic
marijuana is filled with fury at the lone
U.S. senator blocking a ban on the
dangerous drug,” the New York Daily
News reported. “[Paul’s] got blood on
his hands,” the Aurora, Illinois, woman told the tabloid. “It would be good
to ask [Schumer] directly and get him
on the record” about mandatory minimums, Paul told me. Schumer’s office
did not respond to several invitations
to discuss prison reform.
As I wandered the capital, speaking to a seemingly endless parade of
reform-minded conservative Republicans and waiting for Democrats to
return my calls, the senior senator
from New York suggested a key to
the mystery of why a political calculation that has outlived its electoral
usefulness still drives Washington’s
criminal-justice policy. Schumer is
known around town for the money
he raises from the financial sector
and the political protection he offers
Wall Street in return. Meanwhile,
Rand Paul and his ilk represent the
anti-corporatist wing of their party.
Maybe the story of Democrats and
prison reform is no longer the familiar one about pandering for votes,
but an entirely different, if equally
familiar, story about the unholy alliance of big government
and big business.
“I
a ., aged sixteen, in her cell at the harrison county youth detention center, in biloxi, mississippi. since 2001 the facility has been
privately operated by a company called mississippi security police, which receives over $1.6 million from the county each year.
floor, Grassley opposed not only the
content of the Smarter Sentencing
Act but even the idea of bringing the
bill to a vote. He described the act as
“reckless, wholesale, and arbitrary” and
called the fixed sentences prescribed
by current law, which judges cannot
overrule and which are widely seen as
the greatest single driver of mass incarceration, “the only tool that Congress
has to make sure that federal judges do
not abuse their discretion in sentencing too leniently.” Another problem,
according to Grassley: The reform bill
38 HARPER’S MAGAZINE / FEBRUARY 2015
“does not increase discretion for judges
to be more punitive.”
Grassley has often found common
cause in his effort to uphold mandatory minimums with Chuck Schumer,
the New York senator who has long
positioned himself as a tough-on-crime
Democrat. Last year, the Senate version of the Smarter Sentencing Act
was cosponsored by six Republicans,
two independents, and twenty-three
Democrats. Schumer was not among
them. In 2012, Paul earned Schumer’s
ire when he put a hold on a bill that
was looking for businesses that
would be less volatile and that would
perform better in a recession,” Tobey
Sommer, a senior equity-research analyst with S
unTrust Robinson Humphrey, a bank based in Atlanta, explained to me as the stock market
boomed last spring. In 2009, the
staffing firms that Sommer had been
covering for SunTrust were reeling
from the aftershocks of the financial
crisis. “A lot of the stocks I covered
were not stocks I would want to sell,”
he said. His clients wanted the stability of what he calls “government
companies,” and with partnership
corrections—the industry term for
private-sector incarceration—he
found what he was looking for.
Photograph by Richard Ross. Ross self-published his monograph Girls in Justice last month
The profits generated by the corrections economy have not been definitively calculated, and a comprehensive
audit would be a staggering accounting
task. The figure would have to include
the cost of private-prison real estate,
mandatory drug testing, electronic
monitoring anklets, prison-factory labor, prison-farm labor, prison-phone
contracts, and the service fees charged
to prisoners’ families when they wire
money for supplies from the prison
commissary. Contracted commercial
activity flows in and out of every city
jail, rural prison, suburban probation
office, and immigration detention center. For stakeholders in the largest
peacetime carceral apparatus in the
history of the world, the opportunities
for profit add up. For analysts like Sommer, the system also offers a safe,
government-secured investment.
Sommer told me that despite the
calls for reform and recent reductions in prison populations, the industry shows no signs of contraction.
In fact, the majority of new prisons
built in the United States in the
past five years have been for-profit
enterprises. Prisons are not the only
corrections businesses that are flourishing, but they are the standardbearers of innovation in the industry. Their business model is a simple
exchange of money for services: the
company owns or operates a secure
building, and state or federal agencies pay out a per diem for each
man, woman, and adolescent it incarcerates. The more prisoners held,
and the longer they stay, the more
money the company earns.
Private-prison businessmen have
been turning profits in America
since the early 1600s, when English
entrepreneurs began shipping convicts to the Virginia settlements and
selling them as servants. After Reconstruction, when labor plantations
proliferated in the South, prison labor powered manufacturing in the
North. In the late 1800s, convict labor leasing was encouraged by policy
in more than a dozen states. San
Quentin, which was built in 1852
from rock and clay by convicts held
on a nearby prison ship, was initially
operated as a for-profit enterprise.
State and federal agencies took control of prisons starting in the 1920s,
but that government-run system,
made familiar by classic Hollywood
films in which every guard and warden was a public employee, was a historic aberration and a model that
proved incompatible with the demands of the drug wars of the late
twentieth century.
In the 1980s, with prisons brimming to cruel and unusual densities,
judges ordered agencies in more
than two dozen states to remedy
their constitutional violations. According to Christopher Petrella, a
prison-p olicy analyst, these orders
were the first step toward a gradual
return to private enterprise. “Crowding litigation has historically served
as a catalyst for the rapid expansion
of prison capacity and thus the
emergence of for-profit prison management,” Petrella told me. Faced
with eliminating overcrowding
while finding room for scores of new
drug offenders, lawmakers warmed
to the same ideas that had appealed
to the British 400 years earlier.
Private prisons, which cost less and
were built faster than government
projects, rapidly outpaced their already booming public counterparts.
In 1990, there were roughly 7,000
inmates in private facilities throughout the nation, according to the
ACLU. By 2009, that number had
grown to nearly 130,000, an increase
of about 1,600 percent. Today, some
10 percent of the country’s total prison
beds are for-profit, with rates as high
as 44 percent in some states.
Since its first federal contract, in
1983, Corrections Corporation of
America has grown into the fifth-
largest jailer in the country. It holds
85,000 inmates in 14 million square
feet of prisons spread through nineteen states and the District of Columbia. Only the federal Bureau of
Prisons and three states—Texas, California, and Florida—incarcerate more
people. The Geo Group, an international player with more than 78,500
beds in the United States, the United
Kingdom, Australia, and South Africa, is their main domestic competition. Since 2006, Geo’s stock has
nearly quadrupled in value and CCA’s
has more than doubled. In 2001, total
revenues for all private-prison operators worldwide were $1 billion. A
little more than a decade later, the
combined profits of CCA and Geo
alone reached $3 billion. The two
companies own or manage roughly
75 percent of the for-profit-prison
beds nationwide, and along with
the Utah-based Management and
Training Corporation (MTC), they
bring in roughly 90 percent of the
p artnership-corrections industry’s
gross income.
“Our revenue is primarily from
government entities at the federal,
state and local level,” CCA writes in
its shareholder report. According to
Petrella, CCA’s revenue is approximately 99.2 percent governmentsourced.4 These companies are more
accurately thought of as outsourced
government agencies.
Two years ago, both Geo and
CCA legally redefined themselves as
real estate investment trusts (REITs).
Historically, to qualify as a REIT, a
company had to prove that its revenues were wholly derived from real
estate holdings. But as the Internal
Revenue Service gradually loosened
these requirements, prison companies, which identified themselves as
landlords for the government’s criminals, were positioned for the change.
CCA and Geo converted within a
few months of each other and saw the
same immediate benefits—exemption
from the 35 percent federal corporate
tax rate, cash dividends for stockholders (REITs are obligated to distribute
90 percent of earnings to shareholders), and increased stock value.
The conversion also helped the industry invent new, mutually beneficial arrangements for its government
clients. In fall 2013, under court order to alleviate overcrowding, the
state of California made a deal with
CCA to turn the company’s for-profit
federal immigration holding center
in California City into a state prison.
After the transition, CCA maintained ownership of (and earns rent
on) the facility, an arrangement that
solidified both the R EIT’s primary
role as landlord and the prison-guard
union’s claim on jobs. “This format
A prison company doesn’t even need to be
operational to start earning public money.
A 2001 study found that 78 percent of
CCA and 69 percent of Geo facilities were
built with up-front government subsidies.
4
REPORT 39
really addresses the principal concerns of many constituencies,” Sommer said. “If there are downside risks,
they are not evident to me
at this juncture.”
F
or major-party politicians, too,
the benefits of privatization are more
apparent than the risks. Democrats
ride on unionized jobs. Republicans
recruit corrections companies, cut
department budgets, and tout the
marvels of the free market. In rural
America, where manufacturing is
gutted, agriculture consolidated, and
downtowns sit fallow, prisons do
more than provide much-needed
jobs. The federal census makes no
distinction between the free and the
jailed in its population counts, and a
few thousand inmates can help a
desperate district gain political clout
for schools, roads, or any number of
voter-pleasing projects.
The industry benefits the state in
many ways, but it does not take its recession-proof profits and noncompetitive bids for granted. In 2013, CCA
spent $2.7 million on forty lobbying
firms in twenty-seven states and the
District of Columbia “to educate federal, state, and local officials on the
benefits of partnership corrections.”
The company also operates a political
action committee, CCA PAC, which
makes political contributions to choice
candidates while assuring shareholders
that its decisions are made with the
inmates’ best interests at heart. “As a
matter of longstanding corporate policy
and practice,” CCA says, it never lobbies “for or against policies or legislation
that would determine the basis for an
individual’s incarceration or detention.”
But until 2010, CCA was a member of
the American Legislative Exchange
Council (ALEC). During the period of
CCA’s membership, ALEC lobbied for
mandatory-minimum statutes for drug
crimes, California’s three-strikes law,
federal immigration detention regulations, and Arizona’s Senate Bill 1070,
the anti–undocumented immigration
measure signed into law by Governor
Jan Brewer in April 2010. (A spokesman
for CCA told me that the company was
a “non-voting” ALEC member “for the
purpose of monitoring policy trends.”)
Meanwhile, contractual occupancy quotas—also known as capacity
40 HARPER’S MAGAZINE / FEBRUARY 2015
g uarantees—set a minimum number
of inmates that the government must
supply to a private facility. If a government agency, be it the Arizona
Department of Corrections or the
Department of Homeland Security,
fails to meet the minimum, it pays for
the promised inmates nonetheless.
Quotas accomplish two key objectives: they shift the industry’s most
acute risk—a lack of inmates—away
from shareholders and squarely onto
the government, while also encouraging high prosecution rates, regardless
of the frequency of crime. Quotas vary
from state to state and prison to prison,
but a 2013 study of seventy-seven state
and county for-profit facilities conducted by In the Public Interest, a
government-contracting watchdog
group, found that 65 percent of contracts included guarantees, which
ranged between 80 and 100 percent
occupancy. ICE has a quota, written
into federal code by bipartisan congressional assent, to maintain at least
34,000 beds for detained migrants.
Quotas are guaranteed regardless of
circumstances. In the summer of 2010,
three inmates escaped Arizona’s Kingman State Prison, an MTC-operated
facility, with the help of a relative who
threw some tools over the top of a
fence. According to a report in the Arizona Republic, Kingman’s guards ignored the alarm that went off, because
it had been broken and sometimes rang
200 times during a shift. Two of the escaped convicts kidnapped and murdered a retired couple driving through
the area, shooting them at close range
inside their RV and setting the vehicle
on fire.5 After the devastating breach,
the state declared Kingman dysfunctional, removed hundreds of flight-risk
inmates, and suspended new arrivals.
Citing the eleven months that passed
before the prison was back to its guaranteed 97 percent occupancy, MTC
threatened to sue the state for $10 million in lost fees. Arizona settled for
$3 million.
Private-prison incentives undeniably pervert the system. “The business
5
According to the Arizona Republic, when
state police arrived two days later, they found
two of the couple’s three shih tzus, Prissy and
Roxie, waiting outside the charred vehicle
that held their owners’ remains. Bear, the
third dog, was never found.
model they employ is perpendicular to
the fundamental goals of recidivism
reduction, or of criminal-justice policy,” Petrella told me. But the economic and political imperatives that empower the system reach well beyond
the 8 percent of American inmates
who sleep in private beds. Guardsanctioned “gladiator schools” have
encouraged inmate-on-inmate violence in public and private prisons
alike. A class-action lawsuit filed last
October against the Alabama Department of Corrections alleges rampant
guard-on-inmate violence at the state’s
maximum-security St. Clair Correctional Facility. Juvenile solitary confinement and the death penalty, including a highly publicized bungled
execution in Oklahoma last year, are
paid for by your tax dollars, as well.
Petrella worries that “the habit of fetishizing the dysfunction of for-profits
obscures larger questions about the
purpose of punishment.” For the prisoner serving a twenty-year sentence
for selling marijuana, it doesn’t matter
who owns the prison.
Other stakeholders in the public
system have found opportunities every
bit as desirable as those exploited by
profit-seeking companies, and publicsector interest groups—such as those
that represent prosecutors, law enforcement, and prison guards—have also
lobbied against reform. The California
Correctional Peace Officers Association, the state’s prison-guard union,
which represents some of the best-paid
correctional officers in the country,
helped push through the state’s threestrikes law in 1994. The law sent petty
thieves to prison for decades and contributed to the state’s ongoing and unconstitutional overcrowding. The
guards had been staunch opponents of
private prisons, but in California City,
the union essentially merged
with the industry.
I
n early August of 2014, Geo’s
stock experienced its largest price
jump of the year, a 7 percent spike
over two days that came on better
than expected second-quarter news:
tens of thousands of Latin American
children had fled to the MexicanAmerican border.
Tobey Sommer, the SunTrust analyst, confirmed the causation. There is
Nor is investment activity limited to
domestic prisons. In 2014, American
building-management company CGL
partnered with Empresas ICA, Mexico’s
largest construction company, to build and
manage prisons in Mexico. CGL, which is a
subsidiary of Texas-based Hunt Companies,
invested $116 million in the partnership.
6
REPORT
41
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“an expectation emerging that the
ongoing political issue of immigration
and subsequent additional funding
that immigration is receiving could
result in more business for both companies,” he told me. Geo executives
said as much during their secondquarter investor conference call on
August 6, when they announced a
partnership with ICE at the Karnes,
Texas, civil-detention center for “housing family units as a result of the ongoing crisis along the southern border.”
The Karnes facility houses mostly
women and children, in rooms that,
according to Geo, feature individual
bathrooms and showers, televisions,
and microwave ovens. School-age
children at the facility, said Geo president John Hurley, “will be attending
education classes on premises conducted by a certified charter school
under contract by Geo.” As the crisis
continued and the Department of
Homeland Security announced
$405 million in new funding, Hurley
said that Geo was quick to offer ICE
“a number of proposals to provide secure residential care.”
A formula applies to both the fiscal
and political logic: More prisoners
mean more dividends. The inescapable
result is that American inmates exist
in a country within a country, a totalitarian vassal state with a captive consumer market and little regulation. It
doesn’t make much difference whether
the buildings are private or public property. Profits will be extracted from every
part of the prison experience.6
Consider the prison-phone industry.
For inmates, especially urban felons
shipped to far-off rural sites, calls to the
outside are a social lifeline and a proven method for reducing recidivism. But
here, too, Wall Street has identified a
high-demand, low-supply commodity.
Other government contractors, be they
food suppliers or dentists, collect fees
paid out by the state. Prison-phone
companies, and the prison-wiretransfer companies that are following
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The three unclued entries are from “Palindromania,” by Jon Agee:
OH, CAMERAS ARE MACHO!
DEB SAT IN ANITA’S BED
BUT ANITA SAT IN A TUB
ACROSS: 11. e(co)nomy*; 12. Jo(n)g; 13. b-wan-a; 15. to-(get)-her-ness; 20. Ex[x]on-E-ration;
23. pun; 31. in-Evita-b(L)y; 33. homophone; 34. hidden; 38. i(me)s, rev.; 39. homophone;
40. R-etailers*; 41. basil-(is)-K[lein].
DOWN: 1. p-ea-c(E)able; 2. lo-Amy; 3. inte(r[oyalty])stitial*; 4. no-OR; 5. r-yes; 6. *; 7. Mo-hr;
8. Norma(l); 9. *; 10. a-G.E.; 13. homophone; 14. whoreho(U)se*; 16. hidden; 17. son-g; 19. (b)arfs;
20. *; 21. Onanist-S; 22. *; 24. tahi(n)i, tahi(T[ribe])i; 25. pi(V-O)ts; 26. laten[t]; 27. a-BB-ot(rev.);
28. d-[r]ubber; 29. first letters–UK; 30. dr-AMA; 32. a-vale, homophone;
35. *; 36. carb(on).
their model, extract revenues directly
from inmates and their families. (Fifteen dollars for a fifteen-minute phone
call is not uncommon.)
As with partnership corrections, profits are largely determined by contracts,
but phone and money-transfer companies sweeten the deals for their public
partners with profit-sharing perks. These
commissions kick back anywhere from
40 to 60 percent of revenue to the contracting government agency. According
to a study by Prison Legal News, a publication of the Human Rights Defense
Center, about 85 percent of non-federal
jails sign up for commission-added contracts, and because commissions increase in proportion to the total contract value, cash-strapped public
officials are motivated to choose the
most expensive contract available.
Prison Legal News found that when
Louisiana put out a public request for
proposals for phone services in 2001,
the agency stated the wish explicitly:
“The state desires that the bidder’s
compensation percentages . . . be as
high as possible.”
In 2000, prison-phone commissions
totaled more than $20 million in both
New York and California. The states,
along with at least seven others, have
since phased out the kickbacks, and
after a decade of petitions, the FCC
has instituted limits on interstate call
rates. But the FCC rules have not affected intrastate rates, and inmates
and their families still deal with exorbitant fees. The prison-phone industry, which generated more than a billion dollars in annual revenue in 2014,
is one of the brightest stars in the
corrections economy.
Wall Street is paying attention, and
private-equity investors have been
driving successive rounds of merger activity. In 2004, prison-phone companies T-Netix and Evercom Systems
merged to form Securus Technologies,
a firm that in 2009 locked down a fiveyear, $95 million contract to supply
services in twenty-five CCA facilities.
But GTL, which owns about 57 percent of the prison phones nationwide,
is the prize. In 2009, the company was
purchased by two private-equity firms,
Veritas and Goldman Sachs Direct, for
$345 million. In a widely publicized
Wall Street deal, they sold GTL two
years later to another private-equity
42 HARPER’S MAGAZINE / FEBRUARY 2015
firm, American Securities, for $1 billion, a return of 190 percent on their
investment. A year later, Securus sold
for $700 million. Today, three
companies—Century Link, Securus
Technologies, and GTL—control
about 90 percent of the
prison calls in the country.
T
his rigged game of economic
exploitation is a recurring theme in
Rand Paul’s list of criminal-justice
grievances. “You’ve got poor people
caught up in stuff where they are
fined, where they go to jail if they
can’t pay the fine, then the private
company that’s making money off the
ankle bracelet is charging him three
hundred fifty dollars a month,” Paul
said. “Then you go to debtor’s prison
for not paying your debt. People get
trapped, and poor people are particularly trapped.”
In 2010, Geo acquired Behavioral
Interventions, an electronic-monitoring
company that tracks roughly 60,000
offenders nationwide and is the only
federal contractor for electronic supervision of ICE-detained migrants. In many
Southern states, private debt collection
and probation companies work hand in
glove with law enforcement to extract
steady profits.
“Over time, you realize that the
Pentagon and the prisons do things
that the government ought to deal
with,” Grover Norquist told me. “Prisons are too important to leave to the
wardens. Criminal justice is too important to leave to the prosecutors. Conservatives assumed the cops and prosecutors were all good guys. Turns out
that was not a safe bet.”
The power of corporate interests
may be a widespread outrage in this
country; dismay and disgust with the
financial sector might have been the
common complaint shared by the Tea
Party and Occupy Wall Street. But
real reform only comes when there is
consensus about something being broken. As long as the machines are running in lower Manhattan, and migrant children are safer in a South
Texas detention facility than in their
own countries, the system thrives. The
schizoid American psyche, split between corporate boosterism and anticorporate populism, will forever war
against itself.
As Eric Holder finished a six-year
term as attorney general, during which
he spoke out frequently about mass
incarceration but left the federal government’s prison numbers much as he
found them, he told a congressional
sentencing commission that prison
reform was a bipartisan issue that
should appeal to the overlapping interests of the fiscally conservative, socially liberal American middle class.
“Overreliance on incarceration is not
just financially unsustainable,” he said
in his testimony, “it comes with human
and moral costs that are impossible to
calculate.” With this, Holder offered a
classic misinterpretation that betrayed
a fault of perspective. He failed to consider the needs of the system itself. The
American prison system isn’t broken;
it’s working exactly as designed. Seven
million people may find their lives
constrained, but according to the metrics that make America hum, their
time served is also value added. Critics
who mistake mass incarceration for a
failure of social justice are oblivious to
a stronger governing principle: Criminal justice is a business, and business
n
is good.
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