Punishment for Sale

Donna Selman and Paul Leighton[1]

 Reviewed by Randall G. Shelden[2]

The authors of this book provide an insight into the world of private prisons that no one has ever done before.  The world they describe is a world where money rules and profit is the name of the game.  The well-being of society, the rehabilitation of prisoners and savings to taxpayers are only minor concerns by comparison.    

To understand what this book is about requires an understanding of the nature of capitalism. Within a capitalist society there is an insatiable desire to continue “converting money into commodities and commodities into money.”  Everything, it seems, is turned into a “commodity” - from the simplest products (e.g., paper and pencil) to human beings (e.g., women's bodies, slaves and of course prisoners). Indeed, within a capitalist society “daily life is scanned for possibilities that can be brought within the circuit of accumulation,” since any aspect of society that can produce a profit will be exploited.[3] CCA and other private prison operators consistently made the point when they began that the growing incarceration rate was seen as an “opportunity” to make money. Likewise, entrepreneurs see disasters like Katrina as opportunities to make money.  Misery is profitable.

Part of this drive for profits stems from the ideology of the “free market,” a system of beliefs that undergirds the entire capitalist economic system. According to this ideology every individual pursues his or her own personal interests and the result is a collective good for the entire society. It is Adam Smith’s “invisible hand” at work. Corporations are “free” to do whatever they want. The failure of this philosophy became evident in late 2008 and continues to the present date.[4]

A key part of the development of private prisons is the prevailing hatred of the government and the belief that the free market can do better.  Although distrust of government dates back to the early years of the country, it really took off during the Reagan Administration.  As the authors noted in chapter 2, Ronald Reagan summed it up nicely when he said in 1981 that “Government is not the solution to our problems. Government is the problem.” What he and others with similar views keep forgetting to mention is that government is a problem “unless it can benefit big business,” which in fact it has done with much regularity for more than 100 years.[5] Incidentally, I did some fact checking on the size of the government under different administrations and lo and behold it has consistently increased more under Republican administrations than under Democratic administrations.  Specifically, during a 40 year period (1962-2001) the total of non-defense government employees rose by 310,000 during Republican administrations, while during Democratic administrations there was an increase of just 59,000.  In other words, of the 369,000 employees added, 84% were added under Republican administrations.[6]  The size of the government got even bigger under George W. Bush, going from 18.4 percent of GDP in 2000 to 20.3 percent of GDP in 2006.[7] While Clinton increased the federal budget by 11%, under Bush it went up by 104 percent.[8] Also, the national debt went up by 72% under Bush.[9]  This is the irony of free market worshipers: they actually want the government to help them out whenever possible.  Without a doubt CCA and other private prison operators like the government.[10]

Reagan was so enamored with the idea of the privatization that he established a special commission – the President’s Commission on Privatization.  Its report of 1968 was for all practical purposes a foregone conclusion, as most of the members were already leaning toward support of privatization. The lone opposition came from the American Bar Association.  Many groups that were against the idea, such as the AFSCME, were never invited to testify.  And, surprise, surprise, they came down in favor of privatization.

Privatization has become, wrote Edward Herman, “one of the mantras of the New World Order. Economic, political and media elites assume that privatization provides undeniable benefits and moves us toward a good society.” The movement toward privatization stems from the recent trends toward greater and greater corporate power.  This increased power is linked to the emergence of neoliberalism.  Some of the key tenants of this ideology include: (1) The rule of the market (including the “trickle down” theory and the break-up of unions); (2) Reducing public expenditure for social services, such as health and education (many still want to privatize social security); (3) Deregulation; (4)Privatization of public enterprises; (5) Shifting the idea of seeking what’s good for the public to “individualism and individual responsibility.”[11] “Part of the design of neoliberal politicians and intellectuals,” says Herman “has been to weaken the state as a power center that might serve ordinary citizens and challenge the rule of the market.” Contributing to this trend is the increase in capital flow away from urban centers, leaving them in dire financial straits, as governments “have had to limit business taxes and spending on social benefits in order to provide a 'favorable investment climate,' leaving them under financial stress.”[12] Through privatization, states can get around voter resistance to prison construction bonds by having private corporations build the prison, who then turn around and send a huge bill to the state and thus taxpayers.  This represents a classic case of “socializing the costs and privatizing the benefits.”[13]     

Speaking of “free markets,” this book shows that corporations like CCA and GEO do not really believe in a truly “free market” since they constantly seek ways of using taxpayer money to increase their profits. They have constantly received billions of dollars in tax breaks and subsidies from the public.  Indeed, as one study quoted by the author’s shows, a large proportion of the prisons of both these companies were subsidized to the tune of about 70% or more.  In many parts of the country small towns, suffering economically, have practically begged for a prison to be built, naively believing that they will be rescued.  One of the most recent is a federal prison for women being built (at a cost of $195 million) in the tiny town of Aliceville, Alabama (pop. 2500) near the Mississippi border.  It is expected to hold about 1,750 prisoners. It is anticipated that about 300-320 people will be employed from the surrounding area.  While not a private prison, it nevertheless illustrates the desperate conditions in many parts of the country.[14] 

Indeed, as many have reported,[15] most of the building of American prisons during the past two decades has been in rural areas, largely because of the promises of economic stimulus to these areas coupled with the cost savings of the states.  These figures tell the story: whereas during the 1960s and 1970s an average of four new prisons per year were built in non-metropolitan areas, during the 1980s this average increased four-fold to about 16 per year and during the 1990s went to an average of about 25 per year.  During the 1990s a new prison was opened about every 15 days. During this decade, 57 percent of all new prisons were in non-metropolitan counties, which have only 19 percent of the total population.[16] By the end of the 1990s, there were about 235,000 prisoners and 75,000 workers in the new rural prisons built that decade.  Between 1980 and 2000, “more than half of all rural counties added prison work to their available employment mix.” Prisons, along with casinos and animal confinement units for raising or processing hogs and poultry have become the three leading industries in rural areas.[17] There are many states that have several prisons built within a few miles of one another.  Tracy Huling described them as “penal colonies.”  She notes that in the town of Ionia, Michigan (pop. 10,569) there are six state prisons, which ties it with Huntsville, Texas (pop. 35,078) for the most prisons in any city in the country.[18]  True, few of these are private prisons, but you get the general idea.

Many researchers like these Selman and Leighton have noted the close connection between politics, economics and the prison system – the “iron triangle” originally mentioned by President Eisenhower when he brought attention to the Military Industrial Complex in 1960. A classic example of this “iron triangle” was the influence of Tom Beasley (head of the Republican Party of Tennessee), Doctor Grants (with ties to Sodexho-Marriott) and Don Hutto, who was at the time the president of the American Correctional Association.  All came together to help CCA enter the market.

One of the most recent examples concerns the connection between Arizona Governor Jan Brewer, the notorious Sheriff of Maricopa County Joe Arpaio and CCA.  Over the summer reports started to emerge that revealed that two key advisors for Arizona Governor Jan Brewer had close ties to Corrections Corporation of America.  Local CBS affiliate KPOH reported that "two of Brewer’s top advisers have connections" to private prison giant Corrections Corporation of America (CCA). Lawrence Lewis, writing for the Daily Kos, reported that “Paul Senseman, Brewer’s deputy chief of staff, is a former lobbyist for CCA. His wife continues to lobby for the company. Meanwhile Chuck Coughlin, who leads her re-election campaign, chaired her transition into the governorship, and is one of the governor’s policy advisors, is president of HighGround Public Affairs Consultants, which lobbies for CCA.”  Lewis also noted that it just so happens that CCA has a contract with Immigration and Customs Enforcement “to lock up illegal immigrants picked up in Arizona” and obviously sending millions of dollars into the coffers of this company.

As a matter of fact, prison lobbyists were deeply involved in the passage of Arizona’s strict new immigration law. For example, Arizona Senator Russell Pearce (R-Mesa) sent a draft version of S.B. 1070 bill (which he wrote) to the American Legislative Exchange Council (ALEC) for their input.[19]  In case you don’t know about this group, ALEC is a legislative consulting firm consisting of elected officials and business leaders. The membership consists of state legislators, private corporation executives and criminal justice officials.  They are involved in the writing of many laws related to the prison system, including “Three Strikes” laws, “truth in sentencing” and the like.[20] As Selman and Leighton note, some of ALEC’s members represent about a dozen companies that do business with prisons, such as the drug companies Merck and Glaxco Smith-Klein in addition to several telephone companies, which make huge amounts of money off inmates (p.100).

Isn’t it interesting that CCA currently operates a total of six correctional facilities in Arizona in two small towns, Florence (where there are two facilities) and Eloy (which has the other four).  These towns are located within a short distance of Phoenix. Several mention the Bureau of Immigration and Customs Enforcement as part of their “customer base”; for one - the Eloy Detention Center – the Bureau is their only customer.  Altogether, these six facilities house more than 12,000 inmates, some from other states (such as California and Hawaii).[21] 

On the Rachael Meadow show on September 1 it was reported that Arizona Governor Jan Brewer has decided to stop advertising on the station that has been reporting this story, KPHO, because of the “credibility of their journalism” – they admitted it was because of the investigation into Brewer’s ties to CCA.  It has become obvious that CCA stands to gain from the enforcement of the recent anti-immigration law.

Related to this story is another one concerning the hard-line controversial Sheriff of Phoenix, Joe Arpaio.   The Department of Justice has filed suit against him for “refusing to cooperate with an investigation into whether it discriminated against Latinos while trying to catch illegal immigrants,” and engaging in racial profiling, according to the Los Angeles Times. This is the first time in 30 years that a local law enforcement official has withheld documents pertaining to an investigation. Arpaio’s officers have been involved in an intensive effort to enforce the recent law by patrolling neighborhoods where Latino immigrants live and checking on their status. (This comes at a time when the number of illegal immigrants crossing the border has declined from a high of 12 million in 2007 to 11.1 million in 2009, according to a Pew Hispanic Center report.

Returning to the book by Selman and Leighton, as we all know a great deal has been written in recent years about the privatization of prisons (the authors provide ample citations to this body of work), but nowhere have I seen such a deep probe (as an investigative journalist might do) into the two leading corporations in the world of prison privatization. The methodology is unique, as they review Congressional testimony, Securities and Exchange Commission filings, and the contracts that these two corporations have made with state and local governments.  

What amazes me more than anything else is the amount of money extracted from the states that pay these companies to build and/or operate these prisons. Table 5.3 on page 136 compares the top salary and wage earners in public departments of corrections with those of three major private corporations (CCA, GEO and Cornell).  Each of the CEO’s earned in excess of $1 million, while the salaries of the directors of state prisons earned from about $128,000 to $225,000.  In most of the prisons run by private corporations there were fewer prisoners and a lower budget than for state prisons.  This was for the year 2007. In an e-mail exchange Paul Leighton supplied me with a web site that shows the Security and Exchange Commission filings that provides, among other things, the annual compensation for key executives with GEO and CCA for 2009.  To give just one example, a total of $8.3 million was given to six executives of the GEO group, plus five additional people who received $200,000 or more.  The compensation included stock options and other benefits.[22] In short, it has become a rather cozy relationship during which these executives smile all the way to the bank. I was curious what the average compensation per inmate would be, which I did for the 2007 data supplied in Table 5.3.  What I found was that the Chairman of the Board and CEO of GEO Group earned about $55 per inmate, while his counterpart at CCA earned about $26.  The Cornell CEO did even better, earning about $58 per inmate.  It should be noted that these were just their salaries and did not include stock options and other benefits.  In contrast, the Secretary for the California Department of Corrections earned a mere $1.30 per inmate while the Executive Director for the Texas Department of Corrections earned a mere $1.07 per inmate.

Clearly, while crime may not pay, punishment certainly does, as it is a very profitable enterprise.   

Future researchers might be advised to pick up this story and begin to explore another important component of the prison industrial complex, namely the number of lobbyists involved in the prison industry. An example is a recent report about interim San Diego County Sheriff Bill Gore who has received more than $2,000 from employees of The GEO Group.[23]  It just so happens that GEO runs the jail where he is Sheriff.  In this particular report the writer noted that "All told, the companies, their executives, directors and lobbyists gave $3.3 million in 44 states between 2000 and 2004 — a figure that includes contributions from not only private-prison firms, but also the investment and construction companies, food service providers, health-care management and counseling services that do business with them," quoting the Institute on Money and State Politics.  The lobbyist that was involved with Sheriff Gore was not registered as a lobbyist in the county although he was registered with the city.  

One final word about this book.  The authors go into great detail describing the often frustrating and costly search for information from these companies just to get some information about their contracts with the governments where their prisons would be located.  They had to file a Freedom of Information Act request in order to get some of this information.  They discovered that the “cost savings” promised by these companies never panned out and in fact in many cases their costs were higher than what the government could provide.  They also discovered that CCA and others began to engage in a massive public relations campaign (which should be called propaganda, which is what they do) when several crises emerged, such as the disaster at the Youngstown, Ohio prison, among others.  Like other corporate offenders they put the blame elsewhere – the local governments, the inmates, etc.  Then they discovered the “immigrant crisis” and began to seek contracts with the federal government to build and house illegal immigrants and other non-citizens. Ironically, CCA received a $129 million contract from the Federal Bureau of Prisons to operate a detention facility in the same building as the prison in Youngstown, Ohio, which was closed after the scandals broke (p. 123). Also, CCA is now one of my neighbors, as they recently announced that they will operate a federal detention facility is the tiny town of Pahrump, Nevada, about 60 miles west of Las Vegas.[24]  They already operate a women’s prison in North Las Vegas.           

In closing let me suggest that criminologists should begin to follow in the footsteps of Selman and Leighton.  Perhaps the American Society of Criminology can take a close look at itself and how it conducts business.  How many conferences have been located inside a Marriott Hotel?  Does the ASC know that in its own small way it contributes to the Prison Industrial Complex?

 Notes


[1]  Comments prepared for the “Author Meets Critic” session at the ASC annual meeting, San Francisco, November, 2010. Punishment for Sale: Private Prisons, Big Business and the Incarceration Binge (Rowman and Littlefield, 2010)

[2] Randall G. Shelden is a professor in the criminal justice department at UNLV. His web site is: www.sheldensays.com.  

[3] Heilbroner, R. L. 1985. The Nature and Logical of Capitalism. New York: W. W. Norton, p. 60.   

[4] The current recession illustrates this perfectly.  These “free markets” faltered miserably and taxpayers were called upon to “rescue” them.  This is nothing less than socialism for the rich and free enterprise for everyone else. A good assessment of the present economic crisis is found in Paul Krugman’s book The Return of Depression Economics (WW Norton, 2009) and several of his columns in the New York Times, such as “The Third Depression,” New York Times, June 27, 2010. http://www.nytimes.com/2010/06/28/opinion/28krugman.html?_r=1&hp.

[5]  Anti-government feelings have reached a boiling point during the past year or so, as exemplified with the so-called “Tea Party” movement. 

[6] Doherty, B. (2003). “All the President’s Employees: Data - federal employment growth or shrinkage by president - Brief Article.”  Reason, February. http://findarticles.com/p/articles/mi_m1568/is_9_34/ai_96644869/.  Retrieved on September 1, 2010. 

[7] Ward, J. (2008).  “Big government gets bigger.”  Washington Post, October 19. http://www.washingtontimes.com/news/2008/oct/19/big-government-gets-bigger/. 

[8] De Rugy, V. (2009). “Spending Under President George W. Bush.”  Mercatus Center, George Mason University, March. http://mercatus.org/publication/spending-under-president-george-w-bush. Retrieved on September 1, 2010.  

[9] Knoller, M. (2010).  “Bush Administration Adds $4 Trillion To National Debt.”  CBS News, September 29. http://www.cbsnews.com/8301-500803_162-4486228-500803.html.  Retrieved on September 1, 2010. 

[10] Studies documenting this are numerous.  Some examples include: Baker, D. (2006).  The Conservative Nanny State.  Washington: Center for Economic and Policy Research; Johnston, D. C. (2007). Free Lunch.  New York: Portfolio/Penguin. 

[11] Shah, A. (2010).  “A Primer on Neoliberalism.” http://www.globalissues.org/article/39/a-primer-on-neoliberalism#Neoliberalismis. Retrieved on September 11, 2010. 

[12]  Herman, E. (1997). "Privatization: Downsizing Government For Principle and Profit."  Dollars and Sense (March/April). 

[13]  Dyer, J. (2000).  The perpetual prisoner machine: How America profits from crime.  Boulder, CO: Westview Press, , p. 245. 

[14] Poe, R. (2010). “New prison offers boost for region's economy.”  Columbus Dispatch, September 1. http://www.cdispatch.com/business/article.asp?aid=7665.  

[15] See my book Our Punitive Society. Long Grove, IL: Waveland Press. 

[16]  Huling, T. (2002).  “Building a Prison Economy in Rural America.”  In M. Mauer and M. Chesney-Lind, (eds.), Invisible Punishment: the Collateral Consequences of Mass Imprisonment.  New York: New Press, p. 198.Ibid; see also Clement, D. (2002).  “Big house on the prairie.”  Fedgazette (Federal Reserve Bank of Minneapolis), January.  Online: www.minneapolisfed.org.pubs/fedgaz/02-01/house.cfm. These are referred to in my Our Punitive Society.   

[17] Huling, “Building a Prison Economy in Rural America,” p. 199. 

[18]  Huling, pp. 206-207.

[19] Hodai, B. (2010). “Ties That Bind: Arizona Politicians and the Private Prison Industry.”  In These Times, June 21.  http://www.inthesetimes.com/article/6085/ties_that_bind_arizona_politicians_and_the_private_prison_industry/.  Retrieved on September 3, 2010.

[20] More than one-third of state lawmakers in the country (2400) belong and they are, not surprisingly, mostly Republicans and conservative Democrats.  It was started in 1973 by Paul Weyrich (who also co-founded the Heritage Foundation and now was the head of a group called the Free Congress Foundation, a far right conservative group).  Their mission is to promote “free markets,” along with small governments, “states’ rights” and, of course, privatization. Corporate membership dues range from $5,000 to $50,000 annually.  Corrections Corporation of America is a member of this group, which is not surprising.  However, members also include a veritable “who’s who” of the Fortune 500, such as Ameritech, AT&T, Bayer, Bell Atlantic, Bell South, DuPont, GlaxcoSmithKline, Merck & Co., Sprint, Pfizer, to name just a few. Among the companies that have supported ALEC through various grants include Ameritech, Exxon Mobil, Chevron and several corporate foundations, including the Proctor and Gamble Fund, Exxon Educational Foundation, Bell Atlantic Foundation, Ford Motor Company Fund, among many others.  

[21] Altogether, CCA operates 60 facilities with some 75,000 prisoners in 19 states and the District of Columbia.  For details see their web site: http://www.correctionscorp.com/.   

[22] http://sec.gov/Archives/edgar/data/923796/000095012310027753/g22606def14a.htm; http://sec.gov/Archives/edgar/data/1070985/000095012310031594/g22784def14a.htm.  

[23] Barrera, E. A. (2010). “Private Prison Group Uses Unregistered Lobbyists While Giving Money to Sheriff Gore.”  East County Magazine, June. http://www.eastcountymagazine.org/node/3463.  Retrieved on September 3, 2010. 

[24] “CCA to Activate Nevada Southern Detention Center.”  http://www.correctionscorp.com/newsroom/news-releases/168/.