Privatization Watch
The Pennsylvania Supreme Court overturned an arbitrator’s judgment that Delaware County violated its contract with COs when it hired Wackenhut Corrections Corp. to run its prison. The arbitrator ruled that a clause allowing the county to subcontract work did not give the county authority to contract out the entire operation. The Supreme Court decided that the arbitrator interpreted the contract too broadly and that the county has the right to operate the prison “as it sees fit.” The decision was limited to interpretation of the contract and is not expected to have broader implications for prison privatization or privatization, in general.
In Indiana, a citizens’ group, Orange Countians Against the Prison (OCAP), knows how difficult fighting private prisons can be. OCAP formed after word leaked out that the county Economic Development Partnership was having serious talks with Corrections Corporation of America (CCA) about building and operating a prison there. No one at CCA or the partnership will reveal the status of negotiations, or even if CCA has targeted a site.
OCAP presented CCA, the partnership and the county council with a petition signed by 1,500 people who oppose the prison in which CCA plans to house out-of-state prisoners. “We’re a tourist area,” says Gabrielle Weber, OCAP organizer. “We don’t like for-profit prisons, and especially CCA. It has a horrible track record, pays low wages and the lack of training for its staff presents a danger to our community.”
The threat of prison privatization is “real and immediate” in Nebraska, says Bill Arfmann, executive director of the Nebraska Association of Public Employees (NAPE), AFSCME Local 61. State and local officials have been visited by Correctional Services Corp., CCA and Wackenhut, who have tried to interest them in private prison contracts. The state legislature currently is studying the privatization of corrections facilities. So far, Local 61 is the voice against prison privatization in the state. Anyone who hears of privatizing activity in Nebraska is encouraged to call Lee Nugara at NAPE, (402) 486-3911.
Residents of Fillmore, Utah, have found that private-prison pushers just don’t give up. Residents rejected a non-binding proposal at the polls that would have allowed Management Training Corp. (MTC) to build a $34 million facility in their city. While the city council deferred to voters on the matter, the Millard County Commission took up MTC’s cause and approved prison construction in the unincorporated town of Flowell, population 250. Anti-prison activists now believe the facility will be bigger than MTC originally announced, and fear that inmates, who have the right to vote in Utah, will outnumber town voters. Activists working with AFSCME Local 1004 are exploring all avenues in their continued fight against the construction project. MTC, by the way, may hold a bit of sway in the state; it is based in Ogden, Utah.
A former CO at the privately operated Brazoria County Detention Center in Angelton, Texas, has been charged with violating the civil rights of a prisoner whose head he allegedly rammed into a wall. The CO is the first to be arrested as a result of the FBI’s investigation into abuses at the private facility, which was run by Capital Correctional Resources Inc. Physical abuse by COs and attacks on prisoners by dogs were videotaped and broadcast nationally in the summer of 1997.
A Florida study of costs at two private prisons, one run by CCA and the other by Wackenhut, revealed that they are not saving the state as much as the state’s Correctional Privatization Commission projected. The study report recommends that the two contracts be renewed, but with changes to ensure that the state law requiring 7 percent savings over public institutions be met. The Florida Department of Corrections said the study was faulty and that if a greater number of private prisons had been studied, an 11 percent increase in costs over publicly run prisons would have been revealed.
CCA is walking away from a contract to run the Cleveland Pre-Release Center in Liberty County, Texas, admitting that it cannot pay taxes and remain profitable. CCA had been given a 50-percent tax abatement by both the city and county, but the local school board was miffed that the company was escaping local taxes and extracted a $300,000 tax payment plus interest from CCA. No more, said CCA. This would be a happy ending, if the privatization story ended here, but the Texas Department of Criminal Justice is going to solicit bids from other private contractors to replace CCA.
It’s a fall of discontent for private prison companies. Even Wall Street doesn’t like ’em, judging by the recent stock performance of major prison companies. While many stocks have taken a beating recently, the largest prison companies are faring far worse than, for instance, the Standard & Poors 500 Index, which was up 14.55 percent year-to-date as of Nov. 2, and the Dow Jones Industrial Average, which was up 10.09 percent for the same period. Stock performance of the prison companies compared as follows: CCA, down 49 percent; Wackenhut, down 9.3 percent; Cornell Corrections, down 23.5 percent; Correctional Properties Trust, no change; CCA Prison Realty Trust, down 48.2 percent; Youth Services International, down 75.33 percent; Ramsey Health Care, down 60.3 percent and Children’s Comprehensive Services, down 33.8 percent.
The stock news is especially bad for many prison-company employees, such as those at CCA, whose stock-based pensions have fallen by the same percentage as company stock.
