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Private Prison Firms Can't Be Trusted

Private prison operators often promise decision-makers the world to get a contract. However, once a private firm sets up shop, its loyalty is to its shareholders and not to local residents. The following examples illustrate both of these points:

Promise of jobs turns into a nightmare for a city in Ohio.

In Youngstown, Ohio, CCA touted a new privately owned and operated prison as a way to bring jobs to the community. Town officials were so happy about the prospect they sold CCA the land to build the prison for a token payment of $1, and gave the company a five-year partial tax abatement and free utility hookups. However, Youngstown officials became outraged upon finding out that CCA sold the prison for a $13 million profit, accusing the company of alleged profit-making at the expense of local taxpayers. CCA argued, nonetheless, that selling its own prisons is "part of CCA's business strategy."24

The Youngstown facility houses inmates from Washington, D.C. CCA opened the prison last May, and it has been a headache for Youngstown officials since opening its doors. CCA has acknowledged 13 stabbings, including two recent homicides, since the facility opened. To put the Youngstown violence in perspective, the 29 Ohio state prisons reported a total of 22 assaults with weapons in 1997.

In the wake of an inmate's murder on February 22, 1998, U.S. District Judge Sam H. Bell issued a preliminary injunction that prohibits the District of Columbia from transferring any more inmates to Youngstown.25 According to CCA Chief Executive Officer Doctor Crants, "what happened in Youngstown was unfortunate, but there we had a sophisticated inmate population mixed with a rookie staff."26

Inmates and the city of Youngstown are suing CCA. A court document filed on behalf of the prisoners included an admission by CCA Prisoner Classification Chief Karen Young that she falsified classification records. She stated that she falsely noted her involvement "because that was the date I was told to put on there, not the actual date."27

Private firms do not follow through with agreements.

New Mexico contracted with CCA to operate a women's correctional facility in Grants. However, the deal led to a nearly $4 million "misunderstanding" about how much the state would pay the company to house female prisoners. "Frankly, its absurd," Corrections Secretary Rob Perry said of the CCA rate. The cost is about double what the state pays to keep overflow New Mexico male prisoners in county jails, officials said. New Mexico, frustrated with CCA, has not renewed the contract and has tried to buy the facility from CCA. However, CCA filed a lawsuit in the district court to prevent the state from buying the women's prison.28

Private firms conceal crimes from local officials.

Although CCA employees were committing drug and weapons violations at the facility in Hardeman County, Tennessee in 1995, the manager of the facility refused to report the crack cocaine use and weapons smuggling to the local sheriff. According to a recent story in The Nashville Banner, "when they're [CCA] saying, `We're not going to tell,' ... they are more interested in the commercial side than they are in public safety." CCA officials said they weren't aware of any arrangements in which they had to file reports.29

Prison Privatization Increases a Jurisdiction's Liability

In June 1997, the U.S. Supreme Court ruled that employees of private prison companies are not entitled to the immunity that is applied to public corrections employees. State and local corrections employees are generally protected from being sued for performing their job as long as their conduct does not violate "clearly established rights that a reasonable person should have known." The court held, however, that employees of private companies are not shielded by the same immunity.

CCA, the company involved in the case, stated publicly that this decision will not impact their costs because high insurance liability was already built into their fee schedules. This suggests, however, that if the decision had gone the other way, CCA would be able to submit lower bids. As it stands, privatization, which proponents argue will reduce the costs of providing services, may in fact increase costs as indemnification or hold-harmless agreements between jurisdictions and private vendors may not be enforceable, and the ultimate liability for the provision of public services remains with the jurisdiction.

24 Mark Tatge, Youngstown Prison's Sale For $70 Million Outrages Officials, Cleveland Plain Dealer, January 8, 1998.

25 Cheryl Thompson, "D.C. Must Stop Sending Inmates To Ohio," Washington Post, February 26, 1998.

26 "CCA Move Inmates From Ohio To Tennessee," Associated Press, March 31, 1998.

27 Extract from Plaintiffs' Reply to CCA Memo Opposing Emergency Motion to Alter or Amend Order, Case No.4:97-CV-1995.

28 "Firm Won't Cut Fee On Female Inmates," Albuquerque Journal, August 19, 1997; "Corrections Corporation and New Mexico Battle Over Rates", Knoxville News-Sentinel, August 19, 1997.

29 Alisa LaPolt, "State Workers Question Private Prison Safety; Lawmakers' Vote On Measure Stalls In Committee," The Nashville Banner, November 5, 1997.

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