For-profit prisons… What could possibly go wrong?

As it’s been a while since we’ve had a post here about the prison industrial complex, I thought that I’d pass along this clip from Charles Blow’s recent piece in the New York Times.

“Louisiana is the world’s prison capital. The state imprisons more of its people, per head, than any of its U.S. counterparts. First among Americans means first in the world. Louisiana’s incarceration rate is nearly triple Iran’s, seven times China’s and 10 times Germany’s.”

That paragraph opens a devastating eight-part series published this month by The Times-Picayune of New Orleans about how the state’s largely private prison system profits from high incarceration rates and tough sentencing, and how many with the power to curtail the system actually have a financial incentive to perpetuate it.

The picture that emerges is one of convicts as chattel and a legal system essentially based on human commodification.

First, some facts from the series:

– One in 86 Louisiana adults is in the prison system, which is nearly double the national average.

– More than 50 percent of Louisiana’s inmates are in local prisons, which is more than any other state. The next highest state is Kentucky at 33 percent. The national average is 5 percent.

– Louisiana leads the nation in the percentage of its prisoners serving life without parole.

– Louisiana spends less on local inmates than any other state.

– Nearly two-thirds of Louisiana’s prisoners are nonviolent offenders. The national average is less than half.

In the early 1990s, the state was under a federal court order to reduce overcrowding, but instead of releasing prisoners or loosening sentencing guidelines, the state incentivized the building of private prisons. But, in what the newspaper called “a uniquely Louisiana twist,” most of the prison entrepreneurs were actually rural sheriffs. They saw a way to make a profit and did.

It also was a chance to employ local people, especially failed farmers forced into bankruptcy court by a severe drop in the crop prices.

But in order for the local prisons to remain profitable, the beds, which one prison operator in the series distastefully refers to as “honey holes,” must remain full. That means that on almost a daily basis, local prison officials are on the phones bartering for prisoners with overcrowded jails in the big cities.

It also means that criminal sentences must remain stiff, which the sheriff’s association has supported. This has meant that Louisiana has some of the stiffest sentencing guidelines in the country. Writing bad checks in Louisiana can earn you up to 10 years in prison. In California, by comparison, jail time would be no more than a year.

There is another problem with this unsavory system: prisoners who wind up in these local for-profit jails, where many of the inmates are short-timers, get fewer rehabilitative services than those in state institutions, where many of the prisoners are lifers. That is because the per-diem per prisoner in local prisons is half that of state prisons…

My information may be a bit out-of-date on this, but, the last that I heard, here in Michigan, a few of our more powerful unions had stepped in to stop a push by Republicans in the legislature to expand the role of private prisons in our state. While legislation has passed the Senate that would allow the Michigan Department of Corrections to place inmates in for-profit prisons, the House has not been able to follow suit. It would seen that a number of House Republicans, from districts with existing, state-run prisons, are pushing back, at least for the time being. The following comes from a May 4 report by the Mackinac Center.

…House Bill 5174 would allow the Michigan Department of Corrections to house prisoners in privately operated prisons. What’s more, the measure includes a requirement that the private prisons would have to save 10 percent in costs to qualify.

Even with this savings language, the bill remains bogged down in the Michigan House where the GOP enjoys a 63-47 majority and only 56 “yes” votes are needed for passage.

It’s not a secret in Lansing that a group of Republicans, most of whom have prisons in their districts, is causing the logjam.

Michigan corrections officers unions and the United Auto Workers are active in those prison districts and also at the capitol. A union tent was on the capitol lawn the day the prison privatization vote was supposed to take place.

A more expensive state-operated prison likely would be closed and replaced by the privately owned North Lake Correctional Facility in Baldwin if the bill is enacted. Some observers argue that this appears to be one of the strongest trumps the unions are using to keep the bill penned up.

At the moment, it appears that most, if not all, of the Republican hold-outs will have no primary election opponents this summer. That could also be a factor in the success the unions have been enjoying on this issue because the unions could help an upstart challenger enter one of the primary races if the sitting House member decided to support the prison privatization bill…

An earlier report, from yet another Mackinac Center publication, has more background.

…Bills in the House (Bills 5174 and 5177) and Senate (Bills 877-878) would allow the Department of Corrections to send hundreds of adult inmates to a currently shuttered private prison in Baldwin. The Baldwin facility is owned by Florida-based GEO Group, formerly known as Wackenhut Corrections Corp.

The stated goal of the bills is to operate the private Baldwin prison for at least 10 percent less than it costs to others in the state prison system.

“For me, it’s the same motivation we had when we started charter schools,” said state Rep. Joe Haveman, R-Holland. “It’s going to create competition in how Michigan runs prisons. Competition is just good for everybody. I hope this will save money. I know we will learn something that will make us better. Let’s just try it in one facility and see if it works better. I want to hold the Corrections Department’s feet to the fire.”

Supporters like Haveman say the privatization experiment is one of their most hopeful remaining strategies for saving money in the state’s $2 billion prison system, which accounts for 21.5 percent of the state general fund budget. Despite a 17 percent reduction in the prison population, operations efficiencies, and employee concessions on health-care costs, the prison budget continues to grow due to large labor costs and pension obligations…

It’s probably worth noting that Wackenhut was acquired in 2002 for $570 million by Group 4 Falck (a Danish corporation). The resulting company then merged with the G4S in 2004 to become G4S Secure Solutions, the U.S. subsidiary of G4S. G4S is the world’s largest security company, with over 630,000 employees, in more than 125 countries. According to Wikipedia, it is the world’s second-largest private sector employer on the planet, after Wal-Mart.

Here, with more background, is a clip from a recent article by the folks at the Grassroots Leadership News.

…The Michigan House of Representatives is considering bills HB 5174 and HB 5177 to reopen a youth correctional facility in order to house adult inmates. The North Lake Facility for Youth, or Baldwin facility, was opened in 1998 by Wackenhut Corrections Corporation – now know as The GEO Group shuttered the facility in 2005. GEO, in a speculative move with high hopes of filling the prison with Californians, expanded the prison from less than 500 to about 2400 beds. The expected California contract did not fully materialize and the GEO Group’s Lake County facility, dubbed the ‘punk prison’, stood empty for some years.

The Wackenhut/GEO Group’s track record at the youth facility was atrocious:

– Youth were held in solitary confinement, a few for more than one hundred days at a time. One mentally ill inmate spent more than 400 days in ‘segregation.’

– Seventy-six suicide attempts were documented from July 2004 through March 2005

– There were confirmed beatings and rapes.

– Parents complained that children with lesser offenses were not safe from those who had committed violent crimes.

– There was a demonstrated lack of mental health and educational services.

– The facility was chronically understaffed.

– It was a violent facility.

In the United States District Court, Western District of Michigan (Case No. 5:05-CV-0128 ) the Michigan Protection & Advocacy Service, Inc. brought a lawsuit against the Michigan Department of Corrections “to challenge and remedy the Defendant’s illegal and unconstitutional use of isolation, denial of adequate mental health services, and denial of appropriate educational services to young prisoners with mental illness and/or developmental disabilities. The Defendant’s actions and inaction have caused youth with mental illness and developmental disabilities great and irreparable harm.”

When Michigan closed Baldwin in 2005, it was then hit with a $5.4 million lawsuit by GEO/Wackenhut. The corporation, responsible for the operation of the facility and all of the problems that led to its closing, wanted to keep Baldwin open or force the state to continue its payments for an empty facility. The case was eventually heard by the Supreme Court of Michigan which ruled: “Defendants [the state of Michigan] were entitled to cancel the lease … [and] exercise by the state of its contractual right of cancellation does not constitute a government taking of private property.”

And, now The GEO Group and privatization are back. In a state with a declining need for more prison beds, HB 5174 and HB 5177 make no sense. These bills would allow yet another contract between the The GEO Group (yes, the same GEO Group with its abysmal track record and its unsuccessful suit against Michigan) and the Department of Corrections to fill their beds, for a price, at the Baldwin facility. To fill those 2,400 beds, Michigan would need to move inmates in from its own public prisons.

Since the state does not need new prison beds, one has to wonder why some members of the Michigan legislature are so wedded to the idea of filling The GEO Group’s beds and coffers with Michigan inmates and taxpayer dollars. It is time, I think, to follow the money. And, to ask hard questions…

So, to summarize, an enormous international security firm, based outside of the United Sates, would like to start moving Michigan’s adult inmates into a for-profit prison, which, under their management, was shut down several years ago (when it was a for-profit youth detention facility), amid numerous lawsuits, and verified instances of misconduct and serious mismanagement. And, it would seem, in spite of this fact, a majority of Michigan lawmakers are supportive of this new plan, either because they’ve received generous contributions from the company in question, or because they feel as though the possibility of trimming an additional 10% from our prison budget is worth the gamble. Or, maybe they just have a fetish for privatization at any cost.

[Tonight’s post was brought to you by Wilkes-Barre, Pennsylvania judges Mark Ciavarella and Michael Conahan, who were recently found guilty of taking bribes in return for handing down harsh sentences to minors being held in for-profit facilities.]

update: As coincidence would have it, MLive has a piece this morning concerning Governor Snyder’s views on private prisons. Here’s a clip.

…“I don’t believe in privatization. I believe in being competitive,” (Snyder) volunteered for apparently the first time the other day. Given the tenacity that other R’s demonstrate for this, it was a shocking statement.

This is important in that some Republicans are on a mission to privatize prisons and if the governor is opposed, that spells trouble for them.

Republican Sen. John Proos, of St. Joseph, had not heard about the governor’s revelation but that did not move him off message. He is all about “bench-marking” the cost of prison services and if somebody can do it more cheaply, Mr. Proos figures, on behalf of taxpayers, the state should go there.

Gov. Snyder observes, “Simply privatizing a prison is not on my agenda.”

Which, based on his previous use of the same phrase, means: If they send it to him, he will sign it…

That last line is great, isn’t it?

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  1. Posted May 27, 2012 at 9:23 pm | Permalink

    We’ve talked about the prison industrial complex quite a bit in the past. Here are some of the highlights.

    We’ve discussed the possibility of using prisoners as fire fighters. We’ve discussed the conditions of Michigan’s prisons. We’ve talked about the fact that Michigan is one of the few states that spends more on corrections than it does on education. And, of course, we’ve debated the privatization of Michigan’s prisons.

  2. Kristin
    Posted May 27, 2012 at 10:22 pm | Permalink

    Prisons and schools. Why can’t we just agree that those things should be handled in complete sunshine by the whole of society, as in the government?

  3. Rai Harashi
    Posted May 28, 2012 at 7:14 am | Permalink


  4. Erika Johnson
    Posted May 28, 2012 at 8:04 am | Permalink

    What are we allowing to happen to our country?

    Rep. Joe Haveman is absolutely right when he says that charter schools and private prisons are two sides of the same coin.

    More on Bill 5174 can be found here.

  5. Watching Laughing.
    Posted May 28, 2012 at 9:29 am | Permalink

    It’s all about money; follow the money.


  6. Dan
    Posted May 28, 2012 at 10:23 am | Permalink

    where have we heard this before? “…budget continues to grow due to large labor costs and pension obligations”

    personally, i think someone convicted of violating state laws should be under the surveillance of the state. You dont need to privatize the prisons to cut costs. Just eliminate the pensions.

  7. John Galt
    Posted May 28, 2012 at 11:14 am | Permalink

    This is a step in the right direction. Today’s prisons are too cushy. Inmates should be fed bread and water, forced to sleep on cement slabs, covered in rats, and put to work. They should be building our highways and picking our cotton. That’s how this country will become great once again.

  8. Edward
    Posted May 28, 2012 at 9:12 pm | Permalink

    Just think of the savings that could be had if the same company ran both our prisons and our schools!

  9. Elf
    Posted May 29, 2012 at 4:47 pm | Permalink

    So this facility was shut down due to gross mismanagement in 2005, and now we’re talking about opening it again, with the same ownership?

    Pure Michigan.

  10. Elf
    Posted May 29, 2012 at 4:49 pm | Permalink

    What we need to do is use these slaves….. I’m sorry, I mean “prisoners”…… to build private golf courses on previously public land.

    Now, that would really be PURE MICHIGAN.

  11. Dan
    Posted May 29, 2012 at 6:30 pm | Permalink


    It’s insulting to the descendants of slaves to equate them with criminals. A slave ‘s (in the american history narrative) only crime was to be born a different color than the wealthy.

    Criminals in today’s society have been proven guilty of a crime, a crime serious enough to land them in a state prison. Why shouldn’t they have to work to be fed and sheltered?

    Hell, the urban farming thing is so popular here, why not create healthy and fully sustainable agriculture operations within prisons?

  12. Meta
    Posted May 31, 2012 at 3:12 pm | Permalink

    An op-ed from the Lansing State Journal.

    Levine: Private prison bill has many flaws

    Questions include cost savings, accountability

    7:10 PM, Feb. 26, 2012 |

    Barbara Levine is executive director of the Citizens Alliance on Prisons and Public Spending.

    To reduce the $2 billion budget of the Department of Corrections, the Legislature is considering whether to allow prisons operated by private contractors. Michigan’s only private prison was the Michigan Youth Correctional Facility in Baldwin. It opened in 1998 but closed in 2005 because its costs were too high. GEO Corp., the owner of the Baldwin facility, has expanded it from 480 beds to roughly 2,400 — all apparently on speculation. GEO hoped to house prisoners from California, but that contract fell through.

    Prison contractors say they can incarcerate people as effectively as government for substantially less money.

    Opponents say that incarceration is a governmental function that should not be delegated to an industry responsible primarily to stockholders. They question whether private prisons actually save money, since contractors “cherry pick” the least expensive prisoners, leaving the state to pay for those with medical problems or mental illness and those at higher security levels. Opponents also question whether private prisons cut corners on security, safety, living conditions and programming.

    House Bill 5174 would let the state contract with any private provider for the housing and management of Michigan inmates “if the contract will result in an annual cost savings of at least 10 percent.” The bill presents multiple issues.

    HB 5174 doesn’t specify the basis for calculating the 10 percent savings. Per diem costs vary greatly by security level. While a Level I prisoner can be housed for a low of $60 per day, high security prisoners cost a great deal more. The average for all prisoners is more than $90 per day.

    If it costs a private contractor $56 per day to house a Level I prisoner, it could not save 10 percent of the MDOC’s costs for the same prisoner. But if it only must save 10 percent of the average cost for all prisoners, it could charge $81 and make an enormous profit.

    Second, the bill prohibits placing at a private facility any prisoner who has ever been housed above Level IV. This insulates the contractor from the prisoners with the most potential behavioral problems, many of whom are mentally ill.

    Third, the bill does not allow the same public oversight of private contractors that applies to the MDOC. The public could not obtain information about prison operations under the Freedom of Information Act. The Legislative Corrections Ombudsman would have no access to a private facility.

    Fourth, the bill states that the MDOC is not responsible for oversight of the private facility and the state is not liable for damages arising out of the facility’s operation.

    The state could turn a blind eye to abuses at a private prison it chose and be free of liability for any resulting harm to the prisoners it failed to protect.

    The actual cost and operation of any private prison would depend on the terms of the contract and the state’s commitment to enforcing them. However the terms of HB 5174 suggest that serious questions about cost savings, transparency and accountability would be present from the start.

  13. Meta
    Posted June 15, 2012 at 1:25 pm | Permalink

    There’s also a movement afoot to privatize the Woodland Center Correctional Facility.

  14. cmadler
    Posted June 26, 2012 at 12:53 pm | Permalink

    “Prison contractors say they can incarcerate people as effectively as government for substantially less money.”

    I keep hearing this claim with regard to privatization of a variety of services, but I’ve never understood how it can possibly be the case.

    Actual costs + profits = total cost to taxpayers.

    The actual costs only change if you cut pay for workers (including by replacing union workers with non-union workers), provide less (or lesser quality) food, cut corners on construction, squeeze more people into a smaller space, etc. Those are all things that, if they’re legal, government could do. And because the government does not require profits, the same actual costs lead to a lower total cost when the government does it.

  15. Dan
    Posted June 26, 2012 at 2:03 pm | Permalink


    you answered your own question “replacing union workers with non-union workers.” The government COULD do away with unions, and they are trying to (e.g.: teachers unions). The other aspect to your question is related to market competition. Private firms have to compete with other private firms, thus they minimize waste and overhead to win project bids.

    And it’s not just lower pay. It’s mostly legacy costs related to pensions and health care when workers retire. Look at Ypsi city’s budget and projected budget for the next 5 years, to see the magnitude of said legacy costs for police and fire protection.

    That being said, I still think prisons should be run by the state, as the criminals are breaking state mandates. Somethings should be under govt control, regardless if someone else can do things a little more efficiently.

  16. kjc
    Posted June 26, 2012 at 2:22 pm | Permalink

    “Private firms have to compete with other private firms, thus they minimize waste and overhead to win project bids.”

    see Halliburton.

  17. Dan
    Posted June 26, 2012 at 3:39 pm | Permalink


    I will concede fossil fuel spending is a ridiculous ruse. I’m not a fan of any of our energy subsidies or “sole source” nonsense with Halliburton. Just another reason to get money out of politics.

    But in a true competitive market (Haliburton bought billion $ contracts, much like Kochs are trying to do) it works. The problem is that you need actual competition, not bullshit backroom handshakes bought and paid for

  18. Posted July 27, 2012 at 11:44 pm | Permalink

    who would have ever thought there would be a market for prisons

    what is most impressive is the constant references to growth opportunities.

    Business Description
    Juvenile Justice Facility
    asking Price: $3,400,000
    Gross Revenue: $3,400,000
    Cash Flow: $1,000,000
    Servicing counties throughout Michigan this facility was established in the mid 90 s being the first for-profit facility in the state. This business is run very efficiently with a seasoned staff, and easily competes with public and non-profit facilities. Being well respected for offering quality treatment programs, it serves over 60 adjudicated youth between the ages 10 to 17. The facilities are in excellent condition and appropriately built to maximize efficiency. There are both secured units, and open units. Property consists of over 31,000 SF on 30 acres. There is a tremendous opportunity for growth as the State and non-profits have closed many facilities in recent years often times creating a waiting list for some of the programs offered by the organization. Property expansion plans are in place for execution in 2012 which will take place with or without the sale of the business. 30 acres of property easily accommodate future significant growth when needed.

    Proof of funds and a confidentiality agreement will be required before further information is provided, contact Glen Toadvine at 734-929-9032 or glen@Praxisbusiness for further information.
    About the Business
    Year Established: 1995
    Number of Employees: 60

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