Tags: Corrections Corporation of America

FBI Launches Investigation into a Private Prison So Violent it is Called “Gladiator School”

In what is one of the most disturbing private prison stories you’ll ever hear, a facility in Idaho run by Corrections Corporation of America (CCA) in under investigation by the FBI due to claims it was so violent inmates called it “Gladiator School.” So how does a prison transform into such a place? Apparently, CCA was so eager to cut costs that it chose to understaff the facility and hand over control to prison gangs.

I’ve covered private prisons on many occasions in the past, including this CCA facility in particular. I think private prisons are one of the worst ideas possible in a democratic society. I suggest you read some of my prior articles:

A Deep Look into the Shady World of the Private Prison Industry

Idaho Dumps Private Prison Company Due to “Violence, Understaffing and Over-billing”

America in 2013: Florida Football Stadium Named After a Private Prison Company

America in 2013: For-Profit Prisons Get Favorable Tax Breaks

Now from the AP:

BOISE, Idaho (AP) — The FBI has launched an investigation of the Corrections Corporation of America over the company’s running of an Idaho prison with a reputation so violent that inmates dubbed it “Gladiator School.”

The Nashville, Tenn.-based CCA has operated Idaho’s largest prison for more than a decade, but last year, CCA officials acknowledged it had understaffed the Idaho Correctional Center by thousands of hours in violation of the state contract. CCA also said employees falsified reports to cover up the vacancies. The announcement came after an Associated Press investigation showed CCA sometimes listed guards as working 48 hours straight to meet minimum staffing requirements.

“The FBI is investigating CCA and looking at whether various federal fraud statutes were violated and possibly other federal statutes connected with the fraud,” Olson said. “They will be working in close consultation with our office. Beyond that I can’t comment.”

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A Deep Look into the Shady World of the Private Prison Industry

Private prisons are antithetical to a free people. Of all the functions a civilized society should relegate to the public sector, it’s abundantly clear incarceration should be at the very top of the list. Jailing individuals is a public cost that a society takes on in order to ensure there are consequences to breaking certain rules that have been deemed dangerous to the happiness and quality of life within a given population. However, the end goal of any civilized culture must be to try to keep these cost as low possible. This should  be achieved by having as few people as possible incarcerated, which is most optimally achieved by reducing incidents of criminality within the population. Given incarceration is an undesirable (albeit necessary) part of any society, the idea is certainly not to incentivize increased incarceration by making it extremely profitable. This is a perverse incentive, and one that is strongly encouraged by the private prison industry to the detriment of society.

I’ve written many articles highlighting the negative consequences of the private prison industry, and these have focused on the two biggest names in the space. Corrections Corp of America (stock ticker, CXW) and GEO Group. A few of my most popular articles on the topic are:

Texas Teen Faces 8 Years in Jail for an Insensitive Joke on Facebook

Idaho Dumps Private Prison Company Due to “Violence, Understaffing and Over-billing”

America in 2013: Florida Football Stadium Named After a Private Prison Company

In the Public Interest has taken this a step further in its recent excellent report titled: Criminal: How Lockup Quotas and “Low-Crime Taxes” Guarantee Profits for Private Prison Corporations.

In the Public Interest describes itself as:

A comprehensive resource center on privatization and responsible contracting.  It is committed to equipping citizens, public officials, advocacy groups, and researchers with the information, ideas, and other resources they need to ensure that public contracts with private entities are transparent, fair, well-managed, and effectively monitored, and that those contracts meet the long-term needs of communities.

Their report explains how private prison companies insist that states embed “occupancy guarantees” into their contracts with the public sector. They estimate that at least 65% of all private prison contracts have such guarantees, and in some states, like Arizona, the guarantee is a shockingly high 100%. This leads to overcrowding in many instances, and sometimes violent offenders are placed in prisons set up for nonviolent offenses just to fill the quotas. In the event that the beds can’t be filled, the taxpayer makes up the difference to the private prison company. They win no matter what. It’s just more crony capitalism. Below are some highlights from this excellent report.

Major Findings

  • 65 percent of the private prison contracts ITPI received and analyzed included occupancy guarantees in the form of quotas or required payments for empty prison cells (a “low-crime tax”). These quotas and low-crime taxes put taxpayers on the hook for guaranteeing profits for private prison corporations.
  • Occupancy guarantee clauses in private prison contracts range between 80% and 100%, with 90% as the most frequent occupancy guarantee requirement.
  • Arizona, Louisiana, Oklahoma and Virginia are locked in contracts with the highest occupancy guarantee requirements, with all quotas requiring between 95% and 100% occupancy.

In 2012, Corrections Corporation of America (CCA), the largest for-profit private prison company in the country, sent a letter to 48 state governors offering to buy their public prisons. CCA offered to buy and operate a state’s prison in exchange for a 20-year contract, which would include a 90 percent occupancy rate guarantee for the entire term. Essentially, the state would have to guarantee that its prison would be 90 percent filled for the next 20 years, or pay the company for unused prison beds if the number of inmates dipped below 90 percent capacity at any point during the contract term (a “low-crime tax” that essentially penalizes taxpayers when prison incarceration rates fall). Fortunately, no state took CCA up on its outrageous offer. But many private prison companies have been successful at inserting occupancy guarantee provisions into prison privatization contracts, requiring states to maintain high occupancy levels in their private prisons.

These contract clauses incentivize keeping prison beds filled, which runs counter to many states’ public policy goals of reducing the prison population and increasing efforts for inmate rehabilitation. When policymakers received the 2012 CCA letter, some worried the terms of CCA’s offer would encourage criminal justice officials to seek harsher sentences to maintain the occupancy rates required by a contract. Policy decisions should be based on creating and maintaining a just criminal justice system that protects the public interest, not ensuring corporate profits.

The private prison industry has promoted policies and practices that increase the number of people who enter and stay in prison. It is no surprise that the two major private prison companies, CCA and GEO Group, have had a hand in shaping and pushing for criminal justice policies such as mandatory minimum sentences that favor increased incarceration.

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Idaho Dumps Private Prison Company Due to “Violence, Understaffing and Over-billing”

Regular readers know that I think the concept of “private prisons” is one of the worst ideas a society can possibly embrace.  While I am a small government person who strongly believes in decentralization and doing things at the local level, incarceration is something that should never, ever be driven by the profit motive. Particularly not in a country which already has 5% of the world’s population, yet 25% of the world’s prison population.  From the Idaho Statesman:

BOISE, IDAHO — Idaho prison leaders are looking for a new company to run the state’s largest prison after Corrections Corporation of America admitted to understaffing and overbilling for its work operating the Idaho Correctional Center.

The three-member Board of Correction made the decision during a meeting Tuesday evening, opting not to let an automatic two-year extension of CCA’s $29.9 million contract kick in when the current contract expires on June 30, 2014.

The Idaho Correctional Center has a been rife with problems for the past several years, with inmates bringing multiple federal lawsuits alleging rampant violence, a policy of understaffing and a practice of guards ceding too much control to prison gangs. The ACLU of Idaho sued in 2010 on behalf of inmates who said the CCA-run facility was so violent that inmates called it “Gladiator School;” that lawsuit resulted in a settlement in which CCA promised to make widespread management and staffing changes. In 2011 the company reached a financial settlement with one inmate, Hanni Elabed, who was beaten by a fellow inmate until he suffered brain damage while several guards watched.

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Judge Sentenced to 28 Years in “Cash for Kids” Scheme

Cash for kids.  Absolutely disgusting, but in a country where all the financial incentives are aligned toward criminal and immoral behavior, it’s hard to find anything surprising at his point. Think about this case and then think about the growing trend of private prisons in America, prisons that are incredibly being given favorable tax treatment.  From the UK Independent:

An American judge known for his harsh and autocratic courtroom manner was jailed for 28 years for conspiring with private prisons to hand young offenders maximum sentences in return for kickbacks amounting to millions of dollars.

Mark Ciavarella Jnr was ordered to pay $1.2m (£770,000) in restitution after he was found to be a “figurehead” in the conspiracy that saw thousands of children unjustly punished in the name of profit in the case that became known as “kids for cash”.

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America in 2013: For-Profit Prisons Get Favorable Tax Breaks

Here’s a great idea.  At a time when the debt of the country is exploding exponentially and we are running budget deficits that would be the envy of any banana republic, let’s give favorable tax treatment to for-profit prison companies.  This is a growth industry that we should all support, who cares that these United States has 5% of the World’s Population, yet 25% of its Prisoners.  May as well try to improve on that; just imagine how high we could get the prison population if we actually put a banker in jail?  From Forbes:

In early January 2013, both Corrections Corporation of America (CCA) and the GEO Group – the nation’s two largest private prison companies that control a combined 75 percent of the for-profit prison market in the United States – announced that they had each completed preliminary plans to convert their corporate structure to a Real Estate Investment Trust (REIT).

REITs are designed for companies that primarily invest in and generate revenue from real estate holdings, such as hotel chains; like other publicly-held corporations they trade on the stock market. There are special tax advantages for REITs, which generally pay no income tax. They also must distribute at least 90 percent of their income to shareholders in the form of dividends.

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The United States: 5% of the World’s Population, 25% of its Prisoners

This article is from May, but wow what a crazy statistic.  I guess there was just no room for Corzine…From The Economist:

Excessive incarceration is an American problem. The country has about 5% of the world’s population but almost 25% of its prisoners, with the world’s largest number of inmates and highest per capita rate of incarceration. California eagerly participated in this trend of locking up ever more people. During Mr Brown’s previous stint as governor in the 1970s the state switched to more inflexible sentencing. It then spent another two decades adding “tough-on-crime” laws that kept extending sentences even for minor crimes.

The resulting prison-building boom, and rapacious bargaining by the prison-guards union, meant that state penitentiaries became the fastest-growing major cost in the state budget. California’s 33 prisons and associated camps therefore bear no small responsibility for the state’s recurring budget crises, and the resultant crunch on school and university funding.

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