Public Safety & Justice

Contract Lens

As states continue to outsource corrections services, they are struggling to find the right level of private-prison scrutiny.
by | April 2005

Just after seven in the evening last July 20, the Crowley County Correctional Facility was on edge. A group of inmates in this southeast Colorado prison had gathered in a recreation yard and demanded to speak to the warden about food quality and inmate care. When a shift captain denied their request, the prisoners began threatening the guards on duty.

Concerned for their safety, the guards ordered the inmates to return to their cells. They refused, and the protest quickly escalated into a riot: For the next five hours, the prison was engulfed in chaos, as inmates smashed windows, flooded cells, set fire to furniture and bashed down doors and walls. Some 400 inmates--more than a third of the prison population--swarmed the facility's 10-building campus.

The rioters broke into management offices, tore through files of prisoners they suspected of being police informants or sex offenders, and targeted them for assault. One prisoner was dragged from his cell, beaten with weight bars, thrown from a balcony and struck on the head with a microwave oven. Another was stabbed until the blade of the weapon bent. Although no one was killed in the melee, 19 inmates were seriously injured.

In the weeks that followed, the Colorado Department of Corrections conducted an extensive inquiry into the most destructive prison riot in state history. In addition to establishing the chronology of the insurrection, the CDOC's after-action report identified several management issues that may have helped spur or exacerbate the uprising. Among them: Employees did not consistently follow "fundamental security measures," the prison was inadequately staffed and the facility's emergency response team was not properly trained to handle a riot of that magnitude.

But the CDOC's findings weren't a mea culpa. Rather, the tough assessment was directed at a private prison company, Corrections Corp. of America, which owns and operates the Crowley County facility. The guards, prison managers--even the warden--are all private-sector employees contracted by the state to manage the more than 1,100 convicted murderers, rapists and thieves housed at Crowley County, one of four private corrections facilities in Colorado.

The state has already made changes in the wake of the riot, according to the CDOC's prisons director Nolin Renfrow. "What we learned is that we cannot count on their on-site staff to adequately handle a crisis like that," he says. As a result, the state has increased crisis training and emergency preparedness for its employees at publicly run prisons near private facilities. That way, the state can better respond if an incident erupts in the future. "We are ultimately responsible for every inmate in Colorado," Renfrow notes, "even if they are placed in a private facility." He expects more changes to be implemented when the state renegotiates the prison's contract in July.

While Colorado officials are quick to acknowledge that last year's riot isn't indicative of systemic problems with private prisons, the Crowley County incident serves as an example of the issues surrounding contracted corrections. Throughout the country, states are trying to develop the right balance of private-prison oversight. The fact is that many privately run facilities aren't closely scrutinized until an incident incites calls for review. This June, Colorado will release the results of a full-scale audit of its prison-contracting process-- the first such review in the state's 13-year history of outsourcing corrections services.

Advocates continue to maintain that outsourcing corrections is an ideal way for states to save money, but the Crowley County riot has provided new fodder for opponents. They argue that private facilities fail to provide adequate levels of service and management, and that decisions to contract out are based more on successful lobbying efforts than on what's best for the state. In the rush to outsource, do states really know what they're getting?

THE COST-SAVINGS DEBATE

Private prisons are not a new concept in America. They were especially popular in the late 1800s. But around the turn of the 20th century, privately run prisons began to dwindle as states took over the management of inmates. Faced with booming incarceration rates and overcrowded prisons in the early 1980s, however, states and the federal government began to hire private companies to operate parts of their prison systems.

Today, a few companies--including Correctional Services Corp., Wackenhut Corrections Corp. and Cornell Companies--manage more than 95,000 inmates in at least 31 states. Nationally, 6.5 percent of prisoners are in facilities run by the private sector. Seven states contract more than one-fifth of their prison population to private firms.

By far the biggest player in the field of prison facilities management, though, is the Corrections Corp. of America, a Nashville- based company that supervises more than 63,000 inmates in 23 states. CCA founded the modern private-prison industry in 1983 and now administers the sixth-largest prison system in the country--behind only the federal government, Texas, Florida, California and New York.

"States are having to make some pretty difficult decisions about how to spend their capital dollars," says Tony Grande, CCA's vice president for state customer relations. "They just don't have the means to put new beds on line fast enough. We allow the state to focus on its other infrastructure while we invest our money in prison construction."

While privately funded prison construction does save states money up front on capital costs, the ongoing debate over private prisons centers on how much--if any--states save by outsourcing the care of inmates. Industry officials claim that private prisons typically save about 10 percent over publicly operated facilities. In addition, some evidence suggests that the presence of privately run prisons in a given state can, over time, lower the costs of running public prisons in that state.

A 2003 Vanderbilt University study, which was funded by two private prison companies, found that the existence of private prisons slows the growth rate of the per-diem costs at public prisons by about 4 percent. "It's not huge, but it's far from trivial," says James Blumstein, a Vanderbilt constitutional law professor and co-author of the study. He says the public-sector savings may be attributable to competition from private companies or from a sharing of management expertise.

Critics of private prisons say cost comparisons can be misleading and that it's difficult to compare apples to apples when it comes to discussing prison costs. They note, for example, that studies showing cost savings neglect to account for the age of specific facilities. Running older facilities is more expensive, and private prisons tend to be newer buildings. Critics also point out that lower-security facilities are cheaper to run, and the majority of private prisons are low or medium security. "When you compare the costs of running new facilities--private versus public--you basically come out with a wash," says Peter Wagner, assistant director of the Prison Policy Institute. "The best thing you can say about private prisons is that they don't appear to cost us any more. But that's so not the promise of two decades ago."

If, in fact, contracted prisons do save money in the day-to-day management of inmates, there are concerns about how the companies realize those savings. In many cases, private prisons offer employees lower salaries and fewer benefits than their state counterparts. In Colorado, for example, guards at private facilities earn about 60 percent of what they would at state-run prisons, says the CDOC's Renfrow. That pay differential can lead to very high turnover rates. According to a report from the Prison Policy Initiative, the annual turnover rate for state corrections officers nationally is about 15 percent. Within private facilities, the rate is more than 40 percent.

Critics charge that private companies also find ways to save money that are detrimental to inmates, including substandard medical care, inadequate education resources and sub-par food services. Renfrow thinks one cost-saving method in particular may have contributed to the unrest at Crowley County. He says that state-run facilities take in new inmates at a rate of 10 to 15 a day. "We deliberately go slowly," he notes. "We want to find out who these people are, whether they're in a gang, whether they have problems with other inmates specifically. But for [the private companies], their motivation is to fill more quickly; every inmate that's in there every day is more profit for them." In the weeks leading up to last year's riot, Renfrow argues, CCA's "intake rate was higher than it should have been."

The notion that corrections companies are driven predominantly by a profit motive--and that more inmates equate to higher profits--is at the heart of an even broader accusation against the prison industry: The increase in the nation's current incarceration rate, which has quadrupled over the past three decades, has been driven in part by the prison companies themselves.

In a 2000 report called "The Prison Payoff: The Role of Politics and Private Prisons in the Incarceration Boom," Edwin Bender, a former journalist, alleges that private-prison companies have, over the past two decades, pushed for tougher sentencing laws, such as mandatory minimums and "three strikes" legislation, in effect to ensure a growing "market" of prisoners. He and others believe prison corporations utilize the American Legislative Exchange Council, a national organization of conservative lawmakers, to advocate stricter criminal justice legislation.

"While private prisons still represent a small percentage of the overall prison industry, they exert an increasing influence on criminal justice policy," according to the report. "The involvement of private prison corporations in the development of model criminal justice legislation through [ALEC] cannot be ignored."

Bender, who now heads the Institute on Money in State Politics, tracks political donations from prison companies at www.followthemoney.org. He says there's a link between those donations and legislators who support stronger crime laws and outsourcing prisons services. CCA for several years co-chaired ALEC's Criminal Justice Task Force.

Prison corporation officials are aware of such criticism, but they say the industry is only responding to an existing need for new facilities, not advocating more prisoners. "CCA has never lobbied for stiffer sentencing guidelines or anything like that," says Grande, who points out that a former CCA chief executive testified to Congress in opposition to mandatory sentencing laws.

While the private-prison population has grown in absolute numbers over the past decade, the share of the nation's inmates in private facilities has remained fairly constant at around 6 percent. Grande says the industry will not grow by adding inmates to the nation's prison systems but by increasing its presence within states. "Our growth is going to be about states turning to us more and more," he adds.

TIGHTENING CONTRACTS

If that's the case, how can states ensure that issues such as the intake rate, food quality, guard training and inmate health care and education are being properly addressed by the companies running these prisons? The most obvious method is regular monitoring to ensure prison facilities and management meet contract standards. Some states install a full-time public employee in each privately run facility; others send out a team of monitors to visit different facilities around the state on a rotating schedule.

Nationally, there is not a unified approach to state monitoring. In Colorado, a prison-monitoring unit visits each private facility on a weekly basis, and the state has no plans to change that policy despite last year's riot. Georgia announced in February that it planned to scale back its monitoring capacity to cut costs: While the state had had an on-site state monitor at each of its three private prisons, it will now have one monitor who tracks all three facilities.

According to CCA, state monitors maintain offices in about half of the company's facilities. "That is the most effective way we know of to achieve oversight," says Grande, the company's spokesman. "Frankly, we prefer it because it's a degree of protection for both sides of the equation." Nevertheless, he says there's some level of state oversight in all cases. "I can't think of one instance today where states have handed over their inmates and just put it on autopilot."

Monitors are there to track contract standards, but that makes it all the more important to include as many details in the contracts as possible, according to both public and private officials. "Contract negotiation is the most crucial time," says Grande, who notes that the contracting process has become more sophisticated during the 20-year history of modern private prisons. "We've seen a definite change in the scope and definitions within contracts. Before, you might just say, 'An education program will be available.' Now, we're actually adopting the programs used by the state, as part of the contract. States also can dictate a particular diet and specific dietary requirements."

In Colorado, the prisoner-intake rate that Renfrow points to as a precipitate of the Crowley County riot is not spelled out in the state's contracts. He says that Colorado will be sure to include intake rates when prison contracts are next renewed, although it's tough to specify every detail. "There's some real intangibles out there, such as quality of food. But we learn as we go, and every year we tighten up the contract."

As states in general are moving to longer contract periods, it becomes even more important to get contracts right the first time. In the 1980s and early '90s, notes Grande, states were more skeptical of the private-prison industry, and they tended to sign two- or three- year contracts. "Now that the industry has established itself, states are much more willing to put renewals in a contract that could go 10 to 15 years," Grande says. "States are realizing that the RFP process is an expensive, time-consuming process. It's not something you want to be doing every two years."

But even if states adequately address specific issues in the contract process, holding corporations to agreed-upon standards can be challenging, says Ken Kopczynski at the Private Corrections Institute, a watchdog group. Given the difficulty for a state to take over a private prison, including assuming any debt the company may have, states tend to look the other way if contract violations spring up, he argues.

Moreover, when states do closely monitor the contracts, Kopczynski says it becomes evident that companies frequently cannot offer the services contained in the contract at the negotiated rates. He points to Nevada, where CCA chose not to renew a contract for a prison last year because the company could not afford to operate the prison at the rate it had contracted. The company pointed to rising health care costs and said it was losing more than $1 million a year. "CCA low- balled the costs," Kopczynski says.

Nevertheless, it's clear that private enterprise will continue to play a significant role in many states' corrections systems--and public officials must keep trying to pin down the cost savings and hone contract language. Noting that Arizona has already developed very specific and tough private-prison contracts, Colorado's Renfrow says, "We're headed that way."

Zach Patton  |  Executive Editor
zpatton@governing.com  | 

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