Feds phasing private prisons out; Post first to report problems

By Pat Beall - Palm Beach Post Staff Writer

Updated: 8:17 p.m. Thursday, Aug. 18, 2016  |  Posted: 1:30 p.m. Thursday, Aug. 18, 2016

The Justice Department announced Thursday it is getting out of the private prison business, a decision that sent investors in private prison companies running for the exit doors even as it was hailed by critics of for-profit incarceration.

Echoing troubling and sometimes lethal practices first reported by The Palm Beach Post in its 2013 series, Private Prisons: Profits, Politics, Pain, Deputy Attorney General Sally Yates wrote in a memo that the privately managed prisons “simply do not provide the same level of correctional services, programs, and resources.”

Further, she said, “they do not maintain the same level of safety and security.”

The announcement comes on the heels of a report from the Office of Inspector General, detailing high levels of assaults and riots in prisons managed by Boca Raton-based GEO Group and Corrections Corp. of America, the two largest private prison management firms in the world, as well as Management & Training Corp. The three manage a total of seven state prisons for Florida’s Department of Corrections. The three manage 14 federal prisons.

Nothing will happen immediately. The federal directive calls for phasing out privatization as contracts wind down — or significantly reducing the scope of any new contracts.

Still, “there is no step that could have been taken that is as significant as this one toward ending for profit incarceration in this country,” said Don Cohen, executive director of In The Public Interest, a Washington-based policy group long critical of privatization of government operations.

The news cratered the stock of both CCA and GEO. CCA shares opened at $27.06, and fell as low as $13.04 before rallying to close at an anemic $17.57.

GEO suffered a similar pummeling, opening at $32.32, then falling to $16.26 before struggling to close at $19.51.

In some ways, the DOJ decision, and the financial fallout, seems inevitable. Both Bernie Sanders and Hillary Clinton decried privately managed prisons; Clinton has stated flatly she will do away with them if elected.

If further political cover was needed to end privatization, the federal Inspector General’s report released this month provided it. The privately run federal prisons it surveyed had almost twice the number of weapons confiscated as the government-managed prisons; eight times as many cellphones, an especially dangerous type of contraband that is a conduit to crime outside the bars. They had more assaults on staff by prisoners and more assaults on prisoners by prisoners.

And then there was staffing. The Post found that in state and federal facilities alike, understaffing is consistently linked to inmate abuse, assaults and riots.

Yet the Inspector General’s report found that from January 2007 to March 2009, there were no minimum staffing requirements for the GEO-run center in Reeves County, Texas, “because the Bureau of Prisons had sought to reduce costs.”

In 2008 at Reeves, The Post found, an immigrant in the country illegally died in solitary confinement after an epileptic seizure; he had been placed on a cheaper and less effective anti-seizure medication and had been experiencing frequent seizures as a result. Inmates rioted after seeing his body removed and then rioted again a few months later over insufficient medical care.

Auditors later found medical understaffing at Reeves; they expressed concern that penalty payments were cheaper than hiring more staff.

None of this should have come as a surprise, said Alex Friedmann, managing editor of Lake Worth-based Prison Legal News, a widely respected inmate advocacy journal.

“This is nothing new,” said Friedman. “There have always been higher levels of violence and more instances of misconduct” in privately managed facilities.

“The shock is that somebody actually paid attention.”

In another echo of problems found by The Post, the Inspector General concluded that it was near-impossible to determine whether the privatized facilities were actually saving money. Although the lump-sum contracts suggested they were cheaper to run, there was no clear side-by-side comparison that would prove cost savings.

CCA spokesman Jonathan Burns took sharp exception to those and other findings by the Inspector General’s report, which he said “has significant flaws.” Among other things, the report’s authors did not take into account such things as population demographics, such as whether the private facilities house more troublesome inmates.

“The findings simply don’t match up to the numerous independent studies that show our facilities to be equal or better with regard to safety and quality, or the excellent feedback we get from our partners at all levels of government,” said Burns.

Said Management and Training Corp. spokesman Issa Arnita: “If the DOJ’s decision to end the use of contract prisons were based solely on declining inmate populations, there may be some justification, but to base this decision on cost, safety and security, and programming is wrong. The facts don’t support the allegations.”

GEO Group responded with a statement: “We’ve had a long standing private-public partnership with the BOP that dates back to the 1990s. At the federal level, our facilities have a proven track record of providing cost-effective, high quality services for those entrusted to our care. While our company was disappointed by today’s DOJ announcement, the impact of this decision on GEO is not imminent. As acknowledged in the announcement, the BOP will continue, on a case-by-case basis, to determine whether to extend contracts at the end of their contract period.”

The change in course comes almost 20 years after the federal government first hired private companies to run prisons. Today, roughly 22,000 inmates are held in privately managed federal prisons, a figure that translates to a little more than one out of every 10 federal prisoners, many behind bars for low-level immigration violations.

Friedmann’s optimism that DOJ will follow through on changing that is qualified. “DOJ can change course depending on who is in the White House,” he pointed out. And, in a nod to GEO and CCA’s well-funded lobbying efforts, he said, “I imagine they are going to be spending a lot of money lobbying, that they are already setting up meetings with lawmakers to roll this back.”