A look at prison
privatization

Table of Contents
Introduction........................... page 1

Rehabilitation .................... pages 15-16

Executive Summary............... page 2

Transparency ............................ page 17

Overview of Private Prisons.. pages 3-5

Sentencing Reform............. pages 18-20

Costs and Savings ................. pages 6-8

References ........................ pages 21-22

Community Costs .................. pages 9-12
Safety .................................... pages 13-14
The economic downturn has
resulted in a budget crisis for
Ohio, as it has for other states,
and out-of-control prison costs
have emerged as a key concern.
The ACLU of Ohio has been a
forceful proponent of sentencing
reform where policymakers may
save taxpayer dollars and help
create a more just society.
Governor John Kasich’s new
budget plan includes a sweeping
overhaul of Ohio’s Department
of Rehabilitation & Correction.
The proposal includes commonsense sentencing reforms that
would help ease our
overcrowded prison system.
Unfortunately, the proposed
budget also includes a plan to
sell five state correctional
facilities to “prison for profit”
operators like Corrections
Corporation of America and
contract with those companies
to house inmates in them.1
Privatizing state prisons may in
fact undermine sentencing
reform’s goal to remove lowlevel offenders from the justice

system.
Prisons for profit are different
from public institutions because
they must generate revenues for
their shareholders. As a result, they
have a direct interest in ensuring
that Ohio’s prison system stays full
to maximize its profitability.
This is not the first time prison
privatization has been proposed as
a cost-saving measure for Ohio
taxpayers. In the 1990s, Ohio
experimented with a private
penitentiary in Youngstown that
resulted in serious safety and fiscal
concerns. Currently, the state has

limited private facilities to
Northcoast Correctional Facility
and Lake Erie Correctional Facility,
which hold inmates with minimal
health and behavioral issues.
Legislators are taking steps
to correct our broken prison
system, but privatization will
negate this important work. This
report seeks to explore the
many problems that plague
prisons for profit, in the areas of
fiscal efficiency, safety,
contributions to the community,
accountability and effect on
recidivism.

This report was compiled and drafted by senior staff at the
American Civil Liberties Union of Ohio. The ACLU of Ohio would
especially like to thank the following staff and volunteers for
their contributions to this report:
Christine Link, executive director
James L. Hardiman, legal director
Mike Brickner, director of communications and public policy
Gary Daniels, associate director
Carrie L. Davis, staff counsel
Shakyra Diaz, policy director
Ann Rowlett, deputy director
Geoff Schotter, research assistant

1

Executive Summary
Current State of Incarceration
•

Between 1987 and 2007, the
national prison population
tripled to 1,596,127. Nine
percent of the national
prison population is housed
in a private prison.

•

Private prisons have evolved
since the 1980s into a
permanent American
industry grossing billions of
dollars in revenues every
year. Corrections
Corporation of America
(CCA), the nation’s leading
private prison operator,
reported revenues of $1.675
billion in 2010.

prisons are plagued not only
by difficulties in controlling
for variables like security
level, gender, and age, but
also “hidden” costs
associated with contract
writing, financial liability,
and monitoring.
Community Costs
•

Privatization will
undermine sentencing
reform. Prisons for profit
have a different mission than
public prisons: they must
earn revenue. This means
they have an inherent
interest in ensuring prisons
stay filled, even at the
expense of taxpayers.

•

When a state government
enters into a contract with a
private prison company, it
legally binds the taxpayer to
pay the company a certain
dollar amount per inmate
per day. This has led to overincarceration and violence at
private facilities in Ohio and
nationwide.

Costs and Savings
•

•

Many states have recently
begun ending their
contractual relationships
with private prison
operators, concluding that
the costs and risks of
privatization far outweigh any
short-term benefits.
Ohio’s proposal of selling five
prisons will only yield a
short-term infusion of cash.
The state will lose all future
revenue.

•

Studies conducted by the U.S.
Department of Justice and
the U.S. General Accounting
Office have shown that private
prisons yield little or no
long-term savings.

•

Cost comparison studies of
state-run and privately-run

•

The profit motive drives
private prison operators to
pay as little of their fair share
of state and federal taxes as
possible, and they often get
away with shifting the costs
of their prisons’ failures
directly onto the backs of
taxpayers. In 2002, the IRS
had to sue CCA to get it to
pay $54 million in back
taxes.

Safety
•

A 2004 report found that
private prisons had 50
percent more inmate on
inmate assaults and almost
50 percent more inmate on
staff assaults.

•

Private prison companies cut
costs by hiring cheaper,
lower-skilled staff and fewer
of them. The result is a
vicious cycle where poorly
trained and poorly
disciplined corrections
officers are incapable of
adequately responding to
prison emergencies. Prison
safety conditions deteriorate,
and more staff quit,
increasing the turnover rate.

Rehabilitation
•

Of the top five states in
percentage of privatized
prison beds, each has a
higher three-year
recidivism rate than Ohio.

•

Ohio’s two private prison
facilities offer fewer
rehabilitation and training
courses than their public
counterparts.

Transparency
•

Ohio case law is mixed as to
whether private prisons are
subject to public records
requests and other
important transparency
measures. Without these
protections, private prisons
are ripe for abuse.
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Overview of Prisonsr Profit
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Foundations of Prisons for
Profit
Prison privatization has a long
and troubled history in the United
States — a history that offers a
stark warning about the
incentives motivating those who
would turn punishment into a
private, for-profit business. The
Thirteenth Amendment to the
U.S. Constitution was passed
immediately after the end of the
Civil War to formally abolish
slavery throughout the country,
but it contained an exception for
“punishment for crime whereof
the party shall have been duly
convicted.”1 In the following
decades, many states,
particularly in the south,
contracted out prison inmates
as cheap farm, railroad, and
mining laborers under what was
called the Convict Lease
System. Growing political
opposition to the Convict Lease
System during the Progressive
Era of the 1920s led to its
demise. Beginning in the 1980s,
the War on Drugs, the
introduction of mandatory
minimum sentencing, and a
general political climate across
the country that looked to
incarceration as the one and
only solution to all aspects of
crime combined during that
decade to turn incarceration into
an investment opportunity for
private speculators.2
States increasingly began to
sell off their correctional
facilities to private operators
and then enter into contracts

with those operators to house
their inmates as a means of
coping with a suddenly
skyrocketing prison population.
Since then, private prisons
have evolved into a permanent
American industry. Today, the
overwhelming majority of the 264
private prisons in the United
States are operated either by
Corrections Corporation of
America (CCA) or the GEO Group
(formerly Wackenhut Securities,
Inc.).3 As of June 2010, 126,000
state and federal prisoners, 9
percent of the national inmate
population, were housed in
privately run prisons.4
But state after state in recent
years has ended its contracts
with private operators,
concluding that the costs and
risks of privatization are just too
high compared to any benefit
privatization provides to
taxpayers.5 Texas, Oklahoma,
California, Idaho, and Nevada

are among the states that have
terminated or seriously
considered terminating their
contractual relationships with
private prison operators.6
Current Privatization in Ohio’s
Prisons
Ohio Department of
Rehabilitation and Correction
outsources various services in
its many public prisons to
private contractors. For
example, inmates have collectcall telephone funds that are
administered by Global Tel*Link,
a private communications
company that caters to prison
inmates.6
In addition, a 1996 state law
requires Ohio to contract for two
private prisons as long as those
prisons show annual cost
savings of at least five percent in
comparison to state-run
prisons.
Ohio’s two privately owned
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Overview of Prisonsr Profit
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state prisons include the North
Coast Correctional Treatment
Facility in Grafton, which is
owned by the Management and
Training Corporation (MTC) and
hosts 700 minimum-security
inmates, and the Lake Erie
Correctional Institution in
Conneaut, which is also owned
by MTC and hosts 1,509
minimum-to-medium-security
inmates.7 In addition, Ohio hosts
2,016 out-of-state federal
prisoners at the Northeast Ohio
Correctional Center, a CCAowned facility in Youngstown.8
The John Kasich
administration, however, has
indicated that it intends to
pursue privatization as a major
component of its correctional
budget reforms. Kasich’s
appointment of private prison
industry insider Gary C. Mohr as
the new director of ODRC also
signals a willingness to privatize
the prisons. Mohr was CCA’s
managing director from 2007 to
2009, and “CCA was a client of
Mohr’s consulting firm before
and after his employment with

the company.”9
Kasich’s biennial budget
proposal would transfer
ownership of the Lake Erie and
North Coast facilities from MTC
to another private company, sell
the currently state-run Grafton
and North Central facilities to a
private company, and reopen the
Marion juvenile facility as an
adult prison and sell it to a
private company.
Privatization versus reform
Governor Kasich says he is
implementing both sentencing
reform and privatizing prisons in
order to save resources. While
sentencing reform will lessen
the overcrowding of Ohio’s
prisons, prison privatization may
not have a substantial financial
impact.
The budget crisis in Ohio is
not trivial, and the cost of
prisons is indeed out of control,
but privatizing state-run prisons
will not fix the gaping
corrections-related hole in the
state budget, and will more
likely than not make it even

worse.
State prisons are public
assets. Selling them off will
only yield a one-time infusion
of cash.
It is highly disputed whether
the promised savings from a
private prison’s reduced
operational costs will ever
materialize, but even the most
generous estimates of such
savings are trivial in comparison
to costs of housing an everexpanding inmate population in
the first place. As of October
2009, Ohio taxpayers spent an
average of $25,254 per year for
each inmate housed in Ohio
prisons. In June of that year, the
Ohio prison system held a total
of 51,113 inmates, and ODRC
projects that the number will
grow to 52,546 in 2011.10 The
most generous estimates of
operational cost savings at
private prisons compared to
public prisons range from 5 to
15 percent, and even these
figures are highly disputed by
impartial, reputable sources.11 If
Ohio’s prison population
continues to grow, neither of
these dubious cost savings
projections, nor the promised
extra corporate tax revenue12
will amount to anything more
than a monetary drop in the
bucket for Ohio’s budget crisis.
Short-Term Savings and LongTerm Costs
While taxpayers have an
interest in saving funds and
rehabilitating inmates, prisonfor-profit companies like CCA
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Overview of Prisonsr Profit
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only have an interest in their
bottom line. It is in their best
interests to charge taxpayers as
much as they can per inmate
per day and cut programming. It
is the profit motive that drives
private prison operators to
engage in cost-cutting
measures. Since a company’s
profit is the difference between
its costs and revenues, those
measures will always benefit the
shareholder when it comes time
to pay out the dividends. But any
cost savings that the taxpayer
might realize as a result of such
measures can quickly be eaten
up by an increase in the number
of inmate-occupied private
prison beds within the state.
Thus, even if we assumed the
most generous cost-comparison
figures to be the most accurate,
it wouldn’t change the fact that,
the interests of a private prison
company’s shareholders and the
interests of taxpayers in states
that have contracts with that
company are fundamentally
opposed.

Private prison firms have a
natural incentive to maximize
both the number of inmates they
imprison and the amount of
time for which they imprison
each inmate, because the state
pays them for their service of
housing convicts on a perinmate per-day basis.
The prison population
continues to swell both in Ohio13
and nationally. 14 However, crime
rates have also decreased
substantially over the past
several years. Prisons for profit
will only exacerbate this
problem as they have a vested
interest in more people
remaining incarcerated.15
Governor Kasich is not doing
the taxpayers of Ohio any favors
by selling off state prisons to a
private prison company like
CCA. Doing so will not only
worsen the strain on Ohio’s
budget; it will also work strongly
against the rehabilitation of lowlevel offenders and jeopardize
the safety of ordinary Ohioans.
Only sentencing reforms and
guidelines that systematically
identify and invest in the
rehabilitation of such inmates
can reverse Ohio’s
hemorrhaging corrections
budget because only these types
of reforms will actually reduce
the number of inmates
incarcerated in Ohio. Rather
than rewarding private prison
operators like CCA with
contracts that bind Ohio
taxpayers, Ohio’s corrections
policy ought to try as hard as
possible to end the cycle of

incarceration by enacting
sentencing reforms that reverse
the mushrooming of the prison
population that has continued
unabated for decades.

5

COSTs & PrisonsProfit
For

Cost Comparisons
The idea that outsourcing
traditional public-sector
functions will lead to those
functions being carried out more
efficiently and less expensively is
rooted in the philosophy that
“the government which governs
best is that which governs
least.” Those who support
prison privatization believe that
opening up the operation of
prisons to the competitive free
market will result not only in
those prisons being run at a
lower cost than public prisons
but also in those prisons
showing improved “quality,
flexibility, and innovation.”16 This
is the position of the
conservative Reason Institute,
one of the country’s leading
voices for privatization.
Even if one were to assume
this argument to be true, the
sheer number of inmates who
are currently locked up in Ohio
calls into question the wisdom
of incarcerating many of them in
the first place. 73.5 percent of
males and 85 percent of
females in the Ohio prison
system were classified as lowto-medium-security in 2009,
and the majority of Ohio
prisoners were incarcerated for
low-level, nonviolent offenses.17
Taxpayer money could be better
spent providing addiction
treatment, job training, and job
development programs outside
of prison for many of these
inmates than keeping them
locked up. Paying a private
contractor to house them in a

more “flexible” or “innovative”
way than the state is capable of
doing is hardly the best deal for
the taxpayer.
Countless studies by
independent agencies, state
governments, and the federal
government have compared the
cost-effectiveness of public and
private prisons since the
modern era of prison
privatization began in the
1980s.18 Each of them seriously
calls into question the argument
that privatizing a correctional
facility makes it significantly
cheaper or more efficient to run.
One recent study of note was
a performance audit of the
Arizona Department of
Corrections conducted by the
state’s Office of the Auditor
General in 2010.19 The audit
noted that “Arizona’s prison
population has grown faster
than most states’ prison
populations” and that the state

“has expanded [its] prison
system to accommodate
growth,” relying heavily on
privatization in order to contain
costs.20 In particular, the
Department has:
•

contracted for services (such
as food, health, and workbased education) with private
organizations and
community colleges;

•

downsized administrative
office staff;

•

placed responsibility for
more costs on the inmates;

•

taken advantage of volunteer
support;

•

replaced typical mattresses
with ones made from
recycled materials; and,

•

used inmate labor and
inmate-produced products

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COSTs & Prisonsr Profit
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whenever feasible, among
numerous other
efficiencies.21
Yet the audit cautions that even
though the Department of
Corrections “has taken steps to
keep the per-inmate daily cost (per
capita rate) low,” “State spending
on the Department’s operations
has increased significantly” and
“continued expansion will require
significant spending.”22 The
Department’s Operating Per
Capita Cost Report found that
“the state paid private prisons a
higher per inmate rate than it
spent on equivalent services at
state-operated facilities in fiscal
year 2009.”23
The Arizona audit only
confirms decades of studies
inquiring into wisdom and costeffectiveness of prison
privatization. Back in 1988, John
Donahue of Harvard’s Kennedy
School of Government
conducted a study of the
benefits and drawbacks of
prison privatization for the
Economic Policy Institute. He
concluded that “the evidence on
potential cost savings is too
weak and too questionable to
warrant so radical and risky an
experiment.”24 Since then, the
evidence has not gotten any
stronger or more certain.
A 1996 review by the U.S.
General Accounting Office
surveyed studies conducted
between 1991 and 1995 in five
states — Texas, California,
Tennessee, New Mexico, and
Washington — comparing

operational costs at public and
private facilities.25 It found that each
study “reported little difference”
and “could not conclude whether
privatization saved money.”26
In 2001, the U.S. Department
of Justice’s Bureau of Justice
Statistics published an even
more comprehensive survey of
cost-comparison studies and
concluded that private prisons
offered only modest cost
savings. “[R]ather than the
projected 20 percent savings,”
the survey concluded, the
average savings from
privatization was only about one
percent, and most of that was
achieved through lower labor
costs.”27 The minimal cost
savings that were achieved
through lower staffing levels did
not come without a price — they
were accompanied by “a
significantly higher rate of
assaults” on inmates and staff.28
The credibility of studies
which do show cost savings at

private prisons is complicated
by the less-than-scientific
conditions in which they were
conducted. Two analysts from
the Federal Bureau of Prisons
published a paper in 1999 which
concluded that “proponents of
privatization make global,
unsubstantiated, speculative
claims which are rarely
addressed with concrete
evidence.”29 In order to control
properly for such studies, the
researcher ideally would be able to
look at two prisons that were
identical in their design, inmate
population, and inmate
characteristics.30 It is typically very
hard to find such a perfect
comparison, and many of the costcomparative studies that have
yielded pro-privatization results
have suffered from this problem.
In 2008, the National
Institute of Justice found that
private prisons tend to
underestimate the cost of
oversight, health care, and

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background checks in their
proposals and that states end
up paying more than they were
told they would be paying. One
of the key reasons for such
errors, the study found, was the
inherent differences in the way
prison performance in the public
and private sectors is measured.
Private prisons’ performance is
measured by their compliance
with the terms of their
particular contracts (which, of
course, may vary). Publicly-run
prisons, by contrast, measure
performance through auditing
procedures.31
A 2009 “meta-analysis” of
cost-comparative studies by five
University of Utah researchers
consciously took into account
these methodological issues and
surveyed only “high-quality”

State prisons are
public assets. Selling
them off will only yield
a one-time infusion of
cash.
cost-comparison studies—
studies that “directly compared .
. . specific, identifiable, private
prison[s] with . . . closely
matched, identifiable public
prison[s].”32 ‘Cost savings from
privatizing prisons,” the study
concluded, “are not guaranteed
and appear minimal.”33
In addition to control
difficulties, there are often
“’hidden’ or indirect costs
associated with contract writing,

financial liability, and
monitoring that may or may not
be included in the cost
analysis.”34 Whenever a state
contracts with a for-profit
corrections company, it puts the
responsibility of living up to
state operational standards in
private hands. While the
contract may state that the
private company has to meet
those standards, doing so puts
pressure on the company’s
bottom line that the company
will naturally be compelled to
resist.
One telling example of this
problem happened at Ohio’s own
North Coast Correctional
Treatment Facility in 2000. Two
months after it opened, a judge
cited contract violations at the
facility.35 Over the following year,
“[a] pattern of contract
violations, safety problems, and
other issues continued to plague
the institution.” Four
consecutive wardens resigned,
“one of whom had to serve at
two different points to substitute
for sudden departures.”36
Sometimes, the language of
the contract itself ends up
costing more money for the
state than it saves. The North
Coast facility was designed only
to house drunk-driving
offenders, but the ODRC’s
contract with CiviGenics, then
the private company operating
the facility, contained a clause
committing ODRC to pay
CiviGenics for 95 percent inmate
capacity regardless of the actual
number of inmates being held at

the facility. When the state found
it was unable to fill North Coast
solely with DUI offenders,
however, it sent prisoners to the

“[R]ather than the
projected 20 percent
savings,” the survey
concluded, “the
average savings from
privatization was only
about one percent, and
most of that was
achieved through lower
labor costs.”
facility who had been convicted of
serious felony offenses such as
sexual battery, assault, arson,
manslaughter, and robbery. In
December 2000, ODRC withheld
$74,499 from its monthly
payment to the company to
recover part of its cost and then
declined to renew the contract
when it came up for renewal.
After Ohio failed to receive bids
from other companies that were
five percent below the state’s
estimated costs for North Coast,
ODRC raised the per-prisoner
per-day rate it allowed private
companies to charge from $53.11
to $62.88.37
It is little wonder, then, that
the 2010 Arizona audit suggested
repealing the state’s harsh
mandatory sentencing laws and
expanding community
corrections as “fiscally sound”
compared to building new
prisons.38
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Two Ways of Looking at Cost
As taxpayers we all want our
government to provide us with
the best possible prisons to
effectively rehabilitate and
reform those who will one day
re-enter our communities. We
also want our government to
use our tax dollars efficiently
and effectively.
The private prison industry
promises taxpayers that
privately owned, for-profit
prisons will both save on prison
operating costs and generate
public revenue from corporate
taxes the industry pays to the
states in which it operates.39
Both of these promises,
however, are empty.
CCA and other major private
prison operators are publicly
traded corporations. As such,
their primary responsibility by
law is not to the states who
contract with them but to their
shareholders. Since investors
can sell their shares at any time,
the managers and executives of
private prison companies have
immense pressure on them to
consistently turn a profit. The
argument that privately run
prisons are more efficient and
competitive than state-run
prisons fails to take account of
the very peculiar type of
“competition” that exists within
the private incarceration
business.
Competition in most privatesector industries means the
consumer gets to choose among
competing providers of goods
and services. Inmates in

privately run facilities, however,
are no more able to choose a
different prison if they are
dissatisfied with the conditions
of their confinement than are
inmates at state-run facilities.
Like firms in any for-profit
industry, private prison
companies are compelled to
expand and capture an ever
greater market share. CCA’s
current near total domination of
the U.S. private prison industry
dates from the second half of
the 1990s, a time when the
acceleration of prison
construction was at its historical
peak.
Between 1987 and 2007, the
national prison population
tripled to 1,596,127. CCA
capitalized on this trend by
acquiring their smaller rivals
and lobbying states — with
mixed success — to take over
increasing portions of their
prison systems.
In 1990, CCA’s reported
annual revenues were $50
million. By 1997, they had
ballooned to $462 million,40 and
by 2006 they had reached $1.675
billion.41 The company’s
reported revenues and profits
have been steadily growing ever
since.42 In the words of one New
Mexico county commissioner,
“It’s terrible to say, but
prisoners and trash are big
business.”43
If companies in the private
corrections industry seem to
achieve greater success in the
marketplace the more they fail
at providing state taxpayers with

any substantial cost savings, the
reason why is pretty
straightforward. From the
perspective of these companies’
shareholders cost savings
means something completely
different than what it means
from the perspective of the
taxpaying citizens of the states
in which private prisons operate.
The shareholder does not
care whether the company’s
profits result from cutting costs
in half while maintaining the
same revenue inflow or from
maintaining the same cost
outflow but increasing revenues
by expanding the number of
occupied prison beds. As long as
the value of his or her stock in
the company continues to grow,
it is not relevant to them how
this is achieved.
But to the taxpayers of the
state in which the company
operates this prison, it is
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extremely important in which of
these two ways the company
maximizes its profit. All of the
abstract, quantitative talk about
cost savings obscures the basic
fact that the taxpayer does not
stop paying for a prison’s
operation after it becomes
privatized. When the state
government enters into a
contract with a private prison
company, it legally binds the
taxpayer to pay that company a
certain dollar amount perinmate per-day. There is
therefore a direct correlation
between the company’s
revenues and the taxpayer’s
expenses. Privatized prisons are
not intended to make a profit for
taxpayers — they generate
revenue for shareholders.
A privately-operated
correctional facility is nothing
more than a barbed-wireenclosed building filled with
cells and beds; it only becomes
capital — that is, a source of real
economic value to the
company’s shareholders —
when its cells and beds are filled
with human beings at the
taxpayer’s expense. It is this
prison’s status as capital that
prison privatization supporters
point to when trying to persuade
the taxpayer of its superior costeffectiveness in comparison to
its supposedly bureaucratic and
cumbersome state-run
counterpart.44 But in reality, this
is a comparison of apples to
oranges, because the taxpayer
does not measure prisons and
other public services by how

profitable they are to him or her
personally but by how useful
they are to his or her
community.
A 1992 study by the New
Mexico Corrections
Department showed that guards
at a private CCA-run women’s
correctional facility were
pressured to issue disciplinary
infractions to inmates that
resulted in prolonging their
incarceration out of a desire on
the part of CCA executives to
maximize quarterly dividends

Alongside the rise of
private prisons in
America has been
the growing practice
of “interstate
commerce” in prison
inmates.

and satisfy shareholders. As a
result, “inmates at the women’s
prison run by CCA lost good
time at a rate nearly eight times
higher than their male
counterparts at a state-run
lockup.”45
Yet private prison firms are
hardly indifferent as to which
inmates they house. All things
being equal, there would be a
one-to-one correlation between
a correction firm’s profits for a
given time period and the
number of inmates it houses
during that time period.

However, inmates who are
unusually violent and difficult to
control or who have unusual
medical needs cost prison
operators more to house than
inmates who are compliant and
healthy. In addition to having a
natural financial incentive to
maximize inmate capacity and
time incarcerated, private prison
operators have a simultaneous
incentive to “cherry pick” those
inmates who are the least costly
for them to house.46
A 2001 report by Policy
Matters Ohio found that Lake
Erie Correctional Facility
artificially inflated its cost
savings by receiving only
healthy, well-behaved inmates,
and thereby demonstrated the 5
percent cost savings required of
it by Ohio law.47 This
demonstrates one way that
private prisons remain profitable
to their shareholders. After
cutting their operational costs,
they aim to fill as many beds as
possible with the most docile,
healthy, and therefore
inexpensive inmates they can
find.
Alongside the rise of private
prisons in America has been the
growing practice of “interstate
commerce” in prison inmates.
On the eve of the mid-1980s
birth of modern prison
privatization, the U.S. Supreme
Court held that “[j]ust as an
inmate has no justifiable
expectation that he will be
incarcerated in any particular
prison within a State, he has no
justifiable expectation that he

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Community COSTs & Prisonsr Profit
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will be incarcerated in any
particular State.”48
Private prison operators
have therefore benefitted since
the industry’s very beginning
from a national market in
inmates, enabling them to
compensate for convict
“shortages” in the states in
which they operate prisons by
siphoning inmates from other
states with convict “gluts” into
those prisons and thereby fill
them to capacity.
A 1972 study by the
California Department of
Corrections found “a strong and
consistent positive relationship...
between parole success and
maintaining strong family ties
while in prison.”49 In this context,
private prison firms have a
doubly perverse incentive. The
compulsion of these firms to
“import” prisoners from far
away localities to fill empty
prison beds imposes the
“external” cost on society of
more unrehabilitated offenders.
This social cost ultimately falls
on the state’s taxpayers. It
provides at the same time,
however, yet another benefit to
the private prison industry,
because rehabilitated offenders
do not fill private prison beds
and therefore do not generate
profits.
Prisons for Profit and Taxes
When it comes to the
question of private prison
corporations paying taxes for the
privilege of operating in that
state, the interests of taxpayers

“Cash for Kids” Scandal Rocks Pennsylvania
Sometimes private prison
operators are so greedy for
revenue-generating human
beings to fill their cells that
they bribe judges to sentence
children to serious jail time for
the most minor and trivial of
offenses. In February 2011, a
juvenile court judge in Luzerne
County, Pennsylvania was
convicted of racketeering in
connection with a “kids for
cash” scheme. The judge
accepted money from a private
prison operator in exchange
for handing down ridiculously
harsh sentences that would
guarantee prisons were full to
profit-maximizing capacity.50
This scandal led to the
reversal of thousands of
juvenile convictions and
brought national
embarrassment to the county.
The conspiracy “lasted from
2003 to 2008” and involved as
many as 6,500 juvenile cases
and 4,000 individual children,
over 50 percent of whom did
not have an attorney.51 One
and private prison shareholders
are similarly opposed. Taxes are
an expense to private
corporations that cut into their
profits, and the managers and
directors of private prison
companies therefore owe a duty
to their shareholders to
minimize the company’s tax
liability as much as possible.
The taxpayers of the state

youth was “sent to a boot
camp for five months in 2004
for being a lookout for a friend
who was stealing DVDs from a
Wal-Mart.” Another was “sent
to a detention center for
several days in 2006 for failing
to appear at a hearing as a
witness to a fight, even
though his family had never
been notified about the
hearing and he had already
told school officials that he
had not seen anything.” A
state audit of the Pennsylvania
juvenile facilities involved in
the “cash for kids” scandal
found that those facilities
“were systematically
overbilling the county and . . .
had fallen behind in their bills
and begun receiving shut-off
notices from utility
companies.”52 In his closing
argument at the disgraced
judge’s trial, the prosecutor
said he had “turned his office
into a cash-cow, into a
money-making machine.”53

where these companies operate
their prisons, however, naturally
want these companies to pay
their state governments as
much as possible in corporate
taxes, because taxing outside
corporations relieves the
taxpayers of the burden of
funding basic government
services. While private prison

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Community COSTs & Prisonsr Profit
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companies publicly promise
taxpayers that their presence
in the state will generate
revenue, they lobby behind the
scenes and otherwise do
everything they can to minimize
the taxes they actually pay.
CCA, for example, pulled out of
its contract at a Cleveland
facility it operated in the 1990s
because it refused to pay its
share of local taxes.54 In 1998 the
industry even persuaded Arizona
to pass a law retroactively
prohibiting the state from taxing
income derived from the
detention or incarceration of
prisoners by private
companies.55
Real estate tax shelters are
another way private prison
companies avoid paying their
share. A federal tax loophole
allows such shelters to avoid
taxation at the company level.
Although this exemption “was
established for legitimate real
estate companies,” CCA tried to
funnel revenue generated by its
prison operations into the
loophole shelter in order to
avoid paying taxes on it.56 The
loophole, while part of the

federal tax code, shields
companies from tax liability at
both the state and federal
levels.57 The IRS sued CCA in
2002 after its audit of the
company suggested it was
abusing tax loopholes to avoid
paying its share of federal
taxes.58 CCA settled with the IRS
in 2002, agreeing to pay $54
million in back taxes.59 While
CCA’s lawyers “continue[d] to
appeal the IRS’ findings,” the
IRS “questioned the validity of a
previous tax avoidance
structure, and CCA was forced
to pay delinquent taxes.”60
Tax-exempt bonds issued
through partnerships with local
governments and municipalities
are another way private prison
companies avoid tax liability.
These “backdoor taxpayer
subsidies” can cost the taxpayer
more than public financing
would because the local
government might issue higherinterest securities than would be
the case with ordinary public
financing.
Tax-exempt bonds can also
shift the responsibility of
economic failure from the
private prison company to the
taxpayer, leaving the taxpayer
and the government completely
liable for the company’s failure.
This happened in Texas in
1988 when Dallas-based
Detention Services, Inc.
convinced the government of
Zavala County to finance one of
its facilities with county bonds.
The company was supposed to
repay its debt to the county from

its prison revenues. But after it
cancelled another contract it
had with the District of
Columbia on account of
excessive prisoner violence and
staff corruption, the company
had no revenue, and the Zavala
County government had no
choice but to make bond
payments out of its operating
fund, which sent it into deficit
and default on the bonds.61
When private prison
companies market their
“services” to state governments,
they often promise to “fully
indemnify” those governments
from liability for their failures. In
other words, the companies
promise to take total
responsibility for all of the debts
and other obligations that the
state’s taxpayers would
ordinarily be stuck with in the
event of failure.
Such promises, however, can
be exceedingly difficult to
enforce. CCA, for example,
promised to indemnify the
District of Columbia from liability
arising from its operation of the
Northeast Ohio Correctional
Facility, a private facility for DC
prisoners in Youngstown, Ohio.
But when the District sued CCA
to enforce its contract with the
company, CCA “refused to
indemnify District officials and
failed to obtain the required
insurance policy naming the
District as insured.”62

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Safety & Prisonsr Profit
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Safety & Training
The fundamental economic
tension between the private
prison company shareholder
and the state taxpayer is further
reflected in various social
consequences of prison
privatization that reverse the
very public benefits that prisons
are supposed to provide to the
community. Chief among these
benefits is public safety. A study
by a professor at George
Washington University found
that private prisons had a 50
percent higher incidence of

inmate on staff assaults and
two-thirds higher incidence of
inmate on inmate assaults than
state-run prisons.63 A 2004
report by the Federal Probation
Journal that specifically
controlled for prison security
level found that private prisons
had 50 percent more inmate on
inmate assaults and almost 50
percent more inmate on staff
assaults.64
These dangerous conditions
create a difficult working
environment for prison staff,
resulting in a far higher staff

turnover rate at private prisons
compared to public prisons. The
private prison industry’s own
statistics show that at private
prisons the turn-over rate was
53 percent, while at public
prisons it was a mere 16
percent.
Prison safety depends on a
stable workforce. The more
frequently a larger number of
employees quit, the more
dangerous prisons become.
High turnover rates mean
existing staff are fewer in
number and less experienced.

Inmates feel effects of less trained staff: Minnesota case study
In 1999 the University of
Minnesota Law School’s
Institute of Criminal Justice
interviewed 106 prisoners in
Minnesota, 57 of whom were
housed in a public prison run
by the Minnesota Department
of Corrections (DOC) and 49 of
whom were housed at the
private, CCA-owned Prairie
Correctional Facility (PCF).66
Each prisoner was interviewed
about his opinion on the
professionalism of the prison
staff, and security and safety
inside the facility. The
experiences and perceptions of
the prisoners confirmed
previous studies that showed
the problems of lower wages,
higher turnover, and poorer
staff training in private
prisons.67The study found:

•

Prison-for-profit inmates
complained about the lack of
professionalism of the staff.
“The staff attitude here –
they treat you like a
commodity,” one inmate
reported, “its all about the
money.”68

•

Prison-for-profit inmates
were more likely to report a
lack of structure in their day.
The difference stems from
the fact that public prisons
force its inmates to
participate in rehabilitation
activities while the prisonfor-profit does little to
promote these programs.

•

Prison for profit inmates
consistently reported living in
a more dangerous and poorly
supervised environment than
public prison inmates. Many

inmates used words like
“unstable” and
“disorganized” when
describing their living
conditions.69
Many of these inmates were
highly aware of the two primary
causes of this dangerous
environment: the cost-cutting
measure of hiring a low-paid,
poorly-trained staff, many of
whom quit after the first major
disturbance, and the revenueraising measure of “reclassifying” maximum-security
inmates as minimum or
medium-security in order to fill
empty bed space.70

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Safety & Prisonsr Profit
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Workforce instability at private
prisons has resulted in riots,
rapes, assaults and escapes.65
The instability of private
prison staffs is a direct
consequence of the fierce cuts
in labor costs that private
prisons resort to in order to
maintain short-term
profitability. Containing labor
costs “is the crux of the
privatization movement.”71
Running a prison is an
incredibly labor-intensive
endeavor. Not only do you need
enough adequately trained
guards to keep order and
prevent escapes, you also need a
staff to provide a wide variety of
inmate services, including
meals, health care, counseling
and vocational assistance, and
law library services.72
Private prison operators
control their labor costs by
reducing the number of staff,
hiring low-wage, non-union
labor, and eliminating fringe
benefits.73 Prison guards hired
by private facilities often have
little to no training or experience,
and in some instances are barely
out of high school.74
The result is a labor force
that is ill-prepared for the
violent crises that may erupt at
any moment. Cost-cutting on
labor at private prisons
perpetuates a vicious cycle:
poorly trained and poorly
disciplined staff are incapable of
adequately responding to prison
emergencies, which creates
extremely dangerous conditions
at the facility, which then forces

a good many employees to quit,
and raises the turnover rate.

business is built around providing
a valuable service to our
customers.”77
Youngstown Prison for Profit
In March of 1998, the City of
Threatened Community Safety Youngstown sued CCA on behalf
Vividly illustrating the
of the inmates at the prison,
consequesces this combination
“alleging that prisoners were
of cost-cutting and revenueput at risk by being sheltered
generating measures is an
with maximum-security
incident that occurred in 1999 at prisoners in a facility not
the private Northeast Ohio
designed for containing them.”77
Correctional Facility in
The court ordered the 113
Youngstown, Ohio. Upon opening “reclassified” maximumthe facility in 1997, CCA staffed it security inmates be removed
“with guards who had little or no from the prison. The litigation,
cost of reclassifying inmates,
A 2004 report by the
and changes in security
Federal Probation
procedures posed extra costs to
the state.
Journal found that
What the Youngstown
private prisons had 50
incident shows is that even
percent more inmate
where a private prison
on inmate assaults and
demonstrates short term cost
almost 50 percent more
savings, “[i]t only takes one
inmate on staff
major disturbance for such
costs to greatly accelerate.”78
assaults.
More specifically, Youngstown
offers a vivid example of how the
experience in corrections — and very same short-term measures
then imported 1,700 of the most private prisons use to show cost
violent inmates from
savings — such as hiring cheap
Washington, DC, to fill what was labor and cutting staff numbers
supposed to be a medium— produce the conditions in
security prison.”75
which dangerous, violent
In its first 14 months of
incidents can occur. These
operation the facility
incidents result in additional
experienced 13 stabbings, two
costs that could have been
murders, and six escapes.76 When avoided had the facility been
local residents complained to CCA staffed with enough properly
about the dangers posed to their
trained officers.
community, officials responded
dismissively. “It’s nice if your
community is happy with you —
that’s an extra,” the company’s
founder remarked, “[b]ut the

14

Rehabilitation & Prisonsr Profit
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Rehabilitation and
Conditions of Confinement
Another benefit prisons
should provide the community is
inmate rehabilitation. Not only
does it cost the taxpayer directly
to keep an inmate in prison, it
also costs the taxpayer more
indirectly when inmates are
released back into society without
any ability to survive and function
as productive, law-abiding
citizens.
Supporters of prison
privatization sometimes claim
that privately operated prisons
have more of an incentive than
state-run prisons to maintain the
quality of the environment in
which they keep their inmates
and to develop rehabilitation
programs that will reduce inmate
recidivism. They reason this
because private prisons risk
losing the state contract to
operate the facility if it fails to
show results.80 Studies
comparing the recidivism rates
of inmates in public and private
prisons, have been inconclusive.
However, states with the
most private prisons do not have
the lowest recidivism rates.
Ohio’s prisons are, with the
exception of two facilities, entirely
state-operated. Only 4.4% of Ohio
inmates are in private beds.81
States with much higher
percentages of inmates in private
beds have significantly higher
recorded recidivism rates.
The five states with the
highest percentage of privatized
prisons are New Mexico,
Montana, Alaska, Vermont, and

Hawaii.82 According to 2005
statistics, four out of the five
states had higher three-year
recidivism rates than Ohio. 2005
data was not available from New
Mexico, but its 2007 three-year
recidivism rate of 43% was higher
than Ohio’s 2007 rate of 34%.
Privatizing more of Ohio’s
prisons will likely increase
Ohio’s comparatively low
recidivism rates because
privately run prisons have
consistently proven not to invest
in the types of programs and
services that public prisons
invest in order to enable their
inmates to function in society
upon their release. The same
Minnesota study that interviewed
inmates at public and private
facilities about prison safety and
staff training also interviewed
them about the programs and
services the facilities offered
them. Seventy percent of the
state-run DOC inmates reported
having received HIV/AIDS
education compared to zero of
the private, CCA-run PCF
inmates.90 DOC inmates “were
more likely [than PCF inmates] to
report that participation in
educational classes had proved
very helpful to them, personally”
and “gave significantly higher
overall ratings to the educational
programs available in their
facilities” than PCF inmates.91
The drug and alcohol treatment
programs at PCF consisted of 13 hour counseling sessions that
occurred weekly, while most of
the DOC prisoners reported
benefitting from “full-time,

Percentage of prison
beds that are privatized
New Mexico 43.4%
Montana 39.8%
Alaska 30.8%
Vermont 30.1%
Hawaii 28%
Ohio 4.4%

Three-Year Recidivism
Rates, 2005
New Mexico 43%*83
Montana 37.6%84
Alaska 66%*85
Vermont 50%86
Hawaii 52.5%87
Ohio 36.23%88
*No 2005 data was available
for New Mexico and Alaska,
so 2007 data is provided.
Ohio’s 2007 recidivism rate
was 34%.89
highly structured ‘therapeutic
community’ treatment
programs.”92 Typical of the DOC
experience is one inmate’s
report that the DOC prison
“taught me how to read, how to
evaluate my anger, how to
understand myself — it has
made big changes and
improvements in my life.”93
Typical of the PCF experience
was one inmate’s statement that
“I have learned nothing here.”
Effect of Rehabilitation on
Recidivism
A comparison of the programs
and services available to inmates
at Ohio’s two private facilities with

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Rehabilitation & Prisonsr Profit
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those available to inmates at its
state-run facilities suggests a
similar dynamic at play and
underscores the importance of
health care — both physical and
mental — in providing inmates
the treatment necessary for their
successful reintegration into
society.
Lake Erie Correctional
Institute and North Coast
Correctional Treatment Facility
have no trauma recovery
programs, no contract or grantfunded job-training programs,
and no programs addressing
mental illness, disease
management, general health, or
sex offender issues.94
More troubling is the fact that,
despite the many requests by
inmates at these facilities for

medical attention by a licensed
physician (as opposed to a nurse),
none of them were sent off-site to
the Ohio State University
emergency room, whereas
inmates in other, state-run
facilities were.95
It is possible that the two
facilities have been seeking to
cut costs by relying on
“telemedicine,” a private
technological service that public
and private prisons alike in Ohio
have been using since the 1990s.
With telemedicine, inmates
receive medical treatment from
nurses or non-specialist doctors
who receive treatment
instructions from off-site
specialists via a video
teleconferencing device.96
It is important to remember

the elemental fact that recidivism
is good for private prisons. The
more people are returned to
prison, the more business
private prisons get. A 2008 study
published by Crime and
Delinquency found that “private
prison inmates had a greater
hazard of recidivism in all eight
models tested, six of which were
statistically significant.”97 A 2005
study of juvenile prisons
published in the Journal of Law
and Economics found that private
prisons increased costs by
promoting recidivism. Juveniles
in private prisons were more
likely to commit further crimes
and be imprisoned again.
In purely financial terms –
without giving any weight to the
social harm caused by increased
recidivism – the additional costs
of increased future confinement
alone exceeded any short-term
savings offered by private
prisons.98 The study found that
private prisons had “no
contractual incentive to provide
rehabilitation opportunities or
educational/vocational training
that might benefit inmates after
release, except insofar as these
services act to decrease the
current cost of confinement.”99

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Transparency & Prisonsr Profit
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Public Accountability and the
Taxpayer’s Right to Know
Prisons for profit also
weaken the public’s right to
know. Governors’ have less
executive authority over the
prison’s management when it is
privatized. The governor cannot,
for example, fire a warden at a
privately-run prison for poor
management the way he could
at a state-run prison.100 Where
governors are ultimately
accountable to the people of the
state, private prison managers
and executives are accountable
only to their shareholders.
Privatizing prisons remove
responsibility from the state’s
elected representatives and
makes it more difficult for the
facilities to be held accountable
by the public.
The public has far less
oversight of the operation of
private prisons. In many states,
private prisons are exempt from
public records laws. This adds a
layer of secrecy to their
operations and makes it more
difficult to learn about
misconduct.101
Some states are also granted
only partial information on
inmates held in private prisons
in their state. In Arizona, for
example, private prisons are not
required to provide the state
with escape data or details of
the crimes inmates
committed.102
Because the operation of forprofit prisons is in private hands,
states often face considerable
legal hurdles when they try to

monitor the operation of those
prisons.
For instance, in 1987 an Ohio
state auditor tried to audit a
Summit County correctional
facility that was operated by the
private contractor Oriana
House, Inc.103 Oriana House
refused to cooperate with the

The public has far less
oversight of the
operation of private
prisons. In many
states, private prisons
are exempt from public
records laws.

audit, and when the state sued, it
claimed “that it was not required
to produce the requested
records because it is not a
public office as defined in”
Ohio’s Public Records Act.104
The case reached the Ohio
Supreme Court, which ruled
against the state’s right to
access the records, reasoning
that “[a] private business does
not open its records to public
scrutiny merely by performing
services on behalf of the state or
a municipal government.”105
While the courts have not ruled
on prisons for profit specifically,
the decision in the Oriana House
case poses serious questions
over whether private prisons will
be accountable to the public.
Even the most strenuous

proponents of prisons for profit
argue for full public
transparency. Countless studies
of the pros and cons of
privatizing prisons — including
many that favor privatization —
mention the necessity of public
monitoring and oversight of
private prison operations.106 But
if privatization shields for-profit
prison operators from
comprehensive state oversight,
then Ohio’s system will lack
even the low thresholds
proponents claim is necessary
for its success.

17

Sentencing Reform: The Real Solution
Sentencing Reform: The Real
Solution to Ohio’s Ballooning
Corrections Budget
Prison overcrowding is the
underlying cause of Ohio’s
bloated corrections budget. The
state’s prison population has
quintupled since 1975.107 But
while prison overcrowding is
obviously bad news for the Ohio
taxpayer, it is good news for
MTC, CCA, and other private
prison companies operating in
the state. The idea that
privatizing any more of Ohio’s
already overcrowded prisons will
help reverse this overwhelming
burden on the state treasury is
contrary to the nature of prisons
for profit.
The prospect of simply
releasing massive numbers of
prisoners back into society or
changing sentencing laws so
that fewer convicts are
imprisoned raises legitimate
public safety concerns. However,
the current policy of harsh
sentencing and prison
overcrowding results in 60
percent of Ohio prisoners being
incarcerated for low-level,
nonviolent offenses. Sentencing
reforms that are carefully
designed and correctly
implemented will save taxpayer
dollars and improve public
safety whereas increased
privatization will do the opposite
on both fronts.
Legislation introduced
during the 129th Ohio General
Assembly presents a clear first
step toward criminal justice

reform in Ohio. One of the
central innovations of this
proposed legislation is to
increase earned credit
programs.
Unlike traditional “time off
for good behavior,” where
inmates’ sentences are reduced
simply because they did not
misbehave while serving their
time, earned credit allows the
inmate to shave time off of his
or her sentence by
“successful[ly] participat[ing] in
education, vocational training,
penal industries employment, or

substance abuse treatment.”108
The maximum time off the
inmate can earn under the
legislation would be 8 percent of
the sentence.109
Inmates would therefore
have the incentive to participate
in rehabilitative programming
that will help them reintegrate
into society while holding them
accountable. Ohio’s Buckeye
Institute estimates that the
earned credit provision, would
“eliminate the need for 1,270
beds, resulting in annual
savings of $5.48 million.”110

18

Sentencing Reform: The Real Solution
and reduced recidivism rates
when compared with prison.”112
Other notable features of the
bill include a provision that
revises marijuana penalties and
eliminates the sentencing
disparity between crack and
powder cocaine and a provision
that narrows the definition of
“escape” as it applies to
prisoners on supervised
release.113

Thirty-three states have earned
credit laws on the books.
An increase in the use of
community-based corrections is
another feature of the bill that
would save Ohio taxpayers
money. In 1979, Ohio passed the
Community Corrections Act,
which established a system of
prisoner diversion programs. In
2008, “more than 5,500
offenders were diverted into
community-based corrections
facilities (CBCF),” which are
dormitory-style residential
facilities “that receive capital
and operations funding from the
state.”111
CBCFs offer such
rehabilitative programming as
drug treatment, education, and
job training. The typical length of
stay at these facilities is six
months. The Ohio Criminal
Sentencing Commission “has
determined that CBCFs save
taxpayers money because of
shorter periods of confinement

Privatizing state
prisons may in fact
undermine
sentencing reform’s
goal to remove lowlevel offenders from
the justice system.
Both of these reforms
correct the excesses of failed
“tough-on-crime” policies that
have fueled the costly explosion
in prison population in Ohio and
nationwide over the past
generation. The majority of Ohio
prisoners are incarcerated for
low-level, nonviolent offenses,114
and if only a fraction of those
prisoners were diverted into
treatment programs, Ohio
taxpayers would already be
saving millions. But mandatory
drug sentencing laws prevent
this from happening.
Likewise, many probationers
and parolees are reincarcerated for the crime of
“escape” simply because of

honest mistakes or
misunderstandings that they
have “absconded” supervision.
The new escape provision
“would allow the Adult Parole
Authority to utilize various
sanctions at their disposal, thus
avoiding new felony charges”
and would “eliminate the need
for more beds, thus creating
additional incarceration cost
savings.”115
Finally, the bill would expand
eligibility for medical parole
among geriatric inmates. Elderly
prisoners with serious medical
conditions rarely if ever pose a
serious threat to public safety.
The provision would give parole
boards the option of committing
these inmates to nursing homes
in lieu of releasing them.
Geriatric inmates “consume
a disproportionate share of
Ohio’s growing correctional
medical costs.”116 An April 2010
study by the Vera Institute of
Justice found that “between
1999 and 2007 the number of
people 55 or older in state and
federal prisons grew 76.9
percent” and that “prisons
spend about two to three times
more to incarcerate geriatric
individuals than younger
inmates.”117 Removing these
inmates from the prison system
“could significantly reduce
inmate health care costs”118
without posing any substantial
risk to public safety.
Studies on parolee
recidivism find the probability of
parole violations also decreases
with age, with older parolees the

19

Sentencing Reform: The Real Solution
ACLU leads the call
for sentencing reform
In August 2010, the ACLU
of Ohio released “Reform
Cannot Wait”, an analysis of
over 20 years of studies of
Ohio’s criminal justice system. The ACLU concluded the
state needs to implement
common sense sentencing
reforms in order to alleviate
overcrowded prisons, save
resources, and create a more
just society.
Leaders across the state
have cited the ACLU’s report
as the calls for reform have
continued.

If you would like to download a free electronic
copy of the report, go to www.acluohio.org.
least likely group to be reincarcerated.”119
In fiscal year 2010, ODRC
spent $225,829,929 in medical
costs. Thirty-nine states have
laws providing for medical
parole.
Reforms like these will only
work if they are implemented
correctly. Ohio will have to put
forth clear criteria to guide the
selection of inmates who will
participate, provide adequate
post-release supervision of
those inmates who do
participate, and establish a
coordinated statewide system of
administering these alternative
sentencing programs.121 By
doing so, Ohio will be able to
“focus supervision resources on

those people who pose the
greatest danger to the
community” and “systematize
how people are assigned to
services in the community,
which maximizes the value of
these scarce program slots.”122
All of these sentencing
reforms save the taxpayer
money by reducing the number
of inmates occupying prison
beds in Ohio at any given time.
Prisons for profit undermine
these reforms, because the
reforms directly cut into their
profit margins and threaten to
put them out of business. The
more a state privatizes its prison
system, the less control and
authority it will have to
implement these reforms. True

sentencing reform requires
statewide coordination and a
common set of central
guidelines about inmate
classification that private prison
operators would have a natural
economic incentive to resist.
It is troubling enough that
the profit motive compels
private prison companies to cut
their costs by eliminating the
very programs that would allow
inmates to participate, for
example, in earned credit
activities. But the fact that such
cost-cutting provides a further
economic windfall for these
companies by ensuring that
inmates stay incarcerated (and
generating revenue) as long as
possible is obscene.
Privatization, therefore, is not a
sensible component of a
“package” of cost-saving
reforms to address a budget
crisis; it will likely offset any
savings derived from sentencing
reforms and other budgetbalancing measures.

20

Bibliography
1

U.S. Const. Amend XIII, § 1.

2
Robert Perkinson, Texas Tough: The Rise of
America's Prison Empire (New York:
Metropolitan Books, 2010), pps. 320-21.

Leonard Gilroy and Harris Kenny, The
Reason Institute, Annual Privatization Report
2010: Corrections, pp. 1, 10, available at http://
reason.org/files/
corrections_annual_privatization_report_2010.pdf

References

http://www.fbi.gov/about-us/cjis/ucr/
crime-in-the-u.s/2010/preliminary-crimein-the-us-2009

38

Arizona audit, pps. 23, 37, 46.

39

http://www.afscme.org/publications/2556.cfm

http://www.infowars.com/private-prisonindustry-experiences-boom/;

40

14

15

3

http://www.newsweek.com/2010/06/30/howthe-recession-hurts-private-prisons.html

Reason Institute, Watching the Watchmen
Part II, Policy Study No. 290

16

AFSCME, Five Empty Promises, available at:
http://www.afscme.org/publications/2539.cfm.

42

Lundahl, et al., “A Meta-analysis of Cost
and Quality of Confinement Indicators,”
Research on Social Work Practice: July 2009;
vol. 19, no. 4, pps. 383-394 .
Arizona Dept. of Corrections, Audit, http://
www.azauditor.gov/Reports/State_Agencies/
Agencies/Corrections_Department_of/
Performance/10-08/10-08.pdf
19

http://www.drc.ohio.gov/web/prisprog.htm

24

7

http://www.correctionscorp.com/facility/
northeast-ohio-correctional-center/
8

Joe Guillen, Plain Dealer, “Gov.-elect John
Kasich picks private corrections consultant
and former warden to run Ohio's prisons
system,” 1/4/11 available at http://
www.cleveland.com/open/index.ssf/2011/01/
gov-elect_kasich_picks_private.html
9

20

Ibid., pps. 6-12.

28

Ibid., pp. 15

22

Ibid.

23

Ibid., pp. 19.

U.S. Department of Justice, Office of Justice
Programs, Bureau of Justice Assistance,
Emerging Issues on Privatized Prisons(2011)
11

Jeffrey E. Golon, Ohio Legislative Budget
Office, Fiscal Pressure Pushes Prison
Privatization, p. 162, available at http://
www.lsc.state.oh.us/fiscal/special/ohioissues/
issue-09.pdf; John Jarvis, "Sale of two Marion
prisons could boost tax revenue," Marion Star,
Mar. 19, 2011, available at http://
www.marionstar.com/article/20110319/
NEWS01/103190302/Sale-two-Marionprisons-could-boost-tax-revenue

http://epi.3cdn.net/
e6e28612a19ac589e8_ozm6ibbye.pdf, pp. 24.
25

http://www.gao.gov/archive/1996/gg96158.pdf

26

Ibid., pp. 7.

28

Bureau of Justice Assistance, pp. iii.

29

Bureau of Justice Assistance report

http://www.bop.gov/news/
research_projects/published_reports/
pub_vs_priv/oreprcampgaes.pdf, pp. 2.
30

Bureau of Justice Assistance report, pp. 25

http://www.ncjrs.gov/pdffiles1/nij/
221507.pdf, at 35
31

32

Lundahl, et al., 2009

33

Ibid., 383.

12

http://www.ucrdatatool.gov/Search/Crime/
State/RunCrimeStatebyState.cfm

Cibola County Manager Joe Murrietta as
quoted in Mark Oswald, “Cibola County:
Transfers Might Doom Jail,” The Santa Fe
New Mexican, January 27, 1996, pp.B-3.
43

Richard P. Seiter, Corrections Corporation of
America, Inc., Private Corrections: A Review of
the Issues, available at http://www.cca.com/
static/assets/Private_Corr_Review_of_Issues.pdf
44

http://www.prop1.org/legal/prisons/
980105a.htm
45

30

Buckeye Institute, “Smart on Crime,”
available at http://www.opd.ohio.gov/
RC_Reports/
BuckeyeInstituteSmartOnCrimeReport.pdf
10

http://www.businessofdetention.com/?p=71

18

http://www.texasprisonbidness.org/
moneyfinancial-interests/texas-2011budget-plan-includes-private-prison-cutstdcj; http://www.ccpoa.org/news/entry/
oklahoma_seeks_exit_clause_in_private_prison_deal/
; http://www.freerepublic.com/focus/f-news/
1336331/posts; http://www.idahopress.com/
opinion/article_c79ec0a2-1963-11e0-8031001cc4c002e0.html; see also generally http://
www.soros.org/initiatives/usprograms/focus/
justice/articles_publications/publications/
jailbreaks_20011001/jbch1.pdf.
6

http://www.sourcewatch.org/
index.php?title=Corrections_Corporation_of_America.
41

http://www.drc.ohio.gov/web/Reports/Annual/
Annual%20Report%202009.pdf, pps. 21, 24
17

4

5

http://www.soros.org/initiatives/usprograms/
focus/justice/articles_publications/publications/
cca_20_years_20031201/CCA_Report.pdf, pp.
15.

Perrone & Pratt, Comparing the Quality of
Confinement and Cost-Effectiveness of Public

http://www.policymattersohio.org/pdf/
prisrpt.pdf
46

47

Ibid.

Olim v. Wakinekona, 461 U.S. 238, 245
(1983).

48

Presbyterian Church (USA), Resolution
Calling for the Abolition of For-Profit
Prisons(2003)
49

Craig R. McCoy. Jury finds judge guilty in
cash for kids case, The Philadelphia Inquirer,
Feb 18 2011, http://www.philly.com/philly/
news/breaking/
20110218_Jury_finds_judge_guilty_in_kids_for_cash_case.html.
50

51

http://www.jlc.org/luzerne/

http://www.nytimes.com/2009/03/28/us/
28judges.html?pagewanted=3&_r=2

52

53

McCoy, 2011

Cindy Horswell, “Private Prison Firm Pulling
Out After Dispute With School District,”
Houston Chronicle, September 3, 1998, pp. 32.

54

34

Versus Private Prisons, available online at
http://www.sagepub.com/stohrstudy/articles/
11/Perrone.pdf, pps. 311-312
35

Ohio Policy Matters, pp. 5

36

Ibid.

37

Ibid., pp. 6

13

National Conference of State Legislatures,
State Crime Legislation: 1998, November
1998, Vol. 23, No. 19, pp. 13.
55

56

http://www.afscme.org/publications/2556.cfm

John R. Honovich, “Corrections Industry
Financing Options,” presentation at 4th
Annual Privatizing Correctional Facilities,
sponsored by World Research Group, Las
Vegas, Nevada, September 23, 1999.
57

21

References
http://www.contractormisconduct.org/ass/
contractors/170/cases/1077/1477/
corrections-corp-of-america-irs-audit_8k.pdf
58

77

http://motherjones.com/politics/2000/05/
steel-town-lockdown

101

http://www.sentencingproject.org/doc/
publications/inc_prisonprivatization.pdf, at 3.

102

78
59

http://www.afscme.org/publications/2538.cfm

60

Ibid.

Todd Mason, “Its A Bust: Many For-Profit
Jails Hold No Profits — Nor Even Any
Inmates; Still Promoters Keep Pushing
Privately Run Prisons to Job-Hungry Towns;
Texas Rent-A-Cell-Breakout,” The Wall Street
Journal, June 18, 1991
61

Bureau of Justice Assistance report 29

79

Bureau of Justice Assistance report, 32-33;
Bales Fla. Study, 2003, pp. 2

63

AFSCME, The Five Empty Promises

http://www.progressivestates.org/files/
privatization/PrivatizationReport.pdf

104

Ibid.

105

Ibid., pp. 14

106

Ohio Policy Matters; Pozen; Raher; BJA

107

ACLU of Ohio, Reform Cannot Wait, pp. 8.

108

Buckeye Institute, Smart on Crime, pp 12.

109

Ibid.

110

Ibid., pp. 12-13.

111

Ibid., pp. 10.

87
http://hawaii.gov/icis/documents/
copy_of_SARADVSI%20Exploratory%20Study%20%28Oct%202008%29.pdf

112

Ibid., pp. 10-11.

113

ACLU of Ohio, Reform Cannot Wait, pp. 7.

88
http://www.drc.ohio.gov/web/Reports/
reports29.asp

114

89
http://www.drc.ohio.gov/Public/press/
press397.htm

115

Reason Foundation, Annual Privatization
Report 2010
http://www.corrections.state.nm.us/news/
2008-2009_Annual_Report.pdf
83

http://sentencingproject.org/doc/
publications/
inc_StateRecidivismFinalPaginated.pdf
84

Ibid.

64

Private Corrections Institute, Inc., Quick
Facts About Prison Privatization (2009)
65

University of Minnesota study, http://
archive.epinet.org/real_media/010111/
materials/greene.pdf
66

http://www.supremecourt.ohio.gov/rod/
docs/pdf/0/2006/2006-Ohio-4854.pdf, pp. 4

103

81

85

Curtis R. Blakely and Vic W. Bomphus,
Private and Public Sector Prisons: A Comparison
of Selected Characteristics 68 Fed. Probation
27, 29 (2004) available at http://
heinonline.org/HOL/
Page?collection=journals&handle=hein.journals/
fedpro68&id=27.

Casey Newton et al., Arizona Inmate Escape
Puts Spotlight on State Private Prisons, The
Arizona Republic, Aug 22 2010, http://
www.azcentral.com/news/articles/2010/08/22/
20100822arizona-private-prisons.html.

80

82

http://www.afscme.org/publications/
2556.cfm; Cheryl W. Thompson, “D.C. Sues
Private Prison Firm in Contract Dispute; CCA
Failed to Protect and Defend the City in Two
Lawsuits, Complaint Contends,” The
Washington Post, December, 19, 1998, pp.
B07.
62

Private Corrections Institute, Inc., Quick
Facts About Prison Privatization (2009).

86

http://justicereinvestment.org/states/vermont

90

University of Minnesota study, 15

http://www.drc.ohio.gov/web/Reports/
Annual/Annual%20Report%202009.pdf, pp. 24.

Joseph Rogers, Ohio Legislative Service
Commission, Fiscal Note and Impact
Statement on S.B. 10 of the 129th G.A.,
February 22, 2011., pp. 5.

67

Ibid., pp. 37

91

Ibid., pp. 20

116

68

Ibid., pp. 29

92

Ibid., pp. 23

117

69

Ibid., pp. 33

93

Ibid., pp. 24

70

Ibid., pp. 35

94

71

Bureau of Justice Assistance report, pp. 16

W. G. Archambeault, "Management Theory Z Its Implications for Managing the Labor Intensive
Nature of Work in Prison," Prison Journal 62 No.
2 (Autumn/Winter 1982) pp.58-67

Corrections Institution Inspection
Committee, March 2011 report

73

Bureau of Justice Assistance report, pp. 16

Edward J. Clarke, Deviant Behavior: A
Text-Reader in the Sociology of Deviance
(New York: Worth Publishers, 2008), pp. 354

Vera Institure report, pp. 5.

96

http://www.drc.ohio.gov/web/telemed.htm.

120

Andrew L. Spivak and Susan F Sharp,
Inmate Recidivism as a Measure of Private Prison
Performance, 45 Crime and Delinq. 482 (2008).
97

http://motherjones.com/politics/2000/05/
steel-town-lockdown

99

http://www.sentencingproject.org/doc/
publications/inc_prisonprivatization.pdf, pp 3.

Buckeye Institute, Smart on Crime, pp. 13

119

98

76

118

Ibid.

74

75

Vera Institute report, http://www.vera.org/
download?file=2973/Its-about-time-agingprisoners-increasing-costs-and-geriatricrelease.pdf, pp. 4-5.

95
72

Patrick Bayer & David E. Pozen, The
Effectiveness of Juvenile Correctional Facilities:
Public Versus Private Management, 48 J. L. &
Econ. 549 (2005).
Ibid., 557.

James Austin and Garry Coventry, Bureau
of Justice Assistance, Emerging Issues on
Privatized Prisons (2001), pp. 14.

Buckeye Institute, Smart on Crime

Justice and Public Systems, Ohio Facts
2010 Julian Rodgers OHIO LSC, pg 75
available at http://www.lsc.state.oh.us/fiscal/
ohiofacts/sep2010/
justiceandpublicsafetysystems.pdf
Justice Center, The Council of State
Governments, Justice Reinvestment in Ohio:
Policy Framework to Reduce Correction
Spending & Reinvest Savings in Strategies that
Can Reduce Crime (2011), pp. 2, available at
http://justicereinvestment.org/states/ohio/
pubmaps-oh.

121

100

122

Ibid., pp. 9.

22

American Civil Liberties Union of Ohio
4506 Chester Ave.
Cleveland, OH 44103
P: (216)472-2200
F: (216)472-2210
contact@acluohio.org
www.acluohio.org
Published April 2011