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Reason Foundation

Exploring Private Prisons

Geoffrey Segal
August 1, 2007, 6:00am

Frank Smith of the Private Corrections Institute in Kansas wrote a letter to the editor of the Idaho Mountain Express - his letter was in response to an editorial the IME published a few days earlier. Sadly an inmate in a private facility committed suicide because of poor living conditions and Smith used that as an opportunity to attack private prisons. Without argument no one should be treated poorly or inhumanely. Smith, however, suggests the problem lies in the nature of the facility itself. The inmate who committed suicide was in a private facility (if you were to visit Smith's website you'd think that government run prisons were the Hyatt or Hilton...there's never any problems there) and Smith suggests that the profit motive is what led to poor conditions and ultimately the suicide. He suggests that "doing a bad job increases those profits." Smith fails to understand the nature of incentives. Private companies have stronger incentives to do a good job in order to win more contracts and earn more money. If they continually underperform or produce terrible results governments will be forced to send their business elsewhere or build their own facilities. The profit motive actually acts as a push toward good service, not a pull away from it. Smith claims to have "examined monitoring and oversight all around the country...billion-dollar corporations such as GEO and its competitor CCA have frustrated the efforts of those attempting to represent the interests of taxpayers and insure humane conditions." While he may have reviewed monitoring programs he's letting ideology and philisophy drive his argument. Private prison operators collectively spend less money lobbying in the entire U.S. than does the public-employee union in California. Regardless, the government remains responsible for ensuring that prisoners' rights are protected even if they send them to a private prison. Smith fails to note that exploiting or abusing prisoners can occur in both government and private prisons. We hear terrible stories all too frequently: of "gladiator" fights between inmates orchestrated by correctional officers, sexual assaults by correctional officers, and other individual and systematic abuses -- in public facilities. Our goal should be to prevent this in any institutional setting. Arguably, abuse and violations of rights should be easier to prevent in private prisons than in government prisons. Due process is not only implicit in the law of the land; it is usually explicit in private prison contracts. Prisoners have more legal options against private prison officials than against government officials. Private prisons are monitored by state inspectors, and the state is liable for abuses committed by employees of the private firm, so they have an incentive to monitor their conduct. Government correctional departments police themselves, with obvious conflict of interest. In addition, private prisons offer public officials two powerful tools to ensure good conduct. First, a well-written, performance-based contract will reward the private firm for providing the kind of care public officials require. Tying compensation to measurable outcomes in public safety and prisoner treatment puts the private operating firm in the business of serving the public interest. Second, private firms find that mistreating inmates only creates resentment and hostility, which makes managing the prison more difficult and costly. They find that a softer touch can make long-run management more effective, such as in Florida, where private prisons' management style has led to much lower levels of violence than in the state-run prisons. A number of studies have shown similar comparisons in other states. Indeed, contracts with private prisons give public officials a great deal of control. Elected officials control government prisons through budgets, legislative requirements, and their power to appoint heads of correctional departments. With a private prison, public officials have these same tools of control, and more. The contract process lets them control the price paid for services and determine who is going to run the prison. And legislation regarding correctional polices can be applied to private prisons as well. In addition, contracts provide for termination for failure to perform, while no such measure can be used with a government prison. Finally, contracts with private prisons introduce an additional level of accountability through the monitoring process. Government corrections departments are largely self-policing, while private prisons are continuously monitored by an outside agency to assure compliance with the law and the terms of the contract. Of course, this implies a greater responsibility on the part of public officials. If they enter into incomplete contracts, fail to monitor compliance, or allow contracts to become noncompetitive, then a private firm may take advantage. The history of private prisons is not without blemishes, and failure by public officials to practice due diligence can create problems. However, experience clearly shows that well-written contracts, proper monitoring, and a competitive industry can ensure successful public-private partnerships–where both sides get what they want from the relationship. Smith is also concerned about "for-profits have[ing] a vested interest in maintaining the status quo, increasing the numbers of prisoners by helping craft ever more draconian legislation, pushing for "more market and more market share." Unfortunately, there is little evidence of this kind of lobbying. Do private garbage collectors lobby against recycling? Do day-care centers lobby against birth control? In fact, unions representing government prison correctional officers give vastly larger sums to politicians than do private prison operating companies. In California alone, correctional officers gave $1 million to Pete Wilson when he ran for governor in 1990, and another $500,000 to his 1994 reelection campaign. In contrast, the two largest private prison firms' total political contributions nationwide in 1995- 96 was less than $150,000. (Note: Smiths' organization receives support from among others, AFSCME - the largest union representing state, county, and municipal employees). It is unlikely that private prison firms are going to sway policy in favor of greater incarceration when such polices are obviously already very popular with the general population. Moreover, prisons these days are so crowded that the private operating firms almost always find their prisons full as it is. This is not to say that private firms are not capable of the kind of lobbying critics fear. In the past, large industries have used their influence to sway the political process against the public interest. But the private prison industry is not large. It manages only 3 to 4 percent of the nation's prison population. Concerns about private firms acting to prevent inmates from getting parole are equally unfounded. For one thing, revoking "good time" is a punishment used in only about 10 percent of cases. The government retains control of parole decisions and the authority to take away good time, which accrues automatically unless revoked by proper authorities. It is true that the authorities have to rely to some extent on the information provided by the prison regarding an inmate's behavior. However, competent monitoring and inspections, as well as the threat of inmate lawsuits, minimize any temptation by private firms to abuse their power. Denying earned time would create costly hostility between inmates and staff, and for little gain: there are usually more inmates entering the system. Meanwhile, there are ways to mitigate the potential problem before it begins. One method is for contracts to move toward a performance basis, basing a firm's payments on performance measures and not just on keeping a full house. We also must recognize that even if we decide as a society to put more effort into dealing with criminals by means other than incarceration, there will continue to be a need for some prisons, and the private sector can run them well and at lower cost. See our 2002 policy study comparing the costs and quality of private corrections here.


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