Behind Bars of Gold: Prisoners and Profits By Robert Carter

Behind Bars of Gold: Prisoners and Profits


Robert Carter

A debate over private prisons rages in America. Just this week, that debate came back to the forefront when Vermont senator and Democratic presidential hopeful, Bernie Sanders, published a press release calling for the end of private prisons, and promising to immediately introduce legislation to end all federal, state and local contracts for privately run prisons within two years.[1] Sanders argued that “decisions regarding criminal justice and public safety are, without a doubt, the responsibility of the citizens of our country and not the investors in private corporations.”[2] Sanders also cited concerns with profiting from incarceration, dehumanizing conditions in for-profit prisons, lack of oversight, mandatory quotas in immigrant detention facilities, and overcharging of prisoners for banking and other services.[3] On the other side, proponents of private prisons argue that private prisons are a critical low-cost solution to a prison overpopulation crisis.[4]

Private prisons as we know them today arose out of the war on drugs and tough-on-crime laws of the 1970s and 80s.[5] Strict drug laws and harsh mandatory minimum sentences contributed to a 334% increase in the American prison population between 1980 and 2003.[6] Between 1971 and 2008, the American prison population increased tenfold.[7] The massive growth in prison populations rapidly led to severe prison overcrowding.[8] By 1988, the prison systems in 39 states, the District of Columbia and two territories had been placed under federal court supervision due to substandard conditions resulting from severe overcrowding.[9] There simply were not enough prisons to incarcerate the flood of inmates generated by the legislative tough-on-crime push. Private prisons, promising lower-cost facilities and operation, were an attractive option for states and the federal government who were in desperate need of new prisons but operating under tight budget constraints.[10]  Contracting with private prison corporations alleviated the need for bonds, budget referenda or unpopular tax increases.[11] Consequently, the private prison industry enjoyed a booming period of growth throughout the 1990s. There were 3,100 inmates held in private prisons worldwide in 1980.[12] By 1999, the United States held 69,188 in ninety-four different private prisons.[13] Today, 130 private prisons with 157,000 beds rake in $3.3 billion in revenue a year.[14] One particularly disturbing area in which private prisons have exploded in just the last few years is undocumented immigrant detention. While for-profit prisons have grown to house 6% of state prisoners and 16% of federal prisoners, private prisons house nearly half of all immigrants detained by the federal government.[15]

Human rights activists have long been deeply concerned that a for-profit model incentivizes cost-cutting measures that detract from essential inmate services to maximize profits. Unfortunately, these concerns have proved to be well-founded. The daily operations of private prisons are more violent.[16] Private prison guards receive lower pay, fewer benefits and 35% fewer training hours than their public counterparts.[17] As a key cost-cutting provision, private prisons employ on average 15% fewer guards per inmate than their public counterparts.[18] The end result of these cuts is that private prisons experience nearly twice the number of assaults on inmates as public prisons.[19] Prisoners and their families are also charged exorbitant fees for basic services such as banking, paying fees as high as 45% to use their money.[20]

Perhaps the most concerning aspect of the private prison system is the perverse incentive that more inmates, more incarceration and longer sentences means more profits. The private prison industry benefits financially from strict sentencing laws and high recidivism rates, a fact of which the private prison industry is well aware.[21] In its 2014 annual report the Corrections Corporation of America, a major private prison corporation, wrote that relaxation of enforcement efforts or leniency in convictions or parole standards and sentencing practices were a threat to their profits.[22] The report was particularly concerned with legislation proposed in several states that would reduce minimum sentences for non-violent drug offenders.[23] The prison lobby has responded by lobbying against criminal law reform, to the tune of $25 million a year.[24] In one of the most appalling instances demonstrating the incentive to incarcerate, PA Child Care, a private facility, paid two Pennsylvania judges $2.6 million over five years to reject alternative punishments and sentence hundreds of teens to serve time in their facility.[25]

Private prisons benefit not only from harsh sentencing laws but from high recidivism rates as well. A for-profit prison has almost no incentive to rehabilitate inmates or provide educational of vocational training programs that do not decrease the cost of confinement.[26] As a result, for-profit prisons experience a significant increase in recidivism.[27]

Private prisons have transformed the American correctional landscape, but not for the better. The effects of transforming human capital into capital will be felt in the United States for decades to come in the form of mass incarceration and high recidivism rates. Inmates and society at large both suffer from a system that profits from keeping prisons filled. However, private prisons are ultimately just a symptom of the underlying problem of overcriminalization and harsh sentencing as an attempt to reduce crime. While ending private prison contracts could be a meaningful first step, the United States must address the fundamental underlying approach to criminal punishment that has resulted in the highest incarceration rate in the world.

[1] Sanders: Our Criminal Justice System is Broken, Ending Private Prisons is a Good First Step Forward, Bernie 2016 (Sept. 8, 2015),

[2] Id.

[3] Id.

[4] See, e.g., Peter J. Duitsman, The Private Prison Experiment: A Private Sector Solution to Prison Overcrowding, 76 N.C. L. Rev 2209, 2213 (1998); III. A Tale of Two Systems: Cost, Quality, and Accountability in Private Prisons, 115 Harv. L. Rev. 1868, 1891 (2002).

[5] Stephen Raher, The Business of Punishing: Impediments to Accountability in the Private Corrections Industry, 13 Rich. J. L. & Pub. Int. 209, 215 (2010).

[6] Id.

[7]  Lucas Anderson, Kicking the National Habit: The Legal and Policy Arguments for Abolishing Private Prison Contracts, 39 Pub. Cont. L.J. 113, 114 (2009).

[8] Raher, supra note 5 at 215.

[9] Id.

[10] Anderson, supra note 7 at 115.

[11] Id.

[12] Patrice A. Fulcher, Hustle and Flow: Prison Privatization Fueling the Prison Industrial Complex, 51 Washburn L.J. 589, 598 (2012).

[13] Id.

[14] Michael Cohen, How For-Profit Prisons Have Become the Biggest Lobby No One is Talking About, The Washington Post (Apr. 28, 2015),

[15] Banking on Bondage: Private Prisons and Mass Incarceration, American Civil Liberties Union (modified Sept. 11, 2015),

[16] Anderson, supra note 7 at 125.

[17] Id.

[18] Id.

[19] Curtis R. Blakely, Private and Public Sector Prisons—A Comparison of Select Characteristics, 68 Fed. Probation 27, 29 (2004).

[20] Daniel Wagner, Profiting from Prisoners — Prison Bankers Cash in on Captive Customers, The Center for Public Integrity (Sept. 30, 2014),

[21] Cohen, supra note 14.

[22] Id.

[23] Id.

[24] Id.

[25] Anderson, supra note 7 at 128.

[26] Patrick Beyer and David E. Pozen, The Effectiveness of Juvenile Correctional Facilities: Public versus Private Management, 48 J.L. & Econ. 549, 549 (2005).

[27] Id.


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