Hitting Private Prisons Where it Hurts: Prison Divestment

Divesting from the Prison Industrial Complex

The National Prison Divestment Campaign has been in the news the last few weeks, after the University of California became the second US college to sell their shares in private prison companies.

Founded by Enlace* in May 2011, the National Prison Divestment Campaign consists of a coalition of over 150 grassroots organizations, worker centers, unions, and other nonprofits. Over the past four years, this coalition has won numerous victories, such as the recent divestments of SCOPIA, Amica Mutual Insurance, and DSM Netherlands, and the implementation of a investment policy for the City of Portland, OR, that will prevent the city from ever investing in private prisons.

The National Prison Divestment Campaign focuses primarily on two companies: Corrections Corporation of America (CCA) and Geo Group (GEO). These companies have a history of buying politicians and using lobbying for policies that criminalize immigrants and people of color. One example of this policy is the latest federal budget, which proposes a record allocation of $2.9 billion for the Department of Homeland Security to imprison 34,000 people on any given day. Meanwhile, legislatures at every level of government are cutting budgets for essential services like public education and healthcare.

In June, Columbia University became the first US college to divest from private prisons. This entailed dumping 220,00 shares in G4S, the world’s largest private security firm, as well as its shares in CCA. On December 29, the University of California joined them, selling $30 million $30 million of CCA and GEO stock.

African American lawyer and activist Michelle Alexander describes the infamous school-to-prison pipeline endured by minority families in The New Jim Crow. The US has the highest prison population in the world. The vast majority are African Americans and Hispanics, locked away for victimless crimes such as drug possession. As Alexander ably documents police disproportionately enforce these crimes in minority communities, where effective legal representation is virtually non-existent.

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*Enlace is a strategic alliance of low-wage worker centers, unions, and community organizations in Mexico and in the U.S.

Profits, Not Crime, Drive Incarceration Rates

Inmate-run call center

This second post deals with the corporatization of US prisons and the private companies who profit from high incarceration rates.

US rates of violent and property crime have been declining steadily since 1990. Logically dropping crimes rates should produce a drop in incarceration rates. Yet until 2009, when 26 states acted to reduce prison populations, the exact opposite was true. As crime rates declined in state after state, the number of people they locked up skyrocketed.

Presently the US “enjoys” the highest incarceration rate in the world. At 500 per 100,000 population, it’s  five times higher than other developed countries.

A number of factors contribute to this disgrace. In my view, the first and most important is the enormous profit potential of American’s prison industry, resulting in major pressure on state legislatures from private for-profit prison companies and their friends at the American Legislative Exchange Council place on state legislatures. The second is a raft of tough-on-crime legislation driven by deliberate neoconservative race-based fear mongering. The third is the systematic defunding of mental health services in the US, leading to the warehousing of mentally ill patients in federal and state correctional facilities.

Profit, Not Crime, Drives Prison-Building Spree

Prison privatization, which began under Reagan in the 1980s, has turned incarceration and immigration detention into a multibillion dollar growth industry with its own trade shows, conventions, mail order catalogs and state and federal lobbyists. Unsurprisingly Corrections Corporation of America (CCA), Wackenhut and the 16 other for-profit prison companies are major campaign donors to federal and state lawmakers who advocate tough-on-crime and tough-on-immigrant policies. These are usually the same legislators who sponsor bills to replace state prisons with private for profit correctional facilities.

Who’s Making Big Bucks Off Prison Privatization?

The booming private prison industry provides numerous opportunities for banks and other corporate interests to skim off profits at taxpayer expense:
1. The Wall Street investment banks (e.g. Goldman Sachs) who issue the bonds to finance the building of state and local prisons.
2. The private companies who run prisons – Corrections Corporation of America (CCA) and Wackenhut are the largest, but there are now 18 altogether. CCA also operates our federal immigration detention facilities and helped write Arizona ‘s controversial immigration law.
3. Private companies that provide food services, health care, and assorted security paraphernalia to prisons.
4. Bed brokers who, in Texas, earn $2.50 – 5.50 per man-day (for the duration of a prisoner’s sentence) by recruiting prisoners from out of state.
5. Major corporations who save on labor costs in 37 states by contracting cheap prison labor.

The list of corporations employing cheap prison labor is extensive: IBM, Boeing, Motorola, Microsoft, AT&T, Wireless, Texas Instrument, Dell, Compaq, Honeywell, Hewlett-Packard, Nortel, Lucent Technologies, 3Com, Intel, Northern Telecom, TWA, Nordstrom’s, JC Penny, Best Western Hotels, Honda, Chevron, BP, Victoria’s Secret, Revlon, Macy’s, Pierre Cardin, Target Stores, and many more.

Virtual Slave Labor

Inmates in state penitentiaries generally receive the minimum wage ($7.25). Not all do, though. In Colorado state prisons, they get about $2 per hour. In private prisons, they receive as little as 17 cents per hour. The highest-paying private prison is CCA in Tennessee, where prisoners receive 50 cents per hour.

As Vicky Pelaez writes in Global Research, thanks to dirt cheap prison labor, manufacturing jobs that corporations previously outsourced to third world sweatshops are returning to the US. She gives the example of a company operating a maquiladora (Mexican assembly plant near the border) that closed down operations and relocated to San Quentin State Prison in California.

The virtual slave labor that occurs in state prisons also drives down wages in neighboring communities. Pelaez gives the example of a Texas factory that fired its 150 workers and contracted the services of prisoners at the private Lockhart Texas prison, who assemble circuit boards are assembled for IBM and Compaq.

BP also made profitable using of cheap prison labor in cleaning up Deepwater Horizon disaster in the Gulf of Mexico.

Many US corporation employ prison labor to staff their call centers. According to NBC News, If you recently called your motor vehicle department or received a telemarketing call from Microsoft or Hitatchi, it’s likely the person on the other end was a prisoner.

Another great resource on the scandalous prison industrial complex are is the excellent series Nation at Risk  at Deconstructing Myths.

photo credit: The Politics of Information

To be continued.

States Save Billions by Downsizing Prisons

This is the first of four posts on America’s scandalous prison industrial complex. I start with the good news. Thanks to the budget crisis most states have faced since the 2008 economic crash, US prison populations have shrunk by 600,000.

States Save Billions by Downsizing Prisons

An important silver lining of the 2008 economic downturn has been a decline in the US incarceration rate. Despite two decades of declining violent and property crime rates, the US still enjoys the highest incarceration rate (500 per 100,000 population) in the world. Nevertheless, thanks to the recession-related budget crisis in 48 state capitols, America’s prison population has started to fall. According to CBS News, between 2009 and 2012, it fell from a peak of 2.2 million to 1.57 million.

In 2013 prison populations rose slightly (there were an estimated 1,574,700 inmates on December 31, 2013 – an increase of 4,300 prisoners).

What explains this overall decline in prison occupancy? Between 2008 and mid-2013* every state except Montana and North Dakota faced yearly budget shortfalls. Because states aren’t allowed to run deficits, most had to make substantial cuts in “essential” state programs, including education, housing, highway maintenance and repair – and most importantly prisons.

In 2010, the last time such costs were calculated, the average annual cost of incarceration was $28,000 – $40,000 per inmate.

This definite budget breaker has led 26 states to resist lobbing by private prison operators such as Corrections Corporation of America, Wackenhut, Cornell Corrections and their friends at the American Legislative Exchange Council (ALEC) and enact legislation to reduce prison numbers.

California’s Criminal Justice Realignment Act

California clearly leads the nation in this initiative. When the US Supreme Court (in May 2011) upheld a lower court ruling ordering them to reduce prison overcrowding, Sacramento had the hard choice between borrowing money to build more prisons, paying private prisons in other states to take their offenders or adopting the Criminal Justice Realignment Act. This legislation works to move nonviolent offenders out of the prison system, as well as finding alternatives to custodial sentences for new nonviolent offenders. Under the Realignment Act, the number of inmates in California prisons has dropped by 25,000 since 2011. The count of offenders on parole is down about 30,000, and prisoners held in private out-of-state prisons is down 10 percent.

The California Department of Corrections and Rehabilitation estimates that it saves $1.5 billion a year through realignment and will save another $2.2 billion a year by canceling $4.1 billion in new construction projects.

25 Other States Work to Cut Prison Populations

According to the ACLU and NORML, 25 other states are saving money by cutting and/or slowing the growth of their prison populations. Sixteen states and the District of Columbia are working to to reduce their incarceration of nonviolent offenders by decriminalizing marijuana.*

• Alabama – passed law allowing a sentencing commission to set new guidelines for nonviolent crimes.
• Alaska – decriminalized marijuana
• Colorado – shut down large penitentiary in view of falling crime rates and passed a ballot initiative in 2012 legalizing marijuana use for recreational purposes.
• Connecticut – became 17th state to repeal death penalty in April 2012, as well as decriminalizing marijuana.
• District of  Columbia – decriminalized marijuana.
• Florida – closed eight prisons that were built in anticipation of a crime wave that never occurred
• Georgia – passed bill reducing sentences for low level drug offenses and theft, creates drug and mental illness courts and establishes graduated sanctions, such as community service, for probation violations.
• Hawaii – passed law requiring the use of risk assessments in pretrial and parole hearings, to enable the identification of individuals who pose the most risk to public safety, as well as those who can be safely supervised outside of prison or jail.
• Illinois – passed SB 2621, reinstating a program that allows prisoners to reduce their sentences through good behavior and participation in reentry programs. The bill also provides incentives for prisoners to participate in programs, such as drug treatment, that reduce recidivism.
• Kansas – passed a law allowing judges to divert individuals convicted of low-level crimes from prison to less expensive and more effective substance abuse treatment.
• Louisiana – passed one law allowing prisoners serving life sentences for nonviolent crimes to go before a parole board to prove they are ready for release and another allowing inmates who have committed repeat low-level offenses to appear before a parole board after serving one-third of their sentences.
• Maine – decriminalized marijuana
• Maryland – passed a law increasing the number of offenses that must/can be charged via citation instead of arrest and detention.
• Massachusetts – decriminalized marijuana
• Minnesota – decriminalized marijuana
• Mississippi – decriminalized marijuana
• Missouri – passed one law reducing disparity for crack and powder cocaine offenses and another sending fewer people back to prison for technical violations of probation and parole, such as a missed meeting or failed drug test.
• Nebraska – decriminalized marijuana
• Nevada – decriminalized marijuana
• New York – decriminalized marijuana
• North Carolina – decriminalized marijuana
• Ohio – decriminalized marijuana
• Oregon – decriminalized marijuana
• Rhode Island – decriminalized marijuana
• Vermont – decriminalized marijuana
• Washington State – created the LEAD program, which diverts individuals charged with low-level offenses into community-based services, such as drug treatment, immediately after arrest and before booking. Also passed a ballot initiative in November 2012 legalizing recreational marijuana.

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*In 2013, increasing tax revenues enabled all but two states (Washington and California), to balance their budgets without major cuts.
**In most instances decriminalization means no prison time or criminal record for first-time possession of a small amount for personal consumption. Instead the offense is treated like a minor traffic violation.

photo credit: abardwell via photopin cc