Saturday, February 25, 2012

Corrections Corporation of America has a deal you can't refuse

The ACLU noticed that the Corrections Corporation of America (CCA), the largest private prison company in the country, sent a letter to 48 state governors offering to buy up their state-owned and operated prisons.

It offering cash-strapped states a quick infusion of money by taking control state-owned prisons.

Does this sound too good to be true?

It is.  The state would have to sign a 20-year contract and promise a 90 percent occupancy rate over that period.

In other words, CCA is asking states to commit to maintaining prisons filled to capacity. This makes sense, since CCA is a for-profit business whose success depends on keeping prisons full.

In fact, in a 2010 Annual Report filed with the Securities and Exchange Commission, CCA stated: “The demand for our facilities and services could be adversely affected by

…leniency in conviction or parole standards and sentencing practices.

In other words, CCA has much to gain from policies that lock up people. 

Rightardia has pointed out that privatization may look good in the short term, but in the long term it is more expensive. This is why CCA wants a 20-year contract. 

The state will have to appoint a public services commission to oversee the private prisons and provide and operations and maintenance subsidy to operate the prisons. 

Almost all of the studies that have compared operation of private to public prisons have been inconclusive, although CCA will suggest otherwise. 

Who would be the big losers in prison privatization. 
  1. the taxpayer will end up paying more to operate these prisons because of higher overhead costs. 
  2. the prison staff and guards will see big losses in pay and lose their pensions. 
Who will be he big winners? 
  1. CEOS and top executives will get big salaries and bonuses at the expense of the workers.
  2. shareholders will also benefit. 
Rightardia views the prison privatization scheme as more crony capitalism. 

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