Prison Privatization and the Efficiency Myth
In 2010—the most recent year for which reliable records exist—privately owned and/or operated prisons held 128,195—or roughly eight percent— of the 1,612,395 total state and federal prisoners in the U.S. The figure of 1.6 million, mind you, doesn’t include populations residing in municipal jails, as an additional 700,000 individuals languish in local facilities.
On the federal level exclusively, 28,462—or thirteen percent— of the federal Bureau of Prison’s (hereafter ‘the Bureau’) 218,081 inmates are housed in privately managed facilities around the country. Although many rightly decry the Bureau’s burgeoning inmate populations since 2000, a striking number of influential prison policy analysts still fail to notice that of the sixteen privately managed Bureau facilities more than half (ten, to be precise) were awarded contracts beginning the 1990s. That the Bureau began contracting in earnest with private corrections companies in the mid-1990s matters, and here’s why.
Correctly periodizing the Bureau’s affiliation with private management firms is critical for de-naturalizing the dusty assumption that privatization can be trusted as a policy solution for its ability to generate efficient markets. That is, properly contextualizing the rise of the Bureau’s private contracts assails the most popular claims made by apologists of privatized corrections. Devotees of business-model punishment often assert that 1) privatization introduces competition into an otherwise public monopoly thereby enhancing services throughout the system while lowering the overall cost and 2) that private prisons can provide the same or better services at a lower cost than the public sector because the marketplace forces efficiency and innovation.
Contrary to popular belief, however, the initial justification for privatizing the Bureau’s facilities was not the result of economic necessity, but instead the indistinct outcome of a number of intersecting political (electoral) imperatives.
During the fall of 1993 the Clinton White House found itself caught between two seemingly contradictory political objectives: 1) locking up more “criminals” to appear “tough on crime” and 2) reducing the size of the federal workforce to propitiate conservatives. Both aspirations emerged from Clinton’s 1992 campaign promises to shrink the size of the government while simultaneously incarcerating more individuals in federal prisons for longer sentences. Remember that in 1994 President Clinton signed into law both a federal “Truth in Sentencing” bill requiring offenders to serve at least 85 percent of their sentence before becoming eligible for parole and the Violent Crime and Law Enforcement Act which created over sixty new death penalty offenses, rendered prisoners ineligible from receiving Pell grants to participate in post-secondary degree programs while incarcerated, and provided funds to hire an additional 100,000 police officers to enforce drug-related crimes.
These two objectives inevitably collided. Building more facilities to meet a quickly growing field of prisoners, of course, would require hiring thousands of new employees just as the federal government was supposed to be shrinking. And so how did the Clinton Administration solve its seemingly insuperable problem?
Three words: Private prison contracts.
Per the recommendation of President Clinton the Bureau reluctantly agreed to use private companies to manage most new federal prisons; the employees at these would not show up on the department's official payroll.
In endorsing his prison privatization plan, President Clinton embraced the concepts behind the National Performance Review, Vice President Al Gore's 1993 study to reinvent government so that it "works better and costs less," especially the commitment to cut between 100,000-250,000 federal employees from the payroll. (It’s important to recall that in 1993 the total federal workforce had already dipped below Reagan-era thresholds...) In the case of prisons, Clinton’s hypothesis was that after reducing federal personnel, Washington D.C. would then turn to private contractors to do their work.
The federal Bureau of Prisons awarded nine more contracts before the election of George W. Bush thanks in part to the revolving door between private corrections companies and federal law enforcement agencies beginning in the 1990s.
It’s more than a bit ironic, for instance, that in early 1993, Michael Quinlan, Director of the Federal Bureau of Prisons from 1987-1992, was recruited to work for the Corrections Corporation of America (CCA), the nation’s largest private prison firm. Since Quinlan’s arrival the Bureau has awarded contracts to private corrections firms nearly on a yearly basis. And the trend persists to this very day. Less than two years ago President Obama nominated Stacia Hylton as the new Director of the United States Marshals Service (USMS). Just months before her nomination, Hylton agreed to a consulting contract with The GEO Group—the nation’s second largest private prison operator— worth $112,500.
A revolving door is inefficient, so too is cronyism. Cronyism, by its very preferential nature, is antagonistic to the notion of fairness in competition, supposedly the bulwark of modern capitalism. Despite the popular taken-for-granted ideology that privatization spawns efficiency, there is no evidence to suggest that the Clinton administration—the vanguard of federal prison privatization—believed that private firms were any more effective than the Bureau at containing and rehabilitating prisoners. Clinton’s calculus was political, not empirical. My hope here is that a brief sweep of past privatization debates will help us to challenge the sweeping partisanship of those in the present.