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The New Cold War
Part I: Making Crime Pay

"If you wish to know the true morality of a country, observe how it treats its prisoners."

- Fyodor Dostoyevsky

ABC News reports, "...all this money was making the private-prison boys more hungry still; not content with their piece of the pie, they were pushing to take over entire state correction systems in New Jersey, Illinois, Michigan, and Ohio..." So what happens when prisons fall into the hands of private corporations? Social and behavioral reform?... Not when you're slashing costs to turn big profit.

by Cliff Montgomery



Fall has always been my favorite time of year. Perhaps it's the lilting quality of the beast; perhaps it's part of the natural sense of peace we humans feel after the heady flows of the summer sun have finally found their ebb. In any case the autumn months have always seemed to me like a wonderful calm after the storm, almost like the end of a horrid heat stroke or a terrible madness.

I found myself driving one day during those first, red-leaved flashes of October and eased my motorcycle around a tight corner. My eyes caught a glimpse of a small blue-and-white one-storey building, a grey rectangular place with a large blue roof. It's not the kind of thing you're sure to miss.

That's when I first saw the prisoners. They were out in the front yard of this small minimum-security prison, their blue-and-white uniforms eerily matching the coats of paint found on the little prison behind them. A few of the guards - almost all southern white males to a man - were about and closely watching the all-black crowd, just in case.

But, dear readers, you don't know the meaning of the word uncomfortable until you have several inmates' eyes bearing down upon you - even the eyes of low-level, non-violent inmates like these - and each bearing that hungry look that begs to be free, to feel the wind on his face as he barrels down the highway . . . to have what you have.

An hour later my work on the privatization of prisons - and the factors that led up to it - began in earnest.

"The Cold War of the 90's"

The Wall Street Journal knows a good thing when it sees it. As early as 1994 that respected bastion of tradition trumpeted what would surely be a gold mine for the hungry entrepreneur; America's greatest source of revenue during the 80's - its mighty military/industrial complex built at the height of the Cold War - was being privatized by the Clinton Administration and used to fight the enemy within.

On May12th of that year it published, "Making Crime Pay: The Cold War of the 90's", informing its readers that the administration was making good on three of its campaign promises in a single throw. Firstly, it was accelerating the closing of military bases and the whittling of gov't contracts with arms builders that had begun under President Bush after the fall of the Soviet "Evil Empire"; secondly, it was making good on its promise to "clean up America's streets" by putting 100,000 new police on the beat and, taking a cue from Republicans, 'getting tough with criminals'.

But it was the fulfillment of the third promise that had the Journal muttering words of praise. The administration would keep its promise to create employment in those areas hit by military base and plant closings by turning the empty bases and large industrial plants into thriving, privatized prisons - which is a very big business, especially to small American towns that had depended almost entirely on the old military/industrial structure for its revenue and jobs.

It was a good sell. The Journal quoted a poll it had taken with NBC showing that, "more than 70% of those surveyed support longer prison terms for violent offenders", even though the most reliable statistics that year had shown that violent crime was declining sharply for the first time in years; but it is also a virtual truism that no candidate for an American office has ever lost votes by being hard on criminals. Waxing poetic, the article breathlessly stated that:

"Americans' fear of crime is creating a new version of the old military-industrial complex, an infrastructure born amid political rhetoric and a shower of federal, state and local dollars. As they did in the Eisenhower era, politicians are trying to outdo each other in standing up to the common enemy; communities pin their economic hopes on jobs related to the buildup; and large and small businesses scramble for a slice of the bounty. These mutually reinforcing interests are forging a formidable new 'iron triangle' similar to the triangle that arms makers, military services and lawmakers formed three decades ago."

Of course even paradise comes with a bad apple now and again. The Journal felt it right to regretfully add the findings of a Justice Department study taken that year showing that, "[many] federal prisoners are guilty of low-level, nonviolent offenses - such as possession of small quantities of illegal drugs - but are serving lengthy sentences under mandatory minimums set by Congress." These 'mandatory minimums' were enacted by the then-Democratic Congress and quickly signed into law by President Ronald Reagan in the mid-80's as a finishing touch to his "War on Drugs" (though how involved 'the Gipper' really was in this 'war' is hard to say; only six months after the war had been officially declared by he and wife Nancy in a rare dual televised address to the nation in 1984, he quietly slashed much of the war's budget in half, fueling speculation that whatever he did after that moment was little more than a glorified photo-relations opportunity).

In any case, the Journal said, the writing was on the wall; prisons are big business, and privatization was the wave to catch. "Parts of the defense establishment are cashing in, too, sensing a logical new line of business to help them offset military cutbacks", the Journal continued. "Westinghouse Electric Corp., Minnesota Mining & Manufacturing Co., GDE Systems Inc. (a division of the old General Dynamics) and Alliant Techsystems Inc., for instance, are pushing crime-fighting equipment and have created special divisions to retool their defense technology for America's streets . . . Many lesser-known companies already are doing well fighting crime. Esmore Correctional Services Inc., the biggest U.S. maker of police electronics, recently was taken public by Janny Montgomery Scott."

Don't be mistaken; the private prison business had started back in the mid-80's, and by '94 rolled around it was already a huge, fledgling business with about 30-35,000 prisoners in its care by the time this new development showed its head; still, this is the moment many consider the defining one for the new, money-laden industry; it was officially being seen as the next powerhouse for American defense dollars. The 'iron triangle' had landed straight into the private prison lap.

This new 'iron triangle' wasn't lost on several in the loop. Many of America's largest monied firms, such as Goldman Sachs, Merrill Lynch, Prudential, and Smith Barney Shearson were each fighting for a piece of the pie. They were at the vanguard of this attack on America's newest menace, competing savagely to underwrite prison construction where it could with private, tax-exempt bonds - thereby bypassing a public vote on the matter (prisons usually need public approval for gov't bonds to be issued covering costs), just in case. Failing that, these businesses could easily - and legally - build a prison and lease it out to their parent company, a move which kept much of the actual costs off its books - and hence made them very attractive to investors. For their trouble the private investors usually won big, netting for themselves a significantly higher rate of interest on their investments than the public bonds state & federal governments provide.

Brad Sprague, an investment banker with the Columbus, OH office of A.G. Edwards Company, summed it up well when he bluntly told reporters, "[Private] prison bonds are a good investment; I put my own kid's money in them. You get individual investors, bank trust departments, mutual funds, insurance companies - they all know [America] isn't going to go out of the prison business anytime soon."

And it wasn't just gov't officials and the best & brightest in the economic sphere who were on to what was happening; one open-eyed academic was quoted in the Journal piece as saying, "With the population in private prisons growing at four times the rate of the general prisoner population, growth for the private-prison industry is virtually guaranteed. If you were in the hotel industry, you'd think you died and gone to heaven."

And 'heaven' continued; in 1995 "Prisonfest" - a convention held annually by the American Correctional Association (ACA) to further the profits to be made by both states and private investors in the fast-growing prison industry - hit Cincinnati, OH. Nearly 5,000 prison guards, halfway house operators, administrators, educators, and probation and parole officers flowed into that fine city to throw the jailhouse bash of the year. Attorney General Janet Reno was kind enough to take time from her strange personal vendetta against right-wing nuts & Cuban children to speak at the convention, & presumably to speak for the Clinton Administration as well. In her keynote address, she told those there that, "You see the meanest, most vicious among us, and you protect us from them . . .well, I'm here today to tell you how much this nation owes you."

And, if those selling everything at the convention from "razor wire . . . and restraint beds to inmate phone services and modular cells that can be assembled like Lego blocks" (as one local reporter put it) continue in their ways, the nation will come to owe quite a pretty penny indeed.

"Business is great," gushed Cathy Perry, an account manager from Access Catalog of St. Louis. The catalog sells clothing, television sets, stereos and other personal items to inmates by mail order. Typical of those who sell their goods or services to the mighty prison beast, Access pulled in roughly $5 million in sales during '94 alone.

But then again, it's not too hard for a private industry to make quite a pile of money from selling to prisoners; as one gung-ho businessman recently put it to me, "It's not like . . . they're [really] going anywhere too soon", so it's pretty hard for them to shop around for items. If you're an inmate you deal with what vendors the prisons provide, and if you don't you go without.

But going with the structure can be a very expensive endeavor for the prisoner. For instance, in some states like California, phone companies such as MCI and AT&T have been selling phone time to prisoners often at three times the market rate; and, since prisoners must call collect in order to place any call, this ensures a tidy little bundle for them as well as for the prisons, to which MCI will often give a cut of the profits made by this price gouging in exchange for giving the lucrative prison contract to the happy phone company. How much they, like anyone else selling goods or services in prisons, can actually charge depends entirely on what the state or federal regulators will let them get away with.

The Journal did report that not everyone on the outside is jumping for joy at this surge in prisons, or their privatization. Niki Schwartz is a Cleveland attorney who pointed out that in 1982 Ohio spent only one-sixth of what it spent on higher education to build & maintain its prisons; by 1993, the budget had bloated to a full third. "Soon", Schwartz exclaims, "we'll be spending more on corrections than on higher education, and that's crazy".

Indeed. Now prison spending not only outstrips education (money is now commonly diverted from education and welfare spending to fund our need for prisons, like former NY Governor Cuomo's raiding of his state's welfare funds to fuel the building of prisons some years ago; according to the Atlantic Monthly, he now calls that move 'stupid'); it has also risen three times as fast as our military spending over the last 20 years.

"The juiciest pork in the barrel"

Politicians are an amazing breed. They usually achieve precious little & seem absolutely incapable of doing anything else but pontificate on subjects most of them know nothing about, all the while parroting solutions most would never really fight for if given the honest chance; & yet they have somehow convinced each and every one of us that we simply can't do without them.

"If you carefully examine the members of Congress and theexecutive branch, you will discover that precious few of them have ever run a business, made a payroll, grown corn, or engaged in any activity where profit [or the good of others] was paramount.

This means that our country has found a way to keep our less-than-able occupied. Who is to say that these ungifted people might not have fallen by the wayside - or worse, descended into a life of crime?

I believe our treatment of our president . . . and representatives is proof positive that this is a compassionate and Christian nation."

Rita Mae Brown

It is also virtually a truism in journalistic circles that you can always count on certain politicians to say precisely the wrong thing at precisely the wrong time - which is, of course, precisely why we reporters so love to cover them.

Dan Feldman, New York City assemblyman & chairman of its criminal-justice committee, couldn't help but gleefully admit to WSJ just as it was investigating the whole privatization business that prisons were becoming "the juiciest pork in the barrel", as far as he was concerned.

And, like all properly-timed political mistakes, it couldn't be moreilluminating as to what is really going on in the prison business.

The Crunch

To an extent undreamed of in most economic circles, the need for prisons is growing at an alarming rate. In 1980, there were only about 50,000 inmates behind bars; but by year-end 1999, thanks in large part to the 'war on drugs', mandatory minimum sentencing, and the 'truth in sentencing' laws that ensure prisoners serve at least 80% of their sentence before they are even considered fit for parole, there were over 200,000 overcrowding America's prisons, jails, and detention centers, making for more than a 300% increase of incarcerations in the last 20 years, according to Department of Justice statistics. Most of this surge in the rate of incarceration has occurred in the last ten years alone - an increase of over 60% in the last decade. To borrow a dab of capitalistic lingo, demand is now easily outstripping supply - state prisons are working at a rate of 1-17% above top capacity, while the federal cells are operating at a dangerously high 34% beyond maximum capacity.

For all its extra work America started the new century with almost 1 out of every 140 of its citizens locked away in its jails, prisons, and correctional facilities. But the work comes with a very hefty price. States find themselves forced to spend nine out of every ten dollars of their prison budgets on the upkeep of the prisons they already have, and the federal prisons have long ago been forced to figure out ways to make their dollars stretch as far as they can. Prisoners are continuing to fly into our nation's prisons - and staying there - but, because of the crunch, there is less and less money to be found for such essentials as drug treatment, education, violence prevention and job training, as well as putting a terrible squeeze on the federal and state hopes to build the new prisons that are needed to deal with the flow of prisoners.

As for the inmates themselves, since many need at least one of theseprograms to help them back on their way once they put in their time, the lack of proper funding for programs virtually guarantees a large number of inmates a ticket back to the 'big house' after they're released.

As to who is being arrested, the numbers are telling. For instance, there was a 75% increase in the number of males seeing the inside of a prison or jail cell in the last ten years, but the number of women being crushed into the system is even greater - women's prisons and corrections facilities now hold a full 104% more females than they did in 1990. According to the DOJ stats, by Dec. '99 one out of every 110 US men filled prison cells, & about 1 in every 1,700 women - but, with women now the fastest growing group fueling our ever-expanding prison industry (a 104% increase in ten years is a big increase in anyone's book), that number is sure to grow closer to the males' stats in the coming years.

Meanwhile, the disparities found in the racial and ethnic makeup of prisoners have become so disturbing that several on both sides of the ideological aisle are calling for investigation & action. By 1999, 2 out of every 3 prisoners in our prison-industrial complex were non-white, with black males shouldering a disproportionately high amount of the burden. In the roughest numbers, 3% of men in prison were Asian/American Indian/pacific islanders, 18% were Hispanic, 33% were white, and 46% were black.

But it's when the numbers for each race are seen in the frame of individual age groups that the numbers really become unsettling. While 1% of the total white male population aged 30-34 found itself behind bars (the only age group among white men to break the 1% mark) and about 2-3% of Hispanic men in the age groups spanning 20 to 44 years of age were in the nation's prisons, over 7-9% of the entire black male population between the ages of 20-40 found itself looking at prison walls. Those in the 25-29 age bracket were hit hardest, with almost one out of every ten serving hard time. By comparison, black men of this age group were three times as likely to be behind bars as Hispanics of the same age, and over 10 times as likely as whites.

Black women hardly fared any better: 46% of the total female prison population as of Dec. 31 1999 was black, as opposed to 33% of white, 17% of Hispanic & 4% Asian/pacific islander/American Indian - almost the exact overall numbers as one finds for the males.

The principal mechanism behind all these numbers appears to be something that criminologists Franklin Zimring and Gordon Hawkins have coined the prisoner "bait-and-switch"; according to them, it is a game played by politicians, the media, & private financiers who wish to exploit the American public's paranoid fear of violent criminals. It works just like the 'bait-and-switch' maneuver used by a business desperate for interested shoppers: the business offers a service or product sure to get the customer interested in what the business is selling, only to offer some other product or service at the last second - hence the 'bait-and-switch'.

The media, eager to sell papers, tend to report on the most extreme (read most brutal, violent, & shocking) drug & criminal cases, Zimring & Hawkins insist, re-enforcing in our collective puritan mind that we need a strong, authoritative hand to beat us into submission, or as Republican Barry Goldwater euphemistically put it during his 1964 presidential campaign, 'restore law & order'. Politicians, eager for public approval, step over each other to prove to a whipped-up public that they're more stringent & uncompromising than anyone else when it comes to putting behind bars those who have 'terrorized our streets' & 'put our nation in jeopardy', such as Richard Nixon declared in the 1968 presidential race when he claimed to speak for the "great, silent majority"; only these same politicians tend to pass & accept legislation that often punishes non-violent offenders more than violent ones, forcing lesser criminals to spend more time behind bars due to the mandatory minimums, the 'three strikes & you're out' pledge and the 'truth-in-sentencing' laws brought on by the 'drug war' and our own misinformation about who sits in those cells day after day.

But it will be hard to change minds; these are popular laws, howeverover-reaching they may be. Like the 'Star Wars' initiative, just because something has been proven not to work doesn't mean that it won't continue to receive great support. Like 'Star Wars', the truth of the matter is that the real appeal of such things is often economic; nuclear missiles were big business for several reasons, and prisons are usually no different. For instance, people know full well that property values in towns or areas around a prison often rise, and that the prison often brings not only good jobs, but extra benefits to the city's finances. What is almost never discussed is how those 'finances' often find their way into the town's pocket in the first place.

Prisons are almost always set up in rural, poor communities even though most of their inmates come from the city; so much so that demographers have been quoted as saying that this buildup has created a seismic shift in population. Census figures show that 5% of the increase for the total rural population from 1980 to 1990 is the direct result of the prisoners being pushed into these rural neighborhoods.

But there's another implication to all this, according to the newsletter I've written for called The Washington Spectator; those from the city are usually black, while the rural neighborhoods, though poor, tend to be white. This is not just a point of picking at color, because the census helps determine by population what parts of our country will receive money for roads, education . . . and what parts will not.

But a prisoner is never counted as living where he did before he was a prisoner (often in a black, or if not, at least a very poor city neighborhood); he is instead counted as living among the population where the prison is located. Money that would have been sent to entire city neighborhoods is being quietly funneled to other regions - rural towns and the like - because the prisons falsely inflate that area's numbers; hence many of the extra benefits and the real reason for much of the extra money.

As for the prisons themselves, there are three major types of correctional facilities in the American complex:

- The town jails are among the most common, & tend to house those imprisoned by the city, or the state for less than a year, & sometimes those whose cases are pending trial;

- The state prisons, which house the bulk of US prisoners, & tend to house those who have broken state laws and are currently serving sentences of over a year or more;

- The Federal prisons, which keep those who have broken federal laws. There is no time limit for those in federal prison; whether the sentence is a month or 10 years, a violator of federal law will spend his/her time here.

Politicians fought hard - & continue to do so - in their effort to give no rest to the wicked. Prisoners of all persuasions are now often denied parole until they serve at least 80-85% of their original, or 'true', sentences (hence, 'truth-in-sentencing'). In 1990 37% of those on the inside could expect an early release; by 1997, that number had fallen to about 31%. Even those convicted of a 'first-time' offense are expected to pay a bigger share to the fiddler, with their average time in prison climbing from 22 months in 1990 to 28 months by 1998 - or an extra half-year for the same offense. Any reasonable hope of being paroled in 6 months for a first offense has virtually disappeared, with a paltry rate of 15.2 % by 1998 only a little more than half of the 26.5% chance first-timers had eight years before.

Those languishing in our prisons & jails, however, are often not the violent horrors politicians & the media make them out to be. In the local jails, 2 out of every 3 are in fact non-violent offenders, with about half awaiting trial. In the mighty state complex, a full 52% were convicted of non-violent crimes; & in the federal pens, an amazing 88% of those in the total prison population are servicing longer, tougher sentences for non-violent crimes, exactly the opposite of who are supposed to be most effected by the mighty prison buildup in the first place. Those in federal prisons for drug offenses alone - usually the single largest contributor to the prisons among all facilities - outnumbered those in the feds' prisons for all property offenses by about 7-to-1, and all violent offenses (the ones all the extra sentencing & loss of parole was supposed to punish in the first place) by almost 5-to-1. From 1990-1998 those convicted of drug offenses accounted for over 62% of the massive growth in federal prisons alone.

The principal flaws bringing us to this point? One is a little flourish President Reagan gave to Republican House members in 1986 a week before election day as a 'proof' he and the Republican honchos were serious about stopping drug abuse and its violence-related problems after the slashing of the 'drug war' budget I mentioned earlier. Called the "Anti-Drug Abuse Act", it is the signature piece of legislation that signed into law many of those pesky mandatory minimum sentences now in place.

The other is a lesser-known law which found support by both Reaganites & 'Drug Tzar' William Bennett under Presidents Reagan & George Bush two years later called the "Omnibus Anti-Drug Act". Also signed into law by Reagan, it gave 'drug conspiracy' laws the teeth to put anyone associated with those convicted of breaking illegal drug laws into jail, even if they themselves are found innocent of any drug crime(s).

These laws, while perhaps fairly intending to stop the violent and dangerous few, have been 'switched' too often, and become to many in the departments of Justice and Corrections so harsh and overreaching as to be considered ridiculous. The National Criminal Justice Commission - an independent, non-profit organization of law, justice, and corrections professionals - says that many in these professions have become so outraged by the wide scope of these laws that they have quietly staged a mini-revolution. As early as 1996, the Commission reports, judges such as Judge Whitman Knapp of Manhattan and Judge Jack B. Weinstein of Brooklyn have refused to hear another single drug case until the severity of the laws are corrected; Judge Alan Nevis, himself appointed under President Reagan, told USA Today bluntly that these laws are the "unfairest things I've ever had to impose;" and no less a conservative judiciary than Chief Justice of the Supreme Court William Rehnquist - hardly known for his compassion for the downtrodden - has said that the minimums go too far. The Justice Commission further states that "90% of federal Judges and 75% of state judges think mandatory minimums are unsound."

And they aren't the only ones who expressed their displeasure throughout the 90's. The New York Times has reported that organizations as varied as the National Association of Veteran Police Officers, the United States Sentencing Commission, and The American Bar Association have all asked for a change in how these laws are applied.

The Criminal Justice Commission itself, in its excellent book The Real War on Crime, writes that the sentences these laws force onto so many low-level, non-violent offenders are abuses of the system, calling the undue mandatory minimums and drug conspiracy laws an "injustice and a waste of tax dollars".

To illustrate its point, it cited the case of a 20-year-old Alabama woman named Nicole Richardson, whose boyfriend had been a small-time drug dealer working out of a local bar in the area. An undercover cop busted Richardson's boyfriend after asking her (presumably at the bar) where he could buy a hit or two, and being told about her man's sideline by Richardson.

Her boyfriend actually fared well under current laws; facing a decade-long stretch in the pen, he turned snitch for the court, giving damning testimony on other dealers in the area and receiving a reduced sentence of five years for a job well done. As for Richardson, her single statement to that undercover cop provided all the system needed to send her to jail for 10 years without the possibility of parole.

Or consider some of these examples I've discovered on my own:

* In New York, holding two ounces of coke can get you life in prison.

* In one of several raids throughout that city (which, as in the rest of the nation, now often occur without a search warrant), NY police busted in on what they were told by informants was a hideout for pot dealers. Gung-ho cops ripped down the door only to find a 15-year-old girl and her very pregnant sister (8 months), who literally pissed herself as police raced in & turned their home upside down. The young pregnant woman told police repeatedly of her condition, and even of what she'd done, but she was handcuffed and forced to sit in her own piss for two solid hours until the cops were finished. No drugs were found, and no charges by the police were ever filed.

And if that doesn't turn your crank, consider this story from the Atlantic Monthly:

"In May of 1991 Mark Young was arrested at his Indianapolis [Indiana] home for brokering the sale of 700 pounds of marijuana grown on a farm . . . He had never before been charged with drug trafficking. He had no history of violent crime. His two prior felony convictions - one for attempting to fill a false prescription, the other for possession of a few Quaaludes and amphetamines - were more than a decade old. Young . . . never handled either the marijuana or the money [for the sale]. He had simply introduced two partners of a marijuana farm, Claude Atkinson and Ernest Montgomery, to a couple of men from Florida who were acting on behalf of a New York buyer. Under federal law Young was charged with "conspiracy to manufacture" marijuana and was held liable for the cultivation of all 12,500 marijuana plants grown on the Morgan County farm [. . .] No confiscated marijuana, money, or physical evidence of any kind linked Young to the crime. He was convicted solely on the testimony of co-conspirators who were now cooperating with the government.

On February 8, 1992, Mark Young was sentenced by Judge Sarah Evans Barker to life imprisonment without the possibility of parole."

It concludes:

"One of every six inmates in the federal prison system . . . has been incarcerated primarily for a marijuana offense . . . Mark Young's sentence, though unusual, is by no means unique. A dozen or more marijuana offenders may now be serving life sentences in federal penitentiaries without hope of parole; if one includes middle-aged inmates with sentences of twenty [to] forty years, the number condemned to die in prison may reach into the hundreds. Other inmates - no one knows how many - are serving life sentences in state correctional facilities across the country for growing, selling, or even possessing marijuana."

It also softly reminds us that to reduce overcrowding, the most crowded prisons sometimes parole the most violent in order to make room for those caught up in the 'war on drugs' frenzy.

And what does Mark Young have to say about all this? In a follow-up to their story, the Monthly quoted Young as saying, "What they're doing, they're destroying these families and passing out life sentences, taking people's lives, putting children on the street - I mean horrendous acts . . . I don't know of anyone that would do anything that malicious for a salary." Young says that he may not understand who's really behind all this, but he knows that the guards themselves are somehow just like him and caught up in it all, too; just people trying to get along, trying make a little something for themselves as they work among the big squeeze. "I wouldn't take their job for nothing in the world," he says softly.

No Devil's Workshop

"What they should really do", the young woman cutting my hair briskly says as the cold scissors in her hand just brush the side of my right ear, "is stop testing products and these dangerous new drugs on animals - why bother them? - and test it all on these prisoners we have locked away, y'know? I mean, I guess that's why a lot of them are there anyway, right? - Takin' whatever . . . I mean, at least then we don't hurt any animals if something goes wrong"

This type of thinking is par for the course when you mention to anyone nowadays that you're a reporter working on a story - any story, I suspect - that deals with prisons. Many, not having been in prison themselves or known anyone close to them who has done a stretch of prison time - at least not yet - have bought into the "bait-and-switch" completely, and are so certain that we must "lock them all up and throw away the key", that these otherwise sensible people aren't about to let little things like facts get in the way of their thinking.

The politicians in this country don't much like to remind their constituents that America once had another such prison buildup in its history; lasting from about the last part of the 19th into the first quarter of the 20th century, the average American held much of the same blanket contempt for those behind bars, and damned the reasons for their being there. The amount of prisoners - and prisons being built - skyrocketed. The condition began to wear on prison budgets everywhere, so a few enterprising people came up a novel solution; they could offset the skyrocketing costs by putting the prisoners to work for profit.

By the turn of the 20th Century America was going "whole hog" for prisons, & the country was building them as quickly as it could. Chain-gangs were the point of order in the fun-loving southern states, while others had their own horrid inmates engaging in back-breaking labor even the starving working children who crammed many of America's factories had refused to do. It was also a rather nice way of breaking unions and keeping overall wages low.

"Living" conditions for the inmates were hopeless. Overcrowding became rampant as politicians fell over each other to give proof to the predominately white male voting public (women did not yet have the right to vote) that they were harder on criminals than their opponents, as were ready to use any means necessary to get & keep cheap labor behind bars.

It was working rather well - until the prisons exploded almost at once in an orgy of violence & blood. The prisoners - or, as some of the more progressive newspapers openly called them, 'slaves' - revolted against their 'masters'.

The bloodbath was so drastic that even now, those working in public corrections remember the lesson. Danny Thompson, an official for the NC Dept. of Corrections, needed no prodding by me on the subject. In fact, when my memory of the story began to fail me during my interview with him, he quickly picked up the stride.

"Yeah, it was - it was bad", he said during a telephone interview. "We [in corrections] really learned a few things from that. It all came back in their faces, the way prisoners were being used. We can't let that kind of thing happen again."

There are measures still well in force to prevent just such a fallout in public facilities; at the federal level, the Bureau of Prisons has a provision expressly forbidding any warden or high-ranking federal prison official from directly profiting by the hands of inmates - and, though states' measures often depend upon who is in charge, Thompson assures me that, "there are safeguards against that kind of thing happening again in North Carolina." When asked about Governor Jim Hunt's expressed belief that "every able-bodied prisoner ought to be working, and working hard", Thompson admitted that prisoners are being used to make products and provide services that are then sold for a fee, but added that "they are only allowed to work for government or non-profit, tax-exempt clients".

This is true - the state of North Carolina (to use as an example) can only work on projects that serve "tax-supported" entities, as NC law puts it, either in NC or for another state. They have done well - North Carolina's prison-industrial program, "Correction Enterprises", netted over $58 million in sales and a final profit of over $4 million per year by the mid-90's, according to the state's own very informative website ( In 1994 Correction Enterprises "was the nation's fifth largest in sales and third in inmate productivity among large states".

The principal reason given by both Thompson and the Enterprises webpage for the program is as simple and, in many ways, as necessary as any can be; it gives the inmates something to do. Idle hands are the devil's workshop, and if you're locked away doing nothing but staring at four bare walls 18 or 20 hours a day, the devil can set up pretty quickly. Besides, some - like Danny Thompson - insist that Enterprise's programs are "teaching a valuable trade" to the prisoners it utilizes.

But some question whether the types of work prisoners are often trained to do by many states - a great part of Correctional Enterprises' energies are directed to offering goods and services in such things as farming, laundry services, raw manpower and canning goods for the prison population - are really that marketable in a modern, tech-laden economy. One warden in the Midwest, when pressed on this kind of issue by a Prison News Service correspondent, admitted that the work prisoners are usually trained for probably won't be much help in getting them a job in the workaday world.

Which isn't to say that all this 'busy work' has no other purpose. Some services do in fact offer good training for inmates willing to learn - Correction Enterprises also trains prisoners in chemical manufacturing, packaging and distribution, printing and duplicating, and optical lens repair (working on glasses). The federal prison bureau's "Unicor" service is a program that teaches prisoners potentially marketable skills in such fields as electronics, web design and computer technology.

Inmates working for the state is hardly new - Federal Bureau of Prisons chief Kathleen Hawk Sawyer mentioned in a statement to bureau chiefs earlier this year regarding the privatization of prisons that "inmates have been making license plates since the 20's", and very few in this modern world believe such work to be an evil omen. Provided the prisoners themselves are not treated unfairly or taken advantage of by the prisons, there should no problem with the inmates helping to earn their keep.

It's more necessary than it may sound. Remember, already crowded prisons have been gaining prisoners at a horridly increasing rate every year for the last twenty years; and, though they have been given extra funds for their newfound troubles, the money becomes more scarce every year. The Justice Department's point that 9 out of every 10 dollars in prison money to states is now used for the upkeep of prisons already built sticks a pin into the prison budget balloon, leaving precious little for anything else. If the state does try to build another prison or two without the funds needed to pay for costs once the bills come due, there can be problems. About four years ago one new jail in South Carolina sat vacant after it was completed because the state found it didn't have the expected funds to run it once it was finished, according to reports cited by the Justice Commission.

So how to pay for the increase of prisoners?

* A raising of taxes may be in order; public bonds could be issued, but would of course need a positive vote from a populace that's more and more militant against paying more to the government for anything; hence politicians usually aren't going to vote in this day & age to put such things on the ballot.

* Prisoners could be shipped across state lines to other, less crowded prisons in other states, or the local jails can be used to help take the overflow; but that's a temporary solution at best.

* The inmates can be put to work by the state, working to help offset the escalating costs. This is the other, less discussed reason for states using prison labor in a limited government & non-profit market. It is used in many states now, and is of course one of the principal reasons for the inmate/workers in the NC prisons; their own website euphemistically states as much:

"In 1995, Correction Enterprises returned 5% of its net profits to the Crime Victims Compensation Fund of North Carolina (to offset the costs of those hurt in crime), in addition to paying for incentive wages for all inmate jobs in North Carolina prisons and industrial expansion costs (the building of more prisons and more cells for existing prisons)."

But even this can only go so far in covering the spiraling costs of the modern prison society. It simply isn't enough to sustain the continued onslaught of new inmates year after year, while letting fewer and fewer go.

The only other option is to increase the privatization of prisons - which is exactly what many states have begun to do.

Raw Material

The US isn't the only industrialized country concerned about the privatization of its prisons and how it is effecting prison population; noted Norwegian criminologist Nils Christie felt compelled to write Crime Control as Industry to explain the implications of such a move. Christie, using the dry, straightforward logic of the economist, asks why private companies would even wish to become involved in prison-making and prison-running in the first place. Like any other move by business in which an initial investment is made, there is the expected hope of a profit from its investment. And, as in any business, it is the free access, flow, and use of its most basic raw material or materials that is the basis for the continued soundness of the investment. This is so obvious when one is dealing with the theory of economic stability as to be a virtual truism, says Christie.

Then, without the displays of emotion that often characterize both sides of any prison debate, he applies economic logic and theory to prisons and comes up with an inevitable conclusion: if prisons are taken over by private business, the logic of the business world will be used in the prison industry as it's used in any business run for profit. Therefore the business world will do what it can to continue - and often, to increase - the flow and use of its most essential, raw material, the one material or component upon which its very investment is founded - the prisoners.

It hardly even matters whether or not the business in charge is 'outsourcing' the inmates to private companies for work or not; prisoners still boil down to the one essential ingredient needed to invest in and fund a prison. This obvious conflict of interest stands at the crux of the privatization debate; whether it is right for the raw business mentality to be used for the purpose of allowing some people to profit from another's confinement, or to allow a business entity such absolute, total control of its charges.

And, in the US, the question is even more essential than in most places - this country does, after all, have the dubious distinction of throwing more of its own people behind prison walls than any country in the industrialized world, except for Russia. The prison-industrial complex, as it stands now, employs more people than any Fortune 500 company with the possible exception of General Motors - and that is based on USA Today figures that are over six years old.

"Investors predict a recession-proof future for these gated communities", a 1998 ABC News report on prison privatization states. "Stock in the nation's largest prison company, Corrections Corporation of America (CCA), rocketed tenfold on the New York Stock Exchange over the last four years. Shareholders in other publicly traded prison firms have enjoyed similar results."

And it continued after that; an article in the Fall edition of the magazine Colorlines that year made a point in saying that the giant CCA had almost 55,000 beds in 68 private prisons in the US, the UK, Puerto Rico, and Australia either in operation or being created. The second biggest private prison business, Wackenhut Corrections, "claimed contracts and awards to manage 46 facilities in North America, U.K., and Australia."

"I don't know of any other industry growing this quickly," Sun TrustEquitable Securities rep Brian Ruttenbur told ABC News. "CCA grew by 30 percent in 1997 and will continue that growth for the next three to five years." And of course, ABC News reports, the privatizing boys & girls were singing all the way to the bank, from what it made in its first facilities in 1984 (the same time the 'War on Drugs' started, incidentally) to running 6% of all US prisons 14 years later in 1998.

Most states still seem to be testing the waters of privatization, turning only one to about seven facilities over to private hands; they still remember what happened the last time private companies were this involved in the prison complex, and would rather wait and let someone else make the Big Mistake first; to do otherwise would be madness.

Only two states have thrown caution to the wind - California (24 private prisons), which has always jumped onto the latest craze with a determination bordering on madness; and Texas (48 private facilities - a full four to five times the national average), which refuses to be outdone by anyone where judicial & correctional madness is concerned.

But perhaps it was the promise of cutting costs by 15-20% that turned Gov. (&, by the time you read this, possibly President) George 'Dubya' Bush's head. Sold on these promises, Texas & California seem committed - and, if the current rate of incarceration continues, that will be literally true soon enough.

Not everyone is ready to make "McPrisons" anytime soon; the ACU News Service, a newswire for unionized correctional staff, insists that, though pro-privatizing gurus make assurances their solution will create financial saving and a more efficient prison system through competition, there is precious little 'competition' in the real world. CCA (52.3%) and Wackenhut (25.11%) constitute over two-thirds of the total privatizing business, which makes for very little real competition indeed; most of what is left belongs to US Corrections Corporation . If one thing is certain, it's that where these three go, privatization goes.

Some legislators are worried as well. Oklahoma State Senator Cal Hobson has been quoted as saying that the more states and the feds buy solely from, say, CCA or Wackenhut, "the more advantage you give them at negotiation time".

There's no real reason to worry about any imagined problems, Susan Hart of CCA says. As vice president of that corporation's communications when ABC News did its investigation, she's sure its private advantage helps the company remain 'flexible' to new challenges. "If you apply proven business principles to a correctional center, the result is going to be cost savings," she says.

The influx of money from interested investors has allowed several private prisons to cut back drastically on staff, using 'high-tech' gadgets like infrared security systems, video cameras, a wired, computerized gating system, and other toys normally associated these days with Big Brother. But no one seems to have wondered what would happen if some real shit goes done; a heavy fight between gangs, or a stabbing. It might become important to the industry eventually . . .

That's not all; in what ABC News called "an innovative twist", these private prison companies have been playing a bit of 'bait-and-switch' themselves, using communities' desire for those big prison bucks to get wild deals for the property, location, and the bypassing of laws that would not normally be allowed - like a tax-exemption status for at least five years, for instance, which allows them to 'buy low' - only to turn around and immediately sell the property to its Real Estate Investment Trust (REIT), which can then sell it to interested companies for several times the initial price of the prison, leaving towns without any real knowledge of who's going to be running the place in the future; but 'selling high' can make the private companies very rich indeed. Besides, with the REIT holding the property (CCA's REIT, for instance, is the Prison Realty Trust, Inc.; it is CCA's parent company), it no longer shows up on the companies' normal books, thereby freeing up precious capital in the process. Don't worry if you're confused by all this (it took me some time, too); just understand that this little 'switch' allows the companies to play with their books in some very fun ways.

The ABC report also stated that all this money was making the private-prison boys more hungry still; not content with their piece of the pie, they were pushing to take over entire state correction systems in New Jersey, Illinois, Michigan, and Ohio; and for about 15 years CCA has been trying take over Tennessee's prison complex.

[The private prison stocks] are volatile, but very powerful performers and have huge potential, even compared to high tech stocks."

Gary Boston, Paine Webber research analyst - ABC News, '98

"Every month I see another prison going up around the country as part of an economic development program . . . Assuming we are going to imprison people, I believe in giving the taxpayer the same quality for 10 or 15 percent less . . . They bring in a lot of money to the local economy."

Adrian T. Moore, a privatization expert with the Reason Foundation, a libertarian think-tank

"We found we can house inmates for a lot less . . . Where the state spends an average $76 a day, the new Wackenhut prisons come on line at $40 to $50 a day."

Michael Toms, New Mexico Corrections representative

"Members of the [privatization] industry have already lobbied forstiffer penalties [for those convicted of a crime] . . . As a matter of public policy, private prisons become punishment for profit," American University Law professor Ira Robbins told ABC, in what may have been the only truly dissenting voice to be found in the report. However, to be fair the Disney-owned ABC admitted that, "The service [private prisons provide] lies in keeping people locked up. Full cells ensure a steady cash flow. The more beds a prison fills, the greater its value to stockholders."

The end result is that, as the Justice Committee notes, a private company like CCA with net profits of $4 million for $100 million dollars of revenue by 1998 will surely try to protect their continued revenue and investment. Like Microsoft, AT&T, Wal-Mart and all other powerful private entities, they will do what they can to protect their interests with such weapons as soft money - giving cash (which must be reported) and various gifts (which do not) to anyone with a vote who's willing to take them. Will private-prison companies stay out of the fray when questions such as parole, drug rehab, prisoner medication and inmate education are on the table? Probably not - as Prof. Robbins states, they are already buying votes on Capital Hill to increase time served; and the time prisoners serve now is perhaps even worse than it was the last time prisons exploded in violence all those years ago.

"The issue isn't privatizing prisons, but rather privatizing prisoners. Inmates, traditionally the responsibility of state and federal governments, increasingly are being contracted out to the lowest bidder. Convicts have become commodities. Certainly offenders should be punished for committing crimes, but should private companies and their stockholders profit from such punishment?

Private prisons would be great if the primary purpose of the criminal justice system was to warehouse inmates without providing them with meaningful opportunities for rehabilitation. Private prison companies have no incentive to invest in such opportunities, especially when they profit from more crime, more punishment and more prisons.

Cheaper isn't always better in terms of the criminal justice system. We get what we pay for - and that's the bottom line of prison privatization."

Alex Friedman, reporter and former prisoner of a CCA-run medium-security prison in Clifton, Tennessee until officials moved him to a state prison because, they said, of his "efforts to degrade CCA with negative articles and outside sources." He was paroled in November 1999.

"Alex is intelligent," CCA warden Kevin Myers admitted to The Nation correspondent Eric Bates. "But once he gets in his mind that something's wrong, he's going to hit it with a vengeance forever and ever, amen."

The Three Kings

"Recently a number of troubling developments in facilities operated by [some of the] largest and most experienced corporations have damaged the credibility of privatized correctional services as a concept. These developments  . . . . . . . 

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