The Private Prison Industry: Resistance isn't Futile

By Eric Lotke, SEIU

The private prison industry is on the march. In recent months the industry moved to take over 24 state prisons in southern Florida and buy five prisons in Ohio. Now it's making moves in Michigan.

But the industry doesn't always win. Resistance isn't futile.

The industry wanted to buy five prisons in Ohio but had to settle for one. Community members pushed back and corrections professionals raised doubts about cost savings and program effectiveness. Policy Matters Ohio demonstrated that selling the prison will likely cost more money than it produces. Yes, the state gets $73 million immediately for the sale - but the lease commits the state to pay $4 million annually for 20 years. So depending how cost estimates are done, the sale will end up costing the state anywhere from $8 million to $15 million more than traditional corrections.

Florida shows that the prison industry can't make an honest case for the product it sells. The move to privatize 24 prisons was slipped into the annual budget bill, and opponents were literally eliminated. The Corrections chief, Edwin Buss, was forced to resign after expressing doubt that a proper "business case" for cost savings could be made. Senator Paula Dockery (R-Lakeland), an outspoken critic of privatization, was stripped of her seat on the Criminal Justice Committee, where such legislation is ordinarily heard. Senator Mike Fasano (R-New Port Richey) was stripped of his chairmanship of the Committee on Criminal Justice Appropriations when he questioned the accelerated process, compressed hearing schedule, and absence of opposing experts.

The legislation institutionalizes secrecy. SB 2036 exempts prisons from the "applicable cost benefit analyses, business case analyses, performance contracting procedures, service comparisons, and impacts on performance standards" used in every other procurement. No such analysis would be done until after the contract has been executed.

SB 2036 turns procurement into a joke. First, buy my car. Then, after you buy it, you can check my car's condition, compare it to your own car or see if you need a new car at all.

A truly heroic effort killed the bill. A lawsuit by the Police Benevolent Association enforced the state law requiring that such action be in separate legislation not buried in general appropriations. Organized labor, faith groups and local leaders rose up in opposition. The privatization failed in a 21-19 Senate vote on Valentines Day.

Now Michigan. Michigan is interesting because it holds a bleeding wound. The North Lake Correctional Center in Baldwin was private from the beginning, built by Wackenhut now known as the GEO Group. The prison opened in 1999, closed in 2005, and had nothing but problems in between.

The North Lake prison was more expensive than 33 out of 37 other Michigan prisons. The state was paying $75.81 per person per day for confinement that cost $64.89 per day in sufficiently secure state facilities - even though the contractor was failing to provide counseling programs or contractually required levels of staff. At the same time, North Lake was three times more violent than Michigan's other maximum-security prisons. In the first five months of operation North Lake reported 110 critical incidents, including 46 assaults and 12 attempted suicides.

The state didn't even need the secure space it thought it might - so it did the right thing. It served notice and closed the facility.

GEO sued to keep the prison open or compel the state to continue making lease payments anyway. But GEO lost the lawsuit and the facility sat empty for years. GEO spent $60 million renovating it from 500 juveniles to 1,700 adults and landed some inmates from California for a few months in 2011 - but the contract didn't last and the facility again sits empty. GEO is paying capital costs and a skeleton crew for no reason.

Michigan's new privatization proposal bails GEO out. Even though Michigan has been reducing its prison population (from 51,515 in 2006 to 44,113 in 2010) and may not need all of its present secure capacity, the new proposal adds North Lake to the roster.

Moves are also being made to privatize food service and medical care - but this, too doesn't withstand scrutiny. Michigan has a history of trouble contracting for health care in prisons, and privatizing food service leads to myriad hidden costs. In 2007, the Department of Corrections found that using outside food service staff required adding at least one state corrections officer during operations - even though the time shows up as department costs not vendor costs.

But resistance isn't futile. A coalition of working people is coming together to oppose the plans. The Michigan Corrections Organization (MCO), acting in alliance with four different labor unions, published a scathing report that itemizes the false promises and real pitfalls of private prison contracting. The report also includes twenty questions that any legislator considering such privatization needs to be able to answer in advance (eg. How are cost comparisons made? Will the prison contractor reimburse the host city for the local police cost of tracking down escapees?)

Mel Grieshaber, Executive Director of MCO: "Privatization is tempting because corporations make all kinds of promises, but they don't deliver on the cost savings and they don't run their fa