At privately run prisons, occupancy rates determine profits.
The Corrections Corporation of America, the country’s largest owner and operator of for-profit prisons, puts it clearly in its 2012 annual report:
“Filling … available beds would provide substantial growth in revenues, cash flow, and earnings per share. However, we can provide no assurance that we will be able to fill our available beds.”
Many critics find fault with a business model that calls for more incarcerated people, which is just one reason that the private prison industry spends millions of dollars each year on lobbying and campaign contributions.
A growing industry
According to a report issued last year by the Justice Policy Institute, one in six federal prisoners was housed in a private facility in 2009.
Since 2000, private prisons have steadily increased their share of the market, with the number of people in private federal facilities more than doubling.
The field is dominated by just two companies – CCA and Geo Group.
At CCA, federal contracts last year made up 43 percent of revenues, which totaled $1.7 billion. The company contracts with the Bureau of Prisons, the U.S. Marshals Service and U.S. Immigration and Customs Enforcement.
State detention contracts account for half of the company’s revenues.
The Huffington Post reported in February that the company was trying to expand its inventory by offering to buy prisons from cash-strapped state governments.
CCA alluded to this objective in its annual report, citing its success in buying an Ohio prison in 2011. Altogether, the company now operates 66 facilities, owning two-thirds of them.
Geo Group not only does business with local, state and federal agencies in the U.S., but also runs facilities in Australia, South Africa and the United Kingdom.
Contracts in this country make up two-thirds of its revenues, which were $1.6 billion in 2011.
Private prison lobbying
CCA states in its annual report that company policy “prohibits us from engaging in lobbying or advocacy efforts that would influence enforcement efforts, parole standards, criminal laws, and sentencing policies.”
Yet the firm spent more than $1 million last year lobbying in Washington. Spending is on par this year, at $240,000 in the first quarter.
In addition to its own lobbyists, the company contracts with three outside lobby firms:
- McBee Strategic Consulting
- Mehlman Vogel Castagnetti
- Akin Gump Strauss Hauer & Feld
Issues addressed by those lobbyists included prison appropriations, immigration and customs enforcement, and homeland security.
Geo Group last spent $220,000 lobbying in Washington.
Both Geo Group and CCA also lobby state governments and make contributions to state and federal campaign committees.
Data compiled by the National Institute on Money in State Politics show that last year CCA employed 93 lobbyists in 27 states and contributed $99,400 to state candidates.
Its political contributions at the federal level total $181,697 in the 2012 cycle, according to the Center for Responsive Politics. In the last election, the company PAC spent $266,800.
Geo Group employed 44 state lobbyists last year and contributed $379,951 to state candidates, primarily in Florida. Its federal PAC has spent $141,265 in the 2012 cycle.
The two companies also have personal relationships to government.
A co-founder of CCA, Tom Beasley, served as chairman of the Tennessee Republican Party. Former Sen. Dennis W. DeConcini (D-AZ) is a member of the corporate board of directors.
GEO Group’s board includes Norman A. Carlson, former head of the Federal Bureau of Prisons.
Both companies lobbied last year on the Department of Homeland Security Appropriations Bill.
CCA also weighed in on the Private Prison Information Act, which would extend Freedom of Information Act provisions to private prisons operating under government contract.
At the company’s annual meeting last week, shareholders voted down a related resolution calling for public reports on rape and sexual abuse in the prisons.
There’s some irony to CCA’s aversion to releasing information that would be public if the prisons were government-run. One of the company directors is Charles Overby, a former Gannett Co. executive who headed the Freedom Forum, a nonprofit group dedicated to a free press and First Amendment rights.
(Full disclosure: I worked for Overby in the 1980s, when I was a national bureau reporter for Gannett News Service.)