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| Private prisons experience business surge |
| By Business Week |
| Published: 08/08/2005 |
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Though state governments are no longer fueling a private prison boom, the industry's major companies are upbeat -- thanks in large measure to a surge of business from federal agencies seeking to house fast-rising numbers of criminals and detained aliens. Since 2000, the number of federal inmates in private facilities -- prisons and halfway houses -- has increased by two-thirds to more than 24,000. Thousands more detainees are confined in for-profit facilities, which now hold roughly 14 percent of all federal prisoners, compared to less than 6 percent of state inmates. Critics, including prisoners rights groups and unionized corrections officers, contend the policy amounts to a federal bailout of an industry that would otherwise be struggling with a checkered record. The companies and the government say they provide a flexible, economical alternative to building new federal prisons as get-tough policies boost demand for space in an overcrowded system. The industry expanded rapidly in the 1990s on the assumption that business in a tough-on-crime era would grow indefinitely. But escapes and violence at a few private prisons, along with questions about cost savings, tempered enthusiasm. Saddled with thousands of empty beds, CCA teetered near bankruptcy before new federal contracts helped it rebound. Since 2000, the Nashville, Tenn.-based company has doubled its number of federal prisoners to 18,200 -- 29 percent of its overall inmate population. Business is certain to grow. Bureau of Prisons spokeswoman Traci Billingsley said the number of federal inmates is expected to rise from 185,000 to 226,000 by 2010, with private companies likely to be relied on for housing non-citizen immigrants convicted of federal crimes. The number of people detained by U.S. immigration officials also is increasing rapidly -- up three-fold in the past 10 years to more than 21,000 at a given time. In December, Congress passed a terrorism prevention bill calling for 40,000 additional beds by 2010 for aliens awaiting deportation. Many of the detainees are housed at facilities run by CCA and its main rival, GEO Group -- formerly Wackenhut. Both companies anticipate their detention business will grow. Rep. Ted Strickland, D-Ohio, a former prison psychologist, tried unsuccessfully to block privatization approval in Congress. "When the primary goal is profit, that can and probably does lead to a variety of abuse," Strickland said. "I don't see any end in sight." On the state level, there is no comparable boom for private prisons, but neither is there the bust some industry critics anticipated. As of mid-2004, private prisons housed 74,285 state inmates, compared to 76,763 in mid-2001. About 30 states use private prisons, notably in the South and West. Texas has the most inmates in private facilities -- more than 16,000; New Mexico has the highest portion of inmates in them -- 43 percent. Most states' policies remain unchanged since the 1990s and the bottom line is that overcrowding remains a stubborn problem. |
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