Christopher Zoukis's Blog - Posts Tagged "private-prisons"
Private prisons do matter for #BlackLivesMatter
While Barack Obama has placed prison reform front and center on the policy agenda this year, those seeking the office are broaching a critical element of the debate that has yet to be discussed federally: private prisons. It’s become a hot button issue in the last couple months as it was revealed that Hillary Clinton’s campaign accepted donations from private prisons, and Bernie Sanders pledged to ban them altogether.
I response to that, Vox author Dara Lind penned an article suggesting that Black Lives Matter campaigners focus less time and energy on ending private prisons. While by no means should it be the only locus for critique (and of course they shouldn’t “settle” for those promises, but is anyone actually suggesting they would??), the prison-industrial complex is a linchpin in a broken system, and to suggest otherwise is to vastly underestimate the role such companies play in perpetuating it.
Lind and her colleague may be right that private prisons did not necessarily cause the initial levels of mass incarceration that have led to prison over-population and detention levels beyond those anywhere else in the world. But private prisons most certainly have played a role in maintaining those levels and through lobbying efforts and policy, and I beg to disagree, but they most certainly have played a role in perpetuating it.
I certainly agree that one of the most immediate impacts of ending private prisons would be on immigrant detainees, especially given the almost ludicrous minimum quota systems in place at many facilities. And yes, in the grand scheme of things, the $133,000 donated by private prison companies to the Hilary Clinton campaign may seem like small potatoes. But over the last two decades or so, we’re talking about tens of millions being donated directly to political campaigns and to lobbying efforts. Campaign funding is just the tip of the influence iceberg.
Because it’s important to look closely at the lobbying efforts of these organizations at the local and state levels—focusing on presidential campaign funding will simply not give you a clear picture of the kind of influence these companies have on the ground. When you start looking at their operations and efforts in places like California and Arizona, you see how many lives are really being affected. Because the individuals being targeted by the kinds of policies private prisons are lobbying for are precisely the reason why the Black Lives Matter campaign exists.
It’s fine to show a graph that shows that incarceration rates were already on the rise prior to privatization of state prisons, but to draw the conclusion that they still represent only a symptom is to be viewing the situation with blinders on, removing all context and experience from an issue that necessitates the inclusion of precisely those elements.
It’s frustrating to see people with a platform such a platform so dramatically misrepresent what the role of the prison-industrial complex has been in perpetuating cycles of poverty and recidivism. It’s especially frustrating to see someone citing crime rates as a justifiable rationale for excessively punitive policies. Even though the author concedes mass incarceration was not the appropriate response, she fails to recognize that crime rates are rarely indicative of the actual levels of crime; any beginner criminology course will teach you crime rates are strictly representative of police activities in any given jurisdiction. Further, that police activity is contingent on legislative changes which either increase or decrease the criminalization of particular activities—like drug possession—precisely the kinds of legislation private companies have been playing a direct role in influencing. When you attempt to analyze policies without recognizing such crucial context, you are leaving key elements out of your analysis; the conclusions will necessarily be flawed.
It is simply not in the interest of private prison companies to advocate for the kind of prison reform that is needed in this country. Why would they directly advocate themselves out of existence? The prison-industrial complex went beyond simply being a symptom of the problem to a causal entity the moment they began advocating for continued mandatory minimums and for increased immigrant detainees, when they began actively gouging the families of inmates into bankruptcy through exploitive practices and undermining prison education efforts.
I response to that, Vox author Dara Lind penned an article suggesting that Black Lives Matter campaigners focus less time and energy on ending private prisons. While by no means should it be the only locus for critique (and of course they shouldn’t “settle” for those promises, but is anyone actually suggesting they would??), the prison-industrial complex is a linchpin in a broken system, and to suggest otherwise is to vastly underestimate the role such companies play in perpetuating it.
Lind and her colleague may be right that private prisons did not necessarily cause the initial levels of mass incarceration that have led to prison over-population and detention levels beyond those anywhere else in the world. But private prisons most certainly have played a role in maintaining those levels and through lobbying efforts and policy, and I beg to disagree, but they most certainly have played a role in perpetuating it.
I certainly agree that one of the most immediate impacts of ending private prisons would be on immigrant detainees, especially given the almost ludicrous minimum quota systems in place at many facilities. And yes, in the grand scheme of things, the $133,000 donated by private prison companies to the Hilary Clinton campaign may seem like small potatoes. But over the last two decades or so, we’re talking about tens of millions being donated directly to political campaigns and to lobbying efforts. Campaign funding is just the tip of the influence iceberg.
Because it’s important to look closely at the lobbying efforts of these organizations at the local and state levels—focusing on presidential campaign funding will simply not give you a clear picture of the kind of influence these companies have on the ground. When you start looking at their operations and efforts in places like California and Arizona, you see how many lives are really being affected. Because the individuals being targeted by the kinds of policies private prisons are lobbying for are precisely the reason why the Black Lives Matter campaign exists.
It’s fine to show a graph that shows that incarceration rates were already on the rise prior to privatization of state prisons, but to draw the conclusion that they still represent only a symptom is to be viewing the situation with blinders on, removing all context and experience from an issue that necessitates the inclusion of precisely those elements.
It’s frustrating to see people with a platform such a platform so dramatically misrepresent what the role of the prison-industrial complex has been in perpetuating cycles of poverty and recidivism. It’s especially frustrating to see someone citing crime rates as a justifiable rationale for excessively punitive policies. Even though the author concedes mass incarceration was not the appropriate response, she fails to recognize that crime rates are rarely indicative of the actual levels of crime; any beginner criminology course will teach you crime rates are strictly representative of police activities in any given jurisdiction. Further, that police activity is contingent on legislative changes which either increase or decrease the criminalization of particular activities—like drug possession—precisely the kinds of legislation private companies have been playing a direct role in influencing. When you attempt to analyze policies without recognizing such crucial context, you are leaving key elements out of your analysis; the conclusions will necessarily be flawed.
It is simply not in the interest of private prison companies to advocate for the kind of prison reform that is needed in this country. Why would they directly advocate themselves out of existence? The prison-industrial complex went beyond simply being a symptom of the problem to a causal entity the moment they began advocating for continued mandatory minimums and for increased immigrant detainees, when they began actively gouging the families of inmates into bankruptcy through exploitive practices and undermining prison education efforts.
Senator Offers Bill to Deny Private Prisons REIT Status
The ranking Democratic on the Senate’s tax-writing Finance Committee has introduced a bill (S. 3247) to exclude private prison companies from the significant tax breaks available to Real Estate Investment Trusts (REITs).
On July 14, Sen. Ron Wyden (D-OR) offered the “Ending Tax Breaks for Private Prisons Act,’’ which would bar companies operating prisons from being eligible for REIT status.
In a brief statement, Sen. Wyden blamed what he called the nation’s “broken-down tax code” for allowing for-profit prison companies to take advantage of the highly favorable tax treatment accorded REITs.
Created 50 years ago to encourage investments in real estate, REITs have often been compared to mutual funds, since they offer a way to invest in a broad portfolio of assets -- i.e., the properties a REIT owns or finances, just as a owning shares in a mutual fund lets an investor profit from the stocks or bonds the fund owns -- without having to buy those underlying assets.
By law, a REIT is required to pay its investors at least 90% of its taxable income each year, in the form of cash stock dividends, The REIT can deduct those dividends from its taxable income; as a result, those earnings escape being taxed at the corporate level.
The two largest companies in the private prison industry are the Corrections Corporation of America and the GEO Group, which together account for about 75% of that industry. In 2013, those companies reorganized to operate as REITs, based on their substantial real estate in prisons, jails and immigration detention centers.
In reorganizing, the two companies also persuaded the Internal Revenue Service to let them spin off as new subsidiaries also eligible for REIT status they had set as subsidiaries separate from ownership of prison real estate. These subsidiaries provided company properties with services such as prison management and providing supplies.
This had the advantage of generating income for the parent company REITs that also escaped taxation at the corporation level. Last year, the two main private-prison companies recorded a combined total of more than $3.6 billion, but as a result of being able to take advantage of REIT status, reduced their tax liability by a combined total of about $113 million.
Wyden’s bill would reclassify as non-deductible corporate profits income which is currently tax-deductible as REIT dividends to their shareholders. MoveOn.org started a drive earlier this year to gather signatures for a petition opposing REIT status for companies managing private prisons.
In offering his bill, Sen. Wyden made clear he views stripping REIT eligibility from private prisons to be part of broader revisions needed to the U.S. criminal justice system. Other opponents of private prisons have begun campaigns against them on other issues besides their eligibility for REIT status.
Enlace, a Portland, Oregon-based group that identifies its focus as issue of racial and economic justice, has for five years waged a Private Prison Divestment Campaign to persuade pension funds and other large investors to sell any shares they hold in private-prison companies. It has scored success with the University of California and Columbia University pensions, and hopes that Portland this fall will become the first city government to join its effort.
On July 14, Sen. Ron Wyden (D-OR) offered the “Ending Tax Breaks for Private Prisons Act,’’ which would bar companies operating prisons from being eligible for REIT status.
In a brief statement, Sen. Wyden blamed what he called the nation’s “broken-down tax code” for allowing for-profit prison companies to take advantage of the highly favorable tax treatment accorded REITs.
Created 50 years ago to encourage investments in real estate, REITs have often been compared to mutual funds, since they offer a way to invest in a broad portfolio of assets -- i.e., the properties a REIT owns or finances, just as a owning shares in a mutual fund lets an investor profit from the stocks or bonds the fund owns -- without having to buy those underlying assets.
By law, a REIT is required to pay its investors at least 90% of its taxable income each year, in the form of cash stock dividends, The REIT can deduct those dividends from its taxable income; as a result, those earnings escape being taxed at the corporate level.
The two largest companies in the private prison industry are the Corrections Corporation of America and the GEO Group, which together account for about 75% of that industry. In 2013, those companies reorganized to operate as REITs, based on their substantial real estate in prisons, jails and immigration detention centers.
In reorganizing, the two companies also persuaded the Internal Revenue Service to let them spin off as new subsidiaries also eligible for REIT status they had set as subsidiaries separate from ownership of prison real estate. These subsidiaries provided company properties with services such as prison management and providing supplies.
This had the advantage of generating income for the parent company REITs that also escaped taxation at the corporation level. Last year, the two main private-prison companies recorded a combined total of more than $3.6 billion, but as a result of being able to take advantage of REIT status, reduced their tax liability by a combined total of about $113 million.
Wyden’s bill would reclassify as non-deductible corporate profits income which is currently tax-deductible as REIT dividends to their shareholders. MoveOn.org started a drive earlier this year to gather signatures for a petition opposing REIT status for companies managing private prisons.
In offering his bill, Sen. Wyden made clear he views stripping REIT eligibility from private prisons to be part of broader revisions needed to the U.S. criminal justice system. Other opponents of private prisons have begun campaigns against them on other issues besides their eligibility for REIT status.
Enlace, a Portland, Oregon-based group that identifies its focus as issue of racial and economic justice, has for five years waged a Private Prison Divestment Campaign to persuade pension funds and other large investors to sell any shares they hold in private-prison companies. It has scored success with the University of California and Columbia University pensions, and hopes that Portland this fall will become the first city government to join its effort.
Florida Legislator: Private Prison’s Charges Inflated by $16 Million
A Florida state representative claims the operator of a private prison has overcharged the state Department of Corrections by at least $16 million over the past seven years.
Rep. David Richardson, who holds an MBA degree and was an auditor for the Defense Department, an accountant with Ernst & Young, and ran his own practice before Miami Beach residents elected him to the state Legislature in 2012, says Tennessee-based CoreCivic, formerly known as the Corrections Corporations of America, benefited from state officials’ errors or worse in the contract it received to run the state’s Lake City Correctional Facility, which houses almost 900 male offenders between the ages of 19 and 24.
The legislator says he has not uncovered any wrongdoing by the private firm, since they are billing the state corrections department in line with data submitted by that agency and according to contract terms negotiated by the state’s Department of Management Services. But poor negotiating and supervision have given the private firm a contract that has resulted in the state making substantial overpayments in a number of areas.
For example, according to Richardson’s analysis of the contract and related bills and payments, the Lake City facility, constructed by the state in 1997 but leased to the private firm for the past seven years, includes air conditioning, unlike many older prisons. Yet the contract with CoreCivic makes the state, rather than the company, responsible for covering the costs of running that system, and has meant millions in charges to taxpayers.
At the state-run Brevard Correctional, another, slightly larger facility for youthful offenders, Richardson notes, the state’s daily outlays per inmate for certain activities amounted to $3.62; atLake City, however, the contract had the state paying nearly three times that amount -- $9.85 – daily for each inmate. Inconsistencies in the contract favoring the private firm brought it allowances for educational programs about four times larger than state-operated ones received.
Ironically, the state Legislature authorized state corrections officials to contract with private prison firms as a way to save money; the authority to privatize some state correctional facilities was conditioned on the state saving 7 percent or more by contracting out. But Richardson claims his review shows that errors and poor negotiations by state officials have produced added state payments that have far outstripped any savings from privatization.
Since joining the legislature, Richardson has made the state’s criminal justice system a major focus, and has made scores of visits to facilities around the state. A state law allows legislators to visit and inspect state prisons at any time.
After compiling what he says was an independent audit of the Lake City contract and cost outlays last spring, Richardson presented a summary of his findings to budget committees of the state Legislature and asked the state’s chief inspector general to look into the issues he had raised. Nevertheless, the state renewed its Lake City prison contract with CoreCivic last summer, making it the company’s third contract extension.
Besides CoreCivic’s contract to run Lake City, other private prison firms currently have contracts to run six other state correctional facilities.
Rep. David Richardson, who holds an MBA degree and was an auditor for the Defense Department, an accountant with Ernst & Young, and ran his own practice before Miami Beach residents elected him to the state Legislature in 2012, says Tennessee-based CoreCivic, formerly known as the Corrections Corporations of America, benefited from state officials’ errors or worse in the contract it received to run the state’s Lake City Correctional Facility, which houses almost 900 male offenders between the ages of 19 and 24.
The legislator says he has not uncovered any wrongdoing by the private firm, since they are billing the state corrections department in line with data submitted by that agency and according to contract terms negotiated by the state’s Department of Management Services. But poor negotiating and supervision have given the private firm a contract that has resulted in the state making substantial overpayments in a number of areas.
For example, according to Richardson’s analysis of the contract and related bills and payments, the Lake City facility, constructed by the state in 1997 but leased to the private firm for the past seven years, includes air conditioning, unlike many older prisons. Yet the contract with CoreCivic makes the state, rather than the company, responsible for covering the costs of running that system, and has meant millions in charges to taxpayers.
At the state-run Brevard Correctional, another, slightly larger facility for youthful offenders, Richardson notes, the state’s daily outlays per inmate for certain activities amounted to $3.62; atLake City, however, the contract had the state paying nearly three times that amount -- $9.85 – daily for each inmate. Inconsistencies in the contract favoring the private firm brought it allowances for educational programs about four times larger than state-operated ones received.
Ironically, the state Legislature authorized state corrections officials to contract with private prison firms as a way to save money; the authority to privatize some state correctional facilities was conditioned on the state saving 7 percent or more by contracting out. But Richardson claims his review shows that errors and poor negotiations by state officials have produced added state payments that have far outstripped any savings from privatization.
Since joining the legislature, Richardson has made the state’s criminal justice system a major focus, and has made scores of visits to facilities around the state. A state law allows legislators to visit and inspect state prisons at any time.
After compiling what he says was an independent audit of the Lake City contract and cost outlays last spring, Richardson presented a summary of his findings to budget committees of the state Legislature and asked the state’s chief inspector general to look into the issues he had raised. Nevertheless, the state renewed its Lake City prison contract with CoreCivic last summer, making it the company’s third contract extension.
Besides CoreCivic’s contract to run Lake City, other private prison firms currently have contracts to run six other state correctional facilities.
