Jenni Gainsborough

The Truth About Private Prisons

Corrections Corporation of America (CCA), the nation's largest operator of prisons for profit, is celebrating its 20th anniversary throughout this year "at both the company's corporate Nashville office and at all of the more than 60 prisons, jails and detention centers under CCA ownership and/or management."

No word on whether the prisoners will be celebrating with them. However, a new report from Grassroots Leadership sticks a pin in their birthday balloon with a very critical look at the company's management of both its financial affairs and its contract prisons.

It is no secret that CCA has had its financial problems over the years. It came close to insolvency in the late 1990s after it accumulated heavy debt building expensive speculative prisons and restructuring itself as a real estate investment trust. After restructuring again, shaking up its upper management and spending $120 million to settle investor lawsuits, the company now claims to be in better financial shape. The report concedes that there has been some improvement but remains unconvinced about the company's long-term viability especially as many states are trying to reduce the size of their prison populations.

For those who are more concerned about the public policy implications of the CCA story than the ups and downs of its investors, the company's failures as a prison operator and its successes in influencing penal policy at the state and federal level are the most worrying areas of the report.

For-profit prison companies like CCA have always presented themselves as both cheaper and better than the traditional publicly owned prisons, staffed by state employees. However, from the mayhem and murders at the prison in Youngstown, Ohio, which eventually led to the company paying $1.6 million to prisoners to settle a lawsuit, to a series of wrongful death civil suits, and numerous disturbances and escapes, the authors document in detail a staggering range of failures of prison management.

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