In Arizona in 2015, a riot broke out in a private prison where previously three inmates had escaped and murdered a vacationing couple.
After order was restored, the state revoked the contract of Management & Training Corporation and hired another private prison firm, the GEO Group.
Three years earlier, the GEO Group had surrendered its contract to run a Mississippi prison after a federal judge ruled that the inmates had not been protected from gang violence. The replacement: Management & Training Corporation.
The staying power of the two companies shows how private prisons maintain their hold on the nation’s criminal justice system despite large-scale failures. The field is dominated by a handful of companies who have swallowed the competition and entrenched their positions through aggressive lawyering, intricate financial arrangements and in some cases, according to lawsuits by the Mississippi attorney general, bribery and kickbacks.
Though a federal review found private prisons are more dangerous than government-run prisons for both guards and inmates, the Trump administration indicated earlier this year that it will expand their use.
Private prison companies can be found at every level of government, housing 9 percent of the nation’s prisoners. They emerged in the 1980s, when the number of inmates was quickly outstripping capacity, and they have an outsize influence in certain states, including Arizona, Florida, Hawaii, Mississippi and New Mexico.
Despite hundreds of lawsuits, findings that private prisons save taxpayers little to no money, and evidence of repeated constitutional violations, the number of privately housed inmates has risen faster since 2000 than the overall number of prisoners. In 2016, the number rose by about 1.5 percent, according to Justice Department figures.
Last week, Frank Shaw, a warden for Management & Training, or MTC, at the East Mississippi Correctional Facility, was called to testify in a federal trial claiming that the prison routinely failed to shield inmates from beatings and left them so desperate for medical attention that they lit fires in their cells. Mr. Shaw had also been the warden in Arizona during the riot.
The trial concluded on Monday; the judge has yet to issue a decision.
Even states that have sworn off private prisons, or tried to cut back on their use, have found it difficult to extricate themselves. After the prisoners escaped in Arizona, the state tried to reduce the number of inmates held in that prison. But MTC claimed the state was violating its contract, which guaranteed a certain number of beds would be filled. Arizona had to pay the company $3 million. MTC still operates a facility in the state.
States that use private prisons can find themselves limited to a few big players. The largest are GEO Group, based in Florida; CoreCivic (formerly Corrections Corporation of America), based in Tennessee; and MTC, based in Utah. Two of the past four directors of the Federal Bureau of Prisons were later hired by CoreCivic.
George Zoley, chief executive of GEO Group, made $9.6 million in 2017 — almost double his 2016 earnings, according to S.E.C. filings. Damon T. Hininger, CoreCivic’s chief executive, earned $2.3 million in total compensation in 2017, according to the records.
GEO Group and CoreCivic, which are publicly traded, had revenues last year of $2.3 billion and $1.8 billion. Much less is known about MTC, which is privately held. A company spokesman declined to answer a number of emailed questions about its operations and revenues, but said the company was dedicated to helping “at-risk individuals” gain the tools for success.
The companies employ a variety of strategies, including hiring former corrections officials in high-level positions and giving what are sometimes enormous campaign contributions. GEO Group and CoreCivic gave close to half a million dollars to support Mr. Trump’s candidacy and inauguration. After he was elected, their stock prices soared.
Industry officials say they provide cost-effective ways to house inmates, and that they continue to expand into rehabilitation programs as more states seek alternatives to prison. CoreCivic says about 10,000 people in its facilities have obtained high school equivalency diplomas in the past five years, reflecting the company’s efforts to improve the ability of inmates to re-enter society.
But some lawmakers say the claims of cost savings and other benefits do not check out. “There is no convincing argument of why we should have private prisons,” said Mike Fasano, a former Republican state senator from Pasco County, Fla., who voted against a 2012 measure to privatize much of Florida’s prison system.
GEO Group, which did not respond to a request for comment, gave more than $1 million to state candidates and parties in Florida in the two years leading up to the vote, according to data from the National Institute on Money in State Politics. But the proposal was narrowly defeated, Mr. Fasano said, over fears about jeopardizing public safety and hurting public corrections workers, as well as concerns that the promised cost savings would not materialize.
In Mississippi, the state’s three private prisons were once operated by GEO Group and are now run by MTC.
A fourth, Walnut Grove, was closed in 2016, four years after a federal judge wrote that the prison “paints a picture of such horror as should be unrealized anywhere in the civilized world,” and placed the prison under federal oversight.
But the state is still paying for it. In the 1990s, Mississippi issued bonds to pay for prison construction, including some facilities intended to be privately run. It still owes $91 million for Walnut Grove, according to state documents.
In a related case, both companies are being sued by the state attorney general for racketeering in connection with a corruption scandal that led to the conviction of Christopher Epps, a former state corrections director. In 2017, he was sentenced to nearly 20 years in prison after receiving some $1.4 million in bribes and kickbacks from companies vying for state prison contracts.
Cecil McCrory, a former state legislator, was also convicted in the scandal. He did consulting work for both GEO Group and MTC, which paid him $12,000 a month, according to the indictment.
Both companies have denied wrongdoing in the case.
The state declined to settle a separate lawsuit filed on behalf of inmates at the East Mississippi facility by the American Civil Liberties Union and the Southern Poverty Law Center. For the past two months, the resulting trial has presented evidence of rampant violence and chronic neglect amid shortages of guards and medical staff. Although four out of five inmates there are mentally ill, East Mississippi has not had a psychiatrist on its staff since November.
Inmates have testified that rival gangs were the prison’s de facto rulers, even deciding which cells new inmates were allowed to occupy. Last year, an inmate with a mobile phone — available on the prison’s black market for $800 — filmed himself beating another inmate and posted the video on Facebook. MTC gives guards less pay and training than government correction officers receive.
Still, Pelicia E. Hall, the state prison commissioner, testified that she had no plans to cut ties to MTC.
Some states have found themselves with few alternatives when they have tried to curb their use of private prisons.
Hawaii, which sends a quarter of its prisoners to a private prison in Eloy, Ariz., sought to bring them home after the murder of two Hawaiian inmates and allegations of abuse in 2010. One inmate had been stabbed 140 times.
Neil Abercrombie, a Democrat who was governor of Hawaii at the time, declared that the policy of sending prisoners away “costs money, it costs lives, it costs communities.” But Hawaii’s largest prison is filled to capacity, so the state has continued to send inmates to Arizona.
Mike Brickner, senior policy director for the American Civil Liberties Union of Ohio, said the prospects for a privatization plan in his state dimmed after the state sold a prison to a private company and assaults on prison staff and other inmates rose sharply. The frequency of assaults declined in subsequent years.
Much of the industry’s power, critics say, is linked to campaign donations. GEO Group and CoreCivic have given nearly $9 million over the past fifteen years to state candidates and parties across the United States, with the overwhelming majority to Republicans, according to the National Institute on Money in State Politics.
The two companies have also spent between $3 million and $4 million annually on lobbying, according to data from the institute and from the nonprofit Center for Responsive Politics.
Steve Owen, a CoreCivic spokesman, said the magnitude of lobbying and campaign contributions was not unusual for an industry of its size.
The industry also promises savings. But such claims have been disputed, partly because many contracts allow the private prisons to cherry-pick the healthiest inmates while leaving those who need more care to publicly run facilities, making private prisons appear to be cheaper to run, critics say.
The Justice Department’s inspector general concluded in 2016 that it could not accurately compare costs, partly because of “the different nature of the inmate populations and programs offered in those facilities.”
The department ordered a phasing-out of private facilities that year, saying they “compare poorly” with government prisons and citing a lack of substantial cost savings. One month after Mr. Trump’s inauguration, the department rescinded the decision.
Mr. Owen of CoreCivic said his company never insists on terms allowing it to cherry-pick inmates, that its contracts reflect what states want, and that they provide ways for states to withdraw from the arrangement, as some have done.
In some communities, private prisons have become such large taxpayers and employers that backers have forecast economic doom in arguing against their closing.
Perhaps no town is now as dependent as Eloy, Ariz., where four private prisons pay $2 million of the town’s $12.5 million annual operating budget, according to the city manager, Harvey Krauss.
One unit, which houses people detained by Immigration and Customs Enforcement, has come under scrutiny for inmate deaths.
In 2015, The Arizona Republic found that at least five people had committed suicide at that facility since 2003, while none of the almost 250 other detention centers across the country had had more than one suicide in that time. Overall, the newspaper reported, 9 percent of all deaths in detention during that period had occurred at the Eloy center.
While there can be a stigma attached to prison towns, the fiscal impact cannot be overstated, Mr. Krauss said.
“We would be in a world of hurt without them,” he said.
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