Previously published on Nation of Change. Reprinted with permission from the author
By Christopher Petrella
Nearly 130,000 bodies are currently caged in for-profit or privately managed “correctional” facilities in the United States, a figure that accounts for 16.4% of federal and 6.8% of state populations.
Since 2000, moreover, the number of extant for-profit and privately contracted penal institutions has skyrocketed by approximately 120% during a time in which the population of “public” federal and state facilities has grown four times as slowly. And although federal and state expenditures on prisons have mushroomed by 72% over the last decade and now cost taxpayers $74 billion per annum, the two largest private prison companies, Corrections Corporation of America and GEO Group (formerly Wackenhut Corrections Corporation), have together “earned” over $2.9 billion in profits since 2000.
While in recent years much public attention has rightly been devoted to illuminating the “industrial” operations associated with the proliferation of private prison facilities—from the tumesced pocketbooks of private prison operators to the profits generated by telecommunications companies by way of no-bid phone contracts—surprisingly scant attention has been paid to the private financiers of “public” prison projects who earn a profit each time a prison is built. And unlike those who collect revenue on prison operations, firms that purchase bonds for prison construction needn’t have a personal stake in the eventual utility or solvency of any given facility. Their coffers will grow whether or not prison beds are occupied.
But a two-decade long declension in public support for prison expansion has thwarted traditional options for financing new prison construction and has resulted (as it usually does) in new opportunities for cadres of investment bankers, building contractors, and consultants to realize indulgent returns-on-investment with abidingly anti-democratic financing schemes. I call it “leasing through the back-door.”