Privatization as one of the major trends that continues to exert an influence on the criminal justice enterprise. Privatization refers to the practice of outsourcing government functions and services to private, for-profit business under a contract with the government. Punishment and incarceration may seem like odd functions to privatize, but private prisons are a multi-billion dollar a year business and the two largest firms – Corrections Corporation of America (CCA) and GEO Group – are multinational businesses that are traded on Wall Street.
In a recent groundbreaking examination of prison privatization, criminologists Donna Selman and Paul Leighton argue in Punishment for Sale (2010) that understanding the nature of the contemporary criminal justice system requires understanding privatization, including the business model and financial dynamics of these firms. It’s not just a multi-billion dollar business, but CCA has a billion dollar credit line with various powerful Wall Street investment banks. They – and all the shareholders – ensure that the private prison firms are managing the business risk factors that they must disclose in filings with the Securities and Exchange Commission. Risk factors include not getting enough inmates from government to be profitable, sentencing reform (like the repeal of certain mandatory minimum sentences), steps toward the legalization of drugs, and immigration reform. While these are controversial topics, the debate over justice policy needs to be on the merits of reform – not based on the financial interests of wealthy shareholders and Wall Street.
In the space below is a presentation that provides an overview of the problems with private prisons. There is also an earlier version of this I presented at the 2011 International Criminology Congress available from my blog (each presentation can be downloaded in .pdf or .pptx format). I also have presentations about Why Private Prison's Don't Save Money and Prison Privatization in US and Japan (2014 presentation comparing US privatization with Shimane Asahi Rehabilitation Center - a Japanese high-tech, public-private partnership).
Problems With Private Prisons (2013) by Dr Paul Leighton