COMMERCIALIZATION OF JUSTICE
Nuzum, Eastern Michigan
Largely without notice or fanfare, a
multi-billion dollar per year criminal justice industry has emerged -- an
industry with local, state, national and international implications. However,
the effect of privatizing and commercializing justice has received limited
attention. Increasingly, criminal justice is about commerce and profit, with
policy being driven by business, political and private interests. To continue
ignoring the economic context in which criminal justice occurs and the
corresponding policy implications is politically naive and socially
There is strong evidence to support the
existence of a corrections-commercial complex similar to the military-industrial
complex President Eisenhower spoke of in 1961. He used this term to describe a
relationship between the Federal bureaucracy, key members of Congress and
private industrial interests. Eisenhower warned that this elite group had the
power to determine national defense policy free from public scrutiny with
far-reaching economic, political and social consequences (Adams, 1982).
The arrangement depicted by the
military-industrial complex is also referred to as an iron triangle or a
subgovenment. The sides of the triangle protect the participants from external
influence, regulation and public accountability. An exchange of personnel links
the Executive and industry sides of the triangle and creates a closed network of
shared, homogeneous ideas in the particular policy area. The potential conflicts
of interest created by this arrangement can affect prices, supplies and
The relationships in this closed
network are reinforced by corporate contributions to political action committees
(PACs) as well as membership in trade associations and governmental advocacy
committees. PACs provide political education for corporate managers, supervisors
and employees as well as a guide for lobbying efforts. Contributions to PACs
strengthen the relationship between the industrial and Congressional sides of
the iron triangle. Trade associations maintain regular working groups of
corporate representatives who serve on Federal advisory committees. The trade
associations are a critical link between industry and government. Advisory
committees, composed of private sector and government representatives, provide
advice on national policy issues. They are an avenue of company access to
national policy formation and membership results in significant advantages to
the companies involved.
Robert J. Lilly, in his 1993 article,
"The Corrections-Commercial Complex", uses the concept of
subgovernmental policy-making to describe the working alliance between federal
agencies, for-profit corporations and professional organizations. This closed
network of participants operates together to control policy making and has four
1) Participants share a close working
relationship which stabilizes over time and is dependent on a steady exchange
of information, access, influence, personnel and money.
2) Each subgovernment displays an
overlap between societal interests and the particular government bureaucracy
involved. The ties between industry and the government are reinforced by the
exchange of personnel.
3) Subgovernments maintain a low
profile, operating outside of public awareness
4) A subgovernment takes on the
quality of permanence within the given policy area. Partisan politics does
little to disturb the relatively autonomous arrangement.
Emergence & Growth
of the Prison-Industrial Complex
A number of issues have converged to
enable the emergence and growth of a corrections-commercial complex. McDonald
(1990) suggested that interest in privatized corrections services has been
stimulated by facility overcrowding and the need for immediate cell space,
tougher penal policies, and the use of tough on crime policies for political
gain or advantage.
Overcrowding of penal institutions was
not the only economic incentive for engaging the private sector in the criminal
justice industry. The projected cost savings of private sector provision of
services was politically attractive. Given the lack of dramatically increasing
crime rates during the time of rapidly expanding prison populations, the
monetary concerns generated by facility overcrowding were merely the most
Various changes in sentencing practices
have resulted in the incarceration of a rapidly growing number of people. The
most popular measures among politicians have been the "three strikes"
and "career criminal" laws. Although it is highly improbable that the
average citizen is aware of the wide range of "crimes" to which these
laws are applied, limiting their application would also limit their political
appeal. Research shows that those states with career criminal laws continue to
have crime rates comparable to those without such laws but have the fastest
growing prison populations. These laws not only ensure a large number of
long-term inmates who will add to the overcrowding problem but also guarantee a
continued and expanded market for crime control related commodities.
The statistics on changes in prisoner
demographics and numbers emphasize some of the consequences of the "get
tough on crime" philosophy. The construction of criminality along racial
and economic lines is a prime marketing strategy for corporations who profit
from the corrections industry. Public policy ensures that these people are
blamed for their position in society while fostering support for laws which
reinforce existing stereotypes and discriminatory practices. Wideman (1995)
argues that tough on crime policies are substituted for dealing with the social
problems which are the root causes of crime. Private corporations must demand
new criminality to increase profit and safeguard the market for their services,
so there is inherent support for policies which use incarceration rather than
policies promoting social change.
The issue of marginalization of an
increasing number of people and corporate manipulation of this process to
maximize profits is clarified by Barnett and Cavanaugh (1994). They examine the
question of what happens to the people who are no longer needed to manufacture
goods or provide services. Corporations downsize to increase profits and
conserve resources. The production of a relative surplus population creates a
population of people who are both threatening and vulnerable at the same time.
Their marginal status lessens their commitment to maintaining the existing
system, while their lack of power and status increases the likelihood they will
come under official control. The resulting anger and resentment engenders
actions by those in power to accommodate the displaced, not as producers or
consumers (there are no jobs or purchasing power), but as commodities in the
prison system. In effect, the corporations, through their role in marginalizing
greater and greater numbers of people, ensure a market for crime control goods
Tunnell explains the increase in the
sale of crime related commodities and target hardening products during a time
when crime rates have varied little as, "capitalism’s ability to create
commodities from both social problems and unfounded needs." (1992:293).
Commodification is the process of producing and selling goods and services; it
results in consumers defining certain products and services as ‘necessary’
for their social existence and lifestyles. The media play a major role in
forming the public’s perception of crime. The overemphasis on violent crime
leads to people internalizing a false sense of danger which leads to the
identification of crime-related commodities as life and lifestyle sustaining
The idea of both crime and punishment
as economic tools used to reinforce the status quo and further the gap between
the haves and have nots is not a new concept. In capitalist societies,
marginalized people are themselves commodities to be exploited and controlled --
either as laborers, consumers or property for the benefit of the powerful.
Engels stated that the force behind the commodity exchange (the process of
buying and selling) is compulsory competition. In applying this to the
commodification of crime and its role in the corrections-commercial complex, it
becomes clear that the media create the perception of more and new public needs
for crime control related commodities. As the scope of perceived needs
increases, the number of companies and level of competition increases also.
Generation of profit is dependent on increasing the commodities for exchange, so
consumers must be convinced that more commodities are necessities (versus wants)
and the cycle continues.
Scope and Types of Services
When discussing the goods and services
which private corporations produce and sell within the corrections industry, we
most often think in terms of selling to government operated prisons and jails.
"The cost of corrections is discussed primarily in terms of demand and only
then in terms of tax dollars spent on correction employees and operation
expenditures. These figures do not address the various private and corporate
interests which comprise the supply or commercial side of punishment."
(Lilly 1996:6). There are numerous privately provided criminal justice products
which are not directly tied to jails or prisons but are part of the larger
criminal justice industry.
Many of these companies do not consider
the sale of goods and services to penal institutions to be their primary
marketing interest, but they must also be considered when formulating a
comprehensive picture of the industry component of this complex. For example,
additional crime related commodities produced and sold by private corporations
to private consumers include: guns, firing range registrations, 24 hour safe
depositories, home and auto alarm systems, closed circuit TV security systems,
security lighting and fencing, property marking tools, and self-help books (Tunnell
Private Security and Prison Management Corporations:
Although private correctional
facilities represent only a small percentage of existing prison and jails, they
continue to be a hot political issue. They garner political advantage for
proponents through appealing not only to the public’s growing fear of
victimization but also as a quick fix for the huge economic responsibilities
created by "get tough on crime" policies.
The provision of core management
functions by private firms is referred to as operational privatization.
Wackenhut, founded by a former C.I.A. employee, was one of the first companies
to become involved in the operational privatization of prison facilities.
Wackenhut is an international corporation, supplying not only security but also
food, healthcare, education, rehabilitation, facility management, architecture
and design, construction, financing, staffing, screening and training of
employees and personnel management services. George R. Wackenhut, CEO, and
Richard Russell Wackenhut, President of Wackenhut Corporation, are also officers
for 22 other corporations, the majority of which are part of Wackenhut’s
worldwide network of correctional facilities.
Wackenhut Corrections, founded in 1985,
is majority owned by Wackenhut Corporation, a global enterprise, offering a wide
range of services in fifty countries. Wackenhut Corrections produces revenues in
excess of $150 million yearly. In 1995, Wackenhut Corrections was among Forbes
Magazine’s "200 Best Small Companies" with ten years of at least 10
percent growth. Standard and Poor’s "Register of Corporations, Directors
and Executives – 1995", reports sales of $664.16 million, 46,000
employees and an international marketing territory for the parent Wackenhut
Corporation. Its products and services include: security services (including
guards, airport pre-departure screening and court and airport checkpoint
screening), investigations, comprehensive operations and services for government
or private facilities, management of educational and job training facilities,
emergency medical and airport fire rescue services, armored cars and guards.
Based in Sarasota, Florida, Esmore
Correctional Services, Inc. is the third largest publicly held operator of
correctional and detention facilities with a 1996 compound average growth of 36
percent (Company Report 1996). Esmore is run by James Slattery, who was formerly
with the hotel industry and thus understands the all important link between
occupancy rates and profit. Slattery is one of the company’s founders and the
owner of approximately 20 percent of Esmor’s common stock. Michael Garretson,
the Chief Operating Officer, has several years of business experience including
two years as Sr. Vice President - Business Development for Wackenhut
Corrections, Director of Area Development for Infrastructure at EURODISNEY and
has worked with several land developers. Ira Cotter, Executive Vice President -
Finance, was a Vice President of Janney, Montgomery and Scott’s investment
banking department. Esmore is positioned to capitalize on any privatization
trend. Through a focus on the high per diem/low fixed cost end of the market,
Esmor has been able to maintain operating margins in excess of 35 percent.
The Corrections Corporation of America
(CCA) is the oldest and the largest private sector United States correctional
company. Their backers include the same investment firm that helped bankroll
Kentucky Fried Chicken franchises. Standard and Poor’s Register identifies CCA’s
primary business interest as the design, construction and management of
detention and corrections facilities and reports 1995 sales of $100.42 million.
CCA had a record year in 1996 with the highest operating income in the company’s
history. Revenues increased by 41 percent and net profits increased 115 percent
(Prison Privatisation Report International 1997).
On July 24, 1997, CCA announced second
quarter and six month net income growth of 66 percent and 86 percent
respectively on revenue growth in excess of 50 percent. Revenues in the 1997
second quarter were $107 million, up 59 percent from the second quarter of 1996.
Net income for the first six months of 1997 was $23.6 million, compared with
$12.7 million in the same period of 1996. (CCA: Letter to Shareholders 1997).
The exchange of government and industry
personnel typically found in a subgovernment is evident in the Corrections
Corporation of America. CCA has been linked to possible conflicts of interest
due to its close relationships with state and local officials in its home state
of Tennessee. Some of CCA’s original shareholders were influential state and
local politicians, including Governor Ned McWherter, Honey Alexander, the wife
of former Governor Lamar Alexander, and John Neff, Alexander’s insurance
commissioner. Also, after Hamilton County Commissioner Bob Long voted to approve
CCA’s proposal for the Silverdale Work House, Long’s pest control company
was awarded a CCA contract. After he left his government post, Long was hired as
a lobbyist for CCA.
Although Pinkerton’s Incorporated is
primarily associated with investigative and security services, Standard and Poor
(1995) identify the following additional business interests: personal
protection, ATM protection, background and workers’ compensation
investigations, consumer attitude and employee integrity testing, pre-employment
selection services. Pinkerton’s Inc. reported $772 million in sales and 45,000
employees for 1995.
Estimating the Size
of the Prison- Industrial Complex
The number and type of companies
involved in selling commodities and services to prisons and jails is one measure
of the commercialization of punishment in this country. Lilly (1996) examined
this question using the American Correctional Association (ACA) annual Buyers’
Guide for 1991 as his source of information. He then used Standard and Poor’s
Register of Corporations, Directors and Executives to identify additional
corporate interests of the companies who advertised in the Buyers’ Guide. The
findings identified the sales orientation of 87 percent of the companies as
national or international versus local or regional. This substantiates the
relevance of the American punishment industry for criminal justice in other
Following Lilly’s methodology, I used
the 1995 Buyers’ Guide to explore the number of companies and type of goods
and services they produce for sale to prisons and jails. I then used Standard
and Poor’s Register to determine these companies’ connections to other
corporations through the sharing of key personnel.
There were 303 companies listed in the
Buyers’ Guide Company Index and 131 companies in its Index to Advertisers. Of
the companies listed in the Index to Advertisers, 36 were also found in Standard
and Poor’s Register. Seventy-six additional companies were identified who had
the same key personnel as those found in Standard and Poor. This came to a total
of 112 companies.
Of the 36 core companies (those found
in both the Buyers’ Guide "Index to Advertisers" and Standard and
Poor) 34 reported sales information and 36 reported employee information for
1995. The sales for these companies totaled $37.234 billion and they employed
169,013 people. If Esmore, CCA, Wackenhut and Pinkerton’s are included, these
figures increase to $38.880 billion in sales and 305,213 employees. The
magnitude and diversity of the for-profit corporation component of the
corrections-commercial complex is further illustrated by the ACA Buyers’ Guide
Product Category Index which lists a total of 180 different corrections related
goods and services. This data illustrates the prominent role commercialization
plays in the field of criminal justice and emphasizes the need for inclusion of
the economic component in future research.
If the multitude of companies providing
criminal justice related goods and services is merely a response to a true
market need, further concern may not be necessary. Any decrease in demand would
simply mean these companies would pursue other markets for their goods and
services. What we see happening, however, is the expansion of the corrections
industry although the need is more perceptual than real. This misperception is
fueled by all forms of the media as well as political grandstanding focused on
re-election and power rather than the public good. Existing social inequalities
are exploited and reinforced to justify the continuation of ineffective policies
and thereby guarantee a permanent and expanding market for the products of the
The politicizing of crime and
punishment has turned a moral and social concern into an economic issue with a
corresponding loss of focus on the social outcomes. Politics cater to those who
have the power to re-elect and the political system which constructs corrections
policy does so in response to the people, organizations and corporations who
have that power. Therefore, policy does, and will continue to, reflect the
interests of an influential few rather than the public at large.
Politicians focus on the crime problem
as a diversion from larger social problems. They are not only supported but also
joined in this tactic by the corporations who stand to benefit financially as a
result of the existing social inequalities. As criminal justice strategies
target marginalized populations they ignore the social conditions which
contribute to crime. As more public dollars are diverted from social programs,
the prison becomes the key strategy for managing expanding numbers of
marginalized people. The combination of political rhetoric, media manipulation,
tax dollars and corporate profit motives translates punishment into a business
opportunity. When the focus of corrections becomes profit, crime and the
existence of the criminal become economic necessities and will be created to the
level needed to maximize corporate profit.
What are the moral and ethical concerns
related to relinquishing the mechanisms of punishment and crime control to
profit motivated corporations? There is a fundamental question of whether the
public good and the welfare of private corporations are compatible. By
definition, private corporations were not established for serving the public
good; they were established to generate profit for corporate owners and
shareholders. The bottom line is that a corporation is an entity without moral
motivation or conscience, and they are increasingly dominating the areas of
justice and punishment.
Durham (1989) also examined the issue
of possible consequences of the loss of enthusiasm for the benefits of reform
and the current focus on economic concerns relative to institutional
overcrowding. She suggests that by focusing on the private sector and economic
concerns, policymakers are able to ignore the need to develop alternative
methods of responding to the issue of crime. She also argues that, if history
repeats itself, a state which adopts private initiatives to address immediate
penal conditions may become dependent on the private sector resulting in the
continuation of commercial involvement even when the need diminishes. This
corresponds to one of the key characteristics of subgovernment politics -- the
quality of permanence in the relationship between government and private
The commercialization of criminal
justice goods and services exploits the symptom (crime) while ignoring the cause
(inequality of opportunity). The birth place inequalities which deny a large
segment of society equal access to the means of attaining the "American
dream" are the same conditions which are likely to produce crime. The
existence of a corrections subgovernment which advocates policies that reinforce
these inequalities may be considered a form of cultural violence.
Lilly (1996) suggests that the size and
nature of the corrections industry should, in itself, signal the need for
caution and that parallels can be drawn with the defense industry and
commercialization in general. Also, a simple review of the history of
privatization of correction services in America brings to light a history of
conflicts of interest, influence peddling, inmate abuse and political
entrenchment. Although we should learn from past experience, the continued use
and expansion of ineffective crime control strategies would indicate we have not
learned — and that we can expect the same problems to reoccur.
There should be little argument
relative to the existence of a corrections-commercial complex. The close working
relationship of participants, the sharing of high level personnel, industry
connections to major financial institutions, the overlap of societal interests
and the government policy making apparatus, and the development of permanence in
these relationships all point to the existence of a corrections subgovernment.
That this has occurred with very limited public awareness or scrutiny further
affirms the existence of a self-perpetuating, stable and insulated relationship
that responds to the interest of its participants rather than the public at
The magnitude of the corrections
industry, including its international aspects, highlights the need for focus on
the economic components of criminal justice in future research. To date there
appears to be a lack of research that examines all of the contexts in which
criminal justice operates (political, economic, social and moral) and then
integrates those aspects with the goal of developing policies which are more
responsive to true societal needs.
1. Some of the products and services
found in the international punishment market include: new communication
technologies, cross border prison and jail construction and management, food and
medical services, increased use of internationally linked data networks (Lilly
1996). The British media has also reported plans for some U.S. firms to do
international electronic monitoring of offenders in their English homes from the
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Gragg, Randy. 1996. A High Security,
Low Risk Investment: Private Prisons Make Crime Pay. Harper’s. August,
Irwin, Johm and James Austin. 1997. It’s
About Time: America’s Imprisonment Binge, 2nd ed. Belmont: wadsworth.
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Criminality: Private Prisons, Corporate Power and the Color of Crime. George
Lilly, J. Robert and Mathieu Deflem.
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and Delinquency v 42 #1, pp 3-20.
and Paul Knepper. 1993. The
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Prisons and Public Interest. Rutgers University Press.
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International. 1997. v 8, March.
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Eleven: recent Developments in the Commodification of Crime. Sociological
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Wideman, John E. 1995. Doing Time,
Marking Race. The Nation. v 261 #14, pp 503-506.
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