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Private Prisons for Dummies

Charles Thomas' Conflicts of Interest

Charles Thomas is before the Florida Ethics Commission for conflict of interest issues relating to his being on the Prison Realty Trust Board of Directors, a Florida government committee that oversees private prisons, and doing research (in which his affiliation is a University of Florida professor) showing private prisons to be cheaper and have lower recidivism. According to a newspaper account, the Florida Ethics Commission rejected as ''pitifully low" a settlement agreement that would have required him "to pay a $2,000 fine for a conflict of interest that brought him millions of dollars in compensation and investment gains from private prisons companies that had funded his research." They ultimately settled on a fine of $20,000. 

Thomas appeared as a third author of a study showing low recidivism rates from private prisons in Florida. Gilbert Geis and colleagues responded to this article in a 'case study' about Thomas and conflict of interest. They reviewed the Florida charge and also noted that Thomas should have had fuller disclosure about his ties to private prisons. The original authors have responded with a long & detailed article in the latest issue of Crime & Delinquency.

The original article by Lanza-Kaduce, Parker and Thomas (1999) identified all authors as affiliated with the Center for Studies in Criminology and Law, University of Florida. The research involved comparing recidivism rates from a sample of 198 inmates released from two private prisons (one Wackenhut, one CCA) matched to inmates released from seven public institutions. The ‘precision matching’ included gender, classification level, a 53 category primary conviction code, race, prior record, and age (1999, pp 32-33). They use multiple indicators of recidivism, which they also combine into an index.

They report the aggregate percentages as being 17% of inmates from private prison recidivate, compared with 24% of the public facility inmates (Lanza-Kaduce et al 1999 p 36). Within the matched pairs, they test the statistical significance of the difference in recidivism: “The lower recidivism among private releasees was unlikely to have occurred by chance for rearrest (p<.01), resentencing (p<.05), reincarceration (p<.10), or for any indication of recidivism (p<.10). Only the difference regarding technical violations proved to be statistically insignificant” (p 37). No justification is given for relaxing the typical .05 test for significance, an absence especially curious in light of their earlier caution: “All tests of statistical significance were conducted on nonprobability samples and should be interpreted with caution” (p 35). The authors also use the Wilcoxon (Gehan) statistic, using recidivism as the time to failure and find “the survival functions of the two groups did not differ significantly” (1999 p 39). Nevertheless, they conclude: “Only one conclusion can be drawn from the results: Private prison releasees were more successful than were their public prison matches” (p 42).

The Geis et al case study reports on a variety of comments about Thomas observation and additional concerns of theirs. The crux of the issue involves Thomas being the director of the Private Corrections Project, which is housed within the Center for Studies in Criminology. They argue he should disclose that the project is primarily industry funded (to the tune of $400,000) by private prison companies and that he receives a $25,000 summer stipend. Thomas became a member of the Board of trustees “of the CCA-offshoot Prison Realty Trust” from which he receives $12,000 a year, plus $1,000 for each board meeting and $500 for each meeting of subcommittees (1999, p 374). The authors note that an October 18, 1998 Securities and Exchange Commission Filing lists a $3 million fee to Thomas for consulting (p 380). In addition, Thomas owns 30,000 shares of the Realty Trust, which at the time of discovery were worth $600,000 (p 377). The company’s stock option plan has as its avowed purpose “to increase their propriety interest in the company” (quoted in Geis et al 1999, p 375). 

References for the articles are:

    Lanza-Kaduce, Lonn, Karen Parker and Charles Thomas. 1999 "A Comparative Recidivism Analysis of releases form Private and Public Prisons." Crime & Delinquency, v 45: 28-47.
    Geis, Gilbert, Alan Mobley and David Shichor. 1999. "Private Prisons, Criminological research, and Conflict of interest: A Case Study" Crime & Delinquency, v45: 372-388. [full text available free]
    Lanza-Kaduce, Lonn, Karen Parker and Charles Thomas. 2000. "The Devil in the Details: The Case Study of Private Prisons, Criminological Research and Conflict of Interest" Crime & Delinquency, v 46: 92-136.

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