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Prison Profiteers - Ronald Fraser 2008

Ronald Fraser, April 10, 2008.
Book Review - Prison Profiteers - Ronald Fraser 2008

Firms jump on prison gravy train

By Ronald Fraser

Article Last Updated: 04/10/2008 08:36:22 PM PDT

In California's booming prison economy, there are winners and losers. Inmates face financial ruin and state taxpayers lose, too - about $26,000 per year, per inmate. Prison entrepreneurs, for whom each inmate is a government-subsidized business opportunity, are the big winners.

Growing nationally by 3.4 percent a year for the past 10 years, federal, state and local prisons hold 2.3 million inmates - one half of whom are nonviolent and small-time drug-law offenders. In 2006, there were 4,836 new inmates in California. From 2000 to 2005, the state's prison population has grown at a steady 0.9 percent per year.

California's annual taxpayer contribution for state prisons, $6.5 billion in 2005 and rising, keeps the prison market hot. Here is how that money is used to exploit the losers and enrich the winners:

Public jobs: Of the 720,000 state and local corrections employees in the U.S in 2005, 81,851 worked in California guarding 246,317 inmates. That means for every three new inmates locked up in California, one new corrections job follows. That is good news for job seekers but bad news for the three inmates who actually create each new job.

Private profiteers: A new book by Tara Herivel and Paul Wright, titled "Prison Profiteers: Who Makes Money from Mass Incarceration," tells how the prison gravy train actually works. In addition to supplying food, clothing and medical care, private companies profit in other, less visible, ways.

Here we learn from a University of Michigan professor how telephone companies and prisons charge extra high rates for collect calls from inmates. Once MCI, Sprint and others began competing with the Baby Bells and AT&T, end-user rates for collect calls from prisons went up, not down, as was the case in the nonprison market. Exclusive phone-service agreements went to firms offering price-gouging rates and large payments to operators of prisons.

In the 1990s, 90 percent of the correctional systems nationwide received a percentage of these telephone profits and, by 2000, the share going to the prisons ranged from 44 percent in California to 60 percent in New York.

Prisoners, of all people in the country, have the greatest need to rely on collect calls, especially to stay in touch with their families. What excuse is there for price-gouging these families, many of whom are already suffering the loss of a breadwinner?

Over 3,000 prisoners in California and nationally more than 85,000 inmates are held in private, for-profit, facilities. To sell their services in state capitals, we learn in another chapter that "Corporations with a stake in the expansion of private prisons invested $3.3 million in candidates for state office and state political parties in forty-four states over the 2002-04 election cycle."

On top of that, these companies support the American Legislative Exchange Council, an influential behind-the-scenes interest group working with state legislators to pass tougher sentencing laws that will increase prison populations.

Cheap labor: While U.S. laws prohibit importing products made by prisoners in other countries, Gordon Lafer, a University of Oregon professor, reports that about 80,000 U.S. inmates work in 30 states where laws permit private firms to use convict labor.

In Ohio, for example, a Honda supplier pays prison workers $2 per hour. These private firms do not pay for vacations, sick leave or overtime and workers can be dropped at will.

Liberty for sale: According to a recent New York Times article, bail bondsmen occupy a unique, for-profit niche in the American justice system. In all states except Illinois, Kentucky, Oregon and Wisconsin, to avoid going directly to jail an accused person must pay a bondsman a nonrefundable fee - often 10 percent of the bond - even if he or she appears for all court proceedings. In some states, the bondsman is even permitted to hunt down and capture a client who fails to appear in court, breaking into homes without a warrant if necessary.

What can be done to end this tax-subsidized prison gravy train?

First, the laws and policies made in Sacramento must stop filling state prisons with nonviolent drug users who should be in drug-treatment facilities, not prisons.

Second, the lawmakers must stop passing ever-longer, one-size-fits-all mandatory-minimum sentences that only tie the hands of courtroom judges and needlessly fill our prisons.

Until then, prison profiteers will continue to exploit both California inmates and its citizens in whose name the state prisons are built and operated.

Ronald Fraser, Ph.D., writes on public-policy issues for the DKT Liberty Project.