Matthew T. Mangino
November 25, 2016
Just in the nick of time, President-elect Donald Trump may be the savior that a beleaguered private prison industry was longing for. With prison reform in many states focusing on reducing prison population, and in turn prison costs, the private prison industry was taking a hit.
Recent years have not been kind to the private prison industry, culminating in a Federal Office of Inspector General report that revealed serious safety and human rights concerns with private prisons. The Inspector General found, compared with government-run facilities, that private prisons had a higher rate of assaults, security incidents, solitary confinement, and gaps in medical care.
As a result of the report, the Barack Obama Administration announced it would close its private prisons. The Department of Homeland Security, which uses private prisons for immigration detention facilities, indicated the same.
Then came Trump’s stunning victory, private prison stock soared — CoreCivic Co., formerly Corrections Corporation of America, saw the biggest gain on the New York Stock Exchange with shares climbing 43 percent.
Just how bad were things in the private prison industry?
A prime example is Texas, where the private prison boon came crashing down in recent years. As the public sector’s need for private prison beds had diminished, the tally of failing prisons in Texas increased.
The bust is most evident in rural Texas, where more than a dozen once-profitable facilities have failed. At least seven of them, which together borrowed nearly $200 million, are in arrears on bond payments, according to figures from Municipal Market Analytics, a bond-research firm, reported the San Antonio Express-News.
In Polk, Newton, Dickens, Jones, Palo Pinto, Limestone, Lamb, Dallas, Jefferson and Burnet counties, former private prisons are either empty, losing money or are being converted to other uses.
A major source of the decline in prison population has been immigration enforcement. In 2000, the U.S. Border Patrol apprehended 1.67 million people; by 2014 the figure had dropped to fewer than 487,000, and has remained low, reported the Times News.
A Trump Administration is poised to change immigration enforcement in a big way and with it the fortunes of the private prison industry.
The president-elect pledged during a recent “60 Minutes” interview that he would prioritize the removal of “probably two million, it could be even three million” criminal aliens. The removal process will require mass incarceration and private prisons will be the answer.
Private prisons are out to make a profit. That profit is made on the backs of taxpayers. They have no incentive, like government run prisons, to explore alternatives to incarceration, such as electronic monitoring, half-way houses or other diversionary efforts to reduce the number offenders behind bars. The Texas-based criminal justice blog Grits for Breakfast once revealed a portion of CoreCivic’s annual 10-K report filed with the U.S. Securities and Exchange Commission. CoreCivic acknowledged that the company is “dependent upon the governmental agencies with which we have contracts to provide inmates for our managed facilities. We cannot control occupancy levels at our managed facilities ... a decrease in our occupancy rates could cause a decrease in revenues and profitability.” The report continues, “The demand for our facilities and services could be adversely affected by … leniency in conviction or parole standards and sentencing practices.” CoreCivic did not ignore the threat of leniency or a reduction in occupancy. According the Chattanoogan, citing a report from the National Institute on Money in State Politics, CoreCivic hired hundreds of lobbyists and spent many millions of dollars on lobbying in an effort to orchestrate a private prison resurgence.
That money and effort has paid-off. The private prison industry has weathered the storm, and four years of President Trump promises to enrich the industry beyond its most optimistic expectations.
Matthew T. Mangino is of counsel with Luxenberg, Garbett, Kelly & George P.C. His book, “The Executioner’s Toll, 2010,” was recently released by McFarland Publishing. You can reach him atmattmangino.com and follow him on Twitter at @MatthewTMangino.
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