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Private prison companies are facing up to the realities of criminal justice reform — and how it could hurt their bottom lines if they don't rethink their approach soon.
As more states and the federal government have enacted reforms to decrease the number of people in costly, overcrowded prisons, private prison companies have invested in the services that many new criminals will be pushed to instead of prison — probation, parole, and halfway houses.
Bloomberg's Matt Stroud reported on the moves of two of these companies, GEO Group and CCA, both of which pulled in a combined
$3.3 billion last year:
GEO Group in 2011 acquired Behavioral Interventions, the world's largest producer of monitoring equipment for people awaiting trial or serving out probation or parole sentences. It followed GEO's purchase in 2009 of Just Care, a medical and mental health service provider which bolstered its GEO Care business that provides services to government agencies. "Our commitment is to be the world's leader in the delivery of offender rehabilitation and community reentry programs, which is in line with the increased emphasis on rehabilitation around the world," said GEO chairman and founder George Zoley during a recent earnings call.
For $36 million in 2013, CCA acquired Correctional Alternatives, a company that provides housing and rehabilitation services that include work furloughs, residential reentry programs, and home confinement. "We believe we're going to continue to see governments seeking these types of services, and we're well positioned to offer them," says Steve Owen, CCA's senior director of public affairs.
The common refrain, as outlined by a 2011 report from the Justice Policy Initiative, is that private prison companies have hugely benefited from mass incarceration, since they're paid for each prisoner they hold. And as they've benefited, they've used the proceeds to lobby lawmakers to not carry out prison reforms, so they can keep a steady flow of prisoners.
But this diversification shows that private prison companies aren't necessarily all in for mass incarceration anymore. They're developing other options, too — although they'll still rely on a steady flow of people under correctional supervision like probation, parole, and home arrest to boost profits.
Still, private prisons are poised to get increased profits from at least one kind of incarceration in which they've heavily invested: the detainment of undocumented immigrants. A 2014 Government Accountability Office analysis found that the number of non-citizens in immigrant detention nearly doubled between fiscal years 2005 and 2013. And US Immigration and Customs Enforcement (ICE) has a mandate to keep 34,000 detention beds available — although Secretary of Homeland Security Jeh Johnson has said this is a mandate to keep the beds, not necessarily fill them.
