Southern Changes

The Journal of the Southern Regional Council, 1978-2003

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Go to Article List for Southern Changes. Volume 8, Number 3, 1989

Cells for Sale

By Harmon L. Wray, Jr.

Vol. 8, No. 3, 1986, pp. 3-6

The rush to transfer government services and functions from public to profit-making hands has lately found its way to the "field" of incarceration and corrections. The current leader in this new growth industry is the Nashville-based Corrections Corporation of America, chartered in January of 1983 and financed by Hospital Corporation of America founder Jack Massey of Massey Burch Investments, Inc., the South's largest venture capital company. According to CCA president and former Tennessee Republican Party Chairman Tom Beasley, the Corrections Corporation of America alma to ~be to jails and prisons...what Hospital Corporation of America has become to medical facilities nationwide."

Declaring that "the market is limitless," Beasley (age 43) hopes to "solve the prison problem and make a lot of money at the same time." CCA currently has seven contracts to own and/or manage detention centers, treatment facilities, jails and workhouses for federal and local jurisdictions in several Southern states--three in Tennessee, one in Florida, two in Texas (for illegal aliens), one in North Carolina. But this is small potatoes compared with what CCA intends to do: take over the entire prison system of particular states, and prepare for a bid on the federal system. "The private jail market is ripe," reports Barron's, the business weekly. "And it is brokers, architects, builders, and banks-not the taxpayers-who will make out like bandits.. In less than a year, CCA has more than doubled the size of its staff, now at 500.

The proposal CCA made to the State of Tennessee in the fall of 1985 was the boldest move yet in prisons-for-profit and showed why the company is considered the most aggressive and well-connected of the capitalist corrections firms. CCA initially proposed to buy out and operate the state's prison system, under federal court order since 1982, as well as build and manage two new prisons (later expanded to five new institutions). Thanks to effective lobbying by the American Federation of State, County and Municipal Employees (AFSCME) and the American Civil Liberties Union of Tennessee, the CCA bid was tabled last year by the Democratically-controlled state legislature. The action came during a special session called for the prison crisis by Republican governor Lamar Alexander, a CCA supporter who once rented a garage apartment to law student Tom Beasley. Alexander has spent seven years overseeing an unconstitutional prison system but has never set foot inside one of his state's prisons.

This year, the General Assembly, under the influence of nine full-time, high-powered CCA lobbyists paid an estimated $100,000, passed a more moderate privatization bill. Before the session Tom Beasley had


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said, "I intend to get a chunk of this system." Soon he will: the 180-bed Carter County work camp opens September 1, probably under CCA operation. But the legislation (which AFSCME plans to challenge in court) prohibits further privatization of Tennessee prisons for three years.

The ambitions of Beasley and other prison entrepreneurs are not limited to Tennessee. In fact, once CCA lost its bid for all Tennessee prisons, it pursued a smaller "chunk" primarily in order to avoid the embarrassment of having no home-state contracts to advertise in its sales pitch to other jurisdictions. Last December Beasley said that if the Reagan administration decided to sell the federal prison system (as the The Wall Street Journal had just reported it might), CCA would make an offer. CCA was one of three firms bidding for the multi-million dollar Moundsville, W.Va., prison, site of a New Year's Day prisoner rebellion. Reportedly, CCA has been working on proposals for state prison systems in Florida, North Carolina, Texas, Georgia, Louisiana, Misissippi, and Kentucky, as well as several western states. At this writing, CCA contracts to operate jails are pending in Sante Fe, N.M., and Key West, Fla. Meanwhile, CCA's Tennessee competitor, Corrections Associates Inc. (CAI), recently landed Tennessee and Alabama county jail contracts and a prison consulting contract with the Alexander administration. CAI's good fortune came on the heels of the resignation of its new president, Hubert McCullough, as Governor Alexander's finance commissioner.

The McCullough-Alexander connection is only one of many personal, business, and political linkages evident in the prisons-for-profit field. Like CAI's McCullough, CCA lobbyist Tom Ingram, 39, a former journalist and social worker, has been a prime mover with the anti-labor Tennessee Business Roundtable. Ingram also managed Alexander's two winning gubernatorial campaigns and served as his chief-of-staff for four years before forming his own public relations and business consulting firm. Others in the CCA-Alexander circle include CCA stockholders who are current and former Alexander cabinet officers, CCA administrators who are former state GOP chairpersons, a CCA lobbyist who was a Democratic state senator, and two prominent public figures who in 1985 sold their CCA stock to avoid the appearance of conflict of interest: Honey Alexander (the governor's wife held $5,000 of stock) and House Speaker Ned Ray McWherter ($33,000), the Democratic nominee to succeed Alexander. In this fall's general election, McWherter faces former Republican governor Winfield Dunn, a Memphis dentist who became a multi-millionaire as an executive for Hospital Corporation of America. Both Dunn and McWherter have called for the state to experiment with private operation of some prisons.

Another connection is the US Military Academy. Before graduating from Harvard's law and business schools, CCA treasurer and major investor Doctor R. Crants was Beasley's West Point roommate. CCA stockholder Samuel W. Bartholomew, of the Nashville law firm Donelson, Stokes &Bartholomew, was their classmate ('66).

Three of Bartholomew's children are also stockholders. Another West Point alum and major CCA investor is T. Don Hutto, the corporation's executive vice-president. Hutto, an ex-prison guard who became commissioner of corrections in Virginia and Arkansas, has since 1984 been president of the American Correctional Association, which oversees prison accreditation standards. Unlike other corrections-related professional associations-the National Sheriffs Association, the National Conference of State Trial Judges, the National Association of Criminal Justice Planners, and the American Bar Association--the ACA under Hutto's tenure has supported prison privatization.

While the prisons-for-profit trend has national dimensions, CCA leadership has focused much of the attention onto the South, where all of CCA's current contracts and most of its financial backers are located (investors include Vanderbilt University, Hospital Corporation of America, and that symbol of public service delivery, the Tennessee Valley Authority, itself often the target of privatization initiatives). Many members of CCA's management staff have worked in corrections departments in Southern states, including Virginia, Louisiana, Texas, and Alabama.

Critics of corporate punishment have raised a number of issues which call the privatization trend into serious question. Tennessee Attorney General Michael Cody and the ACLU National Prison Project note that the state would retain ultimate legal and fiscal responsibility for assuring private prisons' compliance with state and federal constitutions and court orders. It also appears clear that governments cannot contract their civil liability to private concerns. Noting CCA's lack of a track record in operating a state prison for long-ternm adult offenders, Cody also questions its estimates of operating and capital expenses and doubts the state's


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ability to buy back its prisons in case of a private firm's bankruptcy, incompetence, or unwillingness to continue. Cody suggests that privatization might encourage the public to believe, mistakenly, that Tennessee can solve its corrections problems simply by building more prisons.

A 1985 Tennessee legislative report points out that privatizing does not mean that construction costs are not a liability of the state; rather, the liability has been deferred." Mark Gray of AFSCME wonders if an artifically low cost presented in an initial contract would lead to government dependency on the private firm, making it "impossible to resume operations in the future without huge capital investments. The private contractor is then in a position to raise its prices" in order to maximize profits. Former Minnesota corrections chief Ken Schoen has pointed to "defense" contractors' use of similar tactics as a way of "capitalizing on the public's fears to assure an ever-expanding system, while the basic insecurities remain."

Closely associated with such economic concerns is the question of just how a private firm will be able to operate prisons as inexpensively as it claims. Public employee unions like AFSCME and the Tennessee State Employees Association point to workers' loss of civil service rules and benefits under private prison managers, along with the possibility of lower wages, a minimal workforce, an anti-union atmosphere, and inadequate training of correctional officers. It may be no accident that corrections capitalists' favorite hunting ground for contracts has been the historically low-wage and under-unionized South. And, whether they are called "prison guards" or "correctional officers," those workers who staff our society's cages are already among the lowest paid of all government employees.

Certainly, prisoners themselves could suffer harmful effects from possible cost-cutting for the sake of profit maximization. CCA's initial proposal to Tennessee proclaims the intention of developing a "full-employment economy within the correctional system." Given the history of Tennessee's and other Southern states' "privatization" and "profitization" of prisons, one might be excused for expecting some contemporary variations on the old convict lease systems and chain gangs. Journalist Ronnie Dugger's discomfort over the proposed privatization of the Texas prison system might also apply to other Southern states: "In the company prison, we will be putting state-sentenced inmates under the command of the employees of the corporation and forcing the state-sentenced inmates to labor for the profit of the corporation. What will keep a privately-owned Texas prison from being in its very nature a state-created system of slave labor for private profit?" Constitutionally, slavery is legal as punishment for crime, and our Southern prison populations are, of course, overwhelmingly poor and disproportionately black and Hispanic.

Apprehensions on the part of prisoner advocates and those who abhor slavery may not be unfounded when one considers the professional history of T. Don Hutto, the man CCA touts as its foremost corrections expert. The CCA's executive vice-president's career includes a stint as warden of the Ramsey Unit in Huntsville, Texas, in the 1960s, when the system of using inmates to guard and discipline other inmates, later outlawed in federal court, was "at its strongest," according to the Texas Observer. A 1985 article in The Nation reported that during Hutto's tenure as corrections commissioner in Arkansas the US Supreme Court ruled that state's prison system unconstitutional and found that officials "evidently tried to operate their prisons at a profit." "Inmates were required to work on prison farms ten hours a day, six days a week, often without suitable clothing or shoes, using mule-drawn plows and tending crops by hand....Punishment for minor misconduct included lashing with a wooden-handled leather strap...and administering electric shocks to 'various sensitive parts of the inmate's body.' The trial court called the prisons 'a dark and evil world completely alien to the free world.'" When confronted with this criticism, a CCA offical responded that The Nation essay was "a libelous article" and that Hutto had in fact cleaned up the unconstitutional Arkansas system.

The questions raised by Hutto's track record and by a look at the history of profit-making out of the hides of prisoners were echoed by Michael Walzer in The New Republic: "Helpless men and women have never fared well at the hands of profit-seeking entrepreneurs. The incentive system is all wrong. Who will look after the interests of prisoners? Who will be watching the prison owners as they run their 'own' business?"

Prisoners and their advocates in many Southern states lock at the decades of class-action litigation efforts to remedy their unconstitutional prison systems (now ten years in Tennessee) and wonder how much longer it would have taken had the prisons been


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privately owned during that time. The potential for foot-dragging and buck-passing would surely increase substantially under private ownership and implementation of state functions. The Tennessee Senate Speaker's favorable response to the privatization concept speaks volumes: "If somebody else ran it, somebody else would be in court. We wouldn't."

An analogy with recent corporate mobility trends, another point made by Walzer, is especially striking when seen in a Southern context: "This is probably the chief economic advantage of privatization-that it offers a (temporary) escape from the enforcement of constitutional norms. The resulting savings are like the profit added when a factory moves from a union to a non-union territory. If the union catches up, the old situation is restored. Similarly, if the courts catch up, we will find oursleves again where we are now, with judges struggling to do what state legislatures and Congress ought to do-reform the prison system."

Perhaps the most critical flaw in the privatization move is that it is inherently expansionist. A corporation paid per prisoner and per diem will look to lock up more and more people for longer and longer stretches. Recall the historic Southern practice of determining the county sheriffs' pay according to their jail counts. CCA's Tennessee proposal assumed a steadily expanding prison population (despite the falling crime rate), and its preferred per diem method of being paid has already led to cost overruns for local taxpayers at its Chattanooga penal farm.

The US locks up a larger percentage of its population than any country in the world, with two exceptions: South Africa and the Soviet Union. Some of our Southern states rank even higher than those nations. We ought to be reducing our costly, ineffective, cruel, race- and class-biased overreliance on incarceration in favor of community-based alternative sentences for non-violent offenders, such as victim restitution programs. Other effective alternatives to incarceration include intensive probation, community service work, victim-offender mediation, and required drug and alcohol treatment, GED preparation, vocational training, and job placement. Such options are used frequently with white collar criminals, but perpetrators of street crimes are scarce in these programs.

Organizations such as AFSCME, the American Civil Liberties Union, the National Sheriffs Association, the Vera Institute of Justice, and the National Association of Criminal Justice Planners have all voiced the fear of an inevitable expansionism in this new "growth industry." Vera Institute's Michael Smith, noting that "the private sector has an enormous investment in stimulating demand," fears corporate advertising campaigns to heighten the public's fear of crime and trigger a "lock 'em up" reaction resulting in an increasing number of cages, captives, and dollars.

NACJP director Mark Cunniff, calling CCA's Tennessee takeover proposal "incredible," points out that "private contractors can lobby in ways that a public agency cannot." When those doing the lobbying are close friends and political advisers of governors and legislators, many of the traditional lobbying techniques will be unnecessary.

Perhaps Ken Schoen has put it best: "Private operators whose growth depends upon an expanding prison population may push for ever harsher sentences. With the public's unabating fear of crime, and the lawmakers shrinking from any move that appears to be soft on criminals, the developing private prison lobby will be hard to resist. Any drop in the crime rate will be attributed to long prison sentences. An increase will add weight to the call for more prisons. And the taxpayers will finance the profit-makers while double-locking their doors at night."

Michael Smith says that the scenario sketched out above "worries me enough so that I want to look first at making government innovative and responsive." This points toward a possible third option, between the inefficient and incompetent status quo and the CCA-type prisons-for-profit. Walzer suggests, "...we should deputize nongovernmental agencies to perform some prison-like functions....we all might benefit, prisoners, too, from a little flexibility, unorthodoxy, experimentation. But this will have to be the work of nonprofit agencies, with publicly recognized programs and explicit authorization. We should not be contracting out, as if these were not our prisoners; we should be bringing new ideas into the orbit of public service."

The most reasonable conclusion to be drawn from all this is simply that the citizens and legislatures of our Southern states should avoid the new "dungeons for dollars" game like the plague. The privatization debate distracts us from the real issue of our society's failure to deal with crime in any way other than a knee-jerk, repressive fashion. This is especially true in the South, which tends to have the highest incarceration rates, the longest sentences, and the most executions.

Most citizens-white and black, rich and poor, male and female-regularly report that crime and punishment constitute one of the most salient and urgent issues in their lives. Almost no one, however, is satisfied with our criminal justice system as it is.

As I have suggested, there are alternative approaches to the issue of crime and punishment, but only a few prisoners, lawyers, academics, and prison reform advocates seem to know or care much about them. As in the field of health, our society's primary approach to crime ought to be a preventive, environmental, "public health" strategy. The implications of this approach reach beyond even such a necessary action as the denial of easy handgun access. We must resist and recast the media glorification of violence, insist upon economic and political equality irrespective of race and sex, confront the climate of national militarism, and reconstruct an American culture and economic system propelled by human greed. Meanwhile, we will continue to have to lock up violent, dangerous offenders, but, for the many others, our motto should be "from the cage to the community," which is largely where the problem is and must be dealt with. We must refuse the exploitation of public hysteria and institutional fatigue by the entrepreneurs of captivity.

Harmon L Wray, Jr., lives in Nashville where he is a staff consultant with Project Return and teaches prison ministry at Vanderbilt Divinity School.

Go to Article List for Southern Changes. Volume 8, Number 3, 1989

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