Legal Research

Private Prison Firms Profit As Inmate Rolls Continue Upward

By David Badertscher, PLL

Source: Crime and Justice News, March 11, 2008.

"Crowded U.S. prisons and jails jails have triggered a profit boom for corrections companies, reports Agence France-Presse. Harsher sentencing policies have put more criminals behind bars and prison management firms such as the Corrections Corporation of America (CCA) and The GEO Group are racing to build new jails or expand existing facilities. CCA, the largest U.S. private prison operator, is spending $205 million to build a new prison in Eloy, Az., to house 3,060. It is constructing a $105 million jail near Natchez, Ms., to hold 1,668. "As states struggle with overcrowded facilities, growing populations and no meaningful supply of beds coming online, they are finding that private correction companies [] can deliver beds more quickly and less expensively than they can develop themselves," said CCA chief executive John Ferguson. CCA's profits swelled to $35 million in the fourth quarter of last year, rising from 32 million in the same period of 2006, as revenues jumped to $382 million."

"George Zoley, The GEO Group's chief executive, told analysts on a conference call in February that 2007 had been a bonanza year and predicted that "2008 will be an even better year" as more detention facilities are filled. Its profits rose 10 percent to $11.5 million during the fourth quarter of 2007. The GEO Group is expanding a leased detention center it manages in Clayton County, Ga. so it will be able to house almost 200 extra inmates, and executives have said they are pursuing contracts in Britain and South Africa. Tennessee-based CCA; The GEO Group, headquartered in Florida; and Cornell Companies, based in Texas, have recruited veteran money managers and former federal officials to bolster their executive and lobbying clout. Whether companies or the government can run prisons more cost-effectively is difficult to say. The Federal Bureau of Prisons 'does not have the data necessary to do a methodically sound cost comparison of its various alternatives for confining inmates in low- and minimum-security facilities,' the Government Accountability Office said in October. "

Agence France-Presse

Full post as published by New York Supreme Court Criminal Term Library on March 11, 2008 (boomark / email).