Montpelier, Vermont State House 25 January 2013 Testimony on H.

28 (bill banning private prisons) Christopher Petrella

Good afternoon Representative Wizowaty and other distinguished members of the Vermont House Progressive Democratic Caucus. I truly appreciate your invitation and this opportunity to offer testimony on H.28. Id like to begin by saying that I unhesitatingly support H.28a bill whose passage would prohibit the transfer of Vermont inmates to a privately owned or operated out-of-state correctional facility unless living conditions at that facility meet or exceed those in Vermont. http://www.leg.state.vt.us/docs/2014/bills/Intro/H-028.pdf The success of H.28, in my view, will be contingent on how well youre able to frame policy discussions in your own terms, that is, in terms un-inherited from the private prison industry. Historically, the private prison industry has been expert in crafting policy discussions that consign usits criticsto a certain reactionary politics that the public finds distasteful.

We critics of prison privatization far too often undermine our own arguments by working within policy parameters dictated to us by apologists of the industry. The time has come to flip the script.

My chief intention today isnt necessarily to insist that public prisons are better than private prisons, but to demonstrate that the burden of proof for evaluating correctional services on the basis of efficiency rests not with us but rather with advocates of privatization. The industry has had over thirty years to demonstrate that it can provide better services more efficiently than its public counterparts and yet to date there isnt a single, independent, and methodologically transparent national study that suggests it can. Nevertheless, the for-profit prison industry insists that privatizationor extending the reach and influence of the free marketwill generate efficiencies as companies respond to market pressures.

In the early 1990s Corrections Corporation of America (or CCA)now the nations largest forprofit corrections firm (and the firm with which Vermont presently contracts)predicted that it would operate around 20 percent of the U.S. corrections market by the year 2000. http://www.privateci.org/ That today it barely operates 4 percent legitimately calls into question the market value of its services. http://www.bjs.gov/content/pub/pdf/p11.pdf In some senses the private corrections industry falls victim to its own performance metrics: its relatively sluggish historical growth rate actually suggests that it responds inefficiently to market pressures. This is precisely why large private prison companies spend millions of dollars each year encouraging lawmakers to establish artificial markets for their services. Unfortunately, much of the irony is lost on the public.

I mention these contradictions because theyre worth exploiting in political debate, particularly as the country begins to lock its eyes on Vermont. Ive gotten no less than fifty e-mails over the last few days on the subject of H.28. The nation is curious and concerned and everything in between. If this bill is enacted, Vermont will join a short list of statesthreethat effectively statutorily ban private prisons. http://www.mintpress.net/kids-for-cash-scandal-exposesmore-corruption-in-private-prison-system/ Part of the politics of this process, I think, is underscoring the reality that private prison companies have yet to prove their worth in the market, in court, and as Dr. King might say, in the court of public opinion. This argument is best made by demonstrating to Vermonters that prison privatization inherently compromises the state D.O.C.s ability to meet its fundamental aims, that is, to show that CCAs business objectives stand at cross-purposes with the D.O.C.s four-part strategic mission of 1) prioritizing offender safety, 2) offender rehabilitation, 3) community safety, and 4) community involvement and restoration. http://www.doc.state.vt.us/news-info/news-files/plan-1/view The imperative to generate shareholder value intrinsically situates safety, rehabilitation, and community building as ancillary concerns. Underscoring this hierarchy of values as often as possible is paramount.

Many ask, but wheres the proof? Perhaps youre aware that CCA (and the GEO Group, for that matter) is in the process of reclassifying itself with the IRS from a traditional class-c corporation whose mission is correctional solutions to a Real Estate Investment Trust, or a REIT. According to the Securities and Exchange Commission, a REIT is a company that owns and typically operates - income-producing real estate or real estate-related assets as its primary business. To qualify as a REIT, a company must have the majority of its assets and income tethered to real estate investment. A REIT distributes at least 90 percent of its taxable income to shareholders annually in the form of dividends in exchange for a federal and state corporate income tax rate of zero. That is, companies organized as REITs dont pay corporate taxes. http://truth-out.org/news/item/9499-how-americas-largest-private-prison-operator-plans-tobeat-corporate-income-tax CCAs quest for REIT a status designation shows that the company primarily sees itself as a real estate firm that incidentally dabbles in corrections, not as an agency whose primary objective is rehabilitation, safety, or community restoration. This emerging REIT conversion narrative is chronically underreported but I believe its worth highlighting in the context of H.28 deliberation.

As a short aside, the language of real estate here is particularly troubling in light of the fact that people of colorspecifically African Americans who were once legally reduced to chattel, that is, to real estateare over-represented in CCAs facilities around the country. http://thesocietypages.org/socimages/2013/01/25/race-rehabilitation-and-the-private-prisonindustry/

Though private prison companies like CCA and the GEO Groupthe second largest firmoften advertise themselves over and against the supposed inefficiencies of bureaucratic, big government they heavily rely on contracts from big government agencies likes the Bureau of Prisons, ICE, and USMS to expand their margins. Over 40 percent of both CCA http://ir.correctionscorp.com/phoenix.zhtml?c=117983&p=irol-reportsannual and GEO Groups http://phx.corporate-ir.net/phoenix.zhtml?c=91331&p=irol-reportsannual revenue last year originated in big government, taxpayer-funded contracts.

In debating ideas like cost-effectiveness, efficiency, safety, and rehabilitation its vitally important that decision makers can access impartial and methodologically transparent information about the real costs and benefits of privatization. Id love nothing more than to provide you with a national independent analysis of the performance of private and public prisons in the categories of cost-effectiveness, recidivism, and transparency. Unfortunately, I cannot. Why? Well, because they dont exist. Why? Because its very difficultnearly impossible, I might add based on personal experienceto access information pertaining to privatized corrections when they arent obligated to collect or reveal such data upon request.

Though the private prison industry routinely vaunts its record on measures of efficiency and safety relative to public agencies, it nonetheless refuses to disclose the very information required to substantiate its most basic claims of success. Given that private prison corporations are not required to make their records public, its impossible to offer a full, national quantitative comparison of public and private prisons housing similar types of offenders. And this is key: similar types of offenders. This, for example, is precisely why Im spearheaded a national campaign aimed at urging Texas Congresswoman Sheila Jackson Lee to reintroduce the Private Prison Information Act this Congressional session. If enacted, the bill would require that private prison companies contracting with federal agencies comply with Freedom of Information Act transparency requirements like their public counterparts. This is the first step in supporting the type of data collection necessary to make accurate national public/private comparisons. http://privateprisoninformationactof2013.blogspot.com/

If a company like CCA believes its more efficient than Vermonts D.O.C., then why has it spent over $8 million lobbying against the passage of the Private Prison Information Act since its initial introduction in 2005? http://www.opensecrets.org/pacs/lookup2.php?strID=C00366468 Theres little evidence to suggest that taxpayers and lawmakers can access the type of data necessary for evaluating the performance of private corrections firms in comparison to the public sector. The fact that these reports are so difficult to obtain reveals a dangerous lack of

transparency and accountability among private prison companies that have and/or currently contract with the state of Vermont. Such an analysis is long overdue given that the state has invested millions of taxpayer dollars into this industry for over a decade.

As you know, behind only New Mexico, Hawaii, and Montana, the state of Vermont now houses the largest proportion of its inmates28 percentin prisons owned or operated by forprofit corrections firms. http://www.nationofchange.org/truth-about-private-prison-contracts1348147617 Vermont, in fact, recently renewed its two-year, $24.9 million contract with CCA. According to the terms of the agreement, CCA will house nearly 600 of Vermonts youngest and healthiest inmates in Kentucky and Arizona-based facilities from July 2011 to July 2013. Its difficult to accept the Vermont D.O.C.s claim that out-of-state, private prisons cost $30,000 less per inmate, per year, without asking follow-up questions. http://www.doc.state.vt.us/about/reports I, for one, have been unable to access the methodology on which the study is based. CCA has long been known for cherry picking prisoners to house that are low cost, specifically excluding elderly prisoners, maximum-security prisoners, death row prisoners, juveniles sentenced to adult prisons, female prisoners and, more generally, those prisoners with chronic medical conditions. Each of these inmate categories are more expensive to incarcerate, usually due to increased medical and security costs. Inconsistent selection criteria make reasonable, empirical cost comparisons extraordinarily difficult.

Vermont actually acknowledged this fact in a report entitled Plan to Reduce Correctional Costs and Achieve Savings for Reinvestment presented to the Joint Correction Oversight Committee on 12 December 2007. Page 49 of the report reads: The criteria for inmates accepted for housing at CCA are not likely to change. The CCA facilities do not accept seriously physically or mentally ill offenders, or offenders whose behavior is exceptionally disruptive or who cannot conform to rules. In many of CCAs facilities, the classification system is influenced by host state departments of correction, and has increased levels of criteria for exclusion. http://www.doc.state.vt.us/news-info/news-files/plan-1/view

However, because state prison systems must incarcerate all such offenders, the per-diem cost for public prisons is skewed upwards while the per diem rate for private prisons is kept artificially low. Whereas publicly chartered D.O.C.s are responsible for ensuring the safety and well-being of every type of prisoner, CCA simply circumvents such obligations by requiring the states with which it contracts to retain the least compliant, and, therefore, the most financially burdensome individuals. Private prison firms essentially shift such risk back to state D.O.C.s and taxpayers. How efficient is a privatized system of corrections that willfully omits inmates for whom medical careespecially mental health carewill be most costly? Effectively requiring state departments of corrections to provide reasonable mental health care to vulnerable populations represents a significant externality that private prisons regularly refuse to absorb. Not only is contractually pre-selecting inmates worthy of mental health care services in privatized facilities morally opprobrious, but its a tacit admission that arguments of efficiency advanced by the for-profit corrections industry fail to account for externalities assumed by the public. Drawing equal linkages between unequal circumstances is an exercise in illogic.

Though current national comparative studies are non-existent as a result of the current FOIA exemption enjoyed by private prison companies, a number of state-by-state studies do exist. This is because its sometimes possible to circumvent FOIA exemptions by requesting information through various state public records acts. To this end, studies published by state D.O.C.s in Kentucky, Hawaii, Ohio, Tennessee, and Oklahoma each found that private prisons are no more expensive than public facilities in those states on the basis of the same evaluative criteria. And similar efficiency studies in Arizona and Florida actually found private prisons to be more expensive than publicly operated facilities. http://www.azjournal.com/2012/01/04/corrections-evaluates-both-private-and-public-prisons/ When the New York Times asked CCA spokesman Steve Owen back in 2011 to comment on Arizonas landmark study he said, (and this is a direct quote), There is a mixed bag of research

out there. Its not as black and white and cut and dried as we would like. www.nytimes.com/2011/05/19/us/19prisons.html?pagewanted=all

Again, the burden of proof for contract correctional services rests not with us, but with the private prison industry. http://afsc.org/sites/afsc.civicactions.net/files/documents/AFSC_Arizona_Prison_Report.pdf

Beyond cost-effectiveness, how do private prisons fare on the sort of scales of comparison articulated by the Vermont D.O.C. like safety, rehabilitation, and community involvement? Ill very briefly address each criterion.

Lets begin with offender safety: The only national comparative research on offender safety is from a 2001 Bureau of Justice Assistance study which found a significantly higher rate of prisoner-on-prisoner assault in private prisons (66% more) than in public prisons. The same study suggested that inmate-on-staff assaults were 49% higher in the private prisons. http://afsc.org/sites/afsc.civicactions.net/files/documents/AFSC_Arizona_Prison_Report.pdf In 2011 the state of Tennessee found that incident rates (assaults, escapes, etc.) were consistently higher at the states three private prisons, all operated by CCA. This was in spite of the fact that the state prisons housed higher security prisoners. Also in 2011, an Associated Press report found that one CCA facility in Idaho had more assaults than all other Idaho state prisons combined. http://afsc.org/sites/afsc.civicactions.net/files/documents/AFSC_Arizona_Prison_Report.pdf This is often attributable to staffing challenges. Because private corrections companies achieve their profits by winning low-bid contracts, they generally preserve their bottom line by making significant cuts in staff pay and training. Private prison companies consistently pay staff less than states or the federal government. They often offer minimal staff training, which can leave employees frustrated and unprepared to handle crises, thereby compromising inmate, staff, and community safety.

As a result, privately operated facilities frequently have very high employee turnover rates and are chronically understaffed. The combination of these factors not only produces a challenging work environment, it can also make these facilities genuinely unsafe for staff, inmates, and the community. In Florida, which, unlike Vermont, tracks staff turnover rates at private prisons, GEO and CCA had a 34 percent turnover last year, compared with 12 percent in Florida state prisons. The Texas Senate Criminal Justice Committee's interim report on private prisons in 2009 found that the seven private prisons contracting with the Texas Department of Criminal Justice had a 90 percent turnover rate, compared with the 24 percent rate at state-operated prisons. http://afsc.org/sites/afsc.civicactions.net/files/documents/AFSC_Arizona_Prison_Report.pdf The report stated: "The wages and benefits paid to employees of private contractors are generally lower than that paid to employees of state-operated facilities... Correctional officer salaries in the private prisons vary among facilities, with the highest peaking at slightly more than $24,000 annually." http://afsc.org/sites/afsc.civicactions.net/files/documents/AFSC_Arizona_Prison_Report.pdf Anyone with an appreciation for economics will acknowledge that a high employee turnover rate indicates a serious management problem. In the case of a prison, the impact of these management problems can extend far beyond a few disgruntled employees. Corrections is a field in which good training and solid experience can literally mean the difference between life and deathfor the employee, inmates or even members of the surrounding community. Lets move on to rehabilitation. The most common measurement of the efficacy of a prison is its ability to reduce recidivism, that is, the likelihood that a recently released offender will return to prison in a given time period, usually three years. Unfortunately, private prison corporations flatly refuse to measure their recidivism rates, yet its critical that the people of Vermont and elected representatives have solid data on which to base important decisions about the future of your states prisons. Over thirty non-partisan university studies since 2000 have found that access to and participation in educational programming reduces recidivism rates by 6-30 percent depending on how far projections are extended. http://www.wsipp.wa.gov/

Unfortunately, around the same time a BJS publication demonstrated that significantly fewer educational opportunities are available to inmates in private prisons relative to their public counterparts. Whereas 79.6 percent of state facilities offered basic adult education in 2000, only 56.4 percent of private facilities offered equivalent programming during the same year. In contrast, public departments of corrections, taken in aggregate, have enjoyed a consistent downtick in their recidivism rate since 1999. http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/sentencing_and_correcti ons/State_Recidivism_Revolving_Door_America_Prisons%20.pdf

And finally, how do private prisons fare in the area of community safety and involvement? Well, shipping prisoners out of state (regardless of the type of prison in which theyre contained) inherently compromises the DOCs objective of meeting its own articulated community involvement and restoration standards. In early 2012 the Center on Juvenile and Criminal Justice published a report entitled Collateral Consequences of Interstate Transfer of Prisoners finding that regular family visitation reduces recidivism by up to 25 percent, and thus improves long-term public safety. http://www.cjcj.org/files/Out_of_state_transfers.pdf, http://www.ipcaworldwide.org/resources/Articles/ARTICLE_BlessedBeSocialTieBinds.pdf

To be fair, CCA combats much of the non-partisan research Ive cited by publicizing two high profile studies which both conclude that private prisons are more cost effective than their public counterparts. The first is a 2010 study conducted by the Reason Foundation, a libertarian think-tank strongly in favor of privatization of government services, including prison privatization. http://reason.org/files/private_prisons_california_policy_summary.pdf Politics aside, the Reason Foundation has received funding from private prison companies since 1994. And most recently, according to the Foundations 2009 Carrying the Torch of Freedom list of donors, the GEO Group was listed as a Platinum Level supporter while CCA was listed at the Gold Level. Reason Foundation studies are not peer-reviewed, and the organization doesnt disclose in its research that it accepts money from private prison companies.

http://privateci.org/private_pics/Reason2009.pdf CCA also regularly cites a December 2007 Vanderbilt University study titled Do Government Agencies Respond to Market Pressures?: Evidence from Private Prisons. The study, however, was jointly funded by CCA and the Association for Private Correctional and Treatment Organizations (APTCTO), a now-defunct trade group for private prison companies. https://www.prisonlegalnews.org/%28S%28ou4tagii3nnjzx550fyx0p45%29%29/displayListServ. aspx?listid=5320&AspxAutoDetectCookieSupport=1

Unsurprisingly, CCA hasnt publicized its very latest audit report conducted by Ohios Bureau of Internal Audits and Standards Compliance from last September. The team evaluated compliance levels with audit standards by reviewing both prepared accreditation files and observing institution operations throughout the facility. According to the review, CCAs Lake Erie facility in Ohio achieved a compliance level of 66.7 percent on Ohios state-based corrections guidelines. http://www.citybeat.com/cincinnati/blog-4028private_prison_violates_state_rules.html In scholastic terms, a 66.7 translates to a D. And a D indicates deficiency.

Ohios audit report serves as a distillation of this entire discussion because it unassailably underscores the basic structural flaw endemic to private corrections. A private firm whose principal aim is market capitalization inherently transforms the fundamental mission of corrections from public safety and rehabilitation to profit. Widespread procedural violations, chronic employee turnover, few educational opportunities, dubious inmate selection criteria, and medical negligence demonstrate CCAs continued inability to ensure the welfare and safety of the prisoners they serve, and by consequence, the public on whose funding the company exclusively relies. I know youll make the best choice for Vermont and I support your efforts entirely and without reservation. Thank you.