Archive for the ‘advocacy’ Category
[One of series written for UnitedRepublic.org in 2012. Original article.]
Every year public companies must file what’s called a 10k report with the Securities Exchange Commission (SEC). This is a summary of the firm’s financial performance. There are stiff penalties for lying to the SEC, and investors aren’t too thrilled with less than the truth either.
These are powerful incentives for honest accounting, so you can accept 10k statements as reasonably credible accounts of what a firm really thinks.
Here’s what the Corrections Corporation of America (CCA), the largest private prison management firm in America, had to say in its 10k about the risk to their profitability:
“A decrease in occupancy levels could cause a decrease in revenues and profitability.”
Similarly, the Geo Group (formerly known as Wackenhut), the second-largest American prison management firm, reports in their 10k:
“…most of our revenues are generated under facility management contracts which provide for per diem payments based upon daily occupancy.”
Right away, we see a problem. The costs of prison management are borne by you and me, the taxpayers. We want this done effectively at reasonable cost with minimal overhead expense, like a non-profit organization.
Private prison management has a different goal – to make money. They provide a service, and expect to make a profit over and above their costs. Here’s a clear misalignment between the wishes of the taxpayers and the wishes of private business.
Profits can come from cutting costs or increasing income. Private firms can be expected to attempt both.
Cutting costs too steeply has consequences. Here are some of the cost-cutting techniques that private firms have implemented at prisons:
In 2008, private prisons in Texas paid their corrections officers $24,000/yr – that works out to $12/hr – which was $2,000 less than the lowest salary earned by personnel doing the same work at public-run prisons. Result? A sky-high staff turnover rate of 90 percent. Imagine the chaos in your workplace if 90 percent of your co-workers left each year.
The U.S. Department of Justice notes that public prisons average 5.6 inmates per officer, whereas private prisons average 7.1. A point and half difference might not seem like much at first glance, but remember some of the population we’re dealing with here has a history of violence and aggression. The lower ratio exists for a reason. The Federal Bureau of Prisons has observed, “the greater the inmate-to-staff ration, the higher the levels of serious violence among inmates.” If security becomes too lax, prisoners escape. It does happen.
Some prisoners are more expensive than others. Some due to health care, some for behavioral management. Troublesome inmates tend to get transferred out to state facilities, so taxpayers pay twice – once for the inmate, and again to sustain the private firm’s profit margin.
The other strategy – increasing income – requires more inmates, creating a powerful incentive to generate high incarceration rates. That strategy is part of CCA’s proposal to buy and operate state prisons:
“An assurance by the agency partner that the agency has sufficient inmate population to maintain a minimum 90 percent occupancy rate over the term of the contract.”
Now think about that. It creates a contractual obligation to keep the prisons as full as possible. How would that obligation be fulfilled?
CCA already has some ideas. They’ve hired several lobbying firms to support legislation that will – surprise! – likely result in more inmates.
The current focus is on immigrants. After 9/11, the industry saw opportunity in the new anti-immigrant sentiment and spent millions in support of legislation that would increase detentions. Since 2002, CCA alone has spent more than $17 million to lobby Congress.
The Geo Group (formerly known as Wackenhut) saw the value of their contracts with the Immigration and Customs Enforcement agency expand from $33.6 million in 2005 to $163.8 million by the end of 2010.
In the most recent report available, “Prisoners in 2010”, the U.S. Department of Justice graphs the growth of federal and state inmate populations since 1990:
1990 was the first year that CCA contracted with the federal government to handle immigrant detainees.
Can you think of other areas for prison growth? Remember, the United States already has the highest incarceration rate in the world, and at this writing most prisons are still owned and operated by the public. What could happen to prison growth fueled by the profit motive and contractual obligations to keep prisons full?
Take that thought one step further. What if cheap labor became available in prisons? It’s already happening. The America Legislative Exchange Council (ALEC) promoted, and the Department of Justice implemented the Prison Industry Enhancement Certification Program (PIECP).
The lion’s share of income from the program pays for inmate’s room and board. An obvious strategy looms — fill prison beds, get the inmates to work off a big chunk of their own costs, and pocket the difference.
Good business? The Wall Street Journal seems to think so. A column by Liam Denning opens with the business perspective:
“Imagine a real-estate business where your tenant finds it hard to move and you provide the barest of amenities. No, this isn’t the world of the New York apartment landlord. It’s the private prison business.”
I’ll leave you with a final question.
If private prison firms succeed in replacing public prisons and expand beyond immigrants, where will they look for further growth?
[One of a series written for UnitedRepublic.org in 2012. Original article.]
“The gross national product includes air pollution and advertising for cigarettes, and ambulances to clear our highways of carnage. It counts special locks for our doors, and jails for the people who break them. The gross national product includes the destruction of the redwoods and the death of Lake Superior. It grows with the production of napalm and missiles and nuclear warheads.
“And if the gross national product includes all this, there is much that it does not comprehend. It does not allow for the health of our families, the quality of their education or the joy of their play. It is indifferent to the decency of our factories and the safety of our streets alike. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials …
The gross national product measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to country. It measures everything, in short, except that which makes life worthwhile, and it can tell us everything about America – except whether we are proud to be Americans.”
– Robert Kennedy, 1968
Money in politics is nothing new — corruption has always been part of governance. It accumulates like rust on steel and barnacles on boatsides. Without regular maintenance, the decay grows and overwhelms the structure it builds upon. We recognize the problem, we understand we must deal with it — especially when there comes a point where corruption crosses a line from gaming the system to being the embodiment of evil.
Case in point: The Red Light Cam Scam. Traffic cameras — specifically the timing of the yellow lights — have been manipulated to optimize the chances drivers will cross the stop line at red lights. Here we have a system of traffic lights, designed to protect the safety of all — ALL, mind you, including children — and it’s being shamelessly perverted to generate money. If that’s not evil, what is?
In Orlando, courts are administering disparate treatment to citizens who fight back against unfair red-light camera tickets and those who passively accept the status quo.
We see a similar pattern emerge in lobbies to defeat efforts to reduce childhood obesity and promote healthier food. While the First Lady is advocating change in how food is created and marketed to children, food industry representatives are working to thwart movement in that direction.
For example, Reuters reports that 24 states and five cities contemplated taxes on soda to discourage consumption. Every single proposal failed, save one in Washington State — a tax of two cents per can. One win in 29 tries. But even there, an industry consortium mounted a $16 million referendum drive that defeated the tax proposal. Zero for 29. All this in direct conflict with a clear good — the health of our children.
There were congressional consequences as well. Supporters of the food and beverage industry saw contributions from PACs increase. Senator Tom Harkin, who supported tougher food standards, got nothing at all from the food and beverage people. That’s how Washington works.
The American Legislative Exchange Council — ALEC — is now working with industry leader ExxonMobil on disclosure rules for the fluids used in gas extraction. Why should you care? Because the ‘fracking’ technique injects these fluids into areas that may also contain groundwater used as drinking water.
If gas extraction products might be contaminating your drinking water, wouldn’t you want to know about it? ExxonMobil wants to limit disclosure by invoking a trade secrets clause in relevant law. And as far back as 2005, at the behest of energy interests, Congress exempted the practice of fracking from the Safe Drinking Water Act.
Corporations have, by law, a fiduciary duty to maximize profits. Moreover, CEOs, shareholders, and management all have ample incentive to bolster their income. Everyone wants the best deal. But when business effectively substitutes dollars for votes in our representative government, when it actively subverts our health, safety, and natural resources in the pursuit of endless growth, it has embraced evil.
This is why we fight.