Private Prisons in the South
By Edwin Bender, Research Director

Introduction

Major corrections companies around the country saw startling growth in the mid-1990s, both in the number of prisons they operated and in their profits. The stock price for Corrections Corporation of America alone increased elevenfold from January 1995 to August 1997, from $4.12 a share to nearly $45 a share. By comparison, the Standard & Poor's index merely doubled during the same period.

But the heady days of soaring stock-price increases appear to be a thing of the past for CCA, Wackenhut Corrections, Cornell Corrections and other private-prison companies. The industry now finds itself hamstrung by its own failure to deliver on promises of lower costs and better services, crippled by incident after incident of violence, killings and mismanagement, and facing declining corrections budgets as state economies turn dark.

George Zoley, CEO of Wackenhut Corrections, has acknowledged the industry's problems and as late as May 2001 said his company's future is in long-term federal and international contracts and running mental hospitals and addiction-treatment centers.

But the companies have not abandoned their state prison efforts and their quests for taxpayer-subsidized profits. Evidence of this is the $1,125,598 contributed by private corrections companies to 830 candidates in 14 Southern states during the 2000 election cycle, 90 percent of which went to incumbent and winning candidates who would be making policy and budget decisions in their next legislative sessions.

In fact, in a handful of Southern states - specifically Florida, Georgia, Mississippi, North Carolina, Oklahoma and Texas, which are among the most heavily invested in privatization in the country - corrections companies maintained their key role of housing prisoners and receiving taxpayer money.

The National Institute on Money in State Politics, in an attempt to gauge the influence private-corrections companies sought in state corrections policy and budgeting, examined campaign contributions made during the 2000 election cycle to legislative and statewide candidates in the Southern states. The Institute then examined corrections-related legislation considered in states where the industry gave heavily, and, where possible, correlated the contributions with the policy.

The Institute found that in a number of states, private-prison companies either were able to maintain their positions as service providers for state corrections systems despite adverse budget pressures or were able to repel efforts to reduce state reliance on private corrections companies.

In many cases, lawmakers considering the policy decisions received campaign contributions from the companies that stood to profit from the decisions.

Methodology

The National Institute on Money in State Politics is a nonpartisan, nonprofit organization dedicated to increasing the public's understanding of the role political donations play in the public-policy process. This study of the contributing patterns by private-corrections corporations in Southern states is the second the Institute has done on players in this industry. The first, "Private Prisons, Politics & Profits," was released in late 2000 and is available on the Institute's Web site, www.followthemoney.org.

The contribution data was compiled by the Institute from contribution-and-expenditure reports filed with the state disclosure agency in each state studied. The reports covered the last complete election cycle in each state. While most states studied had elections in 2000, Alabama, Kentucky, Louisiana, Mississippi and Virginia had their major elections in either 1999 and/or 1998 and reports from those cycles were used.

Institute staff researched the contributor databases and assigned an occupation code to all contributors whose occupation or employer it could identify. The Institute's occupation code is based on the Standard Industry Codes used by the Securities and Exchange Commission.

To determine corporate contributors for this study, the Institute went further and compiled a list of corrections company executives using information from the Securities and Exchange Commission and business reference sources, such as Hoover's and Web pages maintained by the companies. In addition, the Institute compiled lobbyist lists from official state disclosure agencies and conducted a systematic search of news stories to identify officials and employees from specific private prisons in the South. The study included contributions made by lobbyists representing the private corrections companies as well as those from other employees of the firms.

The contributions and employee lists were compared to produce the Institute's list of corrections company-affiliated donors to state-level political campaigns in Southern states during the 2000 election cycle.

While this study focuses on the role campaign money plays in the public-policy process, it represents only a piece of the puzzle. It is difficult if not impossible to quantify the role lobbyists play in the process beyond their campaign contributions. They spend hundreds to thousands of hours in the halls of the Legislatures presenting their information and arguments to lawmakers, and they make a lot of money doing so. They also often spend years developing legislative strategies, presenting a bill one session knowing it will be defeated, but opening the door for a different, more passable proposal the next time around. Also, companies and individuals that sub-contract with prison companies are difficult to identify with certainty because of disclosure limitations, so their campaign contributions are not included in this study even though they could play a substantial role in the public-policy process.

This study offers a handful of examples of how current state campaign-financing systems put lawmakers in the unenviable position of having to defend themselves against conflict-of-interest charges or being in situations where an appearance of impropriety exists.

The Contributions

Privatized-corrections companies contributed more than $1,125,598 to 830 candidates in 14 Southern states in the 2000 election cycle. The total includes contributions from the companies, their executives and those in the lobbying firms representing the companies' electoral and legislative interests and was split 54 percent to 46 percent in favor of Democratic candidates.

These interests also split $96,432 almost evenly between political party committees in 14 states, giving Republican committees 49 percent and Democratic committees 48 percent. The balance went to caucus committees.

The states studied, with totals for industry contributions given to candidates and party committees in each state, are:

State & Year
Number

of checks

Number of

Recipients

Total to Candidates
Total to
Parties
Texas
323
156
$361,293
$9,500
North Carolina
590
107
$226,519
$5,150
Florida
381
122
$158,485
$34,722
Louisiana '99
90
56
$71,455
$6,300
Virginia '99
191
92
$63,454
$10,700
Georgia
150
84
$56,650
$15,500
Tennessee
110
44
$52,631
$6,000
Oklahoma
131
54
$52,125
$2,050
Mississippi
75
37
$41,085
$1,000
Arkansas
182
61
$26,125
$500
Kentucky '98-2000
21
14
$8,350
$5,010
Alabama '98
2
1
$4,500
$0
West Virginia
2
1
$2,000
$0
South Carolina
1
1
$925
$0
Overall Total
2,249
830
$1,125,598
$96,432
The major private-prison industry contributors during the 2000 election cycle in the Southern states were executives and lobbyists for the largest private corrections companies in the country. The top companies include:
  • Corrections Corporation of America (CCA), which made more than 600 contributions totaling more than $443,300 to candidates in 13 of the 14 states studied, excluding only South Carolina. CCA also gave 23 contributions totaling more than $36,580 to state political party committees; 
  • Wackenhut Corrections, which gave 336 contributions totaling more than $237,750 to candidates in six states - Arkansas, Florida, Louisiana, Mississippi, Oklahoma and Texas. Wackenhut made eight contributions to state political committees for $33,850; 
  • Cornell Corrections, which made 284 contributions totaling nearly $100,000 in three states- Georgia, North Carolina and Texas. Cornell Corrections gave to state political party committees twice for a total of $3,000; 
  • Correctional Services Corp., which gave 208 contributions in two states - Florida and Texas - totaling more than $97,670. Correctional Services Corp. gave to state party committees 13 times for a total of more than $12,800. 
The companies focused their political money largely on legislative races in the 14 states: 775 legislative candidates received 70 percent of the industry's contributions, with 83 percent of that going to campaign winners. The remaining candidates ran for statewide offices, such as governor, lieutenant governor, secretary of state and auditor.

Foremost on the list of legislative candidates receiving prison industry money were:

  • Rep. James Laney of Texas, who received five contributions totaling $33,600, including one $25,000 check from Corrections Corporation of America's lobbying firm; 
  • Rep. James Black of North Carolina, who received 17 checks totaling $12,400; 
  • Sen. John Wilder of Tennessee, who received 12 checks totaling $10,000; 
  • Sen. Marc Basnight of North Carolina, who received 11 contributions totaling $9,200; 
  • Sen. Debby Sanderson of Florida, who received 19 checks totaling $8,100. 
Fourteen gubernatorial candidates received just 10 percent of the contributions (The number is low in part because only six of the 14 states had races for governor in the time period studied. Most gubernatorial races in the country took place during the 1998 election cycle). Winning gubernatorial candidates received more than 52 percent of the total given in these races. Top recipients were:
  • Gov. Michael Easley of North Carolina, who received 65 contributions totaling $40,675, including 26 contributions totaling $15,950 from the Cornell Corrections lobbying firm and 26 totaling $15,475 from the firm that represented Tennessee prison builder Ray Bell Construction; 
  • Candidate Richard Vinroot of North Carolina, who lost to Easley in the general election. He received 71 contributions totaling $22,156 from the same sources that gave to Easley; 
  • Candidate Dennis Wicker of North Carolina, who lost in the primary to Easley. Wicker received 30 contributions totaling $14,155, again from the same sources that gave to Easley; 
  • Gov. Mike Foster, Jr., of Louisiana (1999), who received two contributions totaling $10,000, both from the firm representing Corrections Corporation of America; 
  • Gov. Ronnie Musgrove of Mississippi, who received eight political gifts totaling $7,300, including $4,750 from Carothers Construction, a prison builder. 
As has been seen in previous election cycles, the companies' focused giving was a formula for access and success.

The companies gave more than 70 percent of their contributions to winning candidates who went on to hold office in their states. An additional 20 percent was contributed to either incumbents or sitting candidates who did not run in the elections. So, only 10 percent of the industry's contributions went to losing candidates.

Totals given in each state appear to have been affected to some extent by contribution limits in each state. In Texas, for example, where no limits exist on political giving, checks ranged in size from $100 to $10,000; 38 percent of the checks were for $500, 26 percent were for $1,000 and five percent were for $2,500. In North Carolina, where limits are high at $12,000 for the entire three-election cycle, a similar pattern exists, with checks ranging in size from $50 to the single-election limit of $4,000; 23 percent were for $250, 21 percent were for $500 and 11 percent were for $1,000. In both cases, the absence of strict limits opened the door to a wide range of and extremely large, five-figure contributions.

But in Florida, with a $500 per-election limit ($1,500 for the three-election cycle if a primary runoff is required), nearly three-quarters of the contributions were at the maximum, and the contribution range was a more constrained $25 to $500. More than one-third of the candidates receiving corrections-company contributions received the two-election maximum of $1,000, indicating that more money might have been available had the limits been higher.

While a clear contributing pattern is less obvious in other states, it does appear that the totals given by the prison companies might have been larger had limits not been in place in some states.

To get the most impact from their political dollars, the companies timed their political gifts strategically. Roughly one-fourth of the contribution total was given in the first year of the two-year election cycle, a time when few were watching who was giving what to whom. Seventy-three percent of those dollars went to incumbents. So the industry was currying favor with incumbent candidates many months before the beginning of the main election season.

More than one-third of the remaining total was given to candidates in the last weeks before the general election when many races are all but decided, or just after the election, when elected candidates begin vying for committee assignments for the upcoming legislative sessions

By strategically timing its contributions, the industry was able to ensure that a large percentage of its money went to candidates who were all but certain to win, thereby improving their odds for access during upcoming public-policy debates.

The following chart shows the flow of political gifts in the final months of the two-year election cycle:

Industry contributions made during last months of the election cycles

The States

The Institute's survey of legislative activity in the 14 Southern states found several places in which prison interests either saw pro-industry measures passed or they prevailed over unfriendly legislation. In North Carolina, for example, legislators approved an expensive expansion of the state prison system using private prison builders. In Mississippi, lawmakers overrode a gubernatorial veto to fund private correctional facilities despite questions about the need to do so. In Georgia and Florida, measures aimed at limiting private prisons or industry influence died in committees. And in Oklahoma, a sentencing reform measure reduced the number of non-violent offenders but increased the number of crimes for which an inmate would be required to serve a long term, thereby ensuring a large inmate population.

In all these cases, which are detailed below, lawmakers who could influence the outcome of the policy debate received campaign contributions from the people who stood to benefit from the decisions.

In several of the states, though, the Institute found no clear or compelling evidence of corporate efforts to move legislation, primarily because many Southern states faced severe and limiting budget problems in their 2001 legislative sessions. For example, in Tennessee - home of Corrections Corporation of America (CCA) and several private prisons - a $300 million revenue shortfall spurred a populist tax revolt that limited lawmakers' spending. At roughly the same time, CCA was attempting to sell seven of its prisons to pay down its own debts. And in South Carolina, which faced a $500 million budget shortfall in 2001, lawmakers considered more state-owned and not private facilities.

The case studies below offer a glimpse of the way in which campaign contributions from special interests can raise serious questions about how public policy is determined and how taxpayer dollars are spent.

North Carolina

Poor staffing and management practices, escapes and violence in private correctional facilities prompted North Carolina lawmakers in 1997 to impose limits on construction of new private prisons. In the spring of 2000, the legislature passed a ban on the importation of out-of-state prisoners to private facilities. Continuing concerns caused state corrections officials to take over operations at the two existing CCA facilities in the fall of 2000 and lease the facilities back for $5 million a year.

But the state's move away from private correctional services did not stop the expansion of the state corrections system, to the benefit of private companies and at great expense to taxpayers. The 2001 Legislature, when confronted with the corrections department's estimates that up to 10,000 new beds would be needed in the next decade, decided the state needed more prisons. And with Senate Bill 25, which was signed by Gov. Michael Easley in May 2001, lawmakers authorized the state to contract out with private prison-construction firms for up to three new 1,000-bed prisons, which the state would then buy back using a complicated purchase-and-lease process. The Legislature finally agreed to move ahead with two facilities. The estimated cost of building the prisons was $75 million each. But the lease-back procedure will bind the state to a 20-year contract that had an estimated total cost of $246.6 million, with the state leasing the facilities from a separate bonding authority. In addition, the annual operating costs for each new prison were estimated at $17.5 million per year. So, apart from the operating expenses, the measure means taxpayers could end up paying nearly $100 million more for the facilities than they would have with a straight purchase deal.

To see that SB 25 came to fruition, supporters of the build-and-lease proposal contributed more than $226,519 to candidates during the 2000 election cycle, with nearly 80 percent or $180,808 going to winning candidates. They contributed another $5,150 to the North Carolina Republican Executive Committee.

Cornell Corrections was the largest donor, giving $71,042 directly and via its lobbying firm to 37 candidates, 75 percent of whom won their races. CCA, which ran two prisons in the state but eventually leased them to the state, and its lobby gave $46,253 to 44 candidates, with 93 percent of those winning their races. CCA contributed the $5,150 to the state Republican Party. Correctional Properties Trust, which bought CCA's prisons and began leasing them to the state, contributed $30,356 to 17 candidates, 70 percent of whom won their races. Lobbyists with Parker, Poe, Adams & Bernstein, which represented prison builder Ray Bell Construction of Brentwood, Tenn., gave 184 times for $55,367 to 81 candidates, 87 percent of whom won their races. The lobbying firm of Bode, Call & Stroupe, which represented prison-builder Centex Rooney Construction, gave 16 times for a total of $12,750 to 12 candidates, all of whom won their races. Also representing Centex Rooney Construction was Linwood E. Mercer, who contributed $10,750 to 16 candidates, all but one of whom won their races.

Nearly one-third of the contributions made to winning candidates in 2000 by SB 25 backers came in late October or early November, or after the election, in November and December.

Coordinating activities for the CCA was Don Beason of The Capitol Group and Jennie Dorsett, who has her own lobbying firm. Don Beason made 21 contributions totaling $22,350. Dorsett made 17 totaling $4,350. CCA founder and executive Thomas W. Beasley contributed $2,000 directly, to winning attorney general candidate Roy Cooper.

William Scoggin and Margaret Westbrook of Kennedy, Covington, Lobdell & Hickman coordinated activities for Correctional Properties Trust. Scoggin, Westbrook and other members of Kennedy, Covington et al. accounted for 83 contributions totaling $30,356.

Lori Ann Harris of L.A. Harris & Associates represented Wackenhut Corrections Corp. in the 2001 session, but no candidates reported contributions from Harris, her firm or Wackenhut Corrections.

George Teague and Leon Killian of Moore & Van Allen coordinated activities for Cornell Corrections. (Sen. Daniel G. Clodfelter is a member of this firm.) The lobbyists and firm members, including Sen. Clodfelter, made 198 contributions totaling more than $71,000.

Lobbyists with three other firms - Parker, Poe, Adams and Bernstein; Bode, Call and Stroupe; and Linwood Mercer & Associates - argued for Senate Bill 25 and represented companies interested in bidding on the projects, as noted above. Members of Parker, Poe, Adams and Bernstein made 184 contributions totaling $55,367. Those with Bode, Call and Stroupe made 16 totaling $12,750. Those with Linwood Mercer & Associates made 22 totaling $10,750.

Proponents of the lease proposal contributed 65 checks totaling more than $40,675 to Gov. Easley, who signed the bill once it passed to the Legislature.

But before it got to Gov. Easley, SB 25 was steered to the Senate Finance Committee by sponsors who had received $3,700 in political gifts from prison-lease proponents during the election; committee members themselves received more than $21,303. More than 60 percent of all committee members received at least one check, some four, five or more:

  • Committee Vice Chairman Daniel Clodfelter received 14 contributions for a total of $4,728; Sen. Walter Dalton received four for $3,300; Sen. Eric Miller Reeves received four for $2,450; Sen. Howard Lee received four for $1,850; and committee Chairman David Hoyle received four for $1,500. 
  • House Finance Committee members, who heard SB 25 after the Senate had already passed the proposal, received $8,950 from its supporters. Nearly half of the committee members received contributions from prison-proposal supporters: Rep. Ed McMahan received 11 contributions totaling $2,500; Rep. Connie Wilson received six for $1,350; Rep. Andy Dedmon received four for $1,100; Rep. Pryor Gibson received four for $950; Rep. Lyons Gray received two for $750; Rep. Andy Dedmon received two for $500; and Rep. Leslie Cox received four for $500. Other committee members received single contributions ranging from $250 to $50. 
The final version of SB 25 overwhelmingly passed the House 109-5, with three representatives excused (Reps. Alma Adams, Donald Davis and Howard Hunter) and three not voting (Reps. Milton Fitch, William Hiatt and Speaker James Black, who only votes to break ties). Nearly 40 percent of those who voted favorably on SB 25 in the House received contributions from the interests that stood to benefit from its passage. Reps. Daniel Blue, Marge Carpenter, Robert Hensley, Martin Nesbitt ,Jr., and R. Tracy Walker voted against the measure.

The vote in the Senate was an unambiguous 45-0 with five absent (Sens. Charles Albertson, David Hoyle, Luther H. Jordon, Kenneth Moore and Robert Shaw); 55 percent of those who voted in favor of the measure received contributions from interested parties.

Top recipients of SB 25 supporters' contributions, besides Gov. Easley, were:

  • Roy Cooper, a former District 10 senator and successful attorney general candidate who received 67 contributions totaling $31,105. The lion's share came from Cornell Corrections, 36 checks for $15,450; CCA contributed 11 times for a total of $8,743; Parker, Poe, Adams & Bernstein gave 13 times for $3,662; Bode, Call & Stroupe gave three times for $1,500; and Correctional Properties Trust gave twice for $1,000. Linwood Mercer & Associates gave twice for $750. 
  • Richard Moore, who was elected treasurer and received 35 checks totaling $13,795, including three from Bode, Call & Stroupe for $5,250; 16 from Parker, Poe, Adams & Bernstein for $4,050; three from CCA lobbyists for $2,100; one from Linwood Mercer & Associates for $1,000; 11 from Cornell for $895; and one for $500 from Correctional Properties Trust. 
  • James B. Black, House District 36 and Speaker of the House, who received 17 checks totaling $12,400: four from CCA for $4,700, including one from CCA lobbyist Don Beason on Oct. 20, 2000, for $2,500; two from Linwood Mercer & Associates for $3,000; six from Cornell Corrections lobbyists totaling $2,500; three from Parker, Poe, Adams & Bernstein for $1,500; and two from Correctional Properties Trust for $700. 
  • Marc Basnight, Senate District 1, who received 11 contributions totaling $9,200: two from CCA for $3,000; one from Bode, Call & Stroupe for $2,000; four from Parker, Poe, Adams & Bernstein for $2,000; two from Linwood Mercer & Associates for $1,500; one from Cornell for $500; and one from Correctional Properties Trust for $200. 
  • Beverly Perdue, who was elected lieutenant governor. She received 11 contributions totaling $6,000: six from Parker, Poe, Adams & Bernstein for $4,500, and five from Cornell for $1,500. 
In a heavily Democratic state, it comes as no surprise that a majority of the contributions from those seeking access went to Democrats. Such is the case with SB 25 supporters, who wrote 444 checks totaling $184,178, or 81 percent of the overall total, to Democratic candidates. Ninety percent of the Democrats' total went to winners.

Republican candidates, on the other hand, received just 146 checks for $42,341, with 35 percent of that going to winners. General-election losers received significantly more than winners, 77 checks totaling $23,356, or 55 percent of the Republican total.

Georgia

The Georgia Legislature, with House Bill 456, drew a battle line for private corrections companies. It would have allowed existing private facilities to be used, but would have banned future private facilities without the express permission of the state and local authorities. The measure also would have banned importation of sex offenders or other violent criminals and required private facilities to repay any costs associated with the capture of escapees. Representatives approved the measure overwhelmingly, 116-54, before sending it to the Senate.

HB 456 died in the Senate Corrections, Correctional Institutions and Property Committee. "It just went nowhere," said Sen. Carol Jackson, D-Cleveland, vice-chairwoman of the committee. Sen. Jackson and Sen. Greg K. Hecht, chairman, both received contributions from private-corrections companies.

Corrections-industry lobbyists began preparing for the legislative battle months earlier as campaigns for political offices were being waged, writing 150 checks for a total of $56,650. Largest of the corporate campaign contributors was Cornell Corrections, whose lobbyists put more than $27,200 into campaigns; CCA, whose lobbyists put in $25,950; and Bobby Ross Group-Correctional Management Service, which wrote $3,500 in checks.

CCA contributed more than $12,500 to the Democratic Party of Georgia; Cornell Corrections gave the Democratic committee another $3,000.

The industry contributed overwhelmingly to incumbent candidates, 91 percent of whom won their races in 2000. (Incumbents are targeted for contributions because they nearly always win and tend to wield more influence than newly elected lawmakers once the Legislature convenes.) More than 95 percent of the total went to incumbent candidates, with more than 80 percent ultimately going to winning candidates.

Cornell Corrections lobbyists were Pete Robinson and Robb Willis, attorneys with the law firm of Page, Scranton, Sprouse, Tucker & Ford. Robinson alone made 73 contributions totaling $23,650, while Willis made only two for $200. Others associated with the firm made additional contributions.

Jim Hammock of the Omni Resource Group, which represented CCA, made 58 contributions totaling $25,950.

T.W. Edwards represented Bobby Ross Group-Correctional Management Services and made three contributions totaling $1,500. Bobby Ross Group-Correctional Management Services made another four contributions totaling $2,000.

The private-prison affiliated contributors divided their giving nearly 60 percent to House candidates, 40 percent to those in the Senate, with key contributions going to Sen. Hecht of Morrow, $900 from Cornell Corrections, and Sen. Jackson of Cleveland, $1,000 total from Cornell Corrections and CCA.

Only four of nine committee members received money from HB 456 opponents, a total of $2,700. Besides Sens. Hecht and Jackson, Sen. Sonny Perdue of Bonaire received $300 from Cornell Corrections and ex-officio member Sen. Dean Hathan of Rockmart received $500 from Cornell Corrections.

Based on overall contributing patterns, it appears that industry lobbyists knew their strength was in the Senate: Nearly 60 percent of the senators received at least one contribution from a private-prison industry source, and 18 percent received more than one check. The giving to House members was markedly different. Only 24 percent received at least one industry contribution.

Top recipients of contributions from HB 456's opponents included:

  • Thomas Buck III, House District 135, who received five contributions totaling $2,700: four from Cornell Corrections lobbyists totaling $1,700 and one from the CCA lobbyist for $1,000. 
  • R.M. (Mickey) Channell, House District 111, who received five contributions totaling $2,450: one for $200 from the Cornell Corrections lobbyists and four for $2,250 from CCA sources. 
  • House Speaker Thomas B. Murphy of House District 18, who received two totaling $1,750: one from the Cornell Corrections lobbyist for $750 and one from the BRG-Correctional Management Services lobbyist for $1,000. 
  • Charles W. Walker, Senate District 22, who received three contributions totaling $1,750: two from Cornell Corrections sources for $750 and one from CCA for $1,000. 
  • House Majority Leader Larry Walker of House District 141, who received four contributions for $1,750: two from Cornell Corrections totaling $750, one from the CCA lobbyist for $500 and one from the BRG-Correctional Management Services lobbyist for $500. 
Opponents of HB 456 heavily favored Democrats with their political contributions, again, not a surprise given the party's dominance in the state. More than 78 percent of the contributions - 118 out of 150 - went to Democrats. In all, Democratic candidates received $45,550; winners received $39,750, or more than 87 percent of that amount.

Republicans received just 32 contributions totaling $11,100, or just 24 percent of the total given. Winners received 20 contributions totaling $5,850.

Mississippi

Taxpayers in Mississippi saw legislators divert $6 million to pay for empty prison-bed space for non-existent "ghost inmates" at the end of the 2001 legislative session, with the lawmakers arguing that they overrode a gubernatorial budget veto to save jobs at several public and private correctional facilities.

Defending his veto, Gov. Ronnie Musgrove said: "We're cutting budgets from every agency in the state of Mississippi and yet we're going to pay money for prisoners located throughout the state of Mississippi under the theory that it's good public policy. Prisons should not drive the state budget of the state of Mississippi."

The Legislature's move underscores a major shift in prison-privatization policy: No longer were advocates in Mississippi arguing over how much money privatization could save taxpayers. Instead, they argued that taxpayer subsidies were necessary in hard economic times to keep existing prison jobs. The fact these subsidies would ensure corporate profits went unspoken.

Knowing that a battle over corrections funding was likely - the state corrections budget was $10.7 million short by January 2001 and officials had begun shifting inmates from private to public facilities - CCA announced in February that it would be closing its 1,000-bed Tallahatchie County facility. The announcement made the prospect of job losses very real, increasing public pressure on lawmakers. CCA's three Mississippi facilities employed more than 460 people.

And even earlier, during the 1999 elections, those involved in private corrections laid the groundwork for sustained state funding with more than $41,000 in campaign contributions to lawmakers.

To reaffirm their position, private-corrections executives and lobbyists met just hours before the veto vote with two of the three lawmakers who had to approve the crucial change in the final budget bill. Sens. Jack Gordon and Bunky Huggins had dinner with Wackenhut executive Wayne Calabrese and lobbyist Al Sage at the Parker House restaurant the evening before the over-ride vote. (Sage said he did not disclose the meeting in official lobbyist reports because Wackenhut paid the tab.)

Both of the influential lawmakers had received campaign contributions from accounts controlled by Wackenhut and CCA lobby firm Buddy Medlin & Associates, Inc.

Senators voted 40-12 and the House members 111-9 to override Gov. Musgrove's budget veto and spend the $6 million for empty prison beds.

Those supporting the veto override included Attorney General Mike Moore, who held a press conference after the governor made his comments defending his veto of the corrections funding. Moore received seven contributions in the 1999 election cycle totaling $5,000, including $1,000 directly from Wackenhut Corrections, $3,750 from contributors affiliated with prison-builder Carothers Construction, and $250 from the lobbyist for Corrections Corporation of America.

During the 1999 election cycle, 38 candidates received one or more campaign contributions either directly from private-prison sources or companies affiliated with the companies; 14 received contributions from more than one industry source.

The main source of contributions was CCA lobbyist Buddy Medlin and his firm, which gave more than 44 times for a total of $18,385, or more than 44 percent of the total given by industry sources. Wackenhut Corrections and Al Sage gave 11 times for a total of $6,850. Together, these two sources of funds account for more than 60 percent of the money given by industry sources.

House candidates received 15 contributions totaling more than $5,500; Senate candidates received 17 totaling $6,850. The largest portion of the contributions - more than 35 percent - went to gubernatorial candidates, with Gov. Musgrove receiving eight totaling $7,300 and his unsuccessful Republican opponent receiving six totaling $5,250.

An analysis of the contributing shows that much of the money given by the industry to candidates was done so strategically. The checks were written either just before the election, when some winners are all but certain, or afterwards, when the winners are beginning to plan legislative strategies. Nearly 30 percent of the $41,085 in contributions made to candidates in the 1999 elections came either just before the election in late October or afterwards.

Despite previous efforts to reduce corrections spending, which has more than doubled since 1994 to $260 million a year, lawmakers in the 2001 Legislature sided with their campaign contributors and powerful industry lobbyists to overrule a gubernatorial veto and fund prison beds that corrections officials say the state didn't need.

More than anything, Mississippi lawmakers' decision to fund empty private prison beds at the expense of other state programs illustrates how measures initially adopted as cost-cutting measures can instead become guarantees of corporate profits.

Just a few months after the legislative showdown with the governor, the Mississippi corrections officials transferred 154 inmates from a state facility to one run by Wackenhut and another 83 to one run by CCA, bringing both up to "profitable" inmate levels.

At about the same time, Wackenhut signed a two-year renewal with the state for one of its facilities. The contract guaranteed 871 inmates for the first year only. Calabrese reportedly said Wackenhut will press for more inmates during the next Legislature.

On Sept. 5, 2001, Mississippi had 2,145 empty prison beds.

A post-session report by the Joint Legislative Committee on Performance Evaluation and Expenditure Review, mandated by the Legislature, found that the "breakeven point" for the regional and private facilities was well below the inmate levels established by the Legislature, and therefore eliminated the need for much of the extra funding. In a subsequent budget-committee hearing, the corrections chief, Robert Johnson, said he shifted $4.2 million of his excess funds to other budget areas.

Florida

In January 2001, Gov. Jeb Bush presented lawmakers with a $43 billion budget plan that included $313 million in tax cuts. And, as has been the case in other states, Gov. Bush proposed a substantial increase in the corrections budget - $114 million. The proposal wasn't a surprise, given Florida's prominence in the prison-privatization movement - with 17 facilities it ranks fourth behind Texas (48), Pennsylvania (25) and California (21).

As also has been the case in other states, the increase in the proposed corrections budget came at the expense of the proposed education budget, for the exact same amount - $114 million.

Gov. Bush's high-profile budget battle took center stage during the 2001 legislative session. His priorities were clear. Less apparent to the public, though, was the level to which the private-prison companies had insinuated themselves into the decision-making process, ensuring that information fed to lawmakers considering the broader budgetary questions supported the private companies' interests.

Two bills that shed some light on how entrenched the industry is in the decision-making process in Florida were Senate Bill 832 and House Bill 727, which concerned the future of the state Correctional Privatization Commission. The commission was formed as a non-partisan oversight body for the state's prison-privatization effort. But it had been compromised by conflict-of-interest allegations concerning staff and consultants.

Both measures addressed concerns that had arisen from the ethics charges and would have abolished the commission and reassigned its duties to the Department of Corrections. Under industry pressure in an initial committee review, HB 727 and SB 832 were amended to prohibit commission executives and staff from acting as private consultants.

HB 727, whose legislative sponsors ironically had received more than $15,250 in campaign contributions from private corrections interests, was passed from the State Administration Committee on a favorable 5-0 vote to the Committee on Crime Prevention, Corrections & Safety, where it died. Five of the latter committee's nine members had received industry contributions totaling $5,200 during the previous election cycle.

SB 832 suffered a similar fate, passing from the Criminal Justice Committee on a favorable 4-1 vote to the Committee on Governmental Oversight and Productivity, where it died. Five of this committee's seven members had received 38 contributions totaling $15,400 from industry sources during the last election cycle. Most significantly, committee Chairman Rudy Garcia received six contributions totaling $2,700 and Vice-chairwoman Debby Sanderson received 19 totaling $8,100.

In the end, the controversial Correctional Privatization Commission survived the session largely unchanged. The corrections agency was well-funded. And while the education budget didn't take as big a budget cut as was first proposed, it still was less than what many believed necessary.

The corrections industries' lobbyists and executives were active campaign contributors: During the 2000 elections, 122 candidates received more than 380 contributions from prison-industry sources totaling more than $158,400, thereby ensuring that its voice would be heard.

Foremost on the list of contributors were Wackenhut Corrections of Palm Beach Gardens, Florida, and its executives and lobbyists, who gave 156 contributions totaling more than $65,200; Correctional Services Corp. of Sarasota, Florida, and its executives and consultants, who gave 153 contributions totaling more than $68,200; and Corrections Corporation of America of Nashville, Tennessee, and its officials, who gave just 34 times for $14,100.

More than 50 percent of the industry total, or $80,250, went to 84 House candidates, and the vast majority of that, $71,575, went to winners and incumbents. In the Senate, 31 candidates received 142 contributions totaling more than $61,600, or nearly 40 percent of the overall total; and again the contributors targeted incumbents and winners with $53,535. Candidates for statewide offices received the remainder of the contributions.

More than 60 percent of the House and Senate candidates who were favored with industry contributions received two or more contributions from industry sources. Sen. Debby Sanderson led the list receiving 19 contributions totaling $8,100; Sen. Constantine Lee received 11 totaling $5,210; Sen. Jack Latvala received 11 totaling $4,250; and Sen. Ken Pruitt received 10 totaling $4,225.

More than half the House and Senate candidates - a voting majority - received at least $1,000 in contributions from industry sources.

As if to put an exclamation point on its efforts to influence the Legislature, Wackenhut Corrections wrote 25 checks of $500 each, totaling $12,500, on Nov. 1 and Nov. 2, just hours before the midnight Nov. 2 contribution deadline.

All but one recipient of these $500 checks - the maximum allowed under state law - won their races; 17 of the 25 were incumbents, and 21 were the same political party as the governor, Republican.

Oklahoma

Oklahoma is a state in which private prisons have thrived. The incarceration rate in Oklahoma was third-highest in the country in 2001, behind only Texas and Louisiana, at 681 people per 100,000. More than 6,730 inmates were housed in private facilities, the second-highest level in the country. And the inmate population grew at a rate of 4.5 percent, more than three times that of the rest of the nation.

In just five years, state spending on private-prison space increased to more than $100 million from $3 million, according to Sen. Cal Hobson.

During the 2001 legislative session, lawmakers appropriated $398 million to the Department of Corrections, a 5.2 percent or $20 million increase. Corrections officials also asked for more than $30 million in supplemental appropriations to cover cost overruns. Said Sen. Hobson during an April 2001 Board of Corrections hearing concerning additional funding: "(The Board of Corrections) needs to understand that we are not a printing press over here - we do not have an endless supply of money for them to go contracting with. I am not going to be taking $30 million out of the education subcommittee to pacify some private prison vendors."

However, just one month into the new fiscal year, corrections officials asked for additional supplemental funds. The $62.2 million request included $31.1 million to cover bills from private-prison contractors and $7.8 million to pay for a 7 percent increase in the per-prisoner payment to private-prison contractors.

The fight over corrections funding had become so acute that by March 2001 the corrections director, James Saffle, resigned and took a position with a private-corrections company.

Thus, the private-prisons industry came back to lawmakers for more funding even before the ink on the new budget was dry.

Sen. Hobson, vice chairman of the Senate Appropriations Committee, blamed the never-ending quest for more funds on "rotunda dynamics," the process in which lobbyists from four private-prison firms maintain a regular presence in the state capitol, "and all are after the same resource: additional (inmates) to put into their systems."

Industry lobbyists punctuated their desires the old-fashioned way, via political donations. In the 2000 elections, the industry officials and lobbyists made more than 131 campaign contributions totaling more than $52,100 to 54 candidates.

Blame also falls on a corrections system that sets up barriers to parolees and on lawmakers whose tough-on-crime policies keep non-violent offenders behind bars. Sen. Hobson estimated that the state spends $98,000 a day keeping more than 2,100 parole-eligible inmates behind bars - often with only a few hours of a required rehabilitation program between the inmates and freedom. The main barrier is that these programs often have months-long backlogs or are not offered at all facilities.

The anti-crime trend of the 1990s contributed to the growth of Oklahoma's prison population. The state's tough-on-crime policies mirror others passed across the country and include a "truth-in-sentencing" statute requiring that people convicted of certain crimes serve 85 percent of their sentences with no eligibility for parole and no time off for good behavior. The Legislature considered repealing the truth-in-sentencing law in a 1999 special session, but it failed after sides couldn't agree on whether to also repeal the state's prison-population-cap law, which allows for the release of eligible non-violent offenders when overcrowding occurs.

An omnibus law-enforcement reform measure passed by the 2000 Legislature - Senate Bill 397 - contained provisions that were designed to reduce the ranks of non-violent inmates and other provisions that would swell the numbers of those who commit "deadly sins."

"We're trying to be tough on crime and smart on crime," SB 397 author Sen. Dick Wilkerson said. "We are doing something different. If the definition of insanity is doing the same thing over and over again and expecting a different result, then our criminal justice system has been constructed in an insane manner."

SB 397 increased the limit for felony check-writing and other property crimes to $500 from $50, thereby reducing the number of people who go to prison for these non-violent offenses.

But SB 397 also added eight violent crimes to those for which offenders must serve 85 percent of their sentences, ensuring a steady stream of long-term inmates.

And, perhaps most significantly, the measure repealed the Oklahoma Prison Overcrowding Emergency Powers Act, which allowed the governor to release qualified, non-violent offenders should the prison system reach 95 percent of capacity. The repeal indicates a willingness to shoulder the increasing costs of an overcrowded system rather than consider ways to reduce the non-violent offender population.

That the private-prison industry sought to influence the public-policy process in Oklahoma is apparent: Of the 54 candidates who received industry campaign contributions during the 2000 election, 50 were incumbents, who typically are re-elected more than 90 percent of the time. Nearly 83 percent or $43,125 of the $52,125 total given to candidates by the industry went to winners.

Of the money that went to winners, 60 percent went to 36 House candidates in the form of 72 separate contributions. Eleven Senate winners received 38 contributions accounting for 22 percent of the total.

More than 34 percent of the House members who voted favorably on SB 397 received contributions from industry sources. In the Senate, nearly 25 percent of those favoring SB 397 received political gifts from industry sources.

Thirty-six Democrats received more than 90 percent of the contribution total that went to winners - 28 House candidates received 59 contributions for $29,000, and eight Senate candidates received 30 contributions totaling $10,200. The total to Republican lawmakers was $3,925 in 21 separate contributions, with eight House candidates receiving 13 contributions totaling $2,425 and three Senate candidates receiving eight contributions totaling $1,500.

Top recipients of private-corrections contributions included:

  • Rep. Larry Rice, who received three contributions totaling $5,500. All three contributions came from Wackenhut lobbyist Jim Barker (Rep. Rice favored SB 397); 
  • Sen. Brad Henry, who received five contributions totaling $4,550, including four from Wackenhut lobbyist Barker totaling $4,300 (Sen. Henry was excused from the vote on SB 397); 
  • Rep. Larry Adair, who received five contributions totaling $4,100, including two from Wackenhut lobbyist Barker for $3,500 (Rep. Adair was co-author of SB 397); 
  • Rep. Fred Stanley, who received three contributions totaling $3,800, including three from Wackenhut lobbyist Barker for $3,500 (Rep. Stanley favored SB 397); 
  • Sen. Maxine Cissel-Horner, who received 10 contributions totaling $2,300, nine from Barker totaling $2,100 (Sen. Cissel-Horner favored SB 397); 
  • Rep. Mike Mass, who received five contributions totaling $2,200, two from Barker totaling $1,700 (Rep. Mass favored SB 397); 
  • Rep. Terry Matlock, who received one contribution from Barker totaling $2,000 (Rep. Matlock favored SB 397); 
  • Rep. Danny Hilliard, who received two contributions totaling $1,700, both from Barker (Rep. Hilliard favored SB 397); 
  • Rep. Ron Kirby, who received four contributions totaling $1,250, including three for a total of $1,100 from Barker and one for $150 from Wackenhut executive Wayne Calabrese (Rep. Kirby favored SB 397); 
  • Sen. Charles Ford, who received six contributions totaling $1,100, including five from Barker for a total of $900 and one for $200 from Avalon Corrections (Sen. Ford favored SB 397). 
The vast majority of the 2000 election-cycle corrections-industry contributions came from Wackenhut and its lobbyist, Jim Barker, who wrote 80 checks totaling $42,025. Avalon Corrections and its lobbyists made 48 contributions totaling $9,200. Lobbyists for CCA made only three contributions totaling $900.

Oklahoma, like many other states in the country, turned to private prisons as a way to deal with overcrowding in what it believed was a cost-effective manner. That short-term solution is now turning into a long-term problem. While lawmakers recognize the hemorrhaging that's taking place in the corrections budget, their proposed solutions are met every step of the way by the lobbyists who helped get them elected. So, in SB 397 lawmakers were able to take steps to reduce the ranks of non-violent offenders, but they also ensured a supply of other inmates by increasing the number of crimes for which long sentences were guaranteed.

Texas

In the early 1990s, Texas embarked on a prison-construction program funded largely by a $1.7 billion bond issue that resulted in 116 prisons and an increase in the number of beds from 50,000 to 155,000. In that decade of tough-on-crime legislation, Texas followed the crowd, passing "three-strikes" legislation and reducing early parole, among other things.

A study by the Justice Policy Institute of Washington found that Texas' prison system in the 1990s grew at nearly twice the rate of that in any other state. At one point, nearly one in 20 adults in Texas were being supervised by the criminal justice system. The Texas Department of Criminal Justice reported the prison populations increased from 48,320 in 1990 to 146,930 in 1999.

Costs followed the three-fold increase in the prison population. Besides the nearly $2 billion in construction costs, operating budgets increased from $793 million in 1990 to more than $2.2 billion in 1999, an increase of more than 280 percent.

And with the expansion came other problems. A 1996 audit by the Texas Department of Corrections found that corrections contractors paid for lobbyists and campaign contributions with taxpayer dollars, as well as legal expenses for health and safety violations, and even funded Christmas presents for judges. The most notable examples of alleged corruption came in 1998 when the director of the state corrections agency was indicted by a federal grand jury for taking more than $20,000 from a prison-food supplier. The official also was investigated for offering a no-bid contract for a $5 million high-tech fence for a prison.

Now, nearly a decade after the Texas Public Finance Authority approved the bonds and the Legislature began spending the funds, corrections officials credit the prison buildup with lower recidivism rates and an overall reduction in corrections costs. But the corrections department's own numbers tell a different story.

The largest increases in prison spending occurred between 1990 and 1995, when legislators spent more than $2.1 billion constructing new prisons and operating costs climbed by $1 billion over the 1990 budget. During this time the prison population swelled to fill the available beds.

In 1995, Glen Castlebury, director of public information for the Texas Department of Criminal Justice, said that Texas began improving its rehabilitation procedures. Corrections department figures show costs stabilizing and the increase in inmate population slowing. The operating budget was reduced to single-digit percentage increases, the number of parolees began to climb, and the per-day cost per inmate dropped to $38.71 from a pre-1995 high of $45.70.

While it perhaps remained behind the scenes after 1995, the shift in attitudes towards rehabilitation was placed squarely on the table in the spring of 2000, when the Texas Board of Criminal Justice asked the Legislature for a $500 million bond package for three new maximum-security prisons. The board didn't get it. Nor did the 2001 Legislature give serious consideration to new money for prisons included in Gov. Rick Perry's preliminary proposals.

Instead, legislators in the 2001 session urged the parole board to adopt new guidelines to increase the number of early parolees. The result was the number of inmates who were paroled jumped from 15 percent to 25 percent.

And as a result of the shift in priorities, Texas corrections officials have alerted counties with state jail-bed contracts that they will be getting fewer inmates. This move alone is expected to save the state more than $20 million, Castlebury said.

An emphasis on rehabilitation, not imprisonment, resulted in reduced inmate numbers and lower costs.

But Texas' tough-on-crime policies of the early 1990s and associated prison expansion provided fertile ground for private-corrections companies and related contractors. The prison firms now have nearly 50 facilities in operation - twice the number operating in any other state. The number of lobbyists pursuing corrections issues and funding for clients climbed from 144 in 2000 to 236 in 2001 as the purse strings tightened, according to state documents.

With an eye to continued state funding, lobbyists and private corrections companies made 323 contributions during the 2000 election cycle totaling $361,293 to 156 candidates.

The lion's share of the contributions - 217 totaling $165,362 - went to candidates seeking seats in the House. Senate candidates received 54 contributions totaling $64,850, which was less than the total received by Rick Perry, the lieutenant governor who was not even up for election and was the successor to Gov. George Bush. Perry received 24 checks totaling $69,911 from those with ties to private corrections companies.

As one might expect in such a conservative state, Republican candidates received more of the industry contributions than did Democrats, $226,568 to $134,225 respectively.

And as is the industry's habit, incumbent candidates whose chances for re-election are nearly certain were favored with most of the industry's money: 138 incumbent candidates received 291 checks totaling $345,982 or 96 percent of the industry's political gifts (16 incumbents not running in 2000 received more than $144,500).

Winning candidates and seated legislators - that is, the lawmakers who took part in the 2001 Legislative session and made decisions about corrections policy and budget - accounted for 97.5 percent of the total raised. Only 2.5 percent went to candidates who lost their races.

So, as lawmakers considered how to fund the Texas corrections system's $4.59 billion appropriation for the 2000-2001 biennium, a decade of expansion and population growth weighed on their minds and literally hundreds of lobbyists urged them to maintain funding levels.

Conclusion

The private-prisons industry in the South is suffering along with other industries as the states grapple with tight budgets and a slow economy, but it isn't going to go away anytime soon.

The major companies - Corrections Corporation of America, Cornell, Correctional Services Corp., and Wackenhut - invested hundreds of thousands of dollars in the campaigns of hundreds of state-level candidates during the 2000 campaign cycle so that when the legislatures convened, they would have a seat at the public-policy table.

To ensure that they had a good seat, the companies and their representatives made their political gifts strategically, giving primarily to incumbents, who won their races more than 90 percent of the time, and to sitting lawmakers who were not up for election. They also wrote a large number of checks late in the election cycle, when many races were all but decided.

The companies gave to both Democrats and Republicans, favoring the party in power - an indication they were more interested in access than a political ideology.

Using these strategies, the companies made sure that more than 90 percent of their contributions in the 2000 cycle went to candidates who would actually vote on decisions that affected their bottom lines.

Much of the money also was contributed to influential members of key committees, where unfavorable policies are more easily altered, stalled or even killed and draw less scrutiny than floor debates.

On top of the strategically made contributions, the companies employed powerful lobbyists to push their interests in the halls of the Legislatures, at a cost that's difficult - if not impossible - to estimate.

By combining these powerful political tools, the companies made inroads during 2001 legislative sessions in Southern states and blocked legislation that would have been harmful to their interests. Perhaps most of all, they ensured that they will remain players in the public-policy process, with politicians looking to them for checks come the next election season and for policy alternatives as the next round of corrections-policy debates begin.

They paid handsomely to play the public-policy game, and likely will do so again.

Source: http://www.grassrootsleadership.org/NIMSP.html


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