APPLES‐TO‐FISH:	PUBLIC	AND	PRIVATE	PRISON	
COST	COMPARISONS	
Alex	Friedmann *	
Introduction ..................................................................................................................... 2	
		I.		Background................................................................................................................ 3	
A.	 Studies	with	Favorable	Findings ....................................................... 4	
B.	 Equivocal	and	Adverse	Research	Results ...................................... 5	
		II.		Difficulties	in	Public‐Private	Comparisons ................................................. 7	
		III.		Cost‐Shifting	Factors.........................................................................................11	
A.	 Prisoner	Population	Differences......................................................15	
B.	 Security	Level	Limitations..................................................................19	
C.	 Medical	Cost‐Shifting............................................................................21	
1.	 HIV,	HCV,	and	Other	Specified	Medical	Conditions...........22	
2.	 Caps	on	Medical	Costs ...................................................................24	
3.	 Prisoner	Eligibility	Criteria .........................................................26	
4.	 Combining	Medical	Cost‐Shifting	Factors .............................28	
D.	 Transportation	Costs............................................................................29	
E.	 Prisoner	Labor	Costs ............................................................................31	
F.	 Administrative	Overhead....................................................................32	
G.	 Law	Enforcement	and	Criminal	Prosecutions............................35	
H.	 Bed	Guarantees .......................................................................................38	
I.	 Long‐Term	Costs ....................................................................................40	
1.	 Per	Diem	Increases.........................................................................40	
2.	 Deferred	Maintenance...................................................................42	
3.	 Recidivism	Rates .............................................................................43	
4.	 Bond	Financing ................................................................................46	
J.	 Fraud	and	Corruption ..........................................................................48	

                                                                                                                             
*	Alex	Friedmann	serves	as	Associate	Director	of	the	Human	Rights	Defense	Center,	a	
non‐profit	organization,	and	Managing	Editor	of	HRDC’s	monthly	publication,	Prison	
Legal	News	(www.prisonlegalnews.org).		He	also	serves	in	a	non‐compensated	capacity	
as	President	of	the	Private	Corrections	Institute	(www.privateci.org),	which	opposes	
the	privatization	of	correctional	services.		He	served	ten	years	behind	bars,	including	
six	years	at	a	CCA‐operated	prison	in	Tennessee,	prior	to	his	release	in	1999.		Special	
thanks	are	extended	to	the	staff	of	the	Fordham	Urban	Law	Journal	for	their	review	of	
this	Article	and	helpful	critiques.		Any	errors	are	the	sole	responsibility	of	the	author.	

	

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		IV.		Quality	of	Service	Comparisons....................................................................51	
A.	 Violence	Levels........................................................................................52	
B.	 Staff	Turnover..........................................................................................54	
C.	 ACA	Accreditation..................................................................................55	
D.	 Recidivism	Rates	Redux ......................................................................58	
		V.		Opportunity	Costs................................................................................................60	
Conclusion.......................................................................................................................64	
	
INTRODUCTION	
It	 sounds	 like	 such	 a	 simple	 question:	 do	 private	 prisons	 save	
money?		The	 answer,	however,	is	 dependent	on	a	number	of	factors—
including	how	“saving	money”	is	defined.	
Consider	 that	 in	 2013,	 the	 nation’s	 largest	 for‐profit	 prison	
company,	 Corrections	 Corporation	 of	 America	 (CCA),	 made	 $300.8	
million	 in	 net	 profit	 on	 gross	 revenue	 of	 $1.69	 billion. 1 	 	 Thus,	 the	
company	achieved	$300.8	million	in	savings	over	operational	expenses	
at	its	prisons,	jails,	and	other	detention	facilities.		But	how	much	of	that	
$300.8	 million	 went	 to	 taxpayers	 or	 reverted	 to	 state	 treasuries	 or	
county	coffers?	
None.		Those	“savings”	went	to	CCA	in	the	form	of	corporate	profit.	
Over	the	past	three	decades	there	have	been	dozens	of	reports	and	
studies	 on	 and	 analyses	 of	 cost	 comparisons	 between	 public	 and	
privately‐operated	 prisons—by	 academics,	 government	 agencies,	 and	
independent	 organizations—all	 attempting	 to	 answer	 the	 elusive	
question	 of	 whether	 private	 prisons	 save	 money. 2 	 	 This	 is	 not	 one	 of	
those	attempts.	
Instead,	 rather	 than	 trying	 to	 determine	 if	 prison	 privatization	
results	in	savings	due	to	the	shifting	of	costs	from	public	agencies,	this	
Article	takes	an	opposite	approach	by	identifying	costs	that	are	shifted	
from	privately‐operated	facilities	to	the	public	sector.		An	examination	
of	 such	 cost‐shifting	 factors	 is	 essential	 when	 evaluating	 cost	
comparisons,	 to	 better	 understand	 how	 private	 prisons	 externalize	
expenses	while	internalizing	profits.	

                                                                                                                             
	
1.	 CORR.	CORP.	OF	AM.,	FORM	10‐K	53–54	(2013).	
	
2.	 See,	e.g.,	CODY	MASON,	THE	SENTENCING	PROJECT,	TOO	GOOD	TO	BE	TRUE:	PRIVATE	
PRISONS	IN	AMERICA	7–9	(2012);	Gerald	G.	Gaes,	The	Current	Status	of	Prison	
Privatization	Research	on	American	Prisons,	3–8,	19–20	(2012)	(unpublished	
manuscript),	
http://works.bepress.com/cgi/viewcontent.cgi?article=1000&context=gerald_gaes.	

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In	 short,	 public	 agencies	 want	 to	 save	 money	 while	 private	 prison	
companies	 have	 an	 inherent	 need	 to	 make	 money—and	 the	 latter	
necessarily	comes	at	the	expense	of	the	former. 3	
Part	 I	 of	 this	 Article	 examines	 previous	 public‐private	 prison	 cost	
comparison	 studies,	 while	 Part	 II	 discusses	 various	 factors	 that	 make	
such	comparisons	difficult.		Part	III	provides	an	exhaustive	look	at	cost	
shifting	 factors,	 whereby	 costs	 are	 shifted	 from	 private	 prisons	 to	
public	 contracting	 agencies,	 and	 Part	 IV	 examines	 quality	 of	 service	
comparisons—including	levels	of	violence	and	staff	turnover	at	private	
prisons,	 accreditation	 by	 the	 American	 Correctional	 Association,	 and	
recidivism	 rates.	 	 Part	 V	 addresses	 opportunity	 costs	 associated	 with	
privately‐operated	 prisons,	 while	 the	 Conclusion	 proposes	 an	
alternative	 approach	 when	 considering	 whether	 prison	 privatization	
results	in	cost	savings.	
I.		BACKGROUND	
There	 is	 no	 dearth	 of	 research	 on	 whether	 privately‐operated	
correctional	 facilities	 are	 more	 cost	 effective	 or	 provide	 equivalent	
quality	 of	 service	 in	 comparison	 to	 public	 prisons;	 numerous	 studies	
have	reached	equally	numerous	and	disparate	conclusions. 4 		As	noted	
by	 Alexander	 Volokh,	 an	 Associate	 Professor	 at	 Emory	 Law	 School,	
“somewhat	surprisingly,	for	all	the	ink	spilled	on	private	prisons	over	
the	last	thirty	years,	we	have	precious	little	good	information	on	what	
are	 surely	 the	 most	 important	 questions:	 when	 it	 comes	 to	 cost	 or	
quality,	are	private	prisons	better	or	worse	than	public	prisons?” 5 		Or,	
as	 candidly	 stated	 by	 CCA	 vice	 president	 Steve	 Owen	 in	 reference	 to	
whether	 private	 prisons	 save	 money:	 “[t]here	 is	 a	 mixed	 bag	 of	
research	out	there	.	.	.	.		It’s	not	as	black	and	white	and	cut	and	dried	as	
we	would	like.” 6	

                                                                                                                             
	
3.	 Although	this	Article	focuses	on	private	prisons,	that	is	not	to	imply	that	public	
prisons	are	without	their	problems	and	faults;	further,	issues	related	to	prison	
privatization	are	tied	to	the	larger	problem	of	mass	incarceration	in	the	United	States,	
considering	that	the	vast	majority	of	correctional	facilities	are	operated	by	public	
agencies.	
	
4.	 See	generally	PRISON	PRIVATIZATION:	THE	MANY	FACETS	OF	A	CONTROVERSIAL	INDUSTRY	
(Byron	Eugene	Price	&	John	Charles	Morris,	eds.,	2012)	(compiling	scholarly	works	
from	various	commentators	on	prison	privatization).	
5.	 Alexander	Volokh,	Prison	Accountability	and	Performance	Measures,	63	EMORY	
	
L.J.	339,	347	(2013).	
	
6.	 Richard	A.	Oppel,	Jr.,	Private	Prisons	Found	to	Offer	Little	in	Savings,	N.Y.	TIMES,	
May	18,	2011,	http://www.nytimes.com/2011/05/19/us/19prisons.html.	

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A.	 Studies	with	Favorable	Findings	
That	 mixed	 bag	 includes	 studies	 that	 have	 identified	 cost	 savings	
and	other	benefits	resulting	from	prison	privatization,	such	as	research	
conducted	 in	 the	 1990s	 by	 Professor	 Charles	 W.	 Thomas	 at	 the	
University	 of	 Florida;	 a	 2008	 study	 by	 researchers	 at	 Vanderbilt	
University;	 various	 reports	 by	 the	 Reason	 Foundation;	 and	 most	
recently	 a	 study	 by	 two	 Temple	 University	 economics	 professors,	
published	 in	 July	 2014.	 	What	 do	 they	 have	 in	 common?	 	 All	 received	
funding	from	the	private	prison	industry.	
Professor	 Thomas	 served	 as	 director	 of	 the	 Private	 Corrections	
Project	 at	 the	 University	 of	 Florida,	 which	 studied	 the	 private	 prison	
industry	and	produced	research	and	statistical	data	concerning	prison	
privatization. 7 		He	also	owned	stock	in	the	private	prison	firms	he	was	
researching,	served	on	the	board	of	Prison	Realty	Trust,	a	CCA	spin‐off,	
and	 received	 $3	 million	 in	 payments	 from	 CCA/Prison	 Realty. 8 		
Thomas	retired	after	these	conflicts	became	known;	he	was	later	fined	
$20,000	 by	 the	 Florida	 Commission	 on	 Ethics,	 which	 stated	 his	
“contractual	 relationships	 with	 private	 corrections	 companies,	 or	
companies	 related	 to	 the	 private	 corrections	 industry	.	.	.	conflicted	
with	his	duty	to	objectively	evaluate	the	corrections	industry	through	
his	research	with	the	University	of	 Florida.” 9 		Regardless,	proponents	
of	prison	privatization	still	occasionally	cite	his	work. 10	
The	 2008	 Vanderbilt	 study,	 which	 found	 competitive	 benefits	
through	a	shared	system	of	public	and	privately‐operated	prisons,	was	
partly	funded	by	CCA	and	the	Association	for	Private	Correctional	and	
Treatment	 Organizations	 (APCTO),	 an	 industry	 trade	 group. 11 	 	 The	
Reason	 Foundation,	 which	 strongly	 favors	 privatization,	 has	 received	

                                                                                                                             
	
7.	 See	Alex	Friedmann,	University	Professor	Shills	for	Private	Prison	Industry,	
PRISON	LEGAL	NEWS	(Feb.	15,	1999),	
https://www.prisonlegalnews.org/news/1999/feb/15/university‐professor‐shills‐
for‐private‐prison‐industry;	Dara	Kam,	Ethics	Board	Fines	Former	UF	Professor	$20,000,	
SARASOTA	HERALD‐TRIB.,	Oct.	22,	1999,	at	1B,	4B.	
	
8.	 See	Friedmann,	supra	note	7;	Kam,	supra	note	7.	
	
9.	 Fla.	Comm.	on	Ethics,	Final	Order	No.	99‐21	(1999),	available	at	
http://www.ethics.state.fl.us/orders/1997/97‐100fo.html.	
	 10.	 See,	e.g.,	LEONARD	C.	GILROY	ET	AL.,	REASON	FOUND.	&	HOWARD	JARVIS	TAXPAYERS	ASS’N,	
PUBLIC‐PRIVATE	PARTNERSHIPS	FOR	CORRECTIONS	IN	CALIFORNIA:	BRIDGING	THE	GAP	BETWEEN	
CRISIS	AND	REFORM	(2011),	available	at	
http://reason.org/files/private_prisons_california.pdf;	SIMON	HAKIM	&	ERWIN	A.	
BLACKSTONE,	PRISON	BREAK:	A	NEW	APPROACH	TO	PUBLIC	COST	AND	SAFETY	(2014),	available	at	
http://www.independent.org/pdf/policy_reports/2014‐06‐30‐prision_break.pdf.	
	 11.	 James	F.	Blumstein	et	al.,	Do	Government	Agencies	Respond	to	Market	Pressures?	
Evidence	from	Private	Prisons,	15	VA.	J.	SOC.	POL’Y	&	L.	446	(2008).	

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funding	from	private	prison	companies	since	at	least	the	1990s. 12 		For	
example,	 a	 2009	 Reason	 Foundation	 donor	 list	 included	 the	 GEO	
Group—the	 nation’s	 second‐largest	 for‐profit	 prison	 firm—as	 a	
Platinum	 Level	 supporter,	 while	 CCA	 was	 listed	 as	 a	 Gold	 Level	
supporter. 13 	 	 And	 the	 report	 by	 Temple	 University	 professors	 Simon	
Hakim	 and	 Erwin	 A.	 Blackstone,	 which	 found	 substantial	 cost	 savings	
through	prison	privatization,	received	funding	from	the	nation’s	three	
largest	 private	 prison	 companies:	 CCA,	 the	 GEO	 Group,	 and	
Management	 &	 Training	 Corp.	 (MTC). 14 	 	 That	 funding	 was	 not	
disclosed	in	their	initial	working	paper,	but	it	was	mentioned	when	the	
study	was	subsequently	published	by	The	Independent	Institute. 15	
Of	course,	the	mere	fact	that	these	studies	received	funding	from	the	
private	prison	industry	 does	not	mean	their	findings	are	 faulty.		Such	
studies	 do,	 however,	 stand	 in	 contrast	 to	 another	 body	 of	 research—
not	funded	by	for‐profit	prison	companies—that	has	reached	contrary	
conclusions.	
B.	 Equivocal	and	Adverse	Research	Results	
As	early	as	1996	a	report	by	the	then‐U.S.	General	Accounting	Office	
(GAO)	 reviewed	 five	 studies	 on	 prison	 privatization,	 and	 concluded	
that	 cost	 savings	 were	 inconclusive:	 “regarding	 operational	 costs,	
because	 the	 studies	 reported	 little	 difference	 and/or	 mixed	 results	 in	
comparing	private	and	public	facilities,	we	could	not	conclude	whether	
privatization	saved	money.” 16	
A	 2003	 review	 of	 public	 and	 private	 prison	 cost	 comparisons	
published	in	The	Prison	Journal	concurred,	finding	that	“neither	side	of	
the	 correctional	 privatization	 debate	 should,	 at	 this	 time,	 be	 able	 to	
legitimately	claim	that	the	weight	of	the	empirical	evidence	is	on	their	

                                                                                                                             
	 12.	 PRIVATE	CORR.	INST.,	POLICY	BRIEF:	DO	PRIVATE	PRISONS	SAVE	MONEY?	2	(2012),	
available	at	
http://www.privateci.org/private_pics/PCI%20policy%20brief%20on%20private%2
0prison%20costs%202012.pdf.	
	 13.	 REASON	FOUND.,	CARRYING	THE	TORCH	OF	FREEDOM	(2009),	available	at	
https://www.prisonlegalnews.org/media/publications/reason_magazine_supporters_
incl_private_prisons_2009.pdf.	
	 14.	 HAKIM	&	BLACKSTONE,	supra	note	10,	at	70;	see	also	Martha	Woodall,	Temple	
Completes	Probe	of	Profs’	Prison	Study,	PHILA.	INQUIRER,	July	18,	2014,	
http://articles.philly.com/2014‐07‐18/news/51663586_1_ethics‐complaint‐alex‐
friedmann‐temple‐university.	
	 15.	 See	Woodall,	supra	note	14;	see	also	HAKIM	&	BLACKSTONE,	supra	note	10,	at	70.	
	 16.	 U.S.	GEN.	ACCOUNTING	OFFICE,	GAO/GGD‐96‐158,	PRIVATE	AND	PUBLIC	PRISONS:	
STUDIES	COMPARING	OPERATIONAL	COSTS	AND/OR	QUALITY	OF	SERVICE	7	(1996),	available	at	
http://www.gao.gov/archive/1996/gg96158.pdf.	

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side.” 17 	 	 More	 recently,	 a	 meta‐analysis	 by	 the	 University	 of	 Utah’s	
Criminal	 Justice	 Center,	 published	 in	 2009,	 found	 that,	 “[c]ost	 savings	
from	 privatizing	 prisons	 are	 not	 guaranteed	 and	 appear	 minimal.” 18 		
The	 researchers,	 who	 examined	 a	 dozen	 studies,	 concluded	 that	
“prison	 privatization	 provides	 neither	 a	 clear	 advantage	 nor	
disadvantage	 compared	 with	 publicly	 managed	 prisons.	 	 Neither	 cost	
savings	 nor	 improvements	 in	 quality	 of	 confinement	 are	 guaranteed	
through	 privatization.” 19 	 	 Similarly,	 an	 August	 2010	 review	 by	
Professor	 Gerald	 G.	 Gaes	 at	 Florida	 State	 University	 concluded	 that	
“[d]irect	 comparisons	 of	 cost	 and	 quality	 neither	 favor	 the	 public	 nor	
the	private	sector.” 20	
Yet,	a	2010	report	by	Arizona’s	Office	of	the	Auditor	General,	based	
on	 data	 from	 the	 Department	 of	 Corrections,	 noted	 that	 privately‐
operated	 prisons	 were	 actually	 more	 expensive	 than	 their	 public	
counterparts. 21 		The	report	stated:	
[A]ccording	 to	 the	 Department’s	 Fiscal	 Year	 2009	 Operating	 Per	
Capita	Cost	Report,	the	State	paid	private	prisons	a	higher	per	inmate	
rate	than	it	spent	on	equivalent	services	at	state‐operated	facilities	in	
fiscal	year	2009.		After	adjusting	state	and	private	rates	to	make	them	
more	 comparable,	 the	 Department’s	 study	 found	 that	 rates	 paid	 to	
private	 facilities	 were	 higher	 for	 both	 minimum‐	 and	 medium‐
custody	beds—the	two	categories	of	beds	for	which	the	Department	
contracts. 22	

Specifically,	after	adjusting	“for	healthcare	costs,	depreciation	costs,	
and	costs	for	functions	provided	only	by	the	State,”	the	Auditor’s	Office	
reported	 that	 the	 fiscal	 year	 (FY)	 2009	 per	 diem	 cost	 for	 minimum‐
security	prisoners	at	state	facilities	was	$46.81,	compared	with	$47.14	
at	 private	 prisons,	 while	 the	 per	 diem	 cost	 for	 medium‐security	

                                                                                                                             
	 17.	 Dina	Perrone	&	Travis	C.	Pratt,	Comparing	the	Quality	of	Confinement	and	Cost‐
Effectiveness	of	Public	Versus	Private	Prisons:	What	We	Know,	Why	We	Do	Not	Know	
More,	and	Where	to	Go	from	Here,	83	PRISON	J.	301,	315–16	(2003),	available	at	
http://tpj.sagepub.com/content/83/3/301.full.pdf.	
	 18.	 Brad	W.	Lundahl	et	al.,	Prison	Privatization:	A	Meta‐Analysis	of	Cost	and	Quality	
of	Confinement	Indicators,	19	RES.	ON	SOC.	WORK	PRAC.	383,	383	(2009),	available	at	
http://www.epsu.org/IMG/pdf/luhndahl‐prisons‐.pdf.	
	 19.	 Id.	at	392.	
	 20.	 Gaes,	supra	note	2,	at	8.	
	 21.	 STATE	OF	ARIZ.	OFFICE	OF	THE	AUDITOR	GEN.,	REPORT	NO.	10‐08,	DEPARTMENT	OF	
CORRECTIONS—PRISON	POPULATION	GROWTH	(2010),	available	at	
http://www.azauditor.gov/Reports/State_Agencies/Agencies/Corrections_Departmen
t_of/Performance/10‐08/10‐08.pdf.	
	 22.	 Id.	at	19–20.	

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prisoners	 at	 state	 facilities	 was	 $48.13,	 compared	 with	 $55.89	 at	
private	prisons. 23	
Somewhat	similar	results	were	reported	by	the	Arizona	Department	
of	 Corrections	 (ADC)	 in	 an	 April	 2011	 report	 that	 found	 the	 FY	 2010	
adjusted	daily	per	capita	cost	for	minimum‐security	prisoners	at	state	
prisons	was	$46.59,	just	slightly	higher	than	the	$46.56	cost	at	in‐state	
privately‐operated	 facilities. 24 	 	 The	 adjusted	 per	 capita	 cost	 for	
medium‐security	 prisoners	 was	 $48.42	 at	 state	 prisons—significantly	
lower	than	the	$53.02	cost	at	in‐state	private	prisons. 25 			
In	 Georgia,	 cost	 allocations	 by	 the	 state	 Department	 of	 Corrections	
found,	based	on	FY	2012	data,	that	the	average	per	diem	cost	at	state	
prisons	 was	 $51.27	 while	 the	 cost	 at	 privately‐operated	 facilities	 was	
$52.75,	 or	 around	 2.88%	 higher. 26 	 	 Considering	 only	 state	 funds	 and	
excluding	 proration	 of	 central	 office	 expenses,	 the	 average	 per	 diem	
cost	at	state	prisons	was	$49.69	compared	with	$52.30—around	5.2%	
higher—at	privately‐operated	facilities. 27	
Apparently,	 the	 results	 of	 the	 existing	 body	 of	 research	 on	 public‐
private	 prison	 cost	 comparisons	 depend	 in	 part	 on	 who	 performs	 the	
study,	and	partly	on	what	factors	are	considered	when	evaluating	cost	
measures;	for	example,	how	per	diem	rates	are	calculated.	
II.		DIFFICULTIES	IN	PUBLIC‐PRIVATE	COMPARISONS	
Why	are	there	such	dissimilar	research	outcomes,	with	some	studies	
finding	cost	savings	through	prison	privatization,	others	not	being	able	
to	 determine	 if	 savings	 occur,	 and	 yet	 others	 concluding	 that	 private	
prisons	 result	 in	 higher	 costs?	 	 In	 one	 case,	 separate	 studies	 by	 the	
Federal	 Bureau	 of	 Prisons	 (BOP)	 and	 Abt	 Associates 28 	 examined	 the	
same	 four	 facilities,	 three	 public	 and	 one	 private,	 over	 the	 same	 time	
period,	and	reported	markedly	different	results. 29 		A	number	of	factors	
make	an	apples‐to‐apples	comparison	difficult.	

                                                                                                                             
	 23.	 Id.	at	20.	
	 24.	 ARIZ.	DEP’T	OF	CORR.,	FY	2010	OPERATING	PER	CAPITA	COST	REPORT	3	(2011),	
available	at	http://archive.azcentral.com/ic/pdf/0904prison.pdf.	
	 25.	 Id.	
	 26.	 GA.	DEP’T	OF	CORR.,	FY	2013	ALLOCATION	OF	COST	TO	INMATES,	PROBATIONERS,	ETC.	1	
(2014),	available	at	http://www.dcor.state.ga.us/pdf/CorrectionsCosts.pdf.	
	 27.	 Id.	
	 28.	 Abt	Associates,	a	private	firm,	frequently	conducts	research	for	government	
agencies.	See	ABT	ASSOCIATES,	www.abtassociates.com	(last	visited	Nov.	12,	2014).	
	 29.	 See	Gerry	Gaes,	Cost,	Performance	Studies	Look	at	Prison	Privatization,	NAT’L	
INST.	JUST.	J.,	March	2008,	at	32,	available	at	
https://www.ncjrs.gov/pdffiles1/nij/221507.pdf;	see	also	Volokh,	supra	note	5.	

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It	 is	 hard	 to	 compare	 private	 and	 public	 prisons	 unless	 they	 share	
similar	security	levels,	population	types	(including	gender,	average	age	
of	 offenders,	 medical	 and	 mental	 health	 care	 needs,	 etc.),	 staffing	
levels,	 programming,	 age	 of	 the	 facility,	 and	 other	 relevant	
characteristics. 30 	 	 Absent	 comparable	 facilities,	 researchers	 lack	
comparable	 data.	 	 Thus,	 some	 studies	 have	 attempted	 to	 analyze	
hypothetical	 public	 and	 private	 prisons	 rather	 than	 actual	 ones. 31 	 	 In	
other	cases,	studies	have	concluded	that	such	comparisons	simply	are	
not	possible;	as	noted	by	the	GAO	in	an	October	2007	report:	
A	 methodologically	 sound	 cost	 comparison	 analysis	 of	 BOP	 and	
private	 low	 and	 minimum	 security	 facilities	 is	 not	 currently	 feasible	
because	 BOP	 does	 not	 gather	 data	 from	 private	 facilities	 that	 are	
comparable	 to	 the	 data	 collected	 on	 BOP	 facilities	.	.	.	.	 	 [W]ithout	
comparable	 data,	 BOP	 is	 not	 able	 to	 analyze	 and	 justify	 whether	
confining	 inmates	 in	 private	 facilities	 would	 be	 more	 cost‐effective	
than	 other	 confinement	 alternatives	 such	 as	 constructing	 new	 BOP	
facilities	or	renovating	existing	BOP	facilities. 32	

Or	 as	 stated	 by	 Davidson	 County,	 Tennessee,	 Sheriff	 Daron	 Hall,	 past	
president	 of	 the	 American	 Correctional	 Association	 and	 a	 former	 CCA	
program	 manager,	 “I’ve	 seen	 so	 many	 different	 attempts	 to	 compare	
the	 two	 [public	 and	 private	 prisons]	 that	 I	 don’t	 know	 if	 there	 is	 a	
simple	way	to	evaluate	one	versus	the	other.” 33	
Consider	 that	 when	 comparing	 public	 and	 privately‐operated	
prisons,	 the	 costs	 of	 the	 former	 are	 just	 as	 important	 as	 those	 of	 the	
latter.	 	 While	 the	 focus	 tends	 to	 be	 on	 expenses	 at	 private	 prisons,	
without	 accurate	 costs	 for	 public	 prisons	 such	 comparisons	 are	
meaningless.		In	some	cases	the	methodology	for	determining	baseline	
operating	 expenses	 at	 public	 prisons	 has	 been	 faulted,	 which	
undermines	public‐private	prison	cost	comparisons.		In	Hawaii,	which	
houses	almost	a	third	of	its	prisoners	in	privately‐operated	facilities	on	
the	U.S.	mainland,	a	December	2010	report	by	the	state	Auditor’s	office	
cited	 problems	 with	 the	 way	 the	 Hawaii	 Department	 of	 Public	 Safety	

                                                                                                                             
	

30.	 See	DOUGLAS	MCDONALD	ET	AL.,	PRIVATE	PRISONS	IN	THE	UNITED	STATES:	AN	ASSESSMENT	
OF	CURRENT	PRACTICE	iv–v	(1998),	available	at	

http://www.abtassociates.com/Reports/priv‐report.pdf.	
	 31.	 See,	e.g.,	U.S.	GEN.	ACCOUNTING	OFFICE,	supra	note	16,	at	26.	
	 32.	 U.S.	GOV’T	ACCOUNTABILITY	OFFICE,	GAO‐08‐6,	COST	OF	PRISONS:	BUREAU	OF	PRISONS	
NEEDS	BETTER	DATA	TO	ASSESS	ALTERNATIVES	FOR	ACQUIRING	LOW	AND	MINIMUM	SECURITY	
FACILITIES	10	(2007),	available	at	http://www.gao.gov/assets/270/267839.pdf.	
	 33.	 Annmarie	Timmins,	N.H.	Officials	Mull	Private	Prison	Bids,	CONCORD	MONITOR,	
Apr.	8,	2012,	http://www.concordmonitor.com/article/322211/nh‐officials‐mull‐
private‐prison‐bids	(quoting	Daron	Hall).	

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(PSD)	 calculated	 costs	 at	 in‐state	 public	 prisons. 34 	 	 According	 to	 the	
Auditor,	“PSD	reports	that	it	spends	about	twice	 as	much	to	 maintain	
an	 inmate	 in‐state.	 	 However,	 we	 found	 that	 these	 cost	 estimates	 are	
based	 on	 a	 flawed	 methodology	 designed	 around	 what	 is	 easiest	 for	
the	 department	 to	 report,	 or,	 as	 one	 PSD	 official	 characterized,	 ‘quick	
and	dirty’	numbers.” 35 		Consequently,	the	“true	costs	are	unknown.” 36 		
The	 Auditor’s	 office	 released	 a	 follow‐up	 report	 in	 April	 2013,	 noting	
that	 the	 PSD	 had	 “improved	 the	 accuracy	 of	 its	 incarceration	 data,	
employing	 a	 more	 systematic	 process	 that	 utilizes	 comparable	 costs	
and	cost‐accounting	methodology.” 37 		However,	the	report	 also	found	
that	due	to	various	factors,	“the	department’s	calculation	on	per	capita	
incarceration	 costs	 for	 the	 various	 inmate	 populations	 is	 still	
inaccurate	and	skews	overall	inmate	costs.” 38	
But	 private	 prison	 companies	 and	 their	 proponents	 make	 it	 sound	
so	easy:	as	one	theoretical	example,	say	the	average	per	diem	cost	for	
housing	a	prisoner	at	a	state	facility	is	$55	while	the	average	cost	at	a	
private	 prison	 is	 $45.	 	 Thus,	 obviously,	 the	 privately‐operated	 prison	
saves	 money.	 	 That	 comparison,	 however,	 falls	 somewhere	 between	
the	 “damned	 lies”	 and	 “statistics”	 of	 the	 well‐known	 aphorism	
variously	 attributed	 to	 Mark	 Twain	 or	 Benjamin	 Disraeli:	 “[t]here	 are	
three	 kinds	 of	 lies:	 lies,	 damned	 lies	 and	 statistics.” 39 	 	 Some	
comparisons	 of	 public	 versus	 private	 prison	 costs	 rely	 heavily	 on	
statistical	 prevarication.	 	 Take,	 as	 an	 example,	 a	 joint	 report	 released	
by	 the	 Reason	 Foundation	 and	 the	 Howard	 Jarvis	 Taxpayers	
Association	 (HJTA)	 in	 2010. 40 	 	 The	 report	 advocated	 sending	 25,000	
California	 prisoners	 to	 out‐of‐state	 privately‐operated	 facilities,	
claiming	savings	of	up	to	$1.8	billion	over	a	five‐year	period	based	on	

                                                                                                                             
	 34.	 HAW.	OFFICE	OF	THE	AUDITOR,	REPORT	NO.	10‐10,	MANAGEMENT	AUDIT	OF	THE	
DEPARTMENT	OF	PUBLIC	SAFETY’S	CONTRACTING	FOR	PRISON	BEDS	AND	SERVICES	(2010),	
available	at	http://files.hawaii.gov/auditor/Reports/2010/10‐10.pdf.	
	 35.	 Id.	
	 36.	 Id.	at	15.	
	 37.	 HAW.	OFFICE	OF	THE	AUDITOR,	REPORT	NO.	13‐03,	REPORT	ON	THE	IMPLEMENTATION	OF	
STATE	AUDITOR’S	2010	RECOMMENDATIONS	45	(2013),	available	at	
http://files.hawaii.gov/auditor/Reports/2013/13‐03.pdf.	
	 38.	 Id.	at	47.	
	 39.	 For	an	exhaustive	discussion	on	the	origin	of	this	saying,	see	Lies,	Damned	Lies	
and	Statistics,	UNIV.	OF	YORK,	http://www.york.ac.uk/depts/maths/histstat/lies.htm	
(last	revised	July	19,	2012).	
	 40.	 GILROY	ET	AL.,	supra	note	10.	

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an	 estimated	 $162	 per	 diem	 cost	 at	 in‐state	 prisons. 41 	 	 California	
currently	houses	around	9000	prisoners	in	out‐of‐state	facilities. 42	
The	 Private	 Corrections	 Institute	 (PCI), 43 	 which	 opposes	 the	
privatization	of	correctional	services,	issued	a	press	release	on	May	21,	
2010,	stating:	
The	 $162	 per	 diem	 rate	 cited	 in	 the	 report,	 which	 was	 obtained	 by	
simply	 dividing	 the	 state’s	 corrections	 budget	 by	 its	 prison	
population,	 grossly	 misrepresents	 the	 actual	 cost	 of	 incarceration.		
For	 example,	 the	 inflated	 per	 diem	 rate	 in	 the	 Reason‐HJTA	 report	
inaccurately	 includes	 parole	 supervision	 and	 administrative	 costs,	
which	 are	 part	 of	 the	 prison	 system’s	 budget;	 medical	 and	 mental	
health	 care	 expenses,	 which	 are	 under	 the	 control	 of	 the	 federally‐
appointed	 receiver;	 and	 central	 office	 administrative	 overhead.	 	 The	
report’s	 exaggerated	 per	 diem	 rate	 also	 apparently	 includes	 prison	
design	and	construction	expenses,	which	are	not	factored	into	private	
prison	 cost	 analyses.	 	 The	 report	 fails	 to	 consider	 that	 privately‐run	
prisons	 do	 not	 house	 maximum‐security	 California	 prisoners,	 death	
row	 prisoners,	 female	 prisoners,	 juveniles	 or	 prisoners	 with	 serious	
mental	health	or	medical	conditions,	all	of	whom	are	more	expensive	
to	 incarcerate.	 In	 the	 latter	 regard,	 medical	 costs	 for	 California	
inmates	held	in	private	prisons	are	capped	at	$2,500	per	prisoner;	the	
state	 must	 pay	 medical	 expenses	 above	 that	 amount,	 plus	 all	
treatment	costs	for	inmates	who	are	HIV‐positive. 44	

In	fact,	the	California	Legislative	Analyst’s	Office	(LAO)	reported	in	a	
January	2007	letter	that,	“the	state	now	budgets	on	average	about	$56	
per	 inmate	 per	 day	 for	 each	 additional	 prison	 inmate—often	 referred	
to	 as	 overcrowding	 costs	 per	 inmate.	 	 By	 comparison,	 the	 contracted	
rate	for	.	.	.	new	out	of	state	prison	beds	is	higher,	about	$63	per	inmate	
per	day.” 45 		The	LAO	further	noted	that	the	per	diem	rate	for	prisoners	
in	out‐of‐state	private	prisons	did	not	include	transportation	costs,	the	

                                                                                                                             
	 41.	 Id.	
	 42.	 See	Out	of	State	Population	Capacity,	CAL.	DEP’T	CORRECTIONS	&	REHABILITATION,	
http://www.cdcr.ca.gov/Visitors/CA_Out_Of_State_Facilities.html	(last	visited	Nov.	12,	
2014).	
	 43.	 PRIVATE	CORRECTIONS	INST.,	www.privateci.org	(last	visited	Nov.	12,	2014).		Note:	
the	author	serves	as	president	of	the	Private	Corrections	Institute.	
	 44.	 Press	Release,	Private	Corr.	Inst.,	Report	on	Prison	Privatization	Plagued	with	
Conflicts	of	Interest,	Faulty	Data,	Political	Connections	(May	25,	2010),	available	at	
http://penknifepresscop.blogspot.com/2010/05/report‐on‐prison‐privatization‐
plagued.html.	
	 45.	 Letter	from	Elizabeth	G.	Hill,	LAO	Legislative	Analyst,	to	Gloria	Romero,	Cal.	
State	Senator	(Jan.	5,	2007),	available	at	
https://www.prisonlegalnews.org/media/publications/CA%20LAO%20report%20on
%20out%20of%20state%20private%20prisons.pdf.	

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cost	of	oversight	by	state	officials	or	medical	expenses	above	the	$2500	
cap. 46	
This	 led	 PCI	 executive	 director	 Ken	 Kopczynski	 to	 observe:	
“[c]ontrasting	 the	 inaccurate	 per	 diem	 rate	 in	 the	 [Reason‐HJTA]	
report	with	the	cost	of	housing	inmates	in	out‐of‐state	private	prisons	
cannot	even	be	considered	an	apples‐to‐oranges	comparison.		It’s	more	
like	an	apples‐to‐fish	comparison.” 47	
III.		COST‐SHIFTING	FACTORS	
Typically,	 private	 prison	 contracts	 are	 based	 on	 a	 per	 diem	 model;	
the	public	contracting	agency,	such	as	a	state	Department	of	Correction	
or	 sheriff’s	 office,	 pays	 a	 set	 amount	 per	 prisoner,	 per	 day	 to	 the	
private	 prison	 company;	 therefore,	 to	 reduce	 costs,	 contracting	
agencies	 are	 incentivized	 to	 contract	 with	 the	 company	 offering	 the	
lowest	 per	 diem	 rate.	 	 But	 as	 indicated	 above	 and	 discussed	 below,	
there	are	a	number	of	factors	that	can	result	in	costs	to	public	agencies	
beyond	the	contractual	per	diem	rate.		Such	cost‐shifting	factors,	which	
include	differences	in	prisoner	populations	and	security	levels,	medical	
expenses,	 transportation	 costs,	 and	 administrative	 overhead,	 serve	 to	
inflate	the	costs	paid	by	the	public	contracting	agency	while	 deflating	
the	expenses	of	private	prison	companies.		Many	of	the	earlier	studies	
that	compared	costs	at	public	and	private	prisons	failed	to	adequately	
address	relevant	cost‐shifting	factors,	including	long‐term	expenses. 48 		
The	 importance	 of	 adjusting	 for	 factors	 that	 shift	 costs	 from	 private	
prisons	to	the	public	sector	is	demonstrated	by	the	following	examples.	
As	 noted	 above,	 a	 2010	 report	 by	 Arizona’s	 Office	 of	 the	 Auditor	
General	 found	 that	 privately‐operated	 prisons	 were	 more	 expensive	
than	 public	 prisons	 when	 using	 an	 adjusted	 per	 capita	 rate.	 	 Using	 a	
non‐adjusted	 rate,	 the	 report	 found	 the	 cost	 for	 housing	 minimum‐
security	 prisoners	 in	 private	 facilities	 was	 $54.78—significantly	 less	
than	 the	 non‐adjusted	 per	 capita	 rate	 of	 $58.80	 at	 public	 prisons. 49 		
The	 non‐adjusted	 rate	 indicated	 cost	 savings	 to	 the	 state,	 while	 the	
adjusted	 rate	 indicated	 a	 net	 loss—evidencing	 the	 need	 to	 adjust	 for	
cost‐shifting	factors. 50	

                                                                                                                             
	 46.	 Id.	
	 47.	 Press	Release,	Private	Corr.	Inst.,	supra	note	44.	
	 48.	 See	supra	Part	I.	
	 49.	 STATE	OF	ARIZ.	OFFICE	OF	THE	AUDITOR	GEN.,	supra	note	21,	at	20.		The	non‐adjusted	
rate	of	medium‐security	prisons	still	indicated	that	privately‐operated	facilities	cost	
more	than	state	prisons,	though	the	difference	was	around	sixty	percent	smaller.	Id.	
	 50.	 Adjusted	per	capita	cost	data	was	discontinued	beginning	in	2012;	since	then	
the	Arizona	Department	of	Corrections	has	only	reported	unadjusted	per	capita	costs,	

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Also,	according	to	a	2009	report	by	the	Hawaii	Department	of	Public	
Safety	 related	 to	 expenditures	 for	 housing	 offenders	 in	 out‐of‐state	
private	 prisons,	 such	 costs	 were	 $48.04	 million	 in	 FY	 2009	 based	 on	
contractual	 per	 diem	 rates. 51 	 	 However,	 those	 costs	 did	 not	 include	
certain	 medical	 expenses,	 transportation	 expenses,	 staffing	 costs,	 the	
cost	 of	 prisoners’	 wages,	 and	 various	 overhead	 expenses. 52 	 	 When	
those	 costs	 were	 factored	 in,	 the	 adjusted	 expenditures	 for	 housing	
Hawaii	 prisoners	 at	 private	 facilities	 totaled	 $57.38	 million—a	 19.4%	
increase. 53 		Nor	was	this	an	anomaly.		The	Hawaii	Department	of	Public	
Safety’s	 expenditure	 report	 for	 FY	 2008	 indicated	 a	 14.7%	 increase	
between	 the	 contractual	 housing	 costs	 ($48.39	 million)	 and	 adjusted	
expenditures	 including	 medical	 care,	 prisoner	 wages,	 transportation,	
staffing,	 and	 other	 expenses	 ($55.52	 million). 54 	 	 For	 FY	 2007,	 there	
was	 a	 14.9%	 increase	 between	 contractual	 housing	 costs	 ($43.76	
million)	and	adjusted	expenditures	($50.29	million). 55	
Given	that	prior	research	has	found	any	cost	savings	resulting	from	
prison	 privatization	 are	 often	 equivocal,	 even	 small	 variations	 due	 to	
cost‐shifting	factors	can	mean	the	difference	between	a	net	gain	or	loss	
by	 public	 contracting	 agencies.	 	 This	 is	 of	 heightened	 importance	 in	
states	 that	 have	 statutory	 cost	 saving	 requirements	 as	 a	 condition	 of	
prison	 privatization,	 including	 Tennessee	 (minimum	 5%	 savings	
required),	 Ohio	 (5%),	 Florida	 (7%),	 and	 Mississippi,	 Texas,	 and	
Kentucky	 (all	 10%). 56 	 	 The	 consideration	 of	 cost‐shifting	 factors	 is	
essential	in	 such	cases	to	determine	whether	the	statutory	mandate	 is	
being	met.	
Yet	 even	 in	 states	 that	 require	 prison	 privatization	 to	 result	 in	 a	
minimum	level	of	cost	savings,	it	is	still	difficult	to	determine	whether	
such	 savings	 are	 in	 fact	 realized;	 just	 because	 the	 law	 says	 private	

                                                                                                                             
after	the	Arizona	legislature	repealed	a	state	law	requiring	private	prison	cost	
comparisons.	See	Private	Prisons:	Let’s	See	Hidden	Cost	Comparisons,	AZCENTRAL	(Jan.	1,	
2014),	www.azcentral.com/opinions/articles/20140101private‐prisons‐hidden‐cost‐
comparisons.html.	
	 51.	 STATE	OF	HAW.	DEP’T	OF	PUB.	SAFETY,	REPORT	TO	THE	2010	LEGISLATURE,	HCR	312,	
Exhibit	A	(2009),	available	at	
https://www.prisonlegalnews.org/media/publications/Hawaii%202009%20report.p
df.	
	 52.	 Id.	
	 53.	 Id.	
	 54.	 Id.	
	 55.	 Id.	at	Exhibit	B.	
	 56.	 See	FLA.	STAT.	ANN.	§	957.07(1)	(West	2010);	KY.	REV.	STAT.	ANN.	§	197.510(13)	
(West	2007);	MISS.	CODE	ANN.	§	47‐5‐1211(3)(a)	(West	2012);	OHIO	REV.	CODE	ANN.	§	
9.06(A)(4)	(West	2011);	TENN.	CODE	ANN.	§§	41‐24‐104(c)(2)(B),	41‐24‐105(c)	(West	
2014);	TEX.	GOV’T	CODE	§	495.003(c)(4)	(West	2013).	

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prisons	 must	 save	 money	 does	 not	 necessarily	 mean	 they	 do.	 	 As	 put	
bluntly	by	the	Florida	Center	for	Fiscal	and	Economic	Policy	in	a	2010	
report,	 which	 described	 in	 detail	 the	 state’s	 process	 for	 determining	
whether	prison	privatization	results	in	statutory	cost	savings:	“[t]here	
is	no	compelling	evidence	that	the	privatization	of	prisons	has	actually	
resulted	 in	 savings	.	.	.	.	 	 It	 is	 very	 difficult	 to	 ensure	 that	 a	 private	
prison	 is	 in	 fact	 7%	 less	 costly	 to	 operate	 than	 a	 comparable	 public	
prison.” 57 	 	 And	 in	 Ohio,	 which	 requires	 privately‐operated	 prisons	 to	
achieve	 cost	 savings	 of	 at	 least	 5%,	 Policy	 Matters	 Ohio,	 a	 non‐profit	
policy	 research	 organization,	 released	 a	 report	 in	 April	 2011	 that	
sharply	 criticized	 the	 methodology	 used	 by	 state	 officials	 to	 calculate	
estimated	 savings. 58 	 	 “A	 detailed	 examination	 of	 those	 calculations	
shows	 them	 not	 only	 to	 be	 riddled	 with	 errors,	 oversights	 and	
omissions	 of	 significant	 data,	 but	 also	 potentially	 tainted	 by	
controversial	 accounting	 assumptions	 that	 many	 experts	 consider	
deeply	 flawed,”	 the	 report	 stated. 59 	 	 “[O]nce	 past	 errors	 in	 the	 state	
calculations	 are	 corrected	 and	 revisions	 made,	 the	 private‐prison	
savings	 computed	 by	 the	 state	 over	 the	 years	 appear	 to	 shrink	
dramatically.” 60	
Policy	 Matters	 Ohio	 estimated	 that	 for	 the	 2006–2007	 biennium,	
prison	 privatization	 actually	 cost	 the	 state	 between	 $380,000	 and	
$700,000	 per	 year	 based	 on	 corrections	 to	 the	 state’s	 statistical	 data,	
and	 in	 2008–2009	 private	 prison	 costs	 ranged	 from	 a	 potential	 1.2%	
savings	to	a	0.3%	deficit. 61 		Further,	the	estimated	savings	from	prison	
privatization	 for	 2010	 and	 2011	 dropped	 below	 the	 5%	 threshold	
required	by	state	law	once	statistical	revisions	were	made. 62	
Of	 course	 there	 are	 also	 prison	 privatization‐related	 factors	 that	
shift	 costs	 away	 from	 the	 public	 sector.	 	 As	 just	 one	 example,	 some	
research	studies,	including	the	Hakim	and	Blackstone	study	referenced	
above,	 have	 argued	 that	 prison	 privatization	 reduces	 costs	 to	 public	
agencies	 by	 cutting	 payroll,	 benefit,	 and	 pension	 expenses	 associated	
with	 (typically	 unionized)	 public	 corrections	 employees. 63 	 	 That	

                                                                                                                             
	 57.	 FLA.	CTR.	FOR	FISCAL	&	ECON.	POLICY,	ARE	FLORIDA’S	PRIVATE	PRISONS	KEEPING	THEIR	
PROMISE?	4–5	(2010),	available	at	http://www.fcfep.org/attachments/20100409‐‐
Private%20Prisons.	
	 58.	 See	BOB	PAYNTER,	POLICY	MATTERS	OHIO,	CELLS	FOR	SALE:	UNDERSTANDING	PRISON	COSTS	
&	SAVINGS	i–ii	(2011),	available	at	http://www.policymattersohio.org/wp‐
content/uploads/2011/09/CellsForSale2011.pdf.	
	 59.	 Id.	at	i.	
	 60.	 Id.	at	ii.	
	 61.	 Id.	
	 62.	 Id.	
	 63.	 HAKIM	&	BLACKSTONE,	supra	note	10,	at	42.	

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argument	assumes	corrections	employees	are	terminated	when	public	
agencies	contract	with	private	prison	companies,	but	this	is	not	always	
the	case.		Rather,	public	corrections	employees	may	be	transferred	to	
other	 positions	 within	 the	 same	 agency	 or	 to	 other	 agencies—thus	
resulting	in	continued	payroll,	benefit,	and	pension	costs	in	addition	to	
any	 costs	 of	 privatization. 64 	 	 Absent	 evidence	 that	 corrections	
employees	 are	 terminated	 or	 otherwise	 depart	 public	 service	 when	
public	 agencies	 contract	 with	 private	 prison	 companies,	 such	 savings	
are	strictly	theoretical.	
For	 instance,	 when	 Ohio	 privatized	 the	 North	 Central	 Correctional	
Institution	(NCCI)	in	2011,	the	state	noted	that	it	had	vacant	positions	
within	 the	 Department	 of	 Rehabilitation	 and	 Correction	 (DRC)	 to	
accommodate	 employees	 who	 did	 not	 want	 to	 work	 for	 the	
contractor. 65 		According	to	a	memo	provided	to	staff	at	the	facility,	in	
answer	to	the	question	“[w]ill	a	correction	officer	currently	employed	
at	NCCI	be	able	to	find	employment	at	another	state	run	prison	if	they	
do	 not	 wish	 to	 work	 for	 the	 private	 operator?”	 the	 state’s	 response	
was:	 “Yes.	 	 NCCI	 currently	 employs	 208	 correction	 officers,	 and	 DRC	
has	 278	 vacant	 correction	 officer	 positions	 in	 its	 North	 Region.” 66 		
Thus,	 any	 public	 employee	 who	 wanted	 to	 remain	 employed	 by	 the	
state	was	able	to	do	so. 67 		In	fact,	according	to	the	DRC,	when	the	2700‐
bed	NCCI	was	privatized	only	twenty‐three	public	employees	lost	their	
jobs—fifteen	 were	 laid	 off,	 one	 was	 terminated,	 three	 resigned,	 and	
four	retired. 68	

                                                                                                                             
	 64.	 Comparatively,	when	public	prisons	close,	the	employees	at	those	facilities	are	
often	transferred	to	other	positions	in	the	Department	of	Correction,	not	terminated.	
See,	e.g.	Christopher	Petrella	&	Alex	Friedmann,	Slowly	Closing	the	Gates:	A	State‐by‐
State	Assessment	of	Recent	Prison	Closures,	PRISON	LEGAL	NEWS	(June	15,	2013),	
https://www.prisonlegalnews.org/news/2013/jun/15/slowly‐closing‐the‐gates‐a‐
state‐by‐state‐assessment‐of‐recent‐prison‐closures.	
	 65.	 OHIO	DEP’T	OF	REHAB.	&	CORR.,	PRISON	SALE	ANNOUNCEMENT	QUESTIONS	AND	ANSWERS,	
available	at	http://www.drc.ohio.gov/Public/privatizationfaqs.pdf.	
	 66.	 Id.	at	2.	
	 67.	 Also	consider	that	if	public	corrections	employees	do	leave	public	service	as	a	
result	of	prison	privatization,	there	may	be	costs	associated	with	their	departures.		
When	Florida	considered	privatizing	around	one‐quarter	of	the	state’s	prison	system	
in	2011,	affecting	over	4000	state	workers,	the	Department	of	Corrections	estimated	
the	plan	would	incur	$25	million	in	payments	to	departing	employees	for	
“accumulated	vacation	time,	sick	leave	and	special	compensatory	time	for	working	on	
holidays.”	See	Steve	Bousquet,	Florida’s	Private	Prison	Plan	Comes	with	Unexpected	$25	
Million	Cost	to	Taxpayers,	TAMPA	BAY	TIMES,	Aug.	16,	2011,	
http://www.tampabay.com/news/publicsafety/crime/floridas‐private‐prison‐plan‐
comes‐with‐unexpected‐25‐million‐cost‐to/1186300.	
	 68.	 Email	from	Daniel	Flowers,	Ohio	Dept.	of	Rehab.	&	Corr.	(Aug.	22,	2014)	(on	file	
with	author).		Further,	when	Ohio’s	North	Central	Correctional	Institution	was	
privatized	in	late	2011,	seventy	state	employees	were	hired	by	the	contractor	(MTC),	

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The	 focus	 of	 this	 Part,	 however,	 is	 on	 factors	 that	 shift	 costs	 from	
private	 prison	 companies	 to	 the	 public	 sector,	 which	 include	 costs	
related	 to	 population	 differences	 at	 privately‐operated	 facilities,	 such	
as	 security	 levels	 and	 prisoner	 medical	 care,	 as	 well	 as	 operational	
expenses—including	 transportation,	 prisoner	 labor,	 administrative	
overhead,	 and	 bed	 guarantees—plus	 the	 long‐term	 costs	 of	 per	 diem	
increases,	 deferred	 maintenance,	 recidivism	 rates,	 and	 private	 prison	
bond	financing.	
A.	 Prisoner	Population	Differences	
To	 fulfill	 their	 public	 safety	 function,	 public	 prisons	 must	 house	 all	
types	 of	 offenders,	 including	 those	 with	 serious	 medical	 and	 mental	
health	conditions,	maximum‐security	prisoners,	those	on	death	row, 69 	
female	prisoners,	and	juveniles	convicted	as	adults.		Prisoners	in	these	
categories	 are	 more	 expensive	 to	 incarcerate	 due	 to	 medical,	
security/staffing,	or	programming‐related	costs	(e.g.,	female	prisoners	
generally	have	higher	medical	expenses). 70 		Thus,	the	average	per	diem	
cost	 at	 public	 prisons	 is	 inflated,	 as	 it	 necessarily	 includes	 the	 more	
expensive	prisoners	that	public	prison	systems	must	incarcerate.	
In	 most	 cases,	 private	 prisons	 house	 minimum‐	 and	 medium‐
security	 adult	 male	 prisoners.	 	 No	 privately‐operated	 facilities	 house	
prisoners	 sentenced	 to	 death,	 and	 only	 a	 few	 hold	 maximum‐security	
or	 female	 prisoners. 71 	 	 As	 a	 result,	 the	 average	 per	 diem	 cost	 at	
privately‐operated	 facilities	 is	 reduced	 due	 to	 differences	 in	 prisoner	
populations.	 	 Also	 as	 a	 result,	 private	 prisons	 have	 been	 accused	 of	
housing	only	healthier,	lower‐security	prisoners	who	are	less	costly	to	

                                                                                                                             
while	“297	transferred	to	other	state	jobs,	and	eight	retired.”	Julie	Carr	Smyth,	Marion	
Prison	Ready	to	Go	Private	on	Saturday,	COLUMBUS	DISPATCH,	Dec.	30,	2011,	
http://www.dispatch.com/content/stories/local/2011/12/30/marion‐prison‐ready‐
to‐go‐private‐on‐saturday.html.	
	 69.	 That	is,	in	the	thirty‐two	states	that	have	the	death	penalty.	See	States	With	and	
Without	the	Death	Penalty,	DEATH	PENALTY	INFO.	CTR.,	
http://www.deathpenaltyinfo.org/states‐and‐without‐death‐penalty	(last	visited	Nov.	
12,	2014).	
	 70.	 See,	e.g.,	infra	Table	1	(breaking	down	prison	costs	for	Florida);	infra	Table	2	
(breaking	down	prison	costs	for	Tennessee).	
	 71.	 For	example,	according	to	the	2013	annual	report	for	CCA—the	nation’s	largest	
private	prison	contractor—of	the	company’s	sixty‐eight	owned,	operated,	and	leased	
facilities,	only	two	were	designated	maximum‐security.		None	housed	death	row	
prisoners,	and	just	two	were	designated	women’s	prisons	or	detention	centers.	See	
CORR.	CORP.	OF	AM.,	supra	note	1,	at	11–15;	see	also	Find	a	Facility,	CORR.	CORP.	AM.,	
www.cca.com/locations	(last	visited	Nov.	12,	2014).	

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incarcerate. 72 	 	 “It’s	 cherry‐picking,”	 exclaimed	 Texas	 State	 Rep.	 Chad	
Campbell. 73 		“They	leave	the	most	expensive	prisoners	with	taxpayers	
and	 take	 the	 easy	 prisoners.” 74 	 	 Or,	 as	 stated	 in	 an	 April	 2010	 policy	
brief	by	the	Florida	Center	for	Fiscal	and	Economic	Policy,	“[t]here	are	
differences	between	inmates	in	private	and	public	prisons:	those	who	
are	 more	 costly	 to	 handle	 are	 usually	 incarcerated	 in	 public	 prisons,	
such	 as	 those	 who	 are	 the	 highest	 security	 risks	 and	 those	 with	
extensive	medical	issues.” 75 		Both	private	prison	companies	and	public	
contracting	 agencies	 are	 complicit	 in	 such	 “cherry‐picking,”	 as	
limitations	 on	 the	 types	 of	 prisoners	 held	 at	 privately‐operated	
facilities	are	usually	specified	in	the	contracts	signed	by	both	parties.	
An	 examination	 of	 public	 and	 private	 prison	 per	 diem	 costs	 in	
Florida	 illustrates	 how	 population	 differences	 impact	 cost	
comparisons.	The	following	table,	produced	by	the	Florida	Department	
of	 Corrections	 (FDOC),	 provides	 “average	 inmate	 costs”	 for	 FY	 2012–
2013. 76 		Approximately	ten	percent	of	Florida	state	prisoners	are	held	
in	seven	privately‐operated	prisons,	including	five	facilities	that	house	
adult	 male	 offenders,	 one	 facility	 that	 houses	 adult	 females,	 and	 one	
that	houses	youthful	males	(ages	nineteen	to	twenty‐four). 77	

                                                                                                                             
	 72.	 See,	e.g.,	IN	THE	PUB.	INTEREST,	THE	COSTS	OF	PRIVATE	PRISONS	5	(2014),	available	at	
http://www.inthepublicinterest.org/sites/default/files/Prison%20Costs%20Backgro
under%20Brief_Template.pdf.	
	 73.	 Richard	A.	Oppel,	Jr.,	Private	Prisons	Found	to	Offer	Little	in	Savings,	N.Y.	TIMES,	
May	18,	2011,	http://www.nytimes.com/2011/05/19/us/19prisons.html.	
	 74.	 Id.	
	 75.	 FLA.	CTR.	FOR	FISCAL	AND	ECON.	POLICY,	supra	note	57,	at	3.	
	 76.	 See	Budget,	2012–2013	Agency	Statistics,	FLA.	DEP’T	CORRECTIONS,	
http://www.dc.state.fl.us/pub/annual/1213/budget.html	(last	visited	Nov.	12,	2014).	
	 77.	 See	Private	Prison	Monitoring,	FLA.	DEP’T	OF	MGMT.	SERVICES,	
www.dms.myflorida.com/business_operations/private_prison_monitoring	(last	visited	
Nov.	12,	2014).	

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TABLE	1.		FLORIDA	PER	DIEM	COSTS	FOR	FY	2012–2013 78 		
	 	

	 					Category	

	

	

	

													Per	Diem	

 
Total all facilities (exc. private) 

$47.50 

Adult male custody 

$37.33 

Male youthful offender custody 
Reception centers 

$64.46 
$88.97 

Adult and youthful female custody  
Specialty institutions 

$53.19 
$52.76    

Work release centers 
Contracted facility 

$28.02 
$29.35 

Private institutions 

$43.86 

	

	
The	 above	 per	 diem	 figures	 “do	 not	 include	 indirect	 and	
administrative	cost	of	$0.67	for	private	institutions	and	$2.75	for	state	
facilities.” 79 	 	 Thus,	 after	 adding	 the	 indirect	 and	 administrative	 costs,	
the	 total	 average	 per	 diem	 cost	 for	 all	 state	 prisons,	 excluding	
privately‐operated	facilities,	is	$50.25,	while	the	average	per	diem	cost	
for	private	institutions	is	$44.53. 80	
It	is	apparent	that	the	per	diem	cost	at	private	institutions	is	lower	
than	the	cost	at	public	prisons.		However,	the	average	per	diem	cost	for	
state	 prisons	 includes	 the	 higher	 rates	 at	 reception	 centers	 (all	 of	
which	 are	 operated	 by	 the	 state),	 male	 youthful	 offender	 facilities	 (of	
which	one	is	run	by	the	state	and	one	is	privatized),	adult	and	youthful	
female	offender	facilities	(of	which	four	are	operated	by	the	state	and	
one	by	a	private	contractor),	and	specialty	institutions	(all	of	which	are	

                                                                                                                             
	 78.	 Fla.	Ctr.	for	Fiscal	&	Econ.	Policy,	supra	note	57,	at	3. 
	 79.	 Budget,	supra	note	76.		The	Summary	of	Average	Inmate	Costs	table	includes	a	
useful	breakdown	of	per	diem	costs	by	security	operations,	health	services,	and	
education	services.	
	 80.	 The	term	“contracted	facility”	in	the	table	refers	to	Community	Release	Centers,	
not	prisons.	Email	from	Jessica	Cary,	FDOC	Dir.	of	Comm.	(Aug.	20,	2014)	(on	file	with	
author).	

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operated	 by	 the	 state). 81 	 	 Therefore,	 due	 to	 the	 higher‐cost	 facilities,	
the	vast	majority	of	which	are	publicly‐operated,	the	average	per	diem	
cost	at	state	prisons	is	skewed	upwards	while	five	of	the	seven	private	
prisons	 house	 adult	 male	 offenders—the	 least	 expensive	 to	
incarcerate,	according	to	the	table.	
For	 another	 example	 of	 the	 impact	 of	 population	 differences,	
consider	the	FY	2012–2013	per	diem	costs	for	housing	adult	prisoners	
in	the	Tennessee	Department	of	Correction	(TDOC),	where	almost	one‐
quarter	 of	 the	 state’s	 prison	 population—approximately	 5000	 of	
21,000	prisoners—is	held	in	privately‐operated	facilities:	
TABLE	2.	TENNESSEE	PER	DIEM	COSTS	FOR	FY	2012–2013	
	

	 										Facility		

	

												Security		 																		Per	Diem	

 
Tenn Prison for Women 

Max 

$89.10

Turney Center Corr Complex 

Med 

$65.28

Mark Luttrell Corr Fac 
Charles Bass Corr Complex 
Bledsoe County Corr Complex 
Hardeman Co. Corr Facility * 
Whiteville Corr Facility * 
West TN State Penitentiary 
Riverbend Max Security Inst. 
Northeast Corr Complex 
South Central Corr Center * 

Close 
Med 
Max 
Med 
Med 
Max 
Max 
Med 
Med 

$99.39
$92.47
$110.39
$53.63
$55.66
$61.92
$103.74
$61.57
$45.67

Northwest Corr Complex 
DeBerry Special Needs Fac 
Morgan County Corr Complex 
Total Adult Facilities 

Med 
Max 
Max 

$60.63
$189.03
$70.65
$71.79

			

Facilities	designated	with	(*)	are	privately	operated. 82	

                                                                                                                             
	 81.	 Facility	Directory,	FLA.	DEP’T.	CORRECTIONS	(last	updated	Jan.	5,	2015),	
http://www.dc.state.fl.us/orginfo/facilitydir.html.	
	 82.	 Emails	from	Tashonda	Burton,	Office	of	Commc’ns	&	Pub.	Relations,	Tenn.	Dep’t	
of	Corr.	(July	1–2,	2014)	(on	file	with	author).		The	“annual	cost	per	inmate	[does]	not	
include	the	Administration,	Tennessee	Correctional	Academy,	Office	of	Investigation	
and	Compliance,	or	Major	Maintenance	costs.”	Id.	

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First,	per	the	TDOC,	the	Total	Adult	Facilities	per	diem	cost	does	not	
equal	 an	average	 of	the	individual	facility	costs	because	the	latter	are	
weighted	by	population	level.		Rather,	the	total	average	per	diem	cost	
is	“based	on	system	wide	Payroll	expenses	plus	system	wide	Operating	
expenses	 minus	 system	 wide	 Revenue	 collections	 divided	 by	 our	
system	 wide	 Average	 Daily	 Census	 divided	 by	 365	 to	 obtain	 the	
average	system	wide	cost	per	day.” 83	
The	 three	 privately‐operated	 prisons—all	 run	 by	 CCA—are	
medium‐security	 facilities	 that	 house	 adult	 male	 prisoners. 84 	 	 Of	 the	
eleven	public	prisons,	six	are	maximum‐security,	one	is	close‐security	
(a	 step	 between	 medium	 and	 maximum)	 and	 four	 are	 medium‐
security. 85 		The	four	facilities	with	the	highest	per	diem	costs,	all	state	
prisons,	 include	 the	 Lois	 M.	 DeBerry	 Special	 Needs	 Facility	 (a	 prison	
hospital	for	offenders	with	serious	medical	and	mental	health	needs);	
Riverbend	 (maximum‐security	 and	 death	 row	 prisoners);	 Bledsoe	
County	(an	intake	diagnostic	center	that	also	houses	female	prisoners);	
and	Mark	Luttrell	(female	prisoners). 86	
Because	state	facilities	house	prisoners	who	are	more	expensive	to	
incarcerate—maximum	security,	death	row,	medical	and	mental	health	
patients,	 and	 female	 prisoners—their	 average	 per	 diem	 cost	 is	
increased.		As	the	CCA‐operated	prisons	do	not	have	such	higher‐cost	
populations,	 their	 average	 per	 diem	 costs	 are	 decreased.	 	 However,	
note	 that	 the	 per	 diem	 costs	 at	 medium‐security	 state	 prisons	
(Northeast,	 Charles	 Bass,	 Turney	 Center,	 and	 Northwest)	 are	 still	
higher	 than	 the	 costs	 at	 privately‐operated	 medium‐security	 facilities	
(South	 Central,	 Hardeman	 County,	 and	 Whiteville).	 	 Why	 is	 this	 the	
case?		As	discussed	in	the	sections	that	follow,	a	number	of	other	cost‐
shifting	factors	serve	to	further	inflate	per	diem	costs	at	public	prisons.	
B.	 Security	Level	Limitations	
Security	levels	correlate	with	incarceration	costs;	minimum‐security	
prisoners	 are	 usually	 the	 least	 expensive	 to	 incarcerate	 while	
maximum‐security	 prisoners,	 including	 those	 held	 in	 segregation,	 are	
the	 most	 costly. 87 	 	 With	 respect	 to	 security	 levels	 at	 public	 and	

                                                                                                                             
	 83.	 Id.	
	 84.	 TENN.	DEP’T	OF	CORR.,	FY	2013	STATISTICAL	ABSTRACT	46	(2013),	available	at	
http://www.tn.gov/correction/pdf/StatisticalAbstract2013.pdf.	
	 85.	 Id.	
	 86.	 See	State	Prisons,	TENN.	DEP’T	CORRECTIONS,	
www.tn.gov/correction/institutions/stateprisons.html	(last	visited	Nov.	12,	2014).	
	 87.	 For	costs	related	to	prisoners	held	in	solitary	confinement,	see	SAL	RODRIGUEZ,	
FACT	SHEET:	THE	HIGH	COST	OF	SOLITARY	CONFINEMENT	(2011),	available	at	

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privately‐operated	 prisons,	 a	 2004	 article	 in	 Federal	 Probation	 noted	
that:	
[T]he	private	sector	houses	approximately	21%	fewer	inmates	at	the	
maximum	 and	 close	 security	 levels	 and	 approximately	 15%	 more	
inmates	 at	 the	 minimum	 security	 level	 than	 does	 the	 public	 sector.		
Thus,	 90%	 of	 the	 private	 sector’s	 inmate	 population	 is	 classified	 at	
the	 medium	 or	 minimum	 levels,	 whereas	 only	 69%	 of	 the	 public	
sector’s	inmate	population	are	so	designated. 88	

The	 State	 of	 Hawaii	 contracts	 with	 private	 prison	 companies	 to	
house	 prisoners	 at	 facilities	 on	 the	 U.S.	 mainland.	 	 A	 January	 2005	
report	 by	 the	 Hawaii	 Department	 of	 Public	 Safety	 is	 instructive	 in	
regard	 to	 limitations	 on	 the	 types	 of	 Hawaii	 prisoners	 eligible	 for	
transfers	to	private	prisons	in	various	other	states. 89 		Those	limitations	
included	 that	 no	 Hawaii	 prisoners	 above	 medium	 security,	 or	 with	
“Escape	 1,”	 “Murder	 1,”	 or	 sex	 offenses,	 be	 housed	 at	 facilities	 in	
Oklahoma. 90 		No	maximum‐security	prisoners	could	be	held	in	prisons	
in	Arizona	or	Mississippi,	and	Colorado	facilities	only	housed	prisoners	
up	to	medium	security	with	no	“sex	offenses	with	lengthy	terms”	and	
no	life	sentences. 91 		This	list	of	exclusions	illustrates	how	only	lower‐
security	 Hawaii	 prisoners	 who	 have	 not	 been	 convicted	 of	 the	 most	
serious	offenses	(murder,	sex	crimes),	and	are	a	lesser	security	risk	(no	
life	sentences,	maximum	security,	or	history	of	escape)	are	transferred	
to	 privately‐operated	 facilities.	 	 Public	 prisons,	 of	 course,	 must	
incarcerate	 the	 higher‐security	 offenders	 not	 eligible	 for	 such	
transfers,	 which	 translates	 to	 higher	 costs	 for	 Hawaii’s	 state	 prison	
system.	
Another	 example	 of	 security	 level	 differences	 in	 public	 and	 private	
prisons	 is	 found	 in	 a	 2012	 contract	 between	 Idaho	 and	 CCA	 to	 house	
offenders	at	the	company’s	Kit	Carson	Correctional	Center	in	Colorado.		
In	response	to	questions	posed	during	the	request	for	proposal	(RFP)	

                                                                                                                             
http://solitarywatch.com/wp‐content/uploads/2011/06/fact‐sheet‐the‐high‐cost‐of‐
solitary‐confinement.pdf.		More	generally,	for	costs	that	escalate	by	security	level,	see	
NANCY	LA	VIGNE	&	JULIE	SAMUELS,	THE	GROWTH	&	INCREASING	COST	OF	THE	FEDERAL	PRISON	
SYSTEM:	DRIVERS	AND	POTENTIAL	SOLUTIONS	2	(2012),	available	at	
www.urban.org/uploadedpdf/412693‐the‐growth‐and‐increasing‐cost‐of‐the‐federal‐
prison‐system.pdf	(providing	costs	by	security	level	in	federal	prisons).	
	 88.	 Curtis	R.	Blakely	&	Vic	W.	Bumphus,	Private	and	Public	Sector	Prisons—A	
Comparison	of	Select	Characteristics,	FED.	PROBATION,	June	2004,	at	27,	28.	
	 89.	 HAW.	DEP’T	OF	PUB.	SAFETY,	RESPONSE	TO	ACT	200,	PART	III,	SECTION	58	SESSION	LAWS	
OF	HAWAII	2003	AS	AMENDED	BY	ACT	41,	PART	II,	SECTION	35	SESSION	LAWS	OF	HAWAII	2004	
(2005),	available	at	http://dps.hawaii.gov/wp‐content/uploads/2012/11/2005‐
Report4.pdf.	
	 90.	 Id.	
	 91.	 Id.	

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process,	 state	 officials	 wrote	 that	 the	 transfer	 criteria	 used	 by	 the	
Idaho	 Department	 of	 Correction	 to	 send	 prisoners	 to	 the	 privately‐
operated	facility	include:	“2.	No	escape	history	from	a	secure	facility	.	.	.	
[and]	 4.	 No	 class	 A	 disciplinary	 actions	 (Disciplinary	 Offense	 Report)	
within	 last	 12	 months.” 92 	 	 Thus,	 only	 lower‐risk	 prisoners	 and	 those	
who	 are	 better	 behaved—i.e.,	 do	 not	 have	 a	 recent	 history	 of	 serious	
institutional	misconduct—are	eligible	for	placement	at	the	CCA	facility.		
Those	 who	 are	 higher‐risk	 and	 have	 committed	 serious	 disciplinary	
offenses	remain	in	Idaho,	and	the	cost	of	incarcerating	such	prisoners	
is	shifted	to	the	state.	
C.	 Medical	Cost‐Shifting	
Medical	 expenses	 represent	 a	 significant	 and	 growing	 portion	 of	
corrections	agencies’	budgets.		The	FDOC,	for	example,	spent	19.1%	of	
its	 budget	 on	 healthcare	 services	 in	 FY	 2012–2013. 93 	 	 The	 California	
Department	of	Corrections	and	Rehabilitation	(CDCR)	allocated	24%	of	
its	 $8.9	 billion	 budget	 for	 FY	 2013–2014	 to	 medical,	 dental,	 mental	
health,	and	ancillary	health	care	services. 94 		As	mentioned	previously,	
public	prisons	must	incarcerate	all	types	of	prisoners,	including	those	
with	 serious	 and	 expensive	 medical	 and	 mental	 health	 conditions. 95 		
Frequently,	 though,	 private	 prison	 companies	 minimize	 medical	
expenses	through	various	contractual	provisions	that	shift	those	costs	
to	the	public	sector.	
This	is	a	significant	cost‐shifting	factor	because	medical	care	can	be	
very	 expensive,	 especially	 treatment	 for	 diseases	 that	 are	 more	
prevalent	 in	 the	 correctional	 setting	 than	 in	 the	 general	 population,	
such	 as	 HIV	 and	 hepatitis	 C	 (HCV), 96 	 as	 well	 as	 for	 costly	 medical	
procedures	 such	 as	 chemotherapy,	 dialysis,	 and	 even	 organ	
transplants. 97 		Prisoners	have	all	of	the	same	medical	ailments	as	non‐
prisoners	 and	 require	 medical	 care	 that	 is	 just	 as	 expensive.	 	 By	

                                                                                                                             
	 92.	 Contract	Purchase	Order	between	Dep’t	of	Corr.,	Idaho,	and	Corr.	Corp.	of	Am.	
for	Kit	Carson	Correctional	Center,	No.	CPO02476	27	(July	11,	2012).	
	 93.	 See	Budget,	supra	note	76.	
	 94.	 See	CDCR’s	Budget	for	Fiscal	Year	2013‐2014,	CAL.	DEP’T	CORRECTIONS	&	
REHABILITATION,	available	at	http://www.cdcr.ca.gov/Budget/Budget_Overview.html.	
	 95.	 See	supra	Part	III.A.	
	 96.	 See	The	State	of	HIV	and	Hepatitis	C	Care	in	NYS	Prisons,	CORRECTIONAL	ASS’N	N.Y.,	
(Oct.	9,	2013),	http://www.correctionalassociation.org/news/the‐state‐of‐hiv‐and‐
hepatitis‐c‐care‐in‐nys‐prisons‐2013.	
	 97.	 See	Prisoner	Organ	Transplants,	Donations	Create	Controversy,	PRISON	LEGAL	
NEWS	(Apr.	15,	2014),	
https://www.prisonlegalnews.org/news/2014/apr/15/prisoner‐organ‐transplants‐
donations‐create‐controversy.	

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capping	 the	 cost	 of	 medical	 care,	 excluding	 certain	 medical	 costs	
entirely	 and	 limiting	 prisoners	 with	 medical	 and	 mental	 health	
conditions	from	being	housed	at	private	prisons,	the	per	diem	costs	at	
those	facilities	are	decreased.		This	results	in	a	corresponding	increase	
in	 medical	 expenses	 for	 public	 corrections	 agencies,	 which	 are	
responsible	 for	 medical	 and	 mental	 health	 care	 costs	 both	 at	 public	
prisons	 and—when	 specified	 by	 contractual	 provisions—at	 private	
prisons,	too.		Consequently,	cost	comparisons	of	 public	and	privately‐
operated	 facilities	 must	 include	 adjustments	 for	 contractual	 limits	 on	
medical	expenses	that	shift	costs	to	public	agencies.	
As	 the	 Arizona	 Department	 of	 Corrections	 stated	 in	 an	 April	 2011	
report,	when	calculating	per	capita	costs	at	public	and	private	prisons:		
An	 inmate	 health	 care	 cost	 factor	 is	 identified	 and	 deducted	 due	 to	
the	 limitations	 imposed	 by	 the	 private	 contractors	 concerning	
inmates	 [sic]	 physical	 and	 mental	 health	.	.	.	.	 	 This	 adjustment	 is	
needed	because	unlike	the	private	contractors,	the	ADC	is	required	to	
provide	medical	and	mental	health	services	to	inmates	regardless	of	
the	severity	of	their	condition(s). 98	

1.	

HIV,	HCV,	and	Other	Specified	Medical	Conditions	

Private	 prison	 contracts	 often	 contain	 provisions	 that	 exempt	
private	prison	companies	from	costs	associated	with	specified	medical	
conditions,	 most	 commonly	 HIV	 and	 HCV.	 	 For	 example,	 a	 2011	
contract	 between	 the	 California	 Department	 of	 Corrections	 and	
Rehabilitation	 and	 CCA	 specifies	 that	 the	 CDCR	 is	 required	 to	 pay	 for	
“[a]ll	 HIV	 or	 AIDS	 related	 inpatient	 and	 outpatient	 medical	 costs	 and	
the	 costs	 of	 providing	 AZT	 or	 other	 medications	 therapeutically	
indicated	 and	 medically	 necessary	 .	 .	 .	 for	 the	 treatment	 of	 offenders	
with	HIV	or	AIDS.” 99	
Similarly,	a	2007	contract	between	the	State	of	Tennessee	and	CCA	
to	 operate	 the	 South	 Central	 Correctional	 Center	 provides	 that	 “[t]he	
Contractor	 shall	 not	 be	 responsible	 for	 the	 cost	 of	 providing	 anti‐
retroviral	 medications	 therapeutically	 indicated	 for	 the	 treatment	 of	
inmates	with	AIDS	or	HIV	infection.” 100	
A	 2008	 contract	 between	 the	 Hawaii	 Department	 of	 Public	 Safety	
and	 Pinal	 County,	 to	 house	 prisoners	 at	 CCA‐operated	 facilities	 in	

                                                                                                                             
	 98.	 ARIZ.	DEP’T.	OF	CORR.,	supra	note	24,	at	2.	
	 99.	 Offender	Relocation/Housing,	Agreement	between	State	of	Cal.	and	Corr.	Corp.	
of	Am.,	Agreement	No.	C06.298‐0	17	(2011).	
	 100.	 Contract	between	Dep’t	of	Corr.,	State	of	Tenn.,	and	Corr.	Corp.	of	Am.	for	the	
South	Central	Correctional	Center,	RFS‐329.44‐004	13	(2007).		This	provision	was	not	
included	in	the	superseding	2013	contract.	

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Arizona,	 states	 the	 company	 “shall	 not	 be	 responsible	 for	 the	 cost	 of	
medication	 or	 regimens	 specifically	 aimed	 at	 the	 treatment	 of	
conditions	 associated	 with	 Acquired	 Immune	 Deficiency	 Syndrome	
(AIDS)	and	Hepatitis	C.” 101 		Identical	language	was	included	in	a	2008	
contract	 between	 Hawaii	 and	 CCA	 to	 house	 female	 prisoners	 at	 the	
company’s	Otter	Creek	Correctional	Center	in	Kentucky. 102 		In	FY	2009,	
Hawaii	paid	$6.37	million	in	medical	costs	not	included	in	the	per	diem	
rates	in	its	contracts	to	house	prisoners	at	CCA	facilities. 103	
Also,	 a	 2009	 contract	 between	 CCA	 and	 the	 Metropolitan	
Government	 of	 Nashville	 and	 Davidson	 County,	 Tennessee	 states	 that	
“[m]edical	 costs	 for	 AIDS	 .	 .	 .	 ,	 oncology	 and	 dialysis	 treatments	 are	
considered	reimbursable	expenses”;	i.e.,	the	cost	for	treating	prisoners	
with	 those	 conditions	 shall	 be	 paid	 by	 the	 Metro	 Government,	 not	 by	
CCA. 104	
Sometimes	 the	 exclusion	 of	 certain	 medical	 expenses	 is	 not	 as	
obvious	 as	 the	 explicit	 contractual	 provisions	 cited	 above.	 	 For	
example,	a	2012	contract	between	the	State	of	Idaho	and	CCA	to	house	
prisoners	 at	 the	 company’s	 Kit	 Carson	 Correctional	 Center	 includes	
“Option	A”	for	healthcare	services	from	the	state’s	RFP.		Under	Option	
A,	 “[t]he	 Contractor	 is	 solely	 responsible	 for	 all	 costs	 associated	 with	
provision	 of	 care	 as	 provided	 for	 within	 [subsections	 related	 to]	
Healthcare,	Mental	Health,	and	Dental	Services.” 105	
Thus,	under	Option	A	in	the	contract	and	RFP,	it	would	appear	that	
CCA	 is	 responsible	 for	 all	 medical‐related	 costs,	 including	 expensive	
treatments	for	HIV	and	HCV.	
That	is	not	the	case,	however.		The	contract	incorporates	the	state’s	
responses	to	questions	submitted	by	private	prison	companies	during	
the	 RFP	 process,	 and	 those	 responses	 include:	 “The	 IDOC	 does	 not	
anticipate	 sending	 Offenders	 with	 chronic	 healthcare	 and/or	 mental	
health	 issues	 to	 the	 Facility	 (to	 include	 HIV	 treatment	 or	 HCV	
treatment),” 106 	 and	 “The	 transfer	 criteria	 IDOC	 will	 use	 includes	 the	

                                                                                                                             
	 101.	 Contract	between	Dep’t	of	Pub.	Safety,	State	of	Haw.,	and	Pinal	County,	Ariz.,	
Contract	No.	55331	18	(2008).	
	 102.	 Contract	between	Dep’t	of	Pub.	Safety,	State	of	Haw.,	and	Corr.	Corp.	of	Am.	for	
Otter	Creek	Correctional	Center,	Contract	No.	PSD	08‐ID/MB24	16	(2008).	
	 103.	 STATE	OF	HAW.	DEP’T	OF	PUB.	SAFETY,	supra	note	51,	at	Exhibit	A.	
	 104.	 Management	Services	Contract	between	Corr.	Corp.	of	Am.	and	the	Metro.	Gov’t	
of	Nashville	and	Davidson	Cnty.,	Contract	No.	18612	26	(2009).	
	 105.	 Contract	Purchase	Order	between	Dep’t	of	Corr.,	Idaho,	and	Corr.	Corp.	of	Am.,	
supra	note	92,	at	115.	
	 106.	 Id.	at	251	(responding	to	a	question	asking	how	many	offenders	with	chronic	
healthcare	or	mental	health	issues	will	be	transferred	to	the	new	facility).	

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[Vol.	XLII	

following:	 1.	 No	 chronic	 mental	 health	 or	 health	 care	 issues	 .	 .	 .	 .” 107 		
The	RFP	was	amended	to	include	“no	chronic	mental	health	or	health	
care	 issues”	 as	 the	 “primary	 criteria	 in	 evaluating	 offenders”	 for	
placement	at	the	CCA‐operated	prison. 108	
Thus,	 although	 CCA	 is	 responsible	 for	 “all	 costs	 associated	 with	
provision	of	 care”	under	Option	A	in	the	contract	 and	RFP,	it	is	really	
only	 responsible	 for	 such	 costs	 based	 on	 the	 medical	 needs	 of	 the	
prisoners	 housed	 at	 the	 facility.	 	 Since	 Idaho	 does	 not	 send	 prisoners	
with	“chronic	healthcare”	conditions—including	HIV	and	HCV—to	the	
CCA	prison,	the	company	is	not	liable	for	those	costs.	
2.	

Caps	on	Medical	Costs	

Some	 private	 prison	 contracts	 include	 caps	 on	 certain	 medical	
expenses	paid	by	the	private	prison	company,	based	on	specified	dollar	
amounts	or	time	limits.	
For	example,	a	2011	contract	between	CCA	and	the	CDCR	states	that	
the	 CDCR	 will	 pay	 “[a]ll	 expenses	 in	 excess	 of	 $2,500	 annually	 per	
inmate	 for	 medically	 necessary,	 off	 site	 hospital	 or	 emergency	 care.		
This	includes,	but	is	not	limited	to	medical,	surgical,	mental	health,	and	
dental	 care	 delivered	 in	 an	 Emergency	 Room,	 practitioner’s	 office,	 or	
inpatient	 or	outpatient	hospital	setting.” 109 		A	2013	contract	between	
the	 State	 of	 Tennessee	 and	 CCA	 to	 operate	 the	 South	 Central	
Correctional	 Center	 specifies:	 “[i]f	 the	 inmate	 is	 hospitalized,	 the	
Contractor	 shall	 not	 be	 responsive	 for	 Inpatient‐Hospital	 Costs	 which	
exceed	$4,000.00	per	Inmate	per	admission.” 110 		Hospitalization	costs	
above	 the	 $4000	 cap,	 no	 matter	 how	 expensive,	 are	 paid	 by	 the	
state. 111 	 	 A	 2010	 contract	 between	 the	 State	 of	 Texas	 and	 MTC	 to	
operate	the	West	Texas	Intermediate	Sanctions	 Facility	provides	that,	
“[i]f	 an	 Offender	 requires	 continued	 hospitalization	 after	 the	 initial	
forty‐eight	 (48)	 hour	 period,	 the	 [Texas	 Department	 of	 Criminal	
Justice]	shall	be	responsible	for	all	reasonable	and	appropriate	medical	
costs.” 112	

                                                                                                                             
107. Id. at 248 (responding to a question asking what transfer criteria the IDOC will use
to determine which offenders will be transferred to the new facility). 
	 108.	 Id.	at	27.	
	 109.	 Offender	Relocation/Housing,	Agreement	between	State	of	Cal.	and	Corr.	Corp.	
of	Am.,	supra	note	99,	at	17.	
	 110.	 Contract	between	Dep’t	of	Corr.,	State	of	Tenn.,	and	Corr.	Corp.	of	Am.	for	South	
Central	Correctional	Center,	RFP‐32944‐00006	17	(2013).	
	 111.	 Id.	
	 112.	 Solicitation,	Offer	and	Award	between	State	of	Tex.	and	Management	&	Training	
Corp.	for	operation	of	the	West	Texas	Intermediate	Sanction	Facility,	Contract	No.	696‐

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Both	dollar	amount	and	time	limit	caps	were	included	in	2006–2007	
contracts	between	Florida	and	CCA	to	operate	the	Gadsden,	South	Bay,	
and	 Lake	 City	 correctional	 facilities.	 	 The	 contracts	 all	 state:	 “The	
CONTRACTOR	 shall	 not	 be	 responsible	 for	 inpatient	 hospitalization	
costs,	including	any	surgery	and	specialty	services,	in	amounts	greater	
than	$15,000	per	inmate	per	admission,	or	for	costs	incurred	after	five	
(5)	 days	 of	 hospitalization,	 whichever	 comes	 first.” 113 	 	 Notably,	 while	
medical	 care	 expenses	 may	 be	 capped	 for	 private	 prison	 companies,	
there	is	no	cap	on	the	amount	public	corrections	agencies	must	pay	for	
prisoner	medical	care.	
In	 other	 cases,	 private	 prisons	 simply	 are	 not	 responsible	 for	
providing	any	medical	services.		A	2011	contract	between	the	State	of	
Texas	and	CCA	to	manage	the	Bartlett	State	Jail	provides	that	the	Texas	
Department	 of	 Criminal	 Justice	 “will	 contract	 with	 the	 Correctional	
Managed	Health	Care	Committee	(CMHCC)	to	provide	complete	health	
care	services	including	medical,	dental,	mental	health,	pharmaceutical,	
medical	 records,	 emergency	 care	 and	 sick	 call	 services	 for	 Offenders	
assigned	 to	 the	 Facility.” 114 	 	 Similar	 provisions	 are	 included	 in	 the	
state’s	 2010	 contracts	 with	 CCA	 to	 operate	 the	 Bradshaw	 State	 Jail,	
Lindsey	State	Jail,	and	Willacy	County	State	Jail. 115	
Removing	 medical	 services	 from	 private	 prison	 contracts	 usually	
results	in	lower	contractual	per	diem	rates.		However,	it	also	shifts	all	
medical	expenses	to	the	public	agency,	including	costs	associated	with	
prisoners	who	have	serious	medical	and	mental	health	conditions.	

                                                                                                                             
PF‐12‐13‐C029	28	(June	15,	2010),	available	at	
http://www.texasprisonbidness.org/files/facilities/contracts/WestTexas2010.pdf.	
	 113.	 See,	e.g.	Operations	&	Management	Services	Contract	between	State	of	Fla.	and	
Corr.	Corp.	of	Am.	for	Gadsden	Correctional	Facility,	DMS	Contract	No.	06/07‐093	17	
(2007),	available	at	
https://www.prisonlegalnews.org/media/publications/fdoc_cca_contract_for_gadsden
_facility_2009.pdf.	
	 114.	 Solicitation,	Offer	and	Award	between	Dep’t	of	Crim.	Justice,	State	of	Tex.,	and	
Corr.	Corp.	of	Am.	for	operation	of	the	Bartlett	State	Jail,	Contract	No.	696‐PF‐11‐13‐
C064	36	(Apr.	1,	2010).		The	Correctional	Managed	Health	Care	Committee	is	a	state	
agency	that	contracts	with	the	University	of	Texas	Medical	Branch	and	Texas	Tech	
University	Health	Sciences	Center	to	provide	medical	care	for	state	prisoners.	See	
Correctional	Managed	Health	Care,	TEX.	DEP’T	CRIM.	JUST.,	
http://tdcj.state.tx.us/divisions/cmhc/partner_agencies.html	(last	visited	Nov.	12,	
2014).	
	 115.	 See	Solicitation,	Offer	and	Award	between	Dep’t	of	Crim.	Justice,	State	of	Tex.,	
and	Corr.	Corp.	of	Am.	for	operation	of	the	Bradshaw	State	Jail,	No.	686‐PF‐11‐13‐C063,	
at	36–37	(2010);	Solicitation,	Offer	and	Award	between	Dep’t	of	Crim.	Justice,	State	of	
Tex.,	and	Corr.	Corp.	of	Am.	for	operation	of	the	Lindsey	State	Jail,	No.	696‐PF‐11‐13‐
C061,	at	36–37	(2010);	Solicitation,	Offer	and	Award	between	Dep’t	of	Crim.	Justice,	
State	of	Tex.,	and	Corr.	Corp.	of	Am.	for	operation	of	the	Willacy	County	State	Jail,	No.	
696‐PF‐11‐13‐C060,	at	36–37	(2010).	

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[Vol.	XLII	

Prisoner	Eligibility	Criteria	

Some	 contracts	 go	 beyond	 exempting	 private	 prisons	 from	 costs	
associated	 with	 specified	 medical	 conditions,	 as	 discussed	 above,	 and	
exclude	 prisoners	 with	 certain	 conditions	 from	 even	 being	 housed	 at	
privately‐operated	facilities,	or	limit	the	number	of	such	prisoners.	
For	example,	contracts	between	Florida	and	the	GEO	Group	include	
restrictions	 on	 prisoners	 with	 specific	 medical	 and	 mental	 health	
classifications.	 	 The	 FDOC	 assigns	 a	 health	 classification	 to	 each	 state	
prisoner	 ranging	 from	 M1	 to	 M5	 (plus	 M9	 for	 those	 who	 are	
pregnant). 116 	 	 Prisoners	 also	 receive	 a	 mental	 health	 grade,	 ranging	
from	 S1	 to	 S6. 117 	 	 According	 to	 the	 Florida	 Correctional	 Medical	
Authority,	“[t]he	number	assigned	to	an	inmate	is	based	on	the	severity	
or	acuity	of	the	medical	or	mental	health	condition	with	one	indicating	
the	lowest	level	of	need.” 118 		The	state’s	current	contracts	with	the	GEO	
Group	 to	 operate	 the	 Bay,	 Moore	 Haven,	 and	 Graceville	 correctional	
facilities	 include	 a	 population	 cap	 of	 16%	 for	 prisoners	 with	 medical	
grade	M3	(with	a	2%	variance),	and	18%	for	those	with	mental	health	
grade	 S3	 (with	 a	 5%	 variance). 119 	 	 Florida’s	 2010	 contract	 with	 the	
GEO	 Group	 to	 house	 prisoners	 at	 the	 Blackwater	 River	 Correctional	
Facility	 provides	 that	 no	 prisoners	 with	 medical	 grade	 M3	 or	 mental	
health	 grade	 S3	 will	 be	 sent	 to	 the	 prison,	 and	 only	 2%	 of	 the	
population	can	be	HIV‐positive. 120	
Such	 provisions	 led	 Florida’s	 Office	 of	 Program	 Policy	 Analysis	 and	
Government	Accountability	(OPPAGA)	to	note	that	the	state’s	contracts	
with	private	prison	companies	do	not	
[A]ssure	that	private	prisons	serve	inmates	with	comparable	medical	
and	mental	health	conditions	as	those	housed	in	public	prisons	.	.	.	.	As	
special	 needs	 inmates	 are	 more	 expensive	 to	 serve	 than	 other	
inmates,	 the	 difference	 in	 the	 populations	 of	 public	 and	 private	

                                                                                                                             
	 116.	 STATE	OF	FLA.	CORR.	MED.	AUTH.,	2012–2013	ANNUAL	REPORT	AND	REPORT	ON	AGING	
INMATES	22	(2013),	available	at	http://www.flgov.com/wp‐
content/uploads/pdfs/correctional_medical_authority_2012‐2013_annual_report.pdf.	
	 117.	 Id.	
	 118.	 Id.	
	 119.	 Operations	and	Management	Service	Contract,	Bay	Corr.	Facility,	Contract	No.	
DMS	13/14‐0009A	(2014);	Operations	and	Management	Service	Contract,	Moore	
Haven	Corr.	Facility,	Contract	No.	DMS	13/14‐0009B	(2014);	Operations	and	
Management	Service	Contract,	Graceville	Corr.	Facility,	Contract	No.	DMS	09/10‐052	
(2010).	
	 120.	 Operations	and	Management	Service	Contract,	Blackwater	River	Corr.	Facility,	
Contract	No.	DMS	09/10‐053,	Transfer	Agreement	2	(2010).	

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prisons	 results	 in	 the	 state	 shouldering	 a	 greater	 proportion	 of	 the	
cost	of	housing	these	inmates. 121	

Consequently,	 OPPAGA	 said	 the	 statutory	 requirement	 that	
privately‐operated	 prisons	 “operate	 [at]	 a	 7%	 lower	 cost	 than	 state	
facilities	is	undermined.” 122	
As	 another	 example	 of	 prisoners	 with	 certain	 medical	 conditions	
being	 excluded	 from	 private	 prisons,	 UC	 Berkeley	 researcher	
Christopher	 Petrella	 published	 an	 “open	 letter”	 to	 CCA	 in	 July	 2014	
that	addressed	some	of	the	shortcomings	of	the	Hakim	and	Blackstone	
cost	comparison	study,	with	a	focus	on	California	(which	accounts	for	
around	 12%	 of	 CCA’s	 total	 revenue). 123 	 	 According	 to	 Petrella,	 a	
number	of	policies	serve	to	exclude	expensive‐to‐incarcerate	California	
prisoners	 from	 being	 housed	 at	 out‐of‐state	 CCA	 facilities,	 including	
prisoners	 with	 certain	 medical	 and	 mental	 health	 conditions. 124 		
Petrella	 found	 that	 12%	 of	 prisoners	 held	 in	 state	 facilities	 had	 HCV,	
compared	with	6.55%	in	CCA‐operated	prisons. 125 		Also,	according	to	a	
May	 5,	 2014	 letter	 from	 California	 Correctional	 Health	 Care	 Services,	
“HIV+	 inmate‐patients	 are	 not	 transferred	 outside	 of	 California.	 	 If	 an	
inmate‐patient	is	diagnosed	with	HIV+	[sic]	while	residing	in	an	out‐of‐
state	institution	they	are	returned	to	California	as	soon	as	possible.” 126 		
In	addition,	Petrella	found	that	California	prisoners	with	“High	Health	
Risk	 Priority	 1	 &	 2”	 ratings	 comprised	 11%	 of	 the	 state’s	 prison	
population,	while	those	with	a	disability	comprised	6%,	those	65	years	
and	older	comprised	4.4%,	and	those	designated	“Mental	Health	EOP”	
[Enhanced	 Outpatient]	 comprised	 4.2%. 127 	 	 The	 percentage	 of	
California	 prisoners	 in	 those	 same	 categories	 housed	 at	 out‐of‐state	
privately‐operated	prisons?		Zero. 128	

                                                                                                                             
	 121.	 OFFICE	OF	PROGRAM	POLICY	ANALYSIS	&	GOV’T	ACCOUNTABILITY,	WHILE	DMS	HAS	
IMPROVED	MONITORING,	IT	NEEDS	TO	STRENGTHEN	PRIVATE	PRISON	OVERSIGHT	AND	CONTRACTS,	
REPORT	NO.	08‐71	4–5	(2008),	available	at	
www.prisonlegalnews.org/media/publications/oppaga_fl_audit_report_on_private_pri
son_monitoring_2008.pdf.	
	 122.	 Id.	at	5.	
	 123.	 CHRISTOPHER	PETRELLA,	AN	OPEN	LETTER	TO	THE	CORRECTIONS	CORPORATION	OF	AMERICA	
(2014),	available	at	
https://www.aclu.org/sites/default/files/assets/open_letter_to_cca_final.pdf.	
	 124.	 Id.	at	3.	
	 125.	 Id.	
	 126.	 Id.	at	3,	8.	
	 127.	 Id.	at	3.	
	 128.	 Id.	

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4.	

[Vol.	XLII	

Combining	Medical	Cost‐Shifting	Factors	

Standing	 alone,	 contractual	 provisions	 that	 cap	 healthcare	 costs,	
exclude	expenses	for	HIV	and	HCV	treatment,	and	limit	prisoners	with	
specified	 medical	 conditions	 at	 private	 prisons	 shift	 a	 certain	 amount	
of	medical	costs	to	public	contracting	agencies.		When	such	provisions	
are	combined,	however,	the	costs	increase	accordingly.	
As	an	extreme	example	of	cost‐shifting	related	to	medical	expenses,	
a	 2011	 contract	 between	 CCA	 and	 the	 Vermont	 Department	 of	
Corrections	 (VTDOC)	 includes	 a	 cap	 on	 medical	 costs,	 restrictions	 on	
specified	 medical	 expenses,	 and	 exclusions	 for	 prisoners	 with	 certain	
medical	and	mental	health	conditions. 129 		The	contract	provides:	“[t]he	
Contractor	 shall	 be	 responsible	 for	 inpatient	 hospital	 and	 surgery	
charges	 for	 the	 first	 Twenty	 Thousand	 Dollars	 ($20,000.00)	 in	 costs	
per	 inmate,	 per	 incident.	 	 Thereafter,	 VTDOC	 shall	 be	 liable	 for	 all	
inpatient	hospital	and	surgery	charges.” 130	
At	 first	 blush,	 $20,000	 for	 in‐patient	 hospitalization	 and	 surgery	
sounds	 like	 a	 generous	 cap—unless	 the	 reader	 is	 familiar	 with	 the	
costs	 of	 medical	 care	 in	 the	 United	 States.	 	 Consider	 that	 a	 California	
study	found	the	average	cost	to	remove	an	appendix—a	fairly	routine	
procedure—was	 $33,000. 131 	 	 More	 complex	 medical	 procedures	 are	
correspondingly	 more	 expensive—yet	 CCA’s	 maximum	 liability	 for	
hospitalization	and	surgery	is	capped	at	$20,000	per	prisoner.	
Also,	 for	 some	 of	 the	 most	 expensive	 medical	 procedures	 and	
treatment,	the	company	does	not	have	to	pay	anything	pursuant	to	the	
following	contractual	provision:	
Provided	 that	 the	 VTDOC	 is	 aware	 or	 has	 been	 notified	 prior	 to	 the	
hospitalization	of	the	inmate,	the	Contractor	shall	not	be	responsible	
for	 inpatient	 hospitalization	 costs,	 including	 any	 surgery	 and	
specialty	 services,	 associated	 with	 the	 treatment	 of	 persons	 with	
known	Acquired	Immune‐Deficiency	Syndrome	(AIDS),	as	defined	by	
the	 Center	 for	 Disease	 Control,	 organ	 transplants,	 renal	 dialysis,	
cancer	 treatment	 and	 Hep	 C	 treatment.	 	 The	 Contractor	 shall	 be	
responsible	for	inpatient	and	outpatient	hospitalization	costs	for	HIV	
infected	patients,	as	noted	above	when	not	associated	with	treatment	
of	their	HIV	disease.		The	Contractor	shall	not	be	responsible	for	the	
cost	of	providing	AZT,	or	other	medications	therapeutically	indicated	
for	 the	 treatment	 of	 inmates	 with	 AIDS	 or	 HIV	 infection.	 	 Such	

                                                                                                                             
	 129.	 Contract	for	Services	between	Dep’t	of	Corr.,	State	of	Vt.	and	Corr.	Corp.	of	Am.,	
Contract	No.	19863	(2011).	
	 130.	 Id.	at	38.	
	 131.	 Study:	Appendix	Surgery	Costs	Differ	Around	U.S.,	CBS	NEWS,	Apr.	23,	2012,	
http://www.cbsnews.com/news/study‐appendix‐surgery‐costs‐differ‐around‐us.	

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treatment	will	be	at	the	VTDOC’s	discretion	and	expense	and	requires	
pre‐authorization.	 	 The	 VTDOC	 will	 screen	 all	 transfers	 to	 exclude	
inmates	 currently	 being	 treated	 for	 active	 AIDS,	 cancer,	 renal	 dialysis	
and	Hep	C. 132	

But	 what	 about	 prisoners	 with	 serious	 mental	 health	 conditions?		
The	 contract	 covers	 that	 too,	 by	 minimizing	 costs	 to	 CCA.	 	 “Vermont	
Department	 of	 Corrections	 agrees	 to	 review	 the	 mental	 health	 needs	
and	stability	of	all	inmates	proposed	for	placement	with	CCA	facilities,”	
the	 contract	 states. 133 	 	 “CCA	 may	 request	 the	 prompt	 return	 to	
Vermont	 of	 any	 inmate	 whose	 mental	 health	 cannot	 be	 readily	
maintained	while	out	of	state.” 134 	 	Further,	the	state	is	responsible	for	
the	cost	of	prosthetics:	“With	the	prior	approval	by	the	Vermont	Health	
Services	 Director	 Contractor	 shall	 provide	 prosthetic	 devices	 to	
inmates	 as	 medically	 indicated	 .	 .	 .	 .	 	 The	 costs	 associated	 with	
providing	prosthetics	shall	be	borne	by	the	State.” 135	
Therefore,	 costs	 associated	 with	 hospital	 and	 surgery	 expenses	
above	the	$20,000	cap,	as	well	as	costs	related	to	prisoners	who	have	
HIV,	HCV,	and	cancer,	or	who	require	dialysis	or	organ	transplants,	or	
have	serious	mental	health	conditions,	plus	the	cost	of	prosthetics,	are	
all	shifted	to	the	public	sector.	
D.	 Transportation	Costs	
The	 cost	 of	 transporting	 prisoners	 to	 and	 from	 privately‐operated	
facilities	is	sometimes	paid	by	the	public	agency	rather	than	the	private	
prison	 company.	 	 For	 example,	 a	 2010	 contract	 between	 Florida	 and	
MTC	for	operation	of	the	Gadsden	Correctional	Institute	provides:	“The	
CONTRACTOR	shall	not	be	responsible	for	inmate	transportation	from	
the	 [FDOC]	 to	 the	 Facility	 or	 from	 the	 Facility	 to	 the	 inmate’s	
destination	 upon	 transfer	 except	 as	 provided	 for	 in	 Section	 5.13	
[related	 to	 specific	 types	 of	 transfers].” 136 	 	 Also,	 a	 2013	 contract	
between	 the	 Tennessee	 Department	 of	 Correction	 and	 CCA	 to	 house	
prisoners	 at	 the	 South	 Central	 Correctional	 Facility	 specifies	 that,	
“[t]he	 Department	 will	 be	 responsible	 for	 all	 other	 Inmate	
transportation	 via	 connection	 at	 Turney	 Center	 Industrial	 Complex	
[the	closest	state	prison]	for	Department‐mandated	moves	of	prisoner	

                                                                                                                             
	 132.	 Contract	for	Services	between	Dep’t	of	Corr.,	State	of	Vt.	and	Corr.	Corp.	of	Am.,	
supra	note	129,	at	39	(emphasis	added).	
	 133.	 Id.	at	35.	
	 134.	 Id.	
	 135.	 Id.	at	33.	
	 136.	 Operations	&	Management	Services	Contract	between	State	of	Fla.	and	Corr.	
Corp.	of	Am.	for	Gadsden	Correctional	Facility,	supra	note	113,	at	19.	

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[Vol.	XLII	

groups	 for	 assignment	 purposes.” 137 	 	 Transportation	 costs	 may	 be	
minimal,	particularly	when	prisoners	are	moved	to	facilities	within	the	
same	state.		However,	consider	that	over	10,500	prisoners	are	housed	
in	 out‐of‐state	 private	 prisons,	 according	 to	 a	 2013	 report	 by	
Grassroots	 Leadership. 138 	 	 Prisoners	 from	 California,	 Idaho,	 Vermont,	
and	Hawaii	are	held	in	CCA‐operated	facilities	in	other	states,	and	are	
transferred	back	and	forth	via	ground	transportation	or	airplane.	
Who	pays	for	these	more	expensive	interstate	transportation	costs?		
According	to	a	2008	contract	between	the	Hawaii	Department	of	Public	
Safety	and	Pinal	County	to	house	prisoners	at	CCA	facilities	in	Arizona,	
“[t]he	STATE	shall	be	responsible	for	the	cost	of	transporting	Inmates	
to	 and	 from	 the	 STATE.” 139 	 	 Similar	 language	 was	 included	 in	 a	 2008	
contract	between	Hawaii	and	CCA	to	house	prisoners	at	the	company’s	
Otter	 Creek	 Correctional	 Center	 in	 Kentucky. 140 	 	 A	 2011	 contract	
between	 California	 and	 CCA	 states	 that	 “CDCR	 shall	 reimburse	
CONTRACTOR	 for	 the	 cost	 of	 transporting	 offenders	 between	 the	
transfer	 point	 in	 California	 and	 Facility,	 and	 between	 Facility	 and	
transfer	 point	 in	 California	 .	 .	 .	 .” 141 	 	 Those	 costs	 include	 “cost	 of	
airframe	 and	 crew,”	 as	 well	 as	 expenses	 associated	 with	 CCA	
transportation	officers,	including	the	“cost	of	salary	and	fringe	benefits	
for	 each	 guard	 accompanying	 the	 transportation	 of	 offenders,”	 plus	
CCA	 “shall	 be	 entitled	 [to]	 administrative	 overhead	 on	 said	 amounts	
calculated	for	guarding	at	a	rate	of	15%.” 142	
Such	 costs	 can	 be	 substantial.	 	 According	 to	 a	 2009	 report	 by	 the	
Hawaii	 Department	 of	 Public	 Safety,	 transportation	 expenses	 for	
sending	prisoners	to	and	from	private	prisons	on	the	mainland	totaled	
$1,506,144	in	FY	2009	alone. 143 		Particularly	with	regard	to	interstate	
transfers	 to	 private	 prisons,	 the	 shifting	 of	 transportation	 costs	 to	
public	agencies	can	be	significant.	

                                                                                                                             
	 137.	 Contract	between	Dep’t	of	Corr.,	State	of	Tenn.,	and	Corr.	Corp.	of	Am.	for	South	
Central	Correctional	Center,	supra	note	110,	at	19.	
	 138.	 GRASSROOTS	LEADERSHIP,	LOCKED	UP	&	SHIPPED	AWAY:	INTERSTATE	PRISONER	TRANSFERS	
AND	THE	PRIVATE	PRISON	INDUSTRY	(2013),	available	at	
http://grassrootsleadership.org/sites/default/files/uploads/locked_up_shipped_away
.pdf.	
	 139.	 Contract	between	Dep’t	of	Pub.	Safety,	State	of	Haw.,	and	Pinal	County,	Ariz.,	
supra	note	101,	at	2.	
	 140.	 Contract	between	Dep’t	of	Pub.	Safety,	State	of	Haw.,	and	Corr.	Corp.	of	Am.	for	
Otter	Creek	Correctional	Center.,	supra	note	102,	at	2.	
	 141.	 Offender	Relocation/Housing,	Agreement	between	State	of	Cal.	and	Corr.	Corp.	
of	Am.,	supra	note	99,	at	7.	
	 142.	 Id.	
	 143.	 STATE	OF	HAW.	DEP’T	OF	PUB.	SAFETY,	supra	note	51,	at	Exhibit	A.	

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E.	 Prisoner	Labor	Costs	
Most	 correctional	 facilities	 rely	 on	 prisoner	 labor	 to	 perform	
essential	 functions	 such	 as	 kitchen,	 laundry,	 janitorial,	 maintenance,	
clerical,	 and	 grounds	 keeping	 services.	 	 While	 private	 prison	
companies	 benefit	 from	 prisoners’	 labor,	 the	 wages	 that	 prisoners	
receive	 are	 sometimes	 paid	 or	 reimbursed	 by	 the	 contracting	 public	
agency.	
Pursuant	 to	 a	 2008	 contract	 between	 the	 Hawaii	 Department	 of	
Public	 Safety	 and	 Pinal	 County	 to	 house	 prisoners	 at	 CCA	 facilities	 in	
Arizona,	“[t]he	State	shall	reimburse	the	[private	prison	contractor]	for	
Inmate	pay,	which	amount	shall	be	included	as	a	separate	item	on	the	
monthly	 invoice.” 144 	 	 Identical	 language	 was	 included	 in	 a	 2008	
contract	 to	 house	 Hawaii	 prisoners	 at	 a	 CCA‐operated	 facility	 in	
Kentucky. 145 	 	 At	 immigration	 detention	 centers,	 private	 prison	
contractors	 benefit	 from	 detainees	 employed	 in	 “voluntary”	 work	
programs. 146 	 	 Immigration	 and	 Customs	 Enforcement	 (ICE)	
reimburses	private	contractors	for	wages	paid	to	such	detainees,	at	the	
rate	 of	 $1.00	 per	 day	 for	 each	 worker. 147 	 	 For	 example,	 a	 2010	
Intergovernmental	 Service	 Agreement	 between	 ICE	 and	 Karnes	
County,	 Texas,	 to	 house	 detainees	 at	 the	 GEO	 Group‐operated	 Karnes	
County	 Civil	 Detention	 Center	 states	 that	 in	 addition	 to	 the	 per	 diem	
rate,	 ICE	 will	 provide	 compensation	 of	 one	 dollar	 a	 day	 for	 “Detainee	
Work	Program	Reimbursement.” 148	
Prisoners’	wages,	while	typically	paltry,	add	up	due	to	the	number	of	
prisoners	 who	 work	 each	 day,	 year	 after	 year.	 	 According	 to	 a	 2009	
Hawaii	Department	of	Public	Safety	report,	the	cost	for	wages	paid	to	
prisoners	 held	 at	 CCA	 facilities	 in	 FY	 2009	 was	 $607,344—a	 cost	
shifted	 to	 the	 state,	 while	 CCA	 benefited	 from	 the	 prisoner	 labor. 149 		
According	to	Professor	Jacqueline	Stevens	at	Northwestern	University,	
as	 a	 result	 of	 cut‐rate	 detainee	 labor	 costs	 at	 immigration	 detention	
facilities,	 private	 contractors	 achieve	 substantial	 savings—though	
when	detainee	wages	are	reimbursed	by	ICE,	those	savings	come	at	a	

                                                                                                                             
	 144.	 Contract	between	Dep’t	of	Pub.	Safety,	State	of	Haw.,	and	Pinal	County,	Ariz.,	
supra	note	101,	at	14.	
	 145.	 Contract	between	Dep’t	of	Pub.	Safety,	State	of	Haw.,	and	Corr.	Corp.	of	Am.	for	
Otter	Creek	Correctional	Center.,	supra	note	102,	at	12.	
	 146.	 See	Ian	Urbina,	Using	Jailed	Migrants	as	a	Pool	of	Cheap	Labor,	N.Y.	TIMES,	May	
24,	2014,	http://www.nytimes.com/2014/05/25/us/using‐jailed‐migrants‐as‐a‐pool‐
of‐cheap‐labor.html.	
	 147.	 Id.	
	 148.	 Intergovernmental	Service	Agreement	between	U.S.	Dep’t	of	Homeland	Sec.,	
Immigration	&	Customs	Enforcement	and	Karnes	Cnty.,	EROIGSA‐11‐004	2	(2010).	
	 149.	 STATE	OF	HAW.	DEP’T	OF	PUB.	SAFETY,	supra	note	51,	at	Exhibit	A.	

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cost	that	is	shifted	to	the	public	sector. 150 		Using	the	minimum	wage	to	
calculate	 the	 relative	 value	 of	 detainee	 labor	 at	 privately‐operated	
immigration	 detention	 centers,	 Professor	 Stevens	 found	 that	 “[f]or	
2012,	 GEO	 brought	 in	 an	 estimated	 $33	 to	 $72	 million	 profits	 from	
labor	savings,	and	CCA	an	estimated	$30	to	[$66]	million	from	its	labor	
savings,	or	about	25%	of	the	company’s	total	profits.” 151	
Public	 prisons	 use	 prisoner	 labor,	 too,	 of	 course.	 	 But	 if	 private	
prisons	had	to	pay	for	the	prisoner	labor	they	use	and	from	which	they	
benefit,	 their	 operating	 costs	 would	 be	 higher.	 	 Instead,	 expenses	
related	 to	 prisoners’	 wages	 are	 sometimes	 shifted	 to	 the	 public	
contracting	agency.	
F.	 Administrative	Overhead	
According	 to	 one	 study,	 administrative	 overhead	 costs	 at	
correctional	facilities	range	from	eight	to	twenty	percent, 152 	and	not	all	
of	those	costs	can	be	shifted	to	private	prison	contractors.	
Even	 when	 prisoners	 are	 housed	 at	 privately‐operated	 facilities,	
there	 are	 certain	 functions	 that	 still	 must	 be	 performed	 by	 public	
officials.	 	 These	 administrative	 overhead	 duties,	 sometimes	 called	
central	office	functions,	include,	among	others:	
 Calculating	prisoners’	sentences	and	applying	good	time	credits;	
 Recordkeeping	 related	 to	 prisoners’	 institutional	 files	 and/or	
trust	fund	accounts;	
 Intake	and	initial	classification	for	prisoners	entering	the	prison	
system;	
 Reviewing	grievance	appeals;	
 Reviewing	 and/or	 approving	 disciplinary	 decisions	 by	 private	
prison	employees;	
 Planning,	 procurement	 and	 budget	 development	 related	 to	
private	prison	contracts,	including	the	development	of	RFPs	and	
evaluation	of	bids	by	private	prison	companies;	
 Parole	hearings	and	parole‐related	services;	and	
 Responding	to	public	records	requests.	
These	 tasks	 require	 the	 expenditure	 of	 staff	 time	 and	 resources	 by	
public	contracting	agencies,	and	therefore	should	be	factored	into	cost	

                                                                                                                             
	 150.	 See	generally	Jacqueline	Stevens,	One	Dollar	Per	Day:	The	Slaving	Wages	of	
Immigration	Jail	Work	Programs	(Working	Paper	v.	2,	2014),	available	at	
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2434006.	
	 151.	 Id.	at	11.	
	 152.	 GAES,	supra	note	2,	at	18.	

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comparisons. 153 	 	 	 Additionally,	 most	 private	 prisons	 are	 subject	 to	
monitoring	 by	 public	 corrections	 officials.	 	 In	 some	 cases	 those	
expenses	are	paid	by	the	private	prison	company,	while	in	others	the	
public	contracting	agency	is	wholly	or	partially	responsible	for	the	cost	
of	monitoring.		A	2012	contract	between	the	State	of	Idaho	and	CCA	to	
house	Idaho	prisoners	at	the	company’s	Kit	Carson	Correctional	Center	
in	 Colorado	 provides	 that	 CCA	 will	 pay	 for	 the	 monitor’s	 salary	 and	
benefits.	 	 However,	 the	 state	 “is	 responsible	 for	 all	 costs	 associated	
with	 the	 IDOC	 Contract	 Monitor	 other	 than	 salary	 and	 benefits,”	
including	 expenses,	 travel	 and	 lodging. 154 	 	 In	 this	 case,	 travel	 and	
lodging	 costs	 are	 higher	 than	 usual	 as	 the	 prisoners	 are	 housed	 at	 an	
out‐of‐state	facility.	
Costs	 associated	 with	 private	 prison	 monitoring	 may	 be	 minimal,	
such	 as	 when	 one	 or	 two	 employees	 are	 assigned	 to	 oversee	 one	
facility.	 	 But	 in	 other	 cases	 state	 prison	 systems	 have	 an	 entire	
department	 devoted	 to	 private	 prison	 contract	 monitoring	 and	
compliance,	 such	 as	 the	 Mainland/FDC	 Branch	 of	 the	 Hawaii	

                                                                                                                             
	 153.	 These	are	all	functions	typically	performed	by	public	corrections	agencies.		
Private	prisons	do	not	calculate	prisoners’	sentences	or	good	time	credits;	prisoner	
record‐keeping	and	trust	fund	accounts	are	usually	maintained	by	Departments	of	
Correction	through	a	centralized	computer	system.		When	prisoners	enter	the	prison	
system	they	go	through	a	classification	process,	including	medical	and	mental	health	
screening	and	security	classification,	which	is	conducted	at	a	public	reception	facility	
before	prisoners	are	transferred	to	private	prisons.	For	example,	in	the	Tennessee	
Department	of	Correction	(TDOC),	which	contracts	with	CCA	to	house	state	prisoners	
at	three	facilities,	“All	sentence	computations,	including	calculation	of	Inmate	release	
and	parole	dates,	shall	be	done	by	the	Department	.	.	.	.”	Supra,	note	110	at	22.		The	
TDOC	uses	a	computer	system	called	TOMIS	to	manage	information	about	offenders,	
and	“All	computer	equipment	and	communication	lines	necessary	to	interface	with	the	
Department’s	.	.	.	(TOMIS)	will	be	provided	by	the	Department	at	no	cost	to	the	
Contractor.”	Id.	at	3,	23.	The	TDOC’s	intake/reception	facility	is	the	Bledsoe	County	
Correctional	Complex	(BCCX),	which	“is	the	intake	diagnostic	center	for	all	male	
offenders	sentence	[sic]	to	the	[TDOC].	All	offenders	receive	a	comprehensive	
diagnostic	assessment	which	will	determine	their	medical,	mental	health	and	
programming	needs.”		BCCX	is	operated	by	the	state,	which	bears	the	cost	of	all	intake	
and	diagnostic	services.	See	www.tn.gov/correction/institutions/bccx.shtml.	While	
private	prisons	have	their	own	grievance	and	disciplinary	procedures,	grievance	and	
disciplinary	appeals	are	usually	handled	by	public	prison	officials.	See,	e.g.,	Mandela	v.	
Campbell,	978	S.W.2d	531	(Tenn.	1998).		Parole	hearings	and	related	services	are	
provided	by	public	agencies—there	are	no	privatized	parole	boards.		With	respect	to	
public	records	laws,	most	state	public	records	statutes	do	not	specifically	extend	to	
private	prison	companies,	and	the	federal	Freedom	of	Information	Act	only	applies	to	
federal	government	agencies,	not	to	private	contractors.	See	Mel	Motel,	Reintroducing	
the	Private	Prison	Information	Act:	An	Interview,	PRISON	LEGAL	NEWS	(Feb.	15,	2013),	
https://www.prisonlegalnews.org/news/2013/feb/15/reintroducing‐the‐private‐
prison‐information‐act‐an‐interview.	
	 154.	 Contract	Purchase	Order	between	Dep’t	of	Corr.,	Idaho,	and	Corr.	Corp.	of	Am.,	
supra	note	92,	at	237.	

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Department	 of	 Public	 Safety, 155 	 the	 Private	 Facility	 Contract	
Monitoring/Oversight	 Division	 of	 the	 Texas	 Department	 of	 Criminal	
Justice	 (TDCJ), 156 	 and	 Florida’s	 former	 Correctional	 Privatization	
Commission. 157	
As	 of	 2010,	 California’s	 Contract	 Beds	 Unit	 (CBU)	 reportedly	 had	
seventy‐three	 staff	 members	 assigned	 to	 monitor	 out‐of‐state	 private	
prisons—an	 usually	 high	 number	 with	 a	 correspondingly	 higher	 cost	
to	the	state. 158 		According	to	the	CBU,	monitoring	costs	are	paid	by	the	
state	 and	 not	 by	 the	 private	 contractors. 159 	 	 The	 CBU’s	 proposed	
budget	for	FY	2014–2015	was	$398,284,	representing	costs	shifted	to	
the	public	sector	for	private	prison	monitoring. 160	
Finally,	public	agencies	sometimes	must	absorb	administrative	costs	
related	 to	 litigation	 involving	 private	 prisons,	 such	 as	 when	 both	
private	 prison	 officials	 and	 state	 officials	 are	 named	 as	 defendants	 in	
lawsuits.	 	 A	 2013	 report	 by	 Hawaii’s	 state	 Auditor	 noted	 that	 state	
prison	officials	were	not	including	litigation	expenses	when	calculating	
private	prison‐related	costs.		“[T]hese	costs,	if	included,	would	have	the	
biggest	impact	on	per	capita	costs	for	housing	inmates	in	out‐of‐state	
facilities,	since	the	biggest	lawsuits	involve	these	facilities,”	the	Auditor	
wrote. 161	
One	researcher	has	noted	that	even	when	private	prison	companies	
indemnify	 the	 public	 agencies	 with	 which	 they	 contract,	 costs	 of	
litigation	 absorbed	 by	 the	 companies	 may	 be	 passed	 on	 to	 those	
agencies	 through	 cost	 increases	 when	 the	 contracts	 are	 renewed	 or	
rebid:	“[l]itigation	expenses,	settlement	agreements,	and	adverse	court	
judgments	 against	 private	 prison	 operators	 and	 their	 employees	
augment	 the	 Government’s	 expenses	 by	 way	 of	 contract	 pricing	

                                                                                                                             
	 155.	 See	STATE	OF	HAW.	DEP’T	OF	PUB.	SAFETY,	supra	note	51.	
	 156.	 See	Private	Facility	Contract	Monitoring/Oversight	Division,	TEX.	DEPARTMENT	
CRIM.	JUST.,	http://tdcj.state.tx.us/divisions/pf/index.html	(last	visited	Nov.	12,	2014).	
	 157.	 Florida’s	Correctional	Privatization	Commission	was	abolished	in	May	2004,	
the	same	month	that	the	agency’s	director,	Alan	Duffee,	resigned.	See	Joni	James,	Ex‐
Prisons	Official	Admits	Thefts,	ST.	PETERSBURG	TIMES,	Feb.	14,	2006,	
http://www.sptimes.com/2006/02/14/Tampabay/Ex_prisons_official_a.shtml.		Duffee	
pleaded	guilty	to	embezzling	almost	$225,000	from	a	maintenance	fund	set	up	for	
private	prisons	and	was	sentenced	to	thirty‐three	months	in	federal	prison.	See	id.	
	 158.	 HAKIM	&	BLACKSTONE,	supra	note	10,	at	31.	
	 159.	 Telephone	Interview	with	Lt.	Shawn	Simpson,	Pub.	Info.	Officer,	CBU	(Aug.	5,	
2014).	
	 160.	 See	5225	Corrections	and	Rehabilitation,	CAL.	GOVERNOR’S	BUDGET	2014–2015,	
http://www.ebudget.ca.gov/2014‐
15/StateAgencyBudgets/5210/5225/department.html	(last	visited	Nov.	12,	2014).		
Note:	The	CBU	also	oversees	in‐state	contract	facilities.	
	 161.	 HAW.	OFFICE	OF	THE	AUDITOR,	supra	note	37,	at	47.	

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increases	 and	 a	 higher	 degree	 of	 liability	 exposure	 than	 would	 exist	
under	a	purely	public	system.” 162	
Other	 litigation	 expenses	 are	 incurred	 by	 the	 public	 sector	 when	
private	 prison	 companies	 sue	 government	 agencies,	 such	 as	 after	 a	
contentious	 contract	 termination.	 	 Examples	 include	 when	 CCA	 filed	
suit	 against	 Hernando	 County,	 Florida	 in	 2010	 over	 a	 dispute	 about	
deferred	maintenance	and	repairs	at	the	county	jail, 163 	and	when	GEO	
Group	unsuccessfully	sued	Michigan	officials	for	$5.4	million	after	the	
state	 canceled	 its	 contract	 to	 house	 offenders	 at	 the	 GEO‐operated	
North	Lake	Correctional	Facility. 164 		In	the	latter	regard,	according	to	a	
2012	report	released	by	public	employee	unions,	GEO	Group	“sued	the	
state	 to	 keep	 the	 facility	 open—or	 continue	 to	 make	 lease	 payments	
even	if	it	were	empty.		GEO	pursued	the	claim	through	complaint	after	
amended	complaint,	litigating	it	all	the	way	up	to	the	Supreme	Court	of	
Michigan.” 165	
G.	 Law	Enforcement	and	Criminal	Prosecutions	
Private	prison	contracts	often	include	reimbursement	provisions	for	
costs	incurred	by	public	law	enforcement	agencies	due	to	escapes	from	
or	 riots	 at	 privately‐operated	 facilities.	 	 One	 shortcoming	 of	 such	
provisions,	 however,	 is	that	 they	 may	 only	 apply	 to	 the	 parties	 to	 the	
contract.	 	 Thus,	 for	 example,	 if	 a	 state	 contracts	 with	 CCA	 and	 state	
employees	 assist	 in	 searching	 for	 an	 escapee	 from	 the	 CCA‐operated	
facility,	then	the	state	can	seek	reimbursement	for	those	costs.		But	if	a	
county	 sheriff’s	 office,	 city	 police	 department,	 or	 other	 public	 law	
enforcement	 agency	 assists	 in	 the	 search,	 reimbursements	 for	 those	
costs	 might	 not	 be	 covered	 by	 the	 contract.	 	 Contractual	 provisions	
may	also	limit	reimbursements	to	public	agencies.	
A	 2011	 contract	 between	 CCA	 and	 the	 State	 of	 Vermont	 specifies	
that	 “[a]ny	 reasonable	 and	 actual	 costs	 up	 to	 $50,000.00	 incurred	 by	

                                                                                                                             
	 162.	 Lucas	Anderson,	Note,	Kicking	the	National	Habit:	The	Legal	and	Policy	
Arguments	for	Abolishing	Private	Prison	Contracts,	39	PUB.	CONT.	L.J.	113,	131–32	
(2009).	
	 163.	 Complaint,	Corr.	Corp.	of	Am.	v.	Hernando	County	(M.D.	Fla.	2010)	(No.	8:10‐cv‐
02182),	2010	WL	4018750;	see	also	Barbara	Behrendt,	Former	Hernando	County	Jail	
Operator	CCA	Sues	Over	Money,	Equipment,	TAMPA	BAY	TIMES,	Sept.	30,	2010,	
http://www.tampabay.com/news/localgovernment/former‐hernando‐county‐jail‐
operator‐cca‐sues‐over‐money‐equipment/1125116.	
	 164.	 GEO	Group	v.	Mich.	Dep’t	of	Corr.,	No.	273466,	2007	Mich.	App.	LEXIS	1658	
(Mich.	Ct.	App.	June	21,	2007).	
	 165.	 MICH.	CORR.	ORG.,	PITFALLS	AND	PROMISES:	THE	REAL	RISKS	TO	RESIDENTS	AND	TAXPAYERS	
OF	PRIVATIZING	PRISONS	AND	PRISON	SERVICES	IN	MICHIGAN	10	(2012),	available	at	
http://www.mco‐seiu.org/files/2012/02/MCO‐Private‐Prison‐Report‐v8.pdf.	

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VTDOC	in	connection	with	any	escape	and	or	rendition	and	extradition	
process	 shall	 be	 chargeable	 to	 and	 borne	 by	 Contractor.” 166 	 	 Costs	
above	 the	 $50,000	 cap	 are	 shifted	 to	 the	 state,	 and	 the	 contract	 does	
not	 address	 costs	 incurred	 by	 federal	 or	 local	 law	 enforcement	
agencies—only	by	the	VTDOC. 167	
Further,	public	agencies	may	incur	expenses	related	to	escapes	from	
privately‐operated	 facilities	 located	 in	 other	 jurisdictions.	 	 The	 high‐
profile	 escape	 of	 three	 prisoners	 from	 an	 MTC‐managed	 facility	 in	
Kingman,	 Arizona	 in	 July	 2010	 serves	 as	 an	 instructive	 example.	 	 The	
escapees,	 Tracy	 Province,	 Daniel	 Renwick,	 and	 John	 McCluskey,	 were	
eventually	 captured—one	 (plus	 an	 accomplice)	 in	 Arizona,	 one	 in	
Colorado,	 and	 one	 in	 Wyoming. 168 	 	 While	 on	 the	 run	 they	 had	
murdered	 a	 couple,	 Gary	 and	 Linda	 Haas,	 in	 New	 Mexico. 169 	 	 The	
escape	resulted	in	a	three‐week	nationwide	manhunt	involving	dozens	
of	 law	 enforcement	 agencies. 170 	 	 While	 news	 reports	 indicated	 that	
MTC	had	reimbursed	some	of	the	costs	associated	with	the	escape, 171 	it	
is	 highly	 unlikely	 that	 all	 of	 the	 law	 enforcement	 agencies	 that	
participated	 in	 the	 nationwide	 search,	 including	 the	 FBI,	 recovered	
their	costs	from	the	company.	
The	 externalized	 cost	 of	 criminal	 prosecutions	 resulting	 from	
incidents	 at	 private	 prisons	 is	 another	 cost‐shifting	 factor	 often	
overlooked	 in	 public‐private	 prison	 cost	 comparisons.	 	 To	 continue	
with	the	example	of	the	2010	escape	from	the	MTC‐operated	facility	in	
Arizona,	following	their	capture	the	three	escapees	were	prosecuted	in	
federal	 court	 in	 New	 Mexico	 for	 a	 number	 of	 crimes,	 including	 the	
murders	 of	 Gary	 and	 Linda	 Haas. 172 	 	 Prosecutors	 sought	 the	 death	
penalty	 against	 McCluskey; 173 	 death	 penalty	 cases	 are	 the	 most	

                                                                                                                             
	 166.	 Contract	for	Services	between	Dep’t	of	Corr.,	State	of	Vt.	and	Corr.	Corp.	of	Am.,	
supra	note	129,	at	28.	
	 167.	 Id.	
	 168.	 Bob	Ortega,	Arizona	Prisons	Slow	to	Fix	Flaws	in	Wake	of	Kingman	Escape,	ARIZ.	
REPUBLIC	(June	26,	2011),	
http://www.azcentral.com/news/articles/2011/06/26/20110626arizona‐prison‐
safety‐improvements.html.	
	 169.	 Id.	
	 170.	 Id.	
	 171.	 Jayne	Hanson,	County	Reimbursed	for	Prison	Break	Costs,	TODAY’S	NEWS‐HERALD	
(Jan.	25,	2011),	http://www.havasunews.com/news/county‐reimbursed‐for‐prison‐
break‐costs/article_fed1b958‐3c25‐55c8‐8aa9‐5cc0fdf43ab6.html.	
	 172.	 See	Scott	Sandlin,	40	Years	for	Woman’s	Role	in	Murders,	ALBUQUERQUE	J.,	June	3,	
2014,	http://www.abqjournal.com/409968/news/40‐years‐for‐womans‐role‐in‐
murders.html.	
	 173.	 See	id.	

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expensive	 types	 of	 prosecutions. 174 	 	 McCluskey	 and	 Province	 were	
sentenced	to	life,	while	Renwick	received	a	forty‐eight	year	sentence	in	
Colorado. 175 		Their	accomplice,	Casslyn	Welch,	was	sentenced	to	forty	
years	 in	 federal	 prison. 176 	 	 The	 costs	 of	 prosecuting	 the	 escapees,	 as	
well	as	their	future	incarceration	costs	(including	life	sentences	for	two	
of	the	defendants),	were	shifted	to	public	agencies;	MTC	was	not	held	
responsible	 for	 those	 costs	 even	 though	 gross	 security	 lapses	 by	 the	
company	had	contributed	to	the	escape. 177	
In	 another	 case,	 after	 a	 prisoner	 escaped	 from	 a	 CCA‐operated	
prison	 in	 Mississippi	 in	 2009,	 the	 escapee	 and	 an	 accomplice	 shot	 a	
Tennessee	 police	 officer,	 Mark	 Chesnut,	 five	 times	 during	 a	 traffic	
stop. 178 	 	 They	 were	 prosecuted	 in	 Tennessee	 and	 sentenced	 to	 forty‐
five	 and	 thirty‐one	 years	 in	 prison,	 respectively. 179 	 	 The	 cost	 of	 their	
prosecution	and	future	incarceration	was	shifted	to	public	agencies	in	
Tennessee	 even	 though	 the	 escape	 occurred	 at	 a	 CCA	 prison	 in	
Mississippi.	
Further,	 Hawaii	 prisoner	 Bronson	 Nunuha	 was	 murdered	 at	 the	
CCA‐operated	 Saguaro	 Correctional	 Center	 in	 Arizona	 in	 February	
2010. 180 	 	 The	 two	 prisoners	 who	 killed	 him,	 Miti	 Maugaotega,	 Jr.	 and	
Micah	 Kanahele,	 were	 prosecuted	 by	 Arizona	 officials,	 who	 initially	
sought	 the	 death	 penalty. 181 	 	 Four	 months	 after	 Nunuha	 was	
murdered,	 another	 Hawaii	 prisoner	 at	 Saguaro,	 Clifford	 Medina,	 was	
killed	by	his	cellmate,	Mahina	Uli	Silva. 182 		Silva	also	was	prosecuted	in	

                                                                                                                             
	 174.	 See	Financial	Facts	About	the	Death	Penalty,	DEATH	PENALTY	INFO.	CENTER,	
www.deathpenaltyinfo.org/costs‐death‐penalty#financialfacts	(last	visited	Nov.	12,	
2014).	
	 175.	 See	Sandline,	supra	note	172.	
	 176.	 See	id.	
	 177.	 See	ARIZ.	DEP’T	OF	CORR.,	ASP‐KINGMAN	HISTORY	(2010),	available	at	
https://afsc.org/sites/afsc.civicactions.net/files/documents/adoc‐report‐on‐kingman‐
escapes.pdf.	
	 178.	 Kate	Howard,	Mark	Chesnut,	Officer	Shot	on	Interstate,	Sues	CCA	for	More	than	
$14	Million,	TENNESSEAN,	Oct.	30,	2009,	available	at	http://www.hollinslegal.com/wp‐
content/uploads/2012/03/mark‐chesnut‐officer‐shot.pdf.	
	 179.	 Brian	Hass,	Former	Metro	Police	Sgt.	Mark	Chesnut	Settles	Suit	in	Prison	Break	
Case,	TENNESSEAN,	Sept.	14,	2011,	available	at	http://www.hollinslegal.com/wp‐
content/uploads/2012/03/Former‐Metro‐Police‐Sgt.‐Mark‐Chesnut‐settles‐suit‐in‐
prison‐break‐case.pdf.	
	 180.	 See	Gregg	K.	Kakesako,	Third	Hawaii	Inmate	Faces	Death	Penalty	in	Arizona,	
HONOLULU	STAR	ADVERTISER	(Sept.	4,	2010),	
http://www.staradvertiser.com/news/20100904_third_hawaii_inmate_faces_death_pe
nalty_in_arizona.html?id=102211349.	
	 181.	 Id.	
	 182.	 Id.	

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Arizona	and	initially	faced	the	death	penalty. 183 		The	County	Attorney’s	
Office	 assumed	 prosecution	 costs,	 and,	 although	 both	 murders	
involved	 Hawaii	 prisoners	 at	 a	 CCA	 facility,	 the	 future	 incarceration	
expenses	 for	 Maugaeotega,	 Kanahele,	 and	 Silva	 will	 be	 funded	 by	
Arizona	taxpayers.	
As	 indicated	 by	 the	 above	 examples,	 the	 costs	 of	 prosecuting	
prisoners	who	commit	serious	offenses	at	privately‐operated	facilities	
are	shifted	to	public	agencies,	as	are	incarceration	costs	resulting	from	
those	prosecutions—even	when	the	offenses	are	due	to	security	lapses	
by	private	prison	companies.	
H.	 Bed	Guarantees	
According	 to	 a	 September	 2013	 report	 by	 In	 the	 Public	 Interest	
(ITPI)	 titled	 Criminal:	 How	 Lockup	 Quotas	 and	 ‘Low‐Crime	 Taxes’	
Guarantee	Profits	for	Private	Prison	Corporations,	forty‐one	of	the	sixty‐
two	 private	 prison	 contracts	 surveyed	 in	 the	 report	 (around	 65%)	
contained	 minimum	 occupancy	 “bed	 guarantee”	 provisions.	 	 Such	
provisions	 ensure	 that	 private	 prison	 companies	 receive	 per	 diem	
payments	for	a	minimum	percentage	of	beds	at	a	facility—even	if	they	
are	not	being	used. 184 		The	bed	guarantees	identified	in	the	ITPI	report	
ranged	from	80	to	100%;	for	example,	three	private	prison	contracts	in	
Arizona	included	100%	 bed	guarantees,	while	three	in	Oklahoma	had	
98%	 guarantees. 185 	 	 The	 most	 common	 bed	 guarantee	 was	 90%,	 and	
all	 three	 of	 the	 nation’s	 largest	 private	 prison	 firms—CCA,	 the	 GEO	
Group,	 and	 MTC—utilized	 bed	 guarantee	 provisions	 in	 their	
contracts. 186	
In	 some	 cases	 bed	 guarantees	 have	 resulted	 in	 cost‐shifting	 by	
private	prisons,	as	public	agencies	were	required	to	pay	for	unused	or	
unneeded	bed	space.		As	one	example,	following	the	2010	escape	from	
an	MTC‐run	prison	in	Arizona	described	above,	state	officials	removed	
hundreds	 of	 high‐risk	 prisoners	 from	 the	 facility	 as	 a	 security	
precaution. 187 		However,	MTC	filed	a	claim	against	the	state	based	on	a	

                                                                                                                             
	 183.	 Id.	
	 184.	 IN	THE	PUB.	INTEREST,	CRIMINAL:	HOW	LOCKUP	QUOTAS	AND	“LOW‐CRIME	TAXES”	
GUARANTEE	PROFITS	FOR	PRIVATE	PRISON	CORPORATIONS	(2013),	available	at	
http://www.inthepublicinterest.org/sites/default/files/Criminal‐Lockup%20Quota‐
Report.pdf.	
	 185.	 Id.	at	14–16.	
	 186.	 Id.	
	 187.	 Id.	at	9.	

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97%	 bed	 guarantee	 in	 its	 contract,	 and	 Arizona	 ended	 up	 paying	 the	
company	more	than	$3	million	for	empty	beds	at	the	prison. 188	
Also,	The	Tennessean	reported	that	a	90%	bed	guarantee	for	female	
prisoners	 at	 the	 CCA‐operated	 Metro‐Davidson	 County	 Detention	
Facility	in	Nashville	had	cost	taxpayers	over	$487,000	for	vacant	beds	
from	2011	to	2013. 189	
Even	when	private	prison	contracts	do	not	include	bed	guarantees,	
that	does	not	guarantee	such	provisions	are	inapplicable.		According	to	
the	ITPI	report,	Colorado	officials	agreed	to	pay	CCA	$20,000	each	for	
at	 least	 3300	 prisoners	 during	 FY	 2013,	 even	 though	 there	 were	
available	beds	at	state	facilities	that	could	have	accommodated	some	of	
those	 prisoners—and	 even	 though	 the	 state’s	 contracts	 with	 CCA	
specified	 that	 “the	 state	 does	 not	 guarantee	 any	 minimum	 number	 of	
offenders	will	be	assigned	to	the	contractor’s	facility.” 190	
This	 end‐run	 around	 the	 contractual	 language	 was	 achieved	 after	
“CCA	negotiated	the	insertion	of	a	bed	guarantee	provision	in	the	state	
budget	 for	 all	 three	 of	 its	 facilities	 [in	 Colorado]	 for	 the	 2013	 fiscal	
year.” 191 	 	 How	 was	 the	 company	 able	 to	 accomplish	 this	 legislative	
sleight	 of	 hand?	 	 By	 cutting	 a	 deal	 with	 state	 officials	 for	 the	 bed	
guarantees	 in	 exchange	 for	 CCA	 agreeing	 not	 to	 close	 one	 of	 its	
facilities,	as	it	had	threatened. 192 		“CCA	has	said	that	if	we	don’t	figure	
something	 out,	 they	 will	 be	 in	 a	 situation	 where	 they	 have	 to	 close	 a	
prison,”	stated	Roxane	White,	chief	of	staff	for	Colorado	Governor	John	
Hickenlooper,	 in	 a	 March	 10,	 2013	 news	 report. 193 	 	 “The	 General	
Assembly	 and	 the	 governor	 agreed	 to	 have	 a	 year	 where	 no	 other	
communities	 were	 affected	 by	 a	 prison	 closure,”	added	 Eric	 Brown,	 a	
spokesman	 for	 the	 governor’s	 office. 194 		 The	 cost	 for	 both	 the	 private	
prison	beds	and	maintaining	the	unused	bed	space	in	public	prisons—
estimated	at	$2	million—was	shifted	to	the	state. 195	

                                                                                                                             
	 188.	 Id.	
	 189.	 See	TN	Taxpayers	Pay	$500K	for	Empty	Prison	Beds	in	Quota	Contract,	CRIME	REP.	
(Oct.	11,	2013,	5:51	P.M.),	http://www.thecrimereport.org/news/crime‐and‐justice‐
news/2013‐10‐tn‐funding‐empty‐prison‐beds.	
	 190.	 Ann	Imse,	Colorado	Paying	Millions	for	Unneeded	Private	Prisons,	COLO.	PUB.	
NEWS	(Mar.	10,	2013),	http://www.cpt12.org/news/index.php/colorado‐paying‐
millions‐for‐unneeded‐private‐prisons;	see	also	IN	THE	PUB.	INTEREST,	supra	note	184,	at	
7–8.	
	 191.	 IN	THE	PUB.	INTEREST,	supra	note	184,	at	7–8.	
	 192.	 Id.	
	 193.	 Imse,	supra	note	190.	
	 194.	 Id.	
	 195.	 IN	THE	PUB.	INTEREST,	supra	note	184,	at	7.	

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Bed	 guarantees	 can	 also	 have	 a	 significant	 impact	 on	 long‐term	
costs,	 as	 private	 prison	 contracts	 may	 extend	 up	 to	 twenty	 years.	 	 As	
part	 of	 Ohio’s	 2011	 sale	 of	 the	 Lake	 Erie	 Correctional	 Institution	 to	
CCA,	 state	 officials	 agreed	 to	 a	 twenty‐year	 lease	 agreement	 that	
includes	 per	 diem	 rates,	 an	 annual	 ownership	 fee,	 and	 a	 90%	 bed	
guarantee. 196 	 	 In	 the	 latter	 regard,	 if	 Ohio’s	 prison	 population	 drops	
over	 the	 next	 two	 decades,	 and	 the	 state	 no	 longer	 needs	 to	 house	
offenders	 at	 the	 CCA	 facility—or	 decides	 to	 expand	 the	 use	 of	 less	
costly	 sanctions	 such	 as	 community	 corrections	 or	 supervised	
release—it	still	must	fill	90%	of	Lake	Erie’s	1800	beds	pursuant	to	the	
bed	guarantee	provision	in	its	contract	with	the	company. 197	
In	 February	 2012,	 CCA	 sent	 letters	 to	 the	 governors	 in	 forty‐eight	
states,	offering	to	purchase	state	prisons	under	similar	conditions,	with	
90%	bed	guarantees	and	twenty‐year	terms. 198	
Public	prisons,	of	course,	do	not	have	bed	guarantees	because	they	
do	 not	 need	 to	 house	 a	 minimum	 number	 of	 prisoners	 to	 ensure	 a	
guaranteed	profit	margin. 199	
I.	

Long‐Term	Costs	

Comparisons	 between	 public	 and	 privately‐operated	 prisons	 often	
focus	on	short‐term	expenses	and	may	neglect	the	following	long‐term	
cost‐shifting	factors:	(1)	per	diem	increases;	(2)	deferred	maintenance;	
(3)	recidivism	rates;	and	(4)	expenses	related	to	bond	financing.	
1.	

Per	Diem	Increases	

The	 per	 diem	 rates	 specified	 in	 private	 prison	 contracts	 often	
increase	 over	 time	 as	 a	 result	 of	 contractually‐required	 annual	 cost	
adjustments.	 	 For	 example,	 a	 2012	 article	 in	 The	 Spokesman‐Review	
reported	 that	 Idaho’s	 budget	 for	 private	 prisons	 was	 expected	 to	
increase	 pursuant	 to	 “a	 contract	 requirement	 that	 per‐inmate	
payments	 to	 the	 Corrections	 Corporation	 of	 America,	 which	 operates	
the	 Idaho	 Correctional	 Center	 south	 of	 Boise	 for	 the	 state,	 rise	 by	 3	

                                                                                                                             
	 196.	 OHIO	DEP’T	OF	REHAB.	&	CORR.,	supra	note	65.	
	 197.	 IN	THE	PUB.	INTEREST,	supra	note	184,	at	10.	
	 198.	 Chris	Kirkham,	Private	Prison	Corporation	Offers	Cash	in	Exchange	for	State	
Prisons,	HUFFINGTON	POST	(Feb.	14,	2012),	
http://www.huffingtonpost.com/2012/02/14/private‐prisons‐buying‐state‐
prisons_n_1272143.html.		A	copy	of	the	CCA	letter	is	posted	at	
https://www.prisonlegalnews.org/media/publications/ccaletter.pdf.	
	 199.	 Since	bed	guarantees	ensure	a	minimum	profit	margin	for	private	prison	
companies,	a	more	accurate	term	for	such	contractual	provisions	may	be	“profit	
guarantees.”	

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percent	next	year.” 200 		“This	is	all	on	contract,	and	this	is	the	rate	which	
is	 in	 the	 contract,”	 said	 State	 Rep.	 Darrell	 Bolz. 201 	 	 According	 to	 The	
Spokesman‐Review:	“Rep.	Diane	Bilyeu,	D‐Pocatello,	noted	that	after	the	
increase,	the	daily	rate	per	inmate	of	$42.73	for	the	first	1,894	inmates	
[held	at	the	CCA‐run	facility]	will	be	slightly	higher	than	the	state’s	rate	
to	house	state	inmates	in	county	jails.” 202	
In	 fact,	 escalating	 per	 diem	 rates	 in	 private	 prison	 contracts	 are	
fairly	 common.	 	 Pursuant	 to	 a	 2013	 contract	 between	 the	 Tennessee	
Department	 of	 Correction	 and	 CCA	 to	 operate	 the	 South	 Central	
Correctional	Center,	the	per	diem	rate	that	CCA	receives	increases	from	
$45.69	in	2013–2014,	to	$46.70	in	2014–2015,	then	to	$47.73	in	2015–
2016,	to	$48.78	in	2016–2017,	and	finally	to	$49.85	in	2017–2018	(the	
latter	 two	 increases	 only	 apply	 if	 the	 contract	 is	 extended). 203 	 	 This	
represents	 an	 increase	 of	 9.1%	 over	 the	 potential	 five‐year	 contract	
period,	from	a	total	annual	contract	amount	of	$27.38	million	in	2013–
2014	to	$29.87	million	in	2017–2018. 204	
Similarly,	 per	 diem	 payments	 escalate	 in	 a	 2009	 contract	 between	
CCA	 and	 the	 Metropolitan	 Government	 of	 Nashville	 and	 Davidson	
County.	 	 The	 contract	 specifies	 per	 diem	 costs	 of	 $43.36	 per	 male	
prisoner	 and	 $46.42	 per	 female	 prisoner	 for	 the	 first	 year,	 increasing	
to	 $48.80	 per	 male	 prisoner	 and	 $52.24	 per	 female	 prisoner	 by	 year	
five—a	12.5%	increase. 205	
A	 2011	 contract	 between	 CCA	 and	 the	 State	 of	 Vermont	 provides	
that	 in	 the	 first	 year,	 the	 state	 will	 pay	 a	 per	 diem	 of	 $61.72	 per	
prisoner	 housed	 at	 CCA’s	 Lee	 Adjustment	 Center	 in	 Kentucky	 and	
$68.00	 per	 prisoner	 held	 at	 the	 company’s	 Florence	 Correctional	
Center	 in	 Arizona. 206 	 	 Those	 rates	 rise	 incrementally	 to	 $67.43	 and	
$74.30,	respectively,	in	year	four	of	the	contract—a	9.25%	increase. 207	

                                                                                                                             
	 200.	 Betsy	Z.	Russell,	Prison	Budget	Set;	Includes	3%	Increase	for	Private	Prison	Firm	
CCA,	SPOKESMAN‐REV.	(Mar.	5,	2012),	
http://www.spokesman.com/blogs/boise/2012/mar/05/prison‐budget‐set‐includes‐
3‐increase‐private‐prison‐firm‐cca.	
	 201.	 Id.	
	 202.	 Id.	
	 203.	 Contract	between	Dep’t	of	Corr.,	State	of	Tenn.,	and	Corr.	Corp.	of	Am.	for	South	
Central	Correctional	Center,	supra	note	110,	at	1,	28.	
	 204.	 Id.	
	 205.	 Management	Services	Contract	between	Corr.	Corp.	of	Am.	and	the	Metro.	Gov’t	
of	Nashville	and	Davidson	Cnty.,	supra	note	104,	at	25.	
	 206.	 Contract	for	Services	between	Dep’t	of	Corr.,	State	of	Vt.	and	Corr.	Corp.	of	Am.,	
supra	note	129,	at	4.	
	 207.	 Id.	

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The	 State	 of	 Texas	 contracts	 with	 CCA	 to	 operate	 a	 number	 of	
correctional	facilities,	and	a	2010	contract	to	manage	the	Bartlett	State	
Jail	 is	 representative	 of	 such	 agreements.	 	 That	 contract,	 which	
includes	 optional	 extensions	 to	 2017,	 provides	 for	 a	 per	 diem	 rate	 of	
$28.66	 for	 a	 state	 jail	 offender	 during	 the	 first	 year,	 increasing	 to	
$29.23	 in	 year	 three	 under	 the	 base	 term	 of	 the	 contract,	 then	 to	
$31.64	in	the	final	extension	 year—or	an	almost	10.4%	increase	over	
the	full	contract	term,	including	extensions. 208	
Similar	 provisions	 are	 included	 in	 the	 state’s	 2010	 contracts	 with	
CCA	to	operate	the	Bradshaw	State	Jail,	Lindsey	State	Jail,	and	Willacy	
County	 State	 Jail—all	 of	 which	 include	 per	 diem	 increases	 of	
approximately	 10.3%	 over	 the	 full	 contract	 term. 209 	 	 Thus,	 the	
contractual	costs	for	private	prisons	are	not	fixed	but	tend	to	increase	
over	 time,	 which	 might	 not	 be	 reflected	 in	 short‐term	 or	 “snapshot”	
cost	comparison	studies.	
While	costs	at	public	prisons	may	increase	over	time,	such	as	due	to	
inflation,	they	also	may	decrease—for	example,	as	a	result	of	declining	
populations.	 	 According	 to	 the	 U.S.	 Department	 of	 Justice’s	 Bureau	 of	
Justice	Statistics,	beginning	in	2009	the	total	state	prison	population	in	
the	United	States	began	a	very	gradual	decline,	and	twenty‐eight	states	
reported	 prison	 population	 reductions	 from	 2011	 to	 2012. 210 		
However,	 private	 prison	 contracts	 that	 include	 escalating	 per	 diem	
rates,	 such	 as	 those	 cited	 above,	 are	 guaranteed	 to	 result	 in	 higher	
costs	over	the	term	of	the	contract,	unlike	public	prisons	which	do	not	
have	contractually‐required	cost	increases.	
2.	

Deferred	Maintenance	

Another	 long‐term	 cost	 is	 deferred	 maintenance	 by	 private	 prison	
companies	that	manage,	but	do	not	own,	correctional	facilities.		When	
CCA	decided	in	2010	to	terminate	its	contract	with	Hernando	County,	
Florida,	to	operate	the	county’s	jail,	local	officials	found	the	facility	was	
in	 need	 of	 significant	 repairs	 due	 to	 deferred	 maintenance	 by	 the	

                                                                                                                             
	 208.	 Solicitation,	Offer	and	Award	between	Dep’t	of	Crim.	Justice,	State	of	Tex.,	and	
Corr.	Corp.	of	Am.	for	operation	of	the	Bartlett	State	Jail,	supra	note	114,	at	13–14.	
	 209.	 See	Solicitation,	Offer	and	Award	between	Dep’t	of	Crim.	Justice,	State	of	Tex.,	
and	Corr.	Corp.	of	Am.	for	operation	of	the	Bradshaw	State	Jail,	supra	note	115;	
Solicitation,	Offer	and	Award	between	Dep’t	of	Crim.	Justice,	State	of	Tex.,	and	Corr.	
Corp.	of	Am.	for	operation	of	the	Lindsey	State	Jail,	supra	note	115;		Solicitation,	Offer	
and	Award	between	Dep’t	of	Crim.	Justice,	State	of	Tex.,	and	Corr.	Corp.	of	Am.	for	
operation	of	the	Willacy	County	State	Jail,	supra	note	115.	
	 210.	 E.	ANN	CARSON	&	DANIELA	GOLINELLI,	U.S.	DEP’T.	OF	JUSTICE,	BUREAU	OF	JUSTICE	
STATISTICS,	PRISONERS	IN	2012—ADVANCE	COUNTS	3	tbl.2	(2013),	available	at	
http://www.bjs.gov/content/pub/pdf/p12ac.pdf.	

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company. 211 	 	 CCA	 had	 managed	 the	 jail	 for	 twenty‐two	 years. 212 	 	 “If	
they	 had	 performed	 routine	 maintenance	 as	 they	 should	 have	 and	 as	
their	 contract	 required,”	 said	 Major	 Michael	 Page	 with	 the	 Hernando	
County	Sheriff’s	Office,	“this	building	would	look	[ten]	times	better.” 213	
Maintenance	 problems	 at	 the	 jail	 included	 “rusted	 doors,	 windows	
discolored	 and	 compromised	 by	 long‐term	 water	 damage,	 cracked	
walls	 and	 floors,	 ceiling	 tiles	 and	 walls	 bubbled	 and	 stained	 by	 leaks	
from	 a	 faulty	 roof.” 214 	 	 According	 to	 an	 engineering	 report	
commissioned	 by	 the	 county,	 CCA	 was	 responsible	 for	 almost	 $1	
million	in	repairs	due	to	deferred	maintenance. 215	
County	 officials	 withheld	 a	 $1.86	 million	 final	 payment	 pending	
resolution	of	the	repair	work	at	the	jail,	and	CCA	filed	suit	against	the	
county. 216 	 	 The	 case	 settled	 in	 2012,	 with	 the	 company	 paying	 only	
$100,000. 217 	 	 The	 county	 had	 to	 absorb	 the	 remainder	 of	 the	 repair	
costs. 218	
3.	

Recidivism	Rates	

A	 different	 type	 of	 long‐term	 cost	 rarely	 addressed	 in	 comparisons	
of	public	and	privately‐operated	prisons	relates	to	recidivism	rates, 219 	
and	 one	 researcher	 has	 argued	 that,	 “[i]ncreased	 criminal	 recidivism	
among	 inmates	 in	 private	 institutions	 presents	 perhaps	 the	 largest	
hidden	 financial	 cost	 of	 privatization.” 220 	 	 At	 best,	 prior	 research	 has	
found	 that	 private	 prisons	 have	 no	 better	 recidivism	 outcomes	 than	
their	public	counterparts;	at	worst,	based	on	recent	studies,	recidivism	

                                                                                                                             
	 211.	 See	John	Woodrow	Cox	&	Barbara	Behrendt,	Hernando	County’s	Takeover	of	Jail	
Brings	Year	of	Sweeping	Changes,	TAMPA	BAY	TIMES,	Aug.	27,	2011,	
http://www.tampabay.com/news/localgovernment/hernando‐countys‐takeover‐of‐
jail‐brings‐year‐of‐sweeping‐changes/1188387.	
	 212.	 Id.	
	 213.	 Id.	
	 214.	 Id.	
	 215.	 See	Barbara	Behrendt,	Hernando	County,	Jail	Contractor	Reach	Settlement	Over	
Withheld	Payment,	TAMPA	BAY	TIMES,	Jan.	24,	2012,	
http://www.tampabay.com/news/localgovernment/hernando‐county‐jail‐contractor‐
reach‐settlement‐over‐withheld‐payment/1212123.	
	 216.	 Id.	
	 217.	 Id.	
	 218.	 Id.	
	 219.	 Note	that	recidivism	may	be	measured	in	various	ways,	e.g.,	by	rearrest,	
reconviction,	or	reincarceration.		So	long	as	the	same	measure	is	applied	to	public	and	
private	prisons,	such	comparisons	are	valid;	however,	a	more	accurate	comparison	
would	involve	public	and	privately‐operated	facilities	that	offer	similar	rehabilitative	
programs.	
	 220.	 ANDERSON,	supra	note	162,	at	9.	

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rates	are	higher	at	private	prisons—meaning	prisoners	released	from	
such	 facilities	 are	 more	 likely	 to	 be	 reincarcerated,	 resulting	 in	
significant	 cost‐shifting	 from	 private	 prison	 companies	 to	 the	 public	
sector	over	the	long	term. 221	
Beginning	 in	 1999,	 a	 series	 of	 studies	 in	 Florida	 examined	 the	
recidivism	 rates	 of	 offenders	 held	 in	 both	 public	 and	 privately‐
operated	 prisons.	 	 The	 initial	 studies,	 which	 had	 various	
methodological	 weaknesses,	 concluded	 that	 private	 prisons	 achieved	
lower	 recidivism	 rates. 222 	 	 The	 final	 study,	 jointly	 conducted	 by	 the	
Florida	 Department	 of	 Corrections,	 Florida	 State	 University,	 and	
Florida’s	 Correctional	 Privatization	 Commission,	 and	 published	 in	
2005,	 was	 “the	 most	 rigorous”	 of	 the	 Florida	 recidivism	 reports. 223 		
The	 final	 study	 found	 there	 was	 little	 difference	 in	 recidivism	 rates	
between	 public	 and	 privately‐operated	 facilities. 224 	 	 “In	 summary,	 in	
only	 one	 of	 thirty‐six	 comparisons	 was	 there	 evidence	 that	 private	
prisons	 were	 more	 effective	 than	 public	 prisons	 in	 terms	 of	 reducing	
recidivism,”	the	authors	concluded	in	a	December	2003	version	of	the	
study	posted	on	the	FDOC’s	website. 225	
A	January	2011	joint	study	by	the	University	of	Hawaii	and	Hawaii’s	
Attorney	 General	 examined	 recidivism	 rates	 for	 660	 prisoners	 who	
were	paroled	after	serving	time	both	in	public	prisons	and	in	privately‐
operated	facilities	on	the	mainland. 226 		The	study	found	the	recidivism	
rate	for	parolees	from	state	prisons	was	56%	compared	with	53%	for	
those	from	private	prisons;	however,	that	finding	was	“not	statistically	
significant.” 227 	 	 Further,	 there	 were	 differences	 between	 the	 two	
prisoner	 cohorts,	 including	 with	 respect	 to	 gender	 and	 type	 of	
commitment	 offense,	 and	 the	 study	 did	 not	 examine	 recidivism	 rates	

                                                                                                                             
	 221.	 See,	e.g.	MATTHEW	T.	KING,	Private	Prisons	and	Recidivism,	in	PRISON	PRIVATIZATION:	
THE	MANY	FACETS	OF	A	CONTROVERSIAL	INDUSTRY,	supra	note	4,	at	161.	
	 222.	 GRANT	DUWE	&	VALERIE	CLARK,	THE	EFFECTS	OF	PRIVATE	PRISON	CONFINEMENT	IN	
MINNESOTA	ON	OFFENDER	RECIDIVISM	4–5,	28	(2013),	available	at	
http://www.doc.state.mn.us/pages/files/9613/9206/2382/MN_Private_Prison_Evalu
ation_Website_Final.pdf.	
	 223.	 Id.	at	5–6,	28;	see	also	William	Bales	et	al.,	Recidivism	of	Public	and	Private	State	
Prison	Inmates	in	Florida,	4	CRIMINOLOGY	&	PUB.	POL’Y	57	(2005).	
	 224.	 Bales	et	al.,	supra	note	223,	at	78–80.		
	 225.	 William	Bales	et	al.,	Recidivism:	An	Analysis	of	Public	and	Private	State	Prison	
Releases	in	Florida	(Dec.	2003),	available	at		
http://www.dc.state.fl.us/pub/recidivismfsu/summary.html	
	 226.	 UNIV.	OF	HAW.	AT	MANOA	DEP’T	OF	SOCIOLOGY	&	HAW.	DEP’T	OF	THE	ATTORNEY	GEN.,	
HAWAII’S	IMPRISONMENT	POLICY	AND	THE	PERFORMANCE	OF	PAROLEES	WHO	WERE	INCARCERATED	
IN‐STATE	AND	ON	THE	MAINLAND	1–2	(2011),	available	at	
http://ag.hawaii.gov/cpja/files/2013/01/AH‐UH‐Mainland‐Prison‐Study‐2011.pdf.	
	 227.	 Id.	at	23.	

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for	 prisoners	 who	 completed	 their	 sentences	 and	 were	 released	 from	
public	and	private	prisons	without	being	placed	on	parole.		The	report	
concluded,	 “[s]ince	 there	 is	 no	 empirical	 justification	 for	 the	 policy	
argument	 that	 private	 prisons	 reduce	 recidivism	 better	 than	 public	
prisons,	 the	 State	 of	 Hawaii	 should	 decide	 whether	 to	 continue,	
discontinue,	 expand,	 or	 contract	 its	 reliance	 on	 private	 prisons	 based	
on	other	criteria.” 228	
Other	research	has	reached	opposite	conclusions.		A	July	2003	study	
of	 for‐profit,	 non‐profit,	 and	 public	 juvenile	 correctional	 facilities	 in	
Florida,	 published	 by	 the	 Economic	 Growth	 Center	 at	 Yale	 University,	
determined	 that	 “for‐profit	 management	 has	 a	 statistically	 significant	
impact	 on	 recidivism	 as	 measured	 by	 both	 1‐year	 recidivism	 rates	
(approximately	5	to	8	percent	higher	than	the	other	management	types	
in	 terms	 of	 adjudications	 and	 charges)	 and	 by	 daily	 hazard	 rates	
(approximately	 13	 to	 19	 percent	 higher),”	 relative	 to	 non‐profit	 and	
public	facilities. 229	
Further,	 a	 2008	 study	 of	 Oklahoma	 prisoners	 in	 public	 and	 private	
prisons	 found	 “a	 significantly	 greater	 hazard	 of	 recidivism	 among	
private	 prison	 inmates	 in	 six	 of	 the	 eight	 models	 tested	.	.	.	.	 	 In	 every	
categorical	 model	 (including	 the	 two	 that	 were	 non‐significant),	
private	prison	inmate	 groups	had	a	 greater	hazard	of	recidivism	than	
did	 public	 inmate	 groups.” 230 	 	 The	 study	 noted	 that	 the	 more	 time	 a	
prisoner	spent	at	a	private	facility,	the	greater	the	hazard	of	recidivism;	
conversely,	 the	 more	 time	 served	 at	 a	 public	 prison,	 the	 lower	 the	
hazard	 of	 recidivism—though	 the	 effects	 were	 modest. 231 	 	 The	 study,	
which	 controlled	 for	 prisoners’	 age,	 education,	 race,	 prior	
incarceration,	offense	type,	discharge	conditions,	sentence	length,	time	
served,	 time	 spent	 in	 public	 and	 private	 prisons,	 and	 proportion	 of	
sentence	 served,	 concluded	 that	 prisoners	 held	 in	 private	 facilities	
were	up	to	16.7%	more	likely	to	recidivate. 232	
Most	 recently,	 the	 results	 of	 a	 2013	 study	 conducted	 by	 the	
Minnesota	Department	of	Corrections	indicated:	

                                                                                                                             
	 228.	 Id.	
	 229.	 Patrick	Bayer	&	David	E.	Pozen,	The	Effectiveness	of	Juvenile	Correctional	
Facilities:	Public	Versus	Private	Management,	48	J.LAW	&	ECON.	549	(2005),	available	at	
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=441881.	
	 230.	 Andrew	L.	Spivak	&	Susan	F.	Sharp,	Inmate	Recidivism	As	a	Measure	of	Private	
Prison	Performance.	54	CRIME	&	DELINQUENCY	482	(2008).	
	 231.	 Id.		Spivak	opined	that	higher	recidivism	rates	at	private	prisons	may	be	a	
result	of	more	difficult	prisoners	being	sent	to	those	facilities	by	public	corrections	
agencies—a	type	of	“reverse	cherrypicking.”	See	id.		However,	he	offered	no	evidence	
to	support	that	claim.	
	 232.	 Id.;	see	also	King,	supra	note	221,	at	170.	

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[T]hat	offenders	who	had	been	incarcerated	in	a	private	prison	had	a	
greater	hazard	of	recidivism	in	all	20	models,	and	the	recidivism	risk	
was	 significantly	 greater	 in	 eight	 of	 the	 models.	 	 The	 evidence	
presented	 in	 this	 study	 suggests	 that	 private	 prisons	 are	 not	 more	
effective	 in	 reducing	 recidivism,	 which	 may	 be	 attributable	 to	 fewer	
visitation	and	rehabilitative	programming	opportunities	for	offenders	
incarcerated	at	private	facilities. 233	

To	 the	 extent	 that	 prisoners	 released	 from	 private	 prisons	 in	 fact	
have	higher	recidivism	rates,	cost	comparisons	of	public	and	privately‐
operated	 facilities	 should	 examine	 the	 reincarceration	 expenses	 that	
result	due	to	those	higher	rates—which	represent	costs	shifted	to	the	
public	 sector	 over	 the	 long	 term.	 	 Such	 costs	 can	 be	 substantial;	
according	to	a	2012	study	by	the	Vera	Institute	of	Justice,	the	average	
cost	of	incarceration	is	$31,286	per	prisoner	per	year. 234	
As	noted	in	the	2003	study	of	Florida	juvenile	facilities:	
Relative	to	all	other	management	types,	for‐profit	management	leads	
to	 a	 statistically	 significant	 increase	 in	 recidivism,	 but,	 relative	 to	
nonprofit	and	state‐operated	facilities,	for‐profit	facilities	operate	at	a	
lower	 cost	 to	 the	 government	 per	 comparable	 individual	 released.		
Cost	benefit	analysis	implies	that	the	short‐run	savings	offered	by	for‐
profit	over	nonprofit	management	are	negated	in	the	long	run	due	to	
increased	 recidivism	 rates,	 even	 if	 one	 measures	 the	 benefits	 of	
reducing	 criminal	 activity	 as	 only	 the	 avoided	 costs	 of	 additional	
confinement. 235	

4.	

Bond	Financing	

A	 final	 long‐term	 cost‐shifting	 factor	 involves	 the	 construction	 of	
jails	 to	 generate	 revenue	 for	 cities	 and	 towns.	 	 Such	 projects	 usually	
include	 municipal	 or	 private	 bond	 financing	 to	 build	 jails	 that	 are	
operated	by	private	companies;	the	host	town	receives	a	portion	of	the	
revenue	from	housing	prisoners	at	the	facility.		Sometimes	the	projects	
are	 not	 successful,	 though,	 leaving	 public	 officials	 with	 empty	 jails,	
ongoing	maintenance	costs,	and	large	bond	or	loan	payments.	
Examples	include	the	town	of	Hardin,	Montana,	which	built	the	Two	
Rivers	Detention	Center	that	was	supposed	to	be	operated	by	Emerald	
Corrections	 and	 then	 by	 Civigenics,	 both	 private	 prison	 contractors,	

                                                                                                                             
	 233.	 DUWE	&	CLARK,	supra	note	222.	
	 234.	 CHRISTIAN	HENRICHSON	&	RUTH	DELANEY,	VERA	INST.	OF	JUSTICE,	THE	PRICE	OF	PRISONS:	
WHAT	INCARCERATION	COSTS	TAXPAYERS	9	(2012),	available	at	
http://www.vera.org/sites/default/files/resources/downloads/Price_of_Prisons_upd
ated_version_072512.pdf.	
	 235.	 Bayer	&	Pozen,	supra	note	229,	at	549.	

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but	 which,	 until	 recently,	 has	 remained	 vacant	 since	 2007. 236 	 	Hardin	
defaulted	on	$27	million	in	bond	payments	and	the	bondholders	took	
over	the	facility	in	2013. 237	
The	 $10	 million	 Bill	 Clayton	 Detention	 Center	 in	 Littlefield,	 Texas,	
remained	 empty	 for	 three	 years	 after	 the	 GEO	 Group	 pulled	 out	 in	
2009,	leaving	the	city	with	monthly	loan	payments	of	$65,000. 238 		City	
officials	raised	property	taxes,	increased	water	and	sewage	fees,	fired	
employees	 to	 avoid	 defaulting,	 and	 used	 reserve	 funds	 to	 cover	 the	
payments. 239 	 	 The	 facility	 remained	 vacant	 as	 of	 October	 2014;	
meanwhile,	the	city’s	bond	rating	has	suffered. 240	
According	to	another	report:		
Clayton,	New	Mexico	issued	$63	million	in	revenue	bonds	to	contract	
with	 GEO	 to	 build	 a	 medium	 security,	 625‐bed	 institution	 to	 house	
mostly	 state	 inmates.	 	 As	 prison	 populations	 declined,	 a	 study	
conducted	 for	 the	 Legislative	 Finance	 Committee	 reported	 that	 the	
actual	 cost	of	the	 prison	 will	 exceed	the	 estimated	 construction	cost	
of	$61	million.		It	estimated	that	over	the	course	of	twenty	years,	the	
state	will	pay	$132	million	in	construction	and	finance	costs	and	still	
not	 own	 the	 building.	 	 Of	 the	 $95.33	 per	 diem	 inmate	 costs	 for	
housing,	$27.81	will	go	toward	construction	costs. 241	

In	 such	 cases,	 the	 costs	 associated	 with	 maintenance	 for	 shuttered	
facilities,	 public	 funds	 used	 to	 cover	 bond	 payments,	 increased	
property	taxes	and	other	fees,	and	lowered	bond	ratings	are	shifted	to	

                                                                                                                             
	 236.	 Alex	Friedmann,	Improbable	Private	Prison	Scam	Plays	Out	in	Hardin,	Montana,	
PRISON	LEGAL	NEWS	(Dec.	15,	2009),	
https://www.prisonlegalnews.org/news/2009/dec/15/improbable‐private‐prison‐
scam‐plays‐out‐in‐hardin‐montana.	
	 237.	 Id.		The	Hardin	facility	began	receiving	its	first	prisoners	in	August	2014.	See	
Long	Empty,	Hardin	Jail	to	House	Native	American	Inmates,	Associated	Press	(Oct.	9,	
2014),	http://missoulian.com/news/state‐and‐regional/long‐empty‐hardin‐jail‐to‐
house‐native‐american‐inmates/article_f48374e4‐4fad‐11e4‐964e‐6fa7dbfcf380.html	
and	Developers	Turn	Over	Hardin	Jail	to	Bondholders,	Associated	Press	(April	19,	2012),	
http://helenair.com/news/state‐and‐regional/developers‐turn‐over‐hardin‐jail‐to‐
bondholders/article_40291f16‐89e5‐11e1‐bb8d‐001a4bcf887a.html	.	
	 238.	 Matt	Clarke,	Texas	Towns	Saddled	with	Empty,	Expensive	Privatized	Prisons	and	
Jails,	PRISON	LEGAL	NEWS	(Feb.	15,	2012),	
https://www.prisonlegalnews.org/news/2012/feb/15/texas‐towns‐saddled‐with‐
empty‐expensive‐privatized‐prisons‐and‐jails.	
	 239.	 Id.	
	 240.	 Id.;	see	also	Matt	Clarke,	Towns	Defaulting	on	Prison	and	Jail	Bonds,	PRISON	LEGAL	
NEWS	(Mar.	15,	2011),	https://www.prisonlegalnews.org/news/2011/mar/15/towns‐
defaulting‐on‐prison‐and‐jail‐bonds.	
	 241.	 ELAINE	RIZZO	&	MARGARET	HAYES,	AN	ASSESSMENT	OF	THE	RISKS	AND	BENEFITS	OF	PRISON	
PRIVATIZATION	3	(2012),	available	at	
https://www.prisonlegalnews.org/media/publications/rizzo_report_on_assessment_o
f_risks_and_benefits_of_prison_privatization_2012.pdf.	

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the	public	sector	when	contracts	with	 private	prison	companies	do	not	
work	out.	
There	 are	 also	 costs	 associated	 with	 “backdoor”	 financing	 of	
privately‐operated	prisons	and	immigration	detention	centers	through	
the	 use	 of	 revenue	 bonds. 242 	 	 According	 to	 a	 2007	 exposé	 by	 Kevin	
Pranis,	 then	 a	 policy	 analyst	 with	 Justice	 Strategies,	 there	 are	
significant	 long‐term	 expenses	 associated	 with	 prison	 and	 jail	
financing	 schemes.	 	 “A	 review	 of	 recent	 prison,	 jail,	 and	 detention	
expansion	 initiatives	 shows	 that	 federal,	 state,	 and	 local	 governments	
are	 using	 backdoor	 financing	 mechanisms	 to	 borrow	 hundreds	 of	
millions	of	dollars	to	build	facilities	that	the	public	does	not	want	and	
cannot	 afford,”	 Pranis	 wrote. 243 	 	 “Easy	 access	 to	 investment	 capital	
permits	policy	makers	to	commit	to	thousands	of	new	prison	beds	that	
will	 cost	 billions	 of	 dollars	 to	 operate	 over	 the	 coming	 decades	 while	
putting,	as	they	say	in	the	car	commercials,	‘nothing	down.’” 244	
J.	

Fraud	and	Corruption	

While	 some	 level	 of	 corruption	 is	 likely	 present	 in	 all	 corrections	
systems,	both	public	and	private,	government‐operated	prisons	do	not	
have	a	profit	motivation—the	need	to	make	money—that	is	conducive	
to	fraudulent	practices.		Private	companies	do	have	a	profit	motivation.		
Unsurprisingly,	 then,	 there	 have	 been	 several	 examples	 of	 private	
prison	 contractors	 engaging	 in	 corruption,	 fraud,	 or	 other	 unethical	
practices,	 which	 constitutes	 another	 cost‐shifting	 factor	 when	
comparing	public	and	private	prisons.	
In	 2005,	 an	 audit	by	Florida’s	Department	of	Management	Services	
(DMS)	reported	that	over	an	eight‐year	period,	CCA	and	the	GEO	Group	
were	overpaid	around	$12.7	million—including	$4.7	million	for	vacant	
employee	positions,	$5	million	in	“salary	additives,”	and	$2.85	million	
paid	to	CCA	for	facility	 maintenance	the	company	did	not	perform. 245 		
“Our	 review	 showed	 numerous	 instances	 where	 [private	 prison]	
vendors’	interests	were	considered	over	the	State’s	interests,”	the	DMS	

                                                                                                                             
	 242.	 Kevin	Pranis,	Doing	Borrowed	Time:	The	High	Cost	of	Backdoor	Prison	Finance	in	
PRISON	PROFITEERS:	WHO	MAKES	MONEY	FROM	MASS	INCARCERATION	36–51	(Tara	Herivel	&	
Paul	Wright	eds.,	2007).	
	 243.	 Id.	at	36.	
	 244.	 Id.	at	40.	
	 245.	 OFFICE	OF	INSPECTOR	GEN.,	CONTRACT	MANAGEMENT	OF	PRIVATE	CORRECTIONAL	FACILITIES	
i–iii	(2005)	available	at	
https://www.prisonlegalnews.org/media/publications/office%20of%20the%20ig%2
C%20fl%20private%20prison%20audit%20report%2C%202005.pdf.	

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report	stated. 246 		The	GEO	Group	argued	that	the	overpayments	were	
authorized	pursuant	to	its	contract	with	the	state,	and	agreed	to	repay	
only	$402,541. 247 		CCA	agreed	to	pay	$1.55	million—leaving	the	state	
approximately	$10.7	million	short. 248	
More	 recently,	 CCA	 issued	 a	 press	 release	 on	 April	 11,	 2013,	
acknowledging	 that	 employees	 at	 the	 company’s	 Idaho	 Correctional	
Center	 (ICC)	 had	 falsified	 staffing	 records	 and	 billed	 the	 state	 for	
almost	 4800	 hours	 for	 vacant	 positions. 249 	 	 “[E]mployees	 were	 being	
placed	on	the	shift	schedule	who	were	not	present	within	the	building	
or	 who	 were	 actually	 working	 in	 other	 areas	 and	 in	 some	 cases	 were	
no	 longer	 employees	 of	 CCA,”	 said	 Boise	 attorney	 T.J.	 Angstman,	 who	
represents	 prisoners	 in	 a	 federal	 lawsuit	 related	 to	 high	 levels	 of	
violence	at	ICC. 250	
As	a	result	of	the	falsified	records	and	understaffing	at	the	prison,	in	
September	 2013	 CCA	 was	 held	 in	 civil	 contempt	 in	 a	 class‐action	 suit	
filed	 by	 the	 ACLU	 of	 Idaho,	 for	 failing	 to	 comply	 with	 the	 terms	 of	 a	
settlement	agreement	involving	staffing	levels	at	ICC. 251 		CCA	agreed	to	
pay	 $1	 million	 to	 Idaho	 to	 cover	 the	 cost	 of	 the	 falsified	 staffing	
hours. 252 		However,	it	is	unknown	whether	that	compensated	the	state	
for	all	of	its	losses;	state	officials	commissioned	an	independent	audit,	
which	 estimated	 that	 CCA	 had	 understaffed	 ICC	 by	 more	 than	 26,000	
hours	 in	 one	 year	 alone. 253 	 	 The	 company	 has	 contested	 the	 audit	
findings. 254	

                                                                                                                             
	 246.	 Id.	at	7.	
	 247.	 David	M.	Reutter,	No	Criminal	Wrongdoing	Found	in	Overpayments	to	Florida	
Private	Prisons,	PRISON	LEGAL	NEWS	(Jan.	15,	2008),	
https://www.prisonlegalnews.org/news/2008/jan/15/no‐criminal‐wrongdoing‐
found‐in‐overpayments‐to‐florida‐private‐prisons.	
	 248.	 Id.	
	 249.	 CCA	Admits	to	Falsified	Staffing	Records,	Violating	Contract	with	Idaho	DOC,	
PRISON	LEGAL	NEWS	(May	15,	2013),	
https://www.prisonlegalnews.org/news/2013/may/15/cca‐admits‐to‐falsified‐
staffing‐records‐violating‐contract‐with‐idaho‐doc.	
	 250.	 Id.	
	 251.	 Complaint,	Kelly	v.	Wengler,	No.	1:11‐cv‐00185‐EJL	(D.	Idaho	Apr.	27,	2011);	
Idaho:	Federal	Court	Unseals	Pleadings,	Holds	CCA	in	Contempt	for	Violating	Settlement	
Agreement,	PRISON	LEGAL	NEWS	(Oct.	15,	2013),	
https://www.prisonlegalnews.org/news/2013/oct/15/idaho‐federal‐court‐unseals‐
pleadings‐holds‐cca‐in‐contempt‐for‐violating‐settlement‐agreement.	
	 252.	 Rebecca	Boone,	Prison	Company	CCA	to	Pay	Idaho	$1M	Over	Staffing,	ASSOCATED	
PRESS	(Feb.	4,	2014),	http://bigstory.ap.org/article/prison‐company‐cca‐pay‐idaho‐
1m‐over‐staffing.	
	 253.	 Rebecca	Boone,	Private	Prison	Firm	to	Fight	Staffing	Audit	Result,	ASSOCIATED	
PRESS	(Feb.	12,	2014),	http://bigstory.ap.org/article/private‐prison‐firm‐fight‐staffing‐
audit‐result.	
	 254.	 Id.	

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Another	example	of	corruption	involves	Christopher	B.	Epps,	former	
director	 of	 the	 Mississippi	 Department	 of	 Corrections	 and	 former	
president	of	the	American	Correctional	Association,	who	was	indicted	
in	 November	 2014	 on	 federal	 bribery	 and	 kickback	 charges. 255 	 	 Epps	
was	 accused	 of	 accepting	 almost	 $2	 million	 in	 bribes	 in	 connection	
with	 prison	 vendor	 contracts;	 he	 allegedly	 received	 the	 bribes	 from	
Cecil	McCrory,	who,	among	other	positions,	served	as	a	paid	consultant	
to	Management	&	Training	Corp.—a	private	prison	firm	with	contracts	
in	 Mississippi. 256 	 	 Epps’	 indictment	 led	 to	 calls	 to	 examine	 the	 state’s	
contracts	 with	 private	 prison	 companies. 257 	 	 Epps	 and	 McCrory	
pleaded	guilty	to	corruption	charges	in	February	2015. 258	
Further,	a	report	issued	by	the	Office	of	the	Inspector	General	of	the	
U.S.	Department	of	Justice	in	April		 2015	 found	that	with	respect	to	a	
contract	 to	 house	 BOP	 prisoners	 at	 the	 GEO	 Group‐operated	 Reeves	
County	 Detention	 Center	 in	 Texas,	 “Reeves	 County	 improperly	
requested	and	the	BOP	improperly	paid	$1.95	million	in	fringe	benefits	
it	was	not	entitled	to	receive,	including	$175,436	in	payroll		taxes	and	
workers’	compensation	insurance	that	were	incorrectly	calculated.” 259 		
While	 perhaps	 not	 rising	 to	 the	 level	 of	 fraud	 or	 corruption,	 this	
evidences	 another	 way	 that	 private	 prison	 costs	 are	 shifted	 to	 the	
public	sector,	through	improper	or	unjustified	contractual	payments.		
The	 Inspector	 General’s	 report	 also	 noted	 that	 between	 February	
2007	 and	 December	 2014,	 the	 Reeves	 County	 facility	 “was	 rated	
‘deficient’	 or	 ‘unsatisfactory’	 in	 6	 of	 12	 award	 fee	 evaluation	 periods.	
BOP’s	award	fee	rating	reports	reflected	that	[the	facility]	consistently	
struggled	 to	 meet	 or	 exceed	 baseline	 contractual	 standards,	 received	
an	 unacceptable	 number	 of	 deficiencies	 and	 notices	 of	 concern;	 was	
unresponsive	to	BOP	inquiries;	struggled	with	staffing	issues	in	health	
services	 and	 correctional	 services;	 and	 frequently	 submitted	

                                                                                                                             
255. Timothy Williams, Christopher Epps, Former Chief of Prisons in Mississippi, is
Arraigned, N.Y. TIMES (Nov. 6, 2014), http://www.nytimes.com/2014/11/07/us/christopherepps-former-chief-of-prisons-in-mississippi-is-arraigned.html. 
256. Id. 
257. Sid Salter, Epps Corruption Probe Should Bring Investigation of State’s Private
Prisons, Gulflive.com (Nov. 26, 2014), http://blog.gulflive.com/mississippi-pressopinion/2014/11/epps_corruption_probe_should_b.html. 
258. Alan Blinder, 2 Former Mississippi Officials Plead Guilty in a Graft Case Involving
Private Prisons, N.Y. TIMES (Feb. 25, 2015),
http://www.nytimes.com/2015/02/26/us/christopher-epps-former-mississipi-prisons-chiefpleads-guilty-in-corruption-case.html 
259. Audit of the Federal Bureau of Prisons Contract No. DJB1PC007 Awarded to
Reeves County, Texas to Operate the Reeves County Detention Center I/II Pecos, Texas,
Office of the Inspector General of the U.S. Department of Justice (April 2015) at i-ii,
http://www.justice.gov/oig/reports/2015/a1515.pdf. 

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inaccurate	 routine	 paperwork,	 including	 erroneous	 disciplinary	
hearing	records	and	monthly	invoices.” 260	
Other	 forms	 of	 fraud	 and	 corruption	 involving	 private	 prison	
companies	 likely	 go	 undetected,	 and	 thus	 the	 associated	 losses—and	
costs	to	public	agencies—are	unknown	and	impossible	to	quantify.	
IV.		QUALITY	OF	SERVICE	COMPARISONS	
Thus	 far	 this	 Article	 has	 focused	 on	 factors	 related	 to	 cost	
comparisons	 between	 public	 and	 private	 prisons. 261 	 	 Whether	 or	 not	
private	 prisons	 “save	 money,”	 however,	 is	 not	 the	 sole	 consideration;	
whether	they	provide	an	equivalent	quality	of	service	is	important,	too.		
After	 all,	 cheaper	 is	 not	 always	 better	 with	 respect	 to	 our	 criminal	
justice	system.		We	tend	to	get	what	we	pay	for.	
As	stated	in	the	1996	GAO	report:	
Although	comparative	costs	are	very	important,	they	are	not	the	only	
factors	 considered	 by	 policymakers	 in	 deciding	 the	 direction	 or	
extent	 of	 corrections	 privatization.	 	 A	 principal	 concern	 is	 whether	
private	contractors	can	operate	at	lower	costs	to	the	taxpayers,	while	
providing	 the	 same	 or	 even	 a	 better	 level	 of	 service	 as	 the	 public	
sector,	particularly	with	respect	to	safety	and	security	issues. 262	

Also,	as	noted	by	Associate	Professor	Alexander	Volokh	in	an	article	
addressing	 the	 need	 for	 performance	 measures	 at	 privately‐operated	
facilities,	“[i]f	we	find	that	a	private	prison	costs	less,	how	do	we	know	
that	 it	 did	 not	 achieve	 that	 result	 by	 cutting	 quality?” 263 	 	 Volokh	
suggested	 using	 performance‐based	 private	 prison	 contracts—
although	 in	 practice,	 cost	 considerations	 may	 be	 more	 important	 to	
public	agencies	dealing	with	strained	budgets.	
Additionally,	 cost	 and	 quality	 of	 service	 are	 directly	 related:	 lower	
costs	 typically	 lead	 to	 lower	 quality,	 while	 a	 performance‐based	
contract	that	calls	for	higher	quality	service	outcomes	can	be	expected	
to	 result	 in	 higher	 costs.	 	 Again,	 we	 get	 what	 we	 pay	 for,	 and	 when	
public	 agencies	 contract	 carceral	 functions	 to	 the	 lowest	 bidder,	 high	
quality	of	service	should	not	be	expected.	

                                                                                                                             
260. Id. at ii. 
	 261.	 See	supra	Part	III.	
	 262.	 U.S.	GEN.	ACCOUNTING	OFFICE,	supra	note	16,	at	9.	
	 263.	 Volokh,	supra	note	5,	at	361.	

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As	 with	 cost	 comparison	 studies,	 research	 on	 quality	 of	 service	 in	
public	 versus	 private	 prisons	 has	 reached	 equivocal	 conclusions. 264 		
According	to	the	2009	meta‐analysis	by	the	University	of	Utah:	
Our	 conclusion	 is	 that	 prison	 privatization	 provides	 neither	 a	 clear	
advantage	 nor	 disadvantage	 compared	 with	 publicly	 managed	
prisons.	 	 Neither	 cost	 savings	 nor	 improvements	 in	 quality	 of	
confinement	are	guaranteed	through	privatization.		Across	the	board,	
effect	 sizes	 were	 small,	 so	 small	 that	 the	 value	 of	 moving	 to	 a	
privately	managed	system	is	questionable. 265	

One	 researcher	 has	 suggested	 incentivizing	 private	 prison	
companies	 to	 achieve	 desired	 performance	 outcomes	 through	
refundable	 tax	 credits—termed	 a	 “private	 prisoner	 rehabilitation”	
(PPR)	credit. 266 		According	to	this	proposal:	
Through	 the	 tax	 codes	 of	 participating	 governments,	 private	 prison	
companies	could	claim	the	various	PPR	credits	upon	meeting	specific,	
tangible,	 state‐mandated	 benchmarks.	 	 For	 example,	 a	 benchmark	
might	 consist	 of	 a	 five	 percent	 annual	 decrease	 in	 rape	 incidents,	 a	
five	 percent	 annual	 decrease	 in	 prison	 assault	 incidents,	 increased	
employee	training	through	a	state‐certified	program,	implementation	
of	transitional	programming	that	sixty	percent	of	inmates	attend	with	
eighty	 percent	 of	 them	 meeting	 certain	 educational	 goals,	 or	 other	
specific	goals. 267	

Potential	 weaknesses	 with	 this	 approach	 include	 the	 fact	 that	 CCA	
and	GEO	Group,	the	nation’s	two	largest	private	prison	firms,	are	both	
real	 estate	 investment	 trusts	 (REITs)	 with	 very	 low	 tax	 burdens; 268 	
also,	performance	data	for	the	proposed	benchmarks	would	be	largely	
self‐reported	by	the	privately‐operated	prisons.	
A.	 Violence	Levels	
While	 quality‐of‐service	 comparisons	 are	 often	 subjective,	 some	
benchmarks,	 such	 as	 levels	 of	 institutional	 violence	 in	 public	 and	
private	 prisons,	 can	 be	 more	 readily	 analyzed.	 	 Several	 studies	 have	
found	 higher	 rates	 of	 violence	 at	 privately‐operated	 facilities	 despite	

                                                                                                                             
	 264.	 Michael	Montgomery,	Performance	Measures	and	Private	Prisons,	in	PRISON	
PRIVATIZATION:	THE	MANY	FACETS	OF	A	CONTROVERSIAL	INDUSTRY,	supra	note	4,	at	187.	
	 265.	 Lundahl	et	al.,	supra	note	18,	at	392.	
	 266.	 Cassandre	Monique	Davilmar,	Note,	We	Tried	to	Make	Them	Offer	Rehab,	but	
They	Said,	“No,	No,	No!”:	Incentivizing	Private	Prison	Reform	Through	the	Private	
Prisoner	Rehabilitation	Credit,	89	N.Y.U.	L.	REV	267	(2014).	
	 267.	 Id.	at	286.	
	 268.	 Kristen	Gwynne,	The	Corrections	Corporation	of	America’s	Latest	Shady	
Business?	Tax	Evasion,	ALTERNET	(Apr.	26,	2013),	www.alternet.org/corrections‐
corporation‐americas‐latest‐shady‐business‐tax‐evasion.	

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the	 fact	 that	 they	 usually	 house	 minimum‐	 and	 medium‐security	
prisoners	 while	 public	 prisons	 hold	 offenders	 of	 all	 security	 levels,	
including	maximum‐security.	
For	example,	a	2004	article	in	Federal	Probation	found	that	private	
prisons	 had	 more	 than	 twice	 as	 many	 prisoner‐on‐prisoner	 assaults	
than	 in	 public	 prisons, 269 	 and	 a	 2001	 Bureau	 of	 Justice	 Assistance	
report	 found	 privately‐operated	 facilities	 reported	 50%	 more	
prisoner‐on‐prisoner	assaults	and	almost	50%	more	prisoner‐on‐staff	
assaults	than	in	public	prisons	with	comparable	security	levels. 270	
According	to	a	2008	report	by	Idaho	DOC	investigator	Tim	Higgins,	
known	as	the	Higgins	report:	“[s]ince	the	beginning	of	2008,	incidents	
of	violence	at	the	Idaho	Correctional	Center	has	[sic]	steadily	increased	
to	the	point	that	there	are	four	incidents	for	every	one	that	occurs	in	the	
rest	 of	 the	 Idaho	 state	 operated	 facilities	 combined.” 271 	 	 The	 CCA‐
operated	Idaho	Correctional	Center,	discussed	previously,	is	also	called	
the	“Gladiator	School”	due	to	such	high	levels	of	violence. 272	
Further,	a	Human	Rights	Defense	Center	analysis	of	violent	incidents	
at	 public	 and	 private	 prisons	 in	 Tennessee,	 conducted	 by	 this	 author	
based	 on	 data	 provided	 by	 state	 officials	 pursuant	 to	 public	 records	
requests,	 found	 that	 rates	 of	 violence	 at	 private	 prisons	 were	 29%	
higher	 in	 2010,	 15.7%	 higher	 in	 2011,	 22.7%	 higher	 in	 2012,	 and	
15.8%	 higher	 in	 2013	 compared	 with	 state	 prisons. 273 	 	 The	 analysis	
used	 data	 related	 to	 prisoner‐on‐prisoner	 assaults,	 prisoner‐on‐staff	
assaults,	and	institutional	disturbances,	and	violent	incident	rates	were	
calculated	 based	 on	 the	 population	 levels	 at	 public	 and	 privately‐
operated	Tennessee	prisons. 274	
Additionally,	 a	 2013	 report	 by	 Ohio’s	 Correctional	 Institution	
Inspection	 Committee	 found	 that	 within	 the	 first	 year	 after	 CCA	

                                                                                                                             
	 269.	 Blakely	&	Bumphus,	supra	note	88,	at	27–31.	
	 270.	 JAMES	AUSTIN	&	GARRY	COVENTRY,	EMERGING	ISSUES	ON	PRIVATIZED	PRISONS	57	(2001),	
available	at	https://www.ncjrs.gov/pdffiles1/bja/181249.pdf.	
	 271.	 Memorandum	from	Tim	Higgins,	Investigation	&	Intelligence	Coordinator,	to	
Randy	Blades,	Warden	of	the	Virtual	Prison,	Idaho	Dep’t	of	Corr.,	on	Initial	Analysis	of	
Violence	at	the	Idaho	Correctional	Center	(Aug.	7,	2008),	available	at	
https://www.prisonlegalnews.org/media/publications/idaho%20icc%20higgins%20r
eport%20on%20violence%202008.pdf.	
	 272.	 FBI	Takes	Over	Investigation	of	Idaho	Prison	Nicknamed	‘Gladiator	School’,	
ASSOCIATED	PRESS	(Mar.	7,	2014),	http://www.nydailynews.com/news/national/fbi‐
takes‐investigation‐idaho‐gladiator‐school‐article‐1.1714357.	
	 273.	 HUMAN	RIGHTS	DEF.	CTR.,	TDOC	VIOLENT	INCIDENTS	REPORTED,	JANUARY	2010	THROUGH	
MAY	2014	(2014),	
https://www.prisonlegalnews.org/media/publications/TDOC%20violence%20stats%
20Jan%202010%20to%20May%202014%20FINAL_1.pdf.	
	 274.	 Id.	

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purchased	and	began	operating	the	Lake	Erie	Correctional	Institution,	
the	rate	of	prisoner‐on‐prisoner	assaults	was	“significantly	higher	than	
the	rate	for	 comparator	 prisons,”	though	slightly	 lower	than	the	state	
prison	 system	 average. 275 	 	 Further,	 the	 rate	 of	 prisoner‐on‐staff	
assaults	“was	significantly	higher”	than	the	rate	at	comparison	prisons	
as	 well	 as	 the	 state	 prison	 system	 average,	 and	 the	 total	 number	 of	
disturbances	at	the	facility	“doubled	in	comparison	to	prior	years.” 276 		
The	 rate	 of	 use‐of‐force	 incidents	 was	 lower	 than	 the	 prison	 system	
average,	 but	 “more	 than	 1.5	 times	 the	 average	 of	 comparator	
prisons.” 277	
B.	 Staff	Turnover	
Staff	 turnover	 rates	 can	 constitute	 another	 quality	 of	 service	
benchmark.	 	 High	 staff	 turnover	 means	 there	 are	 fewer	 experienced	
staff	 at	 a	 facility,	 more	 new	 “green”	 employees,	 and	 thus	 potentially	
greater	 institutional	 instability.	 	 Increased	 staff	 turnover	 may	 also	
reflect	 employee	 dissatisfaction	 with	 the	 quality	 of	 the	 prison	 work	
environment,	including	safety	and	security.	
Historically,	 private	 prisons	 have	 had	 significantly	 higher	 staff	
turnover	rates	than	public	prisons.		According	to	the	last	available	self‐
reported	 data	 from	 private	 prison	 companies,	 from	 The	 2000	
Corrections	 Yearbook,	 the	 average	 turnover	 rate	 at	 privately‐operated	
prisons	 was	 52.2%	 while	 the	 average	 rate	 at	 public	 prisons	 was	
16%. 278	
More	 recently,	 according	 to	 a	 December	 2008	 Texas	 Senate	
Committee	 on	 Criminal	 Justice	 report:	 “[d]uring	 FY	 2008	 the	
correctional	 officer	 turnover	 rate	 at	 the	 seven	 private	 prisons	 [in	
Texas]	was	90	percent	(60	percent	for	the	five	privately‐operated	state	
jails),	which	in	either	case	is	higher	than	the	24	percent	turnover	rate	
for	TDCJ	correctional	officers	during	FY	2008.” 279	

                                                                                                                             
	 275.	 GREGORY	GEISLER,	CORRECTIONAL	INSTITUTION	INSPECTION	COMMITTEE	REPORT	ON	THE	
INSPECTION	AND	EVALUATION	OF	THE	LAKE	ERIE	CORRECTIONAL	INSTITUTION	4–5	(2013),	
available	at	
http://www.ciic.state.oh.us/docs/lake_erie_correctional_institution_2013.pdf.	
	 276.	 Id.	
	 277.	 Id.	
	 278.	 See	Employees	Leaving	Private	Correctional	Facilities	and	Correctional	Officer	
Turnover	During	1999,	in	THE	2000	CORRECTIONS	YEARBOOK	100	(2000);	Correctional	
Officer	Turnover	During	1999,	in	THE	2000	CORRECTIONS	YEARBOOK,	supra,	at	152.	
	 279.	 TEX.	SENATE	COMM.	ON	CRIM.	JUSTICE,	INTERIM	REPORT	TO	THE	81ST	LEGISLATURE	9	
(2008),	available	at	
http://www.senate.state.tx.us/75r/senate/commit/c590/c590.InterimReport80.pdf.	

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Other	 examples	 include	 a	 2013	 report	 by	 Ohio’s	 Correctional	
Institution	 Inspection	 Committee,	 which	 noted	 higher	 staff	 turnover	
rates	 at	 the	 CCA‐owned	 and	 operated	 Lake	 Erie	 Correctional	
Institution.	 	 “In	 December	 2012,	 the	 staff	 turnover	 rate	 for	 total	 staff	
exceeded	20	percent.		Correctional	officer	turnover	rate	was	reported	
as	19.7	percent,”	the	report	found. 280 		“In	comparison,	the	DRC	 [state	
corrections	 department]	 staff	 turnover	 rate	 is	 reportedly	 12.7	
percent.” 281	
Further,	a	March	2013	report	by	MGT	of	America,	commissioned	by	
New	Hampshire	officials	to	evaluate	responses	to	the	state’s	RFP	for	a	
private	prison	contract,	stated:	
In	 prior	 MGT	 studies	 of	 private	 correctional	 facility	 operations,	 we	
have	 found	 private	 correctional	 facilities	 with	 annual	 staff	 turnover	
rates	 of	 42	 percent	 compared	 to	 13.3	 percent	 for	 nearby	 public	
facilities.	 	 High	 turnover,	 which	 can	 result	 from	 non‐competitive	
compensation	 levels,	 produces	 a	 chronically	 inexperienced	 work	
force	with	direct	implications	for	the	integrity	of	facility	security	and	
safety. 282	

Consequently,	 when	 comparing	 quality	 of	 service	 at	 private	 versus	
public	 prisons,	 staff	 turnover	 and	 the	 impact	 it	 has	 on	 facility	
operations	can	constitute	a	useful	performance	measure.	
C.	 ACA	Accreditation	
The	Hakim	and	Blackstone	study	cited	standards	established	by	the	
American	 Correctional	 Association	 (ACA)	 as	 an	 appropriate	 measure	
for	 quality	 of	 service,	 calling	 ACA	 accreditation	 a	 “robust	 and	 useful	
practical	 indicator	 of	 quality	 in	 the	 operations	 and	 management	 of	
prisons.” 283 	 	 However,	 using	 ACA	 accreditation	 as	 a	 benchmark	 for	
correctional	quality	is	problematic	and	impractical	for	several	reasons.	
According	to	the	1996	GAO	report:	
Comparing	 the	 quality	 of	 service	 at	 private	 and	 public	 prisons	 also	
presents	challenges	and,	in	fact,	can	be	more	difficult	than	comparing	
costs.		The	concept	of	‘quality’	is	neither	easily	defined	nor	measured.		
For	 example,	 although	 the	 American	 Correctional	 Association	 (ACA)	
sets	accreditation	standards	for	prisons,	accredited	facilities	can	vary	
widely	 in	 terms	 of	 overall	 quality.	 	 According	 to	 ACA	 officials,	 such	

                                                                                                                             
	 280.	 GEISLER,	supra	note	275,	at	60.	
	 281.	 Id.	
	 282.	 MGT	OF	AMERICA,	INC.,	FINAL	REPORT:	CORRECTIONAL	FACILITY	RFP	EVALUATIONS	13	
(2013),	available	at	
https://admin.state.nh.us/purchasing/MGT%20Final%20Report%20MGT.pdf.	
	 283.	 HAKIM	&	BLACKSTONE,	supra	note	10,	at	31.	

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variances	 occur	 because	 ACA	 accreditation	 means	 that	 a	 facility	 has	
met	minimum	standards. 284	

In	fact,	the	ACA	is	a	private	organization,	primarily	composed	of	and	
directed	by	current	and	former	corrections	officials,	that	establishes	its	
own	 standards	 with	 no	 oversight	 beyond	 the	 ACA	 itself. 285 	 	 The	 ACA	
basically	“sells”	accreditation	to	correctional	facilities	(both	public	and	
private)	 by	 charging	 substantial	 fees.	 	 According	 to	 the	 ACA’s	 pricing	
chart,	 accreditation	 fees	 range	 from	 $8100	 to	 $19,500	 depending	 on	
the	number	of	days	and	auditors	involved,	and	the	number	of	facilities	
being	 accredited. 286 	 	 The	 ACA	 relies	 heavily	 on	 such	 fees;	 it	 reported	
receiving	more	than	$4.5	million	in	accreditation	fees	in	2011—almost	
half	its	total	revenue	that	year. 287 		The	organization	thus	has	a	financial	
incentive	to	“sell”	as	many	accreditations	as	possible.	
There	 is	 also	 a	 potential	 conflict	 of	 interest	 relative	 to	 ACA	
accreditation	 being	 used	 as	 a	 quality	 of	 service	 measure	 for	 private	
prisons,	 because	 close	 connections	 exist	 between	 the	 ACA	 and	 the	
private	 prison	 industry.	 	 The	 ACA’s	 past	 president,	 Davidson	 County,	
Tennessee,	Sheriff	Daron	Hall,	is	a	former	CCA	program	manager,	while	
CCA	vice	president	Harley	Lappin	and	CCA	warden	Cherry	Lindamood	
serve	on	the	ACA’s	Standards	Committee. 288 		Among	other	companies,	
the	ACA’s	2015	Winter	Conference	listed	CCA,	the	GEO	Group,	and	MTC	
as	 sponsors. 289 	 	 Further,	 the	 ACA	 accreditation	 process	 is	 basically	 a	
paper	audit;	the	ACA	does	not	provide	oversight	or	ongoing	monitoring	
of	correctional	facilities,	but	only	verifies	whether	a	facility	has	policies	
that	comply	with	the	ACA’s	self‐promulgated	standards. 290	

                                                                                                                             
	 284.	 U.S.	GEN.	ACCOUNTING	OFFICE,	supra	note	16,	at	4	(emphasis	added).	
	 285.	 See	Executive	Office,	ACA,	
http://www.aca.org/ACA_Prod_IMIS/ACA_Member/About_Us/Executive_Office/ACA_
Member/AboutUs/Executive_Office_Home.aspx	(last	visited	Nov.	12,	2014).	
	 286.	 See	Message	From	Executive	Director,	ACA	
http://www.aca.org/ACA_Prod_IMIS/ACA_Member/Standards_and_Accreditation/SAC
_AccCosts.aspx	(last	visited	Nov.	12,	2014).	
	 287.	 AM.	CORR.	ASSOC.,	FORM	990	(2012).	
	 288.	 Standing	Committees,	ACA,	
http://www.aca.org/ACA_Prod_IMIS/ACA_Member/About_Us/Our_Committees/ACA_
Member/AboutUs/Committees.aspx	(last	visited	Nov.	12,	2014).	
	 289.	 AM.	CORR.	ASS’N,	ACA’S	2015	WINTER	CONFERENCE	EXHIBITOR	PROSPECTUS	8–11	
(2014),	
http://register.aca.org/aca_prod_imis/Docs/Conference/WC2015/ExhibitorProspecut
s_2015WC.pdf.	
	 290.	 Douglas	McDonald	and	Carl	Patten,	Jr.,	Abt	Associates,	Governments’	
Management	of	Private	Prisons	(Sept.	15,	2003)	at	viii	(“Achieving	ACA	accreditation	is	
not	an	outcomes‐based	performance	goal.	Rather,	ACA	standards	primarily	prescribe	
procedures.	The	great	majority	of	ACA	standards	are	written	in	this	form:	‘The	facility	
shall	have	written	policies	and	procedures	on	.	.	.	.’	The	standards	emphasize	the	

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As	 a	 result,	 some	 facilities	 have	 experienced	 significant	 problems	
despite	being	 accredited.		For	example,	the	CCA‐operated	Otter	Creek	
Correctional	 Center	 in	 Kentucky	 was	 accredited	 by	 the	 ACA	 in	 2009	
when	 at	 least	 five	 prison	 employees	 were	 prosecuted	 for	 raping	 or	
sexually	 abusing	 prisoners. 291 	 	 Two	 states	 withdrew	 their	 female	
prisoners	 from	 Otter	 Creek	 following	 the	 sex	 scandal,	 but	 the	 facility	
retained	its	ACA	accreditation. 292	
The	privately‐operated	Walnut	Grove	Youth	Correctional	Facility	in	
Mississippi	 was	 accredited	 by	 the	 ACA	 even	 though	 the	 U.S.	
Department	 of	 Justice	 found	 “systemic,	 egregious	 practices”	 at	 the	
facility,	including	“brazen”	sexual	activity	between	staff	and	offenders	
that	was	“among	the	worst	that	we’ve	seen	in	any	facility	anywhere	in	
the	nation.” 293 		When	approving	a	settlement	in	a	class‐action	lawsuit	
against	Walnut	Grove	in	2012,	a	U.S.	District	Court	Judge	wrote	that	the	
facility	 had	 “allowed	 a	 cesspool	 of	 unconstitutional	 and	 inhuman	 acts	
and	conditions	to	germinate,	the	sum	of	which	places	the	offenders	at	
substantial	ongoing	risk.” 294	
More	 recently,	 as	 noted	 above,	 the	 ACA‐accredited,	 CCA‐operated	
Idaho	 Correctional	 Center	 has	 been	 cited	 for	 extremely	 high	 levels	 of	
violence,	 understaffing,	 and	 fraudulent	 reporting	 of	 staffing	 hours. 295 		

                                                                                                                             
important	benefits	of	procedural	regularity	and	effective	administrative	control	that	
flow	from	written	procedures,	and	careful	documentation	of	practices	and	events.	But,	
for	the	most	part,	the	standards	prescribe	neither	the	goals	that	ought	to	be	achieved	
nor	the	indicators	that	would	let	officials	know	if	they	are	making	progress	toward	
those	goals	over	time”),	
https://www.prisonlegalnews.org/media/publications/Governments%20Managemen
t%20of%20Private%20Prisons%20‐%20September%202003.pdf.	
	 291.	 Ian	Urbina,	Hawaii	to	Remove	Inmates	Over	Abuse	Charges,	N.Y.	TIMES,	Aug.	25,	
2009,	http://www.nytimes.com/2009/08/26/us/26kentucky.html.	The	CCA‐operated	
Otter	Creek	facility	was	accredited	by	the	ACA	before	the	sex	abuse	scandal.	See	
http://www.cca.com/insidecca/2008‐aca‐round‐up‐a‐year‐of‐excellence‐in‐
accreditation.	
	 292.	 On	July	20,	2011,	after	the	sex	abuse	scandal,	CCA	announced	that	Otter	Creek	
had	been	reaccredited	by	the	ACA.	Thirteen	CCA	Facilities	Earn	ACA	Reaccreditation,	
CCA	(July	20,	2011),	www.cca.com/insidecca/thirteen‐cca‐facilities‐earn‐aca‐
reaccreditation.	Both	Hawaii	and	Kentucky	removed	their	female	prisoners	from	Otter	
Creek	following	the	scandal.	First	Hawaii,	Now	Kentucky	Orders	Pullout	from	Prison,	
STAR	BULLETIN	(Jan.	10,	2010),	
http://archives.starbulletin.com/content/20100110_First_Hawaii_now_Kentucky_ord
ers_pullout_from_prison.	
	 293.	 CIVIL	RIGHTS	DIV.,	U.S.	DEP’T	OF	JUSTICE,	INVESTIGATION	OF	THE	WALNUT	GROVE	YOUTH	
CORRECTIONAL	FACILITY	1	(2012),	available	at	
www.justice.gov/crt/about/spl/documents/walnutgrovefl.pdf.	
	 294.	 Order	Approving	Settlement	at	5,	Depriest	v.	Epps,	No.	3:10‐cv‐00663‐CWR‐
FKB	(S.D.	Miss.	Mar.	26,	2012),	available	at	
https://www.aclu.org/files/assets/order.pdf.	
	 295.	 See	supra	Parts	III.J,	IV.A.	

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A	 video	 of	 CCA	 officers	 failing	 to	 intervene	 while	 one	 prisoner	 was	
brutally	 beaten	 by	 another	 has	 been	 widely	 circulated. 296 	 	 CCA	 was	
held	in	contempt	by	a	federal	court	in	September	2013	for	violating	a	
settlement	 in	 a	 class‐action	 lawsuit	 against	 the	 facility, 297 	 and	 a	
separate	 suit	 alleges	 that	 CCA	 employees	 collaborated	 with	 gang	
members	 to	 maintain	 control	 at	 the	 prison. 298 	 	 The	 state	 assumed	
management	of	the	Idaho	Correctional	Center	on	July	1,	2014,	and	the	
FBI	 is	 currently	 conducting	 an	 investigation	 into	 CCA’s	 staffing	
fraud. 299 	 	 Regardless,	 the	 prison	 remains	 accredited	 by	 the	 ACA. 300 		
Further,	federal	courts	have	held	it	is	“absurd”	and	“simply	ludicrous”	
to	 defer	 to	 accreditation	 as	 a	 defense	 to	 claims	 of	 unconstitutional	
prison	and	jail	conditions. 301	
These	examples	illustrate	that	ACA	accreditation	is	a	poor	measure	
of	 quality	 of	 service,	 whether	 for	 public	 or	 privately‐operated	
correctional	facilities.	
D.	 Recidivism	Rates	Redux	
As	 discussed	 previously,	 a	 number	 of	 studies	 have	 measured	
recidivism	 outcomes	 in	 public	 and	 private	 prisons.	 	 Yet	 recidivism	 is	
typically	 not	 used	 as	 a	 quality	 of	 service	 benchmark	 with	 respect	 to	
prison	 privatization;	 only	 recently	 has	 one	 state	 decided	 to	 adopt	
recidivism	rates	as	a	performance	measure.	

                                                                                                                             
	 296.	 Douglas	Stanglin,	Prison	Video	Shows	Inmate	Beating	as	Guards	Look	On,	USA	
TODAY	(Nov.	30,	2010),	
http://content.usatoday.com/communities/ondeadline/post/2010/11/prison‐video‐
shows‐inmate‐beating‐as‐guards‐look‐on/1#.U‐BUgPldUxA.	
	 297.	 See	Kelly	v.	Wengler,	979	F.	Supp.	2d	1104	(D.	Idaho	2013).	
	 298.	 Idaho:	Federal	Court	Unseals	Pleadings,	Holds	CCA	in	Contempt	for	Violating	
Settlement	Agreement,	PRISON	LEGAL	NEWS	(Oct.	15,	2013),	
https://www.prisonlegalnews.org/news/2013/oct/15/idaho‐federal‐court‐unseals‐
pleadings‐holds‐cca‐in‐contempt‐for‐violating‐settlement‐agreement.	
	 299.	 Rebecca	Boone,	APNewsBreak:	FBI	Investigates	Prison	Company,	ASSOCIATED	
PRESS	(Mar.	7,	2014),	http://bigstory.ap.org/article/apnewsbreak‐fbi‐investigates‐
prison‐company‐cca.	
	 300.	 To	determine	whether	a	facility	is	accredited,	the	ACA	provides	a	searchable	
online	directory.	See	Search	ACA	Accredited	Facilities,	ACA,	
www.aca.org/ACA_Prod_IMIS/ACA_Member/Standards___Accreditation/Accredited_Fa
cilities/Facility_Directory/ACA_Member/Standards_and_Accreditation/Accredited_Fac
ility_Directory.aspx	(last	visited	Nov.	12,	2014).	
	 301.	 Gates	v.	Cook,	376	F.3d	323,	337	(5th	Cir.	2004);	Boulies	v.	Ricketts,	518	F.	
Supp.	687,	689	(D.	Colo.	1981);	see	also	Alex	Friedmann,	How	the	Courts	View	ACA	
Accreditation,	PRISON	LEGAL	NEWS,	October	2014	at	18,	
https://www.prisonlegalnews.org/news/2014/oct/10/how‐courts‐view‐aca‐
accreditation.	

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In	 2013,	 Pennsylvania	 officials	 announced	 they	 would	 provide	
financial	 incentives	 to	 privately‐operated	 community	 corrections	
facilities—halfway	houses—that	are	able	to	reduce	recidivism	rates	of	
offenders	released	from	those	facilities. 302	
The	 initiative	 followed	 a	 report	 that	 found	 high	 recidivism	 rates	 in	
the	state,	with	prisoners	released	from	halfway	houses	(most	of	which	
are	 privately‐operated)	 having	 higher	 rates	 than	 those	 released	
directly	from	prison. 303 		An	average	recidivism	rate	based	on	data	from	
the	 report	 is	 used	 as	 a	 baseline,	 and	 privately‐operated	 community	
corrections	 facilities	 must	 meet	 the	 baseline	 rate	 within	 a	 standard	
deviation	or	risk	losing	their	contracts. 304 		Those	that	achieve	rates	at	
least	10%	lower	than	the	baseline	will	receive	a	financial	bonus	of	one	
percent	of	the	contract	amount. 305	
“It’s	 not	 unreasonable	 for	 us	 to	 expect	 them	 to	 have	 an	 impact	 on	
crime,	because	that’s	what	we’re	paying	them	to	do,”	said	Pennsylvania	
Department	 of	 Corrections	 Secretary	 John	 E.	 Wetzel. 306 	 	 “We	 want	 to	
measure	 performance.	 	 We	 want	 quantifiable	 performance,”	 added	
Kristofer	 Bret	 Bucklen,	 director	 of	 the	 DOC’s	 Office	 of	 Planning,	
Research	and	Statistics. 307	
The	 DOC’s	 community	 corrections	 contracts	 were	 rebid	 in	 2013	 to	
include	 the	 recidivism	 rate	 performance	 measure	 provisions. 308 		
According	 to	 Bucklen,	 the	 initial	 performance	 measure	 period	 was	
based	 on	 recidivism	 data	 for	 an	 abbreviated	 three‐month	 span	 from	

                                                                                                                             
	 302.	 Joe	Palazzolo,	Curbing	Inmate	Round	Trips,	WALL	ST.	J.,	Dec.	5,	2013,	
http://online.wsj.com/news/articles/SB10001424052702303332904579224432712
764514.	
	 303.	 NICOLETTE	BELL	ET	AL.,	PENN.	DEPT.	OF	CORR.,	RECIDIVISM	REPORT	2013	27–36	(2013),	
available	at	
http://ccjs.umd.edu/sites/ccjs.umd.edu/files/PA%20DOC%20Recidivism%20Report
%20final_0.pdf.	
	 304.	 	Alex	Friedmann,	Recidivism	Performance	Measures	for	Private	Halfway	Houses	
in	Pennsylvania,	PRISON	LEGAL	NEWS	(Sept.	19,	2014),	
https://www.prisonlegalnews.org/news/2014/sep/19/recidivism‐performance‐
measures‐private‐halfway‐houses‐pennsylvania.	See	also,	Appendix	L	(“Recidivism	
Monitoring”)	from	the	Pennsylvania	DOC’s	2014	community	corrections	contract,	
available	at	https://www.prisonlegalnews.org/news/publications/pa‐doc‐
community‐corrections‐contract‐appendix‐l‐re‐recidivism‐measures‐2014.	
	 305.	 Palazzolo,	supra	note	302.	
	 306.	 Id.	
	 307.	 Paula	Reed	Ward,	Pennsylvania	Will	Offer	Incentives	to	Combat	Recidivism,	
PITTSBURGH	POST‐GAZETTE,	Mar.	1,	2013,	http://www.post‐
gazette.com/hp_mobile/2013/03/01/Pennsylvania‐will‐offer‐incentives‐to‐combat‐
recidivism/stories/201303010145.	
	 308.	 Friedmann,	supra	note	304.	

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December	 2013	 to	 March	 2014,	 while	 future	 periods	 will	 cover	 six‐
month	spans. 309	
Bucklen	 said	 the	 state’s	 approximately	 forty	 privately‐operated	
community	corrections	facilities	achieved	an	average	16.4%	reduction	
in	 the	 benchmark	 recidivism	 rate	 during	 the	 initial	 three‐month	
performance	measure	period. 310	
Nine	 of	 the	 facilities	 significantly	 reduced	 recidivism	 rates	 during	
the	 initial	 period	 and	 qualified	 to	 receive	 a	 bonus;	 one	 facility	
significantly	 exceeded	 the	 benchmark	 and	 was	 placed	 on	 warning	
status. 311 	 	 This	 indicates	 that,	 given	 the	 proper	 incentives	 (financial	
bonuses)	 and	 disincentives	 (potential	 loss	 of	 contracts),	 private	
contractors	can	be	motivated	to	meet	specified	performance	standards.		
Future	recidivism	performance	measures	by	the	Pennsylvania	DOC	will	
demonstrate	 whether	 positive	 results	 are	 achieved	 on	 an	 ongoing	
basis. 312	
Similarly,	in	early	2015,	news	reports	indicated	that	a	private	prison	
in	 Australia	 would	 operate	 under	 a	 contract	 that	 provides	 a	 financial	
bonus	if	the	facility	reduces	recidivism	rates.		The	1,000‐bed	Ravenhall	
prison	will	be	constructed	and	operated	by	the	GEO	Consortium,	which	
includes	GEO	Group	Australia. 313	
V.		OPPORTUNITY	COSTS	
Finally,	 there	 is	 one	 last	 cost	 factor	 that	 should	 be	 taken	 into	
consideration	when	comparing	public	and	privately‐operated	prisons:	
the	 opportunity	 cost	 of	 contracting	 with	 for‐profit	 prison	 companies	

                                                                                                                             
	 309.	 Telephone	Interview	with	Kristofer	Bret	Bucklen,	Dir.	Of	Planning,	Research,	
and	Statistics,	Penn.	Dep’t	of	Corr.	(Aug.	19,	2014).	
	 310.	 Id.;	emails	from	Susan	Bensinger,	Deputy	Press	Sec’y,	Penn.	Dep’t	of	Corr.	(Aug.	
18–19,	2014)	(on	file	with	author).	
	 311.	 Telephone	Interview	with	Kristofer	Bret	Bucklen,	supra	note	309.	
	 312.	 One	weakness	of	the	Pennsylvania	DOC’s	approach	is	that,	according	to	Mr.	
Bucklen,	recidivism	rates	are	considered	only	for	the	discrete	benchmark	periods	(six	
months	each	after	the	initial	period),	but	not	cumulatively	over	longer	periods	of	time.	
Id.		That	is,	one‐year	and	three‐year	recidivism	rates	for	privately‐operated	community	
corrections	facilities	are	tracked	but	not	considered	for	performance	measure	
purposes,	even	though	longer‐term	recidivism	rates	at	such	facilities	may	in	fact	be	
higher	than	the	corresponding	benchmarks	for	those	time	periods	if	offenders	
recidivate	at	higher	rates	over	an	extended	period	of	time	(i.e.,	if	they	have	delayed	
failure	rates).	Id.	
313. Bonus for Vic Prison if Reoffending Cut, News.com.au (Feb. 12, 2015),
http://www.news.com.au/national/breaking-news/bonus-for-vic-prison-if-reoffendingcut/story-e6frfku9-1227217300075; see also http://www.dtf.vic.gov.au/InfrastructureDelivery/Public-private-partnerships/Projects/Ravenhall-Prison-project. 

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rather	 than	pursuing	alternative	solutions	to	prison	overcrowding	and	
mass	incarceration.	
The	 prison	 and	 jail	 population	 in	 the	 United	 States	 has	 increased	
dramatically	 over	 the	 past	 several	 decades,	 from	 around	 646,000	 in	
1983	 to	 more	 than	 2.2	 million	 as	 of	 2012, 314 	 coinciding	 with	 our	
nation’s	 incessant	 War	 on	 Crime	 and	 War	 on	 Drugs. 315 	 	 In	 the	 1980s	
and	 1990s,	 a	 series	 of	 I‐can‐be‐tougher‐on‐crime‐than‐you	 laws	 were	
enacted,	 spurred	 by	 the	 aforementioned	 domestic	 wars	 and	 a	 steady	
drumbeat	of	violent	crime	coverage	by	the	news	media. 316 		Such	laws	
included	 mandatory	 minimums,	 truth‐in‐sentencing	 statutes,	 and	
three‐strikes	 laws,	 which	 require	 lengthy	 prison	 terms	 or	 life	
sentences	for	certain	offenders. 317	
Consequently,	 more	 people	 were	 arrested	 (mainly	 for	 drug‐related	
offenses),	prosecuted,	convicted,	and	sent	to	prison,	where	they	served	
longer	sentences. 318 		Prison	release	policies	concurrently	became	more	

                                                                                                                             
	 314.	 SEE	LAUREN	E.	GLAZE	&	ERINN	J.	HERBERMAN,	CORRECTIONAL	POPULATIONS	IN	THE	UNITED	
STATES,	2012,	at	10	(2013),	available	at	
http://www.bjs.gov/content/pub/pdf/cpus12.pdf;	Jail,	Prison,	Parole,	and	Probation	
Populations	in	the	US,	1980–2009,	PROCON.ORG,	
http://felonvoting.procon.org/view.resource.php?resourceID=004353	(last	updated	
Jan.	28,	2015).	
	 315.	 More	accurately,	the	War	on	Mostly	Poor	People	Who	Commit	Crimes	and	the	
War	on	Mostly	Poor	People	Who	Use	Certain	Kinds	of	Drugs.	
	 316.	 The	coverage	of	violent	crime	by	the	news	media	does	not	always	reflect	the	
reality	of	crime	rates,	but	it	can	influence	public	perception	of	crime.	See,	e.g.,	Sara	
Tiegreen	&	Elana	Newman,	Violence:	Comparing	Reporting	and	Reality,	DART	CTR.	FOR	
JOURNALISM	&	TRAUMA	(Feb.	18,	2009),	http://dartcenter.org/content/violence‐
comparing‐reporting‐and‐reality#.VFnAGfnF‐ik.	
	 317.	 See	Earl	Smith	&	Angela	Hattery,	Private	Prisons	and	the	Growth	of	Prison	
Populations,	in	PRISON	PRIVATIZATION:	THE	MANY	FACETS	OF	A	CONTROVERSIAL	INDUSTRY,	supra	
note	4,	at	241–44.	
	 318.	 	The	arrest	rate	for	drug	possession/use	increased	from	about	200	per	100,000	
population	in	1980	to	around	500	per	100,000	population	in	2005.	See	Howard	N.	
Snyder,	Ph.D.,	Bureau	of	Justice	Statistics,	Arrest	in	the	United	States,	1980‐2009	(Sept.	
2011)	at	12,	Figure	37,	http://www.bjs.gov/content/pub/pdf/aus8009.pdf.	The	jail	
and	prison	populations	in	the	United	States	increased	dramatically	over	the	past	35	
years,	from	a	combined	total	of	just	over	501,800	in	1980	to	more	than	2.3	million	in	
2013.	See	Jail,	Prison,	Parole,	and	Probation	Populations	in	the	US,	1980–2009,	supra	
note	314.	The	federal	prison	population	alone	increased	“from	approximately	25,000	
in	FY1980	to	over	219,000	in	FY2013.”	See	Nathan	James,	The	Federal	Prison	
Population	Buildup:	Overview,	Policy	Changes,	issues,	and	Options,	Congressional	
Research	Service	(April	15,	2014)	at	2,	http://www.fas.org/sgp/crs/misc/R42937.pdf.	
Further,	the	average	length	of	prison	sentences	increased	from	1990	to	2009	by	24%	
for	property	crimes,	36%	for	drug‐related	crimes	and	37%	for	violent	crimes.	See	Time	
Served:	The	High	Cost,	Low	Return	of	Longer	Prison	Terms,	The	Pew	Center	on	the	States	
(June	2012)	at	3,	
http://www.pewtrusts.org/~/media/legacy/uploadedfiles/wwwpewtrustsorg/report
s/sentencing_and_corrections/PrisonTimeServedpdf.pdf.	

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restrictive;	 for	 example,	 parole	 in	 the	 federal	 prison	 system	 was	
abolished	in	1987. 319 		With	more	people	entering	the	prison	system	to	
serve	 longer	 sentences,	 and	 fewer	 leaving,	 the	 U.S.	 prison	 population	
expanded	 rapidly—increasing	 about	 350%	 from	 1983	 to	 the	
present. 320	
The	 growing	 prison	 population	 in	 turn	 created	 a	 market	 for	
additional	 prison	 and	 jail	 beds,	 and	 for‐profit	 companies	 such	 as	 CCA	
(founded	 in	 1983)	 and	 the	 GEO	 Group	 (founded	 as	 Wackenhut	
Corrections	 in	 1984)	 were	 established	 to	 capitalize	 on	 that	 market	
demand. 321	
At	 the	 beginning	 of	 the	 1980s	 there	 were	 no	 privately‐operated	
adult	 correctional	 facilities	 in	 the	 United	 States. 322 	 	 As	 of	 2012,	
approximately	 128,300	 state	 and	 federal	 prisoners	 were	 held	 in	 for‐
profit	 lock‐ups—around	 8.6%	 of	 that	 total	 population. 323 	 	 This	 does	
not	 include	 thousands	 more	 in	 privatized	 immigration	 detention	
centers	 and	 local	 jails. 324 	 	 So	 long	 as	 public	 officials	 confronted	 with	
expanding	 prison	 populations	 could	 house	 their	 excess	 prisoners	 in	
privately‐operated	 facilities,	 they	 did	 not	 have	 to	 pursue	 politically	
unpopular	 “soft‐on‐crime”	 options	 such	 as	 sentencing	 reforms,	 early	
releases,	 or	 alternatives	 to	 incarceration.	 	 To	 use	 an	 analogy,	 as	 a	
steady	 stream	 of	 offenders	 filled	 the	 prison	 system	 bucket	 to	
overflowing,	 the	 extra	 bed	 space	 provided	 by	 the	 private	 prison	
industry	 allowed	 prisoners	 to	 be	 siphoned	 into	 an	 “overflow”	 bucket,	
so	 the	 stream	 could	 continue	 flowing	 unabated.	 	 Indeed,	 some	 states	

                                                                                                                             
	 319.	 Parole	in	the	Federal	Probation	System,	U.S.	COURTS	(May	2011),	
http://www.uscourts.gov/news/TheThirdBranch/11‐05‐
01/Parole_in_the_Federal_Probation_System.aspx.	
	 320.	 GLAZE	&	HERBERMAN,	supra	note	314;	Jail,	Prison,	Parole,	and	Probation	
Populations	in	the	US,	1980–2009,	supra	note	306.	
	 321.	 AM.	CIV.	LIBERTIES	UNION,	BANKING	ON	BONDAGE:	PRIVATE	PRISONS	AND	MASS	
INCARCERATION	10–12	(2011),	available	at	
https://www.aclu.org/files/assets/bankingonbondage_20111102.pdf.	
	 322.	 The	inception	of	the	modern	private	prison	industry	occurred	when	CCA	was	
founded	in	1983;	the	modern	era	of	private	prisons	is	differentiated	from	the	convict	
lease	system,	a	version	of	prison	privatization	that	existed	in	the	late	1880s	and	early	
1900s.	See,	e.g.,	
http://www.hamptoninstitution.org/convictleasesystem.html#.VTsx7iHONHw.	
	 323.	 GLAZE	&	HERBERMAN,	supra	note	314,	at	10.	
	 324.	 See,	e.g.	CODY	MASON,	DOLLARS	AND	DETAINEES:	THE	GROWTH	OF	FOR‐PROFIT	DETENTION	
(J2012),	available	at	
http://sentencingproject.org/doc/publications/inc_Dollars_and_Detainees.pdf	and	
Bethany	Carson	and	Eleana	Diaz,	PAYOFF:	How	Congress	Ensures	Private	Prison	Profit	
with	an	Immigrant	Detention	Quota,	Grassroots	Leadership	(April	2015)	at	6,	
http://grassrootsleadership.org/sites/default/files/reports/quota_report_final_digital
.pdf.	

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have	 become	 dependent	 on	 private	 prisons	 to	 house	 their	 bloated	
prison	populations.		As	of	the	end	of	2011,	eight	states	held	more	than	
20%	 of	 their	 prisoners	 in	 privately‐operated	 facilities,	 including	 New	
Mexico	 (40.8%),	 Montana	 (38.6%),	 Alaska	 (31.0%),	 and	 Idaho	
(30.1%). 325	
Absent	 private	 prisons	 and	 the	 additional	 bed	 space	 they	 provide,	
policy	 makers	 would	 have	 been	 forced	 to	 turn	 to	 other	 solutions	 to	
address	 problems	 associated	 with	 prison	 overcrowding	 and	 mass	
incarceration—solutions	that	 are	only	now	being	implemented	due	to	
the	recent	Great	Recession	and	its	impact	on	government	budgets. 326	
Such	 solutions	 include	 sentencing	 reform,	 early	 prisoner	 releases,	
justice	 reinvestment	 initiatives,	 expanded	 clemency	 projects,	
alternatives	 to	incarceration,	more	funding	for	reentry	programs,	and	
even	 marijuana	 decriminalization	 and	 legalization. 327 	 	 A	 growing	
number	 of	 states	 are	 reducing	 their	 prison	 populations 328 	 and	 even	
closing	correctional	facilities. 329	
Private	 prison	 companies,	 however,	 have	 little	 incentive	 to	 seek	
reductions	 in	 incarceration	 levels.	 	 As	 stated	 in	 CCA’s	 2013	 annual	
report,	with	respect	to	business	and	industry	risk	factors:	
Our	 growth	 is	 generally	 dependent	 upon	 our	 ability	 to	 obtain	 new	
contracts	 to	 develop	 and	 manage	 new	 correctional	 and	 detention	
facilities.	 	 This	 possible	 growth	 depends	 on	 a	 number	 of	 factors	 we	
cannot	 control,	 including	 crime	 rates	 and	 sentencing	 patterns	 in	
various	 jurisdictions,	 governmental	 budgetary	 constraints,	 and	
governmental	 and	 public	 acceptance	 of	 privatization.	 	 The	 demand	
for	 our	 facilities	 and	 services	 could	 be	 adversely	 affected	 by	 the	
relaxation	 of	 enforcement	 efforts,	 leniency	 in	 conviction	 or	 parole	

                                                                                                                             
	 325.	 E.	ANN	CARSON	&	WILLIAM	J.	SABOL,	PRISONERS	IN	2011,	at	32	(2012),	available	at	
http://www.bjs.gov/content/pub/pdf/p11.pdf.	
	 326.	 David	Reutter,	Economic	Crisis	Prompts	Prison	Closures	Nationwide,	but	Savings	
(and	Reforms)	Are	Elusive,	PRISON	LEGAL	NEWS	(April	15,	2009),	
https://www.prisonlegalnews.org/news/2009/apr/15/economic‐crisis‐prompts‐
prison‐closures‐nationwide‐8232but‐savings‐and‐reforms‐are‐elusive.	
	 327.	 For	example,	the	legalization	of	marijuana	in	Washington	State	and	Colorado,	
and	the	legalization	of	medical	marijuana	in	a	growing	number	of	other	states.	See	
Marijuana	Resource	Center:	State	Laws	Related	to	Marijuana,	OFFICE	NAT’L	DRUG	CONTROL	
POL’Y,	www.whitehouse.gov/ondcp/state‐laws‐related‐to‐marijuana	(last	visited	Nov.	
12,	2014).	
	 328.	 See	NANCY	G.	LAVIGNE	ET	AL.,	JUSTICE	REINVESTMENT	INITIATIVE	STATE	ASSESSMENT	
REPORT	(2014),	available	at	http://www.urban.org/UploadedPDF/412994‐Justice‐
Reinvestment‐Initiative‐State‐Assessment‐Report.pdf.	
	 329.	 Petrella	&	Friedmann,	supra	note	64.	

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standards	and	sentencing	practices	or	through	the	decriminalization	
of	certain	activities	that	are	currently	proscribed	by	criminal	laws. 330	

Specifically,	 CCA	 noted	 that	 risk	 factors	 for	 the	 company	 included	
“changes	 with	 respect	 to	 drugs	 and	 controlled	 substances	 or	 illegal	
immigration,”	 which	 “could	 affect	 the	 number	 of	 persons	 arrested,	
convicted,	 and	 sentenced,	 thereby	 potentially	 reducing	 demand	 for	
correctional	 facilities	 to	 house	 them.” 331 	 	 Additionally,	 “reductions	 in	
crime	rates	or	resources	dedicated	to	prevent	and	enforce	crime	could	
lead	 to	 reductions	 in	 arrests,	 convictions	 and	 sentences	 requiring	
incarceration	at	correctional	facilities.” 332	
In	summary,	by	providing	additional	overflow	bed	space	for	the	past	
three	 decades,	 the	 private	 prison	 industry	 has	 helped	 to	 stymie	
sentencing	and	other	criminal	justice	reforms	that	would	have	reduced	
the	prison	population,	and	thus	the	overall	cost	of	our	justice	system—
which	is	currently	estimated	at	$60	to	$70	billion	annually. 333 		This	is	
the	 opportunity	 cost	 of	 contracting	 with	 for‐profit	 prison	 companies	
rather	than	pursuing	other	options	to	address	our	nation’s	reliance	on	
mass	incarceration.	
CONCLUSION	
Ultimately,	 cost	 comparisons	 between	 private	 and	 public	 prisons	
may	 best	 be	 accomplished	 by	 examining	 actual	 costs	 incurred	 during	
separate	time	periods	when	the	same	facility	is	privately	and	publicly	
operated,	 and	 houses	 a	 similar	 prisoner	 population.	 	 That	 would,	 in	
theory,	constitute	an	apples‐to‐apples	comparison	rather	than	apples‐
to‐oranges—or	 fish.	 	 Fortunately	 there	 are	 several	 instructive	
examples	in	this	regard.	

                                                                                                                             
	 330.	 CORR.	CORP.	OF	AM.,	supra	note	1,	at	28.		CCA	claims	that	its	“policy	prohibits	[it]	
from	engaging	in	lobbying	or	advocacy	efforts	that	would	influence	enforcement	
efforts,	parole	standards,	criminal	laws,	and	sentencing	policies.”	Id.	at	29.		This	is	the	
subject	of	a	larger	debate	that	will	not	be	addressed	here.		This	Article	posits	that	the	
provision	of	additional	bed	space	by	private	prison	companies	directly	contributed	to	
decades	of	delay	with	respect	to	sentencing	reforms	and	prison	population	reductions,	
independent	of	lobbying	efforts	and	political	contributions	by	such	companies,	or	
allegations	that	they	have	influenced	sentencing	laws	and	criminal	justice	policies	
through	participation	in	the	American	Legislative	Exchange	Council	(ALEC)	or	other	
means.	
	 331.	 Id.	at	28.	
	 332.	 Id.	at	28–29.	
	 333.	 HENRICHSON	&	DELANEY,	supra	note	234;	see	also	JOHN	SCHMITT	ET	AL.,	THE	HIGH	
BUDGETARY	COST	OF	INCARCERATION	2	(2010)	(estimating	national	criminal	justice	costs	to	
be	$75	billion),	available	at	
http://www.cepr.net/documents/publications/incarceration‐2010‐06.pdf.	

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65	

CCA	 managed	 the	 Hernando	 County	 jail	 in	 Florida	 for	 twenty‐two	
years,	 until	 the	 company	 and	 county	 parted	 ways	 in	 2010. 334 		
According	 to	 the	 Tampa	 Bay	 Times,	 one	 year	 after	 the	 switch	 from	
private	to	public	management,	“[i]n	total,	with	an	annual	jail	budget	of	
$10.9	 million,	 jail	 officials	 say	 they’re	 saving	 taxpayers	 more	 than	 $1	
million	 this	 year,	 compared	 to	 what	 CCA	 would	 have	 charged	 the	
county.” 335 		According	to	another	news	report,	CCA’s	“actual	costs”	for	
operating	 the	 Hernando	 County	 jail	 in	 2009	 were	 $12.3	 million,	 with	
projected	costs	of	$11	million	for	2010. 336 		County	officials	confirmed	
that	 after	 the	 Sheriff’s	 Office	 assumed	 management	 of	 the	 jail,	 the	
budget	 in	 FY	 2011—the	 first	 full	 year	 of	 operation—was	 $10.9	
million. 337 	 	 The	 budget	 for	 FY	 2012	 was	 $10.62	 million,	 while	 the	
budget	for	FY	2013	was	$10.53	million—all	less	than	what	the	county	
had	been	paying	CCA. 338	
CCA	 also	 operated	 the	 Bay	 County	 Jail	 in	 Florida	 until	 2008,	 when	
the	 Sheriff	 took	 over	 management	 of	 the	 facility. 339 	 	 Local	 officials	
confirmed	 that	 during	 the	 last	 year	 of	 the	 CCA	 contract	 (FY	 2007–
2008),	the	county	paid	the	company	$16.6	million. 340 		During	the	first	
year	 after	 the	 Sheriff’s	 Office	 assumed	 management	 at	 the	 jail	 (FY	
2008–2009),	 actual	 operational	 costs	 were	 $15.9	 million;	 during	 the	
second	 year	 (FY	 2009–2010),	 actual	 operational	 costs	 were	 $16.5	
million. 341 		The	county	noted	that	“if	CCA	had	continued	operating	the	
jail	at	the	figures	it	had	proposed	before	an	impasse	was	reached	and	
they	 walked	 away,”	 the	 costs	 would	 have	 been	 $16.7	 million	 in	 FY	
2008‐09	and	$17.1	million	in	FY	2009‐10. 342 		Also,	according	to	county	
officials,	those	savings	did	“not	include	about	$600,000	the	county	has	

                                                                                                                             
	 334.	 Barbara	Behrendt,	Former	Hernando	County	Jail	Operator	CCA	Sues	Over	Money,	
Equipment,	TAMPA	BAY	TIMES	(Sept.	30,	2010),	
http://www.tampabay.com/news/localgovernment/former‐hernando‐county‐jail‐
operator‐cca‐sues‐over‐money‐equipment/1125116.	
	 335.	 Cox	&	Behrendt,	supra	note	211.	
	 336.	 Michael	D.	Bates,	CCA	Wants	Out	of	Jail	Contract,	HERNANDO	TODAY	(Apr.	28,	
2010),	http://hernandotoday.com/news/hernando‐sports/2010/apr/28/CCA‐wants‐
out‐of‐jail‐contract‐ar‐295110/.	
	 337.	 Email	from	Denise	M.	Moloney,	Cmty./Media	Relations	Manager,	Hernando	
Cnty.	Sheriff’s	Office	(Aug.	20,	2014)	(on	file	with	author).	
	 338.	 Id.	
	 339.	 Felicia	Kitzmiller,	Bay	County	Jail	Shows	Privatization	Isn’t	Always	Best,	NEWS	
HERALD,	Feb.	4,	2012,	available	at	
http://www.privateci.org/private_pics/Bay%20Co%20experience.htm.	
	 340.	 Email	from	Valerie	Lovett,	Pub.	Info.	Officer,	Bay	Cnty.,	Fla.	(Aug.	19,	2014)	(on	
file	with	author).	
	 341.	 Id.	
	 342.	 Id.	

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[Vol.	XLII	

saved	 from	 using	 inmate	 labor	 to	 clean	 roads,	 parks,	 buildings	 and	
cemeteries.” 343	
In	 spite	 of	 these	 real	 world	 examples,	 and	 this	 Article’s	 extensive	
discussion	 of	 cost‐shifting	 factors,	 the	 original	 question	 remains:	 do	
private	 prisons	 save	 money?	 	 Considering	 the	 numerous	 and	
complicated	 factors	 involved	 in	 cost	 comparisons	 of	 public	 and	
privately‐operated	 facilities,	 and	 the	 corresponding	 difficulties	 in	
conducting	 such	 studies,	 it	 is	 possible	 that	 we	 are	 simply	 asking	 the	
wrong	question.	
The	right	one	may	be:	should	we	incarcerate	people	in	private,	for‐
profit	prisons	even	if	they	do	save	money?		Regardless,	to	paraphrase	
the	 late	 Richard	 Culp,	 Associate	 Professor	 at	 the	 John	 Jay	 College	 of	
Criminal	 Justice,	 if	 three	 decades	 of	 experience	 with	 and	 research	
related	 to	 prison	 privatization	 have	 not	 led	 to	 demonstrable	 cost	
savings	or	quality	of	service	outcomes,	resulting	in	articles	such	as	this	
one,	then	we	need	to	take	a	different	approach	relative	to	our	nation’s	
carceral	policies,	practices,	and	priorities. 344	
 

	

                                                                                                                             
	 343.	 Kitzmiller,	supra	note	339.	
	 344.	 Richard	Culp,	The	Failed	Promise	of	Prison	Privatization,	PRISON	LEGAL	NEWS	(Oct.	
15,	2011),	https://www.prisonlegalnews.org/news/2011/oct/15/the‐failed‐promise‐
of‐prison‐privatization	(“Albert	Einstein	suggested	that	insanity	is	doing	the	same	
thing	over	and	over	again	and	expecting	different	results.		If	a	quarter	century	of	
experience	with	prison	privatization	has	not	led	to	better	quality	and	cost	outcomes,	it	
is	time	to	take	a	more	sane	approach.”).