CORRECTIONS CORPORATION
OF AMERICA:
A CRITICAL LOOK
AT ITS FIRST TWENTY YEARS
by
Philip Mattera and Mafruza Khan
Corporate Research Project of Good Jobs First
Washington, DC
and
Stephen Nathan
Prison Privatisation Report International
London

December 2003

1

2

CORRECTIONS CORPORATION
OF AMERICA:
A CRITICAL LOOK
AT ITS FIRST TWENTY YEARS
by
Philip Mattera and Mafruza Khan
Corporate Research Project of Good Jobs First
Washington, DC
and
Stephen Nathan
Prison Privatisation Report International
London

3

ACKNOWLEDGMENTS
This report is a joint project of Grassroots Leadership, the Corporate Research Project of Good
Jobs First and Prison Privatisation Report International. All of us gratefully acknowledge the
Open Society Institute’s Community Advocacy Project for its support of this project.
We also wish to thank the following individuals for providing information and/or commenting
on drafts of the report: Jenni Gainsborough of Penal Reform International; Joshua Miller of the
American Federation of State, County and Municipal Employees; and Ed Bender and Sue
O’Connell of the Institute on Money in State Politics. They are not responsible for our conclusions
or for any errors herein. Special thanks to Betty Grdina for her enormous assistance in the
preparation of the report.
Philip Mattera & Mafruza Khan
Corporate Research Project of Good Jobs First
www.corp-research.org
Stephen Nathan
Prison Privatisation Report International
www.psiru.org/justice
Si Kahn, Executive Director
Grassroots Leadership
www.grassrootsleadership.org

i
4

TABLE OF CONTENTS
Index of State References ...............................................................................................................iii
Executive Summary ....................................................................................................................... iv
Introduction ..................................................................................................................................... 1
1. A New CCA? Recent Scandals and Controversies .................................................................... 4
2. A Failed Experiment: Operating History Through Mid-2000 .................................................. 11
3. “Honest Graft”– How To Seek Contracts and Try to Shape Public Policy the CCA Way ....... 21
4. A Wild Ride: CCA’s Financial Performance ............................................................................. 31
5. Locking Down Labor Costs ...................................................................................................... 37
6. CCA’s International Operations: An Overview......................................................................... 42
7. Underachieving in the U.K. (plus: The Unlawful Death of Alton Manning) ........................... 49
8. Anatomy of a Failed Private Prison in Australia ....................................................................... 55
9. Superiority Unproven: Research on U.S. Private Prisons ........................................................ 61
Conclusion ..................................................................................................................................... 69
Endnotes ........................................................................................................................................ 70

ii
5

INDEX OF STATE REFERENCES

Alabama - 36
Arizona - 2, 5, 9, 15, 16, 40
Arkansas - 12, 21, 49
California - 2, 7, 26, 29, 33, 40, 68
Colorado - 2, 5, 19, 26, 35, 39
District of Columbia - 2, 8, 9, 14, 17, 22, 24, 38, 39, 40, 41
Florida - 2, 5, 6, 7, 13, 14, 18, 27, 29, 37, 38, 40, 41, 61, 64, 66, 67, 68
Georgia - 2, 19, 24, 27, 29, 35, 36, 40
Hawaii - 5, 40
Idaho - 26, 29
Iowa - 26
Kansas - 2
Kentucky - 10, 13
Louisiana - 7, 40
Maryland - 32
Minnesota - 65
Mississippi - 27, 36, 39
Missouri - 16
Nevada - 34
New Jersey - 16
New Mexico - 8, 9, 10, 14, 15, 18, 19, 22, 29
New York - 2, 33
North Carolina - 16, 19, 25, 26, 27, 34
North Dakota - 19
Ohio - 5, 9, 17, 22, 24, 33, 38, 39, 40, 68
Oklahoma - 2, 4, 7, 8, 9, 10, 16, 19, 28, 39, 40, 41, 66, 67
Oregon - 16
Puerto Rico - 14
South Carolina - 16
Tennessee - v, vi, 2, 4, 8, 9, 11, 13, 14, 15, 16, 18, 20, 21-24, 26, 29, 31, 37, 38, 40, 41, 61
Texas - 2, 4, 7, 12, 13, 15, 16, 19, 22, 25, 26, 29, 30, 37, 61, 66, 67
Utah - 19, 30
Virginia - 21, 22, 35, 39, 49
West Virginia - 7
Wisconsin - 2, 7, 10, 25
iii
6

EXECUTIVE SUMMARY
In 2003 Corrections Corporation of America (CCA) is celebrating the twentieth anniversary of
its founding. In announcing a series of celebratory activities earlier this year, CCA’s Chief
Executive John Ferguson declared: “CCA has helped reshape the landscape of American
corrections over the past two decades.”
Normally, corporate anniversaries are of little interest to anyone outside the company, but this
is a special case. CCA is the leading participant in, and in many ways the embodiment of, one of
the most controversial industries ever created—the incarceration of people for profit. While the
company is looking back through rose-colored glasses, there is a need for a critical analysis of
what CCA has brought to the world of corrections. That is the purpose of this report.
Even by its own standards, CCA has not been a success. Rather than taking the industry by
storm, it still manages only about three percent of prison and jail beds in the United States, and
its global aspirations had to be abandoned.
Only a few years ago, CCA was being widely vilified for poor management practices at a
number of its facilities that were associated with abuse, violence and escapes. At the same
time, the company went through an ill-advised corporate restructuring which, along with
huge losses and crushing debt, nearly forced it into bankruptcy. In 2000 the chief executive of
CCA, who had been one of the firm’s founders, was unceremoniously forced out of office.
The management shakeup was accompanied by a $120 million settlement of lawsuits brought
by angry shareholders.
During the past four years, the new leadership of CCA has worked hard to persuade investors,
governments and the public that the company has fundamentally changed. Management would
have us believe that CCA is now free from the scandals and deficiencies that characterized its
performance during the late 1990s.
Our main conclusion is that this is not the case. Thanks in part to a concerted public relations
strategy by the company and its trade organization, the Association of Private Correctional &
Treatment Organizations, CCA is no longer receiving a great deal of negative national media
attention, but that does not mean the underlying problems have disappeared. Our review of
court records, government reports and local news accounts shows that over the past several
years, CCA has been buffeted by numerous lawsuits and scandals involving allegations of:
• failure to provide adequate medical care to prisoners;
• failure to control violence in its prisons;

iv
7

• substandard conditions that have resulted in prisoner protests and uprisings;
• criminal activity on the part of some CCA employees, including the sale of illegal drugs
to prisoners; and
• escapes, which in the case of at least two facilities include inadvertent releases of prisoners
who were supposed to remain in custody.
CCA’s problems have not been limited to the United States. The company’s aim to become a
global provider of correctional services ended with its comparatively meager joint venture
operations in the United Kingdom and Australia being sold off. Prior to the sell-off, CCA’s
foreign affiliates faced controversies over conditions in their facilities.
In Britain, CCA was instrumental in persuading the government to privatize prisons, but CCA’s
joint venture company, UK Detention Services Ltd. (UKDS), failed to become a major player
in the UK market. While under CCA’s joint ownership, UKDS became the first British private
prison company to be fined for contract failure. It was also the first whose staff was found by a
coroner’s court to have unlawfully killed a prisoner.
CCA’s joint venture in Australia also had its share of scandals. After four years of persistent
problems, Corrections Corporation of Australia’s contract for the Metropolitan Women’s
Correctional Centre in Victoria was terminated. Management and ownership of the prison were
taken over by the government.
In addition to examining conditions in its prisons, this report looks at several other key areas in
which CCA has left a dubious legacy during its first two decades.
Financial instability. CCA came close to insolvency in the late 1990s after it embarked on a
risky process of building expensive speculative prisons, i.e. ones for which it did not have an
operating contract lined up ahead of time. The company borrowed a huge sum–ultimately about
$1 billion–to support speculative construction while simultaneously engaging in a series of
dubious financial restructurings. We show that CCA is still feeling the effects of those misguided
policies today and is weighed down by debt. It also continues to face weak demand for new
private prisons at the state and local level. In our view, these problems are given insufficient
attention by the stock analysts who follow CCA. Many of these analysts work for firms (such as
Lehman Brothers) that have investment banking and lending relationships with CCA.
Self-defeating labor practices. From the beginning, CCA has sought to depress its labor costs
by keeping wages low and by denying its employees traditional (defined-benefit) pension plans.
There have been reports of understaffing and high rates of turnover at some of its facilities. For
example, annual turnover rates at several CCA facilities in Tennessee have been more than 60
percent. We argue that underinvestment in its employees has left CCA with a workforce that is
more inclined to commit operational errors and to mistreat prisoners.
v
8

Attempts to influence public policy. Being in a business in which government is the only customer,
CCA has not hesitated to cultivate close ties with public officials and legislators around the
country. In its home state of Tennessee, CCA has enjoyed cozy relationships with powerful
public figures, up to and including governors. In fact, CCA founder Tom Beasley was a partner
with one governor and several leading legislators in a restaurant chain. CCA’s chief lobbyist in
the state was married to the speaker of the House. The company’s current chief executive formerly
served as commissioner of finance in the state.
CCA has also used campaign contributions to build new relationships with legislators. The
company spends hundreds of thousands of dollars during each state election cycle to try to gain
access and build support for its projects. At the federal level, CCA has given more than $100,000
in soft money to the Republican Party since 1997 as well as political action committee
contributions to individual members of key Congressional committees. It also doesn’t hurt that
J. Michael Quinlan, the former head of the Federal Bureau of Prisons, has been an executive of
CCA for the past decade.
Perhaps most controversial is CCA’s involvement in a group called the American Legislative
Exchange Council. ALEC is a powerful force in the promotion of the conservative policy agenda,
including tougher sentencing rules, among state legislators. CCA has been a corporate member
of ALEC and a member of its Criminal Justice Task Force, which helps write model bills.
Through its support of ALEC, CCA is helping to create greater demand for its services as a
result of changes in state policies that keep more people behind bars for longer periods.
Use of questionable research. For years CCA and other prison companies have sought to give
their business a veneer of academic respectability by publicizing a small body of research that
purports to prove the superiority of private corrections over the public sector. Yet a close look at
this literature indicates that much of it is produced by researchers who are either funded by the
industry or are ideologically predisposed in favor of privatization. By contrast, research by
independent investigators has failed to find clear evidence that private prison management is
superior in terms of quality, recidivism rates or cost.
Overall, CCA’s record during the first two decades years of its existence is far from impressive.
Rather than fulfilling the original promise of raising standards in corrections, CCA has built a
reputation marred by numerous instances of scandal, mismanagement, alleged mistreatment of
prisoners and its own employees, attempted manipulation of public policy and a proliferation of
questionable research. Its record is a clear example of how the pursuit of profit stands in the
way of carrying out a core public function such as corrections. CCA has succeeded in staying in
business for two decades, but it has not succeeded in demonstrating that prison privatization
makes sense.

vi
9

INTRODUCTION
Corrections Corporation of America (CCA) is celebrating its twentieth anniversary during 2003.
The largest private prison operator in the United States is proud of its achievements. “CCA has
helped reshape the landscape of American corrections over the last two decades,” said John D.
Ferguson, the company’s chief executive, earlier this year.1
Normally, corporate anniversaries are of little interest to anyone outside the company. CCA,
however, is a special case. Private prison management is one of the most controversial industries
to have emerged in recent times, and CCA has been the most controversial company in that industry.
Despite its claims, CCA has not contributed significantly to reshaping the correctional landscape—
and most of the impact it has had is nothing to boast about.
Criticism of prison privatization takes many forms. Some argue that it is immoral, others that it is
unconstitutional or that corrections is a core government role that should not be privatized. This
report only looks at the evidence on whether CCA has lived up to its own fundamental mission—
providing high-quality, low-cost correctional services to governments while meeting the financial
expectations of its investors.
For a company that set out to improve upon what the public sector can offer, it has had to spend an
inordinate amount of time defending its own performance. During the past decade, a large portion
of the newspaper and magazine articles written about CCA have focused on issues of abuse, violence,
mismanagement, litigation or financial distress. Conditions in CCA’s U.S. prisons are not unique:
prisoners and staff also suffered from operational problems at CCA’s now divested foreign joint
venture operations. Because the history of conditions in CCA’s British and Australian joint venture
operations are not well known in the United States, we have given them special attention in this
report.
Another notion we seek to dispel is that CCA’s problems are a thing of the past. By shaking up its
top management a few years ago and spending $120 million to settle lawsuits brought by disgruntled
investors, the company has tried to give itself a fresh start. We did detect some improvements in
CCA’s financial condition, but this is in comparison to a period in the late 1990s when the company
went through a series of disastrous restructurings and nearly went bankrupt. Moreover, CCA remains
heavily in debt and fundamentally dependent on a surge in privatization that may never materialize.
The biggest gap between hype and reality concerns conditions in CCA’s prisons. We found evidence
suggesting that many of the poor operating practices that characterized various CCA prisons in the
late 1990s may still be present for at least some of the company’s facilities. CCA continues to be
the subject of enough local scandals and court cases to keep its lawyers and public relations people
quite busy. These specialists have been successful in keeping the negative national spotlight off
CCA during the past few years, but that doesn’t mean the company has cleaned up its act. This
report sheds light on the underreported aspects of the company’s recent record to suggest that the
new CCA is very much like the old one.
1

CCA and the Prison Industry At a Glance
Before delving into the details of the company’s record, it is worth considering some basic facts
about CCA, which collected $962 million in revenue in 2002. As of June 30, 2003 (the latest data
available as of this writing), the company operated 59 facilities in 20 states and the District of
Columbia. These facilities, with combined capacity of 58,732 beds, include detention centers,
jails and juvenile facilities as well as prisons. CCA gets about a third of its revenues from the
federal government and the rest from state and local agencies. Among the states, its biggest customers
are Wisconsin, Georgia, Texas, Tennessee, Florida and Oklahoma. CCA also owns Transcor
America, a nationwide provider of prisoner transportation services. CCA no longer has any
significant operations outside the United States.2
CCA claims to be the sixth largest prison system in the United States, behind Texas, California, the
Federal Bureau of Prisons, New York and Florida. According to data from the U.S. Bureau of
Justice Statistics, there were 93,771 prisoners in privately managed federal and state facilities at
the end of 2002, representing 6.5 percent of the total incarcerated population excluding local jails.3
CCA’s website claims there are a total of 185 privatized facilities in existence (154 in the U.S., 31
internationally) with a total prisoner housing capacity of 143,771.
According to CCA, its share of the total number of U.S. prison beds under private management in
mid-2003 was 49.4%, followed by Wackenhut Corrections Corporation (21.0%), Management &
Training Corporation (9.2%), Cornell Companies (8.0%) and Correctional Services Corporation
(6.3 %).4
CCA is the industry leader but, after 20 years of touting their superiority, private prison companies
have captured only about five percent of the total U.S. prison “market” (once local facilities are
taken into account). In an October 2003 presentation CCA’s Chief Financial Officer, Irving E.
Lingo Jr., admitted that corrections privatization has “barely scratched the surface.” Yet he said
that CCA believes it has opportunities to expand in Florida, Texas, Arizona, Colorado and Kansas.5
The same holds for countries outside the United States. For years CCA had global aspirations but,
as we document, these came to naught. CCA only managed to establish footholds in the United
Kingdom and Australia. Some other U.S. operators such as Wackenhut Corrections continue to
operate abroad, but they and European competitors such as Group 4 and Sodexho Alliance together
manage a very small portion of the world’s total prison beds.

A Disproportional Problem
The private prison business represents a problem disproportionately larger than its current size.
The existence of an industry based on incarceration for profit creates a commercial incentive in
favor of government policies that keep more people behind bars for longer periods of time. CCA
has been active in trying to influence correctional policy in the United States. As described in

2

Chapter 3, it has done this through its ties with public officials and legislators, its extensive campaign
contributions and its involvement in a group called the American Legislative Exchange Council
that promotes a conservative criminal justice agenda to state legislators around the country.
In spreading the gospel of privatization, CCA and its competitors have used a small body of
professional literature that purports to prove the superiority of for-profit corrections. What they
fail to mention is that much of this literature has been written by analysts who are either being
funded by the industry or have an ideological predisposition in favor of privatization.
A case in point is Charles Thomas, who in the 1990s put himself forward as an independent guru
on private prisons but who later had to resign his academic post after facing conflict-of-interest
charges stemming from his receipt of $3 million in consulting fees from a company linked to
CCA.6 Before his fall, Thomas boldly asserted that “the debate is over” with regard to privatization,
and the privatizers had won.7
Apparently, that message was not conveyed to the many people in the United States who have
continued to campaign against CCA and prison privatization. It is beyond the scope of this report
to chronicle this campaign, but it is worth noting that CCA acknowledges such opposition when
discussing financial risk factors in its 2003 10-K filing with the Securities and Exchange
Commission:
Public resistance to privatization of correctional and detention facilities could result in
our inability to obtain new contracts or the loss of existing contracts:
The operation of correctional and detention facilities by private entities has not achieved
complete acceptance by either governments or the public. The movement toward
privatization of correctional and detention facilities has also encountered resistance from
certain groups, such as labor unions and others that believe that correctional and detention
facilities should only be operated by governmental agencies.
Moreover, negative publicity about an escape, riot or other disturbance or perceived poor
conditions at a privately managed facility may result in publicity adverse to the private
corrections industry and us in general. Any of these occurrences or continued trends may
make it more difficult for us to renew or maintain existing contracts or to obtain new
contracts, which could have a material adverse effect on our business.8
What is amazing is that CCA has managed to survive amid the endless stream of “negative publicity”
and “perceived poor conditions” that have been associated with the company. While CCA celebrates
the past 20 years and looks forward to many more, we believe that the time has come to put an end
to the misguided experiment of prison privatization.

3

Chapter 1: A NEW CCA? RECENT SCANDALS AND CONTROVERSIES
In August 1999, Corrections Corporation of America was brought in by officials in Tulsa,
Oklahoma, to operate their spanking new jail, the David L. Moss Criminal Justice Center. A
month later, an employee at the facility mistakenly allowed a prisoner to post bond after
incorrectly recording the nature of her offense. “This is not something we’re excited about
having had happened,” CCA’s assistant warden told a reporter.9
Yet this would turn out to be the first in a series of snafus through which at least a dozen
prisoners were accidentally released from custody at the jail. Some of the people set free had
been accused or even convicted of violent crimes. These included an 18-year-old who had been
convicted of first-degree murder, who was mistakenly released in July 2000, and an accused
rapist, who was erroneously released in April 2003.10
Some of the mistaken releases were the result of administrative errors, but CCA employees at
the Tulsa jail have also been fooled by prisoners who impersonated others scheduled for release.11
In one case, a CCA employee mistakenly opened a secure door and allowed a prisoner to walk
right out the front door of the jail.12
CCA officials have tended to put the blame for these incidents on low-level employees, some of
whom have been disciplined or fired. Yet one of those fired workers told a reporter: “I was
never trained how to read court documents…No one every gave me any formal training on how
to do anything down there.”13
In March 2002 the Tulsa County Criminal Justice Authority penalized CCA $5,625 in connection
with the erroneous releases of three prisoners the month before. The three were absent from jail
for a total of nine days. One of them was recaptured after being found with a knife in a stolen
car. CCA Warden Don Stewart responded to the Authority’s action by saying: “We do take
responsibility.”14
Another case of accidental release occurred recently at CCA’s Silverdale Workhouse in Tennessee.
The prisoner who was mistakenly let go was serving time on a drug charge and had just been
indicted on separate charges involving the rape of a child. As of mid-November 2003, there had
been no reports of the prisoner’s recapture.15
Questions about training and competence at CCA facilities have also been raised in a number of
civil lawsuits against the company:
• In May 2003 Conrado Mestas and Rafaela Ochoa Mestas of El Paso filed a wrongful death
suit against CCA in connection with the death of their son in May 2001 during his incarceration
at the Eden Detention Center in Texas. They charged that their son, also named Conrado,

4

died after being subjected to mental abuse by CCA employees who also withheld a special
diet he needed for medical reasons.16
• In April 2003 the family of a prisoner from Hawaii who died of a heart attack at the Florence
Correctional Center in Arizona in 2001 filed suit against CCA and the Hawaii Department
of Public Safety. The plaintiffs charged that Iulai Amani died as a result of being forced by
a prison gang to swallow crystal methamphetamine in a balloon to transport the drug within
the facility.17 This suit came shortly after the filing of a separate action against CCA by
Victoriano Ortiz, a prisoner at Florence who claimed he was badly beaten by the same gang,
which was allegedly given extraordinary privileges by the warden and guards.18
• In March 2003 Tamara L. Schlitters filed a federal lawsuit against CCA and various company
employees, charging that her 26-year-old son Jeffrey A. Buller died while in custody at Kit
Carson Correctional Center in Colorado because prison officials refused to fill a prescription
for him at a time when Buller had only ten days left to serve. Buller was said to suffer from
hereditary angioedema, which causes swelling episodes in parts of the body, including the
airways of the throat. Buller had trouble breathing and died on May 1, 2001, a day before he
was supposed to be released.19
• In January 2003 Frances Hughes sued CCA in connection with the beating death of her 18year-old son, Chad Littles, by other prisoners at the Bay County (Florida) Jail Annex in
October 2002. The suit charged that CCA had insufficient monitoring equipment, that there
were not enough guards and that the guards were not properly trained.20 CCA denied
responsibility for the incident.21
Allegations of incompetence, poor training, mistreatment, medical neglect and inadequate
supervision are nothing new for the country’s largest for-profit prison operator. As the next
chapter will recount, CCA was at the center of a series of controversies from the late 1980s to
the late 1990s about the way it ran its facilities–as well as the way it handled its finances.
Yet all that was supposed to have changed in 2000, when the company was restructured and its
top executive was ousted. After he took over as chief executive of CCA that summer, John
Ferguson arranged for the portraits of the company’s founders – including Doctor Crants,
Ferguson’s predecessor as CEO–to be removed from the corporate headquarters.22 The action
was a small but highly symbolic part of the effort by Ferguson and the rest of the new leadership
team at CCA to remake the company and put the scandals and controversies of the past behind
them. Getahn Ward of Nashville’s Tennessean newspaper, who has followed CCA closely, wrote
at the time that Ferguson’s mission was one of “restoring investor confidence and credibility at
the nation’s largest prisons company.”23
Has this happened? It is true that there have been no major scandals in the past three years to
rival, for example, the uproar over conditions at Youngstown, Ohio in 1998. Yet an examination

5

of the company’s record since the ouster of Crants and the hiring of Ferguson reveals problems
of a significant nature in at least one quarter of CCA’s U.S. facilities. These include escapes,
mistaken releases, outbreaks of violence and allegations of poor medical care. While none of
these incidents has become a national cause celebre, the frequency of these situations suggests
that CCA has not completely changed its stripes.
Litigation Caseload
One measure of the extent to which CCA may be continuing to engage in questionable operating
practices is the volume of lawsuits brought against the company. There is no central information
source on state court cases, but there is one at the federal level.24 This database shows that CCA
has been involved in hundreds of suits filed in the past two years, many of them brought by
prisoners alleging civil rights violations. CCA, like other private and public prison managers,
would undoubtedly argue that many of these cases are frivolous suits filed by jailhouse lawyers.
Some could be frivolous, but others, such as those cited above, clearly allege serious problems
at CCA’s facilities. CCA mentions in its 10-K filing with the Securities and Exchange Commission
that it is subject to such litigation, but it insists that none of the suits will have a material effect
on the finances of the company.
It was not practical to review all of these hundreds of cases, so we took another approach. We
searched media archives for newspaper articles about lawsuits against CCA, both federal and
state, relating to events during the past three years. When it was available, we also consulted the
online court docket for those cases. We also looked for news articles about general instances of
mismanagement, especially escapes and violence, since August 2000. The following pages
summarize the cases we found (beyond those mentioned above), organized by the various types
of problems that continue to appear at prisons run by CCA.
Escapes
The fundamental job of prison administration is to keep the prisoners locked up. CCA’s ability
to carry out this function has come into question as a result of the numerous mistaken releases
at the Tulsa Jail described earlier. The company has also experienced escapes at the Tulsa facility
and elsewhere. Here are some examples from the past few years:
• A prisoner who had escaped from the Hernando County (Florida) Jail in July 2001 was
captured a few weeks later when a former cellmate spotted him in a supermarket and
notified state police. John Devane had escaped from the jail after removing his
identification bracelet and replacing it with a low-security one that he fished out of the
trash during his cleaning duties. This enabled him to join a work detail that was emptying
trash outside the jail and then to flee.25

6

• In June 2001 two guards at the Winn Correctional Center in Louisiana were disciplined
following an investigation of an incident in which two prisoners being driven to a hospital
for medical appointments escaped from custody and remained at large for two days
before being recaptured.26
• In August 2000 two prisoners at the Bartlett State Jail in Texas used a stolen pair of wire
cutters to cut through a perimeter fence at the minimum-security facility and escape. At
the time they were awaiting transfer to a more secure facility.27
CCA’s problem with holding onto prisoners is not limited to the facilities it manages. Escapes
have also occurred during prisoner transfers carried out by the company’s Transcor subsidiary.
For example:
• In September 2001 a prisoner being transported by Transcor in West Virginia overpowered
two guards after faking an illness and getting them to remove his handcuffs. He drove off
in the transport van and then took off on foot, armed with a Transcor shotgun.28
• In July 2001 Transcor officials acknowledged that one of their employees was responsible
for the escape of a teenager who fled custody at a Milwaukee airport after being returned
from California. The teen, who was not handcuffed at the time of the escape, subsequently
fled to Texas, where he allegedly stabbed a police officer after a high-speed car chase.29
Failure To Provide Proper Medical Care
CCA and other private prison operators have been criticized for scrimping on medical care in
order to reduce their operating costs.30 In addition to the Schlitters case mentioned above, CCA
was investigated for medical negligence in the death of Justin Sturgis, a 20-year-old who
apparently swallowed several Ecstasy pills before being arrested and locked up in February
2001 at CCA’s Bay County Jail in Florida. A grand jury concluded that deficiencies by CCA
employees, including a nurse, contributed to the death of Sturgis. The grand jury found no
criminal liability on CCA’s part, but its presentment stated that “correctional personnel failed to
demonstrate adequate health training in responding to the level of distress evidenced by Justin
Sturgis.” The presentment did not address the allegations of other prisoners that guards mocked
the moaning Sturgis for two hours before calling an ambulance.31
Even when medical care is provided by CCA, it may not be properly supervised. For instance,
in May 2002 a female prisoner at the Tulsa Jail was hospitalized for a drug overdose after she
hoarded psychotropic medications. The incident allegedly occurred as a result of improper
supervision by CCA medical employees at the jail.32 In December 2001 the Tulsa County Criminal
Justice Authority had notified CCA that it was in violation of its contract for failing to administer

7

certain drugs in liquid form to prisoners. This action was taken after another prisoner apparently
attempted suicide by taking an overdose of hoarded psychotropic drugs.33
In another suicide case, a civil rights and wrongful death suit was filed against CCA in May
2002 on behalf of Calvin Lamy, a Native American prisoner who took his own life at the Torrance
County Detention Facility in New Mexico in August 2001. The suit alleged that prison officials
had been warned by Lamy’s psychologist that he posed a suicide risk but did not take appropriate
precautions.34
Guard Involvement In Selling Illegal Drugs
While CCA’s medical care is alleged to have been inadequate at times, some of its guards have
been accused of providing drugs—of the illegal variety. For example:
• In September 2001 a former guard at the Tulsa Jail pleaded guilty to one count of
attempting to smuggle methamphetamine to a prisoner. The charge came as the result of
a federal sting operation.35 A year later, CCA terminated a new employee at the jail after
she was arrested for possession of a controlled substance (cocaine). The employee had
been working at the jail for about two months after completing a CCA training course.36
• As a result of an FBI sting operation, four guards at CCA’s Correctional Treatment Facility
in the District of Columbia were indicted in November 2002 on charges that they smuggled
drugs, pagers and cash to prisoners in exchange for bribes. The facility, originally used
for prisoners with substance-abuse problems, was being used to house the overflow from
the D.C. Jail.37
• The warden and security chief at the Silverdale Workhouse in Tennessee were fired in
November 2002 following the escape of two prisoners and allegations of illegal drug use
at the facility. The alleged drug use came to light as the result of a newspaper exposé,
which prompted a request from Hamilton County Executive Claude Ramsey for a list of
drug incidents at Silverdale for the previous two years. CCA officials who went to the
facility to investigate the two escapes learned that the warden was unable to produce
records of drug seizures. Silverdale was the site of a large-scale 1996 investigation of
drug trafficking that led to nine convictions, including four guards.38
Failure To Control Prisoner Violence
There is no denying that prisons, especially at the higher security levels, can be violent places.
Yet prison administrators have at least a moral responsibility to provide a reasonable level of
safety for prisoners. As for the question of legal responsibility, the U.S. Supreme Court ruled in
1994 that the Eighth Amendment prohibition against cruel and inhuman punishment requires

8

prison officials to take reasonable measures to guarantee the safety of prisoners. Yet the Court
found that officials incur legal liability only when the danger is “sufficiently serious” and officials
show “deliberate indifference” to a prisoner’s health or safety.39
Allegations of failures by CCA to ensure prisoner safety were at the center of the uproar over
conditions at its Youngstown, Ohio facility in the late 1990s. Such problems have persisted
even after the change in top management at the company. For example:
• In December 2002 CCA settled a lawsuit brought by Brandon McKnight, who was
critically injured as the result of a beating in 2001 by a fellow prisoner at the Tulsa Jail.
McKnight had accused CCA of negligence for placing him in the same cell as a prisoner
who had previously been found guilty of assaulting him. CCA did not admit wrongdoing
in the case and did not disclose the terms of the settlement.40
• In January 2002 a prisoner serving two life sentences for murder convictions admitted to
stabbing a counselor to death at the Hardeman County Correctional Facility in Tennessee.
CCA said that the counselor, Delbert Steed, was the first employee to be killed on the job
in the history of the company.41
• In August 2002 two former prisoners at the Cimarron Correctional Facility in Oklahoma
were charged with assaulting female guards in two separate incidents during the previous
winter. Both prisoners were transferred to the publicly-run Oklahoma State Penitentiary
after the incidents.42 That same month, prisoners at Cimarron were charged with severely
beating another prisoner the previous September.43
Prison Protests And Uprisings
CCA’s reputation was seriously marred during the 1990s by protests, which sometimes took the
form of riots, by prisoners at a number of its facilities. In at least some of these cases, the
protests were explicitly aimed at conditions in the prisons. This phenomenon, like many of
CCA’s other problems, has continued during the new management regime. Here are some
examples:
• In September 2000 three guards at the Florence Correctional Center in Arizona were injured,
one seriously enough to require hospitalization, in a disturbance involving about 20 prisoners
who smashed property and briefly held one of the guards hostage.44
• In December 2000 CCA announced that the warden and chief of security of the Torrance
County Detention Facility in New Mexico had been fired after an uprising the month before
by prisoners from the District of Columbia. Eight guards were injured during the incident.45

9

• In April 2001 some three-quarters of the 800 prisoners at the Cibola County Correctional
Center in New Mexico took part in a non-violent protest in which they refused to return to
their cells. The protest ended when guards fired tear gas into the recreation yard, where the
prisoners had gathered. A prison official said the protest was prompted by the quality of
food being served and by the price and availability of items at the prison commissary.46
• In July 2001 hundreds of prisoners at the Otter Creek Correctional Facility in Kentucky
staged a nine-hour riot. A new warden appointed after the incident said that his ousted
predecessor had failed to change procedures when medium-security prisoners were introduced
into what had been a minimum-security facility.47
• An April 2003 disturbance at the North Fork Correctional Institution in Oklahoma, which
housed more than 1,000 prisoners from Wisconsin, resulted in minor injuries to a guard and
more than $12,000 in damages to the prison kitchen.48
While none of the problems of the past few years have received substantial media attention at
the national level, they do suggest that the new CCA proclaimed in 2000 often looks a lot like
the old, scandal-ridden CCA.

10

Chapter 2: A FAILED EXPERIMENT:
OPERATING HISTORY THROUGH MID-2000
Corrections Corporation of America was created during the early years of the presidency of
Ronald Reagan, a time in the United States when entrepreneurs were riding high and privatization
was regarded as a panacea for a supposedly inefficient and incompetent public sector.49 The
company was founded in 1983 by Thomas Beasley, former chair of the Tennessee Republican
Party, with backing from venture capitalist Jack Massey, who had previously helped build
Kentucky Fried Chicken (the fast-food chain now known as KFC) and Hospital Corporation of
America (HCA), a pioneer in the controversial business of privatizing healthcare facilities.
HCA, in fact, was Beasley’s model. He told a reporter at the time: “CCA will be to jails and
prisons that are owned and managed by local, state, and federal governments what Hospital
Corporation of America has become to medical facilities nationwide.”50 This statement was, of
course, made well before HCA was accused of defrauding the federal government and had to
pay $1.7 billion to settle the charges.51
Although Beasley and other CCA executives would repeatedly depict the company’s creation
as a 1980s free-market innovation, the idea of incarceration for profit actually had a much
longer–and sordid–history.
The Origins Of Private Prisons
In England, jails operated by private parties originated in the Middle Ages.52 The profit came
mainly from the fees charged to the prisoners for the costs of food, lodging and other services.
Prisoners were even made to pay each time their irons were put on or taken off. In short, prisoners were totally at the mercy of extortion practiced by jailers. Prisoners of means were able to
purchase decent–and sometimes quite comfortable–conditions, while poorer prisoners faced a
miserable existence.
Colonial America avoided prisons in favor of fines and public punishment (such as whipping
and stocks). There were jails for pretrial detention, and these were usually operated by private
parties. These jailers, who sold meals and privileges to detainees, were notorious for corruption
and cruelty.
The 19th Century saw the emergence of penitentiaries, in which prisoners were locked up not
simply to await trial; in most cases, incarceration itself became the punishment for criminal
activity. These institutions were usually established by governments, but private interests got
deeply involved, mainly through the exploitation of prison labor. Prisons soon turned into an
important source of inexpensive and easily controllable labor for the Industrial Revolution.

11

By the mid-1800s the leasing of prisoners by private interests was the norm throughout the
country. After the Civil War, the prison leasing system greatly expanded, particularly in the
South, where prison labor provided a source of cheap labor in the wake of Emancipation. In the
South during this period it became known as the “convict lease system.” The degree of control
exercised by contractors over prison labor made the leasing system disturbingly similar to slavery. In some cases the conditions faced by leased prisoners–who in the South were overwhelmingly Black–were even worse than those experienced by some slaves. Because contractors were guaranteed a certain number of prison laborers, they could work a prisoner to death
and be assured of a replacement at no additional cost. Moreover, the contracts entered into by
prison officials and entrepreneurs were often marked by cronyism and corruption.
Instances of scandals, corruption and abuse of prisoners could be found throughout the country.
Consequently, the convict lease system became a prime target of Progressive Era reforms. During the first half of the 20th Century, one state after another was forced to abandon the leasing
system and replaced it with arrangements under which any work performed by prisoners was
done for the government. This ranged from agricultural work on farms that grew food for the
prisons to road maintenance and the proverbial license-plate manufacturing. These practices
did not necessarily make life for prisoners any more humane (road chain gangs became notorious for their brutality), but they did eliminate significant private sector involvement in the
corrections system.
An Inauspicious Start
This unsavory history was conveniently ignored by Beasley–and his co-founders T. Don Hutto
and Doctor Crants–who presented private prisons as an exciting new entrepreneurial concept.
The federal government jumped on the bandwagon, offering CCA a contract in 1983 despite the
company’s lack of a track record in corrections. Hutto had credentials as a corrections
professional, but these credentials were not exactly impeccable. In 1978 the U.S. Supreme
Court affirmed a federal district court ruling that that Arkansas prison system, then being run by
Hutto, constituted “cruel and unusual punishment.” The decision by the Supreme Court speaks
of rape, torture and 10-hour workdays for prisoners. The latter prompted the Court to state that
“the administrators of Arkansas’ prison system evidently tried to operate their prisons at a profit.”53
CCA’s federal contract was awarded by the Immigration and Naturalization Service, which was
turning to the private sector for help in the growing task of detaining undocumented immigrants.
The agency called on CCA to build and then manage a detention center in Houston, which
opened in 1984.
CCA’s initial performance, however, was something less than spectacular. When it fell behind
in building the new facility, the company leased a seedy motel that was a favorite spot for
streetwalkers to ply their trade. Twelve-foot high cyclone fences topped with barbed wire were
erected around its perimeter, iron bars were put on the windows, and soon the motel was filled
12

with young men. Security was hardly tight: a number of detainees escaped by pushing out the
motel’s air conditioners, climbing through the holes and scaling the fence.54
Beasley also got a boost from a source closer to home when CCA was awarded contracts to
manage Tall Trees, a non-secure juvenile facility in Memphis, and the much larger Silverdale
detention facility in Chattanooga. The following year (1985), CCA got two more federal
contracts–for an INS processing center and a Bureau of Prisons pre-release center–and a local
one to operate the Bay County Jail in Florida. It also received a contract to build and manage
the Shelby Training Center, a secure-treatment facility for juvenile offenders that was sited
adjacent to Tall Trees.
By this time, CCA was already the subject of controversy. Cost overruns at Silverdale were a
national news story as well as a local one.55 In 1985 the company made an audacious proposal
to take over the entire state prison system in Tennessee, which was facing a federal court mandate
to relieve overcrowding. In exchange for a 99-year lease on existing facilities and an annual
operating contract of about $250 million, CCA offered to spend $150 million of its own money
to build two new 500-bed prisons and to throw in an additional $100 million payment to the
state, half in cash and half in IOUs.56 The state legislature, faced with strong opposition from
public employee groups and others, declined to act on the offer.
Despite the setback in Tennessee, CCA moved ahead with its privatization crusade. The pressure
on states to address overcrowding made the prospects for private prisons promising enough to
encourage others to enter the field. These included established firms such as security services
leader Wackenhut Corporation, well-funded start-ups such as Pricor Inc. and a slew of less
substantial operations. The first state contract was awarded to U.S. Corrections Corporation in
1986 to operate a prison at an abandoned college campus in Marion, Kentucky (U.S. Corrections
was acquired by CCA in 1998). In 1987 CCA got its first state-level contracts – for the construction
and management of a regional juvenile facility in east Tennessee and two minimum-security,
pre-release facilities in Texas.
Operating Problems Mount
CCA’s stock started trading publicly in 1986 and the company made a profit for the first time in
1989. It also made some of its first moves abroad during this period, winning its first Australian
contract in 1989 and its first contract in Britain in 1992. (See Chapters 6-8 for more on CCA’s
track record outside the United States.)
Yet the late 1980s and early 1990s were a difficult time for CCA. In addition to slow growth in
new contract awards, CCA began to experience the kind of operating problems previously
associated only with certain public prisons. For example:

13

• In January 1988, CCA was hit with its first major lawsuit. The company was accused of
failing to provide adequate medical care to Rosalyn Bradford, a prisoner at the Silverdale
facility in Tennessee, and that this failure resulted in Bradford’s death. Ten months later,
CCA agreed to pay $100,000 to settle the case.57
• In 1989 and early 1990, there was a series of escapes from CCA’s new $8 million jail in
Hernando County, Florida. A state investigator found that “a combination of improper cell
security checks by staff, defective cell doors and ineffective security grating behind the light
fixture of Cell A-6” was responsible for the escape of four prisoners in January 1990. A
guard who was fired as a result of the incident alleged that the jail administrator had ordered
him to falsify state-mandated logs to cover up the fact that the facility was not complying
with a requirement that prisoners who are known escape risks be checked every 15 minutes.58
Later in 1990, a prisoner at the Hernando jail escaped by removing a stainless steel plate in
a shower stall.59
• In December 1990 guards had to use tear gas to quell a riot that erupted at CCA’s West
Tennessee Detention Facility less than a year after the prison opened. The cause was reported
to be anger on the part of prisoners who were transferred to the facility from out of state just
before the Christmas holiday.60
• In May 1992, there were press reports that the FBI and federal prosecutors were investigating
whether CCA had offered bribes or other illegal enticements to public officials for contracts.
The probe was said to focus on CCA’s contracts in Tennessee. The investigation did not
result in an indictment.61
CCA avoided being indicted in Tennessee, but it continued to have problems at its facilities in
that state. Soon after the South Central Correctional Center in Clifton opened there were reports
of beatings of prisoners, lax security, and the presence of alcohol and weapons.62 CCA’s ability
to claim superior efficiency over publicly-run facilities in Tennessee was weakened in late 1992
when the company lost its contract to run the state’s Mountain View Youth Development Center.
The contract CCA signed with state officials was based on the assumption that the company
would need only 99 employees to run the 144-bed facility. As it turned out, CCA needed some
160 people to do the job, about the same number as at a state-run institution.63
However, the company’s problems were not limited to Tennessee. For example, in 1993 two
men escaped from CCA’s immigrant detention facility in Houston64 and the company was hit
with a federal civil rights lawsuit filed on behalf of three Puerto Rican prisoners who were shot
during a disturbance at CCA’s Torrance County Detention Facility in New Mexico.65 That same
year, the District of Columbia decided to remove its prisoners from CCA’s West Tennessee
Detention Facility for fiscal reasons, prompting the company to announce that its earnings for
the year would be depressed.66

14

“Prisoners And Trash Are Big Business”
The second half of the 1990s was a turning point for CCA. It was during this period that the
company began to achieve critical mass. CCA began the decade with annual revenues of just
over $50 million. By 1997 revenues had increased nearly tenfold to $462 million, and its profits
were more than $50 million. During the same period, the number of prison beds CCA had under
management jumped from about 5,000 to more than 38,000, giving it a U.S. market share of
more than 50 percent.67 That growth was accomplished by the capture of a series of contracts
ranging from 200-bed minimum-security facilities to a 2,000-bed state jail in Texas. In early
1995 CCA branched into the prisoner transportation business with the purchase of Transcor
America.
CCA, of course, wanted an even larger share of the prison market. It did this in part by acquiring
smaller rivals such as Concept Inc. and Corrections Partners Inc., both in 1995. It also made
another attempt to take over the entire prison system of Tennessee, but again it was rebuffed.
Nonetheless, CCA benefited from favorable conditions throughout the United States. By 1995
the country’s total prison population–local, state and federal–had reached more than 1.5 million,
which was three times the number in 1980. The incarceration rate–the number of prisoners per
100,000 U.S. residents–jumped in that 15-year period from 221 to 601.68 Governments at all
levels were having difficulty figuring out how to house this ballooning population. While many
jurisdictions continued to seek public-sector solutions, others succumbed to the bold claims
being made by the private prison industry and its political allies.
At the federal level the Clinton Administration created an opening for private firms to begin
operating Federal Bureau of Prison facilities, while at the local level, many officials saw the
overcrowding problem as an opportunity to create jobs in economically depressed areas. A
county commissioner in New Mexico put it this way to a newspaper reporter: “It’s terrible to
say, but prisoners and trash are big business.”69
Prisons, however, like trash dumps, can sometimes cause a big stink, and this is exactly what
started to happen in the mid-1990s as major instances of violence erupted at a series of forprofit correctional facilities. Some of the worst cases involved CCA’s competitors, but the events
undermined the reputation of the entire industry. For example:
• In October 1994 some 250 prisoners rioted at the Eloy Detention Center in Arizona run by
Concept Inc. The prisoners, many of them undocumented immigrants being held by the INS
and the federal Bureau of Prisons, set fires and damaged property. Riot police put down the
revolt, but a similar incident occurred several weeks later. Five prison employees were injured
in clashes with prisoners, some of who had managed to acquire steel pipes.70 Employees
later told a reporter that the riot was sparked by shortages of food, soap, toilet paper and
other essentials. They also said that the poorly paid and inexperienced staff was not equipped
to handle the volatile situation.71

15

• In June 1995 there was an uprising by prisoners at an immigration detention center operated
by Esmor Correctional Services in Elizabeth, New Jersey. Most of the guards, described by
one local official as “unarmed and undertrained, ” fled once the disturbances began. Police
in riot gear reclaimed control of the facility, which previously had been the subject of press
reports about inhumane treatment and substandard conditions.72 In the wake of the uprising,
the INS issued a scathing report on mismanagement at the Esmor facility. The INS found
that poorly trained and abusive guards terrorized the immigrant prisoners, while supervisors
did little to monitor the situation.73 Esmor, which was removed as the contractor for the
Elizabeth facility (later taken over by CCA), changed its name to Correctional Services
Corporation and is still active in the field.
• In August 1997, a national controversy developed when a videotape showing abuses by
guards at the Brazoria County (Texas) Detention Center was made public in the course of a
lawsuit brought by one of the prisoners at the facility, run by Capital Correctional Resources
Inc. The video, originally shot as footage for a training film, showed guards kicking prisoners,
coaxing guard dogs to attack them, and shocking at least one prisoner with a stun gun.74 The
abuses depicted on the tape especially disturbed officials in Missouri, given that prisoners
from that state were being housed at the Brazoria facility. In the wake of the revelation,
Missouri removed its prisoners.75
CCA’s facilities were not immune from incidents of violence and lax security. In October 1995
more than 100 prisoners from North Carolina went on a rampage at the company’s West Tennessee
Detention Facility, causing considerable damage.76 In August 1996 two convicted sex offenders
from Oregon broke out of a CCA facility near Houston and traveled nearly 200 miles before
they were caught. State officials, who had not been informed by CCA that out-of-state prisoners
had been imported, realized they had no authority to prosecute the convicts for the escape. The
reason: there was no law against escaping from a private correctional facility (a situation that
was later changed in Texas and elsewhere).77
Also in August 1996, there was an uprising by about 400 federal prisoners at the Eden Detention
Center in Texas, which CCA had taken over the year before from a small-time prison operator.78
Two months later, six prisoners–three of them convicted murderers–broke out of CCA’s Central
Arizona Detention Center.79 In February 1997, South Carolina announced it would not renew its
$14 million-a-year contract with CCA to run a juvenile detention facility that had been plagued
with security lapses (resulting in several escapes) and allegations of beatings by guards.80 (In
2000 a federal jury awarded $3 million in damages to a teenager who said he was hog-tied,
maced and thrown against a wall while being held at the facility.81) A riot at CCA’s Davis
Correctional Facility in Oklahoma in May 1997 resulted in injuries to two guards.82 The following
November four guards were injured in a fight with prisoners at the CCA-run South Central
Correctional Center in Tennessee.83

16

The Youngstown Debacle
The negative publicity in these incidents was minor compared to the national controversy
generated in the late 1990s by a series of incidents at the prison in Youngstown, Ohio that CCA
had built (with free land and large tax abatements from the city) to house prisoners from the
District of Columbia. The facility was plagued with stabbings and disturbances almost from the
moment it opened in May 1997. State and local authorities began to complain that they were not
being adequately informed about the problems, and a state legislator told a reporter in July
1997: “There is no doubt in my mind that we have a bomb ticking in Youngstown.”84
In August 1997 prisoner rights attorney Alphonse Gerhardstein filed a class-action lawsuit on
behalf of the prisoners, charging that the facility was unsafe. The following February, by which
time there had been 19 stabbings at the prison (some of them fatal), a federal judge ordered the
District of Columbia to stop sending prisoners to the facility after he found that prisoners with
different security classifications were being improperly combined in what was supposed to be a
medium-security lock-up. Using graphic language, U.S. District Judge Sam Bell stated that
“the failure to classify prisoner populations, mixing of predators and their prey, if you will, may
well amount to a deliberate indifference to the conditions of the prisoners.”85
The uproar over the management of the prison reached a new height in July 1998, when six
prisoners, included four convicted murderers, cut through a gate and escaped from the prison in
broad daylight. Ohio Gov. George Voinovich and other officials expressed public concern over
conditions at the prison and began to talk of closing the facility, though the state attorney general
warned that there were legal obstacles to doing so.86
In October 1998 a state prison oversight committee released a report that blamed the District of
Columbia for misclassifying many of the prisoners sent to Youngstown, but it also lambasted
CCA, saying that the escape of the six prisoners represented “the ultimate failure in the primary
mission and public promise of any prison.”87 The mayor of Youngstown, who had helped lure
CCA to the city, said “It’s been a nightmare. [CCA’s] credibility is zero.”88
In March 1999, the company agreed to pay $1.6 million to prisoners and $756,000 in legal fees
to settle the class action lawsuit brought on behalf of the prisoners. The settlement also provided
for the assignment of a full-time independent monitor to the prison and an annual review of
prisoner security classifications.89 After the District of Columbia declined to renew its contract,
CCA shut down the prison in July 2001, leaving the employees without a job and the town with
an empty facility.
“Dropping Like A Rock”
The Youngstown episode was a low point in CCA’s history–and that of the industry as a whole.
The political fallout from the troubles in Ohio affected the company’s reputation and prospects

17

in other states, especially Tennessee, where CCA was still trying to take over the entire
correctional system. In September 1998 The Tennessean newspaper wrote that “the concept of
prison privatization, the hottest political commodity on [Nashville’s] Capitol Hill just a year
ago, is now dropping like a rock.”90 That same month, a besieged CCA put out a press release
denouncing its critics and insisting that “the safety risk posed is no greater at privately managed
prisons than at publicly run prisons.”91
Even if that statement was true (which some studies had disputed; see Chapter 9), it represented
an enormous concession on the part of the pioneering private prison company. The whole prison
industry had been created and promoted on the premise that the private sector could do a much
better job than government in running prisons, in terms of cost and safety. Now here was CCA
desperately arguing that private operators were no worse than the public sector.
The legitimacy of private prisons was also weakened by a controversy involving their leading
academic supporter. For much of the 1990s, Charles Thomas, a professor at the University of
Florida and founder of the Private Corrections Project, was frequently quoted in the media as an
authoritative voice on prison privatization. His status as an independent observer came into
question in 1997, when Thomas was named to the board of the CCA Prison Realty Trust, the
real estate investment trust set up by CCA to serve as the owner of its facilities for tax reasons
(see Chapter 4 for more details).92 The Florida Police Benevolent Association, which had already
been questioning Thomas’s role as a consultant to the Florida Correctional Privatization
Commission because his university research was being financed in part by the industry, stepped
up its challenge with complaints to the Florida Commission on Ethics. Thomas ended up retiring
from his university post, and in 1999 he was fined $20,000 by the ethics commission after it was
revealed that he received a $3 million fee for acting as an advisor on the re-merging of CCA and
the Realty Trust.93 The entire episode cast a shadow on Thomas’s work, especially research that
purported to demonstrate the superiority of private correctional management.
CCA’s progress was also hindered by serious problems at several other facilities. In August
1998 there were two serious disturbances at the company’s Torrance County Detention Center
in New Mexico. In the first instance, five guards were injured, and in the second, five prisoners
were stabbed and a guard was injured. Some of the prisoners involved had previously been at
the Youngstown prison.94 In October 1998 four prisoners escaped from the South Central
Correctional Facility in Tennessee. A supervisor at the prison was fired in connection with the
incident. Warden Kevin Myers justified the action by saying, “I wouldn’t say he facilitated the
escape, but he may have done something that allowed the escape to occur.”95
CCA insisted that all these problems did not diminish the demand for its services. “We’re simply
drowning in business,” Chief Executive Doctor Crants told the Associated Press in October
1998. “We can’t get it off the drawing board as fast as it’s coming in to us.”96 Yet the company
felt compelled to run a series of image advertisements on television and in periodicals that
depicted the company as: “Quietly going about the business of public safety.”

18

“Quiet” was not the best word to describe the continuing string of escapes at CCA facilities
such as the West Tennessee Correctional Facility and the Bent County Correctional Facility in
Colorado–and certainly not the violence that erupted during the summer of 1999 at the
Diamondback Correctional Facility in Oklahoma and again at the Torrance County Detention
Center in New Mexico.97 The latter took place around the same time as another riot at a private
prison in New Mexico–Wackenhut Corrections’ Guadalupe County Correctional Facility–where
a guard was fatally stabbed during an uprising involving as many as 200 prisoners.98
Following the incident in Torrance County, a group of guards at the facility filed suit against
CCA, charging that prison officials knew of a planned uprising but did nothing to prepare. The
suit also charged that the prison was chronically understaffed and that guards were not adequately
trained. One of the guards filing the lawsuit had been beaten by prisoners with a baseball bat,
crushing both his hands, fracturing his skull in six places and leaving him in a coma for six
days.99 Most of the claims were dismissed by a judge who found that they were precluded by
workers compensation rules.100
CCA also got in trouble for poor performance on the part of its Transcor America prisoner
transportation subsidiary. In March 1999 the American Civil Liberties Union of Colorado sued
the company on behalf of a woman who said she was sexually assaulted by a Transcor guard
while she was being transported from Texas to Colorado the year before.101 (The case was
resolved in April 2002 when Transcor reportedly agreed to pay a substantial out-of-court
settlement; the exact amount was not disclosed.102) In October 1999, a Transcor driver in Texas
sexually assaulted a female prisoner he was transporting. (The driver was later sentenced to ten
years in prison.103) That same month Transcor was publicly criticized by North Dakota Gov. Ed
Schafer after the escape from custody of a notorious child molester from his state while he was
being transported through New Mexico.104 Transcor guards reportedly were sleeping on the job
during the escape and did not realize the prisoner was missing from their bus for nine hours.105
“Private Prisons Don’t Work”
Problems such as these, along with economic considerations, helped to persuade some
jurisdictions that had experimented with private management to conclude it was not worth the
trouble. In June 2000 North Carolina terminated its two prison management contracts, both
with CCA, saying it would be “in the best interest of the state” to return them to public
management.106 State Rep. Paul McCrary told a reporter: “I really felt like it was a failure,”
adding that private prison firms “are in business to make money, and they’re going to take some
shortcuts when they can.”107
In August 2000 state officials in Utah abandoned a plan for that state’s first fully-privatized
prison after concluding that it would be cheaper to rent space in county lockups.108 At about the
same time, corrections officials in Georgia decided they didn’t need a 1,500-bed prison that
CCA was building “on spec” (i.e., without a prior operating contract in hand) in Stewart County,
19

prompting the company to halt construction.109
Things for the industry got so bad that in September 2000, Business Week published an article
headlined “ ‘Private Prisons Don’t Work’: For-profit facilities face a barrage of criticism – and
overbuilding has cut into profits and hurt stock prices.”110 The article, which noted that the CCA
real estate investment trust had 12,000 unfilled prison beds, concluded by suggesting that “the
industry’s heyday may already be history.”
By this time, history was also the way to describe the top manager of CCA. On July 31, 2000
Doctor Crants, the chief executive of the company and its affiliated real estate investment trust,
was terminated by the boards of the two firms. A few days later, CCA’s board replaced Crants
with John Ferguson, a banker who had served as Tennessee’s commissioner of finance and
administration. Ferguson ushered through a merger of CCA and its real estate investment trust,
calling it “the first step in streamlining our corporate structure…The reconsolidation allows our
management team to improve operations, enhance customer service and reduce costs.”111
The restructuring and the change in leadership at CCA can be attributed both to the company’s
operating problems and its financial difficulties (which are described in Chapter 4). Above all,
the moves were part of a desperate effort to stabilize the company. They were accompanied by
the election of a new board of directors, the settlement of shareholder lawsuits and other measures
meant to restore confidence in the company. These changes brought a reprieve for CCA, but
they did not resolve the company’s underlying operational and financial problems.

20

Chapter 3: “HONEST GRAFT”– HOW TO SEEK CONTRACTS
AND TRY TO SHAPE PUBLIC POLICY THE CCA WAY
A hundred years ago, George Washington Plunkitt, the turn-of-the-century Tammany Hall boss,
coined the phrase “honest graft” to refer to the use of one’s contacts and influence for personal
gain.112 Honest graft is alive and well ten decades after Plunkitt in the private prison industry,
especially on the part of CCA.
For an industry whose only customer is the public sector, it is no surprise that private prison
operators need to cultivate relationships with government officials. Yet CCA has taken this to
great lengths. Most controversial has been the involvement of CCA in the American Legislative
Exchange Council, a conservative group that promotes changes in state laws by drafting model
bills and networking with legislators.
CCA has also attempted to use its direct relationships with executive branch officials and
legislators, especially in its home state of Tennessee, to improve its chances of winning contracts.
The company has nurtured these relationships through its generous campaign contributions and
its practice of hiring former government officials.
CCA’s efforts to make friends and influence important people are also evident at the federal
level. The company has depended heavily on federal contracts since its founding, and it was the
feds who were largely responsible for helping CCA survive its brush with bankruptcy several
years back. The emphasis on homeland security in the wake of 9/11 has created new opportunities
for CCA and the rest of the prison industry.
For 20 years CCA has invested large amounts of time and money in the public sector, and it
expects to receive a continuing payoff.
Friends Of CCA
CCA recognized from the beginning the importance of having ties to the public sector. Its
founding fathers Tom Beasley and Doctor Crants had no experience in corrections. That is
apparently why they chose as a co-founder T. Don Hutto, who had served as the commissioner
of corrections in Arkansas from 1971 to 1976 and had held the same position in Virginia from
1976 to 1981. As noted in Chapter 2, Hutto’s record in Arkansas was controversial enough to be
criticized by the U.S. Supreme Court, but there was no doubt that he was well connected in the
world of prisons.
At the federal level, CCA’s most important recruit from the public sector has been J. Michael
Quinlan, who served as director of the Federal Bureau of Prisons from 1987 to 1992. Quinlan

21

has held various positions at CCA since 1993, including that of president and chief operating
officer. He is currently senior vice president. In 2002, CCA’s current chief executive, John
Ferguson, described Quinlan as “a major reason why we have garnered the credibility that we
have amongst our valued clients.”113
John Ferguson, the company’s current chief executive, was the Commissioner of Finance for
the state of Tennessee from 1996 to 2000. Ferguson was one of the members of a Transition
Advisory Council appointed by Gov. Don Sundquist in 1998 to make recommendations on
policy matters when the state was considering privatizing up to 70 percent of its prison system.114
Ferguson is just one of a series of state officials in Tennessee who have left the public sector in
recent years to join CCA. Among the others are:
• Brian Ferrell, an aide to Gov. Sundquist, who became CCA’s vice president for government
relations;115
• John Tighe, Sundquist’s top health care advisor, who became CCA’s vice president of health
services;116
• Natasha Metcalf, commissioner of human services, who became CCA’s vice president for
local government customer relations;117 and
• Tony Grande, commissioner of economic and community development, who became CCA’s
vice president of state customer relations.118
The revolving door is not restricted to Tennessee. For example, Joseph R. Johnson Jr., who
joined the board of CCA in 1996, had important political connections from his time as secretary
of health in New Mexico, national campaign manager and political advisor to Virginia Gov.
Douglas Wilder, executive director of Jesse Jackson’s Rainbow Coalition and political strategist
to District of Columbia Council member John Ray.
When a 1998 federal report linked violence at CCA’s Youngstown facility, which housed prisoners
from the District, to mistakes by the company and the city, Johnson publicly disputed many of
the findings, including the charge that CCA cut corners in critical areas, leading to the serious
security issues.119 The year before, Johnson had been paid a fee of $382,000 for consulting
services related to CCA’s contracts with Washington, D.C. for the housing of prisoners at
Youngstown and at the D.C. Community Treatment Facility. In addition, in 1997, CCA paid
$911,000 to National Corrections and Rehabilitation Corporation–a company co-owned by
Johnson–for rehabilitation services rendered at the Dallas County State Jail facility.120

22

Money Go Round
CCA’s ties to the public sector are not limited to the hiring of former public officials. The
following sections provide some examples of how the company apparently tries to use campaign
contributions, personal relationships and other means to gain an edge in seeking contracts.
Tennessee. CCA used its connections in its home state to help it obtain some of its earliest
contracts to manage city and county facilities, and later it tried to use those relationships in an
audacious attempt to take over the prison system of the entire state. The latter goal, which was
attempted on two different occasions, was ultimately unsuccessful, but this was not for a lack of
trying. In fact, CCA’s failure may have been the result of having too much political “juice,”
resulting in a backlash against the company as well as the politicians who were pushing prison
privatization.
The story began in 1983 when Tom Beasley, fresh from a stint as chairman of the Tennessee
Republican Party during Lamar Alexander’s first term as governor, co-founded CCA. Beasley
and Alexander went back a long way. As an undergraduate at Vanderbilt University, Beasley
used to rent an apartment above Alexander’s garage. Alexander’s wife Honey invested $5,000
in CCA in 1984. This investment didn’t look good when CCA made its first move to take over
the state’s prison system in 1985. But instead of simply selling her shares, possibly at a loss,
Honey Alexander took advantage of some assistance from friends of her husband and CCA.
The venture capital firm run by Jack Massey, a long-time political backer of Gov. Alexander
who had also helped CCA get started, arranged for Honey Alexander to exchange her CCA
stock (which was not yet publicly traded) for shares of South Life Corporation, a privately held
Tennessee insurance company. She ended up with a profit of $133,000 when she sold the insurance
stock.121
Other than Honey Alexander, CCA’s early investors included House Speaker Ned McWherter
and State Insurance Commissioner John Neff. McWherter later became governor (1987-1995)
and was a Prison Realty Trust board member from 1999 to 2000. McWherter, like Honey
Alexander, sold his CCA stock in 1985 to quell conflict-of-interest perceptions.122
Although CCA lost its takeover bid, it continued to do its best to influence public policy in
Tennessee. The company contributed generously to the gubernatorial campaigns of Don
Sundquist, who was first elected in 1995 and served until 2003. The Republican candidate
knew CCA and its key founder very well. Sundquist and Beasley were business partners in Red,
Hot & Blue, a barbeque franchise.123
In 1997, after CCA launched its second attempt to take over the state prison system, House
Finance Committee Chairman Matt Kisber revealed that he and a small group of state officials
had met in secret with CCA to discuss the privatization plans. Kisber insisted that even though
CCA had been involved in the discussions, that didn’t necessarily mean that the company had

23

an inside track.124 It certainly looked that way. In fact, it was CCA that had gotten Kisber and
Senate Speaker John Wilder to introduce the privatization measure. The company’s chief lobbyist
was Betty Anderson, the wife of House Speaker Jimmy Naifeh.125
According to investigative reports on the company’s early years, CCA was even more aggressive
in seeking county contracts in Tennessee. A 1988 article in the publication In These Times
quoted CCA’s director of investor relations as saying that so many of the local officials the
company negotiated with were “small-minded people, rednecks” that “you have to get in and
go down to their level.” The article reported that in 1984, “just before the Hamilton County
Commission was to vote on CCA’s proposal to establish the Silverdale work farm, the company
gave contracts directly to three of nine sitting commissioners.”126
Ohio. This is another case in which CCA worked with relatives of public officials to advance its
interests. In 1995 CCA negotiated a sweet deal in which the depressed city of Youngstown
provided 100 acres of land for $1 along with other subsidies to assist the company in its
construction of a 2,000-bed facility that would house prisoners from the District of Columbia.
Years later it was revealed that CCA had negotiated the tax abatement part of the subsidy package
with the help of V Companies, a consulting firm run by Paul Voinovich, the brother of Ohio
Gov. George Voinovich. CCA paid V Companies $3.5 million for its services.
What made this fact more controversial was that in 1996 Gov. Voinovich vetoed a provision in
the state’s budget bill that would have enabled the Youngstown school system to challenge the
tax abatements because of their impact on revenues for education.127 Apparently, private prison
subsidies were deemed more important than funding for schools.
Georgia. In this case there was an appearance that CCA used its contacts to try to influence what
was supposed to be an arm’s-length bid evaluation process. In 1997 CCA was one of four
companies competing for a $655 million contract to build and run two private prisons in Georgia.
According to a report in the Atlanta Journal and Constitution, during the bidding process Jim
Hammock, a lobbyist for CCA, spoke 48 times with Corrections Commissioner Wayne Garner–
in apparent violation of state rules. Garner said he and Hammock did not have substantive
discussions about the bidding process or CCA.128
Garner said that CCA got the contract for the two facilities because it had the lowest price. Yet,
according to the same newspaper article, the state had requested bids for several different numbers
of prison beds. CCA’s bid scored well for a prison of 401-500 beds, but the state ended up going
for 1,000 beds, a configuration for which CCA’s bid had been the highest.

24

Smart ALEC?
CCA has not been satisfied simply with trying to influence public officials in its efforts to win
contracts. It has also worked to bring about changes in state laws that would likely increase the
demand for its services. It has pursued this objective by working with a 30-year old conservative
organization called the American Legislative Exchange Council.129 ALEC, which remained
relatively unknown until the past decade, has worked to influence state legislators to pass laws
which in the criminal justice area include tougher sentencing rules. By 2002 a third of the
nation’s state lawmakers were members of ALEC. Members gather at ALEC meetings to swap
ideas and form model legislation, which legislators then take back to their states and try to
enact.
CCA has long been one of the private sector members that pay $5,000 to $50,000 a year to help
shape ALEC’s agenda. In addition to its general membership, CCA has paid $2,000 a year for a
seat on ALEC’s Criminal Justice Task Force, which has at times been chaired by CCA executives.130

At the 2002 trade show sponsored by the American Correctional Association in Philadelphia,
CCA Vice President Louise Green told National Public Radio (NPR) that belonging to ALEC
gives the company a chance to educate state lawmakers. At the show, NPR reported, Wisconsin
State Representative Scott Walker proudly declared that he was part of a group of lawmakers
that had helped pass the state’s “truth in sentencing” legislation, which was similar to a model
bill prepared by ALEC. NPR noted that “the Wisconsin Department of Corrections says the
truth in sentencing law will add to the state’s prison population in the years to come. That’s
money in the bank for Corrections Corporation of America.”
A former head of Wisconsin’s prison system, Walter Dickey, told NPR that it was shocking that
lawmakers would write sentencing policy with help from ALEC. But James Ball, Vice President
of Customer Relations for CCA, told NPR that the company did not advocate for longer sentences.
He also claimed that ALEC is merely a research organization, not a promoter of public policy.
A different impression was given by Harold Brubaker, a member of ALEC and a state legislator
in North Carolina, when he was interviewed on a BBC Radio program on private prisons in
April 2003. The interviewer asked whether “there may be some vested interest in companies
like Wackenhut and CCA pushing for harder, tougher legislation.” Brubaker responded:
“Absolutely. Yes, I can visualize the point.”131
ALEC’s apparent influence has been on display in the Texas legislature. Rep. Ray Allen, chair
of the House Corrections Committee, is an active member of ALEC, serving as Public Sector
Chair of the organization’s Criminal Justice Task Force.132 In 2003 Allen introduced legislation
that would have paved the way for much more privatization of the Texas prison system, a
significant portion of which is already operated by CCA and its competitors.133 The legislation
(which ended up being folded into another bill) did not pass, but state officials in Texas gave a

25

boost to CCA in November 2003 by awarding the company contracts to operate six additional
prisons.134
State Campaign Contributions
“We literally spent millions of dollars educating our legislators on the advantages of private
prison operators,” CCA’s chief executive Doctor Crants told Business Week in 1990.135 By all
accounts, that educational process has continued, with both Republicans and Democrats being
tutored. During the 1990s it undoubtedly played a key role in the rapid expansion of state prison
spending.
Providing a detailed account of the company’s use of campaign contributions to influence state
policy is hampered by the fact that relatively complete data became available only in the late
1990s. During the past five years, according to the Institute on Money in State Politics, CCA
and its executives have contributed a total of about $1 million in state races.136
In the 1998 elections, the private prison industry contributed more than $546,000 to state-level
candidates in 25 states. CCA (along with its employees) was the top contributor, giving a total
of $353,106 or nearly two-thirds of the industry’s total. CCA also spread its largesse most
widely–195 candidates in 16 states–but the company concentrated its efforts in California,
Tennessee, Iowa, Idaho, Colorado and Texas. Winning candidates and incumbents from both
parties were the primary recipients of CCA’s contributions; $315,106 or 89.2 percent of CCA’s
contributions went to lawmakers who would most likely be involved with legislation related to
prison privatization.
According to the Institute’s data on the 2000 election cycle, private prison companies and their
employees contributed a total of $1,125,598 to 830 candidates in 14 Southern states. Ninety
percent of the legislative contributions went to incumbents and winning candidates. The total
included contributions from the companies, their executives and by lobbying firms hired by the
private prison companies. CCA, which made more than 600 contributions (including those of
its employees) for a total of more than $443,300, was the top giver in the industry. Wackenhut
was a distant second at $237,750. CCA also gave 23 contributions totaling more than $36,580
to state political party committees.
It appears that CCA has tried to use its deep pockets to wield influence in a number of states,
with varying degrees of success, as the following shows:
North Carolina
Due to serious problems over a period of time involving escapes, lawsuits and substandard
services at its private prisons, North Carolina moved away from private correctional services

26

during the late 1990s. The state ended its management contract with CCA and took over operations
at the two CCA facilities in the fall of 2000 after the company failed to correct its recurring
management problems. The Associated Press story on the switch back to public management
described it as “the end of a two-year experiment that some call a flop.”137
Despite the industry’s track record, CCA and other private prison companies lobbied successfully
for the expansion of the state’s corrections system. Senate Bill 25, which was signed by Gov.
Michael Easley in May 2001, authorized the lease-purchase of three new prisons (for up to
1,000-beds each ), for which the state borrowed $218.4 million through an entity called the
North Carolina Infrastructure Finance Corporation. According to the Institute on Money in
State Politics, supporters of the lease-purchase arrangement contributed more than $226,519 to
candidates in North Carolina during the 2000 election cycle. CCA was the second-highest
contributor, after Cornell, at $46,253.
Georgia
In Georgia a bill was introduced in 2001 that would have allowed existing private prisons to
stay in operation, but it would have banned future private facilities without the permission of
state and local authorities. The measure would also have banned the importation of sex offenders
and other violent criminals, and required private facilities to pay the costs associated with the
capture of escapees. Representatives approved the measure overwhelmingly in 2001, but the
bill died in the Senate corrections committee. Sen. Carol Jackson, vice-chairwoman of the
committee, and Sen. Greg K. Hecht, chairman of the committee, both received contributions
from private prison companies. The industry as a whole gave a total of $56,650 in contributions
during the legislative battle. CCA, whose lobbyists contributed $25,950, was a close second
after Cornell.
Mississippi
In 2001 the Mississippi legislature overrode a veto by Gov. Ronnie Musgrove in order to preserve
a plan under which $6 million in payments was to be spent for empty prison beds at two private
prisons, including CCA’s Delta Correctional Facility.138 The groundwork to keep state funding
for private prisons had been laid during the 1999 elections, during which the industry had made
more than $41,000 in campaign contributions–a significant amount in a state with fewer than
2.8 million residents. CCA’s lobbying firm Buddy Medlin and Associates gave a total of $18,385,
or more than 44 percent of the total given by the industry.
Florida
Governor Jeb Bush’s budget plan, which included a $114 million increase in the corrections
budget at the expense of education, took center stage during the 2001 legislative session. Also
at stake was the future of the state’s controversial Correctional Privatization Commission. Senate

27

Bill 832 and House Bill 727 addressed concerns over ethics charges related to the Commission;
both measures would have abolished the commission and reassigned its duties to the Department
of Corrections. Intense industry pressure, including more than $158,000 in campaign
contributions, enabled the commission to survive. CCA and its officials gave a total of $14,100.
Oklahoma
In Oklahoma the private prison industry built six prisons in the state during the 1990s.139 State
records show that officers of private prison companies and industry lobbyists gave at least
$29,000 to Gov. Frank Keating’s two campaigns and to the campaigns of influential lawmakers.
Pat McCoy, a prominent Oklahoma City developer who had done $4 million of business with
CCA, gave Keating’s campaign $5,000 in 1997. The CCA contributions became an issue in
1998, when Keating asked the state Board of Corrections to reconsider its decision to cancel
CCA’s contract to run the North Fork Correctional Facility in a dispute over payment rates. The
Board voted to terminate anyway, with one board member complaining to a reporter that CCA
officials “talk out of both sides of their mouth in a way that is unusual in Oklahoma.”140 The
Board and CCA later reached a settlement that allowed the company to maintain its contract.
The Significance of Federal Contracts for CCA
CCA got its first contract from the federal government and has continued to depend on its
friends in Washington, DC. In 2002 the three federal agencies with correctional and detention
responsibilities–the Federal Bureau of Prisons (BOP), the United States Marshals Service
(USMS) and the Immigration and Naturalization Service (now a branch of the Department of
Homeland Security and known as Immigration and Customs Enforcement, or ICE)–accounted
for about 32 percent of CCA’s total revenues.
The point in CCA’s history when federal business was most crucial was in the late 1990s, when
many state governments were cutting back their prison spending. At this time the BOP, which
had long resisted privatization, was forced to move in this direction, partly as a result of pressure
from Republicans in Congress (and to some extent also from the Clinton Administration) and
partly because the bureau simply could not expand its own capacity fast enough to house a
prison population that was mushrooming because of harsher sentencing rules and the “war on
drugs.”
Another factor was the explosion of the so-called “criminal alien” population in the wake of the
1996 Immigration Reform Act. The federal government’s campaign to lock up non-citizens for
a wide range of crimes, including relatively minor ones such as attempting to re-enter the country
without proper documents, generated a huge new demand for prison beds. The BOP addressed
the problem by calling on private contractors to help meet its “criminal alien requirements,” or
CAR. As a result of the CAR-I solicitation process, CCA got two contracts in 2000 that allowed

28

it to fill its long-empty speculatively built prison in California City, California, and its Cibola
County Correctional Center in New Mexico. Together, these deals are estimated to be worth
$760 million to CCA over ten years. In 2002 CCA was rewarded again with a $103 million
CAR contract to fill its struggling McRae Correctional Facility in Georgia. Analyst Judith Greene
has referred to these CAR contracts as a “virtual bailout” for CCA.141
CCA and the rest of the prison industry are hoping for another bonanza from federal spending
linked to homeland security. As CCA noted in its most recent 10-K filing:
We believe that recently proposed initiatives by the federal government in connection
with homeland security should cause the demand for prison beds, including privately
managed beds, to increase. The proposed funding [for homeland security] is intended
to support the agencies’ efforts to prevent illegal entry into the United States and target
persons that are a threat to homeland security. We believe that these efforts will likely
result in more incarceration and detention, particularly of illegal immigrants, and
increased supervision of persons on probation and parole.142
The fruits of this can already be seen in the October 2003 announcement by CCA that it had
signed a new contract with ICE at its Houston Processing Center. The company also announced
its intention to more than double the capacity of the facility to 905 beds.143
CCA’s federal prospects have no doubt been aided by the continuing presence of former BOP
director J. Michael Quinlan as well as the company’s political contributions. Since 1997 the
company has given $101,800 in soft money contributions (i.e. those not designated for a specific
candidate) to the national Republican Party, and its political action committee has given $24,500
in contributions to Congressional candidates during the past two election cycles. Among the
recipients have been Sen. Saxby Chambliss of Georgia, chair of the Senate Judiciary
Subcommittee on Immigration, Border Security and Citizenship, along with two other members
of that panel—Larry Craig of Idaho and John Cornyn of Texas. Craig and Cornyn are also
members of the Subcommittee on Crime, Corrections and Victims’ Rights. On the House side,
CCA’s PAC gave to three members of the Committee on the Judiciary—Marsha Blackburn of
Tennessee, Tom Feeney of Florida and Lamar Smith of Texas. Blackburn and Smith are members
of the Subcommittee on Immigration, Border Security and Claims.144
APCTO: Lobbying for Privatization
“Adverse media reporting is a bigger issue with the banks than you might think. It underscores
the need for getting a global privatization voice out there.” So said Lisa Cohen of Summit
Bancorp, speaking at the World Research Group/Reason Public Policy Institute prison
privatization conference in 2000.145

29

That voice is the Association of Private Correctional and Treatment Organizations (APCTO).
CCA and other private prison companies formed APCTO in 2001 to combat the industry’s
negative image, restore investor confidence and lobby for new business. According to CCA’s
director of government affairs, Jeremy Wiley, “APCTO will work diligently to educate key
elected officials about our membership and the whole spectrum of vital public services we
provide…APCTO will lay the foundation to become a defining force in the policy debates
taking place in Congress, state legislatures and local governments.”146 APCTO’s website lists
CCA’s John D. Ferguson as first vice president and the company’s vice president of marketing
and communications, Louise Green, as co-chair of the public relations committee.147
The organization’s 2002 federal legislative agenda included: creating a privatization caucus in
the U.S. Congress; supporting cost cutting measures in all departments; developing relationships
with appropriate federal agencies and Congress; and increasing opportunities for private
correctional and treatment organizations in the budget process.148
At its Industry Day at Capitol Hill on April 3, 2003 APCTO launched the Congressional Caucus
on Public-Private Partnerships, co-chaired by Reps. Chris Cannon of Utah and Charlie Stenholm
of Texas. The caucus aims to promote “greater use of private sector providers in the corrections
and treatment field.” APCTO participated in “nearly 50 meetings with individual congressional
members and staff to discuss APCTO’s legislative agenda.”149
As part of its strategy to “get the good word out to those who set public policy for our industry,
to our current and potential governmental customers, and to the general public,” APCTO is
summarizing “the best of the research literature on privatization” to be used “to get the objective
truth of our industry to decision makers and the media. A subsequent project will establish a
clearing house on the APCTO website to keep the membership and general public apprised of
the latest privatization research.”150 But as we discuss in Chapter 9, that research will almost
certainly conclude that privatization is superior.
More APCTO-sponsored pro-privatization research is to come. APCTO is “attempting to identify
several colleges or universities that have strong criminal justice programs that APCTO can
approach about the prospects of conducting further research into public-private partnerships in
the corrections and related fields.” Meanwhile the lobbying also continues apace. APCTO “will
be conducting outreach to state and national think tanks and editorial boards from key state
newspapers, and will be creating an opinion editorial campaign.”151
Prison companies such as CCA have always claimed that they deserve to take over the
management of prisons because they could do a better job. If this is true, it begs the question
why CCA has had to go to such lengths to expand its business.

30

Chapter 4: A WILD RIDE: CCA’S FINANCIAL PERFORMANCE
For investors, the past two decades of CCA’s history have been a wild ride, characterized at
times by astounding rates of growth and at other times by disastrous financial results and shocking
operational scandals. Within a short period of time, the company went from being ignored to
being lionized to being condemned. As one Wall Street analyst put it: “After operating roughly
ten years in relative obscurity, CCA became a darling of the investment community in the mid1990s before crashing and burning in a spectacular fall from grace in 1999.”152
That fall involved the destruction of hundreds of millions of dollars in shareholders’ equity as
investors lost faith in a dubious decision by management to create a real estate investment trust.
The company narrowly escaped a bankruptcy, thanks only to the willingness of its creditors to
restructure about $1 billion in debt. Chief executive officer and co-founder Doctor Crants was
unceremoniously expelled, and some $120 million was spent to settle lawsuits brought by angry
investors. Critics who had long pointed to the company’s operating deficiencies could now
point to financial disarray as well. The profiteers, it seemed, were not very effective at making
a profit.
Over the past three years, CCA has sought to escape its unsavory reputation and to present itself
as essentially a new company. In some respects it has been successful, but serious questions
remain. But before assessing the company’s future, let’s review its financial past.
The 15-Minute Deal
CCA apparently had no difficulty raising funds for its start-up in 1983. CCA founder Tom
Beasley, the story goes, went to see venture capitalist Jack Massey and quickly got the green
light. “We made the deal and shook hands in 15 minutes,” Beasley told Forbes magazine in
1985.153
Despite the failure of its audacious attempt to take over the entire prison system of Tennessee,
CCA had other big plans and needed money to finance them. In August 1986 it filed a registration
statement for a proposed initial public offering of two million shares of stock. The company had
already attracted the attention of some well-known financial players. Its underwriting syndicate
was to be managed by Donaldson, Lufkin & Jenrette, Prudential-Bache Securities and the
Scandinavian investment bank Enskilda Securities. Yet the launch was not so impressive. The
initial selling price turned out to be $9 a share, well below the $14-16 company executives had
hoped for.154 In other words, the company was able to raise only about $18 million rather than
$28-$32 million.
CCA’s revenues grew handsomely in the late 1980s, increasing at a rate of about 50 percent a
year. “We are recession-proof,” crowed Beasley in early 1991.155 Yet the company’s profit
31

performance did not keep pace. CCA had its first profitable quarter in 1988, but the profit was
meager. CCA posted a profit of $1.6 million for the full year in 1989, but the profit plummeted
the following year and disappeared in 1991. These results kept the company’ stock price in the
cellar, as low as $3 a share in 1987. In the early 1990s it briefly reached $10 but mostly sold
between $5 and $8.
The market began to look more favorably on CCA in 1994, following the completion of two
profitable years and the attainment of annual revenues in excess of $100 million. In December
1994 CCA graduated from Nasdaq to the more prestigious New York Stock Exchange, after
which the stock soared. It reached a level of about $50 a share, prompting the company to
announce a 2-for-1 split in October 1995 (a move designed to keep the price of a single share
price affordable). That month the Business Week stock advice column quoted an investment
manager as saying: “It’s the stock to own for at least the next 10 years if you’re looking for a
company that’s dominant in an erupting market.”156
By 1996 CCA was riding high. It issued 2.85 million new shares in an offering underwritten by
regional investment banks J.C. Bradford and Stephens Inc., both of which had been strong
proponents of the industry. In June 1996 CCA chief executive Doctor Crants, noting CCA’s
“unprecedented success in recent months,” announced another 2-for-1 stock split, reflecting the
continuing strength of the stock.157
REITs and Restructuring: CCA Overreaches158
CCA sought a way to extract even more investment capital from the stock market to pay for its
ambitious expansion plans. The solution it hit on was the real estate investment trust. REITs are
publicly-traded entities that own and manage real estate but do not pay corporate income taxes.
However, these tax avoidance entities must distribute 95 percent of their operating income as
dividends to shareholders. These characteristics are intended to boost the price of REIT shares
and thereby help raise even more capital.
In July 1997, CCA Prison Realty Trust, a REIT registered in Maryland, made an initial public
offering of 21.3 million shares, priced at $21, raising more than $400 million. Most of the
proceeds of the offering were used to purchase nine facilities from CCA, which leased them
back and continued operating them under government contracts. This process improved the
look of CCA’s finances but amounted to the kind of off-balance-sheet transactions that would
later become notorious in connection with the fall of Enron. Back in 1998 an investment banker
told the financial magazine Investment Dealers’ Digest that REITs such as Prison Realty were
“an off-balance-sheet financing vehicle if you want to pursue more acquisitions.”159 The fact
that Prison Realty owned only properties connected to CCA made it a captive REIT.
The use of off-balance-sheet financing was also at the center of numerous deals in which
construction of CCA’s prisons was financed through the issuance of tax-exempt lease-revenue
32

bonds (or certificates of participation). These financing vehicles involve the creation of a nonprofit entity that issues the bonds and acts as the titular owner of the facility. The bonds are
backed by lease payments made by the correctional agency, which also pays CCA an operating
fee. More than a dozen CCA facilities were built using this arrangement, which amounts to a
form of taxpayer-subsidized low-cost financing for what is essentially a private facility. This
financing is only one of the ways in which CCA (and other private prison operators) have
received state and local economic development subsidies. It has also received tax abatements
(in Youngstown, Ohio, for example), infrastructure assistance and other incentives.160
While Wall Street generally approved of the REIT deal, some observers expressed conflict-ofinterest concerns over the fact that Doctor Crants, chairman and chief executive of the CCA
operating company, was also to serve as chairman of Prison Realty, and his son D. Robert Crants
III was to be president of the trust.161 There also were some raised eyebrows over the price the
REIT was paying to CCA for the nine prisons–more than $300 million for facilities that had cost
only $170 million to build, a premium of some 80 percent. The newsletter On Wall Street pointed
out that, in light of how difficult it was to sell prisons, the premium “seems very pricey.”162
Nine months after CCA Prison Realty Trust was formed, it and CCA announced a plan under
which the REIT would acquire the management company (CCA). Operating as a subsidiary of
the REIT, CCA would be controlled by insiders and freed from the direct pressure of showing
quarterly earnings growth, while CCA Prison Realty Trust would enjoy REIT tax benefits as the
owner of the entire CCA portfolio of prisons. Many CCA stockholders were less enthusiastic
about the deal, arguing that the amount they were going to be paid for their shares was below the
recent market price.163 Several major pension funds, including the California Public Employees
Retirement System and the New York State Common Retirement Fund, came out against the
deal.164 In the end, however, the merger was approved, and the surviving public company took
the name of Prison Realty Corporation (later changed to Prison Realty Trust Inc.).

Faced with slumping occupancy rates in its facilities, Prison Realty Trust had to take on more
debt to survive. In May 1999, it landed a $1 billion credit agreement (secured by the Trust’s real
property) from a syndicate of lenders led by Lehman Brothers. In the same period, it was hit
with several shareholder class-action lawsuits charging that the REIT was paying an artificially
high management fee to its operating subsidiary CCA.165 The increase in the number of REIT
shares generated by the merger increased the amount that had to be paid out in dividends.
All of this raised doubts about the wisdom of the restructuring, given that an arrangement that
was supposed to free up capital had generated a financial squeeze instead. Securities analyst
James Macdonald of First Analysis Corporation concluded in November 1999 that “the financial
structure is unsustainably flawed. Ultimately, it needs to be demolished.”166 Even more serious
was the fact that in Prison Realty’s 10-K filing for 1999, the company’s auditor, Arthur Andersen
LLP, warned that the company’s financial difficulties “raise substantial doubt about [its] ability
to continue as a going concern.” Andersen noted that the same concern had been raised by the
auditors for CCA, which was privately held at the time.167
33

As Prison Realty Trust’s share price fell to record lows, Doctor Crants was ousted as chairman
in late December 1999, though he remained chief executive and a member of the board. This
occurred as Prison Realty, struggling to meet its dividend obligations, announced that it had
agreed to a restructuring program led by an affiliate of Fortress Investment Group LLC and
affiliates of The Blackstone Group. These parties, along with an affiliate of Bank of America,
agreed to pump $350 million into Prison Realty, which would cease to be a REIT, and help to
expand its credit line.
In February 2000, Pacific Life Insurance Company, a large holder of Prison Realty shares,
proposed a competing restructuring plan, which Prison Realty tentatively accepted. While the
terms were being ironed out, Prison Realty fell into default under the terms of its $1 billion
credit agreement and had to get a waiver from its lenders. In June 2000, talks between Prison
Realty and Pacific Life broke down and the prison company decided to restructure on its own.
It devised a plan under which it would merge again with CCA and cease to be a real estate
investment trust. Within a few weeks, Crants was deposed as chief executive of Prison Realty
and CCA, and he was forced off the board.
In August 2000, Prison Realty agreed to a $120 million settlement of the various shareholder
lawsuits pending against the company, paving the way for approval of the new merger plan the
following month.168 Thus was the new Corrections Corporation of America created. In November
2000, the lenders involved in the $1 billion credit agreement that CCA inherited from Prison
Realty agreed to a series of amendments that helped the company avoid default. Despite this
boost, CCA reported that in 2000 it had lost an astonishing $730 million, reflecting a huge
write-down of asset values. To shore up its share price, which had fallen below $1, raising the
danger of being delisted from the New York Stock Exchange (and thus losing its access to
capital), CCA implemented a 1-for-10 reverse stock split in May 2001–an unusual and desperate
move to prop up the stock price.
Lehman Brothers and the company’s other lenders came through again, allowing CCA to
restructure and extend its credit agreement, with the stipulation that the company raise $100
million in new capital (which it did by selling assets such as two prisons in North Carolina and
one in Nevada). This allowed the company to proceed with the settlement of the shareholder
lawsuits and prompted the major credit rating services to upgrade their outlook on CCA. A
stock analyst at Lehman Brothers lauded all this as a “remarkable turnaround.”169 The Internal
Revenue Service did not join in the praise. It pursued charges against CCA in connection with
questionable tax deductions taken in 1997 by the former Prison Realty Trust. In late 2002 CCA
agreed to pay the IRS $52 million to settle the charges.170

34

The New Investment Thesis
Over the past couple of years, CCA has managed to persuade Wall Street analysts that it has
changed and that it is poised to prosper. This has apparently not been very difficult, since nearly
all of the few analysts who follow the company work for firms–above all, Lehman Brothers–
that also have investment banking relationships with CCA, which now have to be disclosed in
each analyst report.
It is interesting that the analysts, following management’s lead, no longer talk in terms of CCA’s
providing better or more cost-effective services than the public sector. The new investment
thesis is simply that prison overcrowding persists and that government agencies will have no
choice but to use the services of firms such as CCA. As a July 2002 report by an analyst at
Jefferies & Company, which has co-managed debt offerings for CCA, put it:
Although the growth rate in incarcerations has slowed in recent years, the absolute
number of inmates continues to swell…Unfortunately, facilities at both the state and
federal level are overextended, making placement of new prisoners much more difficult.
With state budgets lacking sufficient resources to fund the development of new prisons
and jails and the federal government ramping up drastic homeland security efforts,
something needs to be done. While lighter or alternative sentencing can alleviate shortterm budget constraints, it does not address the outstanding overcrowding issue. Instead,
increased utilization of private prison capacity and services appears to be a logical
choice.171
This analysis has some significant holes. For example, it assumes that the private sector will be
the source of significant new prison capacity. CCA tried to play that role in the late 1990s by
building prisons on spec, with disastrous results. The newly humbled and streamlined CCA is
probably not inclined to use a lot of its own money to finance new prisons, given that it is still
weighed down by debt. In the short term, CCA does have unfilled beds that it will be happy to
provide, but that will hardly solve all of the public sector’s overcrowding problem. In early
2003 CCA increased its overall capacity, not by building a new facility, but instead by spending
$47 million to buy the 1,200-bed Crowley County Correctional Facility in Colorado that had
been run by Dominion Correctional Services. Yet a couple of months later, CCA lost 1,500 beds
when the Virginia Department of Corrections terminated its contract to run the Lawrenceville
Correctional Center.172 In September 2003 CCA did take a step to increase its capacity by
announcing plans to complete construction of the 1,524-bed Stewart County Detention Center
in Georgia, which had been suspended in 2000.173
CCA’s ability to invest in new facilities is hampered by the heavy debt load that the company
continues to carry At the end of 2002, CCA’s debt was $956 million, compared to only $125
million at Wackenhut Corrections. The repayment schedule for CCA’s debt soars to about $229
million 2007, $250 million in 2009 and $450 million in 2011.174

35

CCA’s annual interest burden ($87 million in 2002) has helped keep the company’s net income
in the red. The net loss in 2002 was about $29 million. That’s why management and friendly
analysts prefer to speak in terms of EBITDA (earnings before interest, taxes, depreciation and
amortization), which makes the results more palatable but does not conform with strict accounting
rules. Using EBITDA, CCA’s earnings last year were a more respectable $189 million. Yet this
controversial way of looking at financial results does not change the fact that the company is
struggling in ways that could have a detrimental impact on operations.
The company has managed to increase its occupancy rate to about 91 percent, thanks to factors
such as the federal contract for the McRae facility in Georgia and the more recent emergency
contract from Alabama to house about 1,400 prisoners at a CCA facility in Mississippi. Lehman
Brothers estimates that for every additional 1,000 beds CCA fills it enjoys an increase of about
$5.5 million in EBITDA.175 “Take or pay” deals, such as the one at McRae, in which the company
receives remuneration as if 95 percent of the facility were occupied, are especially attractive to
CCA.
Analysts have seized on these deals to issue rosy forecasts for the company. An October 2003
report by Jefferies & Company said CCA “is on track to meet its stated expansion goals.”176
Recent quarterly conference calls have tended to be love fests, with the few analysts participating
going out of their way to praise management for a job well done. On the August 6, 2003 call,
Susan Jansen of Lehman Brothers prefaced her question by saying “congratulations on another
fine quarter.”
This positive outlook has helped to boost the stock price, which rose to about $27.50 in midNovember, up from about $18 at the beginning of the year. Also helping is the fact that CCA has
begun to generate “real” net income ($18.2 million in the third quarter of 2003) once again. Its
“operating margin per compensated man-day” (the profit on its average prisoner per diem of
about $51) has recently increased to around 25 percent.
There is some wariness, however. The market pushed down CCA’s stock price for a while in
early August 2003, apparently out of concern over the new and relatively expensive debt taken
on by the company. It may also be significant that CCA’s largest institutional shareholder–FMR
Corporation (parent of the Fidelity mutual funds)–reduced its holdings by 527,000 shares, or
about 17 percent, since the beginning of 2003.177
Overall, it cannot be denied that CCA is in better financial condition than it was a few years
ago, but that’s not saying much, considering how bad things were. This is a company that is still
weighed down (in debt) by the mistakes of the past and still asks investors to sustain a questionable
belief in a huge pot of gold in the future.

36

Chapter 5: LOCKING DOWN LABOR COSTS
The rise of modern prison privatization was based in significant part on the notion that government
was doing a poor job of incarceration. “The work done in the public sector in the last 30 years
has been a dismal failure,” asserted Ted Nissen, president of now-defunct prison operator
Behavioral Systems Southwest, in 1985.178 As part of their sales pitch, companies such as CCA
made the bold (and perhaps contradictory) claim that they could operate prisons in a way that
was both superior in quality and lower in cost.
On the cost side of the equation, CCA and the other operators had to confront the fact that
prisons are a very labor intensive business. In its Securities and Exchange Commission filings
after going public in 1986, CCA said that labor accounted for about two-thirds of its operating
expenses. More recent filings do not specify an amount but say that labor is “the most significant
component of fixed operating expenses.”179 Obviously, any cost advantage would have to involve
this major portion of expenses. In a 2001 report for the Bureau of Justice Assistance, James
Austin and Garry Coventry put it this way:
This point of containing labor costs is the crux of the privatization movement. Prisons
are extremely labor intensive, with approximately 65 to 70 percent of the costs of
operating a prison going to staff salaries, fringe benefits, and overtime. Controlling
these costs is more difficult to achieve with unionized government workers. Private
firms typically use nonunion labor, allowing for the lowest benefit packages. Overall,
private firms claim that they can save 10 to 20 percent in prison operations due largely
to efficient handling of labor costs.180
For CCA, “efficient handling of labor costs” meant–and still means–keeping strict controls on
both wages and benefits, and this, in turn, required a policy of union avoidance. “Efficient labor
is precluded in public facilities in several states by unionized labor,” wrote Doctor Crants in
1991 while he was serving as CCA’s president, “Union contracts tend to increase wage costs
and promote unjustified job security.”181
It was to CCA’s advantage that the states that were initially most receptive to prison and jail
privatization–including Tennessee, Florida and Texas–were also ones in which unions were weak,
partly as a result of “right to work” laws that discouraged unionization. CCA remained totally
non-union from its founding until early 1993. In March 1993 CCA signed its first collective
bargaining agreement–with an independent (non-AFL-CIO) union representing 73 guards at the
Silverdale facility in Tennessee. The agreement was terminated a year later when the union was
decertified.182 In 1993 unions lost representation bids at two other Tennessee facilities: the South
Central Correctional Center in Clifton and the West Tennessee Detention Facility in Mason.183

In January 1996 CCA signed an agreement with an independent union representing 38 nonsecurity employees at the Shelby Training Center in Memphis, and the following year it
recognized existing union representation arrangements when it took over the Correctional
37

Treatment Facility in Washington, DC. Around the same time, it recognized a union representing
about 60 guards at Shelby.184 The next case of union recognition came in the late 1990s at the illfated Northeast Ohio Correctional Center in Youngstown, where CCA reached agreements with
the Teamsters (representing non-security personnel) and an independent guards union.185
These organizing efforts did not have much of an impact on CCA. At the end of 2001, by which
time the Youngstown prison was closed, only 515 of the company’s 15,156 employees were
represented by unions, and the union presence was limited to four facilities.186 In 2002 there was
some new organizing by the Security, Police and Fire Professionals of America that brought the
number of union-represented CCA employees up to 1,100. This was equal to about 8.2 percent
of CCA’s total workforce.187
CCA at times has professed neutrality on unions. For example, in 2001 a company spokesman
said, “we don’t take a stance as far as they’re good or they’re bad.”188 That same year, however,
organizers for an independent union charged that they were videotaped by management while
distributing literature outside the CCA-run Tulsa Jail and that employees were made to attend
meetings at which the warden warned them against supporting the union.189
What complicates an assessment of CCA’s labor record is the fact that many large unions shied
away from organizing the company’s workforce and instead supported a campaign, led by publicsector unions, that opposed the very existence of an industry dedicated to incarceration for
profit. Yet whatever was the main cause, CCA has remained largely non-union. This, along with
the company’s preoccupation with depressing labor costs, has helped create substandard working
conditions in CCA’s facilities.
Benefits and wages. The absence of unions during its early years enabled CCA to take what
was perhaps its most significant step in controlling labor costs: denying its employees the kind
of retirement benefits that unionized public-sector correctional employees ordinarily enjoyed.
CCA offered employees shares of stock (which initially had questionable value) rather than
pension benefits. A 1995 comparison of similar public and private correctional centers in
Tennessee found that the CCA-run prison had employee benefit costs 23 percent lower than at
the government-run facility. The study also found that higher-level administrative staff at the
CCA facilities received much more lucrative benefit packages than the typical employee.190
In 1997 an official at the Monroe County Sheriff’s Office in Florida calculated that a CCA
employee who retired at age 50 with 25 years of service would, over the rest of his or her life,
receive only about 14 percent of the pension benefits that a correctional officer employed by the
Sheriff’s Office would receive.191
These days CCA still does not offer a defined-benefit retirement plan to employees, but it does
enable workers with a year or more of tenure to participate in a 401(k) plan. The company,
however, will match employee contributions only up to five percent of pay. In addition, it takes
five years for employees to be fully vested in any company contributions.192 This means that
the company benefits financially from high turnover of its staff. Public-sector correctional officers,
38

by contrast, typically have defined-benefit pension benefits for which a worker is eligible at age
50 after 20 years of service or at any age with 25 years of service.
CCA has tended to be secretive about its salary levels, but occasionally details have become
public. In 1995 a newspaper reported that positions at a proposed CCA facility in Wythe County,
Virginia would have starting salaries as low as $13,840.193 A 1999 article in Corrections
Professional pointed out that guards at CCA’s Diamondback Correctional Facility in Oklahoma
were earning only $8.25 an hour, which it noted was barely above the federal poverty line for a
family of four.194 Guards at Youngstown were paid a more generous $11.84 an hour, but this was
below the $12.49 received by correctional officers at Ohio state prisons.195 In February 2003 a
state official in Colorado said that CCA was paying its employees in the state an average of
$8,000 a year less the salaries of public-sector correctional officers.196 In August 2003 the union
at the D.C. Correctional Treatment Center held a press conference to complain about inadequate
pay and forced overtime.197
The problem of low salaries is common throughout the private prison industry. According to the
Corrections Yearbook, the average starting salary of guards in private adult prisons in 2000 was
only $17,628, and the average maximum salary was a mere $22,082 . It should be noted that
these averages were calculated without information from facilities run by CCA, which declined
to provide data to the Corrections Yearbook. CCA’s non-cooperation was one of the reasons the
Yearbook’s editors finally decided to stop publishing salary data on private facilities.198
By comparison, data published in the U.S. Labor Department’s Occupational Outlook Handbook
show that in 2000 federal correctional officers had a median salary of $37,430. At the state level
the median was $31,860, and at the local government level it was $29,240.199
Executive compensation. Like most corporations, CCA’s quest for cutting labor costs disappears
when it comes to the firm’s top executives. In 2002, Chief Executive John Ferguson was paid a
salary of $400,000 and a bonus of $458,846. Senior Vice President J. Michael Quinlan had a
salary of $281,323 and a bonus of $131,562; Executive Vice President Irving Lingo Jr. had a
salary of $299,116 and a bonus of $199,312; Executive Vice President G.A. Puryear IV had a
salary of $168,617 and a bonus of $122,282; and Operations Vice President Jimmy Turner had
a salary of $186,576 and a bonus of $50,252. Each of the five men, the highest paid officers of
the company, also received stock options.200 It should be noted that the compensation received
by each of the five men was greater than the salary of the director of the Federal Bureau of
Prisons, who is in charge of a system with more than 100 facilities and about 160,000 prisoners–
far larger than CCA’s.
Wage & hour compliance. It has been alleged that some of CCA’s facilities have violated the
overtime pay and minimum wage rights of its employees. In 2001, lawyers in Mississippi brought
three suits against the company in federal court for violations of the Fair Labor Standards Act.
The suits charged that guards were required to attend meetings off the clock and were barred
from clocking out on days during which they worked more than eight hours.201 CCA settled the
cases out of court. According to an online database of wage and hour violations, CCA’s Winn
39

Correctional Center in Louisiana paid $5,430 in 2000 to settle charges that it had violated
minimum wage rules in connection with 33 employees.202 At its San Diego Correctional Facility,
CCA paid $4,846 in 2000 for failing to pay the prevailing wage rate to 48 employees under the
federal Service Contract Act.203
Inadequate staffing levels. The need to work people overtime (and then shave off paid hours to
reduce the additional labor costs) can be seen as a reflection of inadequate staffing levels. For
example, a 1999 audit by the Georgia Department of Corrections of two CCA facilities in the
state found insufficient staffing at both prisons. As a result, auditors said, critical security posts
were sometimes not staffed for entire eight-hour shifts, and prisoners had easy access to tools that
could be fashioned into weapons.204 In his 1998 article on CCA in The Nation, Eric Bates quoted
a guard as saying “We’re always short…They do staff fewer positions—that’s one way they save
money.”205 A September 2003 audit of prisons by the state comptroller of Tennessee cited numerous
instances in which CCA had failed to live up to its contractual obligations on staffing at the South
Central Correctional Facility and the Hardeman County Correctional Facility.206

Lack of experience. Given the pay and benefit levels offered by private prisons operators, it is
no surprise that many of the people who apply for jobs and end up being hired do not have
extensive corrections experience. This was made abundantly clear in the report that the District
of Columbia Corrections Trustee issued in 1998 on the CCA-run prison in Youngstown. The
report, which cited inexperienced staff as a major contributor to the problems at the facility,
found that more than half of the senior correctional officers at Youngstown had no prior
correctional experience of any kind (or only minimal experience as security guards) before
being hired. The same was true of two of the nine assistant shift supervisors (lieutenants). Four
of the six shift supervisors (captains) had less than five years of experience in the field. Taking
into account the many inexperienced hirees among entry-level personnel, the report found that
overall, 80 percent of the security staff at the prison were new to the field of corrections.207
Inexperienced staff was also cited by Hawaii state auditors in their 2001 study of violent outbreaks
among prisoners (including ones from Hawaii) at CCA’s Florence Correctional Facility in
Arizona.208
CCA may be willing to hire inexperienced men, but in one case it was accused of refusing to
hire women. In 2002 CCA’s North Fork Correctional Facility in Oklahoma agreed to pay $152,000
in back wages to 96 women who claimed they were denied employment because of their sex,
according to charges brought by the U.S. Department of Labor.209
In some cases, the people hired by CCA have the wrong kind of criminal justice experience. For
example, during a 2002 review of the company’s Gadsden Correctional Facility, the Florida
Department of Law Enforcement found that CCA had failed to follow registration procedures
for dozens of guards and that five of these individuals had arrest records that should have been
reported.210 In May 2001 a Tulsa newspaper found that 20 of the 348 employees hired by CCA
to work at the city’s jail had arrest records. Most were for traffic offenses, but there were also
cases of burglary, pointing a deadly weapon, assault and battery, shoplifting and fraud. CCA
40

told the newspaper that it did not hire convicted felons, but it took a “case-by-case approach”
with regard to applicants who had been convicted of misdemeanors.211
Turnover. What goes along with inexperience and low pay is high turnover. A 1999 report by
the Tennessee Department of Correction found that turnover at CCA’s South Central Correctional
Center the year before had been 104.8 percent, while that at CCA’s Hardeman County Correctional
Center was 81.7 percent. At publicly run prisons in the state the overall turnover rate was 34
percent, and no facility had a rate above 52 percent.212
In July 2001 a newspaper reporter did an analysis of work records at the CCA-run Tulsa Jail and
found that 72 percent of the people hired when the company began operating the facility in
August 1999 were no longer there.213 A similar analysis, published in January 2003, found
annual turnover rates of more than 60 percent for CCA facilities in Tennessee.214 By contrast,
the average turnover rate among state correctional officers is about 16 percent.215
Insufficient training. Another part of the mix is inadequate training of personnel. In a 1998
report on Youngstown, the D.C. Corrections Trustee found that CCA did not require pre-service
firearms training for guards and that its overall in-service training requirements were loosely
enforced. For example, guards were given credit toward the 40-hour annual requirement simply
for attending staff meetings.216 Youngstown guards told a newspaper reporter that CCA did not
provide firearms training because of the cost—about $3,000 per worker—of state certification
in that area, yet the company allowed untrained guards to carry guns.217 At the Hernando County
Jail in Florida, 44 percent of the guards did not have state certification in 1999.218
“A Recipe for Disaster”
Taken together, these labor practices spell trouble not only for private prison employees, but
also indirectly for prisoners and for the public at large. As Joshua Miller of the public employee
union AFSCME put it in his survey of private prison working conditions:
Private corrections is structurally flawed. The profit motive drastically changes the
mission of corrections from public safety and rehabilitation to making a quick buck.
Chronic employee turnover and understaffing, a high rate of violence, and extreme
cost-cutting make the private prison model a recipe for disaster.219
As the largest and most influential of the prison companies, CCA has its name writ large on that
recipe. It is difficult to avoid the conclusion that the numerous operating problems CCA has
experienced are at least partly a result of the company’s drive to reduce labor costs. Understaffing,
high turnover, and substandard wages and benefits all lead to the creation of a labor force that
may be ill equipped to do what is a stressful and often dangerous job.

41

Chapter 6: CCA’s INTERNATIONAL OPERATIONS: AN OVERVIEW
In its January 27, 2003 press release announcing plans to celebrate the company’s twentieth
anniversary, CCA conveniently failed to mention a key fact about its history: CCA once had
global aspirations. In 1995, one industry analyst claimed that Corrections Corporation of America
had identified markets in Canada, Brazil, Mexico and China “which in the long term could
represent the majority of [CCA’s] earnings.”220
But it was not to be. CCA did influence the implementation of prison privatization in the United
Kingdom and Australia where, in the state of Victoria, its joint venture earned the dubious
distinction of being the only private prison operator to have had a government buy out its
contracts due to failure. CCA failed to win contracts in Canada and New Zealand and apparently
decided not to pursue the South African market. CCA ultimately disposed of nearly all of its
limited international interests to concentrate on the United States.
Global Aspirations
Unlike its major U.S. competitor, Wackenhut Corrections Corporation (originally a subsidiary
of the global security giant Wackenhut Corporation), CCA did not start out with a ready-made
international corporate structure to capitalize on. And at the time of CCA’s early forays into
international markets, the company had only a handful of U.S. contracts and was still unprofitable.
Further, there was no independent evidence that the prisons it operated were achieving their
stated aims. Yet none of this stopped CCA from marketing itself as a successful operator.
From early on, CCA’s strategy was to identify potential markets abroad and form joint ventures
with politically well connected and experienced security, construction and finance corporations
to lobby governments, promote prison privatization and bid for contracts.
Europe
One of CCA’s first foreign forays was in France. In December 1986 CCA signed joint venture
agreements with French construction firm Spie Batignolles, contract services giant Lyonnaise
des Eaux and Banque Worms. The consortium, known as COGESIP, was to bid for contracts to
finance, design, build and operate French penitentiaries.
However, a subsequent change in government policy limited the private sector’s role to
construction, maintenance and non-custodial operations at 21 new prisons. French firms won
the contracts, while CCA was left out in the cold. When CCA entered into a strategic alliance
with Sodexho in 1994, the company agreed not to pursue business in France.

42

CCA also experienced disappointment in Italy and Switzerland. In 1986 the company signed
agreements providing for the “joint development of the Italian and Swiss markets.”221 Then in
1988 CCA signed an agreement with Iniziative Industriali SpA, part of the SASEA Group.222
But neither the Italian nor Swiss governments adopted a prison privatization policy.
However, CCA made inroads in the United Kingdom. In 1986 the UK parliamentary Home
Affairs Committee was examining the state and use of prisons in England and Wales. Privatization
was being considered for the first time in the UK and, in October 1986, members of the Committee
visited two establishments run by Corrections Corporation of Australia. Although they also
visited facilities run by RCA Service Co., it was CCA that impressed to the extent that, in its
subsequent report to Parliament, the Committee relied heavily on what CCA had told them
about privatization, taking at face value the assertion that this system of provision in the United
States was now a “proven concept.”223
In 1987, CCA formed the joint venture company UK Detention Services Ltd. (UKDS) with two
long-established British construction companies, Sir Robert McAlpine & Sons Ltd. and John
Mowlem & Company. Both companies were regular contributors to the then ruling Conservative
Party.
But instead of simply waiting for the British government, CCA set out to speed up the privatization
process. In a memorandum signed on January 19, 1988 the joint owners of UKDS agreed to
“promote the private design, financing, construction and management by private contractors of
prisons and remand facilities in the United Kingdom (including the acquisition of land and/or
other property in connection therewith).”224
UKDS later admitted to having “a leading role in explaining the benefits of private sector
management of prisons and the advantages of introducing competition to the Prison Service.”
For example, Mowlem letterhead was used to lobby Members of Parliament to support enabling
legislation for privatizing prisons. A letter to members of the House of Lords dated March 7,
1991 and signed by Nicholas Hopkins (the UKDS director of corporate communications) tried
to drum up support, stating:
We have actively promoted the introduction of private sector management of our prisons
for four years ... the present UK public sector prison service is rightly under attack.
UKDS wants the opportunity to show just how much better the best of the private
sector can do the job ... I do hope for your support and I would welcome the opportunity
to discuss the matter further if you so wished.
Later, Hopkins said: “It took us two or three years to finally convince government that it was
indeed the right course of action” and that with regard to the UK’s enabling legislation “UKDS
was very much involved in bringing forward the arguments in favour of the case.”225

43

Despite CCA’s involvement in influencing the UK government in the 1980s, UKDS’ first British
contract was not awarded until 1992. This was to manage Blakenhurst prison at Redditch, in the
West Midlands. The 649-bed medium-security prison opened in May 1993 and was the first
privately managed prison housing sentenced offenders.
CCA had also acted as a consultant to Mowlem and McAlpine in the building of Wolds prison in
North East England.226 Wolds, like Blakenhurst, was part of a program of new prisons earmarked
for public operation. But after the government decided to use Wolds to launch privatization it
ended up being run by competitor Group 4, which beat off a bid by UKDS.227 It was not until
1998 that UKDS won its second contract from the Prison Service of England and Wales. This
was to finance, design build and operate an 800-bed prison in Salford, north west England.

For a brief account the troubles experienced by UKDS, including its involvement in the unlawful
death of a prisoner, see Chapter 7.
Australia
In November 1988 CCA was invited by an Australian construction firm to a promotional event
in Sydney, New South Wales.228 In 1989 CCA executive T. Don Hutto and his colleagues traveled
through Australia to persuade state governments to privatize prisons. The first to respond was
Queensland, which in November 1989 awarded CCA its first contract outside of the U.S. and
the first private prison management contract in Australia.
However, one version of events is that it was Wackenhut’s partner that persuaded Queensland
to privatize. According to Bill Curnow, Executive Manager Infrastructure for Thiess Contractors,
which formed an Australian consortium with Wackenhut, “it was Thiess that convinced Jim
Kennedy in his report to the Queensland government to put its toe in the privatization waters,
and it was Thiess that convinced the New South Wales government to test the water as well.”229
Jim Kennedy was the author of a report that was instrumental in convincing the government of
Queensland to privatize prisons. In May 1998 Kennedy had published an interim report on the
future of Queensland’s correctional system. In that he had decided against privatization. Between
then and his final report in August 1998 he changed his mind.
Australian academic Paul Moyle noted that Kennedy offered “no account of why [he] had lost
his reservations about the ethics of the state relinquishing its supervision over sentenced offenders
and committing them to the control of companies” but there was “a strong impression that
Kennedy had changed his mind on the basis of discussions with several companies.”230
In 1989 CCA formed a joint venture company, Corrections Corporation of Australia Pty. Ltd.
(CC Australia). The company won the contract to manage Borallon Correctional Centre, a 240bed medium-security facility for men which opened in January 1990 at Ipswich, near Brisbane.
44

In April 1994, the government of Victoria awarded CC Australia a three-year contract to provide
prisoner security at St. Augustine’s Security Ward at the St. Vincent’s Hospital and Melbourne
Supreme and County Courts; and prisoner transport between prisons and the Melbourne Supreme
and County Courts. In announcing the award on April 28, 1994, the Government stated that
there would be better protection for the community and cost savings of approximately 20 percent.
But for a month after the contract was awarded, CC Australia staff did not have firearms
accreditation and the Government had to temporarily subcontract the work back to the state
correctional services division.231
Noting that the company had also been short listed to run one of Victoria’s three new prisons,
the opposition corrections spokesperson asked the government minister: “How can we have
any confidence that the government is able to get it right with a major prisons contract when it
can’t get it right with something as simple as this contract...you have to question the security
and competence of the company involved.”232 This comment was to prove prophetic.
In December 1994, Victoria chose CC Australia’s consortium to finance, design, build and
operate the 125-bed Metropolitan Women’s Correctional Centre (MWCC) near Melbourne.
For CCA’s overseas operations, 1995 was a pivotal year. That year CCA acquired Corrections
Partners Inc. (CPI), a competitor that also had international aspirations. CPI was bidding for
contracts in Australia, Canada, New Zealand and the UK. In Australia, CPI formed a consortium
known as CorrPac Pty. Ltd. A CPI advertisement for staff described CorrPac as having “long
range economic objectives throughout Australia and the Pacific region.”233
Also in 1995, CC Australia’s contract to operate Borallon in Queensland was extended for a
further five years: and CC Australia bought out a stake in the company that had been held by
Chubb Security and sold it to Sodexho, giving the French company a 53 percent stock holding
but only 50 percent voting rights.
By early 1999 CCA still had high hopes for the Australian market. According to Prison Realty
Corp’s 10-K for the year ending December 31, 1998, “CC Australia provides services similar to
CC America in Australia and surrounding countries.” The reality was, however, that the company
had not yet cracked the market in surrounding countries.
In 1999 a commission of inquiry in Queensland found that existing contracts [CC Australia at
Borallon and Wackenhut subsidiary ACM at Arthur Gorrie Correctional Centre] “did not reflect
best practice.”234
However, this conclusion did reflect the findings of academic Paul Moyle’s research. His
comparative study of CCA-run Borallon and the publicly run Lotus Glen prison concluded that:

45

the impact of private contract management upon the Queensland corrections system
during the early 1990s was not revolutionary, or for that matter, particularly innovative.
Therefore the hypothesis that the private sector will introduce important improvements
relating to implementing better quality programs, providing industrial and trade training,
improving staff and prisoner perceptions of interpersonal relations, reducing levels of
violence and assault and improving the provision and utilization of amenities, was not
proved. Further, Borallon’s introduction led to a dual system. Borallon did not comply
with QCSC policies and reduced accountability to external stakeholders. Finally, the
distinction between the allocation and the administration of punishment was breached.235
In opposition, the Labor party had pledged to return Victoria’s private prisons to the public
sector. But following its election win in 1999 the new government continued to be kind to CC
Australia. In December 1999 the government announced the award of a 20-year contract to
finance, design, build, maintain and operate a A$140 million county court complex in Melbourne.
The successful bidder was The Liberty Group consortium, which included CC Australia.236
Also in 1999 the company sealed an interest in its third Australian state when, in partnership
with construction firm Transfield, CCA was chosen as preferred bidder by the government of
Western Australia to build and manage Acacia, a 750-bed medium security prison at Wooroloo
South. In January 2000 the company announced that it had signed a five-year contract.237
Less than two weeks later, CCA announced the signing of a five-year contract with the same
government to provide court security and prisoner transportation from July 2000 onwards.
Announcing the new contract, Tom Beasley of CC Australia’s U.S. parent said: “By the end of
2001, Corrections Corporation of Australia expects to provide transportation and custodial
services for all major law enforcement agencies throughout Western Australia” and that “the
international arm of Prison Realty Trust continues to garner contracts and expand its services to
foreign governments, particularly in Australia. We believe this growth is further evidence that
privatization of public services in both the domestic and international arenas will increase.”238
Meanwhile, in Queensland, the commission of inquiry’s negative findings about private prison
contracts had not stopped the government from continuing with private management. However,
the government ended CC Australia’s involvement in the state when, in September 2000, it
announced that, after 10 years, the company had lost the Borallon contract to Management &
Training Corporation of Utah, one of CCA’s main U.S. competitors. As we show in Chapter 8,
around the same time in Victoria, CC Australia had run into serious trouble at its Metropolitan
Women’s Correctional Centre.
The Sodexho Connection
In June 1994, Doctor Crants, then CCA’s president and chief executive, announced a new
international joint venture with Sodexho, a Paris-based international facilities management
46

company with a growing interest in the private prison market. “Our partnership links two premier
service providers with the expertise to make a significant impact on the global corrections
market at a time when every criminal justice system is seeking fiscally sound, technically
innovative ways to solve their corrections problems,” he said.239
According to the terms of the agreement, the joint venture was to bid for management projects
outside of the U.S., U.K., Belgium and Australia, splitting profits 51/49 percent in Englishspeaking countries, where CCA would take the lead, and 49/51 percent in the rest of the world,
where Sodexho would lead.
Sodexho became CCA’s principal shareholder and Sodexho director Jean-Pierre Cuny joined
the CCA board.240 At the time, Sodexho had operations in 46 countries and through its SIGES
subsidiary provided non-custodial services to six French prisons. In the early 1990s Sodexho
had formed a subsidiary in the U.K. called ManCare, but the company failed to win any contracts.
Within a few years Doctor Crants was explaining the Sodexho deal rather differently:
In 1987 Sodexho plunged into the private prison management business in France. They
came here thinking they would enter the U.S. market. We made a strategic alliance that
we would market together in international marketplaces. Less well known is our
agreement that we would not pursue business in France. And they would not pursue
business in the US. We did not want to wake up one morning and have a $6 billion
revenue giant bouncing around in the domestic market. And we did not see ourselves as
giving up anything in France. I would imagine the French government would never
give an American company a contract.241
Sodexho became the 50 percent joint owner of CC Australia in the second quarter of 1995.242 By
1997 Sodexho had also become CCA’s 50 percent partner in UK Detention Services Ltd.
By the end of August 2000 Sodexho provided non-custodial services to eight prisons in France,
five in Spain, three in Italy, 21 in the Netherlands, one in Belgium as well as having a stake in
CCA’s joint venture operations in the UK and Australia. But, as described below, the company
was also preparing to sell its stake in CCA and acquire the British and Australian joint ventures
outright.
The End of Global Aspirations
Despite its early aspirations and the alliance with Sodexho, by 1998 CCA had not gone global
and still only had contracts in the U.K. and Australia. Doctor Crants tried to rationalize this
failure:

47

Approximately half of the prison inmates in the world are in the US ... we have
incarcerated in US prisons and jails at county, state or federal level approximately 1.8
million people. The sum of all the rest of the countries on the face of the earth is about
1.8 million, counting the People’s Republic of China, which says it has one million
people locked up. A country like England has 60,000 people incarcerated. So the
international market is not very interesting when compared with the domestic market.
It’s not a priority for us. There are also cultural differences. That’s why we’re only in
Australia and the UK.243
Speaking at the 1999 annual meeting of Prison Realty, Crants tried another approach, making it
seem as if CCA’s international frustrations were due to ideological considerations. He said
CCA and Prison Realty were interested primarily in the United States because, while the U.S. is
a “free enterprise nation,” most other countries in the world are “if not Socialist, at least socialistic
...they tend to be against privatization because they think it interferes with the contract between
government and workers.”244
As part of its restructuring in 2000, CCA sold its 50 percent holdings in UK Detention Services
Ltd. and CC Australia to Sodexho, suffering a net loss of $2 million on the transactions. The
following May, Sodexho sold its stake in CCA, with the majority of that stock ending up in the
hands of Latonia International Ltd., an affiliate of Luxembourg-registered Rolaco SA. Sodexho
director Paul Jeanbart was a co-founder and chief executive of the Rolaco Group and CEO of
Rolaco Holdings SA.
According to Sodexho “as part of our divestiture from CCA we purchased CCA’s stake in both
of those companies because that was the only way we could sever those business relationships.”245
In April 2001 CCA sold a financial interest in Forest Bank in England but retained a 50 percent
stake in Agecroft Prison Management, the company managing the prison. The deal raised some
$65.7 million, which was used to reduce CCA’s debt.
In sum, CCA not only failed to take the world by storm but, as the following chapters show, the
company also failed to live up to its promises in the U.K. and Australia.

48

Chapter 7: UNDERACHIEVING IN THE U.K.
We would do what we can to make a prison cheaper, so long as the specification was
left entirely to us. What we envisage is quite simply building secure places where there
would be just one person watching all the inmates on a TV screen. All the doors would
open electronically and all the men would come out and then walk around their yards
and then they would go back in again. There would probably be workshops and recreation
facilities.246
UKDS will certainly stay, offering the highest standards of prison management,
innovation and new ideas, value for money for governments and taxpayers and, above
all, caring, humane forward-looking regimes for prisoners committed to our care. What
our American colleagues might call a win-win solution.247
These visionary statements by UK Detention Services Ltd. (UKDS) representatives in the late
1980s and early 1990s, respectively, did not match the reality of CCA’s joint venture operations
in the United Kingdom.
UKDS became mired in controversy within months of being awarded the contract to manage
Blakenhurst prison. In April 1993 the BBC television program Public Eye raised questions
about the company’s suitability as a prison contractor in the UK.248
The program dealt with lawsuits involving the Arkansas and Virginia state prison systems,
where T. Don Hutto was in charge before joining CCA as a director in 1983, as well as scrutinizing
CCA’s operational history in the US. The Prison Reform Trust followed this up by sending a
critical dossier on CCA to the government.249
In response, the government sent F.W.P. Bentley, a non-executive director of the Prison Board,
to the United States to investigate the issues raised.
Bentley was in the U.S. between April 30 and May 7, 1993. His report to ministers, which was
not made public, noted that: “Assertions made against CCA covered a range of issues including
their lobbying methods; policies on staff recruitment, training, remuneration practices and unions;
provision of educational, vocational and health care programs; and contract compliance generally.
Like many businesses CCA has clearly not been without problems under these headings from
time to time, but there is no evidence that, in the United States context, CCA has overstepped
the bounds of legality in any of these areas.”250
Although Bentley gave CCA a clean bill of health and the Blakenhurst contract continued,
UKDS did not win another prison contract in the UK until five years later in 1998. Only after
CCA sold its 50 percent interest in UKDS to Sodexho in 2000 did UKDS go on to win two more

49

prison contracts. In the meantime, rivals Group 4 and Wackenhut had become the dominant
correctional services companies in the UK.
Shortly after the completion of Bentley’s investigation, problems began to emerge at Blakenhurst,
beginning with a major gaffe by David Brooke, the former Prison Service governor who had
been brought in to direct the facility. In June 1993 a photograph of Brooke unlocking a cell
during a visitors’ open day appeared in the Birmingham Post. Unfortunately for Brooke and the
company, his keys were clearly identifiable and therefore posed a security breach. UKDS had to
replace 84 locks and keys, reconfigure some 570 levers and replace a further 500 keys.251
In August 1993 the director was sent by UKDS to the United States for further training and was
formally replaced in October 1993 by the deputy director, who had no previous experience of
governing a prison.252
In February 1994 UKDS became the first private operator to be penalized by the government
when it was fined £41,167 after losing control of Blakenhurst during a disturbance.253
Between opening day in mid-1993 and July 1994, one UKDS staff members was dismissed for
assaulting a prisoner, another for having a criminal conviction for theft, a third for colluding
with prisoners to allow an assault on another prisoner, and a fourth for insubordination.254 By
March 1994 staff turnover was 10%.255 This included 42 resignations.256 Pay and conditions
might have been an influence. The U.S. practice of private prison management brought a twotier system of wages and conditions into the U.K. prison system. UKDS paid their custody
officers £1,500 per year less than their public sector counterparts, for a 40-hour week and a
willingness to work any assigned shift.257
In February 1995 the chief inspector of prisons published a report of his team’s inspection of
Blakenhurst eight months earlier.258 He found that “the most disappointing feature was the
comparative shortage of innovation.” He also reported that the prison was failing to deliver
contracted services in several areas and the Home Office was not ensuring that the original
tender submission and the contract were being adhered to. Better systems needed to be introduced
“if the secretary of state is to be satisfied that value for money is being achieved.” His 109-page
report included over 100 recommendations for improvement. The press release accompanying
the report stated that “it was possible to detect a confusion of cultures between the American
and traditional British styles of managing prisoners.”259
Incidents of violence, security breaches and other operational problems occurred at Blakenhurst
throughout CCA’s joint ownership. The most serious was the death of prisoner Alton Manning,
which is described below. Some other examples include:
• On May 1, 1995 Jeffrey Titmarsh, a UKDS prisoner custody officer, was jailed for 18 months
for scheming to have two prisoners beaten up after he suspected they had put drugs in his
coffee.260

50

• On August 7, 1996, 25-year old prisoner John Cowley was found hanging in his cell. His
was the fourth death at the prison within ten months.261
• In 1997 the Prison Service invoked special powers to force UKDS to change Blakenhurst’s
locks following reports that prisoners had obtained a set of keys. UKDS refused to pay and
so taxpayers footed the estimated £200,000 cost.262
• In November 1998 the company was fined £25,000 for allowing a prisoner to escape from
escort.263
• In 1998/99 the prison “had the highest rate of positive drug tests and the third highest assault
rate in the country.”264
Almost five years after opening, for the year ending March 31, 1998, Blakenhurst failed to
meet its performance targets in respect of: assaults as a percentage of the prisoner population,
hours of purposeful activity per week, percentage of prison population tested for drugs and
percentage of positive drug tests. The number of assaults was more than double either of the
prison’s comparators. In terms of education, Blakenhurst offered no accredited courses.265
However, these shortcomings did not prevent Blakenhurst from being regarded by the chief
inspector of prisons as having a “can do” culture.266
UKDS also won its second contract in 1998. This was to finance, design, build and operate
Forest Bank prison in Salford, north west England. The 800-bed prison opened in January 2000.
Inferior wages and conditions were immediately an issue, although there were improvements at
both Forest Bank and Blakenhurst after some staff joined the Prison Service Union (PSU), a
non-Trades Union Congress-affiliated union that the company had agreed to recognize.
In an interview in 2000, PSU General Secretary Phil Hornsby said there was “an acute shortage”
of staff at Blakenhurst and those who remained could not take their four weeks’ annual leave.267
The company compensated for this with Time Off In Lieu (TOIL) but, due to staff shortages,
this could not be taken either. The company’s failure to provide meal breaks was one of a
number of issues that had been raised with the government’s Health and Safety Executive.
According to Hornsby, starting salaries for new staff at Blakenhurst had been cut from £13,500
when the prison first opened to just £12,500. Meanwhile, at Forest Bank he reported that
employees did not have meal breaks and the prisoner population was about to be increased from
800 to 1,100. Staff shortages meant that one officer was often left alone on a wing with 60 to 70
prisoners. “The company is desperately trying to recruit and is paying staff overtime to keep
them there,” said Hornsby. After the PSU intervened, the company stopped the practice of
requiring staff to arrive for an (unpaid) briefing 15 minutes before their shift was due to start.

51

By the time CCA sold its operational interest in UKDS to Sodexho in 2000, a tendering process
for the renewal of the company’s Blakenhurst contract had been long underway. Unlike in
1992, when the company only had to bid against other companies, this time UKDS was also up
against a Prison Service in-house bid. On January 12, 2001, a couple of months after the sale to
Sodexho, the prisons minister announced that UKDS had lost its contract to that in-house bid.268
The company’s cut-rate wages had not been enough to keep costs down and guarantee the
contract’s renewal. The gap between the bids was startling. The Prison Service bid was 13
percent higher on quality yet 12 percent lower on cost than the bid from UKDS.
A third inspection of Blakenhurst by the chief inspector of prisons was carried out some ten
days after staff had found out that they had lost the contract. The chief inspector said: “of more
immediate concern is the clear evidence that treatment of and conditions for prisoners…had at
best stood still since our previous inspection [in 1998], and in some respects have become
worse. It was disappointing to find so many previous recommendations still not actioned and so
many promising innovations stalled.”269 This deterioration had clearly set in long before CCA’s
departure.

THE UNLAWFUL DEATH OF ALTON MANNING
UK Detention Services Ltd. has the dubious distinction of being the first private prison operator
in the United Kingdom to cause the unlawful death of a prisoner and the first to cause such a
death by the use of restraint.270
The victim in that incident was Alton Manning, a black prisoner who was 33 years old at the
time of his death on December 8, 1995 at Blakenhurst.271 The full story of Manning’s demise
did not come to light until a coroner’s inquest that took place more than two years later. On
March 24, 1998 the jury in that inquiry returned a unanimous verdict that Manning had been
unlawfully killed by UKDS staff.
However, this was not before UKDS had taken the unprecedented step of applying to the High
Court to deny the jury the option of returning such a verdict. But the circumstances surrounding
Manning’s death led the court to reject the company’s arguments.
The case of Alton Manning still resonates today, in part because none of those allegedly involved
in his death has yet been brought to justice. We present here a summary of the disturbing facts
that came to light during the inquest.
The events leading to Manning’s death commenced when two guards, identified only by their
last names Brumby and Reynolds, went into his cell to carry out what was supposed to be a
routine random search for drugs. When Manning was taken into another cell for a strip search,
he readily cooperated. He balked, however, when he was ordered to squat for an inspection of
his genital and anal areas. According to prison policy, such a search was to be performed only

52

when a guard had grounds for suspecting that a prisoner was hiding contraband. Officer Brumby
testified at the inquest that he had had such suspicion, but he could not explain why he had not
mentioned it in his statement to the police the day after the incident took place.
Manning refused to squat and a struggle took place. The officers claimed that Manning became
violent and attacked Reynolds. After Brumby called for help, a number of other guards arrived
at the cell and became involved in the incident. Manning was thrown to the floor and held
prone, face down, with officers putting his arms in locks and restraining his head and legs.
Reynolds testified that he put a knee at the base of the spine for two to three seconds. This form
of restraint was in direct contravention of Home Office directives on Control and Restraint.
Reynolds, unlike other more junior officers, claimed he did not know of this Home Office
guidance and could not remember whether he had been trained in it.
Manning was removed from the cell while being held face down by several guards. Several
prisoners who witnessed the event testified that one of the guards held Manning in a neck lock.
The witness said that at one point Manning was placed on the ground and violently kicked in
the side by one guard and struck in the head by another.
At one point the guards noticed a pool of blood on the floor near Manning, whose body had
gone limp. A call was made for urgent medical assistance. When the nurse arrived, she saw
officers still restraining Manning’s arms. After asking the guards to release him, the nurse
examined Manning and found that he had no pulse and was not breathing. Shortly thereafter,
Manning was pronounced dead.
An eminent forensic pathologist called in to examine the body established that the cause of
death was respiratory impairment/restriction during restraint, leading to asphyxia. There was
evidence of airway occlusion due to pressure to the neck and restriction of chest movement
while on the ground, with pressure applied to the back of the chest.
According to the post mortem, Manning had suffered bruising to the neck, he had blood spots in
the eyes, face and neck, and there was blood leaking from the ear and mouth, which was consistent
with the occlusion of the airway. Bruising found on his back was consistent with the application
of a knee in that area. Eight separate visible areas of injury to the face, as well abrasions to the
arms and legs, were noted. The pathologist also confirmed that no drugs or alcohol were found
in Manning’s body.
None of the eight guards who were directly involved in the restraint offered any explanation for
the visible injuries or the cause of death. All of the officers denied that any pressure was applied
to the front of Manning’s neck at any stage of the restraint, and while one officer admitted to
kneeling on Manning’s back while he was face down on the floor, the rest of the officers denied
seeing this at all.
Without exception, each officer maintained that they did not see the injuries to Manning’s face
at any stage, and that the only injury they were aware of was blood from mouth immediately
53

before his death. All of them claimed that Manning struggled violently throughout the restraint,
but they were unable to account for the fact that none of them sustained any injury except for
two scratches in the case of one officer.
Crucial documents and evidence from the prison relating to the events leading to the death were
unavailable to the coroner or the jury. UKDS surveillance cameras that would have recorded an
unobstructed view of the last moments of the restraint were said to have recorded nothing
because of operational error. Original reports containing the first written accounts of the events
by the relevant officers went missing and could not be located by Blakenhurst managers when
sought on behalf of Manning’s family.
Raju Batt, the lawyer for Manning’s family, said: “The catalogue of errors at every level of
management is quite shocking. We have seen prison officers giving evidence claiming ignorance
of matters of life and death.” According to INQUEST, a prisoners’ rights organization that
supported and arranged legal representation for Manning’s family, the evidence and information
available to the jury called into question the following:
• the honesty and integrity of the UKDS officers and their accountability to the rule of law;
• the management at Blakenhurst and the relationship between the private company running
the prison and the Home Office, Parliament and the public;
• the nature and extent of the force applied in the course of the restraint and the training given
to prison officers with regard to restraint techniques, particularly in the context of the wellknown dangers of neck holds and restraint asphyxia; and
• the nature and quality of the investigations into Manning’s death conducted internally by the
Home Office and externally by West Mercia Police that exonerated the prison and its officers.
Following the Coroner’s court verdict of unlawful killing, seven UKDS officers were suspended
on full pay pending an investigation by the government’s Crown Prosecution Service (CPS).
The seven were subsequently reinstated and, to this day, no prosecution has been forthcoming.
The CPS announced in February 1999 and again in 2002 that no charges were to be brought.

54

Chapter 8: ANATOMY OF A FAILED PRIVATE PRISON IN AUSTRALIA
A Liberal/National Coalition alliance won the Victoria state election in Australia in October
1992. By 1993 it had embarked on a program to reform the prison system, having identified “a
number of serious, long standing problems.” These included “operating costs; a declining and
inadequate infrastructure; poor productivity levels; and low levels of accountability.”272
The solution to these problems, the government decided, was privatization. Victoria’s Department
of Justice established the New Prison Project to implement a plan to shift nearly half of the
state’s prison population into three new facilities (one for women, two for men) that were to be
privately financed, designed, built and managed. In proposing the enabling legislation to
parliament, the state’s minister for corrections promised that: “The community and prisoners
will receive obvious benefits through the provision of new purpose-built facilities which provide
additional capacity for prisoner numbers and which will have modern security methods built
into their structure. Victorians will also benefit from significant private sector involvement in
Victoria’s infrastructure and the achievement of cost efficiency and effectiveness through the
establishment of a real competition in the delivery of correctional services.”273
However, an alternative view of the government’s project was provided by Amanda George, a
community lawyer: “The sell-off of prisons was part of an ideological commitment to
characterizing government as a business and our community as an economy rather than a society.
The prison sell-off went hand in hand with a law and order climate of mandatory and longer
sentences that handed private prison contractors a guarantee of rising prison numbers (and
profits). The decimation of services in the community that supports people at risk of incarceration
sealed the deal.”274
The first of the new contracts was for the 125-bed Metropolitan Women’s Correctional Centre
(MWCC) at Deer Park, outside Melbourne. The successful bidder was Excor Investments Pty.
Ltd., a consortium comprising Corrections Corporation of Australia Pty. Ltd., which would
operate the facility, John Holland Construction and Engineering Pty. Ltd. and Société Generale
Australia as financiers. At the time, Corrections Corporation of Australia (CC Australia) was a
subsidiary of Corrections Corporation of America.275
One of the main aims of the government’s privatization policy was to cut costs, so the state
Treasurer set benchmarks derived from the costs incurred at the three publicly run prisons that
were due to be replaced. In the case of MWCC this was the Fairlea prison for women.276 The
original benchmark costs that the private sector had to improve upon have never been published,
since they were deemed commercially confidential. The same applied to the Auditor General’s
attempt to publish the difference between the winning bid and the government’s benchmark
cost.

55

Operational problems from the beginning
A promotional brochure for CC Australia proclaimed that “the arrival of the Metropolitan
Women’s Correctional Centre marks a significant advance in correctional services for women
in Victoria, and a model for the rest of Victoria. It will simultaneously provide a better living
and working environment, improved security and greater operating efficiency.”277
In August 1996, amid large anti-privatization protests, the prison received its first prisoners
from the state-run women’s prison that it was replacing. The population was to be a classification
mix of medium and maximum security. Within a month, there were reports that union
representatives had met with prison officials to raise concerns about safety standards, working
conditions and the fact that salary levels, at A$34,000 per year, were substantially less than that
of their public sector counterparts, who earned around A$50,000 plus benefits.278
In December 1996 some of the prisoners breached a security perimeter and were beginning a
protest over a rumor that a prisoner was being beaten by guards. According to court testimony,
most of the guards panicked and locked themselves in a room, leaving the prisoners temporarily
in control. A senior office allegedly ignored a request to call in police.279 By February 1997, the
prison’s first general manager, Gary Emmerson, had resigned and there were calls in parliament
for the government to take over the management of MWCC.280
What transpired in that first year was also documented by the Federation of Community Legal
Centres (FCLC).281 The organization reported: a remand and protection prisoner was brutalized
and bashed; drugs were allegedly rife; and women were being denied adequate clothing, access
to medical treatment and subjected to humiliating strip searches. The FCLC also quoted media
reports that drug-related assaults and other incidents were not being reported to the government
due to the company’s fear of being penalized. The group also noted that in June 1997 Corrections
Minister Bill McGrath admitted in evidence to a Public Accounts and Estimates Committee
hearing that the prison’s staff was inadequately trained to manage the riot in December 1996.
Years two and three were characterized by more incidents, including the death of 23-year-old
prisoner Paula Richardson on September 11, 1998. In March 1999, the Community & Public
Sector Union alleged that CC Australia was putting lives at risk by using inadequately trained
staff. The union alleged that the company was “cutting corners to save costs” and called on the
government to investigate claims of security breaches.282
In May 1999, Victoria’s Auditor-General published the findings of what he described as “a wide
ranging but difficult audit dealing with the State’s prison system.”283 The report covered the
three private and three publicly run prisons. While the report had some positive things to say
about MWCC, it also raised doubts about projected cost savings and noted that the prison had
exceeded the acceptable limit for self mutilations and attempted suicides by 91 percent and
assaults on prisoners and others by 20 percent.

56

These findings were confirmed in a 2000 report on private prisons commissioned by Victoria’s
recently elected Labor administration.284 MWCC’s performance on non-financial matters was
found to be “mixed”. While it was “not possible to obtain information as to staff turnover
levels,” there had been a large turnover of staff at management level and the prison was “worthy
of further investigation.”
The report’s conclusion about financial performance was that “cost data provided by the
department of justice does not provide a clear indication that private prisons are cheaper to run
than public prisons.”285
MWCC was also included in another independent investigation into the management and
operation of Victoria’s three private prisons. The report was presented to the minister of
corrections in October 2000 and published the following month.286 Known as the Kirby Report,
its key findings included:
• Prisoners and, in some cases visitors, did not feel safe within the prison...the prison atmosphere
did not give the impression that staff were in control.
• The impression of the lack of safety...permeated all key areas of prison operations: the lack
of confidence of staff in dealing with prisoners, the restrictions on access to programs, frustrations with the visits program, and the inadequacy of the health services. Each of the
issues contributed to and was, in turn, reinforced by the lack of effective prisoner management.
• Although many of these issues were previously identified in other reports, and indeed led to
the issuing of three default notices, there did not appear to be any urgency in bringing about
the required changes on the part of the prison operator.
• Since its commissioning only four years ago, there have been numerous changes of senior
management ... four general managers, a high turnover within the management team, and a
high turnover of custodial staff, particularly in the first year of operation. The Panel heard
that this instability...had led to constant changes in the regimes governing the women’s lives
in the prison.
• The lack of experience and expertise, and the limitations in relation to staff training and
development, resulted in staff who appeared to lack confidence in themselves, in each other,
and in management.
• Inadequate or inappropriate physical facilities and programs, including drug and alcohol
treatment and education.

57

The Government Takes Over
Even before the Kirby Report was completed and published, the government decided that it had
no choice but to act. On October 3, 2000, the government used emergency powers and took
control of operations at MWCC. According to a statement by Andre Haermeyer, Minister for
Corrections, “The Government has taken over the running of the prison today to ensure its duty
of care to the community, prison staff, and prisoners is met. The Government has also approached
the contractor with a view to negotiating an early termination of the contract.”287
The minister said that this action followed a September 2000 report by the Correctional Services
Commissioner on contract non-compliance at MWCC.288 The commissioner stated that MWCC
was a troubled prison during its fourth performance year (August 1999-August 2000)
characterized by:
•
•
•
•

an unacceptably high number of prison incidents;
a disproportionate number of prisoners being classified as Protection Prisoners;
poor performance against its Prison Operations Service Delivery Outcomes;
levels of attempted suicide/self mutilation that were more than double the maximum allowed
benchmark;
• prisoner assaults on staff that were almost double the maximum allowed benchmark;
• prisoner-on-prisoner assaults that were significantly in excess of the maximum allowed
benchmark; and
• a higher than benchmark illicit drug rate.
According to the Commissioner, the situation “clearly demonstrates an inability by the prison
to implement strategies to ensure the welfare and safety of prisoners and staff. She added that:
“establishing the root causes of these troubles is difficult,” but she added that the nature of the
difficulty appeared to be a collective result of:
• inconsistent management practices and poor leadership at the facility since the resignation
of the then general manager in July 1999;
• lack of operational procedures, guidelines and on the job support and training for staff;
• staff shortages and budget constraints: and
• poor prison design.
The report stated: “Despite CCA’s repeated assurances that its remedial actions would ensure
that the service deficiencies would be identified and addressed, OCSC [Office of the Correctional
Services Commissioner] has assessed that both CCA and MWCC management fail to appreciate
the full range of their contractual obligations.”
And that: “Too many of their improvement strategies are implemented by the deployment of
resources from existing functions. Rarely are additional resources or new efforts deployed.

58

Often, compromises are made to less pressing functions in order to address more glaring
deficiencies.”
The report also revealed that on July 18, 2000, a default notice with nine components was
issued to the company. The seven-day cure period expired on July 25. Four components were
subsequently complied with, but the Commissioner found that “the areas in which MWCC
remains non-compliant cover five of the most fundamental aspects of the prison’s operations.”
The failures covered the following categories of service delivery:
• provision of sufficient security systems to ensure security and safety of prisoners and staff;
• containment and supervision of prisoners at risk;
• provision of adequate staffing to ensure close prisoner surveillance and maintenance of
security/safety of staff and prisoners and breach of prison management specifications due to
lockdowns; and
• management of programs and security procedures for illicit drugs.
A further breakdown of the third Default Notice revealed deficiencies such as the following:
•
•
•
•
•
•
•
•
•

failure to comply with suicide prevention procedure;
failure to provide adequate staffing;
failure to ensure prisoners have 12 hours out of their cells each day;
failure to comply with Victorian Prison Drug Strategy;
failure to conduct mandatory weekly drug testing;
failure to comply with strip search procedure;
failure to provide adequate surveillance of visitors;
failure to implement systems to detect and confiscate weapons, drugs and contraband; and
failure to develop a drug detection system.

The end
On October 3, 2000 CC Australia’s managing director, Terry Lawson, said that the company
had been trying to comply with changes requested by the government and was seeking legal
advice on the situation. In a statement, he said: “CCA has been the victim of a concerted campaign
by the Victorian Minister for Corrections who has gone on record as saying that he does not
believe in private prisons. There is no reason for the government to claim ‘step in’ rights. There
is no emergency and the prison is operating efficiently and peacefully.”289
Despite these assertions, the government started negotiations with Excor principals Corrections
Corporation of America and Sodexho on October 6, 2000. By mutual agreement, the contract
was terminated effective October 30, 2000.

59

The transfer of ownership was announced in State Parliament on November 2, 2000 when
corrections minister Andre Haermeyer said that the government had paid A$20.2 million to
Sodexho, taking the ownership and operation of the prison into the public sector. He said that no
compensation had been paid to the company, and the cost was less than the value of the ongoing
payments for use of the prison had the contracts continued: “The settlement is on the basis of a
fair price for the prison buildings, infrastructure and chattels and below the valuer general’s
valuation of almost A$22 million.”290
As this account shows, CCA’s joint venture affiliate, CC Australia, failed to meet its stated aims
for MWCC as well as its contractual obligations. The operational problems and policy flaws at
MWCC only began to be addressed following the election of a new government in 1999.

60

Chapter 9: SUPERIORITY UNPROVEN –
RESEARCH ON U.S. PRIVATE PRISONS
In a bid to stem the tide of negative reports about private prisons and to attract investors to the
industry, in September 2000 corrections industry stock analyst James Macdonald of First Analysis
Corporation called for the private prison industry to pay for “really neutral research,” although
he admitted: “it’s hard to pay and still be neutral.”291
Macdonald’s call for industry-paid neutral research is an oxymoron. For almost 20 years CCA
and the private prison industry as a whole have relied upon methodologically doubtful and/or
biased research produced by stock analysts and free market-oriented think tanks to support their
claims that privatization is superior to public management. On the other hand, independent
research in the U.S. has challenged the industry’s claims but this goes largely ignored by CCA,
the wider industry and its promoters.
As far back as 1987 the Adam Smith Institute (ASI) published The Prison Cell, The Start of A
Better Approach to Prison Management.292 The report featured some of CCA’s early contracts
in Texas, Tennessee and Florida. Despite the fact that CCA and the industry had been in existence
for less than three years, ASI stated unequivocally: “the record of private prisons in America
has, so far, been impressive.” The report was used as a marketing tool to promote private prisons
in the UK, and ASI called its publication “the first comprehensive review of private prison
experience to be published in the United Kingdom. Whereas most comment to date has been
theoretical speculation about what might result from prison privatization, such a review of the
evidence can provide some hard conclusions based on the facts of what actually has happened.”293
Not only was that report anecdotal but ASI’s role as a promoter of privatization hardly made it
an independent arbiter.
Ever since, there has been a steady stream of studies on the costs, benefits and general legitimacy
of prison privatization. The industry, of course, only promotes the studies proving that private
provision is superior while remaining silent on the fact that most of that research has been
carried out by individuals or organizations who have links to the industry or an ideological bias
towards privatization. The most egregious case is that of Charles Thomas, which was discussed
in Chapter 2.
More recently, industry proponents have celebrated a May 2002 article in the Harvard Law
Review that reaches pro-privatization conclusions. For example, on the question of cost and
quality comparisons, the author argued that “what imperfect empirical evidence there is suggests
that private prisons cost less than public prisons and that their quality is no worse…In short
despite all their possible faults, private prisons are a promising avenue for the future development
of the prison system.”294
Steven Logan, chief executive of the industry’s trade association, APCTO, said that “we view
61

the HLR article as a meaningful report for this industry,” recommending it to state and government
officials as a sound external study on the benefits of the public-private partnership in corrections.
Logan also played up the article’s validity by referring to the HLR as an “internationally respected
source for sound legal and policy analysis.”295
Conveniently, neither Logan nor the HLR mentioned that the author of the article, Alexander
Volokh was, in addition to being a graduate student at Harvard, affiliated with the Reason
Public Policy Institute (RPPI).296 For years RPPI, a division of the libertarian Reason Foundation,
has been one of the leading cheerleaders for privatization generally and prisons in particular.
Volokh’s qualifications for writing about prison privatization were listed on the RPPI website:
“Mr. Volokh’s expertise includes hazardous waste policy, environmental economics, regulation,
risk assessment, solid waste management, and the tort system.”
This relationship was not lost on attorney Michele Deitch in her review of the article in the
Correctional Law Reporter. Deitch reviewed the whole issue of HLR but had the “strongest
reservations” about the private prisons section, which, she argued “reads like a lobbying piece
for the private prison industry and which was explicitly influenced by the Reason Foundation,
a free market think tank that advocates privatization in this area. Little law is actually covered
in the discussion ...which cites extensively from industry-supported studies to argue that private
prisons are in fact more cost effective and accountable than public institutions.”297
Deitch goes on to say:
There is no evidence that the author approached corrections officials for their points of
view, nor did the author discuss issues such as the frequent practice of reducing costs
by deliberately under staffing private facilities. Moreover, the author…misses a key
policy point when reviewing case studies: because private operators can pick and choose
the ‘cream of the crop’ inmates, who are necessarily less expensive to house, they
effectively drive up the prices of the comparison group of public institutions, which are
left with higher-security and more medically needy inmate population.
The most recent study being trumpeted by the private prison industry does not hide the fact that
it was funded by CCA and APCTO. James F. Blumstein and Mark A. Cohen of Vanderbilt
University conclude that “during the period 1999-2001, the existence of prisoners under private
management in a jurisdiction seems to have had a restraining effect on the growth of expenditures
on public prisons.”298
The study ignores the findings of the GAO and Abt Associates about costs (see below) to claim:
“Numerous previous studies have shown that private prisons can be built more cost effectively
and operated at lower costs (between 5-20%) than public facilities. This is the first study to
measure the impact of private prisons on public corrections budgets.”299 Unsurprisingly, the
authors draw heavily on material produced by RPPI and the Harvard Law Review article
mentioned earlier.
62

RPPI’s latest contribution to the literature was published in 2002. Without naming specific
corporations or providing any critique of methodology of the research they quoted from, the
authors concluded that “private prisons are delivering significant cost savings and equal or
higher levels of quality when compared to government-run correctional facilities.”300 A key
indicator in their argument was that 44 percent of privately managed prisons (67 of 150) were
accredited by the American Correctional Association (ACA) compared with just 10 percent of
government facilities. However, once again, the RPPI’s findings and recommendations cannot
be separated out from the organization’s agenda to promote privatization. The authors reject
entirely the prospect that public rather than private provision is either feasible or desirable.
More research in the same vein will be forthcoming. In addition to material from RPPI, other
think tanks and APCTO, CCA revealed that it is forming its own separate research division.301
The Difference Independence Makes
A very different picture emerges when for-profit prisons are analyzed by researchers without
industry ties or an ideological commitment to privatization.
Perhaps the first major independent analysis of what had gone on in the U.S. private prison
industry was the 1996 study by the federal government’s General Accounting Office (GAO).302
The report, which analyzed previous research on costs and quality of service, was a far cry from
the Adam Smith Institute’s assertions of ten years earlier. The GAO’s findings included:
• no conclusions about cost savings or quality of service could be drawn, since four studies
assessing operational costs indicated little difference or mixed results;
• two studies that addressed quality of life reported equivocal findings or no differences
between private and public facilities; and
• the studies provided little information which could be applied to different correctional
settings, since states may differ widely in terms of correctional philosophy, economic
factors, and prisoner population characteristics.
Underlining the difficulties of accurately assessing quality of service, the GAO remarked that
although ACA set accreditation standards for prisons, the actual quality of service of a facility
with such accreditation could vary widely, since the ACA only required compliance with
minimum standards.
As part of the exercise, the GAO submitted its own findings for independent scrutiny. The
Bureau of Prisons commented that the report was “accurate, well done and useful.” Dr. Edith
Elisabeth Flynn of the College of Criminal Justice at Boston’s Northeastern University also
reviewed the report and said the conclusion that the five studies offer little generalizable guidance
63

for other jurisdictions was “right on point.” She also emphasized the need to focus privatization
research on crime prevention and various philosophical questions underpinning the privatization
debate.303
In its September 9, 1996 issue, the financial publication Barron’s referred to the GAO report as
“noteworthy because it contravenes the conventional wisdom...that companies like Corrections
Corporation of America automatically manage prisons more efficiently and economically.”
Barron’s contacted a CCA spokesperson, who “scoffed” at the GAO report and referred the
newspaper to a refutation by Charles Thomas of the Private Corrections Project at the University
of Florida. Barron’s said it found Thomas’ refutation “tendentious but not necessarily devastating
to the GAO’s argument” and concluded that the controversy over private prisons was not yet
over.
The Abt Associates Report for Congress
In 1997 Congress ordered the Attorney General to conduct a study of correctional privatization.
The National Institute of Corrections commissioned Abt Associates to carry out the study, which
was published in October 1998.304
In a letter to the House Committee on Appropriations, the Acting Assistant Attorney General
described the report as a “careful and thorough review of prior research” and “consistent with a
Government Accounting Office report published in 1996.” He also noted: “The Abt study is
selective in scope to maximize the use of time allotted...the report also provides a valuable
framework for the additional research needed on the comparative cost and quality of private
versus public prison operations.”
The Abt study found that the proclaimed benefits of privatization were unproven. Some of the
main conclusions included:
• Some proponents [of privatization] argue that evidence exists of substantial savings as a
result of privatization. Indeed, one asserts that a typical American jurisdiction can obtain
economies in the range of 10-20 per cent. Our analysis of the existing data does not
support such an optimistic view.
• Few studies have been conducted to compare the relative performance of privately and
publicly operated prisons. Most are affected by a variety of methodological problems...
given these shortcomings and the paucity of systematic comparisons, one cannot conclude
whether the performance of privately managed prisons is different from or similar to
public operated ones.
• With respect to public safety and prisoner programs, the available data do not support
definite conclusions.

64

• The available surveys of either privately or publicly operated facilities do not provide
the information needed to compare the quality of such programs or the extent of prisoners’
engagement with them.
In arriving at their conclusions about costs, the authors stated: “Perhaps the main finding...is
that only a very small percentage of those facilities operated by private firms have been evaluated
systematically...it is difficult to have much confidence in conclusions about relative costs...when
we have systematic cost comparisons of such a small subset.” Similar limitations were found
with regard to quality. “Only a few of the more than a hundred privately operated facilities in
existence have been studied, and these studies do not offer compelling evidence of superiority.”305
The authors stated that: “For the most part, those who have evaluated private corrections in
comparison to public corrections have concluded that the private...performed as well or better
than the public institutions. However, in our assessment...we find that most of these studies are
fundamentally flawed, and we generally agree with the 1996 GAO Report that there is little
information that is widely applicable to various correctional settings.”
In their summary, the researchers also stated: “It appears to us...the private sector’s approach to
corrections has been to build upon correctional practices that already exist in well-run public
prisons. The private sector does not appear to argue that they run prisons in a dramatically
different way based on different philosophies of managing inmates. However, there has been
little attention given to documenting the private sector approach to innovation or to the impact
of competition from the private sector on the practices of the public sector.”
The authors also stated; “While most correctional administrators agree that U.S. prisons should
meet American Correctional Association (ACA) accreditation standards at a minimum, there is
probably much less agreement as to how far above the bar set by the ACA standards those
prisons should operate to perform effectively.”
In their review of previous research, the authors also gave short shrift to Adrian Moore of the
Reason Foundation: “Moore… argues that market pressures and the competition for contracts
result in better direct services to inmates. This is typical of the argument-without-proof that is
often found in this literature. Anecdote is combined with glittering generalities to produce a
conclusion having little or no foundation. Rather than critically evaluating each study on its
own merits, Moore’s review of the prison quality literature merely cites those conclusions reached
by the individual authors.”
Minnesota

A comparative study by Judith Greene and others of CCA’s medium-security Prairie Correctional
Facility in Appleton, Minnesota with three similar facilities run by the Minnesota Department
of Corrections revealed significant differences in service delivery and program operations.306

65

The report paid special attention to the quality and availability of medical care as well as the
quality and degree of prisoner participation in education and treatment programs. It found that
levels of medical care were comparable in the public and private facilities, but education programs
were more extensive and more effective in the public prisons.
The author concluded: “These research findings add significant evidence to a growing perception
that a pattern of deficiencies in the way private prisons are being managed in the U.S. are
proving them to be unsuitable for handling prisoners above the lowest levels of security
classification.”307
Austin & Coventry
In a 2001 report for the U.S. Department of Justice’s Bureau of Justice Assistance, James Austin
and Garry Coventry continued with the theme of unsubstantiated claims for the private sector’s
superiority. Regarding previous studies, they concluded that “there are no data to support the
contention that privately operated facilities offer costs savings…similarly no definitive research
evidence would lead to the conclusion that inmate services and the quality of confinement are
significantly improved in privately operated facilities.”308
Perrone and Pratt
In this recent article, the authors reiterate the Abt findings. “Overall, the comparison of the
quality of confinement between public and private prisons is inconclusive.”309 Further, they
state: “as with the literature addressing the comparisons of the quality ...the existing cost
comparisons offer little in the way of conclusions about whether turning over the responsibility
of managing prisons to the private sphere will result in any substantial and/or consistent cost
savings.”310 They argue that to advance the debate “certain changes in the way scholars go about
studying these issues would be helpful.”311
Abt again

This latest piece of research recently completed by Abt Associates for the National Institute of
Justice once again does not support the claims of CCA and the rest of the private prison industry.312
Abt researchers focused on evidence relating to Texas, Florida and Oklahoma, which they note
are the states with the longest and most extensive experience with private prison operation. As
for Texas, Abt received data from state officials suggesting that private firms were providing
correctional services at a cost about 9-10 percent lower than it would cost the government to
provide. Abt, however, did not feel it received an adequate explanation of how those numbers
were derived. Its report said, “Lacking more information about how these costs were estimated,
it is not possible to evaluate them.”313

66

They also note that “contracting for management services alone doesn’t seem to have relieved
overcrowding any faster than would have happened if the state built and then operated the
facilities.” Texas privatized to alleviate overcrowding in the state system, improve conditions
in confinement and avoid having to pay stiff fines levied by the federal courts. The answer to
the question of whether contracting achieved conditions of confinement any faster than was
achieved in the state-operated facilities was “probably not.”
As for the question of whether Florida’s private prisons resulted in lower recidivism rates, Abt
said that “absent a stronger methodology…the study [commissioned by Florida] does not provide
indisputable evidence that privately operated prisons are doing any better or any worse than the
public prisons.” Noting that there has been no formal assessment of whether private firms have
introduced innovation into the state’s prison system, Abt stated: “The legislature may have
assumed that any innovation of significance would result in more effective prisons (i.e., lower
recidivism) and less costly ones. The existing studies of comparative costs and of comparative
recidivism rates do not support any strong influences about the state’s obtaining more innovative
imprisonment from the private sector.”314
Finally, in Oklahoma, Abt found that the primary motivation behind the state’s decision to
privatize was to avoid the cost of building its own new prison. Oklahoma’s strategy was to rely
solely on the private sector for additional beds to relieve overcrowding in the state system. By
absorbing increasing numbers of prisoners through contracting out rather than building new
prisons, the state had more flexibility when those numbers decreased and long-term debt servicing
for new infrastructure has been avoided. Abt’s view on whether the state had been able to avoid
locking itself into political obligations to support the private prison industry “for now…seems
to be yes.”
From the industry’s point of view, the best that can be said about the results of independent
research is that many questions remain unanswered. Companies like CCA apparently have little
confidence that future research will yield results favorable to privatization, so they are planning
to pay for analyses that they can be sure will have the desired results.
What’s Wrong with the ACA?
For years CCA has promoted its adherence to American Correctional Association (ACA)
standards as a sign of its quality. According to the company “all CCA facilities operate in
accordance with ACA standards… approximately 85%…are ACA accredited.315 The ACA website
lists 53 of CCA’s facilities as being accredited.316
Although ACA standards are widely accepted by both private and public prisons, these standards
have come under criticism from a number of quarters. According to Elizabeth Alexander, director
of the American Civil Liberties Union’s National Prison Project: “Absent complete restructuring
the ACA is as much a barrier to meaningful reform of prison conditions as it is an ally.”317
67

In their most recently published study, the Abt researchers reiterated their earlier concerns about
the ACA: “Achieving ACA accreditation is not an outcome-based performance goal. Rather,
ACA standards primarily prescribe procedures.” They also refer to research involving juvenile
facilities that found no difference in rates of suicidal behavior, escapes and attempted escapes,
and injuries to staff and juveniles between those facilities that conformed to key ACA standards
to those that did not.318
ACA’s impartiality has also come into question. David Shichor of the University of California
has noted: “the major professional organization dealing with corrections, the ACA, is heavily
influenced by the private correctional industry.” He goes on to argue: “the ties between private
industry and the ACA may have something to do with the accreditation process in corrections as
corrections standards were written by ACA personnel. The fact that the ACA president from
1984-1986, T. Don Hutto, was a co-founder of CCA reinforces the impression that a powerful
and influential criminal justice-industrial complex, having strong interlocking directors, is
developing. This kind of interrelationship may lead to co-optation.”319
It is worth noting that CCA’s Youngstown facility received ACA accreditation right after a
controversy over violence and escapes at the prison.320 More recently, ACA’s Hernando County
Jail in Florida also received ACA accreditation in 2000 despite failing to meet the ACA’s own
standards in six areas. Of these, five had been mentioned in the jail’s audit three years earlier.321
Among the benefits of accreditation listed by ACA on its website are improved staff morale and
professionalism, a safer environment for staff and offenders, and defense against lawsuits.
“Accredited agencies have a stronger defense against litigation through documentation and the
demonstration of a ‘good faith’ effort to improve conditions of confinement.”322
But as mentioned in Chapters 1 and 2, CCA’s facilities, many of them with ACA accreditation,
have experienced numerous incidents of violence, mistreatment of prisoners and other problems
that hardly add up to a safe environment. Moreover, the problems of low pay, inadequate benefits,
insufficient training and high turnover described in Chapter 5 don’t seem to contribute to a high
level of morale and professionalism for employees. It remains to be seen whether ACA
accreditation serves as an adequate defense to the numerous lawsuits the company currently
faces.
CCA and the industry’s use of ACA accreditation as a barometer of quality is questionable.
Even more so is relying solely on the conclusions reached by pro-privatization ideologues.
After 20 years, the claimed overall superiority of private prison operations over the public
sector remains unproven.

68

CONCLUSION
Writing in CCA’s 2002 Annual Report, CEO John D. Ferguson says: “As we enter 2003, CCA
celebrates its 20th anniversary year – a momentous achievement for a company that began as an
unproven idea, and grew into an industry.”323 It is ironic that by the end of 2003 another top
executive, Chief Financial Officer Irving E. Lingo Jr., admitted that corrections privatization
has “barely scratched the surface.”324
There is no question that a private prison industry has developed, even if it comprises only
about five percent of the total U.S. prison and jail population. In promoting its agenda of prison
privatization, CCA and its competitors have consistently engaged in a few core strategies:
• using a small body of questionable research written by analysts and academics who are
either funded by the industry or have an ideological predisposition in favor of privatization;
• making significant campaign contributions at the state and federal level to lawmakers and
politicians; and
• using the support of organizations like the American Legislative Exchange Council and the
Association of Private Correctional and Treatment Organizations.
As this report shows, in spite of these efforts, CCA has not been a success even by its own
standards. CCA continues to be plagued by many of the same kinds of operational deficiencies,
scandals and mismanagement that characterized its performance during its early years. It is no
surprise that the company acknowledges that, “The operation of correctional and detention
facilities by private entities has not achieved complete acceptance by either governments or the
public.”325
CCA’s record is a clear example of how the pursuit of profit stands in the way of carrying out a
core public function such as corrections. It is time for the public to know that independent
investigators have failed to find clear evidence that private prison management is superior in
terms of quality, recidivism rates or cost. CCA has succeeded in staying in business for two
decades, but it has not succeeded in demonstrating that prison privatization is socially,
economically or ethically acceptable.

69

ENDNOTES
1

. “CCA Marks Twentieth Anniversary,” PR Newswire January 27, 2003.

2

. The data in this paragraph come from a presentation by CCA Chief Financial Officer Irving E. Lingo Jr. at the Deutsche Bank
Global High Yield Conference, October 8, 2003; available online at the Investor Relations section of the CCA website
<www.correctionscorp.com>.

3

. U.S. Department of Justice, Bureau of Justice Statistics, Prisoners in 2002, July 2003, p.6; available online at <www.ojp.usdoj.gov/
bjs/pub/pdf/p02.pdf>.

4

. The market share numbers are from the Lingo presentation cited in Note 2.

5

. ibid.

6

. “Ethics fine $20,000 for UF Professor,” Florida Times-Union, October 22, 1999, p.B3.

7

. “Privatized Prisons Booming in US,” Globe & Mail, June 12, 1995.

8

. CCA 10-K filing for year ending December 31, 2002, p.32.

9

. Tony Bennett quoted in Tim Hoover, “Error Frees Inmate; Mistake in Jail Paperwork Lets Her Post Bond,” Tulsa World, September
1, 1999.
. See Nicole Marshall, “Teen Killer is Set Free in Error, Recaptured,” Tulsa World, July 12, 2000 and Cary Aspinwall, “Inmate
Released via Clerical Error,” Tulsa World, April 26, 2003, p.A19.

10

. Susan Hylton, “Inmate Freed After Posing As Another,” Tulsa World, August 18, 2001.

11

12

. Susan Hylton, “CCA Guard Fired for Inmate’s Flight,” Tulsa World, August 16, 2002, p.A20.

13

. Susan Hylton, “CCA Supervisor Fired Over Mistaken Inmate Releases,” Tulsa World, June 7, 2001.

14

. Susan Hylton, “Jail Authority to Dock CCA’s Pay,” Tulsa World, March 23, 2002.

15

. “Child Rape Suspect Released from Workhouse by Mistake,” Chattanooga Times Free Press, November 9, 2003, p.B15.

16

. “Parents of Inmate Who Died File Prison Lawsuit,” Houston Chronicle, May 21, 2003, p.A26. See also, “Parents of Former Eden
Inmate File Wrongful Death Suit,” Associated Press, May 19, 2003. The case, which is pending, was filed on May 16, 2003 in the
51st Judicial District, Tom Green County, Texas (Cause No. A-03-0595-C).

17

. “Family Sues Over Inmate Death,” Honolulu Advertiser, April 17, 2003, p.6B.

18

. “Inmate Claims Severe Beating Resulted from Unfair Gang Privileges.” Associated Press, April 10, 2003. The case, which is
pending, was filed on April 7, 2003 in federal district court in Phoenix (03-CV-652).

19

. Karen Abbott, “Lawsuit Blames Prison in Death of Inmate,” Rocky Mountain News, March 25, 2003, p.24A and “Lawsuit Alleges
Inmate was Denied Medication,” Associated Press, March 25, 2003. The case, which is pending, was filed on March 24, 2003 in
federal district court in Denver (03-CV-500).

20

. “Mom Sues over Death of Jailed Teen Son,” Miami Herald, February 3, 2003, p.B1. The case, which is pending, was filed on
January 29, 2003 in Bay County Circuit Court (Case no. 03000316CA).

21

. “Jail Company Denies Responsibility in Panhandle Inmate Killing,” Naples Daily News, October 10, 2002.

22

. Getahn Ward, “CCA Executive Seeking His Own Legacy,” The Tennessean, November 8, 2000.

23

. Getahn Ward, “Formidable Task at Prison Realty,” The Tennessean, August 6, 2000, p.1E.

24

. The Administrative Office of the U.S. Courts maintains a system called PACER, which provides online access to the electronic
case dockets of nearly all federal district courts. PACER’s U.S. Party/Case Index lists more than 700 cases involving CCA as
having been filed since August 1, 2001. We took that date as our starting point because it was one year after Ferguson was hired,
a point by which any suit filed would likely refer to events that happened after he took office. Note that the Index includes some
duplications, since variations on the names of the parties are counted. The Administrative Office of the U.S. Courts does not
collect data on the correctional facility in which the filer of a prisoner lawsuit is being held. For more information on PACER, see
<http://pacer.psc.uscourts.gov>

70

25

. Jamie Malernee, “Jail Escapee Caught After Month on Lam,” St. Petersburg Times, August 3, 2001. See also Jamie Malernee,
“Prison Escapee Capitalized on Opportunities,” St. Petersburg Times, July 6, 2001.

26

. Nita Birmingham, “Two Correctional Officers Disciplined,” Shreveport Times, June 24, 2001, p.1B.

27

. Janet Jacobs, “2 Men Escape State Jail in Bartlett,” Austin American-Statesman, August 28, 2000, p.B1.

28

. “Prisoner Escapes from Van Off I-79,” Charleston Gazette, September 29, 2001.

29

. Lisa Sink, “Company Admits Fault in Escape of Teen Inmate.” Milwaukee Journal Sentinel, July 27, 2001, p.1B.

30

. See, for example, Elizabeth Alexander, “Private Prisons and Health Care: The HMO from Hell,” in Andrew Coyle et al., eds.,
Capitalist Punishment: Prison Privatization & Human Rights, Atlanta: Clarity Press, 2003, p.67.

31

. “Florida Grand Jury Says Jail Workers’ Negligence was a Factor in Inmate’s Death,” Associated Press, August 9, 2002. The text of
the presentment can be found online in Prison Privatisation Report International, No. 50, October 2002; available online at
<www.psiru.org/justice/ppri501.asp#UNITED%20STATES>.

32

. Susan Hylton, “Jail Employee Cited in Inmate Overdose,” Tulsa World, May 16, 2002.

33

. Susan Hylton, “CCA Notified of Violation,” Tulsa World, December 5, 2001.

34

. Carolyn Carlson, “Lawsuit Filed in Prisoner’s Hanging Death,” Albuquerque Journal, May 23, 2002, p.A2.

35

. David Harper, “Ex-Jailer Guilty in Drug Sale,” Tulsa World, September 20, 2001.

36

. “CCA Worker Fired After Drug Arrest,” Tulsa World, September 21, 2002, p.A20.

37

. David A. Farenthold, “Corrections Officers Charged with Bribery,” Washington Post, November 8, 2002, p.B2.

38

. Chris Joyner, “Silverdale Warden, Officer Lose Jobs,” Chattanooga Times Free Press, November 9, 2002, p.A1.

39

. Dee Farmer, Petitioner v. Edward Brennan, Warden, et al., U.S. Supreme Court, No. 92-7247 (1994).

40

. “Inmate, Jail Reach Suit Settlement,” Tulsa World, December 27, 2002, p.A13.

41

. “Inmate Admits Fatally Stabbing Counselor,” The Commercial Appeal, January 27, 2002, p.B2 and Richard Locker, “Counselor
Slain by Inmate is a First for Private Firm,” The Commercial Appeal, January 18, 2002, p.B1.

42

. Patti Weaver, “Two Inmates Arraigned in Prison Assaults,” Tulsa World, August 29, 2002, p.A13.

43

. Patti Weaver, “Tulsa Rapist is Beaten in Prison,” Tulsa World, August 1, 2002, p.A36.

44

. “Three Injured in Florence Prison Hostage Standoff,” Associated Press, September 13, 2000.

45

. Jennifer Archibeque, “CCA Fires Two Prison Officials,” Albuquerque Journal, December 7, 2000, p.A1.

46

. “Lockdown Remains in Effect at Private Prison,” Associated Press, April 27, 2001.

47

. Lee Mueller, “Warden Blames One Inmate for Riot,” Lexington Herald-Leader, August 18, 2001, p.C3.

48

. Anita Weier, “Lockdown Affects Wisconsin Inmates,” Capital Times, April 30, 2003, p.2B and Tom Sheehan, “State Officials to
Probe Fracas at Oklahoma Prison,” Wisconsin State Journal, May 1, 2003, p.C4.

49

. This chapter draws from chapter I of Philip Mattera & Mafruza Khan, Jail Breaks: Economic Development Subsidies Given to
Private Prisons, Washington, DC: Good Jobs First, 2001.

50

. “Company Organized to Manage Jails,” United Press International, May 29, 1983.

51

. “Largest Health Care Fraud Case in U.S. History Settled; HCA Investigation Nets Record Total of $1.7 billion,” U.S. Department
of Justice press release dated June 26, 2003; available online at <www.usdoj.gov/opa/pr/2003/June/03_civ_386.htm>.

52

. This section is based largely on; David Shichor, Punishment for Profit: Private Prisons/Public Concerns, Sage Publications, 1995,
chap. 2.; Alex Lichtenstein, Twice the Work of Free Labor: The Political Economy of Convict Labor in the New South, London &
New York: Verso Books, 1996; Mildred C. Fierce, Slavery Revisited: Blacks and the Southern Convict Lease System, 1865-1933,
Brooklyn: Africana Studies Research Center, Brooklyn College, 1994; and Norval Morris and David J. Rothman, editors, The
Oxford History of the Prison, New York: Oxford University Press, 1995.

71

53

. Hutto et al. v. Finney et al., No 76-1660, Supreme Court of the United States, 437 U.S. 678; 98 S. Ct. 2565; 57 L. Ed. 2d 522; 1978
U.S.LEXIS 125, Footnote 3. See also Craig Becker and Amy Dru, “The Downside of Private Prisons,” The Nation, June 15, 1985,
p.728.

54

. Wayne King, “Contracts for Detention Raise Legal Questions,” New York Times, March 6, 1984 and Richard Behar, “Partners in
Crime,” Forbes, February 11, 1985, p.112.

55

. See, for example, Martin Tolchin, “Privately Operated Prison in Tennessee Reports $200,000 in Cost Overruns,” New York Times,
May 21, 1985.

56

. See David A. Vise, “Private Company Asks for Control of Tenn. Prisons; 99-Year Contract Bid Gets Mixed Reception,” Washington Post, September 22, 1985 and Bill Rawlins, “Company Offers $100 Million to Operate Tennessee Prisons,” Associated Press,
September 12, 1985.

57

. “Corrections Corporation of America Settles Lawsuit,” Business Wire, October 3, 1988.

58

. Dan DeWitt, “Guard Fired Over Inmates’ Escape; State Review Blames Staff, Jail Construction,” St. Petersburg Times, March 21,
1990, p.1.

59

. Dan DeWitt, “Inmate Escapes from Hernando Jail,” St. Petersburg Times, December 19, 1990, p.1.

60

. Chris Conley, “Prison in Mason Quells Disturbance,” The Commercial Appeal, December 24, 1990, p.B1.

61

. Phil Williams, “Private Prison Company Under Investigation,” Gannett News Service (distributing article that appeared in The
Tennessean), May 24, 1992.

62

. See Reed Branson, “Prison Firm Seeks Changes Amid Troubles,” The Commercial Appeal, October 10, 1992, p.B1 and “CCA
Under Scrutiny in Tenn. Legislature,” The Commercial Appeal, October 13, 1992, p.A7.

63

. Paula Wade, “CCA to Give Up Running Youth Prison; State Will Run Mountain View Facility,” The Commercial Appeal, December 13, 1992, p.B3.

64

. “2 Men Escape from Private Prison,” Houston Chronicle, July 28, 1993, p. A23.

65

. “Jail Operator Sued,” Ft. Lauderdale Sun-Sentinel, September 16, 1993, p.3B.

66

. “CCA Lowers Fourth Quarter Estimate as D.C. Prisoners Leave West Tennessee Facility,” PR Newswire, November 8, 1993.

67

. The market share figure is from Charles W. Thomas, Private Adult Correctional Facility Census (as of 12/31/1997), Table 2;
available online at <www.crim.ufl.edu/pcp>. Thomas’s absolute numbers are not entirely reliable, since he measured capacity
based on signed contracts rather than actual occupied beds, but for relative measures such as market share his estimates are
reasonably reliable.

68

. U.S. Department of Justice, Office of Justice Programs, Bureau of Justice Statistics, Prisoners in 1994, p.2 and Prisoners in 2001,
p. 2. Both can be found online at: <www.ojp.usdoj.gov/bjs/prisons.htm>.

69

. Cibola County Manager Joe Murrietta as quoted in Mark Oswald, “Cibola County: Transfers Might Doom Jail,” The Santa Fe New
Mexican, January 27, 1996, p.B-3.

70

. See the following articles, all from The Arizona Republic: “250 Inmates Riot, Set Fire at Eloy Prison” (October 24, 1994, p.B1),
“Disturbance Rocks Prison in Eloy Again” (November 15, 1994, p.B1) and “Eloy Riots Called Typical for New Prison” (November 16, 1994, p.B1).

71

. Miriam Davidson, “Workers: Shortages Sparked Prison Riots,” The Arizona Republic, December 27, 1994, p.B1.

72

. “Tinderbox Explodes in Elizabeth; Immigrants Riot; Detention Center Now Uninhabitable,” The Record , June 19, 1995, p.A01.

73

. Ashley Dunn, “U.S. Inquiry Finds Detention Center was Poorly Run,” New York Times, July 22, 1995, p.1.

74

. Sam Howe Verhovek, “Video Puts a Harsh New Spotlight on Texas Jails,” New York Times, August 22, 1997, p.A1.

75

. Kim Bell, “All 188 Missouri Prisoners in Jail in Texas Will Return to the State Soon, Corrections Officials Say,” St. Louis PostDispatch, December 13, 1997, p.18.

76

. Chris Conley and Shirley Downing, “111 Inmates at W. Tenn. Prison Go on Rampage,” The Commercial Appeal, October 29, 1995,
p.1A.

72

77

. Christy Hoppe, “Oregon Inmates’ Escape from Houston Jail Raises Questions,” Dallas Morning News, August 10, 1996, p.1A. See
also Joan Thompson, “Laws Lag Behind Booming Private Prison Industry,” Associated Press, November 5, 1996.

78

. David McLemore and Christy Hoppe, “W. Texas Inmate Uprising Ends After 13-Hour Standoff,” Dallas Morning News, August
23, 1996, p.29A.

79

. “Six Inmates, Three of Them Convicted Murderers, Escape from Prison,” Associated Press, October 20, 1996.

80

. John Heilprin, “Prison to Go Back Under State Control,” The Post and Courier, February 20, 1997, p.B1.

81

. Lora Hines, “Jury Finds Prison Firm Abused Boy,” The State (Columbia, SC), December 16, 2000, p.B1. The case was William P.
vs. Corrections Corporation of America, Case No. 3:98-290-17, U.S. District Court for the District of South Carolina.

82

. Jerry Fink, “2 Guards Hurt in Private-Prison Melee,” Tulsa World, May 9, 1997, p.A1.

83

. Paula Wade, “Tenn. Prison Fight Injures 4 Guards,” The Commercial Appeal, November 22, 1997, p.A7.

84

. Rep. Ronald Gerberry quoted in Mark Tatge, “Private Prison Worries Officials; More State Control Sought for Lock-Up,” The
Plain Dealer, August 1, 1997.

85

. Quoted in Cheryl W. Thompson, “D.C. Must Stop Sending Inmates to Ohio Prison,” Washington Post, February 26, 1998, p.A8.

86

. Paul Souhrada, “Voinovich Gives Up Plan to Close Private Prison,” Associated Press, August 3, 1998.

87

. Quoted in Bonna M. De La Cruz, “Ohio Lawmakers Say CCA Prison Fails in its Mission,” The Tennessean, October 10, 1998,
p.6B.

88

. Quoted in Cheryl W. Thompson, “Ohio Sours on Prison Managed by Private Firm,” Washington Post, October 19, 1998, p.B1.

89

. Cheryl W. Thompson, “Prison Firm Settles Suit by D.C. Inmates in Ohio,” Washington Post, March 2, 1999, p.B1.

90

. Larry Daughtrey, “A Chill in Fervor for Privatization,” The Tennessean, September 6, 1998.

91

. Quoted in Catherine Trevison, “CCA Fires Back at Critics of Private Prisons,” The Tennessean, September 9, 1998, p.1A.

92

. Rick Brooks and Karen L. Tippett, “Leading Expert on Private Prisons Criticized for Taking REIT Seat,” Wall Street Journal
(Southeast Journal), April 30, 1997, p.S2.

93

. “Ethics fine $20,000 for UF Professor,” Florida Times-Union, October 22, 1999, p.B3. Thomas was later appointed to the board
of directors of Avalon Correctional Services.

94

. Steve Shoup and Guillermo Contreras, “Six Injured in Estancia Prison Riot,” Albuquerque Journal, August 14, 1998, p.A1.

95

. Quoted in “Guard Supervisor at Clifton Prison Fired After Four Inmates Escaped,” Associated Press, October 23, 1998.

96

. Karin Miller, “Troubles At Private Prison Don’t Make a Dent in Demand, Income,” Associated Press, October 23, 1998.

97

. On these escapes, see “Latest Escape Raises New Questions about Private Prisons,” Associated Press, May 28, 1999 and “Officials
Step Up Security at Bent Prison Following Two Escapes,” Associated Press, July 31, 1999. On the violence, see “Five Guards,
Two Inmates Injured During Disturbance,” Associated Press, August 16, 1999 and Mark Oswald, “Brawl Fuels Debate Over
Private Prisons,” Santa Fe New Mexican, August 19, 1999, p.A1.

98

. “Guard Killed During Disturbance at Private Prison,” Associated Press, September 1, 1999.

99

. “Lawsuit: Officials Knew of Planned Estancia Prison Riot,” Associated Press, December 15, 1999.

100

. Jennifer Archibeque, “Majority of Guards’ Suit Dismissed,” Albuquerque Journal, October 19, 2000, p.A3.

101

. Kirk Mitchell, “Woman Claims Private Guards Assaulted Her,” Denver Post, March 2, 1999, p.B1.

102

. Howard Pankratz, “Inmate Assault Lawsuit Settled,” Denver Post, April 24, 2002, p.B1.

103

. Carol Christian, “Ex-Driver Gets Prison, Fine in Assault of Inmate,” Houston Chronicle, October 6, 2001, p.A29.

104

. Dale Wetzel, “Reward Posted for Kyle Bell; Schafer Blasts Company After Escape,” Bismarck Tribune, October 15, 1999, p.1A.

73

105

. Dale Wetzel, “North Dakota Officials Angry, Frustrated by Escape,” Associated Press, October 14, 1999 and “No Excuses Offered
for Sleeping Guards,” Albuquerque Journal, November 6, 1999, p.E3.

106

. Gary D. Robertson, “State Wants to Run Privately Run Prisons,” Associated Press, June 23, 2000.

107

. “State Ends Experiment with Private Prisons,” Associated Press, October 1, 2000.

108

. “Private Prison Scrapped,” Deseret News, August 16, 2000, p.B1.

109

. “Private Prison Stands Empty in Stewart County,” Associated Press, August 12, 2000. In September 2003 CCA announced plans
to complete construction.

110

111

. Charles H. Haddad, “’Private Prisons Don’t Work’: For-profit facilities face a barrage of criticism, and overbuilding has cut into
profits and hurt stock prices,” Business Week, September 11, 2000, p.95.

. “Prison Realty Completes Merger with Corrections Corporation of America,” PR Newswire, October 2, 2000.

112

. George Washington Plunkitt was a leader of New York’s Tammany Hall, the prototype of big-city political machines. By 19thcentury standards, as well as today’s, he was undeniably corrupt. His motto was, “I seen my opportunities and I took ‘em.”

113

. “CCA Names Former Marriott Executive as EVP and COO,” PR Newswire, June 24, 2002.

114

. Paula Wade, “Sundquist Hits Hard for Bill to Privatize Prisons,” The Commercial Appeal, January 21, 1998, p.A1.

115

. “Sundquist Aide Leaves State for CCA Lobbying Position,” Chattanooga Times Free Press, December 23, 2001.

116

. Carolyne Park, “Tighe Leaving State for CCA,” Chattanooga Times Free Press, November 14, 2002, p.B1.

117

. “Sundquist’s Human Services Commissioner Joins CCA,” Chattanooga Times Free Press, November 20, 2002.

118

. “Prison Operators CCA Taps Tennessee ECD Commissioner as Vice President,” PR Newswire, January 6, 2003.

119

. Cheryl W. Thompson, “D.C. Prisoner Transfers Faulted; Federal Report Links Assaults to Mistakes by City, Ohio Prison,” Washington Post, December 5, 1998, p.B1.

120

. CCA proxy statement dated March 31, 1998, pp.18-19.

121

. Sam Howe Verhovek, “Alexander Still Draws Scrutiny for Making Small Investments Pay Well,” New York Times, February 28,
1996, p.B6. See also Dale Vincent and Henry Metz, “Alexander Works State in Final Campaign Push; How Alexander Became
Rich,” The Union-Leader, February 19, 1996, p.A1.

122

. “Newspaper: FBI Probes Charges Prison Management Company Offered Bribes,” Associated Press, May 26, 1992.

123

. Paula Wade, “Don’t Fence Me In,” The Commercial Appeal, November 19, 1995, p.7B.

124

. Paula Wade, “Insider Job? Secrecy Clouds Prison Privatization,” The Commercial Appeal, April 20, 1997, p.B3.

125

. Paula Wade and Richard Locker, “Not So Fast, Naifeh Says Of Prison Switchover,” The Commercial Appeal, April 22, 1997,
p.A1.

126

. Deborah Davis, “Prisons for Profit: Crime Pays If You Own the Jail,” In These Times, August 17-30, 1988, p.12.

127

. Sandy Theis and Timothy Heider, “Voinovich Veto Aids Brother’s Jail Interests,” Cleveland Plain Dealer, June 26, 2000, p.1A.

128

. Ann Hardie, “Spotlight on Private Prisons; Contract bidding; Phone call to friend is still above board,” Atlanta Journal and
Constitution, March 22, 1999, p.1B.

129

. This section draws heavily on the Nexis transcript of a program on the American Legislative Exchange Council broadcast by
National Public Radio’s Weekend Edition program, April 13, 2002.

130

. Brigette Sarabi and Edwin Bender, The Prison Payoff: The Role of Politics and Private Prisons in the Incarceration Boom,
Western States Center and Western Prison Project, November 2000, p.4; available online at <www.westernprisonproject.org/
assets/Publications/report.pdf>. Also see Defenders of Wildlife and Natural Resources Defense Council, Corporate America’s
Trojan Horse in the States: The Untold Story Behind the American Legislative Exchange Council, n.d., p.9; available online at
<www.alecwatch.org/11223344.pdf>.

74

NOTE #14
fixed after
APPROVE
when we di
on the film

47

ED proof
iscovered it
(too late)

131

. Excerpt from transcript of BBC Radio 4 program “Capitalist Punishment” aired on April 8, 2003; published in Prison Privatisation
Report International, No. 54, April 2003; available online at <www.psiru.org/justice/PPRI54.1.htm#UNITED%20STATES>.

132

. See the description of the Criminal Justice Task Force on the ALEC website <www.alec.org>.

133

Thom Marshall, “Lawmaker Lauds Privatized Prisons,” Houston Chronicle, April 30, 2003, p.21.

134

. “State of Texas Awards Seven Contracts to Corrections Corporation of America,” Business Wire, November 10, 2003.

135

. Gail DeGeorge, “Wackenhut is Out to Prove that Crime Does Pay,” Business Week, December 17, 1990, p.95.

136

. An estimate of $185,900 for contributions in 2002 was obtained directly from the Institute on Money in State Politics on November 13, 2003. The 1998 data for CCA and other contributors come from Edwin Bender, Private Prisons, Politics and Profits,
Institute on Money in State Politics, July 1, 2000; available online at <www.followthemoney.org/press/ZZ/20000701.phtml>.
The 2000 data come from Edwin Bender, A Contributing Influence: The Private Prison Industry and Political Giving in the South,
Institute on Money in State Politics, April 28, 2002; available online at <www.followthemoney.org/press/ZZ/20020430.pdf>.

137

. “State Ends Experiment with Private Prisons,” Associated Press, October 1, 2000.

138

. Clay Harden, “State to close Delta prison,” The Clarion-Leader, July 26, 2002, p.1A.

139

. This section is based mainly on: “Keating asks prison board to reconsider contract.” Associated Press, September 29, 1998 and
Ziva Branstetter and Barbara Hoberock, “Private Prisons Benefit Politicians,” Tulsa World, December 19, 1999.

140

. “Officials Say Frustration with CCA Led to Contract Termination,” Associated Press, September 17, 1998.

141

. Judith Greene, “Bailing Out Private Jails,” The American Prospect, September 10, 2001, p.27.

142

. CCA 10-K filing for the year ending December 31, 2002, p.13.

143

. “Corrections Corporation of America Announces New Contract and Facility Expansion,” Business Wire, October 2, 2003.

144

. All contribution information is from the website of the Campaign for Responsive Politics at www.opensecrets.org.

145

. Fifth Privatizing Correctional Facilities Conference, September 25-26, 2000, cited in Prison Privatisation Report International,
No. 37, September/October 2000; available online at <www.psiru.org/justice>.

146

. ibid., p.6.

147

. On page 2 of the Summer 2002 issue of APCTO’s newsletter Partners in the Public Service, Ferguson is listed simply as
“member-at-large–large companies.” Note that Dr. Charles Thomas (see Chapter 2) was APCTO’s inaugural co-chair of both
the research and communications committee.

148

. Partners in Public Service, Spring 2002, p.2 <www.apcto.org>.

149

. Partners In Public Service, APCTO, Summer 2003, p. 6 <www.apcto.org>.

150

. Partners In Public Service, APCTO, Summer 2003, p. 4 <www.apcto.org>.

151

. Partners In Public Service, APCTO, Summer 2003, p. 5 <www.apcto.org>.

152

. BB&T Capital Markets report on CCA dated December 4, 2001, p.1.

153

. Quoted in Richard Behar, “Partners in Crime,” Forbes, February 11, 1985, p.116.

154

. “Business Briefs,” United Press International, October 2, 1986.

155

. Quoted in Bruce Buursma, “Social Woes Fuel Prison Firm’s Growth,” Chicago Tribune, January 28, 1991, p.3.

156

. Andrew Lanyi quoted in Gene G. Marcial, “Inside Wall Street: Locking in a Winner?” Business Week, October 9, 1995, p.126.

157

. “CCA to Implement 2-for-1 Stock Split,” PR Newswire, June 5, 1996.

158

. This section is largely taken from Chapter II of Philip Mattera & Mafruza Khan, Jail Breaks: Economic Development Subsidies
Given to Private Prisons, Washington, DC: Good Jobs First, 2001; available online at <www.goodjobsfirst.org/jbstudy.htm>.

159

. Quoted in Brian Garrity, “Sale-Leaseback REITs Yield Big Profits…to Owners,” Investment Dealers’ Digest, February 2, 1998,
p.11.

75

160

. For an overview of subsidies to CCA and other private prisons, see Philip Mattera & Mafruza Khan, Jail Breaks: Economic
Development Subsidies Given to Private Prisons, Washington, DC: Good Jobs First, 2001; available online at
<www.goodjobsfirst.org/jbstudy.htm>.

161

. See “CCA Prison Realty Trust Files for $340M IPO,” Going Public: The IPO Reporter, May 5, 1997, p.1.

162

. Irv McGraw, “IPOs Go to Jail,” On Wall Street, June 1, 1997.

163

. See, for example, “Class Action Suit Filed Against Corrections Corporation of America and Its Board of Directors,” Business
Wire, April 28, 1998.

164

. Barbara Martinez and Martha Brannigan, “Corrections Corp.’s Accord with CCA Draws Opposition of 3 Pension Funds,” Wall
Street Journal, November 27, 1998, p.A4.

165

. See Prison Realty Trust 10-K for the year ending December 31, 1999, p.18.

166

. Quoted in Getahn Ward, “Prison Realty, CCA Merger Under Scrutiny: Financial Structure At the Forefront of Analysts’ Critiques,” The Tennessean, November 15, 1999, p.1E.

167

. Prison Realty Trust Inc. 10-K filing for the year ending December 31, 1999, p.F-3.

168

. Getahn Ward, “Prison Realty Settles Suits for $120M,” The Tennessean, August 25, 2000.

169

. Lehman Brothers report on CCA dated August 15, 2002, p.1.

170

CCA 10-K for the year ending December 31, 2002, p.50

171

. Jefferies & Company report on CCA dated July 19, 2002, p.3.

172

. See “Corrections Corporation of America Announces Transition of the Management of the Lawrenceville Correctional Center to
the Virginia Department of Corrections,” PR Newswire, March 18, 2003.

173

. Harry Franklin, “Stewart Prison to be Finished,” Columbus Ledger-Enquirer, September 11, 2003.

174

. From a presentation by CCA Chief Financial Officer Irving E. Lingo Jr. at the Deutsche Bank Global High Yield Conference,
October 8, 2003; available online at the Investor Relations section of the CCA website <www.correctionscorp.com>.

175

. Lehman Brothers report on CCA dated May 21, 2003, p.1.

176

. Jefferies & Co. report on CCA dated October 3, 2003, p.1.

177

. Data downloaded through subscription to Vickers Stock Research website <www.vickers-stock.com>.

178

. Quoted in Martin Tolchin, “As Privately Owned Prisons Increase, So Do Their Critics,” New York Times, February 11, 1985, p.B6.

179

. See, for example, CCA’s 10-K filing for the year ending December 31, 1989, section on Facility Expenses and the 10-K for the
year ending December 31, 2002, p.60.

180

. James Austin and Garry Coventry, Emerging Issues on Privatized Prisons, Washington, DC: Bureau of Justice Assistance, February 2001, p.16; available online at <http://www.ncjrs.org/pdffiles1/bja/181249.pdf>.

181

. Doctor R. Crants, “Private Prison Management: A Study in Economic Efficiency,” Journal of Contemporary Criminal Justice,
vol. 7, no. 1, p.53; quoted in Scott D. Camp and Gerald G. Gaes, Private Adult Prisons: What Do We Really Know and Why Don’t
We Know More?” Office of Research and Evaluation, Federal Bureau of Prisons, August 3, 1999, p.11.

182

. See the section on Personnel in the CCA 10-K filing for the year ending December 31, 1992 and the section on Employees for the
10-K filing for the year ending December 31, 1995.

183

. Results of search performed in a database of National Labor Relations Board elections (January 1990-October 2002) contained on
the Labor Database CD-ROM produced by the Food and Allied Service Trades, January 2003.

184

. Prison Realty Corp. 10-K filing for the year ending December 31, 1998, section on Employees.

185

. CCA 10-K filing for the year ending December 31, 2000, section on Employees.

186

. CCA 10-K for year ending December 31, 2001, section on Employees.

76

187

. See CCA 10-K for the year ending December 31, 2002 and the Election Scorecard section of Labor Relations Week, May 23, 2002.

188

. Susan Hylton, “Union Organizer Alleges Labor Activities Videotaped by CCA,” Tulsa World, March 25, 2001 and “Further Unfair
Acts at Jail Alleged,” Tulsa World, March 31, 2001.

189

. ibid.

190

. Cited in Chuck Davis, “Prison Privatization and the Correctional Workforce” in Privatization of Correctional Services: Evaluating the Role of Private Prison Management in Minnesota, University of Minnesota Law School Institute on Criminal Justice, June
1999; available online at <http://www.law.umn.edu/centers/crimjust/publications/07_CorrectionalWorkforce.pdf>.

191

. Calculation based on numbers cited in a February 1997 article in American Jails summarized in Prison Privitisation Report
International, No. 11, June 1997; available online at </www.psiru.org/justice/ppriarchive/ppri11-06-97.asp>.

192

. See the description of employee benefits on the CCA website at <http://www.correctionscorp.com/career/benefits.html>.

193

. Paul Dellinger, “Prison Company Lists Salary range in Wythe,” Roanoke Times & World News, January 12, 1995.

194

. “Poverty Figures has [sic] COs Sizing Up Their Jobs,” Corrections Professional, November 8, 1999.

195

. Mark Tatge, “Employees Criticize Privately Run Prison,” Cleveland Plain Dealer, August 30, 1998, p.18A.

196

. Rich Schweigert quoted in Tom McAvoy, “Colorado Hopes to Contract with Private Prisons to Gain More Beds,” Pueblo Chieftain, February 12, 2003.

197

. Arthur Santana, “Contractor for Annex at D.C. Jail Under Fire Again,” Washington Post, August 14, 2003.

198

. The Corrections Yearbook 2000: Private Correctional Facilities, Middletown, Conn.: Criminal Justice Institute Inc, 2000, p.98.

199

. U.S. Bureau of Labor Statistics, Occupational Outlook Handbook, 2002-2003, Washington, DC, 2002, p.341; available online at
<http://www.bls.gov/oco/home.htm>.

200

. All of the compensation data come from the CCA Form DEF14A proxy statement dated April 11, 2003, p.31.

201

. “Overtime Pay Questioned in Lawsuit for Workers at Three Private Prisons in Mississippi,” Associated Press, June 22, 2001.

202

. Results of a search performed in a database of Overtime and Minimum Wage Compliance Activity (January 1996-October 2002)
contained on the Labor Database CD-ROM produced by the Food and Allied Service Trades, January 2003.

203

. Results of a search performed in a database of Service Contract Act violations (January 1996-October 2002) contained on the
Labor Database CD-ROM produced by the Food and Allied Service Trades, January 2003.

204

. Rhonda Cook, “Audit Blasts Private Prison Management,” Atlanta Journal and Constitution, October 2, 1999, p.1F.

205

. Eric Bates, “Private Prisons,” The Nation, January 5, 1998, p.14.

206

. Tennessee Comptroller of the Treasury, Performance Audit: Department of Correction, September 2003, pp.43-44; available
online at <http://www.comptroller.state.tn.us/sa/reports/pa02018.pdf>.

207

. Report to the Attorney General: Inspection and Review of the Northeast Ohio Correctional Center, prepared by Office of the
Corrections Trustee for the District of Columbia, November 25, 1998; available online at <http://www.usdoj.gov/ag/
youngstown.htm>.

208

. Hawaii Department of Public Safety, Briefing Report—Florence Correctional Facility, 2001; cited in Joshua Miller, “Worker
Rights in Private Prisons,” in Andrew Coyle et al., editors, Capitalist Punishment: Prison Privatization and Human Rights,
Atlanta: Clarity Press, 2003, p. 141.

209

. “Failure to Hire Pay Agreed for 96 Women,” Daily Oklahoman, August 29, 2002.

210

. Jeff Burlew, “Violations Uncovered at Prison; Personnel Practices Spark Trouble,” Tallahassee Democrat, October 19, 2002.
p.A1.

211

. Susan Hylton, “Some Jail Workers have Prior Arrests,” Tulsa World, May 13, 2001.

212

. Tennessee Department of Correction, Tennessee Department of Correction Correctional Officer Turnover, 1/1/98-12/31/98, September 1, 1999, pp.1-2.

77

213

. Susan Hylton, “Jail Sees Turnover of 72% Since ’99,” Tulsa World, July 15, 2001.

214

. Chris Joyner, “Workhouse Turnover: Silverdale Losing Average of Two-Thirds of Employees Annually,” Chattanooga Times Free
Press, January 1, 2003, p.A1.

215

. The Corrections Yearbook 2001: Adult Systems, Middletown, Conn.: Criminal Justice Institute, 2002, p.170.

216

. Report to the Attorney General: Inspection and Review of the Northeast Ohio Correctional Center, prepared by Office of the
Corrections Trustee for the District of Columbia, November 25, 1998; available online at <http://www.usdoj.gov/ag/
youngstown.htm>.

.
217

. Mark Tatge, “Employees Criticize Privately Run Prison,” Cleveland Plain Dealer, August 30, 1998, p.18A.

218

. Scott Calvert, “Past Officers Cite Warden for Turnover,” St. Petersburg Times, November 21, 1999, p.1.

219

. Joshua Miller, “Worker Rights in Private Prisons,” in Andrew Coyle et al., editors, Capitalist Punishment: Prison Privatization
and Human Rights, Atlanta: Clarity Press, 2003, p.150.

220

J.C. Bradford & Co report on CCA dated January 9, 1995, p.11.

221

. Agreement between Corrections Corporation of America, Jean-Louis Vullierme and Pierre Dejardin-Verkinder, Exhibit 10 (ll),
CCA 10-K for the year ending December 31, 1994.

222

. Agreement between CCA International Inc and Iniziative Industriali S.p.A., Exhibit 10, CCA 10-K for the year ending December
31, 1994.

223

. House of Commons, Fourth Report from the Home Affairs Committee, Contract Provision of Prisons, May 6,1987, quoted in
Stephen Nathan, “Prison Privatization in the UK,” in Andrew Coyle et al., eds., Capitalist Punishment: Prison Privatization &
Human Rights, Atlanta: Clarity Press, 2003.

224

. Memorandum between the registrant Corrections Corporation of America and CCA International Inc, Sir Robert McAlpine &
Sons Ltd and John Mowlem & Company Ltd, January 19, 1988.

225

. RDN Hopkins, “The Formation of UK Detention Services,” paper presented at Private Gevangenissen in Nederland conference,
Utrecht, December 1, 1993, p.2.

226

. Prison Contracting Out: A First Year Report, Prison Reform Trust, London, April 1993, p10.

227

. “Group 4 awarded prison contract,” Independent, November 7, 1991.

228

. Eileen Baldly, “Private Prison Entrepreneurs and the NSW Experience,” Socio-Legal Bulletin, No.12, Autumn 1994, p11.

229

. “Private Prison Companies: Their Perspectives,” paper given at Australian Institute of Criminology Conference, June 16-17,
1997.

230

. Paul Moyle, Profiting from Punishment, Private prisons In Australia: Reform or Regression? Pluto Press, 2000. This book contains a full discussion of the history of private prisons in Australia and a comparative study between CCA-run Borallon and
publicly-run Lotus Glen prisons.

231

. Victoria Hansard, September 8, 1994.

232

. Victoria Hansard, September 8, 1994.

233

. Advertisement in The Australian, April 22, 1995.

234

. Corrections in the Balance: A Review of Corrective Services in Queensland, January 1999.

235

. Paul Moyle, Profiting from Punishment, Private Prisons in Australia: Reform or Regression? Pluto Press, 2000, p.335.

236

. “New A$140 million county court facilities to be built,” Office of the Attorney General Media Release, December 16, 1999.

237

. “Corrections Corporation of Australia Contracts With Western Australia,” Prison Realty Trust news release, January 14, 2000.

238

. “Corrections Corporation of Australia Awarded Contract To Provide Inmate Transportation and Court Security,” Prison Realty
Trust news release, January 25, 2000.

78

239

. “CCA/Sodexho Alliance: Privatisation Factfile No. 7,” in Prison Report No.28, Autumn 1994, Prison Reform Trust, UK.

240

. Corrections Corporation of America Annual Report for 1994, back cover.

241

. Doctor C. Crants, CCA’s then chief executive officer, interview in Chief Executive magazine, May 1998.

242

. Corrections Corporation of America 1995 Annual Report, p 27.

243

. Doctor C. Crants, Chief Executive magazine, May 1998.

244

. Harmon Wray, “Prison Realty’s AGM,” Prison Privatisation Report International No. 30, July/August 1999; available online at
<www.psiru.org/justice>.

245

. Leslie Aun, Sodexho VP Public Relations, speaking at a Webster University forum, October 24, 2001, according to notes taken by
a participant at the event.

246

. Jack Pullen, “UKDS, Consortium aims at free hand over private jails,” Independent, November 18, 1987.

247

. R.D.N. Hopkins, “The Formation of UK Detention Services,” paper presented at Private Gevangenissen In Nederland, December
1, 1993, Utrecht.

248

. “Public Eye,’ BBC TV, April 16, 1993.

249

. Corrections Corporation of America: Tennessee Tales, Prison Reform Trust, London, April 1993.

250

. FWP Bentley, Review Visit to USA, May 10, 1993, unpublished.

251

. “Riots on the menu at private prison that left out chips,” Sunday Times, August 29, 1993.

252

. Home Office, Report by HM Chief Inspector of Prisons, HMP Blakenhurst, February 1, 1995, p.16.

253

. Hansard, Apri1 2, 1994.

254

. Hansard, July 11, 1994.

255

. Hansard, March 28, 1994.

256

. Hansard, July 13, 1994.

257

. UKDS letter to prospective employees, 1993

258

. Home Office, Report by HM Chief Inspector of Prisons, HMP Blakenhurst, February 1, 1995.

259

. “Inspection Finds Confusion of Cultures at Blakenhurst Prison,” HM Inspectorate of Prisons News, February 1, 1995.

260

. “Privatisation Factfile 10, “Prison Report No. 31, Summer 1995, Prison Reform Trust, p. 13.

261

. “Inquiry call after inmate dies in cell,” Birmingham Post, August 9, 1996.

262

. “Taxpayer foots the bill for private prison made to change 1,000 locks,” Independent, March 5, 1997.

263

. Hansard, April 28, 1999.

264

. HM Prison Service/Management Consultancy Service, HM prison Blakenhurst, unpublished, March 16, 2001.

265

. Jo Woodbridge, “Review of Comparative Costs and Performance of Privately and Publicly Operated Prisons 1997-98,” Home
Office Statistical Bulletin, Issue 13/99, July 28, 1999.

266

. HM Inspector of Prisons, Report on a Short Unannounced Inspection of HM Prison Blakenhurst, 5-7 October 1998, p5; available
online at <www.homeoffice.gov.uk/justice/prisons/inspprisons/inspection.html>.

267

. Prison Privatisation Report International, No. 37, Sept/Oct 2000; available online at <www.psiru.org/justice>.

268

. “Prison Service to Run Manchester and Blakenhurst Prisons,” HM Prisons News, January 12, 2001.

269

. HM Chief Inspector of Prisons, Report on a Full Announced Inspection of HM Prison Blakenhurst, January 22-26, 2001.

79

270

. At the time of Alton Manning’s death, UKDS was jointly owned by Corrections Corporation of America and two UK construction
firms, Mowlem and McAlpine. At the time of the inquest the company was run by CCA and Sodexho.

271

. The material in this chapter draws on information provided by INQUEST <www.inquest.gn.apc.org/briefings/manning.html> and
the Birmingham Racial Attacks Monitoring Unit (BRAMU, www.bramu.fsnet.co.uk). See also The Queen and HM Coroner for
the County of Worcester and the Metropolitan Borough of Dudley ex parte UK Detention Services Ltd, Royal Courts of Justice
CO-402-98, Queens Bench Division, February 18, 1998.

272

. “Policy Overview and Framework for Prison Privatization in Victoria,” paper presented by the Deputy Secretary (Justice Operations) at the Australian Institute of Criminology conference, June 16/17, 1997.

273

. Quoted in Victoria’s Prison System, Community Protection and Prisoner Welfare, Special Report No.60, May 1999, Auditor
General Victoria, p.25

274

. Amanda George, “The New Prison Culture, Making Millions from Misery,” in Cook & Davies, eds., Harsh Punishment, International Experiences of Women’s Imprisonment, Northeastern University Press, 1999, p.189.

275

. Corrections Corporation of Australia: A Brief Profile and History, Corrections Corporation of Australia Pty. Ltd. promotional
brochure, undated.

276

. An Introduction to the Prison Development Plan, Proposed Metropolitan Women’s Prison, New Prisons Project, April 1995.

277

. The Metropolitan Women’s Correctional Centre, Corrections Corporation of Australia, brochure issued by the New Prisons Project
, August 1996.

278

. “Jail staff in union talks,” Australian, September 19,1996.

279

. Victoria Button, “Jail Out of Control, Say Warders,” The Age (Melbourne), June 18, 1997, p.3.

280

. Prison Privatisation Report International, No. 8, March 1997; available online at <www.psiru.org/justice>.

281

. 12 Months At Australia’s First Private Women’s Prison, Media Conference, August 10, 1997, Federation of Community Legal
Centres (Vic) Inc.

282

. “Union attacks private jail,” Warrambool Standard, March 23, 1999.

283

. Victoria’s Prison System, Community Protection and Prisoner Welfare, Auditor-General of Victoria, Special Report No. 60, May
1999.

284

. Audit review of Government Contracts, Contracting, Privatisation, Probity and Disclosure in Victoria 1992-1999, An Independent Report to Government, May 2000.

285

. ibid., p.40.

286

. Report of the Independent Investigation into the Management and Operations of Victoria’s Private Prisons (The Kirby Report),
October 2000.

287

. “Government Tales Control of Women’s Prison,” media statement from the Minister of Corrections, October 3, 2000.

288

. Correctional Services Commissioner’s Report on Metropolitan Women’s Correctional Centre’s Compliance with its Contractual
Obligations and Prison Services Agreement, Office of the Correctional Services Commissioner, Department of Justice, No.40,
Session 1999-2000, September 13, 2000.

289

. “CCA Questions Government’s Motives,” Corrections Corporation of Australia media release, October 3, 2000.

290

. Victoria Hansard, November 2, 2000.

291

. Speaking at the World Research Group/Reason Public Policy Institute’s Fifth Privatizing Correctional Facilities Conference, San
Antonio, September 25/26, 2000.

292

. Peter Young, The Prison Cell: The Start of a Better Approach to Prison Management, London: ASI (Research) Ltd, 1987.

293

. ibid., p.38.

294

. “Tale of Two Systems: Cost, Quality and Accountability in Private Prisons,” Harvard Law Review, May 2002.

295

. PR Newswire, July 23, 2002.

80

296

. See Volokh’s personal web page at <http://kuznets.fas.harvard.edu/~volokh>.

297

. Michele Deitch, “From the Literature,” Correctional Law Reporter, August/September 2002.

298

. James F. Blumstein and Mark A. Cohen, “The Interrelationship Between Public and Private Prisons,” April 2003; available online
at the APCTO website (www.apcto.org; click on Research Findings).

299

. ibid., p.xiii.

300

. Geoffrey F. Segal and Adrian Moore, Weighing the Watchmen: Evaluating the Costs and Benefits of Outsourcing Correctional
Services, Reason Public Policy Institute, Policy Study No. 289-290, January 2002; available online at <www.rppi.org/
prisoncost.html>.

301

. Sherri Deatherage Green, “PR Commitment Helps CCA Escape Reputation Woes,” PR Week, May 13, 2003.

302

. U.S. General Accounting Office, Private and Public Prisons: Studies Comparing Operational Costs and/or Quality of Service,
Washington, DC, August 1996, GAO/GGD-96-158.

303

. ibid., pp.4-5.

304

. Abt Associates Inc., Private Prisons in the United States: An Assessment of Current Practice, July 16, 1998.

305

. ibid., p.56.

306

. Judith Greene et al., “Comparing Private and Public Prison Services And Programs in Minnesota: Findings From Prisoner Interviews,” Current Issues in Criminal Justice, Journal of the Institute of Criminology, University of Sydney Faculty of Law, Vol. 11,
Number 2, November 1999.

307

. ibid., p.231.

308

. U.S. Department of Justice, Office of Justice Programs, Emerging Issues on Privatized Prisons; available online at
<www.ojp.usdoj.gov>.

309

. Dina Perrone and 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,” The Prison Journal, Volume 83, Number 3,
September 2003, p.309.

310

. ibid., p.315.

311

. ibid., p.317.

312

. Abt Associates, Governments’ Management of Private Prisons, September 15, 2003.

313

. ibid., p.66.

314

. ibid., p.83.

315

. “CCA Marks Twentieth Anniversary,” PR Newswire January 27, 2003.

316

. See <www.aca.org>.

317

. Elizabeth Alexander, “What’s Wrong With the ACA,” NPP Journal, Vol. 15, No. 1, Summer/Fall 2001.

318

. Abt Associates, Governments’ Management of Private Prisons, September 15, 2003, p.27.

319

. D. Shichor, Punishment for Profit, Private Prisons/Public Concerns, Sage, 1995, p.5.

320

. “CCA’s Northeast Ohio Correctional Center Receives ACA Accreditation,” PR Newswire, August 16, 1999.

321

. “Jail earns ‘excellent’ passing grade,” St. Petersburg Times, October 5, 2000.

322

. See <www.aca.org/standards/benefits.asp>.

323

. The report is available online at <www.shareholder.com/cxw/downloads/2002ar.pdf>.

324

. From a presentation by CCA Chief Financial Officer Irving E. Lingo Jr. at the Deutsche Bank Global High Yield Conference,
October 8, 2003; available online at the Investor Relations section of the CCA website <www.correctionscorp.com>.

325

. CCA 10-K filing for year ending December 31, 2002, p.32.

81

ORIGINAL PUBLICATION
Union Printed By

Charlotte, NC (704) 372-6785
2
CH

A R L O T T E, N C

82