Donald Cohen has a regular bulletin called “In the Public Interest” that reports on the latest in the world of privatizing public services. The results are consistent: the private organization seeks to cut costs and to avoid serving those who cost the most.
In the Public Interest provides a valuable service to all of us. If you want to subscribe or learn more, go to its website.
Here is an excerpt from the latest bulletin:
Upcoming Outsourcing Issues
1) National: Donna Murch, associate professor of history at Rutgers, discusses her new Boston Review article, “Paying for Punishment: The New Debtors’ Prison,” on how private industry is cashing in on mass incarceration, the criminal justice system, and indebtedness. [Audio]. She writes, “opposition to mass incarceration and the war on drugs has lately become fashionable. The Koch brothers, Grover Norquist, and Newt Gingrich are lining up with the NAACP, ACLU, and Van Jones to support criminal justice reform. Many assume that budget savings are driving this newfound consensus. But understanding decarceration only through the lens of cost cutting has a major blind spot. America’s contemporary system of policing, courts, imprisonment, and parole doesn’t just absorb money. It also makes money through asset forfeiture, lucrative public contracts from private service providers, and by directly extracting revenue and unpaid labor from populations of color and the poor.”
See also In the Public Interest’s new fact sheet on how “Private Prison Companies Encourage Mass Incarceration by Owning Facilities,” and ITPI’s infographic on how “Private Companies Profit from Almost Every Function of America’s Criminal Justice System.” And follow ITPI’s Programs Not Profits, a multi-year campaign that promotes replacing private profits that hurt incarcerated people, correctional officers, and taxpayers, with publicly funded and managed programs that provide job training, mental health care, and substance abuse treatment. On youth incarceration see the Burns Institute’s “Stemming The Rising Tide: Racial and Ethnic Disparities in Youth Incarceration and Strategies for Change.”
2) National/Revolving Door News: Corrections Corporation of America has appointed Stacia A. Hylton, the former head of the U.S. Marshals Service—a major contractor with CCA—to its board of directors. “Hylton, age 56, retired in 2015 as Director of the U.S. Marshals Service (“USMS”), which with more than 5,600 employees, is responsible for judiciary security, fugitive operations, asset forfeitures, prisoner operations and transport and witness security. She was nominated for the leadership position of USMS by President Barack Obama and was confirmed by the United States Senate in 2010. Previously, she was President of Hylton, Kirk and Associates, a Virginia-based private consulting firm, and served under President Bush as the Attorney General’s Federal Detention Trustee in the United States Department of Justice. From 1980 to 2004, Hylton served in progressively senior leadership positions within USMS.”
3) National: A damning new report from the Justice Department’s Inspector General finds that private contract prisons run by Corrections Corporation of America, the GEO Group, and Management and Training Corporation are more dangerous than those managed by the Bureau of Prisons. “Low risk” inmates at contract prisons were nine times more likely to be placed on lockdown and put in solitary confinement than others in the federal system. The IG report calls for more oversight, but the ACLU’s Carl Takei says “that’s not enough,” and that the IG’s recommendations “avoid confronting the larger question of whether it makes sense to continue the federal government’s multi-decade experiment with prison privatization.” [DOJ IG Report]
4) National: The GEO Group for-profit prison REIT has been downgraded to a “strong sell” by Zacks Investment Research. But “California Public Employees Retirement System boosted its stake in Geo Group by 0.6% in the fourth quarter. California Public Employees Retirement System now owns 190,200 shares of the real estate investment trust’s stock worth $5,499,000 after buying an additional 1,100 shares in the last quarter.” Vanguard Group, which owns around $343 million of GEO stock, boosted its stake by 5.6% in the last quarter. Also, the state of Tennessee Treasury Department bought a new stake in Geo Group during the fourth quarter worth about $1,667,000.
Privatization is a crime against the public interest. It benefit the investors and corporate owners, but shortchanges those in need–whether in prisons, in hospitals, or in schools–and stiffs the public.

As this article explains http://www.alternet.org/civil-liberties/what-you-need-know-about-dojs-claim-it-ending-private-prisons , privatized prisons are not so much the problem per se, but monetized/profitized prisons, which affects public prisons too. Just as we’re starting to understand that there are many ways to profit off a “non-profit”, we also need to understand that there are ways to profit off “public” services as well.
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Privatization of the public sector is a major factor in the corruption of government, as ever-increasing shares of the taxpayers’ dollars are diverted by the privateers into buying the politicians who control the flow of those very tax dollars.
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Jon, you said it in one sentence. Privatization of government services leads to corruption.
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Today’s Wall Street Journal reports on the Obama administration’s decision to close federal for-profit prisons. There are relatively few prisoners in these facilities and the wind-down is expected to take up to a decade. The news of this action brought an immediate drop in the stock price of the three major corporations that operate facilities, and claims that the research citing inferior operations was flawed and insufficient to warrant this action. This response was predictable. The move is certain to energize the rest of the for-profit industry lest there be more returns of these institutions to the government monopoly and bureaucracy.
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The DOJ announced today that they will end the use of privatized prisons claiming that the facilities are less safe and efficient than government institutions. Now if we can only get the DOJ to understand that charter schools are a similar boondoggle. We should not be wasting public funds on amateur schools that increase segregation and achieve meager results. The big “winners” are corporations and billionaires, not students and communities. The big losers are all the other students left in underfunded public schools.
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We will march around
Those jail house walls
That symbolize segregation
We will walk around them
Like unto Joshua
Until the walls
Come tumbling down
Martin Luther King
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The private sector may be more efficient and economical than government in certain respects, often by being less ethical, however the private sector can be much, much worse than just unethical in certain respects. Being for profit, it encompasses the realms of investment, false advertising, cheating, gaming and gambling. People don’t provide a needed service conscientiously, they essentially say, I’ll bet this much we can do that. And then they use all devices to make sure it at least appears they have done it. And the beat goes on.
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While it’s certainly good news that the DOJ won’t be using private prisons anymore, they are still being used by DHS to house hapless migrant families. I discuss this at length in a recent *Jacobin* piece https://www.jacobinmag.com/2016/08/immigration-democrats-hillary-clinton-barack-obama/
Worrisome too are the huge campaign contributions private prison firms make to politicians. CCA and GEO have contributed over $130K to certain presidential hopefuls, making me doubt they would change policies.
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