Florida Prisons Bill Would Expand Private Management, Netting A Big Win
For Political Contributors
First Posted: 02/
1/2012 2:08 pm Updated: 02/ 2/2012 3:50 pm
Florida
this week faces a choice that is increasingly confronting much of the nation --
whether to hand over a major slice of its prison system to private, for-profit
businesses that answer to Wall Street.
Lawmakers
in Florida are taking a final vote on legislation that would result in the
single largest expansion of for-profit prisons in the country, resulting in
the privatizing of every state
prison south of Orlando. This would amount to just under 30
facilities representing 20 percent of the state's sprawling correctional
system. The state Senate postponed a scheduled vote on the issue Wednesday
afternoon and is expected to address the measure as early as next week. The
House would still have to approve a companion bill for the measure to become
law.
Proponents
have advanced the move as a cost-saving measure, a business-minded response to
the state's budget shortfall. But a series of studies and the experiences of
several other states that have experimented with privatizing prison systems
raise significant doubts about the cost savings that are supposed to accrue:
Private prisons have tended to take control of the lowest-cost inmates, those
lacking health problems and posing less risk of violence, while leaving states
to contend with the harder cases.
The
action by Florida’s legislature comes after years of sustained lobbying by
corporations that operate private prisons, an industry that has been expanding
aggressively by offering itself as a solution to state budget shortages. The
industry has contributed more than $1.4 million to Florida's Republican Party
in recent years and has spent millions lobbying key lawmakers in that state.
The
stakes are high: Florida has the third-largest prison system in the nation.
Opponents decry the move as a perversion of the legislative process, one that
would determine the shape of the corrections system not based on concerns over
public safety, but as a means of distributing spoils to a well-financed special
interest group.
"This
is a major policy change," said state Sen. Mike Fasano, a Republican who
opposes prison privatization despite his party's strong support, speaking
during a recent hearing on the plan. "Do we privatize public safety now?
Is that what we're doing -- just so some private companies, some multimillion
dollar companies, can make a profit?"
The
moves in Florida highlight a contentious debate, ongoing for the past two
decades, about U.S. criminal justice and incarceration policies. As prison
populations have surged nationwide since the 1980s, private corporations have
positioned themselves to secure a growing share of the money expended on
incarceration, courting influence in Washington and in state capitols across
the country in a strategic bid to secure contracts.
Among
proponents' primary talking points is the contention that they will save the
taxpayer money -- an argument that experts say is difficult to prove.
"There
is no real empirical data to say with any certainty that private prisons cost
less or that they're more effective than public prisons," said John Hall,
a public policy consultant in Florida who studied private prisons in
recent years as the executive director of the Florida Center for Fiscal and
Economic Policy.
But
even as the Florida Senate considers final drafts of legislation on prison
privatization, lawmakers have commissioned no outside studies to
analyze the projected costs or benefits of the plan, which would more than
double the number of private prisons and inmates under private supervision in
the state.
Over
the last two decades, Florida increasingly has come to rely on the private
prison industry in such a fashion that experts say the history justifies taking
a pause before approving the expansion plan. A 2005 report by a state inspector general's office found
that the commission overseeing Florida private prisons had been unable to
calculate the cost savings required by the state, while allowing contract
modifications that benefited private prison operators -- changes that resulted
in the state's being overbilled by millions of dollars.
While reports from the state's legislative research office show
that Florida's seven existing private prisons cost less than public facilities
-- a benefit cited repeatedly over the past week by supporters of the bill --
they also point out that "the cost savings estimates are subject to
caveats and should be evaluated cautiously."
Cutting
costs is a key issue in Florida, which faces a more than $3 billion budget
deficit. But critics in the Senate have questioned why the bill has moved so
fast even though the annual financial savings estimated by supporters come to
no more than $30 million. The state’s Department of Corrections budget exceeds
$2 billion.
"Privatization
is good for certain functions, but it's not good in my mind for public
safety," said Paula Dockery, another Republican state senator who
disapproves of the privatization plan. "They have not done any true fiscal
analysis on it, and I think it's really an embarrassment."
BIG SPENDING IN THE SUNSHINE STATE
One
company that is especially well positioned to take advantage of new legislation
in the Sunshine State is the GEO Group, a Florida business that is the nation's
second-largest for-profit prison corporation. Based in Boca Raton,
at the northern end of the Miami metropolitan area, GEO owns or manages more
than 100 correctional facilities in the United States, the United Kingdom,
Australia and South Africa.
The
GEO Group already has contracts in Florida and aims for more. The Corrections
Corp. of America, the country's largest operator of private prisons, also
operates prisons in Florida.
Information
about its potential Florida expansion is featured prominently on the GEO
Group's home page, and executives have headlined quarterly earnings calls over
the past year with discussion of the legislature's proposal.
"This
is the largest single contract procurement in the history of our industry, and
we've taken what we believe are important steps to put our company in a
competitive position to pursue this unprecedented opportunity," GEO
Group's chief executive, George Zoley, said in an August call with investors.
Corrections
Corp.'s chief executive, Damon Hininger, sounded similarly eager in a
conference call last year, saying the company was "aggressively pursuing
this opportunity."
Both
companies have been active contributors to the state's elected officials and
have hired top-tier lobbyists in Tallahassee to influence legislators and
officials in the governor's administration in recent years.
A
spokesman for the GEO Group did not respond to requests for comment. Mike
Machak, a spokesman for Corrections Corp. of America, wrote in an email that
the company had a "longstanding and productive partnership with
Florida."
"We
would certainly be interested in expanding our presence as both a partner and
corporate citizen in Florida," Machak wrote.
A
Huffington Post analysis of campaign contributions over the last three election
cycles finds that political action committees, executives and spouses at
for-profit prison companies have donated nearly $1.8 million to Florida
candidates and committees.
The
Florida Republican Party over the last decade has been the single largest
recipient of campaign money nationwide from both the GEO Group and Corrections
Corp. of America. Prominent Florida lawmakers in federal and state offices are
among the top recipients of campaign donations from the GEO Group.
U.S.
Sen. Marco Rubio (R-Fla.) received $27,000 from the GEO Group during his 2010
campaign, and GEO was listed as contributing the maximum of $25,000 last year
to the inaugural party for Florida's Republican Gov. Rick Scott.
State
Senate President Mike Haridopolos, a major supporter of the prison
privatization plan, also received more than $35,000 from the GEO Group last
year when he decided to seek the Republican nomination for the U.S. Senate race
to challenge the Democratic incumbent Sen. Bill Nelson. Haridopolos decided to
drop out of the race last summer.
An analysis by the National
Institute on Money in State Politics found that during the 2010
election cycle, private prison interests gave $998,000 to Florida state
lawmakers. In a similar fashion, the Florida Police Benevolent Association,
which until recently represented the state's correctional officers, donated
about $1 million. The Police Benevolent Association also serves as a union for
local police officers and many other law enforcement agents in the state.
HARD PUSH FOR PRIVATIZATION
This
latest move to privatize South Florida's prisons is the second time in less
than a year that the legislature has taken up the measure. Last spring,
legislators included the prison privatization plan in a massive budget bill,
rather than introducing separate legislation on the issue.
Using
the budget approach, lawmakers avoided a direct up-or-down vote on the prison
changes. The Florida Police Benevolent Association sued the state in July to
halt the plan, arguing that the legislature had overstepped its authority by
slipping such language into a budget bill.
A
state judge in Tallahassee ruled last fall that the approach was
unconstitutional and that lawmakers could not use the "hidden
recesses" of the budget process to enact such a sweeping change in state
policy.
After
the court ruling was announced in September, the GEO Group's stock fell by
nearly 5 percent in one day.
Lawmakers
started anew on the privatization effort last month, swiftly moving the bills
through committees. The head of the committee that sponsored the legislation in
the state Senate, John Thrasher, was the former chairman of the Florida
Republican Party, which has received more than $1.4 million in donations from
political action committees and executives of for-profit prison corporations
over the last three election cycles.
In
recent debate in the Senate, Thrasher has argued that the goal of the
legislation is cutting state costs.
"I've
got taxpayers in my district who are concerned about the [shortfall] we have in
the state of Florida, and they've asked us to look at ways that we can make
government more efficient," Thrasher said in a committee meeting last
week. "It's not a new concept. The evidence is that we're going to save
money."
Supporters
have argued that the state requires outsourced government services to be
provided at a 7 percent discount and said the state would have the power to
keep companies accountable for achieving the savings.
But
evidence from numerous national studies has shown that the benefits of handing
prisons off to private corporations can be illusory at best.
In
Arizona, a 2010 report from the state's
auditor general showed that it cost the state more to house
prisoners in private facilities than public prisons, for both minimum- and
medium-security facilities. After adjusting for the types of medical care
provided in state prisons, the report found that the state spent more per
inmate in private prisons than it did in its own public facilities.
Other
outside research has found little in the way of convincing evidence that
privatization significantly reduces prison costs. An analysis by the University of Utah that
compiled a bevy of previous research on prison costs found that "neither cost
savings nor improvements in quality of confinement are guaranteed through
privatization."
Reports
from Florida's legislative research arm, the Office of Program Policy Analysis
and Government Accountability, noted that the financial savings were more of a
cost shift. Recent reports showed that the biggest savings in Florida's private
prisons resulted mostly from lower retirement benefits for private guards; but
higher administrative costs turned up for the state, which is still charged
with overseeing the entire corrections system.
Dockery,
the Republican state senator who disapproves of the privatization plan,
questioned why budget decisions should be made by effectively firing state
workers who have the option of getting rehired by a private company with fewer
benefits.
"You're
not even really balancing the budget. You're giving this for-profit company all
of the employees' benefits as their profits," she said. "If you had
employees who were not doing a good job, then laying them off for reason is one
thing. But you're really making all these cuts off the backs of 3,800
employees."
Once
enacted, the legislation would give companies 30 days to draw up proposals to
operate the 27 facilities in South Florida.
UPDATE: 2:50
p.m. -- This story originally stated that the Florida state Senate was expected
to vote on the prison management bill Wednesday afternoon. It has been updated
to reflect that the Senate postponed its vote.
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