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What Is the Best Way to Hold Private Prisons to Account?

Although some universities are divesting as much as $10 million in holdings from private prisons, this is a drop in the bucket for a $5 billion industry.

December 13, 2017

Cross-posted from News­week

In the past year, three major cities have launched divest­ment campaigns from the private prison industry, follow­ing on the heels of a slew of major univer­sit­ies break­ing ties with compan­ies that profit from over incar­cer­a­tion.

Just a few weeks ago, for instance, the Phil­adelphia Board of Pensions and Retire­ment voted to with­draw its $1.2 million in invest­ments the GEO Group, Core­Civic, and G4S, which all own and oper­ate pris­ons.

In June, New York City made head­lines as the first large public pension system to fully divest its port­fo­lio from these compan­ies, citing concerns about health and safety viol­a­tions plus alleged human rights abuses.

And in April, Portland’s city coun­cil voted to end all new invest­ments in corpor­ate secur­it­ies, includ­ing those with the private prison industry.

Columbia became the first private college in the nation in 2015 to divest from private pris­ons. Shortly there­after, the Univer­sity of Cali­for­nia became the first public educa­tion system to divest its hold­ings in the industry when it announced it would sell its $25 million stake in GEO Group, G4S, and Core­Civic.

A domino effect ensued, with divest­ment campaigns popping up at Harvard, Swarth­more, Yale, North­west­ern, Prin­ceton, and City Univer­sity of New York.

These campaigns are crit­ical to rais­ing aware­ness of the prob­lems with the private prison industry among some of Wall Street’s largest hedge funds and power­ful Boards of Trust­ees.

But the polit­ical real­ity is that these private pris­ons aren’t going away anytime soon, so ulti­mately enga­ging poli­cy­makers is the most effect­ive way to change the industry’s incent­ives, trans­par­ency, and account­ab­il­ity to the public.

First, a bit of back­ground. Today’s two largest private prison corpor­a­tions, Core­Civic and Geo Group, earned a combined $4.3 billion in revenue in 2016, with $382 million in profits.

For decades, student activ­ists have protested their schools’ invest­ments, from the tobacco industry to today’s campaigns against fossil fuels. Although some univer­sit­ies are divest­ing as much as $10 million in hold­ings from private pris­ons, this is a drop in the bucket for a $5 billion industry.

For research on my new book, Inside Private Pris­ons: An Amer­ican Dilemma in the Age of Mass Incar­cer­a­tion, I inter­viewed students at multiple univer­sit­ies about the divest­ment campaigns they were involved in. The students felt passion­ately that their univer­sit­ies were compli­cit in creat­ing and sustain­ing mass incar­cer­a­tion by mere virtue of any invest­ment ties to compan­ies that profit off of people behind bars.

One student told me she didn’t want her univer­sity to spon­sor the captiv­ity of humans who could be inno­cent, some of whom are moth­ers who even­tu­ally get depor­ted.

William MacAskill, an Oxford Univer­sity professor who recently wrote about divest­ment campaigns and CEO compens­a­tion, argues that while some of these compan­ies earned the dubi­ous title “sin stocks,” they often produce better returns than their ethical altern­at­ives.  “As soon as an ethical investor sells a share, a neut­ral or uneth­ical investor will buy it,” McAskill wrote.

Ulti­mately, to make an impact on these corpor­a­tions’ bottom lines, it would require the heft of huge money manage­ment funds such as the Vanguard Group, the coun­try’s second-largest manage­ment firm, to renounce its interests in these corpor­a­tions. Today, the Vanguard group owns roughly 12 percent of GEO Group stocks and 9 percent of Core­Civic.

In the end, divest­ment campaigns likely will not harm private prison revenue, as another investor will swoop in and purchase the shares—espe­cially if they are a sound finan­cial invest­ment.

For-profit prison corpor­a­tions have been the subject of consid­er­able criti­cism over the last four decades. One of the chief criti­cisms of the industry is its lack of trans­par­ency.

For example, what are the pris­ons’ staff­ing levels, escape stat­ist­ics, health­care records and solit­ary confine­ment stat­ist­ics?

While govern­ment pris­ons are required to comply with requests for inform­a­tion under public records laws at the state level or the Free­dom of Inform­a­tion Act at the federal level, private pris­ons usually are not.

It is time that we reform the private prison industry. After all, if these corpor­a­tions are making a profit from hous­ing people behind bars, should­n’t they be asked to improve their trans­par­ency, account­ab­il­ity, and the way people in their care are treated?

We can’t simply cast aside the men and women who languish behind bars until they are released. We owe them a duty and respons­ib­il­ity to constantly monitor their condi­tions and beyond that, we owe them the prom­ise that we will push the envel­ope as far as we can to incentiv­ize prison oper­at­ors to provide better program­ming and outcomes.

Contracts have the power to make whole­sale changes in how we conduct the busi­ness of provid­ing care and services to those in private pris­ons and private deten­tion centers.

Govern­ment needs to ensure that contract terms are tightly writ­ten and provide enforce­able stand­ards to improve staff­ing, medical and mental health care, nutri­tion, sanit­a­tion, educa­tion, and recre­ation.

Govern­ment should require the for-profit-sector to reduce recidiv­ism rates  —and beat the govern­ment’s lousy 75 percent rate, which means about ¾ of those who leave prison return within three years.

And penal­ties for viol­a­tion of these contracts must be suffi­cient to make compli­ance more prof­it­able than non-compli­ance. At the end of the day, private entit­ies that perform public func­tions should be subject to the same trans­par­ency, account­ab­il­ity, and over­sight that public entit­ies are.

One under­gradu­ate student at Columbia told me that she and others there “wanted to send the message that it didn’t matter how these compan­ies reform them­selves, that private pris­ons are still wrong,” that enga­ging with these compan­ies  sets "us down a traject­ory that would suggest that these compan­ies could be fixed in some way and made better and then they would be okay.”

The real­ity is that these divest­ment campaigns only move the needle so far.

Students and constitu­ents should engage poli­cy­makers to reform private prison contracts, argu­ably the most effect­ive way to improve their prac­tices. It is ulti­mately pres­sure on poli­cy­makers that will change the industry’s incent­ives, trans­par­ency, and account­ab­il­ity require­ments.