Wall Street recently celebrated an initial public offering (IPO) and welcomed the addition of a spanking new growth-oriented corporation: CCA Prison Realty Trust.

This Nashville-based corporation is a spin-off of the world's largest private prison corporation -- another Wall Street darling, Corrections Corporation of America -- whose stock is one of the top performers on the NYSE (doubling in value in just the first six months of 1997). CCA Prison Realty Trust is the nation's first real estate investment trust (REIT) that will focus solely on buying prisons.

As reported by Gregg Wirth in Left Business Observer, CCA Prison Realty sold 18.5 million shares in its IPO, 1.5 million more than originally planned, at a price of $21 a share, a dollar above initial projections, so hot was Wall Street for a piece of the imprisonment action. The deal was underwritten by investment bank J.C. Bradford & Company, also based in Nashville, and a fleet of co-managing firms, including heavyweights Lehman Brothers and PainWebber.

In a research paper, Equitable Securities (yet another Nashville firm), estimated that the U.S. prison population will reach 3.5 million over the next ten years, more than double the 1995 warm-body count of 1.6 million prisoners. ...

By Julia Lutsky 

GAO Reports Available


Federal and State Prisons: "Inmate Populations, Costs and Projection Models," November 1996, GAO/GGD-97-15

Private and Public Prisons: "Studies Comparing Operational Costs and/or Quality of Service," August 1996, GAO/GGD-96-158

Reflecting both the relatively recent "get tough on crime" and the age-old theme of corporate profit there are two new GAO reports, one written as if in response to questions raised by the other. Approximately 1.1 million people were incarcerated in 1995. Assuming the sentencing policies in effect in 1994, there will be 1.4 million in prisons by the year 2000. This estimate is based on the average annual increase of 8.5 percent experienced between 1980 and 1995, the period covered by the report on federal and state prisons. If all states opted to use truth-in-sentencing laws which require prisoners to serve 85 percent of their sentences however, the number of prisoners could reach 1.6 million. Other estimates predict as many as 2 million by 2002.

All of this comes at a not inconsiderable cost to the taxpayer. In 1980, $3.1 billion was spent on prisons. In 1994 that sum had increased to $17.7 billion. By the year 2000, prisons could drain $25.5 billion in operating ...

The Corrections Corporation of America (CCA) plans to build a 2,000-bed prison in California's Mojave Desert -- on speculation. CCA President David L. Meyers said his private prison corporation has no guarantee the California Department of Corrections (CDC) will send prisoners the proposed facility, nor has CCA yet held any discussions with the state of California.

Meyers, officials from California City (population 8,000) and state senator Richard Polanco (D-Los Angeles) held a July 31, 1997, news conference in Sacramento to announce plans to open the "top-of-the-line" medium security prison within two years. And California might be the perfect location to exploit this new "build it and they will come" corporate strategy.

The state prison system, already overcrowded at nearly double its design capacity, is expected to exhaust all possible bed space by 2000, Polanco said. California voters have rejected general obligation bonds for more prison construction, and the legislature has defeated the use of lease revenue bonds.

"We don't know enough about it to have a position one way or another," said CDC media-wrangler Tip Kindel. However he added: "If someone comes and says 'Hey, we've got some beds,' we're always open to talk about it."

Mike Jimenez, executive vice ...

by Alex Friedmann

Many of the hundred-thousand-plus prisoners of the Federal Bureau of Prisons (BOP) are familiar with the BOP's buses that shuttle convicts around the country. The federal government also maintains a fleet of a dozen planes designated for transporting prisoners, known as ConAir, which was brought to the public's attention with the release of the 1997 action movie of the same name. But prisoners in state and county lock-ups are subject to local transportation services to move from one prison to another. And there's a lot of moving going on: In addition to intrastate transfers and interstate extraditions, a growing number of corrections departments are exiling prisoners to out-of-state "rent-a-jail" facilities (most of them privately owned or operated) ostensibly to relieve overcrowding and save money.

With a growing demand for prisoner transport services, private for-profit companies have entered the market to fill this lucrative niche; many of these companies are small-scale operations that are paid flat-rate fees and per-mile expenses by state and local governments. And because the majority of small private transport services utilize vans and other passenger vehicles, they are exempt from most federal regulations regarding the operation of commercial over-the-road vehicles (except for a requirement ...

Eight federal prisoners being transported in a van operated by Federal Extradition Agency escaped July 30 near Ordway, Colorado. Two guards working for the private transport firm were driving nine prisoners across Colorado when they stopped to drop one prisoner off at the Crowley county sheriffs department. One guard took the prisoner inside and the other reportedly fell asleep in the van.

One of the prisoners, David Glick allegedly snatched the keys from the dozing guard and freed himself. He then stole two revolvers and a 12-guage shotgun, say authorities, woke the guard and told him to drive away.

The other guard was coming out of the sheriffs office when he saw the van pull away. He said his partner waved at him as the van sped off.

Seven of the eight escapees were caught within hours, not far from the van. Glick allegedly commandeered a pickup, drove it a short distance and abandoned it near a ranch where he forced the rancher to give him his best horse. The rancher told authorities that he last saw Glick, clad in chaps and a cowboy hat, stolen from him, riding into the sunset across the open prairie.

About 60 law enforcement ...

The Brazoria County Jail, site of the video-taped beatings that aired on network television, is but one of 38 for-profit jails or prisons in the state of Texas. And it's not the only one with problems, just the one with the most press.

A week before Brazoria County erupted into the national spotlight, the U.S. Justice Department's civil rights division announced that it planned to investigate the Dickens County Correctional Center (DCCC).

The facility is operated by the Bobby Ross Group, based in Austin, Texas. It is one of many small "Rent-a-Jails". in the state, housing primarily out of state prisoners about 60 miles east of Lubbock.

Colorado removed 140 of its prisoners from DCCC in June. The facility houses other prisoners from Hawaii and Montana, and hopes to fill the cells vacated by Colorado prisoners with fresh, profit-producing, warm bodies from Missouri.

The DCCC has experienced numerous problems in the last year. In August, 1996, 120 Hawaii and Montana prisoners refused to report to their jobs or return to their cells. Guards fired warning shots in an attempt to quell the disturbance. A month later, warden George Fry was fired for violating prison policies in dealing with the protest. ...

The state of Oklahoma announced in July that it would pull 500-plus prisoners out of the Limestone County Detention Center, in part because of a conflict over the use of pepper spray on "unruly inmates."

Limestone County, Texas, contracts with a private firm, Capital Correctional Resources, Inc. (CCRI), to operate its rent-a-jail. The approximately 540 Oklahoma prisoners make up about two-thirds of the Limestone facility's population.

The withdrawal was precipitated by a series of complaints by Oklahoma prisoners and family members about the use of pepper spray. Oklahoma's policy allows the use of pepper spray only in emergencies and with the approval of the highest-ranking guard on duty. The policy at the Limestone rent-a-jail allows for the use of pepper spray in "minor disturbances" and requires only a sergeant's authorization.

Oklahoma was paying Limestone County about $41 per prisoner per day, or about $8.5 million annually. News accounts report that after paying on the debt incurred in building the rent-a-jail and paying the private operator, Limestone County makes a profit of more than $800,000 annually.

The Oklahoma prisoners were slated to be transferred out of Limestone in groups of 90 - 100 to another for-profit prison in Hinton, Oklahoma, that ...

The state of Missouri was swift to react to the explosive national news coverage resulting from the release of a video tape showing Missouri prisoners being kicked and beaten during a "shake down" at a Texas Rent-A-Jail. The state of Missouri announced that it was terminating its $6 million contract Capital Correctional Resources, Inc. (CCRI), operators of the Brazoria County, Texas, prison where the video-taped beatings took place.

CCRI also operates the Limestone County, Texas, Rent-A-Jail whose Oklahoma prisoners were pulled out by Oklahoma state officials concerned about CCRI's "inordinate use of pepper spray" and "quality of life" issues at the Limestone Rent-A-Jail.

The Brazoria County video tape "shocked" a national TV audience who saw Missouri prisoners kicked, beaten, set-upon by dogs, and targeted by stun gun-wielding deputies. The incident was video-taped in September of 1996, and CCRI was reportedly using the tape as a training aid. The video came to light only as the result of discovery motions filed on behalf of several Missouri prisoners litigating the adverse conditions suffered by out-of-state exiles in the Brazoria County Rent-A-Jail.

It is worth noting that Missouri state officials could not have been unaware of the conditions their exiled prisoners faced in ...

by Adrian Lomax

In September, 1996, Melody Bird complained to guards at Florida's Pinellas County Jail that she was experiencing severe chest pains and having trouble breathing. Nurses at the jail, finding no discernible blood pressure, concluded that Bird was suffering a heart attack.

An immediate call for an ambulance to transport Bird to a hospital emergency room would likely have saved the prisoner's life. Instead of calling 911, though, the nurses called the medical director of Emergency Medical Services Associates (EMSA).

Pinellas County had contracted with the private company to provide health care services to its county jail inmates. EMSA's procedures did not allow for its employees at the jail to send a prisoner to an outside hospital without prior approval from a company bureaucrat.

Thirteen hours after the nurses first contacted EMSA's medical director, they received permission to call an ambulance. But Melody Bird couldn't wait that long. Her pulse stopped before she reached the emergency room.

Bird, a 24-year-old jailed on prostitution charges, had a history of serious heart problems. Nonetheless, EMSA medical staff at the jail took her off previously prescribed heart medication.

The contract between Pinellas County and EMSA is similar to managed care arrangements ...

My husband and I toured the Northeast Ohio Correctional Center, a new "private prison" that is soon to open in Youngstown. Near the entrance there is a bulletin board with the words, "Yesterday's Closing Stock Price," a reminder that the Corrections Corporation of America is in business to make a profit.

Fifteen hundred prisoners will arrive from Washington, D.C. in the next few weeks. Eventually there may be more than three thousand housed here. Some will live here for the rest of their lives.

One of the first places we toured was the visiting room. Although this is a medium security prison -- not maximum security there will be no contact visits. On one side of a very large room there are about ten tiny stalls with phones. Prisoners will be on the other side of a thick glass barrier. There will be no hugs, no children on the knee as in the Trumbull Correctional Institution, a close security state prison where we visit.

The woman who was showing us around told us the prisoners will be dressed in orange, 'so you will know who the enemy is." If this is the attitude of staff before any prisoners arrive, I ...