Learning how to profit from crime

“Maximise investment opportunities in this explosive industry” is the World Research Group and Reason Public Policy Institute’s call to executives to attend the second Annual Privatising Correctional Facilities conference on 15 and 16 September 1997. The Grand Hyatt Hotel in New York is where financial and government executives will be provided with “the tools you need to grow profits with privately managed correctional facilities.” Privatised prisons “alleviate overcrowding and poor facility management ... how will these new correctional facilities that are in such demand be financed? Privatisation is the answer,” claim the conference organisers.

They add that “private prisons offer a whole new area for revenue growth in the private sector ... industry analysts predict potential revenues to surpass the $2 billion mark before the end of the decade.”

With the incentive to “unlock new areas for investment growth in the corrections industry,” the organisers illustrate the conference brochure with a map of the United States covered by a locked prison cell door. They also note, however, that “as governments overseas  begin to follow the US in turning to private corrections, the industry is becoming increasingly international.”

The  benefits of attending the conference are listed as:

n Penetrate the $1 billion market in the corrections industry;

n Network with key industry executives;

n Evaluate the risks and rewards of financing correctional facilities;

n Learn to structure a successful privatisation project from conception to operation;

n Hear from leading private management firms about prime investment opportunities;

n Understand why stock performance on publicly traded private prison firms set historic highs;

n Discuss public sector initiatives to support the growth of privatisation;

n Realise the best strategies for raising capital to finance either public or private facility projects;

n Learn about alternative investment opportunities shaped by international trends in privatisation;

n Analyse the barriers to entry private management firms are facing in some states.

According to the brochure, publicly traded prison management firms “have to deal with many issues to remain competitive.These include international expansion, diversity of facility options and, in some cases, consolidation of the players ... find out exactly what issues private management firms are currently wrestling with and how they remain competitive in this industry.”

In an audacious attempt to break down the barriers between public and private sectors, the conference brochure also states that participating companies include Arizona Department of Corrections, Florida Correctional Privatisation Commission, HM Prison Service and the Virginia Department of Corrections, as well as Wackenhut, Youth Services International, Cornell Corrections, Securicor, Avalon Community Services, Childrens Comprehensive Services, Correctional Services Corp, Res-Care Inc and Durrant Justice. Also making presentations will be Municipal Capital Markets, MBIA Insurance Corp, Prudential Securities Inc, Rodman and Renshaw, First Dallas Securities, Legg Mason, Stephens Inc, Standard & Poor’s Public Finance and Partnering & Procurement Inc. Wackenhut Corrections Corp. is also sponsoring the Networking Cocktail Reception.

The fee for attending the two day conference and two workshops is $1,795 ($1,395 for government delegates), after which delegates can “take home proven techniques that you can implement within your own organisation.”

New prison programme

     The federal government is to build 52 new prisons across Brazil in the next two years. None will be privately financed or managed. The government is committed to each state running its own penitentiary system. The new prisons are needed to provide enough spaces for the projected prisoner population and also to relieve the situation whereby some 40 per cent (60,000) of all prisoners are in overcrowded conditions. Many are held in police precincts and jails. Twelve of the prisons will be built in the state of Sao Paulo and four in Rio.

 

 

COLOMBIA

 

Investigating the issues

 Colombia’s National Prison and Penitentiary Institute  is considering whether to privatise the finance and construction of its new prisons. The first facility to be built will be the Metropolitan Prison Complex of Santafé de Bogotá. The projected cost is US$75m and the facility will have a capacity  of 3,200 prisoners.

In Colombia, only prison food services have been contracted out so far, but there are plans to privatise  health services. The Institute is still collecting additional documentation and proposals on prison privatisation.

 

 

UNITED KINGDOM

 

New contracts to be signed

The Home Secretary, Jack Straw, has once again reiterated the Labour government’s reservations about the principle of privately managed prisons, saying that “it is generally accepted that responsibility for the incarceration of offenders must remain with the state.”

But on 19 June 1997, he also announced that, for operational and financial reasons, he had no alternative but to proceed with the previous Tory administration’s plans for private prisons, claiming that new prison places are badly needed by 1999-2000.

In the short term, tendering will begin for an 800 place category B local prison in Salford, Lancashire and a 400 place young offender institution near Bristol. Also, one private prison management contract which expires in May 1998, and which could be terminated with one year’s notice, is being renewed. Blakenhurst prison will continue to be run by UK Detention Services Ltd (owned by CCA and Sodexho) for a further three years.  According to Mr Straw, the facility could not be returned to public management without incurring additional expenditure which the government does not have available.

The government is also to consider strengthening the current regulatory framework of privately run prisons, including extending the powers of the on-site Controller to deal with prisoners’ complaints, sentence calculation, scrutiny of security classifications and frequency of security audits.

The recommendations of the Home Affairs Select Committee, which reported last March, are still to be fully considered. But in the meantime, the Prison Service has been asked to explore all possible methods whereby new prisons would be financed and built by the private sector - which could also provide non-custodial services - while  the core custodial services would remain a public responsibility.  The Prison Service is also being asked to “seek to demonstrate that the public sector ... has the capacity to match the performance of the private sector in comparable prisons, and that realistic plans can be developed to establish a case for returning contractually managed prisons to the public sector on value for money grounds when consideration is given to the issue on the expiry of contracts.” 

Proposals for private sector involvement in other Prison Service functions, such as prisoner escorting, do not, according to Mr Straw, raise the same issues of principle, and will be treated on their merits.

n Seven Securicor Custodial Services Ltd  staff  have been banned by the Prison Service from working with prisoners. They have had their Home Office certificates suspended. 

On 26 June 1997, a coroner’s inquest into the death of Peter Austin, who was left hanging in his cell at Brentford Magistrates Court in London on 29 January 1997, found that a lack of care contributed to his death. Securicor staff watched Mr Austin hanging by a T-shirt wrapped around a light fitting for nearly ten minutes. The staff were convinced that Mr Austin was only faking suicide and took no action until after he had died.

This was the first death of a prisoner in Securicor’s care since the company won the contract to transport and guard prisoners between prisons and courts in London. But the coroner, Mr John Burton, is to ask the Home Office to consider a number of recommendations aimed at preventing such fatalities. The Prison Service may also require improved training for private security companies. The company has launched its own internal inquiry.

 

AUSTRALIA

 

Women’s jail still controversial

Victoria’s Corrections Minister, Mr Bill McGrath, told the state Public Accounts and Estimates Committee on 15 June 1997 that Corrections Corporation of Australia staff at the Metropolitan Women’s Prison were inadequately trained to deal with an incident that occurred on 21 December 1996. The prison opened last August.

“The warders involved didn’t know the correct procedure at that particular time. The reason is, I guess, there hadn’t been the proper training at that particular time. When they have been put under  pressure of carrying out their duties, they may not have been able to deliver,” he told the Committee. He added that teething troubles occurring at the prison were now “rectified and overcome” but “that may be one of the things there is a financial penalty [for] at the end of the 12 months”. No default notice was issued for the December 1996 incident during which warders locked themselves into a room while prisoners caused a disturbance.

At Melbourne Magistrates Court on 17 June 1997, at the hearing  of a prisoner charged with causing criminal damage during the 21 December 1996 incident, prison officers’ statements read to the court revealed that they  lost control of the prison and had no riot gear because nobody had keys to the armoury or knew where it was. They also said that the fire brigade was kept waiting outside the prison for 40 minutes and that the officer in charge of the prison refused to call the police despite repeated requests from staff.

It was also revealed that earlier in June, despite the assertion that the prison’s  teething troubles were over,  a remand prisoner was beaten unconscious by four other prisoners using a rock wrapped in a towel. In another incident, a prisoner in a maximum security cell was assaulted after the cell door was left open.

The government has rejected calls for a public inquiry into the handling of the prison contract, although Mr McGrath has agreed to investigate allegations by the Community and Public Sector trade union that the company’s prisoner escort and  transport staff  - some of whom  receive just three days’ training - are being used as prison officers.

n The Victorian Police Association has called for a judicial inquiry into the building of the state’s private prisons and the government’s apparent underestimation of the demand for places. This follows emergency procedures being invoked to place extra beds in the 125 bed capacity Women’s Prison to cope with the demand for extra places. In June, at least 16 women were being held in police cells.

 

AIC Conference

The Australian Institute of Criminology’s controversial conference on prison privatisation and public policy took place on 16 and 17 June 1997. Most of the delegates were from Australia but there were also representatives from the Philippines’ Bureau of  Corrections, China’s Ministry of Justice, Malaysia’s Prison Service and Singapore’s Prison Service.

There were more than 25 speakers from Australian state governments, the private sector and academic institutions. Victoria’s privatisation programme was the main case study but other presentations included: the companies’ perspectives; contracting out community corrections; education and health services; issues for aboriginal prisoners; prison industries; and access and accountability.

The companies

For Corrections Corporation of Australia, which partly sponsored the event, Ms Anne Dutney, General Manager Operations,  said that “sound research rather than anecdotal evidence or biased opinion is the mechanism which is most likely to resolve many aspects of the current debate” about private prisons. “Perhaps the opportunity now exists for some real apples with apples comparisons in all areas of correctional practice and outcomes,” she said.  She also stressed that it was not her intention to “suggest that correctional systems should be totally privatised or that the required outcomes are only achievable through the private sector.”

Mr Bill Curnow of Thiess Contractors described his  company’s most recently opened prison, the Fulham Correctional Centre: “At Fulham, the internal walls are as good as most of us have in our own living rooms, the level of general amenity is high and the level of programme provision is exceptional. Nothing has been spared with respect to amenity and nothing has been wasted either. It is an efficient, functional and socially responsive solution to corrections in the late 20th century ... the private sector has demonstrated that it is  possible to build and own new infrastructure for less than the operational cost only of existing and inefficient infrastructure.”

Issues for Aboriginal prisoners

Privatisation in Victoria will mean that almost half of the Aboriginal people in prison will be in private prisons. Mr Alf Bamblett of the Victorian Aboriginal Community Services Association described the mechanisms that should be in place to ensure that  human rights are ensured and  deaths in custody prevented.

Corporatisation

The purchaser/provider split in Queensland and recent changes in Victoria were described  as leading to “a truly open and competitive corrections market” and a “win win” solution respectively, although privatised community corrections in Victoria will “continue to be subject to much debate.”  There were said to be a range of benefits as a result of contracting out offender management programmes in New South Wales.

Accountability

According to Group 4's Mr Stephen Twinn, it is a myth that the private sector is secretive. Professor Richard Harding of the University of Western Australia said that as the private sector has matured, it has become apparent that there are many potential benefits. But there is also excessive secrecy, an absence of properly-based complaints and grievance systems and an increasing propensity of governments to cut back indiscriminately on all aspects of public sector activity, including regulatory overview. “Hazards such as these must be confronted if the unified public/private prison system is to deliver what it seems to have promised,” he said.

There was also a call for Queensland to establish an independent monitoring agency for all of the state’s corrective services.

Year 2000

Dr Leo Keliher, Commissioner of the New South Wales Department of Correctional Services, told the conference that “it appears unlikely that New South Wales will privatise further in the foreseeable future.” He said: “I am not convinced by any arguments that I have seen which suggest that privatisation will lead to a better run correctional system than NSW has at the moment. In fact, I am greatly disturbed by the prospect of public companies (and their employees) whose economic future depends on growing inmate numbers (with longer sentences) lobbying political parties. The morality and ethics of such a covert ‘law and order’ lobby process is highly questionable.”

n At the conference, Dr Keliher said that the February 1997 issue of PPRI had exaggerated the extent of contracting out in NSW. He said that although some outside law firms were used from time to time, there is no plan to privatise the entire legal service. Also, apart from Junee, the privately run prison, only 35 prisoners at the publicly-run Tamworth Correctional Centre eat contracted-out meals every day.

(A lack of space prevents full coverage of all the conference contributions. For more details contact: AIC c/o Conference Co-ordinators, PO Box 139 Calwell, ACT 2905. Email:conference@netinfo.com.au)

 

 

CORPORATE WATCH

 

Cornell Corrections Inc.