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IssaEl21 IssaEl21 is offline
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Join Date: Aug 2007
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Default Lie #5: “Our security system is state-of-the-art”

Lie #5: “Our security system is state-of-the-art”

I would bet a large sum of money that this exact same pitch was made to the people of Kingman when that prison was built. They might have fancy technology, but does it work? And if it stops working, will they fix it? See the security audit referenced under Lie #5—broken monitors, control-room panels that don’t work, alarms that don’t ring properly, malfunctioning security cameras. These problems were found in all our private prisons.

Technology is only as good as the people using it. We consistently hear after a riot or escape that a for-profit prison was having “staffing issues.” That pay was low, there was a lack of training, and the guards were inexperienced. Clearly, ADC has gotten wise and is requiring contractors to provide the same training as the state—it’s written into the RFP. But that doesn’t address the turnover problem. Those folks might get trained, but they won’t stick around. That means that a large percentage of the staff is inexperienced and unlikely to know how to handle a dangerous situation. One report stated that 80% of the guards at Kingman were recent hires.

At Kingman, the guards were propping those state-of-the-art security doors open with rocks. They ignored those high-tech alarms when they went off. The ADC monitor was either asleep at the switch or being blown off by Central office. As they say, “you can’t fix stupid.”

Lie #4: “The town is not taking any risks in the financing scheme for the prison”

Prison construction for private facilities is almost always financed through lease revenue bonds. They generally create an “Industrial Development Authority” or “Public Facilities Corporation,” which is essentially a paper tiger created through the city or county. The reason they fund through this mechanism is because they don’t want to take the risk, carry the paper, nor pay the interest.

When industrial revenue bonds are issued, the public is often told that neither the local government nor the taxpayers will be obligated or negatively affected in any way if the project fails. While it’s true that revenue bonds are not a general obligation of the issuer, it is not true that governments and taxpayers will be unaffected by the risks of the project.

The debt is paid off with the money received as per-diem payments for each inmate housed. This looks great on paper, but what happens when there are no inmates?

The savvy businessperson approaches any financing project asking “where is the market?” In this case, the financing for these prisons is dependent on a guaranteed occupancy of state prisoners. Yet the Arizona Auditor General reports that our prison population grew by only 65 prisoners in 2010. And there’s a movement afoot in the state legislature to reduce our prison population as 25+other states have done through sensible reforms to criminal sentencing laws favoring cheaper alternatives like probation, drug treatment, and house arrest.

If there’s no market, then these projects are doomed to fail. And what will happen to the town then? What if the corporation gets a better offer somewhere else and decides to pull out of the contract? What if Arizona’s prison population goes down?

Don’t just take my word for it. Here’s what the Director of the Oklahoma DOC said after Arizona pulled its inmates out of a private prison there: He said the private prison industry is a speculative market. “It is not immune to recession and trends in sentencing and crime,” Jones said. “A lot of states have gone back and applied research to their sentencing practices, which results in sentences that are more evidence-based, and that obviously affects a market that relies upon incarceration.”

There are numerous cautionary examples of towns facing default struggling to pay the debt on an empty prison: Hardin, MT is one of the most notable. The town there got so desperate that they actually asked the state to send them sex offenders and lobbied the Obama administration to send Guantanamo detainees. A few weeks ago, the town of Littlefield, TX had to hold a public auction to sell a prison there so that they could pay the debt on the facility after GEO group cancelled its contract and left the town holding the bag.

Even if the town isn’t directly responsible for paying the debt on the prison, a default on the bond can affect the town’s credit rating (kinda like S&P just did to the United States). That can make it difficult for the town to borrow money for other needed projects like new schools or a hospital. Some towns have taken desperate measures to try to pay the debt on a prison in an effort to avoid default, including raising taxes and cutting other critical city budgets. A bond default can also make a city the target of costly litigation, further draining the town’s coffers.
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