Shackled by Money: How Vanderbilt Helped Spawn the Private Prison Industry

Last month, Bettsy Woodruff wrote in the Daily Beast:“If you’re looking to make some money, try locking up toddlers.” She wasn’t kidding. The Corrections Corporation of America, a for-profit corporation, made $49 million dollars in the last year by housing undocumented infants, toddlers, children, and mothers fleeing Central America in conditions so deplorable they provoked chastisement from a federal judge and Human Rights Watch.

Headquartered about three miles away from our campus, Corrections Corporation of America is the nation’s oldest, largest, and most famous private prison corporation. Through contracts with state governments and the federal immigration services, CCA handles the imprisonment of more than 70,000 inmates at 60 facilities around the country. The number of prisoners in private facilities has expanded from less than 10,000 in 1990 to nearly 130,000 inmates today. For-profit companies are now responsible for “approximately 6% of state prisoners, 16% of federal prisoners, and… nearly half of all immigrants detained by the federal government,” writes the American Civil Liberties Union.

As CCA says on its website: “New companies are created every day. But it’s not every day that new industries are established.” It takes a special kind of genius to make millions from human imprisonment. And that entrepreneurial genius has its roots in Vanderbilt University.

Tom Beasley, a distinguished alumnus of Vanderbilt Law School, had transformative aspirations when he founded the company in 1983. A 1986 article in The Journal of the Southern Regional Council described Beasley’s creative ambitions using his own words: “Declaring that ‘the market is limitless,’ Beasley… hopes to ‘solve the prison problem and make a lot of money at the same time.’” Lamar Alexander, Tennessee longtime senator and former governor, is another Vanderbilt alum involved with the company. A friend of Beasley, and formerly his landlord, Alexander was governor of Tennessee and a supporter of CCA when Beasley first proposed (and succeeded) in taking a “chunk” of the state’s prison population. Lamar Alexander’s wife was an early investor in CCA; now, CCA regularly gives thousands to Lamar Alexander’s campaigns.

The link goes further. Vanderbilt professors have produced research, funded by CCA, that shows private prisons lower costs in states. And Vanderbilt University even invested in CCA in its early years before the company’s IPO. Currently, four leaders of CCA are Vanderbilt graduates: two executive Vice Presidents as well as the Vice Presidents of Health and Human Services Technology.

Along with their Nashville headquarters, CCA operates six correctional facilities in Tennessee, including the Metro-Davidson County Detention Facility. According to the state of Tennessee’s Online Campaign Finance Database, CCA contributed thousands of dollars to Nashville’s elected sheriff Daron Hall along with tens of thousands of dollars to officials around the state and to both the Republican and Democratic parties. The Tennessee legislature honored CCA-architect Tom Beasley in a joint resolution extolling his “astute business skills” and “entrepreneurial spirit.” Unfortunately, this entrepreneurial spirit helped spawn a dangerous and exploitative industry.

If crime-rates decline, private prisons lose money. If crime-rates go up, private prisons make more money. These incentives are problematic to those of us who think that the point of the justice system is to stop crime, not make money. Instead, the profit motive pushes private prison corporations to lobby for ever-stricter laws to put more people in prison and keep them there. A company whose bottom line hinges on keeping people behind bars has no incentive to stop recidivism, rehabilitate offenders, or even provide basic care to prisoners. But it has every incentive to grow the prison population to boost its profit margins.

And this isn’t just theoretical. CCA and other private prisons benefit from massive lobbying operations at the local, state, and national level to push policies that increase the number of incarcerated people. According to the Center for Responsive Politics, CCA has spent more than $2.3 million on federal campaign contributions and more than $20 million on federal lobbying, largely on legislation related to the Department of Homeland Security, which contracts with CCA for housing detained illegal immigrants. From 2000 to 2011, CCA won $3.84 billion in federal contracts. Laura Lichter, an immigration attorney and former head of the American Immigration Lawyers Association, told The Daily Beast “The only reason I can see that [detained migrants] are still in family detention is because there must be incredible pressures to keep it going on the basis of its profitability.”

At the state and local level, there is also evidence of cozy-dealings by public servants influenced by CCA. Dina Rasor, an investigative journalist and whistleblower, gives the following example: In 2011, “the state of Ohio agreed to sell their Lake Erie Correctional Facility to CCA for around $72 million and even promised to pay CCA for a 90 percent inmate rate even if the inmate population drops below 90 percent. Perhaps CCA’s sales pitch had a more favorable audience in Ohio because the current head of Ohio’s Department of Corrections, Gary C. Mohr, was formerly a managing director at CCA.”

Revolving-door lobbying is also pervasive. Christopher Petrella, a researcher at UC Berkley, points out that three former directors of the Federal Bureau of Prisons (Harley Lappin, Michael Quinlan, and Norman Carlson) went on to chair senior level positions at either CCA or the GEO Group (another private prison corporation).

The National Institute on Money and Politics reports that CCA has given more than $3 million in contributions to state and local candidates. CCA lobbies state legislatures to pass laws imposing harsher sentences to boost the prison population, according to the Justice Policy Institute; with longer sentences comes higher costs to states and more profit for CCA (“the market is limitless!”). Lobbying efforts have endowed four states with a contractual obligation to pay private prison companies for full capacity use even if their prison beds are not needed.

CCA has gone to terrifying lengths to maximize their bottom-line at the expense of inhumanely treating both its guards and prisoners. In 2013, three states canceled their contracts with the company after reports of abuse and mismanagement. As the Center for American Progress writes: “Idaho cut ties with the corporation on Wednesday, which turned the state’s largest prison into a violent hellhole inmates called ‘Gladiator School.’ Earlier this year, CCA was caught understaffing the prison and using prison gangs to control the population. The company admitted to falsifying nearly 4,800 hours of staffing records to squeeze more money out of the state for nonexistent security work. Shift logs at the prison showed the same security guards working for 2 to 3 days at a time without break. Texas closed two CCA prisons, including one with a history of suspicious prisoner deaths. One lawsuit alleges prison staff ignored an inmate’s cries for medical assistance, forcing her to give birth in a prison toilet to a baby that died four days later. CCA was also booted from Mississippi earlier this month after multiple deadly riots over poor food and sanitation, lack of medical care, and mistreatment by guards.”

These incidents are systemic, providing a limitless supply of painful anecdotes. CCA prisons have charged prisoners $5 per minute on phone calls while paying them one dollar a day to do menial labor. CCA uses a similar scheme at immigrant detention facilities, paying the detained (undocumented immigrants not authorized to work in the United States) as a little as a dollar a day to do manual labor related to site maintenance, such as cleaning, cooking, painting, and drywall. The site then charges detainees to make phone calls. Pedro Guzman, a formerly detained immigrant, told an interviewer that he estimated about 90% of jobs on the site are handled in this way.

These abuses do not exist in a vacuum. They compound with other problems in our criminal justice system, such as racism, poverty, overincarceration, and mental illness. In 2010, CCA’s President and CEO received more than $3 million in executive compensation; the two biggest private prison companies alone made more than $3 billion in profits.

That money—sourced from our taxpayer dollars—was made on the backs of shackled human beings. It takes a certain kind of genius to profit from the servitude of vulnerable populations. And that genius is a distinguished alumnus of our university.

Tom Beasley Receiving Distinguished Alumnus Award