Christopher Petrella cpetrella@post.harvard.

edu

7 February 2013 RE: HB 443-FN

Dear Chairman Robertson and Committee Members: Thank you for your invitation to offer testimony in reference to HB 443-FN, a bill whose passage would bar the New Hampshire Department of Corrections from housing prisoners in privately-operated prisons. I serve as co-director of the Private Prison Transparency Campaign, a national initiative endorsed by over forty criminal justice, civil rights, and public interest organizations urging members of the 113th Congress to reintroduce the Private Prison Information Act this session. http://privateprisoninformationactof2013.blogspot.com/ The bill, if enacted, would require that private prison companies contracting with federal agencies comply with Freedom of Information Act transparency requirements like their public counterparts. Im also a nationally recognized prison journalist, an educator at San Quentin State Prison in San Rafael, California, and a doctoral student at U.C. Berkeley completing a book entitled Race, Markets, and the Rise of the Private Prison State. www.christopherfrancispetrella.net Moreover, Ive offered testimony on issues of prison expansion and privatization in a number of state legislatures. I commend your sponsorship of HB 443-FN and encourage you to frame attendant policy discussions in your own terms, that is, in terms un-inherited from the four companies that have responded to your request for proposals (RFP) last spring. You must define very clearly and carefully the fundamental evaluative categories being used in service of HB 443-FN, categories like efficiency, re-entry, recidivism, and rehabilitation. Allowing these terms to be defined for you by the private prison industry will invariably compromise the success of this bill. My chief intention here isnt necessarily to insist that public prisons are better than private prisons, but to demonstrate that the burden of proof for evaluating correctional services on the basis of efficiency often the singular criterion on which these debates hinge rests not with critics of prison privatization us but rather with its advocates. The industry has had over thirty years to demonstrate that it can provide better services more efficiently than its public counterparts and yet to date there isnt a single, independent, and methodologically transparent national study that suggests it can. Nevertheless, the for-profit prison industry insists that privatizationor extending the reach and influence of the free marketwill generate efficiencies as companies respond to market pressures.

In 1995 Corrections Corporation of America (or CCA)now the nations largest for-profit corrections firm (and one of the companies responding to your RFP)predicted that it would operate around 20 percent of the U.S. corrections market by the year 2000. http://www.privateci.org That today it barely operates 4 percent legitimately calls into question the market value of its services. http://www.bjs.gov/content/pub/pdf/p11.pdf The private corrections industry falls victim to its own performance metrics: its relatively sluggish historical growth rates suggest that it responds inefficiently to market pressures. This is precisely why large private prison companies spend millions of dollars each year encouraging lawmakers to establish artificial markets for their services. Unfortunately, much of this irony is lost on the public. I mention these internal contradictions because theyre worth exploiting in political debate, particularly as the country begins to lock its eyes on New Hampshire. Ive gotten a no less than twenty e-mails over the last few weeks on the subject of HB 443-FN. The nation is curious and concerned and everything in between. If this bill is enacted, New Hampshire will join a short list of statesthree, in fact that statutorily ban private prisons. http://www.mintpress.net/kids-for-cash-scandal-exposes-morecorruption-in-private-prison-system/ Part of the politics of this process, I think, is underscoring the reality that private prison companies have yet to prove their worth in the market, in court, and as Rev/Dr. Martin Luther King, Jr. might say, in the court of public opinion. This argument is best made by demonstrating to citizens of New Hampshire that prison privatization inherently compromises the state D.O.C.s ability to meet its fundamental aims, that is, to show that the business objectives of private contractors stand at cross-purposes with the D.O.C.s strategic mission of providing a safe, secure, and humane correctional system through effective supervision and appropriate treatment of offenders, and a continuum of services that promote successful re-entry into society for the safety of our citizens and in support of crime victims. http://www.nh.gov/nhdoc/aboutus.html The imperative to generate shareholder value intrinsically positions safety, rehabilitation, and community building as ancillary concerns. Underscoring this hierarchy of values as often as possible is paramount. Many ask, but wheres the proof? Perhaps youre aware that CCA and the GEO Groupthe nations two largest private corrections firmsare in the process of reclassifying themselves with the IRS from traditional class-c corporations whose stated mission is correctional solutions to Real Estate Investment Trusts, or REITs. According to the Securities and Exchange Commission, a REIT is a company that owns - and typically operates - income-producing real estate or real estate-related assets as its primary business. To qualify as a REIT, a company must have the majority of its assets and income tethered to real estate investment. A REIT distributes at least 90 percent of its taxable income to shareholders annually in the form of dividends in exchange for a federal and state corporate income tax rate of zero. That is, companies organized as REITs dont pay corporate taxes. If CCA or GEO wins a contract with the state of New Hampshire, then its very likely that they will be exempted from the states 8.5 percent corporate tax rate. http://truth-out.org/news/item/9499-how-americas-largestprivate-prison-operator-plans-to-beat-corporate-income-tax

CCA and GEOs quest for REIT status shows that both companies primarily see themselves as real estate firms that incidentally dabble in corrections, not as agencies whose primary objective is rehabilitation, safety, or community restoration. This emerging REIT conversion narrative is chronically underreported but I believe its worth highlighting in the context of HB 443-FN. In debating ideas like cost-effectiveness, efficiency, safety, and rehabilitation its vitally important that decision makers can access impartial and methodologically transparent information about the real costs and benefits of privatization. Id love nothing more than to provide you with a national independent analysis of the performance of private and public prisons in the categories of cost-effectiveness, recidivism, and transparency. Unfortunately, I cannot. I cannot provide you with such data because its nearly impossible to access information pertaining to privatized corrections when such companies arent obligated to collect or reveal such figures upon request. Though the private prison industry routinely vaunts its record on measures of efficiency and safety relative to public agencies, it nonetheless refuses to disclose the very information required to substantiate its most basic claims of success. Given that private prison corporations are not required to make their records public, its impossible to offer a full, national quantitative comparison of public and private prisons housing similar types of offenders. And this is key: similar types of offenders. This, for example, is precisely why Im spearheaded a national campaign aimed at urging Texas Congresswoman Sheila Jackson Lee to reintroduce the Private Prison Information Act this Congressional session. If companies like CCA or GEO believe their correctional operations are more efficient than New Hampshires Department of Corrections, then why have they spent over $12 million lobbying against the passage of the Private Prison Information Act since its initial introduction in 2005? http://www.opensecrets.org/pacs/lookup2.php?strID=C00366468 Scant evidence exists to suggest that taxpayers and lawmakers can access the type of data necessary for evaluating the performance of private corrections firms in comparison to the public sector. The fact that these reports are so difficult to obtain reveals a dangerous lack of transparency and accountability among the very private prison companies responding to your RFP. The claim that private prisons inherently save taxpayers money is misleading. Private prison companies have long been known for cherry picking prisoners to house that are low cost, specifically excluding elderly prisoners, maximum-security prisoners, death row prisoners, juveniles sentenced to adult prisons, female prisoners and, more generally, those prisoners with chronic medical conditions. Each of these inmate categories is more expensive to incarcerate, usually due to increased medical and security costs. Inconsistent selection criteria make reasonable, empirical cost comparisons extraordinarily difficult. Your neighbor to the west, Vermont, acknowledged this fact in a report entitled Plan to Reduce Correctional Costs and Achieve Savings for Reinvestment presented to the Joint Correction Oversight Committee on 12 December 2007. The report reads: The criteria for inmates accepted for housing at CCA are not likely to change. The CCA facilities do not accept seriously physically or mentally ill offenders, or offenders whose behavior is exceptionally disruptive or who cannot conform to rules. In

many of CCAs facilities, the classification system is influenced by host state departments of correction, and has increased levels of criteria for exclusion. http://www.doc.state.vt.us/news-info/newsfiles/plan-1/view However, because state prison systems must incarcerate all such offenders, the perdiem cost for public prisons is skewed upwards while the per diem rate for private prisons is kept artificially low. Whereas publicly chartered D.O.C.s are responsible for ensuring the safety and well-being of every type of prisoner, CCA simply circumvents such obligations by requiring the states with which it contracts to retain the least compliant, and, therefore, the most financially burdensome individuals. Private prison firms essentially shift such risk back to state D.O.C.s and taxpayers. How efficient is a privatized system of corrections that willfully omits inmates for whom medical careespecially mental health carewill be most costly? Effectively requiring state departments of corrections to provide reasonable mental health care to vulnerable populations represents a significant externality that private prisons regularly refuse to absorb. Not only is contractually pre-selecting inmates worthy of mental health care services in privatized facilities morally opprobrious, but its a tacit admission that arguments of efficiency advanced by the for-profit corrections industry fail to account for externalities assumed by the public. Drawing equal linkages between unequal circumstances is an exercise in illogic. Though current national comparative studies are non-existent as a result of the current FOIA exemption enjoyed by private prison companies, a number of state-by-state studies do exist. This is because its sometimes possible to circumvent FOIA exemptions by requesting information through various state public records acts. To this end, studies published by state D.O.C.s in Kentucky, Hawaii, Ohio, Tennessee, and Oklahoma each found that private prisons are no more expensive than public facilities in those states on the basis of the same evaluative criteria. And similar efficiency studies in Arizona and Florida actually found private prisons to be more expensive than publicly operated facilities. http://www.azjournal.com/2012/01/04/corrections-evaluates-both-private-and-public-prisons/ When the New York Times asked CCA spokesman Steve Owen back in 2011 to comment on Arizonas landmark study he said, (and this is a direct quote), There is a mixed bag of research out there. Its not as black and white and cut and dried as we would like. www.nytimes.com/2011/05/19/us/19prisons.html?pagewanted=all Again, the burden of proof for contract correctional services rests not with us, but with the private prison industry. http://afsc.org/sites/afsc.civicactions.net/files/documents/AFSC_Arizona_Prison_Report.pdf The only national comparative research on offender safety is from a 2001 Bureau of Justice Assistance study which found a significantly higher rate of prisoner-on-prisoner assault in private prisons (66 percent more) than in public prisons. The same study suggested that inmate-on-staff assaults were 49 percent higher in the private prisons. http://afsc.org/sites/afsc.civicactions.net/files/documents/AFSC_Arizona_Prison_Report.pdf In 2011 the state of Tennessee found that incident rates (assaults, escapes, etc.) were consistently higher at the states three private prisons, all operated by CCA. This was in spite of the fact that the state prisons housed higher security prisoners. Also in 2011, an Associated Press report found that one CCA facility in Idaho had more assaults than all other Idaho state prisons combined. http://afsc.org/sites/afsc.civicactions.net/files/documents/AFSC_Arizona_Prison_Report.pdf

This is often attributable to staffing challenges. Because private corrections companies achieve their profits by winning low-bid contracts, they generally preserve their bottom line by making significant cuts in staff pay and training. Private prison companies consistently pay staff less than states or the federal government. They often offer minimal staff training, which can leave employees frustrated and unprepared to handle crises, thereby compromising inmate, staff, and community safety. As a result, privately operated facilities frequently have very high employee turnover rates and are chronically understaffed. The combination of these factors not only produces a challenging work environment, it can also make these facilities genuinely unsafe for staff, inmates, and the community. In Florida, for instance, GEO and CCA had a 34 percent turnover last year, compared with 12 percent in Florida state prisons. The Texas Senate Criminal Justice Committee's interim report on private prisons in 2009 found that the seven private prisons contracting with the Texas Department of Criminal Justice had a 90 percent turnover rate, compared with the 24 percent rate at state-operated prisons. http://afsc.org/sites/afsc.civicactions.net/files/documents/AFSC_Arizona_Prison_Report.pdf The report stated: "The wages and benefits paid to employees of private contractors are generally lower than that paid to employees of state-operated facilities... Correctional officer salaries in the private prisons vary among facilities, with the highest peaking at slightly more than $24,000 annually." http://afsc.org/sites/afsc.civicactions.net/files/documents/AFSC_Arizona_Prison_Report.pdf Most anyone with an appreciation for economics will acknowledge that a high employee turnover rate indicates a serious management problem. In the case of a prison, the impact of these management problems can extend far beyond a few disgruntled employees. Corrections is a field in which good training and solid experience can literally mean the difference between life and deathfor the employee, inmates or even members of the surrounding community. Most would agree that the most common measurement of the efficacy of a prison is its ability to reduce recidivism, that is, the likelihood that a recently released offender will return to prison in a given time period, usually three years. Unfortunately, private prison corporations flatly refuse to measure their recidivism rates, yet its critical that the people of New Hampshire and elected representatives have solid data on which to base important decisions about the future of your states prisons. Over thirty non-partisan university studies since 2000 have found that access to and participation in educational programming reduces recidivism rates by 6-30 percent depending on how far projections are extended. http://www.wsipp.wa.gov/ Unfortunately, around the same time a BJS publication demonstrated that significantly fewer educational opportunities are available to inmates in private prisons relative to their public counterparts. Whereas 79.6 percent of state facilities offered basic adult education in 2000, only 56.4 percent of private facilities offered equivalent programming during the same year. In contrast, public departments of corrections, taken in aggregate, have enjoyed a consistent downtick in their recidivism rate since 1999. http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/sentencing_and_corrections/Stat e_Recidivism_Revolving_Door_America_Prisons%20.pdf To be fair, CCA combats much of the non-partisan research Ive cited by publicizing two high profile studies which both conclude that private prisons are more cost effective than their public counterparts. The first is a 2010 study conducted by the Reason Foundation, a libertarian think-tank strongly in favor

of privatization of government services, including prison privatization. http://reason.org/files/private_prisons_california_policy_summary.pdf Politics aside, the Reason Foundation has received funding from private prison companies since 1994. And most recently, according to the Foundations 2009 Carrying the Torch of Freedom list of donors, the GEO Group was listed as a Platinum Level supporter while CCA was listed at the Gold Level. Reason Foundation studies are not peer-reviewed, and the organization doesnt disclose in its research that it accepts money from private prison companies. http://privateci.org/private_pics/Reason2009.pdf CCA also regularly cites a December 2007 Vanderbilt University study titled Do Government Agencies Respond to Market Pressures?: Evidence from Private Prisons. The study, however, was jointly funded by CCA and the Association for Private Correctional and Treatment Organizations (APTCTO), a now-defunct trade group for private prison companies. https://www.prisonlegalnews.org/%28S%28ou4tagii3nnjzx550fyx0p45%29%29/displayListServ.aspx?listi d=5320&AspxAutoDetectCookieSupport=1 Unsurprisingly, CCA hasnt publicized its very latest audit report conducted by Ohios Bureau of Internal Audits and Standards Compliance from last September. The team evaluated compliance levels with audit standards by reviewing both prepared accreditation files and observing institution operations throughout the facility. According to the review, CCAs Lake Erie facility in Ohio achieved a compliance level of 66.7 percent on Ohios state-based corrections guidelines. http://www.citybeat.com/cincinnati/blog-4028-private_prison_violates_state_rules.html In scholastic terms, a 66.7 translates to a D. And a D indicates deficiency. Ohios audit report serves as a distillation of this entire discussion because it unassailably underscores the basic structural flaw endemic to private corrections. A private prison industry whose principal aim is market capitalization inherently transforms the fundamental mission of corrections from public safety and rehabilitation to profit. Widespread procedural violations, chronic employee turnover, few educational opportunities, dubious inmate selection criteria, and medical negligence demonstrate the continued inability of private prison companies to ensure the welfare and safety of the prisoners they serve, and by consequence, the public on whose funding the companies exclusively rely. I know youll make the best choice for New Hampshire and I support your efforts without reservation. Thank you, and please dont hesitate to reach out for continued support.