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For-Profit Prisons Get another Bite of the Apple

May 8, 2013 New Jersey law mandates that only non-profit entities can provide contract services for its Department of Corrections. To get around this law, for-profit prison corporation, Community Education, Inc., created a non-profit subsidiary to run New Jersey's reentry program, reportedly managed by the same executives of the for-profit company1. Housing having become the war cry for reentry, community demand for halfway houses has driven the appeal. The results, however, indicate that our nation's halfway houses have become breeding grounds for crime. Operating in Isolation: Departments of Corrections are notorious for operating in isolation. The easiest way to defer accountability to an increasingly skeptical public is to contract out services and thereby responsibilities. Medical and mental health services are commonly outsourced. Private for-profit prisons have become big business. Reentry services, currently a hot-button federal initiative, offers a natural niche for halfway house conglomerates. Departments of correction can defer mandated services they otherwise are unable adequately to provide. Shadow Corrections Network: A New York Times investigation reported that New Jersey's halfway house conglomerate had "...mutated into a shadow corrections network, where drugs, gang activity and violence, including sexual assaults, often go unchecked..."2 Worse still, the report indicated that halfway houses may be yielding a higher recidivism rate than that experienced in traditional release plans. Likewise, a recent Pennsylvania study has concluded that individuals who spend time in halfway houses are more likely to return to a life of crime than those released directly to the streets.3 Pennsylvania currently contracts out 38 halfway houses, with 4,500 beds, at an annual cost of $110M. Community Education, Inc., is the largest provider of those services.4 Cheaper but Not Better: The system, designed for ease of transition from incarceration to society, has been effective as a safety valve for overcrowded prisons at around two-thirds the per-bed cost. Recidivism rates for those released from PA halfway houses was reported at 67% within the first three years, as opposed to 60% of those released from prison to the streets.5 Considering the parole and probation violations and re-offenses that are never made of record, it is clear that both public and private attempts to rehabilitate offenders are failing miserably. There is at least one exception.
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Harriet McDonald, Rethinking Government Contracts for Prisons, The Doe Fund, 12/18/1012. <http://www.doe.org/news_detail.cfm?pressID=377&news_type=current> 2 Sam Dolnick, As Escapees Stream Out, a Penal Business Thrives, The New York Times, 06/16/2012. http://www.nytimes.com/2012/06/17/nyregion/in-new-jersey-halfway-houses-escapees-stream-out-as-a-penalbusiness-thrives.html?ref=unlocked 3 Tom Corbett, Gov. & John Wetzel, Secretary, "Pennsylvania Department of Corrections: Recidivism Report 2013", Commonwealth of Pennsylvania Department of Corrections, 02/08/2013. 4 Sam Dolnick, Pennsylvania Study Finds Halfway Houses Don't Reduce Recidivism, New York Times, 03/24/2013. http://www.nytimes.com/2013/03/25/nyregion/pennsylvania-study-finds-halfway-houses-dont-reducerecidivism.html?pagewanted=all&_r=0 5 Ibid.

Prisoner Entrepreneurship Program (PEP): In May, 2004, Wall Street professional, Catherine Rohr, toured a prison and noticed the business ethic prevalent among many felons. She reasoned that if prisoners were trained to build legitimate business enterprises, it would likely have a big effect on recidivism. Leaving her New York career, she moved to Cleveland, TX to launch her project, intentionally recruiting former gang leaders, drug dealers and hustlers.6 While Catherine has since moved on to other projects, the results have been phenomenal. Not only were those who went through the program able to secure and hold jobs when released, 106 new businesses were created in 7 years, one with over $1M in revenue. More important to public safety and state budgets, the recidivism rates for graduates dropped to around 5%.7 Compare that with a nearly 68% national rate.8 There are obvious sampling problems inherent in comparing results of a bright and creative subject base with random prison population. Inasmuch, however, as PEP draws on those with the highest capacity for rehabilitation, should that also not be the objective of departments of correction? Appealing to Creative Energy: Appeal to creative energies, along with risk potential for success, are two of the natural motivators that drive us all. Is it possible that industry and government might collaborate, as they are in Cleveland, TX, to instill pride and purpose at all levels of the corrections industry? That is unlikely through arms-length, for-profit, bottom-line prison enterprises like Community Education, Inc. Stand-alone, non-profit entities providing prison services, however, remain a viable, largely untested option. However it is done, it is clear that government corrections remains too far behind the curve of progress to recover. It is time for legislators to rip aside the shroud of secrecy and open the door to creative options to this voracious consumer of economic and human resources. It is time to stop deferring common human relations issues exclusively to the keepers of the keys.

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http://www.prisonentrepreneurship.org/who/story.aspx

Ibid. Nathan James, Offender Reentry: Correctional Statistics, Reintegration into the Community and Recidivism , Congressional Research Service, 06/01/2011.

http://www.nationalcia.org/wp-content/uploads/Correctional-Statistics-Reintegration-into-theCommunity.pdf 2