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A private prison or for-profit prison, jail, or detention center is a place in which individuals are physically confined or interned by a third party that is contracted by a government agency. Private prison companies typically enter into contractual agreements with governments that commit prisoners and then pay a per diem or monthly rate for each prisoner confined in the facility.
Today, the privatization of prisons refers both to the takeover of existing public facilities by private operators and to the building and operation of new and additional prisons by for-profit prison companies.
In the modern era, the United Kingdom was the first country in all of Europe to use prisons run by the private sector to hold its prisoners. Wolds Prison opened as the first privately managed prison in the UK in 1992., as one of a number of prisons built by the public sector but contracted to the private sector to operate under 5 year contracts. Soon private prisons were established under the government's Private Finance Initiative, where contracts are awarded for the entire design, construction, management and finance of a prison under 25 year contracts. Later, Government attempted to 'market test' prisons operated by the public sector, though no prison transferred from public to private operation through this route until Birmingham in 2011. Prisons operated by the private sector are subject to re-competition at the end of the contract, when the public sector may bid, and on 3 occasions has done so successfully.
Privately run prisons are run under contracts which set out the standards that must be met. Payments may be deducted for poor performance against the contract. Government monitors ('controllers') work permanently within each privately managed prison to check on conditions and treatment of prisoners, and privately run prisons are subject to inspection by HM Chief Inspector of Prisons in the same way as publicly run ones. There are now 14 prisons in England and Wales operated under contract by private companies. Between them they have the capacity to hold about 13,500 prisoners or approximately 11% of the entire prison population. There are also 2 privately run prisons in Scotland. Current operators in the United Kingdom are G4S (6), Sodexo Justice Services (formerly known as Kalyx, and prior to that UKDS) (4) and Serco (6).
A competition is in progress to run 9 prisons in England and Wales. The first stage of the results was announced on 8 November 2012: the public sector will retain 3 and also take over Wolds Prison, currently run by G4S. The other 5 prisons will be subject of further competition between Serco, Sodexo and a new company, MTC/Amey. At the same time, Ministers outlined plans to contract out all but core custodial functions at all public sector prisons with the aim of saving £450m over 6 years. The loss of G4S of Wolds Prison and its failure to win any new contracts was widely linked to the company's failures with its contract for the 2012 Olympics.
HM Prison Ashfield opened in 1999 and was the first private prison in the UK to house young offenders. The prison was soon mired in controversy after repeated riots and reports of poor management. Conditions at the prison became so bad in 2003 that the Youth Justice Board withdrew prisoners from Ashfield, and threatened to recommend that the prison should be taken over by the public sector. Conditions at the prison improved however and the jail remained privately managed. Buckley Hall Prison was originally opened as a privately managed prison in 1994, but after a competitive tendering process in 2000, management of the prison was transferred to Her Majesty's Prison Service
The privatization movement can be traced to the contracting out of confinement and care of prisoners after the American Revolution. Deprived of the ability to ship criminals and undesirables to the Colonies, Great Britain began placing them on hulks (used as prison ships) moored in English ports.
The partial transfer of San Quentin prison administration from private to public did not mark the end of privatization. The next phase began with the Reconstruction Period (1865–1876) in the south, after the end of the Civil War. Plantations and businessmen needed to find replacements for the labor force once their slaves had been freed. Beginning in 1868, convict leases were issued to private parties to supplement their workforce. This system remained in place until the early 20th century.
Federal and state government has a long history of contracting out specific services to private firms, including medical services, food preparation, vocational training, and inmate transportation. The 1980s, though, ushered in a new era of prison privatization. With a burgeoning prison population resulting from the War on Drugs and increased use of incarceration, prison overcrowding and rising costs became increasingly problematic for local, state, and federal governments. In response to this expanding criminal justice system, private business interests saw an opportunity for expansion, and consequently, private-sector involvement in prisons moved from the simple contracting of services to contracting for the complete management and operation of entire prisons.
The modern private prison business first emerged and established itself publicly in 1984 when the Corrections Corporation of America (CCA) was awarded a contract to take over a facility in Hamilton County, Tennessee. This marked the first time that any government in the country had contracted out the complete operation of a jail to a private operator. The following year, CCA gained further public attention when it offered to take over the entire state prison system of Tennessee for $200 million. The bid was ultimately defeated due to strong opposition from public employees and the skepticism of the state legislature. Despite that initial defeat, CCA since then has successfully expanded, as have other for-profit prison companies.
The US Department of Justice statistics show that, as of 2013, there were 133,000 state and federal prisoners housed in privately owned prisons in the US, constituting 8.4% of the overall US prison population.  Broken down to prison type, 19.1% of the federal prison population in the US is housed in private prisons and 6.8% of the US state prison population is housed in federal prisons.  While 2013 represents a slight decline in private prison population over 2012, the overall trend over the past decade has been a slow increase  Companies operating such facilities include the Corrections Corporation of America, the GEO Group, Inc. (formerly known as Wackenhut Securities), and Community Education Centers. In the past two decades CCA has seen its profits increase by more than 500 percent. The prison industry as a whole took in over $5 billion in revenue in 2011.
According to journalist Matt Taibbi, Wall Street banks took notice of this big influx of cash, and are now some of the prison industry's biggest investors. Wells Fargo has around 100 million invested in GEO Group and 6 million in CCA. Other major investors include Bank of America, Fidelity Investments, General Electric and The Vanguard Group. CCA's share price went from a dollar in 2000 to $34.34 in 2013.
There are links between institutions of higher education and private prisons. In June 2013, students at Columbia University discovered that the institution owns $8 million worth of CCA stock. Less than a year later the student group Columbia Prison Divest was formed and delivered a letter to the president of the University demanding total divestment from CCA and full disclosure of future investments.
Corrections Corporation of America (CCA) has a capacity of more than 80,000 beds in 65 correctional facilities. The GEO Group operates 57 facilities with a capacity of 49,000 offender beds. The company owns or runs more than 100 properties that operate more than 73,000 beds in sites across the world.
Most privately run facilities are located in the southern and western portions of the United States and include both state and federal offenders. For example, Pecos, Texas is the site of the largest private prison in the world, the Reeves County Detention Complex, operated by the GEO Group. It has a capacity of 3,763 prisoners in its three sub-complexes,
Studies, some partially industry-funded, often conclude that states can save money by using for-profit prisons. However, academic or state-funded studies have found that private prisons tend to keep more low-cost inmates and send others back to state-run prisons.
Others[who?] have contended that ostensible cost savings come at the expense of security, and considerable costs are externalized.
In the wake of the escape of three murderers from the minimum/medium security Kingman Prison, Arizona operated by Management and Training Corporation (MTC), and its gruesome aftermath, Arizona Attorney General and gubernatorial candidate Terry Goddard said "I believe a big part of our problem is that the very violent inmates, like the three that escaped, ended up getting reclassified [as a lower risk] quickly and sent to private prisons that were just not up to the job." The private prison had inadequate patrols and prisoner movement, excessive false alarms, a lax culture, and inconsistencies in visitor screening procedures.
One escaping murderer, Daniel Renwick, immediately absconded with the intended getaway vehicle, abandoning his companions outside the prison. He was involved in a shootout in Rifle, Colorado, about 30 hours after the prison break, and was captured by a Garfield County deputy and Rifle police. Though he still "owed" Arizona 32 years on his sentence, he was sentenced to sixty years to be served first in Colorado.
In the course of evading pursuers, the remaining two escapees and their accomplice, Casslyn Welch, kidnapped vacationing Oklahomans Gary and Linda Haas in New Mexico. The couple was soon murdered by the ringleader, John McCluskey.
The extended family of the murdered couple sued the state of Arizona, as well as Dominion, an Edmond, Oklahoma corporation that spec-built the prison, and MTC, the corporation that managed it, for $40 million.
The last escapees and their accomplice were soon captured. Tracy Province, a lifer, was apprehended in Wyoming on August 9th. The final pair were arrested on August 19th, 20 days after the jailbreak, upon their return to Arizona. All three were first convicted of the escapes, initial hijacking, kidnappings and robberies in Kingman, Arizona. Then they were charged with the same crimes plus murder in New Mexico. John McCluskey, the ringleader, and his accomplice, Casslyn Welch, were also alleged to have committed an armed robbery in Arkansas. The three were eventually held on federal murder charges in New Mexico. McCluskey was tried on death penalty charges but after five months of court proceedings, his jury gave him life imprisonment on December 11, 2013.
Estimates of the costs of the nationwide searches as well as the apprehensions, prosecutions and subsequent imprisonment in the three states greatly exceed a million dollars.
Proponents of privately run prisons contend that cost-savings and efficiency of operation place private prisons at an advantage over public prisons and support the argument for privatization, but some research casts doubt on the validity of these arguments, as evidence has shown that private prisons are neither demonstrably more cost-effective, nor more efficient than public prisons. An evaluation of 24 different studies on cost-effectiveness revealed that, at best, results of the question are inconclusive and, at worst, there is no difference in cost-effectiveness.
A study by the U.S. Bureau of Justice Statistics found that the cost-savings promised by private prisons “have simply not materialized.” Some research has concluded that for-profit prisons cost more than public prisons. Furthermore, cost estimates from privatization advocates may be misleading, because private facilities often refuse to accept inmates that cost the most to house. A 2001 study concluded that a pattern of sending less expensive inmates to privately run facilities artificially inflated cost savings. A 2005 study found that Arizona’s public facilities were seven times more likely to house violent offenders and three times more likely to house those convicted of more serious offenses. A 2011 report by the American Civil Liberties Union point out that private prisons are more costly, more violent and less accountable than public prisons, and are actually a major contributor to increased mass incarceration. This is most apparent in Louisiana, which has the highest incarceration rate in the world and houses the majority of its inmates in for-profit facilities.
A 2014 study by a doctoral candidate at UC Berkeley shows that minorities make up a greater percentage of inmates at private prisons than in their public counterparts, largely because minorities are cheaper to incarcerate. According to the study, for-profit prison operators, in particular CCA and GEO Group, accumulate these low-cost inmates "through explicit and implicit exemptions written into contracts between these private prison management companies and state departments of correction."
Evidence suggests that lower staff levels and training at private facilities may lead to increases in incidences of violence and escapes. A nationwide study found that assaults on guards by inmates were 49 percent more frequent in private prisons than in government-run prisons. The same study revealed that assaults on fellow inmates were 65 percent more frequent in private prisons. An example of private prisons' low staff training level led to jail violence is reported by two journalists Margaret Newkirk and William Selway in Mississippi which is named Walnut Grove Youth Correctional Facility. According to the journalists, The ratio of staff to prisoner in this prison is unexpected 1/120. In a recent bloody riot in this prison, six inmates were rushed to hospital includes one with permanent brain damage. During the riot, staffs of the prison just sat there and waited until the melee ended, because prisoners are 60 times of the number of staff. The lack of well-trained staffs does not only cause violence but also eruption. According to former prisoner in this prison, the correction officers are also in charge of the smuggling in the prison. To make more money, they can provide prisoners everything, including weapons. 
CCA and The GEO Group have been members of the American Legislative Exchange Council (ALEC), a Washington, D.C. based public policy organization that develops model legislation that advances free-market principles such as privatization. Under their Criminal Justice Task Force, ALEC has developed model bills which State legislators can then consult when proposing “tough on crime” initiatives including “Truth in Sentencing” and “Three Strikes” laws. By funding and participating in ALEC’s Criminal Justice Task Forces, critics argue, private prison companies influence legislation for tougher, longer sentences. Writing in Governing magazine in 2003, Alan Greenblatt states:
|“||ALEC has been a major force behind both privatizing state prison space and keeping prisons filled. It put forward bills providing for mandatory minimum sentences and three-strikes sentencing requirements. About 40 states passed versions of ALEC's Truth in Sentencing model bill, which requires prisoners convicted of violent crimes to serve most of their sentences without chance of parole.||”|
According to a 2010 report by NPR, ALEC arranged meetings between the Corrections Corporation of America and Arizona’s state legislators such as Russell Pearce at the Grand Hyatt in Washington, D.C. to write Arizona SB 1070, which would keep CCA's immigrant detention centers stuffed with detainees.
CCA and GEO have both engaged in state initiatives to increase sentences for offenders and to create new crimes, including, CCA helping to finance Proposition 6 in California in 2008 and GEO lobbying for Jessica's Law in Kansas in 2006. In 2012, The CCA sent a letter to 48 states offering to buy public prisons in exchange for a promise to keep the prisons at 90% occupancy for 20 years. States that sign such contracts with prison companies must reimburse them for beds that go unused; in 2011, Arizona agreed to pay Management & Training Corporation $3 million for empty beds when a 97 percent quota wasn't met.
In the Kids for cash scandal, Mid-Atlantic Youth Services Corp, a private prison company which runs juvenile facilities, was found guilty of paying two judges, Mark Ciavarella and Michael Conahan, $2.8m to send 2000 children to their prisons for such crimes as trespassing in vacant buildings and stealing DVDs from Wal-Mart.
Many organizations have called for a moratorium on construction of private prisons, or for their outright abolition. The religious denominations Presbyterian Church (U.S.A.) and United Methodist Church have also joined the call, as well as the Catholic Bishops of the South organization.
As of 2013, there has been a modest pushback against the private prison industry, with protests forcing GEO Group to withdraw its $6 million offer for naming rights of FAU Stadium, and Kentucky allowing its contract with the CCA to expire, ending three decades of allowing for-profit companies to operate prisons in that state. In 2014, Idaho will be taking over the operation of the Idaho Correctional Center from the CCA, which has been the subject of a plethora of lawsuits alleging rampant violence, understaffing, gang activity and contract fraud. Idaho governor Butch Otter, a champion of privatization, said "In recognition of what's happened, what's happening, it's necessary. It's the right thing to do. It's disappointing because I am a champion of privatization."
In the final quarter of 2013, Scopia Capital Management, DSM North America, and Amica Mutual Insurance divested around $60 million from CCA and GEO Group. In a Color of Change press release, DSM North America President Hugh Welsh said:
|“||In accordance with the principles of the UN Global Compact, with respect to the protection of internationally proclaimed human rights, the pension fund has divested from the for-profit prison industry. Investment in private prisons and support for the industry is financially unsound, and divestment was the right thing to do for our clients, shareholders, and the country as a whole.||”|
Some U.S. states have imposed bans, population limits, and strict operational guidelines on private prisons:
There have only been two private detention facilities in Canada to date, and both reverted to government control.
The only private prison in Canada was the maximum-security Central North Correctional Centre, Penetanguishene, Ontario, operated by the US-based Management and Training Corporation from its opening in 2001 through the end of its first contract period in 2006. The contract was held by the Ontario provincial Ministry of Community Safety and Correctional Services. A government comparison between the Central North "super-jail" and a nearly identical facility found that the public-run prison had measurably better outcomes.
Additionally the GEO Group built the New Brunswick Miramichi Youth Detention Center under contract with the provincial Department of Public Safety, then had its contract ended in the 1990s after public protests.
In 2004, the Israeli Knesset passed a law permitting the establishment of private prisons in Israel. The Israeli government's motivation was to save money by transferring prisoners to facilities managed by a private firm. The state would pay the franchisee $50 per day for each inmate, sparing itself the cost of building new prisons and expanding the staff of the Israel Prison Service. In 2005, the human rights department of the Academic College of Law in Ramat Gan filed a petition to the Israeli Supreme Court challenging the law. The petition relied on two arguments. First, it said, transferring prison powers to private hands would violate the prisoners' fundamental human rights to liberty and dignity. Secondly, a private organization always aims to maximize profit, and would therefore seek to cut costs by, for instance, skimping on prison facilities and paying its guards poorly, thus further undermining the prisoners' rights. As the case awaited decision, the first prison was built by the concessionaire, Lev Leviev's Africa Israel Investments - a facility near Beersheba designed to accommodate 2,000 inmates.
In November 2009, an expanded panel of 9 judges of the Israeli Supreme Court ruled that privately run prisons are unconstitutional, finding that for the State to transfer authority for managing the prison to a private contractor whose aim is monetary profit would severely violate the prisoners' basic human rights to dignity and freedom. Supreme Court President Dorit Beinisch, wrote that "Israel's basic legal principles hold that the right to use force in general, and the right to enforce criminal law by putting people behind bars in particular, is one of the most fundamental and one of the most invasive powers in the state's jurisdiction. Thus when the power to incarcerate is transferred to a private corporation whose purpose is making money, the act of depriving a person of [their] liberty loses much of its legitimacy. Because of this loss of legitimacy, the violation of the prisoner's right to liberty goes beyond the violation entailed in the incarceration itself."
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