Inside Private Prisons: An American Dilemma in the Age of Mass Incarceration

We first had trouble getting contracts when we were ready to open. The only people who were interested in talking to us were newspaper reporters who were interested in doing a story on a prison that was built and never opened. The LA Times and the New York Times did a story, as well as many regional newspapers. But it was good, interesting reading, I suppose, for some small, little town in rural Minnesota that took it upon themselves and no one came. I think that’s kind of the headline of the story: “They built it, and no one came.”

IN THE SPRING of 1990, Bob Thompson, a thin man now in his early seventies who has the polite reserve of a long-time Minnesotan, had an idea. He was the city coordinator of Appleton, Minnesota, a rural town of 1,500 people far west of St. Paul. It was just a two-square-mile town where almost every street is named after a military veteran who died in combat, and it was losing people and money. The recession had hit Appleton hard, and the agricultural industry it depended on was its first victim.

After attempting to woo a casino and a furniture manufacturing plant, neither of which expressed enthusiasm for setting up shop in Appleton, Thompson settled on another idea—a prison. “I had done a substantial amount of reading about what was going on with prisons in the United States, and there definitely was overpopulation of inmates and shortages of beds,” said Thompson. “And there were some private prisons being built in southern USA, and one day I called a financial consultant for the city of Appleton, located in Minneapolis, and I said, ‘Steve, I’ve got a project for you.’ ” He said, “ ‘Yeah, what’s that?’ And I said, ‘I’d like to build a prison in Appleton.’ And there was one of those long pauses, and then he said, ‘Are you serious?’ And I said, ‘I am. I would like to pursue it, and see if it’s possible.’ And after some thought, he said he would get back to me.”2

Steve did get back to Thompson, and after many phone calls between them, they presented their plan to the Appleton Chamber of Commerce. At the packed meeting, Thompson told the residents what a prison in their town would mean for infrastructure, jobs, and economic viability. The Chamber of Commerce told him to “run with it” and see what he could do. He delivered letters to the seven board members of the Appleton Business Development Corporation, introducing the project. At first they responded with shock: “You want to build…a prison?” one said to him. But eventually, according to Thompson, “One gentleman at the business chamber meeting said, ‘What have we got to lose? It’s a downhill slide right now. Let’s try it.’ ”

They ran into legal hurdles almost immediately, and Thompson found himself in meetings with lawyers from white-shoe Twin Cities firms searching for the money and legal authority to break ground on a new prison. The lawyers drew up the paperwork for the Appleton Economic Development Association (AEDA), a subsidiary of the city of Appleton, to create a 501(c)(3) that issued revenue bonds to 900 investors. The AEDA eventually adopted the name Appleton Prison Corporation. The transaction essentially removed the city of Appleton from any liability and gave the Appleton Prison Corporation responsibility for building, marketing, and managing the finances of the facility.

Thompson’s idea became reality more quickly than he could have imagined. It took only two years to build; they broke ground in November 1990 and two years later, on a mild September day, the Appleton Prison Corporation opened the Prairie Correctional Facility, a $28-million 500-bed prison facility in the middle of a soybean field. The prison in Appleton was just one of fifty-seven privately managed prisons in operation in the country at the time.³

The town seemed to be onto something. The state and federal prison population had increased about 168 percent in the last decade, and “the 1992 increase translate[d] into a nationwide need for approximately 1,143 prison bed spaces per week, compared to the nearly 981 prison beds spaces per week needed in 1991.”4 The residents of Appleton hoped their 500 inmate beds came at precisely the right time to dramatically change their economy, and there was already cause for hope. A Super 8 motel had just opened with the prospect of incoming prison staff and families of those incarcerated at the new facility visiting Appleton. The town even began renovations to its small airport.

The 1990s was a time of economic prosperity, and the GDP rose continuously for almost a decade. But rural America was often excluded from that prosperity as bigger cities benefited from the rapid increase in the service market, a hugely expanding labor market, and rising stock prices. Farming communities suffered. The advent of advanced equipment and rising land prices contracted the agricultural sector, and family farms were crowded out of land and equipment. Rural populations fled to the cities and the suburbs. In 1950, about 44 percent of Americans lived on farms and in small towns, but by 1990 that number had declined to about 23 percent.

The allure of prisons as a tool of economic development in rural America grew as prison spending skyrocketed. Sociologist Michael Jacobson found that “prisons tend to create secondary and tertiary support systems that also create jobs and sustain development. Once prisons are operating, they require, for instance, outside health care systems to provide medical care to inmates and transportation businesses and hotels to bring and house people visiting prisoners.”⁵

The 1990s were the heyday for prisons. An average of twenty-five new rural prisons opened each year, a marked increase from sixteen prisons per year in the 1980s and just four per year in the 1970s. The United States built 245 new facilities across 212 of its 2,290 rural counties.⁶ In 1996, the nation spent $22 billion on prisons, $1.3 billion (6 percent) on constructing new facilities. Expenditures on state correctional activities rose 115 percent from $12.7 billion in 1985 to $27.3 billion in 1996.⁷ New York State alone spent $716 million on prison construction projects in 1999 and 2000.⁸ In the 1990s, a prison was built somewhere in rural America every fifteen days.⁹

And rural towns bent over backward to entice public and private prisons with perks: housing subsidies for prison employees, donated land, and substantial tax breaks to corporations willing to build in small towns. Rural communities that host inmates benefit from federal antipoverty funds. With a captive population behind bars earning no income but counting as residents, impoverished towns across the United States qualify for more government money based on their “low-income population.” For example, the two prisons in Coxsackie, New York, made up almost 28 percent of its 1990 population in the census, which reduced its median income and made it eligible to receive more federal funds from the Department of Housing and Urban Development.10 Some of the largest federal assistance programs—Temporary Aid for Needy Families (TANF), public education, and Section 8 public housing—depend on census data to distribute benefits across the nation.

Despite the demand for inmate beds, the medium security prison built next to the Swift County Fairgrounds in Appleton sat empty for almost nine months; its white building blending into the perpetually snowy backdrop of the small Minnesota town. The unoccupied prison missed its first principal and interest payments to bondholders in February 1993.¹¹ Thompson was losing weight and sleep waiting for inmates to breathe life into the prison. He was hopeful that the Appleton Prison Corporation would sign a contract with Alaska. He was on twenty-four-hour alert and kept his bags packed in case he received a call to meet with their Department of Corrections. The deal fell through after Alaska’s corrections union got wind of the potential contract. “That’s when the newspapers and TV stations started coming out and saying, ‘You smart people, you spent $27 million and you don’t have anything to show for it,’ ” said Thompson.¹² Articles ran in the New York Times and the Los Angeles Times, and Michael Moore covered the story on his show TV Nation. State policy makers introduced legislation allowing the state to buy or lease the prison, which was on the verge of default.

Early on, once construction was completed, Appleton hosted an open house at the Prairie Correctional Facility. Thompson hired buses to bring people to the facility, where they took guided tours. They invited residents of neighboring towns, who were concerned about “prisoners getting out and ravaging through the surrounding countryside.” But Thompson said these concerns were relieved after the tours. “These weren’t inmates who were classified as violent, even if they had been classified as violent in the past,” Thompson said. “And besides that, they aren’t getting out. It’s constructed like a high-security prison, razor wire and all.”13

Thompson vowed to quit smoking once a contract to house inmates was signed.¹⁴ He met with the Minnesota corrections secretary, and the meeting led to a surprising phone call from the state’s head of corrections: “‘Bob, I just got off the phone with Puerto Rico. They are looking for at least 500 beds. I gave them your name.”¹⁵ Thompson wasted no time. He flew to Puerto Rico to meet with their corrections officials and negotiated a contract to house 500 men at the prison. On his return to Appleton, Thompson met a rejoicing 185 employees who were now assured of job security. It was April 1993, and the Prairie Correctional Facility was about to welcome its first prisoners—350 Puerto Rican men. Thompson said that the Minnesota corrections secretary had warned him that the Puerto Rican inmates may be difficult. “You know, you’re not professionally trained in corrections,” Thompson recalled the corrections head telling him. “I know you’ve been around and you’ve seen a lot of different prisons and met with a lot of different sentencing jurisdictions, but I’m just going to warn you that there could be a problem with Puerto Rican inmates. They are not easy to handle.”¹⁶ The corrections staff brushed up on their Spanish and prepared for the men who would soon be housed behind bars at their facility.

The commonwealth of Puerto Rico officially began renting cells in May 1993, paying an estimated $50 a day per prisoner. But eventually Appleton started sending inmates back to Puerto Rico as the territory opened a new prison and individuals reached their parole dates. The Federal Bureau of Investigation opened an investigation into allegations that guards assaulted the prisoners, and in March 1995 Minnesota sent back the remaining thirty-seven Puerto Rican inmates. A spokesperson for the Prairie Correctional Facility reported that the “inmates were taken to an undisclosed airport and flown back to Puerto Rico under guard aboard a chartered passenger jet.”¹⁷ In July 1996, the FBI closed its investigation, citing insufficient evidence to support allegations by former prison employees that prison guards had beaten inmates and locked them in unheated cells during the winter.¹⁸

In 1994, Appleton signed a contract to house Colorado inmates. By the summer of 1995, approximately 1,000 inmates were shipped out of Colorado and sent to correctional facilities in Minnesota and Texas, and 514 of them were behind bars at the Prairie Correctional Facility. A 1996 article noted that “the prison-building boom of the past decade has failed to keep up with lengthier sentences and tougher parole requirements, leaving the DOC with roughly eight beds for every ten prisoners.”19 Thompson’s hard work appeared to pay off. The residents were cautious but soon saw hundreds of people driving out to the prison to go to work. Even former Mayor Ron Ronning worked at the facility for many years, managing correctional staff. “It’s a senior citizen community, so they seemed more concerned about the far-fetched concepts,” said Ronning. “What’s an inmate like? Could he escape? What will happen?”²⁰

Assured that the prison could potentially bring in over $10 million in revenue a year, residents soon warmed to the idea of the town’s new architecture. The lights were on at night, the grocery store profited from the traffic, and the gas stations made more revenue than ever before. Thompson estimates that the prison provided about $1 million of business to the hospital each year. Thompson said they sold the prison idea on the premise that the people running it were small-town, rural people with values. Thompson recalls that soon after welcoming its first inmates, the Evangelical Lutheran Church of America founded a Lutheran congregation inside the prison called Prisoners of Hope. It had incarcerated individuals on its council.²¹

The news that Appleton had built a prison and successfully started to fill it caught the attention of small towns across the country. Thompson recalls, “A lot of towns became interested and [said], ‘Why can’t we have a prison, too?’ If I had a dollar for every phone call that I got with someone asking that question.” Prairie Correctional was built to capitalize on the overcrowding of other state facilities by housing inmates from Colorado, Idaho, and Minnesota. The supply of incarcerated individuals fluctuated, but by 1996 the prison was once again in default on the prison bonds with a $26.7 million principal debt and $9.7 million in unpaid interest.²²

Idaho housed inmates at the Prairie Correctional Facility in Appleton because Idaho had run out of space. Its prison population nearly doubled between the mid-1990s and the mid-2000s, to just fewer than 7,000 inmates.23 A big driver of Idaho’s prison population was people sentenced for felony substance abuse offenses, which increased from 957 in 1996 to 1,807 in 2005.²⁴

A 1997 article framed CCA’s prison in Appleton as a success story: a “$28 million private prison built by the town of Appleton, Minnesota (population 1,300) signed a contract with Puerto Rico to house 350 inmates. Colorado and Idaho later sent prisoners. Business is now so good that the prison, which was bought last year by the CCA, is doubling its capacity to 1,076 beds.”²⁵ Buoyant with the success of the prison, Thompson told a reporter, “It appears that the way things are going in this country, the market’s never going to dry up.”²⁶

By October, the prison boasted a staff of 400 and an annual payroll of $8 million. Its incarcerated population mostly came from Colorado, but it also housed individuals from Idaho, Minnesota, and North Dakota.²⁷ By 1997, Colorado shipped nearly 1,700 inmates out of state because they ran out of prison cells in Colorado, and 1,000 of them were housed in Appleton by the summer of 1998.

There are Appletons everywhere. In 1990, city leaders in Hinton, Oklahoma, built a prison with $38 billion in bond money at a 9.23 percent interest rate. Eight years later the town’s economic development board auctioned off its 812-bed Great Plains Correctional Facility. Cornell Corrections (acquired by the GEO Group in 2010) paid $43 million for the prison, adding $18 million in profit to the town of Hinton. The town used $2 million to build an eighteen-hole golf course and country club, including one hundred lots for new homes, $700,000 to build its new fire station, more than $900,000 to improve the local high school—including a 1,000-seat metal grandstand for the football stadium—and $800,000 to build a two-story terminal at its airport.28 Ironically, Cornell Corporation deeded the prison back to the city in December 1999, which allowed Cornell to manage the prison but permitted the town to receive a share of profits if it could convince the federal government to send inmates to the prison. Although seemingly a success story, when Arizona ended its contract with the prison in 2010, it sat empty until early 2014 when the Department of Justice finally shipped inmates there. The GEO Group is under contract with the federal Bureau of Prisons to house inmates at the facility from 2017 through 2020.

Although the 1990s and early 2000s saw huge increases in the nation’s prison population, growth slowed in the late 2000s. The economic downturn, partly attributed to the subprime mortgage crisis and the collapse of the housing bubble, opened huge shortfalls in state budgets. States tightened their belts and slashed their expensive corrections budgets. These expenditures were already coming under scrutiny in states as lawmakers reconsidered whether incarcerating so many people for so long actually protected public safety. For the first time in decades, prison reform became a subject of significant public discussion in Texas, South Carolina, and Louisiana.

Existing as a ready-made facility with extra prison beds was the key to the Prairie Correctional Facility’s early success. But both Colorado and North Dakota hoped the Appleton solution was not a long-term one. In 1999, the Colorado prisoners who were housed at Prairie were sent home when Colorado had built enough cells.²⁹ North Dakota had relied on the Appleton prison for years to relieve overcrowding, but it eventually built its capacity even as the state’s prison population continued to grow. North Dakota built new cells in county jails, opened a treatment center in September 2006, and expanded other facilities.³⁰

Appleton soon found itself delicately balancing out of state contracts with a need to house Minnesota inmates to ensure long-term profits. Making a business calculation that reserving cells for its own state inmates would pay off, in the summer of 2006 Idaho transferred 270 of its inmates out of Appleton to a correctional facility in Texas so the Prairie Correctional Facility could house incarcerated individuals from Minnesota. After the transfer, only 31 Idaho inmates remained.31 Despite the end of the Colorado and North Dakota contracts, and the exodus of the Idaho inmates, in early 2009 the Prairie Correctional Facility was almost at capacity, with 542 inmates from Minnesota and another 525 from Washington. Things would look different in Appleton by Christmas.

By the end of 2009, the Prairie Correctional Facility had lost its contract with Washington. Steve Conry, vice president at CCA, commenting about the loss of so many incarcerated individuals said that the company was seeing demand to house inmates in the deep South and the far West. According to Conry, Appleton’s location in the Midwest proved a disadvantage because of the distance inmates would have to travel to Appleton.³²

CCA increasingly found it difficult to sign contracts with states that struggled with decimated budgets. Many of these states reduced their prison populations to save money or double-bunked incarcerated individuals in lieu of sending them out of state.³³ Compounding CCA’s troubles, two Minnesota state-owned correctional facilities underwent expansions. At one time Minnesota had housed more than 1,000 incarcerated individuals at Appleton, but by 2009 they no longer needed the private facility. Minnesota had opened four new housing units at a medium security prison in Faribault and added new beds at the correctional center in Moose Lake.³⁴ Prairie Correctional Facility staff pinned their hopes on a bid to the Alaska Department of Corrections to hold its prisoners being housed outside of the state, but the Alaska Department of Corrections announced it would sign a contract with Cornell Corporation to house up to 1,000 inmates at their new facility in Hudson, Colorado.³⁵ They couldn’t fill the cells in Appleton.

In the late fall of 2009, the Prairie Correctional Facility competed against Kansas, Michigan, Nevada, Oklahoma, and Virginia to house 2,000 medium security individuals from Pennsylvania. With the support of the Minnesota Department of Corrections, the state sent a proposal to Pennsylvania, offering to relieve their overcrowded state prisons. By January 2010, Pennsylvania’s prison population stood at more than 51,000 inmates housed in twenty-seven facilities intended to hold 43,222 inmates.³⁶ Ronning, who was Appleton’s mayor at the time, said that the Pennsylvania inmates would be a “dream come true.”³⁷

In January 2010, Pennsylvania’s Secretary of Corrections Jeffrey Beard announced that they would send the incarcerated men to state-run prisons in Michigan and Virginia. Prairie had lost the bid. Once again Appleton found itself unable to offer an attractive alternative. CCA closed the prison in February, and nearly 450 employees lost their jobs. Tim Wengler, the prison’s warden, told Minnesota Public Radio, “The Department of Corrections did their job the right way and we’re a victim of that.”38

At the prison’s closing, CCA’s CEO Damon Hininger said, “We are disappointed to make the decision to close the Prairie Correctional Facility. Unfortunately, without an inmate population large enough to significantly utilize the facility, maintaining operations at the Prairie facility isn’t economically viable. I would like to thank our outstanding and dedicated staff who have done an exceptional job, and we look forward to resuming operations at the facility at some point in the future.”³⁹

Appleton’s economy crashed. The $1.1 million the facility provided to Appleton annually made up almost 60 percent of the city’s budget. The closure reduced revenues for public utilities, and the county’s solid waste fund ran at a $75,000 deficit because the prison’s trash and recyclable goods were no longer part of the sewage system.⁴⁰ CCA and Swift County negotiated a tax agreement including a reduction in the 2009 valuation from $42.9 million to $32 million for the 2010 taxes, which meant a loss of $50,000 in tax revenue to the county. The city of Appleton received $250,000 less in revenue and the Lac Qui Parle Valley School District saw a decrease of $40,000 because of the lowered value of the prison.⁴¹ Property taxes jumped 30 percent for residents the year after the facility closed in an attempt to close the deficit.⁴²

The prison closure forced pizza parlors and restaurants to close, unemployment soared, and younger families moved away. Driving around the town of 1,200 residents on a 20-degree day in December 2015, I felt the desolation. The prison has been closed since early 2010, despite rumors over the years of a contract for federal inmates or that the facility would house incarcerated individuals from California. Roads were potholed, only a few restaurants remained, and the town’s one gas station seemed to be the central hub of activity.

I stopped at one of Appleton’s only restaurants, JJ’s, known for its hamburgers and milkshakes. I ordered a coffee and sat at a booth by a window. The only other diners were a woman in a blue Walmart fleece who sat in a booth with her husband, a heavyset man on disability. She used to work at the Prairie Correctional Facility, but today she works for Casey’s General Store. If the prison receives inmates again, she said she hopes Casey’s will finally open twenty-four hours a day. “No store in this town is open past eleven at night,” she told me. The prison reopening would be a godsend to the town. “Everything is dying now,” she said.

CCA has maintained the facility since its closure, including its ACA accreditation status and a $750,000 project to upgrade its roof in 2015. Six people were employed full-time at the facility, ensuring that it stayed up to code in hopes the facility would one day reopen. One employee must flush the prison’s 800 toilets each week so the pipes don’t freeze.43 Upon learning that CCA would close the facility in 2009, Minnesota State Congressman Andrew Falk wrote an op-ed in a local paper: “There is no responsibility I take more seriously than the need to create and protect local jobs. I still haven’t given up hope the situation with Prairie can be resolved, and I look forward to working with everyone involved to reach a solution.”⁴⁴

In 2012, CCA proposed something surprising. As state budgets struggled with considerable deficits, CCA sent letters to forty-eight states offering to buy their prisons. In return, CCA proposed a twenty-year contract to manage the prisons with a guarantee that the prisons would remain 90 percent occupied.45 The letter was signed by CCA’s Chief Corrections Officer Harley Lappin, a former director of the federal Bureau of Prisons. The letter read, “In short, CCA is earmarking $250 million for purchasing and managing government-owned corrections facilities. The program is a new opportunity for federal, state or local governments that are considering the benefits of partnership corrections.”⁴⁶ The previous year, Ohio closed a deal with CCA to sell its Lake Erie Correctional Facility to the corporation in exchange for $72.7 million, a way to reduce its budget shortfalls. CCA’s self-proclaimed “corrections investment initiative” made headlines, but no state took them up on Lappin’s offer.

Many private prison companies bear the risk of building jails and prisons without any guarantee that departments of corrections will send them individuals to house. The Prairie Correctional Facility in Appleton, Minnesota, was built on speculation (“spec”), a term referring to the construction of a building that is financed and built without a contract for occupants (in the real estate market) or incarcerated individuals (in corrections). The strategy has come under scrutiny by those who worry about mass incarceration in the United States, but it was a growth strategy for private prisons in the 1990s and early 2000s. Constructing prisons before a contract is in place can be financially remunerative, as it allows the contractor to circumvent government procurement laws and presents a ready-made facility when state corrections find their own prisons overcrowded.

One of the most persuasive reasons for corrections administrators to use private prisons is the speed with which prisoners can be transferred to them.⁴⁷ Using private prisons also provides the state with flexibility; they can easily shed capacity when prison populations drop. Relying on corporations to house inmates when governments don’t have enough prison beds allows departments of corrections to pivot without long-term obligations to employees for pensions or the upkeep of empty facilities.

In 1998, CCA was desperate to gain a foothold in the California prison boom and invested $216 million to build three medium to high security prisons on “spec” with just over 4,000 beds. “If you build it in the right place, the prisoners will come…. Clearly the need is here,” David Myers, CCA’s West Coast regional president, told the Wall Street Journal. Myers added that California has “a prison crisis. They have tough (anticrime) legislation, and they’re going to need prison beds. The private sector can step up to the plate and provide them.”48 In 2000, Susan Hart, vice president of communications for CCA, justified the practice of building spec prisons: “We are anticipating their needs without costing government or taxpayers any capital.”⁴⁹

But reformers criticize how much control spec prisons give corporations over where and when prisons are built, how large they are, and how they are designed. Instead of a well-planned strategic discussion between the department of corrections and other state agencies about the need for more prison beds, where in the state those beds are located, and how the prison is constructed for the most efficient use of state resources, private companies and developers hold all the cards. Private developers do not need to apply for any authorization or license from a state corrections agency to build and operate facilities. In fact, many spec prisons—as the Appleton story shows—don’t even hold prisoners from their own state.

The practice is so controversial that in 2001 Wisconsin’s joint budget committee recommended banning all future speculative prison construction in the state. Despite criticism that building spec prisons encourages higher incarceration rates because the prison beds exist, private companies capitalized on the venture. Between 1990 and 1999, private prisons expanded their design capacity—meaning they could house more inmates—from just over 15,000 to an astonishing 119,000.⁵⁰ Although a tremendous growth strategy in the nineties, private prison companies have started to put the brakes on spec prisons. “They basically had overbuilt,” Anton Hie said, an analyst at Jefferies and Co. who covered CCA and the GEO Group. “There was a lot of promise of new inmates that never came…it kind of all came crashing in.”⁵¹

CCA’s 2015 Annual Report noted, “In the long-term, we would like to see continued and meaningful utilization of our remaining capacity and better visibility from our customers before we add any additional capacity on a speculative basis.”52 GEO Group’s 2015 Annual Report was more optimistic: “In addition to pursuing organic growth through the RFP process, we will from time to time selectively consider the financing and construction of new facilities or expansions to existing facilities on a speculative basis without having a signed contract with a known customer.”⁵³

For rural communities facing skyrocketing unemployment rates—usually from the decline in agricultural and manufacturing jobs—even the news of spec prisons sitting barren across the nation does little to deter building them or welcoming a private prison conglomerate into their towns.

A little more than a decade after the Prairie Correctional Facility housed its first inmates, officials in Hardin, Montana, more than 600 miles west of Appleton, had the same idea. They wanted to create new jobs, increase tax revenue, and reap the economic benefits a prison can bring to a small town. James Parkey, a Texas-based prison developer and architect, approached officials in Hardin, offering to build a prison on speculation and bring revenue to the impoverished town, whose unemployment rate was closing in on 10 percent. His team—a construction firm to build the prison, dedicated staff to find prisoners and manage the facility, and underwriters to sell the bonds and conduct an economic feasibility study—would take care of everything. Parkey promised to generate 150 jobs and at least $100,000 in annual per-prisoner fees.⁵⁴

In 2004, officials made a deal with Parkey to build a 464-bed prison in Hardin, a town of 3,600 residents in southeast Montana. The city would own the prison through the tax-supported Two Rivers Trade Port Authority (TRA). The county would finance the prison, a private prison company would manage the facility and receive a portion of the profits, and the state and federal government would send the inmates.⁵⁵ Three years later, the Two Rivers Detention Facility was poised to open its doors, but, like Appleton, the town could not find individuals to fill its beds. For seven years the $27-million facility sat vacant. The state department of corrections never sent inmates there, and the Montana Attorney General’s office issued an opinion stating that the facility could not legally house out-of-state inmates. Three years later, the city overturned that opinion.

Despite the Montana Attorney General’s opinion, it is common practice for states to ship inmates out of state to serve their prison sentence in a private facility hundreds or thousands of miles away from their home. A prisoner’s sentence remains the same whether housed in a state or private facility, in or out of the prisoner’s home state. The sentences for prisoners housed out-of-state are governed by the law of the state their conviction stems from, and that state’s rules and regulations apply to the those shipped away to private prisons out of state.

Hardin continued to look for people to house behind bars in its prison. In 2009, the Hardin City Council supported a proposal to house prisoners from the U.S. military prison at Guantanamo Bay in Cuba, passing a resolution noting their capacity to provide “a safe and secure environment, pending trial and/or deportation.” The facility was not equipped to house maximum security prisoners, so the plan fell through.⁵⁶

Desperate to find inmates, in the fall of 2009 the city announced a ten-year contract with the American Private Police Force Organization (APPF), which claimed to be a paramilitary, security, and investigative services company. It was later revealed by news organizations that the company’s public face, California resident Michael Hilton, had a criminal past, including a long history of civil fraud.57

The prison grew to become an embarrassment to the town. In 2014, Louisiana-based private prison corporation Emerald Correctional Management took over the operational reins. They procured a contract with the federal Bureau of Indian Affairs to pay the company $75 a day per inmate, all of whom came from American Indian reservations in Montana, North Dakota, and Wyoming. Despite the contract, the average inmate population hovered around 150, not nearly enough to break even.⁵⁸ The facility was $40 million in debt, and worse, the Bureau of Indian Affairs canceled its contract in November 2015. Hardin’s unemployment rate had reached 10 percent, and the lack of inmates proved a grave disappointment to its residents. By January 2016, the 92,000 square foot facility reported housing zero inmates. Warden Ken Keller and his program manager, Hope Keller (his wife), were the detention center’s only two employees: “There’s two of us here,” Warden Keller told the Billings Gazette, “We’re keeping the lights on and chugging away.”⁵⁹

In November hopes were high again when the federal government posted help-wanted ads for cooks and correctional officers to work at the facility. More concrete news emerged in February that the Bureau of Indian Affairs was negotiating another contract to operate the Two Rivers Detention Facility, which might be signed as early as April.60

These spec prisons “run the risk of becoming half-empty white elephants marooned on the American landscape.”⁶¹ It is no accident that so many U.S. prisons are in rural areas where the land is cheaper and more plentiful, and where inmates who mostly hail from the cities are housed hundreds of miles from their family.

The research on whether there are long-term positive economic gains associated with prison development is decidedly mixed. Sociologist John Eason’s research of the prison boom on rural towns across decades indicates a slight net positive for towns that attract prisons. His analysis indicates that “on average, towns that adopted a prison in the first period of the prison boom (1969–1978) experienced an increase in median home value and median family income, and a reduction in poverty.”⁶² However, Eason acknowledges that prisons provided only “a short-term economic boon in some periods for rural communities that built prisons. While prison-building increases median home value, reduces unemployment, and eases poverty, these effects are not lasting.”⁶³

Other research suggests that prisons do not produce the economic growth rural towns once expected. Even if a prison is built in a rural community, many of its jobs are not doled out to residents. Although correction officers do not typically need advanced degrees, they need a certain level of education that is not a given in all rural communities. As was the case in Appleton, a good many correction officers came from other cities and counties. Most did not uproot their families and homes and move to Appleton; instead they commuted. Despite the Super 8 and a few restaurants, the town did not have the infrastructure that neighboring towns offered. In addition, correction officer turnover is dramatically high—41 percent in private prisons and just 15 percent in public prisons.64 Correction officers and jailers have one of the highest rates of injuries and illnesses, often due to confrontations with inmates.⁶⁵ One study analyzed death certificate data from twenty-one states and determined that correction officers’ risk of suicide was 39 percent higher than that of all other professions combined.⁶⁶

Inmate labor may displace workers who live in rural communities because inmates are paid poorly, usually well below the minimum wage.⁶⁷ Prisoners typically earn less than 50 cents an hour, making it quite profitable for industries—and even community-based retailers—to use prison labor. Inmates in Colorado are paid between 74 cents and $4 per day for working in prison. The Haystack Mountain Goat Dairy contracted with the Colorado Department of Corrections for labor and paid inmates to work at a dairy processing cheese products the company sold to retailers such as Whole Foods. The dairy claimed that, “depending on their schedule, inmates can earn anywhere from $1,000 per year to over $2,500 per year.”⁶⁸ Although inmates working in the dairy learned job skills that could translate into employment after their release, the idea that prisoners made less than minimum wage to make goat cheese for eventual sale at Whole Foods caused a public outcry. In this case, advocates protested, concerned that inmate labor was being exploited. But often communities are upset because they feel that inmates are competing for their jobs.

The median wage for state inmates is 20 cents an hour and for federal prisoners about 31 cents an hour.⁶⁹ Those housed behind bars are paid pennies on the dollar because prison jobs do not fall under the Federal Labor Standards Act (FLSA), which sets minimum legal standards for wages and working conditions.

Although inmate labor may worry local workers, local leadership may find the prospect of cheap labor appealing. Consider the 2016 announcement of planned closures of inmate work centers in Oklahoma after a deal to rent a private prison from CCA. To cut costs, the Oklahoma Department of Corrections consolidated fifteen Department of Corrections Work Centers, transferring 1,000 inmates to one prison in Granite, Oklahoma, and shuffling the inmates from the Granite prison to a private facility owned by CCA in Sayre, Oklahoma. City administrators from across the state who benefited from inmate labor from the work centers protested the decision at a Board of Corrections meeting that summer. A city administrator for the town of Marlow voiced concern that the loss of these inmates “would severely cripple our ability to continue to serve our community with mowing, street repair, maintenance, and other services.” Seminole’s city manager echoed this: “We got the call like everyone else this morning, and panic set in quickly.”⁷⁰

A 2003 report by the Sentencing Project studying the effect of rural prison towns in New York found that over twenty-five years there was “no significant difference or discernible pattern of economic trends between the seven rural counties in New York that hosted a prison and the seven rural counties that did not host a prison.”71 Another study noted that manufacturing industries and some others tend to generate “clusters of linked industries,” something prisons do not produce.⁷²

Once a decade, the U.S. Census Bureau counts individuals that make up the population. Under the traditional “usual residence” rule, people are counted where they live and sleep. But “usual” residence might not reflect “actual” or “legal” residence. Where a person lives, sleeps, or works can differ from where he or she permanently resides or is registered to vote. So how are inmates counted? Incarcerated adults are “counted at the facility” in which they are housed, even if that facility is hundreds (or even thousands) of miles away from their actual residence.⁷³

Under the bureau’s usual residency rule, more than 2 million adults were and will continue to be “counted as residents of their prison cells for the entire decade following the [2010] census.”⁷⁴ The census provides the data needed to apportion House seats and determine state legislative district boundaries. It also serves a critical economic purpose: it affects the annual allotment of more than $400 billion in federal and state funding to state and local governments.⁷⁵ State legislative districts are redrawn every decade after the census, and counting inmates as residents of the town where their prison or jail sits has significant political repercussions.

Residents of rural areas that house prisons benefit; their district appears much more populated than it is. Ironically, inmates can’t vote in forty-eight states while they are prisoners (Maine and Vermont are the exceptions). This prison-based gerrymandering also disproportionately boosts political power to rural, often Republican, districts. Political science professor Marie Gottschalk notes that this practice also affects urban centers, which lose huge voting blocs because so many of their residents are locked away in rural America. In Pennsylvania, almost 40 percent of the state’s inmates come from Philadelphia, which doesn’t have a state prison. Most of these inmates are black and Latino and are considered to be residents of the counties where they’re incarcerated.76

After the 2010 census, more than 185 counties and other small towns changed how they drew their districts and did not include prison populations.⁷⁷ These efforts even extend to Congress. U.S. House Representative Hakeem Jeffries (D-N.Y.) and twenty-three other representatives introduced a bill to the Committee on Oversight and Government Reform in 2015. The Fairness in Incarcerated Representation Act would require the secretary to count inmates at their last place of residence before incarceration. The committee has not yet reported the bill to the House floor.⁷⁸

Advocates are attempting to change how inmates are counted through administrative challenges to the “counting-at-facility” rule. On May 30, 2015, the bureau submitted its 2010 Census Residence Rule and Residence Situations for public comment. Of the 262 comments received, “156 suggested that prisoners should be counted at their home or pre-incarceration address.”⁷⁹ After reviewing the comments, the bureau rejected the proposed change. Counting inmates at a location other than their respective facilities, it concluded, “would violate the concept of usual residence, since the majority of people in prisons live and sleep most of the time at the prison.”⁸⁰

The “counting-at-facility” rule remains unchanged, and in June 2016 the bureau submitted its Proposed 2020 Census Rules for public comment. Civil rights groups were especially vocal about the hypocrisy of the bureau’s proposal that deployed service members should be counted at their home address (usual residence) in the United States even if they live and sleep elsewhere for most of the time at the time the census is conducted.⁸¹

Since 2010 when the Prairie Correctional Facility doors closed for lack of inmates, the state’s prison population had climbed. In fact, the prison population was on the rise even when the facility closed. Despite seeing the crime rate cut by more than 30 percent in the last decade, Minnesota’s incarceration rate had almost doubled between 2000 and 2015. An increase in mandatory minimum sentences for certain crimes and new crimes on the books greatly increased the number of people serving felony convictions. In 2015, Minnesota claimed the fifth fastest prison growth rate in the country.82

Lawmakers had turned toward more draconian policies. Amid much fanfare, they enacted the state driving-while-intoxicated law in 2002. Today, 700 inmates can trace their incarceration to that law. Policy makers also focused on legislation that increased sentences for drug crimes, lowering the weight for possessing methamphetamines and heroin to the same as for cocaine, and lowering the minimum weight for high-level charges. Minnesota also cracked down on illegal guns. In 1998, state legislators increased the minimum sentence for a violent felon caught with a firearm from eighteen months to five years. This policy change, according to the Minnesota Sentencing Guidelines Commission, created a demand for about 400 more prison beds.⁸³

Faced with too many inmates to house at its ten state prisons, Minnesota did something many states are forced to do—house state prisoners at county jails. County jails are not built for this; they typically don’t have the resources or programming for long-term inmates. Three years after the Minnesota Department of Corrections started to send state prison inmates to county jails, nearly 400 state prisoners were housed there.⁸⁴ With the state prison population projected to grow to 10,885 by 2022, the state knew it would quickly run out of space even relying heavily on its jails to pick up the slack.

Minnesota is not alone in having increased its prison population despite dramatically lowered crime rates. Between 2006 and 2014, twenty-two states increased their prison population, and saw crime drop by an average of 20 percent.85 The political dynamics in Minnesota are a microcosm of what states across the country face in regulating crime and punishment, private versus government run prisons, and just how large the prison population must be to ensure the public safety. In 2015, Minnesota state legislators created a task force to examine the size and scope of its prison population, hoping to pass legislation that would safely reduce the number of inmates in their prisons and jails. After debating policy solutions and hearing months of testimony from corrections officials, the sentencing commission, academics, and criminal justice experts, the task force enunciated the choice before them: they could either reduce their prison population or find new prison beds.

The politics around mass incarceration, racial disparities, criminal justice policies, and the private prison industry collided in Minnesota. CCA offered a compromise. They would lease the facility back to Minnesota for about $7 million a year. Many legislators supported the deal, and the citizens of Appleton prayed that the lights would turn on again at Prairie Correctional.

Leasing deals are not unusual. California has relied on private prisons to relieve its correctional overcrowding, sometimes leasing prison space from for-profit prison corporations but opting to manage the facilities with their own correction officers. The California City Correctional Center southwest of Death Valley National Park is operated by the California Department of Corrections and Rehabilitation, but the state leases the prison from CCA. After California extended its lease for the prison through the fall of 2020, the company’s CEO stated: “Our California City Correctional Center has proven to be a great solution to provide CDCR [California Department of Corrections and Rehabilitation] with in-state prison capacity operated by the CDCR, while avoiding significant upfront capital costs associated with new construction.”⁸⁶

But many Minnesotans did not want to follow California’s example of leasing the prison. Tensions ran high at the state house that day, and the legislature had to take an hour-long recess after protesters, upset about the idea of sending inmates to a private prison in their backyard, consistently interrupted the committee hearing. Black Lives Matter and other civil rights groups carried signs in the hearing room and in front of the state legislative building. One read, “We can have jobs without prisons,” and another, “Funds 4 Human Needs Not More Prison Beds #STOPCCA.” Some protesters yelled: “Private prisons are akin to slavery—treating prisoners as commodities.” They accused the committee members of racism.87

African Americans make up 6 percent of Minnesota’s population but 35 percent of the state’s prison population.⁸⁸ A partnership of community, faith, labor, and civil rights organizations spearheaded by ISAIAH, a faith-based organization of a hundred congregations across Minnesota, publicly opposed the lease of the Prairie Correctional Facility in Appleton. ISAIAH organized candlelight vigils outside the state capital to protest the reopening. They put out a statement:

We will vigil and pray for the thousands of incarcerated Minnesotans as well as for the community of Appleton. It is time to come together and say NO to CCA in Minnesota. No one should ever profit from the incarceration of human beings. We will also pray for the prisoners to be set free. And we will pray for the community of Appleton, MN. The people of Appleton deserves [sic] better than the lies and false promises being peddled by CCA and their hired gun DC lobbyists. Together, we can do better.⁸⁹

I attended a Minnesota prison population task force meeting a few months earlier when legislators heard testimony from the state’s Department of Probation about how many people were sent back to prison for technical violations of probation. A person may be sent back to prison or jail not for committing a new crime but for violating a condition of release, such as failing a drug test. The task force discussed how their prison population compared to other midwestern states and whether the sentencing guidelines should be reformed. Mayor Chad Syltie and Swift County Board of Commissioners member Gary Hendrickx sat in the audience, listening intently to the testimony about how the prison population could be reduced.

Hendrickx, who also owns a Subway Sandwich shop in Appleton, organized letters from Appleton residents to the legislature and to the Department of Corrections in support of reopening the Prairie Correctional Facility. He even helped organize a letter from local ministers stating that they would work with the inmates to rehabilitate them.

For the mayor of a 1,200-person town, the discussion at the capital that day could make or break the future of his city. If the state legislature approved the lease agreement, the value of the prison would climb, meaning direct revenue for the city from CCA’s annual taxes. Syltie said that before the prison closed it had a value of about $32 million. Today it is valued at approximately $14 million. “So you can see in a town of 1,200 people what it did to the value of the town. That was a devastating blow.”⁹¹

To Mayor Syltie and the residents of Appleton, the answer was obvious. Why would the state invest in new construction when a perfectly good facility could turn its lights on tomorrow? Syltie hoped the legislature could work out its political misgivings about private prisons. He thought the lease option was a perfect compromise, allowing the state to manage and run the facility while essentially paying CCA rent and not constructing a new prison. The $140 million it would cost the state to construct new beds would equal twenty years of rent to CCA. Syltie had a valid point. The state would also limit its financial exposure if and when the prison was no longer needed by not paying bonds for two to three decades to fund a prison that may only be needed for five or ten years.

Many powerful people in the state opposed the very idea of putting money in the hands of CCA and everything the nation’s largest private prison operator represented. Minnesota Corrections Commissioner Tom Roy, for one, was against the idea: “I have said very publicly, as has the governor, that the support of private prisons is not on our agenda.” Roy is on record that he doesn’t like the basic principle of private for-profit companies running prisons and that “it is a responsibility that falls clearly on the role of government. Incarceration…for corporate profit is the antithesis of America.”92

State correction officers voiced their own frustration over any contract with the private prison in Appleton. The Minnesota chapter of the American Federation of State, County & Municipal Employees (AFSCME), which represents correction officers, opposed housing state prisoners there. Even though the facility would be run by the state, meaning that the correction officers would belong to their union, AFSCME was still opposed. In part, the opposition was speculative. AFSCME feared the political winds could shift, and the state could turn over the operation of the facility to CCA, which would make it nonunion. There also was the matter convenience. Appleton is about a three-hour drive from Minneapolis, an impossible commute for many union members. But a state lobbyist who represents CCA and other clients explained the larger underlying political forces at play for tiny Appleton. CCA had run a nonunion shop the last time the prison’s doors were open, incurring the permanent opposition of AFSCME and the Department of Corrections to CCA ever again gaining a toehold in Minnesota, no matter the terms.

The California Correctional Peace Officers Association (CCPOA) is arguably one of the most influential players in California politics. CCPOA began in 1957 as a small prison guards’ union. Today the union represents approximately 32,000 prison guards. It rose to prominence when its president, Don Novey, a former correction officer, worked to beef up the union’s footprint on California’s correctional landscape in the 1980s. Novey was described as the “most important man in California politics that no one had ever heard of.”93 Novey served as president of CCPOA from 1980 until 2002, and led the union’s efforts to back tough-on-crime laws. In 1994 CCPOA contributed more than $100,000 to pass Proposition 184, California’s “three strikes” ballot initiative, which required lengthy mandatory prison terms for individuals who committed their third crime—it passed with more than 70 percent of the vote. Under Novey, CCPOA created a political action committee, which today is the second largest in California. During Novey’s tenure California built twenty-three new prisons.⁹⁴

In 2004, the union’s PAC spent more than $1 million to defeat Proposition 66, a ballot initiative to limit the crimes eligible for a life sentence. In 2008, the PAC spent $1 million to defeat Proposition 5, a measure that would have shortened prison sentences for nonviolent drug offenses.⁹⁵ Novey negotiated a deal, which expired in 2006, that yielded an average correction officer salary of approximately $70,000 a year and potentially more than $100,000 with overtime. The union also earned members the most generous wage and benefits packages in the nation. As president, Novey negotiated pensions of up to 90 percent of salary beginning at age fifty, which is more than teachers, nurses, or firefighters receive.⁹⁶ With the state in a massive fiscal crisis, private prisons offer a way to avoid high salaries and expensive benefits packages.

The California prison union’s influence has declined somewhat in the past decade, but it remains a powerful force in California state politics.⁹⁷ Since 1989, the California prison guard union has made $22 million in political campaign contributions, more than GEO Group and CCA combined.⁹⁸ Unions also butt heads with the private prison industry. California’s correction officer union squared off with CCA when the corporate giant planned to open a 2,000-bed prison in California’s Mojave Desert. Worried about the loss of union jobs, Novey told the San Francisco Chronicle, “Public safety should not be for profit. It’s just kind of stupid.”⁹⁹

In 1997, around the time CCA was expanding the facility in Appleton, the company tried launching another operation in a small rural town in New York State. Wanting to expand its footprint in the Northeast, where union opposition had made it nearly impossible to increase its presence, CCA bought a tract of land in Fallsburg, a town known for its lakes, ponds, and dairy farms, and intended to build a 1,000-bed minimum security drug treatment center at the site of a former resort hotel.¹⁰⁰

CCA paid $470,000 for the Olympic Hotel and Spa, a luxury resort on 185 acres, and it seemed that Fallsburg, a dying town in Sullivan County, had at last found a savior.101 “We would rather have a Marriot or a Hilton build [sic] here, but they haven’t called us lately,” said the town’s building inspector.¹⁰² But Fallsburg and CCA ran into a wall of opposition, including Republican Governor George Pataki, the state attorney general, and the head of the corrections department. CCA planned to import prisoners from other states because of New York’s ban on private prisons holding New York state prisoners. The prison guard union stood ready to fight the construction of the private prison in Sullivan County. Bob Lawson, the public relations director of the prison guard union, said that private prisons will come to New York “over my dead body.”¹⁰³ New York’s state attorney general vowed, “I’m not going to stand idly by while they bring in prisoners from an undisclosed jurisdiction.”¹⁰⁴

New York is home to one of the nation’s other most powerful correctional unions, the 20,000-member New York State Correctional Officers & Police Benevolent Association (NYSCOPB). After lobbying from the union, in 2000 the New York legislature passed the Correctional Facility Moratorium Act, banning private prisons altogether. The only other state with such a ban is Illinois. CCA never built the facility in Fallsburg.

The dependence of poor, rural communities on prisons for employment confronted New York Governor Cuomo in 2011. With more than 4,500 vacant beds in state prisons, Cuomo announced he was closing seven of them, saying in his State of the State address in 2011 that “an incarceration program is not an employment program.”¹⁰⁵ To make the plan more palatable, Cuomo promised an aid package of up to $100 million to “help communities end their reliance on incarceration as a major source of employment and economic sustainability.”¹⁰⁶

Typically, the corrections unions balked and trotted out their most effective public rhetoric: Any change in the status quo will harm law-abiding citizens. The president of the state prison guard union called the plan “a direct threat to the public safety of all New Yorkers,” adding, “it will jeopardize the safety of inmates and the brave men and women who serve as New York’s correctional officers. If enacted, the closures will make New York’s tough times even tougher by damaging a prison system that is already overcrowded and understaffed.”¹⁰⁷

By January of 2016, Cuomo had closed thirteen state prisons. In fact, New York reduced its prison population by more than 25 percent from its peak in 1999. Even with this huge dent in its prison population, New York’s corrections budget increased by nearly one-third to close to $3 billion.108 Despite cost-savings from shuttering facilities, it costs more to run the maximum security prisons that didn’t close, and New York’s strong correctional guard union has ensured that the state will retain as many correction officer jobs as they can.

Texas, too, is home to a powerful prison guard union. Since 2006, Texas has desperately tried to find and retain prison guards. The state Department of Corrections has struggled to compete with high-wage job growth in the state’s oil-rich private sector.¹⁰⁹ The Texas chapter of the American Federation of State, County, and Municipal Employees (AFSCME) has joined inmates’ rights groups to advocate for improved prison conditions—arguing that prison conditions are dangerous to both employees and inmates—and called for curtailing solitary confinement for death-row prisoners who pose the lowest security risk.¹¹⁰ The AFSCME Huntsville chapter called for the abolition of private prisons in the state, arguing that if these private facilities aren’t closed, looming budget cuts will cost hundreds or even thousands of correction officers their jobs.¹¹¹

Yet University of Michigan Historian Heather Ann Thompson suggests that it is misguided to focus on unions as such powerful forces motivating mass incarceration as opposed to self-interested corporations. “American prison guards organized because they were consistently paid less than workers in other institutions, such as factories and schools, while they were equally exploited on the job and endured far more on-the-job injuries. These injuries stemmed from working in overcrowded prisons where the inmate–guard ratio was dangerously high.”¹¹² Thompson argues that prison guard unions criticize “draconian” policies that lead to mass incarceration since it is prison guards who must consequently manage more inmates than they can handle. Thompson writes that there is “scant evidence” that prison guard unions have much, if any, effect on mass incarceration, and focusing on them rather than on the role of private corporations “obscure[s]” who the “most crucial players” really are.¹¹³

Senate Judiciary Chair Ron Latz (D–St. Louis Park), has represented constituents in his state’s legislature for more than a decade. As a cochair of the Minnesota Prison Population Task Force, Latz has had a bird’s-eye view into the deliberations. Latz told me that he convened the task force to explore options and possible solutions concerning the state’s runaway prison population. Although aware of the unemployment in rural Minnesota, the significance of opening a prison—even if it was only one of the reasons—with economic development goals in mind was fraught. “The last thing we want to do is make criminal justice policy based on economic development.” He appeared almost professorial for a moment, as he paused before continuing, “but my goal is not to have to build additional prison space.”114

Harvard professor Herman “Dutch” Leonard, cochair of the Social Enterprise Initiative at Harvard Business School, would call the proposed relationship between CCA and the Minnesota Department of Corrections “nominal privatization,” a partnership in which the private company owns the prison and another entity operates it.¹¹⁵ According to Leonard, “given the authority to use the existing facility, either public or private operators can provide the services within it; who owns (tax) the title to the property is an insignificant matter.”¹¹⁶ In fact, Leonard believes this type of relationship can provide significant benefits such as avoiding construction delays and eliminating the need for public bond issuance.

I spoke to Latz about the possibility of reopening the Prairie Correctional Facility, and he noted that many legislators, including himself, had no appetite for the proposal. “There is no such thing as a short-term lease. Once you set up an operation like that and the local community becomes dependent on it, it is almost impossible to pull out of it.” Latz looked down for a moment. “It’s like pulling out of a military base.”117

In April 2016, the editorial board of the Star Tribune, Minnesota’s largest newspaper, published an editorial supporting a dramatic reform to the state’s sentencing laws. The commission claimed their proposal was the best hope to reduce the state’s prison population and eliminate overcrowding in its state prisons. The editorial conceded, however, that if the overcrowding could not be eased, “the state should reopen Appleton as a state-run facility before considering more brick-and-mortar projects to expand existing prisons.”¹¹⁸

The Colorado legislature struggled with the future of its own prisons that same April. Colorado’s prison population had declined by more than 1,000 people between 2014 and 2015, dramatically reducing the number of individuals housed in the CCA-owned and -operated Kit Carson prison in Burlington. The state legislature debated whether they should bail out CCA by providing $3 million to stave off closure of the prison in eastern Colorado. Policy makers who advocated for the bailout argued that the rural community of Burlington would be devastated by the prison’s closure. In a town of barely 4,000 people where the median income was $33,000, the loss of the prison would destroy the community.

Through an arrangement common in private prison contracts, Colorado’s contract with CCA guaranteed that the state’s Department of Corrections would pay for 3,300 inmate beds no matter how many inmates the facility housed. This occupancy requirement ensured that CCA received a guaranteed revenue each month. The legislature eventually passed the budget, which included $3 million to ensure that CCA would not shutter its facility. Even so, the facility closed in July of 2016, a terrible blow to the community that had benefited from 140 jobs and $1.2 million in property taxes.¹¹⁹ The Burlington facility only housed 402 inmates when it closed, even though it had the capacity to hold more than 1,400 inmates.¹²⁰ Kit Carson became the fourth private prison to close in Colorado since 2009, leaving only three in operation.¹²¹

Throughout the United States, the story repeats itself. Adelanto, California, a rural desert town two hours north of Los Angeles, is currently home to three correctional facilities with beds for over 3,000 individuals. Two of the facilities are privately owned and operated by GEO Group, and one by the county sheriffs’ department. In 2016, the town’s city council voted to construct two new privately run correctional facilities. In desperate need of jobs, the town’s unemployment rate in 2011 was almost 22 percent. Today that number has dropped to 12 percent.122

These small towns show the tension between ensuring enough prison space exists and projecting how to profit from the people who will one day end up behind bars. As Eric Schlosser told me, mass incarceration can’t simplistically be attributed to private prisons, but “there is no question that the economic motive has been a major incentive in driving mass incarceration.” He pointed to efforts to shut down prisons in New York as an example of how prisons anchor rural economies. “The economic motive, both in building the prisons in the very beginning, and then in maintaining them, has been a real drive of mass incarceration, of which the private prison industry is a subset.”¹²³

Many argue that for-profit prisons play only a small role in the economics of mass incarceration. Former New York City Corrections Commissioner and Secretary of Corrections in Pennsylvania Martin Horn agrees with Schlosser that economics matter, but he believes the vast influence of correctional unions is more significant in the financial structure of mass incarceration. “Private prison operators aren’t the only ones with an economic self-interest in the location and operation of prisons,” he explained. “Public prison employees and their unions as well as the communities where public prisons operate similarly lobby hard against closing prisons, for example, look at the difficulty the State of New York had when it tried to close prisons following the falloff in population after the reform of the Rockefeller Drug Laws.”¹²⁴

Rural communities with soaring unemployment rates and dwindling economic opportunities have latched onto the idea: if you build it, they will come. Both government agencies and for-profit prison corporations are culpable for promising economic prosperity in exchange for metal and bars. But the difference, although subtle, is significant. Private prisons know what is coming: adding prison beds to an oversaturated prison landscape, often subverting taxpayer bond initiatives, and avoiding politically fraught city council meetings. Prison proposals anywhere tend to provoke vigorous debate; residents fear prison escapes and depressed property values. What incentive does government have to reduce incarceration if companies such as CCA spend millions of dollars a year to maintain prisons in perpetuity?

In April 2017, the Minnesota House of Representatives passed a bill that would allow inmates to be housed in non-publicly-owned facilities. Specifically, the bill would require Minnesota to contract with CCA to operate and purchase or lease to own the Prairie Correctional Facility to alleviate the state’s own prison bed shortage. If the bill gets through the Senate, Governor Mark Dayton (who is not a supporter of opening the facility) would have to sign the legislation.125

A quarter of a century after Bob Thompson began his quest to build a prison, he looks back at all the challenges he and the town officials faced to keep the lights on at the prison in Appleton. The airport can’t land commercial aircraft, and even the closest airports require bussing inmates a hundred miles or more once they land. He told me that, in retrospect, Appleton is not really an ideal town for a prison.