Elizabeth Warren Investigates Private Prison Profits

Elizabeth Warren Investigates Private Prison Profits
Photo by Gage Skidmore, CC license

Last June, Senator Elizabeth Warren proposed banning for-profit prisons. Now, she is requesting information from five private equity firms that have heavily invested in companies that provide services to U.S. prisons. 

Warren and the inquiry’s co-sponsors (Reps. Mark Pocan and Alexandria Ocasio-Cortez) want to know everything about revenue, profits, how many employees were involved, and how many inmates were serviced in connection with the underlying investments.  

After launching a widely publicized investigation into the relationship between private equity firms and for-profit colleges, it seems natural that Warren would target for-profit prisons next. Her hypothesis appears to be that private equity ownership results in prisons offering lower-quality services.

The companies that received Warren’s inquiry letters are: American Securities, which has invested in GTL, a top provider of phone and email services to inmates; Apax Partners, investor in Attenti, which provides electronic monitoring devices; BlueMountain Capital, an investor in the infamous Corizon Health, the largest private company providing healthcare services to incarcerated Americans, operating in 17 states; H.I.G. Capital, an investor in Trinity Services Group, which provides food and commissary services in jails and prisons across 43 states; and Platinum Equity, an investor in Securus, another phone and email provider. 

A top contender for the Democratic nomination as a presidential candidate, Warren has often stated that private prisons and their associates are profiting off mass incarceration. Last June, she rolled out a comprehensive plan to ban for-profit detention centers.

“Washington hands billions over to corporations profiting off of inhumane detention and incarceration policies while ignoring the families that are destroyed in the process,” Warren said in a Medium.com blog at the time, “We need to call that out for what it is: corruption. Incarcerating and detaining millions for profit doesn’t keep us safe. It’s time to do better.”

Due to the spike in the incarceration of immigrants under Donald Trump, the prison business is now more profitable than ever. Advocacy organizations have warned that 73 percent of the immigrants detained in the U.S. today are being held in facilities run by for-profit companies. 

Warren has also warned that there are about 4,000 corporations that have been profiting from the rising incarceration rates since the year 2000. Forced labor has been a particularly profitable element of private prisons, and analysts have pointed to the fact that prisons where inmates are forced to work tend to become more unsafe.

Over the years, investigative journalists have unearthed hundreds of stories of inmates who were subjected to solitary confinement in inhumane conditions, often in retaliation for behaviors associated with untreated mental health issues. 

Warren has also referred to the way contractors boost profits by providing substandard services. 

“While contractors getting paid taxpayer dollars cut corners to maximize margins, the government has turned a blind eye. Food companies make millions but serve bug-infested food to save cash. An investigation into a prison transport company that allowed at least five deaths and a sexual assault to occur under their watch has gone nowhere,” she wrote.

Prison service providers have abundant opportunities to make spectacular profits. Inmate phone calls, the majority of which are provided by either Securus or GTL, can cost as much as $8.20 for the first minute. Corizon Health has been known to receive $15.16 per inmate per day for medical staffing in certain jurisdictions. 

A company that was later fired after maggots were found in food, was once paid $115 million in a contract with the Michigan Department of Corrections. Some corporations make millions by providing ankle bracelets and other monitoring devices. Last, but not least, inmates and their relatives spend a staggering $1.6 billion per year on commissary items.

It will be interesting to see the response Senator Warren will receive from the private equity firms that are profiting from this business of, literally, captive customers. It seems that the Senator has asked all the right questions, but the road to the truth is never so smooth, and, with billions at stake, this will not be the exception.

Warren and her opponent Joe Biden are currently locked in an extremely tight race for the Democrats’ presidential candidate nomination. Should Warren be elected, there is little doubt that prison reform will be one of the top issues on her agenda. 

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Related topics: for-profit prisons


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