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LATEST HOT IDEA: PRIVATELY RUN PRISONS

Ronald Reagan embraced the idea first, but now President Clinton is backing it, New York Mayor Rudolph Giuliani is as well, and state and local officials all over the country increasingly are for it.

What they are enthused about is turning over governmental responsibility for housing, restraining and hopefully rehabilitating convicted criminals to private companies that operate prisons for profit.Making money off convicts has become so politically popular that a recent University of Florida study indicates nearly 50,000 jailhouse beds (existing or under construction) are now under private management.

To hear proponents tell it, this is just a natural extension of ordinary private business endeavors, such as running a hotel.

But the purpose of hotels is to woo nice customers by offering polite service and comfortable accommodations. If the customers don't like how they are treated, they can leave and not return.

Running prisons is a very different kettle of fish. How much incentive private companies, concerned only about the bottom line, will have to treat inmates decently, feed them properly and respect their rights is an open question. The temptation may simply be to warehouse people on the cheap, since they are out of sight and often out of mind.

But privatization of public services has become popular the past decade as local, state and federal officials seek new ways of passing on civic responsibilities to hired contractors in order to reduce costs and avoid raising taxes.

The concept originally was promoted during the Reagan administration and early results appear mixed, with some tasks performed more efficiently and others actually costing more than before. Myth or not, it is so alluring it is now accepted across much of the political spectrum.

President Clinton's 1996 budget included a plan to turn over four new minimum and low security prisons, as well as some future federal facilities, to private companies.

Maintaining an adequate and well-run penal system is becoming a national headache. Last year the prison population rose so rapidly it set a record of more than 1 million jailbirds, with severe overcrowding in many federal and state institutions.

The tougher we get on criminals, the more cells we need to house them. To combat the spread of drugs and violence, Congress recently imposed tighter sentencing guidelines that have increased the median time convicts serve in federal prisons. And a pending new crime bill would impose further rules bound to put more bums in prison and keep them there longer.

But in a civilized world, tossing society's outcasts in a dungeon does not mean starving or abusing them, even if some politicians suggest that harsh punishment is all they deserve.

Two months ago, a prisoner uprising at the Immigration and Naturalization Service's detention center in New Jersey exposed abuses there by a private firm. The company operating the center had cut costs so sharply that guards and staff were poorly paid, overworked, undertrained and mean to their charges.

To the contrary, however, there seem to be other places where privately run prisons work out. A Tennessee legislative study recently concluded that a prison there run by a private company was operating at a lower cost than comparable prisons run by the state's department of corrections.

The key to successful prison privatization seems to lie in an active and responsible state role.

If the government contract is priced unrealistically low, private companies will do whatever necessary to make a profit anyway. That is bound to mean there will be little spent on internal educational and jobs programs and bad food, bad sanitary conditions, bad attitudes and bad news.

If the contract generously includes reasonable costs for rehabilitation services, however, it may not turn out to be all that big a bargain for the state after all.

Vigorous governmental oversight also is crucial. Private employees are responsible to their bosses, not accountable to the public interest. They are relatively immune to the pressures that convince public servants and politicians not to abuse citizens, even nasty ones who have committed crimes.

The popular notion that business people are automatically honest and efficient while bureaucrats are not has never been supported by the facts.

Government-run prisons are regularly inspected, studied and held up to public examination. They are subject to constitutional concepts and public safety requirements. They honor the legal and civil rights of prisoners. But it is not clear how obligated private prison operators will feel to rigorously maintain decent custodial and disciplinary standards.

This is a risky idea whose time seems to have come. But it should be tested gradually, keeping a close eye on the sense of public responsibility those cost-cutters display.