The War on Drugs and harsh sentencing laws led to explosive growth in state and federal prison populations in the 1980s. The massive rise in prisoners overwhelmed government budgets and resources, and created opportunities for private prison companies to flourish. In 2010, one in every 13 prisoners in the U.S. was held by for-profit companies,1 despite evidence that private prisons often provide inadequate levels of service and are no more cost-effective than publicly-run facilities. In addition, private prisons operate on a business model that emphasizes profits over the public good, and benefit from policies that maintain America’s high incarceration rate. Nonetheless, these companies could count on predictable growth in the number of state and federal prisoners until 2008, when budget crises and policy changes led some states to reduce their prison populations and private prison contracts. The resulting losses for private prison companies were more than offset by expansion of their management of federal detainees under the jurisdiction of Immigration and Customs Enforcement (ICE) and the U.S. Marshals Service. Between 2008 and 2010, the number of privately-held inmates decreased by 1,281, while the number of privately-held detainees increased by 3,327.4 This growth was part of a larger trend that saw the total private detainee population increase by 259 percent between 2002 and 2010; a change largely due to stepped up efforts to find, incarcerate, and deport people who violate immigration laws. There are indications that federal detention will remain a major market for private companies. There are two key concerns about the expansion of private federal detention that need to be addressed. First, many of the problems associated with private corrections appear equally valid in the area of private detention. These include unsubstantiated claims of cost savings, problems with oversight, and high staff turnover. Second, there are considerable concerns regarding transparency in the use of private detention. The way federal agencies report data on privately-held detainees, along with the complex contractual arrangements and tiered layers of bureaucracy that result from privatization, make it difficult to ascertain the full scope of detention privatization at any given time. Without such transparency, policymakers and citizens are inherently limited in their ability to assess the full effects of privatization.
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