The private prison model lines pockets, but at what cost?

The private prison model lines pockets, but at what cost?

GEO private prison
Many profit from the private prison model, even unknowingly.

By Christopher Zoukis

On August 18, 2016, then-Deputy Attorney General Sally Yates issued a memorandum with the subject line “Reducing our use of Private Prisons.”

In the memo, Yates points out that the Federal Bureau of Prisons (BOP) had contracted with privately operated facilities about a decade ago in an effort to curtail the burden of a prison population that increased faster than the Bureau could handle. By 2013, the Bureau was housing about 15 percent of the prison population, or about 30,000 inmates, in private prisons.

Between 2013 and 2016, the memo states, the federal prison population dropped from approximately 220,000 to fewer than 195,000 inmates. She credits this to “several significant efforts to recalibrate federal sentencing policy, including the retroactive application of revised drug sentencing guidelines, new charging policies for low-level, non-violent drug offenders, and the [Obama] Administration’s ongoing clemency initiative.”

Citing “real and positive results,” Yates pointed out that private prisons served an important role during a difficult time, but proved to “compare poorly” to BOP facilities, stating private prisons don’t provide the same level of correctional services, programs, resources, don’t offer substantial cost savings, and, as noted in a report by the department’s Office of lnspector General, don’t maintain the same level of safety and security.

That statement hit some big corporations right in the pocketbook. Henri Wedell was on the board of Corrections Corporation of America (CCA), which operates 60 private prisons, and his shares in the company made him millions. Then there is George Zoley, CEO of GEO Group, America’s second-largest private prison investor firm. With more than 500,000 shares in GEO, the private prison model made Zoley a millionaire many times over. That’s just two of the many people that profit from the private prison model.

Big-time investors aside, surely the humble American citizen doesn’t buy into this model? Actually, many do — and they don’t even know it. The Vanguard Group and Fidelity Investments are huge investors in CCA and GEO, meaning that Americans that invest with these financial behemoths are profiting off private prisons as well.

So what’s the problem with making money?

The problem is that prisons should be about rehabilitation and getting inmates back into society, while a private corporation is about making money. When it’s all about making money, everything from the food the prisoners eat to their activities and facility upkeep gets scrutinized – and where pennies can be pinched, they most certainly are. The books show a profit, but prisoners suffer with less food, low to no programming, poor infrastructure, and even issues around inadequate security.

Yates’s memo predictably was welcome in some circles, but a bone of contention in others.

Then, along came Trump.

Trump was not originally a politician. He was —and is— a businessman. His platform included positioning himself as “the savior of corporate America,” and he made good on his promises to promote big business — including private prisons.

On Feb. 21, Attorney General Jeff Sessions issued a memo of his own: “I hereby rescind the memorandum ‘Reducing our Use of Private Prisons’…I direct the Bureau to return to its previous approach.”

Unsurprisingly, GEO stock surged that same month, right alongside other private prison stocks.

In America, you can make a lot of money. You can put a businessman in charge of the country to ensure that you keep making that money. You can go from being penniless to being a multi-millionaire. Turns out some just aren’t too choosy about how they get there.

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Christopher Zoukis is the author of Federal Prison Handbook: The Definitive Guide to Surviving the Federal Bureau of Prisons, College for Convicts: The Case for Higher Education in American Prisons (McFarland & Co., 2014) and Prison Education Guide (Prison Legal News Publishing, 2016). He can be found online at,, and