For decades, these companies attempted to win contracts to house convicts in privately owned or leased in-state prisons, only to see their efforts thwarted by the wealthy, politically influential California prison guards union.
Nashville-based Corrections Corp. of America, the industry leader, even built a 2,300-bed, maximum-security prison as a speculative investment in Kern County in the mid-1990s. The state balked, and the facility now holds federal prisoners.
Now, California has signed a contract with Corrections Corp. to house as many as 4,000 prisoners at a per-prisoner price of $63 a day. That compares with the average of $123 a day that the state estimates it costs to keep an inmate in one of California's 33 prisons.
Opposition to private prisons from the 30,000-member California Correctional Peace Officers Assn., other state employees organizations and prison watchdog groups remains potent. They sued in Sacramento Superior Court to halt the transfers and won. But the judge put her ruling on hold pending an appeal in February.
"I'm dubious that it's a good idea for the state to embrace" private prisons, said Steve Fama, an attorney with the nonprofit inmate advocacy group Prison Law Office near San Quentin. Prisons are "a core state function," he said.
The governor should control the prison population by releasing nonviolent offenders and reducing parole revocations, not by building more prisons and sending inmates to other states, Fama said.
California is one of at least 30 states that have turned to the private prison industry for help after realizing that they couldn't build enough prisons to keep pace with a flood of new inmates as lawmakers passed ever-tougher sentencing laws.
Over the last decade, the number of inmate beds in private prisons has jumped sixfold to about 112,000 in mid-2006, according to the U.S. Bureau of Justice Statistics. Most of the growth was at three major operators -- Corrections Corp., Boca Raton, Fla.-based Geo Group and Houston-based Cornell Cos.
"We think we can play a significant role in a solution to the problem" in California, said Tony Grande, Corrections Corp.'s vice president for state government relations. So far, California has sent 317 prisoners to Arizona, 312 to Mississippi and 80 to Tennessee.
Prison industry analysts, impressed with the growing demand for private prison beds, are upbeat. The stocks of the three big companies have shown solid growth this year. "We remain bullish," said Jeffrey T. Kessler, a Lehman Bros. equity researcher in a recent report.
