Editorial: Privately run prisons are a big mistake

Wednesday, Feb. 25, 2004 | 8:48 a.m.

Not long after signing its current three-year contract with the state, which expires Oct. 1, the Corrections Corporation of America began complaining. Even though it had agreed to the terms of the contract to run the 550-bed women's prison in North Las Vegas, the corporation protested that it was losing money. The state's relationship with the corporation became so tense that in January 2003, Senate Majority Leader Bill Raggio, R-Reno, asked what would happen if the corporation declined to renew its contract. Jackie Crawford, director of the Corrections Department, responded: "We are very capable of moving in and taking over that facility immediately."

Last week, in a letter to Crawford, the corporation officially announced that it would not seek renewal of the contract. Unfortunately, Crawford's resolute response was not repeated. Keith Munro, deputy chief of staff and general counsel to Gov. Kenny Guinn, said the state will review proposals to run the prison it had received two years ago from three private companies. The proposals had been sought by the state during another of its confrontations with CCA over money. With the state willing to consider private proposals, CCA said it would consider bidding again itself -- for a "more viable contract."

The state should see CCA's announcement as an opportunity to end seven years of private management of the prison. Nevada's limited experience with private prison management has been dismal. Last year it found that private medical services for inmates at the maximum-security prison in Ely were not cost-efficient, and resumed state care. The Summit View juvenile facility here in Clark County had to be closed for more than a year after a private company's management proved to be inept. Looking to lower its costs, CCA last month proposed a dubious deal. It wanted the state to take over health care at the women's prison; in exchange, it would lower its per-inmate fee. The Legislative Interim Finance Committee balked, fearing taxpayers would get the short end. The women's prison also has had management problems, including a guard caught smuggling heroin into the facility and another guard whose relationship with an inmate resulted in the inmate's pregnancy.

In 2001 the Justice Department studied the current trend toward privatization of prisons, which began in the early 1980s. It discovered that privatization's most appealing aspect -- projected savings of 20 percent -- never materialized. The actual savings was about 1 percent, achieved through lower labor costs. The study also found that privately run prisons have not produced any innovations. "No evidence was found to show that the existence of private prisons will have a dramatic effect on how nonprivate prisons operate," the study concluded. The state should drop all talk of seeking private proposals and start preparing to run the prison itself come Oct. 1.