Immigration Detention, Inc. Private prisons funded by taxpayers are no solution

KATE BRUMBACK/AP — Detainees at a facility operated by Corrections Corporation of America.

Economists sometimes speak of “perverse incentives” — laws that create a financial incentive for bad public policy. I can think of few incentives more perverse than paying for-profit corporations to jail immigration detainees. And I can think of few worse public policies than the ones that have resulted.

It’s a sad story, told in numbers.

Every year, the government seeks to deport a record number of undocumented immigrants. This year, the government hopes to break the all-time record by deporting more than 400,000 immigrants — upwards of a thousand a day.

The problem is, those kind of numbers dwarf the ability of immigration courts to process cases. In August of 2012, there were 322,681 cases pending in immigration courts, a record, with the average case pending for 529 days with no disposition — also a record.

With such a huge backlog, the government must constantly look for more cells to house detainees awaiting the conclusion of their cases. Eventually, the government runs out of space and contracts with for-profit operations, like the Corrections Corporation of America (CCA), to house detainees.

There are some government functions that simply should not be outsourced, and housing prisoners is one of them. A 2001 Bureau of Justice Assistance study found higher rates of assaults on inmates in private jails. And evidence suggests that outsourcing jails doesn’t even save money. <!–more–>

But the overcrowding problem has gotten so bad that nearly half of all immigration detainees are now housed in private, for-profit institutions. That’s a lot of taxpayer money — and a potential windfall for the corporations that run the jails.

Example: CCA this month signed a contract with the state of Arizona to operate a 1,000-bed facility at Red Rock Correctional Center. The private jailers negotiated themselves a pretty sweet deal. The contract lasts for up to 20 years. And while New York hotels are pleased to average an 85% occupancy rate, the contract with Arizona does even better — it guarantees CCA at least a 90% occupancy rate.

This is where the perverse incentive comes in: the more prisoners, the more profit. How does a prison corporation continue to grow its supply of immigration detainees?

CCA figured out the answer to that one: Get legislators to toughen immigration laws. Large portions of some of our nation’s immigration laws have been essentially written by the corrections industry. The most striking example is also the most Draconian: Arizona’s infamous SB 1070.

While that bill was passed by the Arizona state legislature and signed by the governor in 2010, its words were lifted almost verbatim from a “model” bill drafted by an organization called the American Legislative Exchange Council.

ALEC is a well-funded, influential outfit. Notable victories include persuading 31 states to enact “Castle Doctrine” statutes patterned after Florida’s infamous “stand your ground” law.

In Arizona, at least 49 of 90 members of the state legislature are “members” of ALEC. While they pay nominal dues, the real money comes from large corporate patrons — like the Corrections Corporation of America.

The Arizona immigration law ALEC produced is a piece of legislation that only a for-profit jail corporation could love. It is illegal to overstay a visa in America; the ALEC bill went further and said that anybody overstaying a visa was therefore trespassing in Arizona. Trespassing was a state crime — a misdemeanor, unless you were convicted again. Then it was a felony.

This summer, of course, in Arizona v. United States, a 5-3 majority of the U.S. Supreme Court struck down most of the legislation as unconstitutional.

And so, one might say that CCA wasted a lot of its money by lobbying for a bill that was eventually invalidated. But one would be only half right. CCA wasted lots of our money as well.

That’s because, even as ALEC does the lobbying work for the for-profit CCA, it claims nonprofit, tax-exempt status; lobbying is heavily restricted for tax-exempt organizations. When CCA bankrolls ALEC, it claims the payments as a deduction from its taxes, just as you do when you give money to the Red Cross.

I’d call that a case of perverse incentives: Our tax dollars subsidize lobbying for bad immigration and corrections policies. The corrections industry makes the profit and gets a tax write-off — and taxpayers foot the bill.

Fortunately, where a perverse incentive creates bad policy, there is always a simple solution: eliminate the incentive. I will leave it to the IRS to determine whether ALEC is being honest when they claim they do no lobbying. In the meantime, immigration authorities should simply stop doing business with for-profit jails.

Morgenthau, of counsel Wachtell, Lipton, Rosen & Katz, is the former Manhattan district attorney.