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Wednesday, Sep 15, 2004

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International

Private prisons boom in Bush's America

NASHVILLE, SEPT. 14. America's largest operator of private prisons expects to benefit from the Bush administration's expansion of federal policing and thinks prison overcrowding could lead to more business. Corrections Corporation of America (CCA), which houses about 63,000 inmates in 20 States and the District of Columbia, has told investors that the demographic producing many prisoners — males between 18 and 24 years old — is growing and should create more demand for its services.

``Successfully exploiting these opportunities should result in strong earnings and cash flow growth,'' CCA is telling investors as part of presentations it is giving this week.

The company is working to persuade investors that its prospects are bright and its jails secure after a summer in which it saw two riots within a week at prisons in Colorado and Mississippi, and a female inmate died of a skull fracture at a CCA detention centre in Nashville after an incident with guards.

The company's share price has tumbled from about $40 in July since the inmate uprisings, coupled with a drop in second quarter earnings. The company has said the 24 per cent drop in earnings was caused by an accounting change for taxes. CCA shares gained 80 cents to close at $33.69 on Monday on the New York Stock Exchange.

The good and the bad

But critics contend that what is good for a private prison generally spells trouble for society.

``These people are making money off the hope that we keep locking people up and there's more crime, which is a sorry state of affairs to say something like that,'' said Ken Kopczynski of the Private Corrections Institute Inc., an advocacy group opposing private prisons.

The company cited an escape rate better than that of publicly run prisons from 1999 to 2001. In the most recent year data was available, CCA said its escape rate was less than one per 10,000 inmates — compared with an escape rate at government prisons of more than four per 10,000 inmates.

Of escape rates

The Nashville-based company said the low escape rate reflects good overall security at its prisons.

Ms. Kopczynski said he is not sure the statistic provided by the company proves anything.

``There's lies, damn lies and statistics,'' he said. — AP

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