PA House Hearing

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House Labor Relations

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HARRISBURG - (10/25/07, 11:00 a.m., Room 140, Main Capitol Building)

The House Labor Relations and Judiciary Committees held a joint public hearing on House Bill 1469 and the issue of privatizing prisons.

Members in attendance included Labor Chairman Bob Belfanti (D- Northumberland), Judiciary Chairman Tom Caltagirone (D-Berks), Rep. Mike McGeehan (D-Philadelphia), Rep. Steven Cappelli (R-Lycoming), Rep. Scott Boyd (R-Lancaster), Rep. Tim Seip (D-Schuylkill), Rep. John Galloway (D- Bucks), Rep. Carl Mantz (D-Berks), Rep. Glen Grell (R-Cumberland), Rep. John Sabatina (D-Philadelphia), Rep. Ron Buxton (D-Dauphin), Rep. Neal Goodman (D-Schuylkill), Rep. Ron Waters (D-Philadelphia), Rep. Will Gabig ( R-Cumberland), Rep. Jim Cox (R-Berks), Rep. Eugene DePasquale (D-York), Rep. Frank Shimkus (D-Lackawanna), Rep. Harold James (D-Philadelphia), Rep. Marc Gergely (D-Allegheny), and Rep. Jewell Williams (D-Philadelphia).

HB 1469 Goodman - (PN 1816) Amends Private Prison Moratorium and Study Act by stating that no private correctional facility may be operated in PA. The bill also states that nothing in this act would prevent the continued operation of any private correctional facility which was in operation during 1985 or on the effective date of this paragraph.

Rep. Neal Goodman (D-Schuylkill), sponsor of HB 1469 spoke first and told the committee that as many as four new state correctional facilities are being considered for construction in Pennsylvania. He told the panels that his legislation "would impose a moratorium on the operation or construction of a private prison at the state level and create a legislative task force to conduct a comprehensive study with regard to private, versus public prisons." He went on to say, "The Pennsylvania Department of Corrections has proven it's capable of safely and effectively managing the state prison population. I do have, however, have concerns about private prisons being considered as an alternative to running state facilities." He said advocates of private prisons claim that for-profit firms operate prisons more effectively than state-run facilities, "…when in reality the estimated savings turn out to be an exaggeration."

Ann Schwartzman, Director of Policy and Public Education, The Pennsylvania Prison Society, said as an organization that was instrumental in the development of the modem penitentiary system, the Society is opposed to the furtherance of private prisons. The Prison Society has a long history of working with government to strengthen the correctional system, including initiatives to provide separate facilities for incarcerated men, women, children, and the mentally ill, she offered. She outlined a number of failed efforts to privatize prisons. She told the committee that the nation's largest private prisons operator, Corrections Corporation of America (CCA) opened a facility in Youngstown, Ohio, with an "outbreak of mayhem and murder" that wound up costing $1.6 million to settle a series of wrongful death lawsuits and included numerous disturbances and escapes. Schwartzman cited a 2001 study that found, "Given the relatively low wages paid by the industry and its limited ripple effect on the larger economy, subsidizing private prisons may not provide much bang for the buck... A lot of small, struggling communities have spent a significant amount of money to bring these prisons into existence. There's no evidence there's been any payoff for them." Solutions to overcrowding and the tremendous costs associated with incarceration, criminal justice, and public safety must be found, she acknowledged, but added that the Society firmly believes privatization is not the answer. Corporations motivated by profit cannot fill the role of the government in many critical areas, Schwartzman opined.

Rep. McGeehan asked Schwartzman about the nature of the complaints about private prisons in states that have them. She said the most common complaints include poor medical care, the lack of cleanliness, inadequate access to lawyers and family members, and their visitation rights. He asked if there was a study on the long term tax savings of private prisons. She was not aware of such a study, but there have been numerous new articles indicating the tax savings were not as great as promised.

Rep. Cappelli wanted to know if there is a lack of fiscal resources to handle the current capacity in state, federal and local prisons. Schwartzman said alternatives to imprisonment should be considered as a way to reduce the prison population before privatization or building more prisons occurs.

Rep. Sabatina asked if private prisons are more restrictive and if that contributes to less access to lawyers for inmates. She responded that the cost of travel to distant prisons is part of the problem for some attorneys. She also said that in private prisons, due to a lack of training, some employees do not know what the rules are in their institutions and that often limits interaction between inmates and their lawyers.

Rep. Buxton inquired about the level of staffing and the differences between staff at private and public facilities. Schwartzman said what her organization has seen generally are lower salaries, fewer and less comprehensive benefits, limited training which puts guards in potentially dangerous situations they are not familiar with and problems with contracts and the right to strike. She continued by saying other issues include whether private prison employees should be allowed to carry weapons, should they be allowed to punish inmates and by definition, are they law enforcement officers or institutional security guards.

Rep. Goodman commented that his research has shown many private prisons have received financial incentives, such as up-front money, tax abatements and grants in order to operate in certain areas. He expressed his concern that private prison operators sometimes submit low bids to operate facilities and once they have the contract, the county or state government finds it too costly or too cumbersome to get out of that agreement and is forced to continue having the private firm run its local prison.

Chairman Belfanti queried Schwartzman on her organization's position on juvenile facilities. She replied that the PA Prison Society focuses on adults and has no position on juvenile correctional facilities.

Chairman Caltagirone asked if private prisons pay property taxes. She said she didn't know for sure, but felt that as private corporations, they are inclined to pay as few taxes as possible and to make as much profit and recoup as much of their investment as possible.

Alex Friedman, Associate Editor of Prison Legal News, spoke against private prisons and briefly recounted his six-year experience as an inmate at a private prison in Tennessee. Friedman said private prisons are beholden to shareholders and lack public accountability. He further outlined his opposition to private prisons by stating the guards lack sufficient training, they are poorly paid and there is high turnover, private prisons offer little or no medical and mental health care, there are widely varying restrictions on visits to inmates by family and legal counsel and private prisons are mainly concerned with the warehousing of prisoners for profit rather than rehabilitation. He further stated there is no incentive for private prisons to reduce recidivism because that would cut into the private prison operating company's profits. Friedman also told the committee members private prisons have more violent episodes and escapes by dangerous criminals than those run by state government. He said private prisons are more motivated by cutting costs and that, "…you can only have so many costs cut before public safety is compromised."

Chairman Belfanti asked Friedman where he had been imprisoned and why. Friedman said he was convicted in 1989 and 1991 for armed robbery, assault to attempt commit murder and aggravated robbery and served 10 years, four years in a public facility and six in a private facility, all in Tennessee.

Rep. McGeehan asked Friedman if he had any insight into the guard training at private facilities. Friedman said the training in private prisons follows the American Correctional Association (ACA) model and that calls for 40 hours of training per year. He went on to say most public prison systems have much longer training programs, most lasting several weeks before a guard is allowed to work in an institution.

Rep. Sabatina wanted to know, based on his experience as an inmate, what makes private prisons so bad compared to publicly-operated facilities. He said that from a prisoner's perspective, private facilities are great because you can get away with more misconduct. He further stated that private prisons have no incentive to rehabilitate prisoners because the more prisoners they have or the longer they are in the facility, the more money the operating company can make.

Rep. Seip wondered if the guards at private prisons are unethical or just lack training. Friedman responded that state prison guards are more seasoned, they have a career in corrections and know how to deal with many different situations. Private prison companies have turnover in their guard ranks, they are poorly paid and don't value their jobs as careers. Because of the low pay, they see their job more as one like they might have at Wal- Mart rather than as a career as a correctional officer. He also said that for infractions of prison rules or laws, guards at private facilities are usually just fired and they move on to their next job while guards at state -run facilities are prosecuted and that is a "big difference."

Rep. Waters said he gets a lot of letters from public prison inmates complaining of poor medical care. He asked if that would indicate the problem is likely to be worse in private prisons than those operated by government. Friedman said medical care and mental health care is worse in private prisons and cited a New York Times article on Delaware prisons that outlined those problems. He said private prisons contract their care out to medical firms and cited an example of a doctor who was rewarded more financially for offering less care and fewer prescription drugs to inmates because it reduced the operating company's expenses.

Joan Erney, Deputy Secretary, Office of Mental Health and Substance Abuse Services, Department of Public Welfare (DPW) discussed the Request for Proposal (RFP) issued on August 16, 2007, to solicit proposals to privatize three forensic units currently operated by the Office. She explained the Office currently operates three forensic units associated with three state hospital sites for the evaluation and treatment of individuals who are in need of forensic behavioral health services. She noted that Pennsylvania's per diem averages $713 a day, while the national average is $388 a day. "Given the disparity between what Pennsylvania is spending compared to the rest of the nation, and in order to be good stewards of the Commonwealth's money, it was necessary to find ways to control costs, bring our costs in line and maintain the level of quality services that are necessary to operate the facilities," she said. To do that the Office released a RFP to develop two psychiatric inpatient forensic centers with capability for community residential step down and transitional treatment team services, she explained. Erney also outlined what vendors must follow to achieve taxpayer savings and ensure quality. She told the committee that bids are due on October 31, 2007.

Rep. McGeehan asked Erney if privatizing the forensic services for troubled inmates would ensure good medical care. Erney explained that DPW is still exploring the situation and will have an evaluation team to go over each proposal and after careful review the department will decide whether to continue with its privatization effort for these services. He further expressed his concerns with potential turnover rates with the private companies and stated that he was not optimistic for the privatization of the forensic services. He then told Erney that after the RFPs were evaluated, DPW should come back to the committee and reveal its findings.

Rep. Boyd asked if HB 1469 would apply to DPW's desire to privatize the forensic care. Erney said she didn't think it would since they are not a correctional facility.

Rep. Goodman wanted to know if Erney is concerned about reducing the number of facilities available for treatment from three to two. She said no, the bed capacity would remain the same with the two facilities, one in the eastern part of the state and the other in the western region.

William Sprenkle, Deputy Secretary of Administration, PA Department of Corrections, stated that the management of prisons has become a lucrative business opportunity for private prison providers across the nation, such as the Corrections Corporation of America (CCA) and The GEO Group, Inc. He noted that nationwide, 7.2% of all federal and state inmates at midyear 2006 were housed in privately operated prisons, up 10% from the year before. He commented that the following three privatization claims are false: (1) Private providers can operate prisons in a more cost effective manner than can the state; (2) Private providers can deliver better treatment services and ultimately produce greater reductions in recidivism; and (3) Private providers can maintain safety and security at least as well as can state run prisons. The evidence suggests that these claims are largely overstated, and are not supported by solid scientific evidence, he remarked. Sprenkle offered that the best evidence available about the cost of public versus private prisons indicates that overall there is no financial advantage to privately run prisons. There is no support for the claim that privately run prisons are safer and better managed than public prisons, he added. He commented that management problems have been noted in every state that operates private prisons. "The privatization of entire prison operations in Pennsylvania would undermine the solid reputation for safe, secure, orderly and effective prison management that has been established by the corrections professionals in the Commonwealth," Sprenkle concluded.

Rep. Gabig inquired of Sprenkle if the Department of Corrections supports DPW's desire to privatize the mental health care services of certain prisoners. He said they do. Gabig commented that the Rendell Administration should be given a chance to look into privatization in certain areas to reduce operating costs to the state.

Rep. McGeehan asked Sprenkle how much training guards in state correctional facilities receive. He responded that the initial training program is five weeks. He added that for at least one year, new guards are continually trained by experienced officers and they have three months of training in multiple guard posts before they are ever put in a position where they are guarding part of a prison by themselves. He said most private prisons provide less training than what the state does.

Monique Hales -Slaughter, Corporate Developer, Resources for Human Development, testified to encourage Pennsylvania to develop a county-based jail diversion model. The Pennsylvania Jail Diversion Program would divert people with serious mental illness and substance abuse who have committed a non-violent act into a program that would provide appropriate case management, treatment, housing, employment and appropriate social services, she explained. She stated the model would develop partnerships with stakeholders required to create an effective jail diversion process in counties across Pennsylvania and to bring knowledge and experience about best practices in jail diversion to all involved stakeholders. The program would seek to help people break the vicious cycle of repeat incarcerations due to treatable medical conditions, specifically mental illness and substance abuse, she added. The primary goal of the Pennsylvania Jail Diversion Program would be to divert as many people as possible from the prison system and to break the cycle of repeat recidivism, she concluded.

After the presentation by Resources for Human Development, Chairman Caltagirone commented that certain non-violent offenders don't necessarily need to be incarcerated and the state should look at alternatives to sentencing in order to reduce the prison population and the overall costs.

Roy Pinto, Vice President, Pennsylvania State Corrections Officers Association, said his organization's position on privatization is simple, "Evidence clearly shows it just doesn't work for public safety and we oppose it." He suggested that when talking about the critical custody and control functions of Corrections Officers and employees, these frontline, well- trained, highly seasoned professionals can't just be replaced with a profit -driven company who just happens to be the lowest bidder. For-profit operations lead to less secure state hospitals and prisons because profit ultimately drives the decision-making, he argued. He cited a study that found that the costs to operate identical beds in public facilities Arizona were 8.5% to 13.5% less than comparable in-state private beds. The study also found that utilizing publicly-run prisons in fiscal years 2003 and 2004 would have resulted in savings of $3.5 to $5.3 million to Arizona state taxpayers, he added. These statistics shed a new light on this issue that bears further study in Pennsylvania, he said. "The people who work in these institutions do an outstanding job for all of us and should not pushed aside because privateers have poured money into political war chests or because they can't get its overtime problems under control," he concluded.

Percy Poindexter, Vice President, Pennsylvania State Corrections Officers Association, stated privatizing state mental hospitals, which hold some of this state's most dangerous criminals, is a severe misjudgment by the Rendell administration and a "reckless gamble with public safety." He opined that there is no way a for-profit company, mandated by the state to make significant cost cuts and do more with less, can approach the level of security and control currently provided. He said during his career he has been injured, hospitalized and gone through rehab from injuries sustained at the hands of a forensic unit patient. He suggested that a private company hiring someone to this job for $8 an hour "is a recipe for disaster." DPW's 200-plus page RFP is embarrassingly flawed, Poindexter remarked. He noted there is small mention of security and how it would be applied and it "smacks of the famously failed public policy of the early '70s when the doors of mental hospitals across the country were indiscriminately thrown open." According to the DPW, privatization will cut costs by 20 percent while enhancing services, he said, adding that the "so-called enhancements would include an acceleration of processing, evaluation, and potential release of these inmates."

Rep. Seip asked about how the prisons currently handle outside entities and Pinto replied that there are civil and forensic duties that contracted out. Rep. Seip then inquired if education is available to those outside entities to which Pinto said that there are extensive training programs that are always available and on going even to non-state employees. Rep. Seip also asked if there were deputies at the Norristown State Hospital and Poindexter said there were not.

Rep. McGeehan asked if the PA State Corrections Officers have the same training as DOC employees, Poindexter said the training mirrors DOC training but his employees are trained to secure hospitals, so there is a medical responsibility that accompanies the training.

Poindexter concluded by mentioning grievances of reduced funding and failure to compensate overtime which has occurred during a time of contract negotiations.

Frank Smith, PA Prison Institute, has an extensive 36 year of experience within the corrections field and said that his problems with privatization are the lack of accountability, the "low ball" wages, and the alarming turnover. Smith reiterated his point stating that with the large turnover comes ill advised and premature advancement of under qualified people who then provide the training of other under qualified employees. He provided numerous examples where he has witnessed or studied as to why private prisons do not work. He concluded by warning that private prisons are operated by corporations that are "supremely mindful of their bottom line and are willing to substantially compromise ethics in order to elevate profits."

Rep. Seip appreciated Smith's testimony especially since it stressed the importance of the state mentoring program which best prepares individuals for work or advancement in corrections.

Rep. McGeehan mentioned that he read some supplements provided with Smith's testimony about the reaction from Catholic bishops as informative, and noticed a heading referring to the owners of private prisons as "Wardens from Wall Street", and asked as to who these people were. Smith replied that the many of these individuals have prison background and begin with good intentions, but over time all of the good ones leave, and added, that in these prisons integrity is not valued. Rep. McGeehan recommended Smith be retained for future reference due to extensive background and body of knowledge. Smith appreciated the confidence found in his experience and commended the Committees on their diligence of learning both sides of the privatization story.

Rep. Waters asked if the taxpaying townspeople of the communities of these facilities are aware of the profits being made, and Smith responded that in most cases they did not, and most employees of these facilities also have no idea of how much greed is involved.

David Fillman, Executive Director, AFSCME Council 13, believes that imprisonment of citizens should remain a function of the government because the government's judicial system sentences an individual and it should be the government's responsibility to enforce that sentencing. Privatization of prisoners, according to Fillman, jeopardizes public safety through inferior maintenance by unqualified and underpaid employees. "Citizens have a right to be confident in the promise that prisons will be run by competent, professional and dependable staff." Fillman cited the large turnover rates of private prisons (52%) compared to public prisons (16%) as evidence of the poorly trained staff, which will dangerous situations for everybody involved.

Representatives McGeehan and Caltagirone commended Fillman and the work and assistance of the AFSCME to the executive board and all the work they do for their employees they represent.

Rep. Waters inquired if private prisons could unionize and Fillman said they could, but would need to organize under the National Labor Relations Act.

Nathan Benefield, Director of Policy Research, Commonwealth Foundation, is concerned that HB 1469 is "misguided" and only addresses and prohibits fully privatized prisons. Benefield believes that private prisons can assist PA in their ever increasing overcrowding issues and add efficiencies which will save taxpayers an estimated 5-20% per prisoner. He also mentioned that states which have introduced privatization have seen slower rates of growth in correctional costs. "If Pennsylvanians were to place 30% of inmates in private facilities, taxpayers could save $100 million annually, with higher expected savings in the future." Benefield stated that critics believe privatization leads to lower service, but he refuted that notion by saying that the opposite is true. He mentioned that private prisons have additional safeguards such as contractual requirements and financial incentives to reward order and security, and additionally private prisons offer educational and rehabilitation programs. Benefield went on to opine that if a private facility fails to provide adequate services, it would "likely experience contract revocation and ultimately fail to survive among its competitors."

Rep. Goodman recognized the core values of Benefield's organization, the Commonwealth Foundation, and was not surprised the he would be in favor of privatization of prisons, and followed by asking him about how his testimony could be completely opposite to the overwhelming testimony provided by a non-intentionally "loaded" panel. Benefield replied that studies have shown the potential savings and the evidence is out there for people to review. Benefield also addressed that private prisons are not permitted to retain fugitives when they have escaped, but they do however reimburse for the costs involved for retaining the escapees. Rep. Goodman said that is good but private programs in other states have failed with similar programs despite all the contractual obligations that were set in place. Benefield said that private prisons are held to performance standards unlike public prisons. Rep. Goodman asked who is the "Reason Foundation," to which Benefield said they are a Washington DC based political research firm that is much like the Commonwealth Foundation, but much larger. Rep. Goodman asked if he honestly believes after figuring in all the factors to maintain a prison, that private prisons are comparable to public prisons. Benefield replied that he is not qualified to answer that.