After 20 years in business, Corrections Corporation of America still finds itself having to defend the very nature of its existence.
Being the largest private prison operator in the country has thrust CCA into the spotlight of the ongoing debate over whether the nation's prisons should be privately owned and run.
The issue hit home for CCA in May when a union of jailers picketed in front of their Nashville headquarters on Burton Hills Boulevard. Their beef: Don't replace the government-run county jail in Shelby County with a private prison.
Opponents claim privately-run jails are understaffed and suffer from high turnover and inadequate training - claims that CCA insists have no basis in fact.
As is typical with counties facing a budget crunch, the Shelby County Commission is weighing a proposal by CCA whereby the company would fund the costs of a $200 million, 3,600-bed private jail, and charge the county a fee per inmate to manage it.
Opposition is being waged by the American Federation of County, State and Municipal Employees Local 1733, which represents the correctional officers at the Shelby County Correction Center and downtown jail. They said they have no assurances that they will retain their jobs if the CCA, which normally doesn't employ unionized officers, takes over.
"We don't think that selling jobs to a private company is in the best interest of the citizens of this community and our union members," said the local AFCSME director, Dorothy Crook, who took union members to Nashville recently to picket CCA and lobby legislators.
The debate raging in the Memphis area has been played out across the United States as CCA and other companies have convinced more and more states that private operation is a solution to their overcrowding and budget problems. The company assumes the cost of construction and charges the government entities a per-diem fee per inmate to manage the population.
The private operators manage an estimated 6 percent of state offenders and more than 12 percent of all federally sentenced offenders, according to CCA. Established in 1983, CCA has grown to become the largest player in the industry, managing more than 64 facilities and 70,000 prison beds in 19 states and the District of Columbia.
As privatization has swept through the heavily unionized Northeastern states in the past six years, labor organizations have become more desperate and aggressive in fighting CCA to hold on to union jobs, CCA spokeswoman Louise Chickering said.
Unions also came out in full force recently to oppose CCA's proposal to build a private jail in Dickson County, which was looking at options to deal with overcrowding.
After much debate, the Dickson County Commission in January turned down CCA's proposal by a 5-7 vote. While labor mounted stiff opposition, the commission responded not to the privatization issue, but rather the intense neighborhood opposition, said Commissioner Benny Spencer, who cast one of the "no" votes.
"Most of [the commissioners] thought it was a good idea to privatize it, but we just couldn't find a location," he said.
For years CCA has argued that private prisons save government money. Because companies are willing to foot the typical prison construction cost of $50 million to $100 million, counties avoid taking on added bonded indebtedness, Chickering pointed out.
CCA also argues that privatization saves counties money in operations because it introduces the element of competition into the public sector.
In an April 2003 study, funded by CCA and the Association for Private Correctional and Treatment Organizations, two Vanderbilt University professors concluded that by using the private sector, state corrections departments reduced total daily incarceration costs by 4.45 percent annually, resulting in a $20 million annual savings for the typical state budget.
The incarceration costs at private prisons are, on average, 5 percent to 20 percent lower than at public corrections facilities, the researchers said.
"States that actively use the private sector have lower costs. When you bring competition into the system, the rising tide raises more boats," Chickering said.
Critics, led by the Private Corrections Institute Inc. in Florida, strongly disagree with CCA's assessment, saying that many of the studies that CCA relies upon have been financed by the industry.
"What I found with the industry is they don't save money. It's always an apples to oranges comparison," said Ken Kopczynski, the institute's executive director and lobbyist for the Florida Police Benevolent Association.
His institute has been leading the charge on behalf of unionized corrections officers, taking their cause to battlegrounds around the country, including Dickson and Shelby counties.
He said per-diem cost comparisons done by CCA don't take into account the health care and pension tabs picked up by state governments after employee benefits exceed the caps placed by private operators. Florida absorbed $1.8 million in cost shifts last year, he said.
Labor officials argue that although private operators pay jailers an average of $3,000 less a year in wages than public prisons, the issue is not one of union jobs erosion.
"This is more of a public safety issue. When you start cutting corners in prisons, you start having riots, you start having inmates burn the place down," Kopczynski said.
In fact, 2004 proved to be a challenge for CCA, which saw disturbances and riots break out in its facilities in Arizona, Florida and Kentucky.
A riot that lasted several hours last July at the Crowley County Correctional Facility in Colorado prompted a review by the state Department of Corrections. State officials found flaws in the prison staff's level of emergency preparedness.
Pointing out that state and federal prisons have had more than three times as many incidents as CCA, company officials say they are cooperating fully with ongoing investigations by public bodies.
Chickering said the company is also making a determined effort to strengthen its quality assurance efforts, including improving communications with its state clients to make sure CCA has a better handle on all their inmates and their files.
She said CCA's accountability to its government clients is built into the contracts and people are hired to make sure those contracts are followed appropriately.
"In our history, CCA has never lost a contract because a customer was not satisfied with our performance. That's a huge statement," she said.
CCA has gained an ally in one of its most stringent critics of the past - Mike Grotefend, the former president of the Council of Prison Locals, a large union of federal corrections officers.
He said when privatization was new in the early 1980s, he felt threatened by the possibility of private operators cutting corners, prompting unsafe conditions.
But, he said, after touring CCA facilities he changed his mind, seeing first-hand the quality of the operations and the professionalism of the staff. He now sits on an advisory board for CCA.
"Call it undercutting or doing it fair market or whatever, but the per-diem cost to care for an inmate is heavily watched because that's the bidding process," he said. "Privatization has stabilized the industry."