Cash-strapped states fuel lucrative business for privatized prisons

“We get three hots here,’’ Townsend, 40, said while taking a short break from sweeping the yard at La Palma Correctional Center in Eloy, Ariz., a desert town halfway between Phoenix and Tucson. “It’s all right. It’s decent.’’

La Palma, which houses about 2,900 convicts from California, is one of 65 facilities operated by Corrections Corp. of America.

As is the case at the company’s other facilities, all the workers at La Palma, from the guards and office staff to the warden, are employed not by a government agency but by Nashville-based Corrections Corp.

The company has grown to become the largest private-prison operator in the nation as states from California to Florida, along with the federal government, turn to corporate America to punish felons and hold detainees.

Tightened budgets will probably lead to more contracts, company executives said.

“The fiscal situation on the state side is very dire,’’ said Damon Hininger, who began his career as a prison guard and has been chief executive of Corrections Corp. since October. States have less money for prison construction, meaning more incarceration has to be outsourced, he said.

“We think that is very favorable for the company and for the industry,’’ Hininger said.

Conflicts are inherent in shifting one of the government’s gravest responsibilities — punishing and rehabilitating criminals — to private companies, which seek to both expand their business and reduce costs, said Mark A.R. Kleiman, a University of California-Los Angeles, professor and author of “When Brute Force Fails: How to Have Less Crime and Less Punishment.’’

Corrections Corp. has been accused in lawsuits of allowing violence at its facilities and providing inadequate health care to prisoners, resulting at times in preventable deaths.

“It’s a question of how you delegate the really ferocious powers of the state to a private enterprise,’’ Kleiman said.

US states are forecasting budget deficits of $136.1 billion through 2012, according to figures released in February by the National Association of State Budget Officers and the National Governors Association.

“It cuts both ways,’’ said Jane Cotroneo, an analyst at Moody’s Investors Service who follows prison operators and real estate investment trusts.

Decisions by some states to eliminate mandatory minimum sentencing and release some prisoners early may hurt Corrections Corp., she said.

While private prisons have gained acceptance by states across the nation, opposition remains.

America Civil Liberties Union attorneys in 2007 filed a complaint that says immigrant detainees at the company’s San Diego Correctional Facility, managed for the federal government, were provided inadequate medical and mental health care resulting at times in avoidable death.

That case is currently being mediated.

In March, ACLU attorneys, working on behalf of six prisoners at the Idaho Correctional Center, said in an amended complaint that the San Diego prison has become so violent that it’s known as “Gladiator School.’’

“We think there are certain structural problems that exist with private prisons,’’ said David Fathi, director of the ACLU National Prison Project in Washington.