Incarceration is money-maker backed by 'entrenched' incentives

REUTERS/Samantha Sais
  • 2020 law review article by Emma Kaufman

July 15 - An obscure web of bureaucracy incentivizes local officials around the U.S. to jail more people in order to generate revenue, rather than advance public safety, according to a new report from the Brennan Center for Justice.

Those perverse incentives have created what researchers referred to as a “market in incarcerated people,” an industrial complex that transforms humans into objects of trade and advances mass incarceration.

"Fiscally distressed counties have seen this market as a solution to their budget woes, often expanding their jails to serve it," the authors wrote.

The report, titled Revenue Over Public Safety, released on July 6 by the Brennan Center for Justice at New York University School of Law, catalogs a range of programs and practices that are ostensibly aimed at public safety but are better understood as revenue producers.

Business, in a word.

Lauren-Brooke Eisen, director of the Brennan Center’s Justice Program, said the study was undertaken to understand why recent efforts at decarceration and broader criminal justice reform have largely been unsuccessful.

“We knew we have a vast and complicated infrastructure that feeds on itself to perpetuate the status quo,” Eisen told me. “What was surprising was the more we peeled back the layers the more we realized that there’s an interlocking set of incentives that is so deeply entrenched that we may not get significant changes until we highlight them for the public and policymakers.”

Many Americans are well-aware that law enforcement and elected officials around the country sometimes deploy programs and practices that generate money for their agencies by criminalizing mostly low-income people and communities of color. Many probably also know that U.S. prisoners are compelled to work, often for less than $1 per hour.

In recent years, criminal justice reform advocates and even judges have described law enforcement and judicial policies in some cities and municipalities as modern-day debtors’ prisons, or a judicially-sanctioned extortion racket.

But few know that there is also a lucrative trade in prisoners between states — swapping prisoners or paying private companies to hold them across state lines, according to the report. Also largely unreported is the fact that local governments can effectively serve as headhunters in the marketplace for incarcerated people. They can facilitate deals to have private companies build jails for the federal government — even in a different jurisdiction — and get a cut from the company, the authors explained.

The study also lays out how states and counties have been able to supplant their corrections budgets with emergency stimulus funds distributed after the Great Recession and with COVID-19 relief funding, for example. Even funds from the U.S. Department of Agriculture can go toward mass incarceration. The agency has provided $360 million to build new jails in rural areas since 1996, according to the report.

The financial incentives and legal mechanisms that enable mass incarceration revenue streams, federal policy mandates, administrative and municipal actions — often go unnoticed or unmentioned, as does the crucial role that sheriffs, county commissioners and corrections department bureaucrats play, the Brennan Center report reveals.

For example, Eloy, a small town in Arizona, received an annual fee of nearly $440,000 for serving as an intermediary between Immigration and Customs Enforcement and private prison company CoreCivic (then known as Corrections Corporation of America) when ICE wanted to quickly build a new immigration jail in 2014. ICE simply added a provision to an existing contract with Eloy that allowed CoreCivic to run an immigration center for the government — even though the facility was constructed 900 miles away in Dilley, Texas, where Eloy couldn’t provide meaningful oversight, according to the report and a 2018 audit by the Department of Homeland Security inspector general.

ICE argued it needed jail space quickly at the time and had to circumvent the usual, lengthy government standards for contracting with private companies, the Associated Press reported in October 2018. City officials said ICE initiated the modification on its own, The Arizona Republic reported in September 2018. The city council voted to remove the provision and pulled out of the agreement in 2018.

Eloy city officials didn't respond to a request for comment. ICE spokespersons also didn't immediately respond to an inquiry.

Ryan Gustin, a spokesperson for CoreCivic, told me that the Obama administration needed a detention center urgently, and that Dilley, Texas, not Eloy, is now the IGSA holder for the South Texas facility.

“In all cases, our government partners determine the type of contract they want us to operate under,” Gustin said.

Prison construction contracts like the one in Eloy are enabled by intergovernmental service agreements, or IGSAs, a type of government contract that doesn’t always have to comply with procurement regulations and isn’t subject to much oversight — which means unscrupulous actors can very easily take advantage, according to the Brennan study. In fact, a 2021 study by the Government Accountability Office found that ICE actually uses IGSAs specifically because they involve fewer procedural hurdles and less scrutiny than most federal contracts.

Similar agreements enable the state-to-state prisoner trades, in which a state or municipality pays another a per diem rate to hold its prisoners. Interstate corrections contracts have been approved by almost every state court and the U.S. Supreme Court, largely by uncritically adopting corrections bureaucrats’ justifications, according to a 2020 law review article by Emma Kaufman that was cited in the Brennan report. Kaufman is associate law professor at New York University School of Law. (West Virginia is the only state that prohibits interstate transfers).

Officials justified shipping people around by arguing that interstate imprisonment could reduce overcrowding and improve safety and rehabilitation.

What's more, details about the money sources to build jails can be buried in statutes, administrative policies and directives. For example, USDA sometimes funds the building of prisons because they are considered “essential community facilities” that provide services and jobs, the authors wrote.

Laying bare the operations also exposes the roles that some officials unexpectedly play in advancing mass incarceration. In practice, it's largely prison bureaucrats that decide carceral policy, rather than judges, legislatures or political communities, according to the report and Kaufman's 2020 paper.

Sheriffs and county commissioners play a primary role in proposing, securing funding and deciding the scope of jail construction. And they're often eager to expand jails, the authors wrote.

The report details the operations of the hidden bureaucratic and legal infrastructure underneath mass incarceration, and it’s crucial to understand those operations in order to achieve meaningful criminal justice reform.

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Hassan Kanu writes about access to justice, race, and equality under law. Kanu, who was born in Sierra Leone and grew up in Silver Spring, Maryland, worked in public interest law after graduating from Duke University School of Law. After that, he spent five years reporting on mostly employment law. He lives in Washington, D.C. Reach Kanu at