Incarceration has become a big business in the US, which is now home to the world's largest prison population. Amid a growing dialogue about mass incarceration, the dubious ethics (and horrible track records) of private prisons have generated widespread outrage.
But the privatization of prison facilities by for-profit corporations is just the tip of the iceberg. Every aspect of incarceration provides an opportunity for someone to make a buck. State and federal governments spend billions to run prisons, jails and detention centers. Each one is like a small city, requiring infrastructure, services and upkeep -- all of which can be outsourced, including:
Design and construction of prisons;
Furniture, from guards' desks to the metal bunks prisoners sleep on;
Prisoners' medical and mental health care;
Food service and commissary (clothing, food, hygiene supplies and other items prisoners buy from the prison "store");
Phone calls and video visitation with loved ones;
Security and surveillance systems, including electronic monitoring;
Transportation of prisoners.
This vast market has spawned a number of new corporations designed specifically to capitalize on one or more prison "niche markets." But increasingly, other more established companies are wading into the incarceration business as well. Two of them are likely represented on your desk at this very moment.
3M: Stuck on Prison Profits
The first company is 3M, which many US consumers know as the maker of Scotch tape, Post-it sticky notes and other common household items, such as Scotch-Brite cleaning products, Ocelo sponges, Nexcare and Ace bandages, desk accessories and an array of other consumer goods.
More established companies are wading into the incarceration business. Two of them are likely represented on your desk at this very moment.
In 2015, 3M reported over $30 billion in revenue. The corporation's second-highest earning division is the "Safety and Graphics Business Segment" (nearly $5.5 billion, or 18 percent of total revenue in 2015). This segment provides high-tech security and surveillance products for law enforcement and correctional facilities. 3M and its subsidiaries hold numerous contracts with federal, state and municipal prison systems.
3M plays a major role in the global electronic monitoring industry, which is projected to reach $6 billion by 2018. 3M Electronic Monitoring currently operates systems internationally throughout Europe, the US, Israel, Australia, Singapore, Mexico and various Latin American countries. GPS and radio-frequency identification (RFID) systems are used for curfew monitoring, to monitor people on parole and to permanently track sex offenders in states and countries requiring life-long registration. 3M's breath-alcohol detection equipment is widely used by law enforcement, including inside prisons.
3M Electronic Monitoring makes electronic devices that identify prison guards under duress and issue alarms. It also makes devices that monitor groups of prisoners through tags on their uniforms, both inside penitentiaries and on modern-day chain gangs, which the company labels "off-site work crews." The company has developed an "Inmate Tracking System," which it advertises as offering real-time, automatic headcounts; real-time prisoner tracking; staff security alerts (officer duress, "man-down" alarms); and real-time event and escape notification.
CenturyLink: Dialing for Dollars
The second company is CenturyLink, the third-largest telecommunications company in the US (after AT&T and Verizon). CenturyLink's subsidiary, CenturyLink Public Communications Inc., is one of the largest phone service providers to prisons in the US, serving over 250,000 prisoners nationwide. As of September 2015, CenturyLink provides prison-based phone services to 37 incarceration facilities in 13 states (Alabama, Arizona, Florida, Idaho, Kansas, Louisiana, Missouri, Nevada, North Carolina, South Carolina, Texas, Utah and Wisconsin).
Phone services from CenturyLink connect prisoners' calls to the community, to families, friends, attorneys, etc. This service extracts a very high cost on the incarcerated individuals and families. Call costs, commissions to facilities (de facto "kickbacks") and types of phone services contracted with CenturyLink vary by state. These kickbacks are written into contracts as payments to the facilities -- a percentage of the call's cost added onto the base price of the call.
For example, in Arizona, the cost for a 15-minute phone call with a prisoner is either $3.60 (collect) or $3.15 (prepaid). CenturyLink will return 93.9 percent of that money to the Arizona Department of Corrections. The actual cost of the call is much less than what a prisoner is charged. Often, contracts are awarded based on which company returns the highest commission to the state, rather than which company can provide the best service and lowest rate for prisoner phone calls.
CenturyLink adds additional fees on top of this cost per call. Families are charged for setting up accounts, for adding money to an account, a monthly charge for maintaining an account and for taxes and tariffs. Families in Arizona, where CenturyLink is the sole provider to state prisons, have had to pay up to $180 per month to maintain communication with a loved one.
CenturyLink is one of the companies being sued by the Federal Communications Commission (FCC) because of the exorbitant cost of prison phone calls. In 2015, the FCC capped rates for local and in-state long-distance prisoner calling, and cut its existing cap on interstate long-distance calls by up to 50 percent. At the same time, the FCC closed loopholes by barring most add-on fees imposed by "inmate calling service" providers, and set strict limits on the few fees that remain.
In its annual report, CenturyLink identifies the FCC regulations as a regulatory risk that could cause a termination in contracts and a loss of revenue with the company. CenturyLink has lobbied against FCC cap orders and publicly attacked them as "wholly unrealistic." Prison phone service providers, including CenturyLink, have repeatedly appealed court decisions siding with FCC caps.
CenturyLink also contracts for video visitation services used at correctional facilities. Video visitation can occur over webcams at a family home, or in jail facilities where the visitor is in a separate room from the prisoner. CenturyLink has contracts with jails in Florida to allow webcam-based video visitation. As part of the contract, CenturyLink covered the cost of equipment and installation, and set a standard of 50 cents per minute for visitation calls. CenturyLink provides 15 percent of the revenues to the jail's fund for prisoner re-entry programs and staffing.
Note to Self: Move Your Money
As this sort of prison profiteering is increasingly coming to light, a number of efforts have been generated to boycott or divest from companies that make money from mass incarceration. In 2011, the National Prison Divestment Campaign was launched, targeting primarily companies that contribute to or benefit from immigrant detention, such as Wells Fargo.
That campaign scored a huge victory in 2012 when the United Methodist Church USA decided not only to divest from the Corrections Corporation of America and GEO Group -- the United States' two largest private prison operators -- but also to permanently put in place a screen that will not allow future investment in any corporation that has gross revenues of 10 percent or more from private prisons. In 2015, Columbia University became the first US university to divest from private prisons.
In November 2015, the American Friends Service Committee (AFSC) unveiled an online "Investigate" tool for individuals to screen their investments for the full array of prison profiteers. The new tool can scan any list of holdings and highlight prison-related investments. "We wanted to expand the focus and go beyond 'the usual suspects,' the facility management companies," said Dr. Dalit Baum, AFSC's director of economic activism. "Our research maps the wider prison industry and profiles the main companies providing services that range from health and food services to private probation and the supply of surveillance apparatuses."
3M and CenturyLink are among 13 publicly traded companies facing scrutiny for profiting from mass incarceration. AFSC's "Investigate" site maps these companies industry by industry, and can scan any investment file to flag companies for divestment.