Wednesday, May 18, 2011

Pecos: A Debtor's Prison in West Texas

(The second in the Border Lines series on Pecos Prison Town Blues, following up an article on "A Death in Texas" in the Boston Review of November 2009.)

“The prison represents big bucks for us,” Reeves County Treasurer Linda Clark told me.

The more than three thousand immigrants imprisoned at the Reeves County Detention Center in Pecos constitute the economic lifeblood of this West Texas town, where immigrant inmates constitute more than 40 percent of the town’s population of 7,500 residents.

“If they weren’t here, we wouldn’t be here,” remarked Clark, explaining that the county-owned prison that is operated by the private prison giant GEO Group employs some five hundred workers and creates a stream of revenue into the county’s coffers. 

RCDC, which has expanded three times since its opening in 1987, is the nation’s largest immigrant prison.  The immigrant inmates are supplied by the Federal Bureau of Prisons (BOP) through contracts and agreements with the county and GEO.

It’s this deep economic dependence that explains the continued willingness of the Commissioners Court to keep expanding the debt burden to keep the prison operating and to keep BOP outsourcing its immigrant charges to the remote Pecos prison complex.

Last year the Commissioners Court issued $19.68 million in new lease-purchase revenue bonds to help reconstruct and upgrade the two older units of the prison complex that houses as many as 3,750 “criminal aliens.”  This new bond certificate followed the financial restructuring of its 2005 bond debt of $42 million to lighten the annual debt-servicing burden to relieve the fiscal crisis facing the county in 2009.

Pecos, the seat and population center of Reeves County (with its 11,046 residents, including inmates), was hit hard by the nation’s economic downturn in 2008 – with unemployment rising to 14.1 percent and property valuations dropping $76 million.

While property values, including the value of the speculative oil/gas land investments, sunk precipitously, there was no speculative housing boom in this sad town of dilapidated commercial buildings and family homes.  A century of a series of economic booms, ending around 1980, left the town of Pecos, as well as other small towns scattered across the vast county (eight largest in Texas), with an abundance of cheap, although largely substandard housing.  

Even before the 2007-2008 housing crash, housing values were so low that few dared to invest in building new housing. Today, the median value of occupied homes in Reeves County is just $29,500 --- the very lowest of any county in the nation.

There’s no disputing how downtrodden this community is. Unemployment hovers at 10 percent, and nearly one-third of the county’s families live in poverty. The county government, similarly, is in desperate straits. After voters approved in November 2008 a $16-million bond issuance to build a new library and community recreational facility, the county commissioners killed the bond sale given the financial emergency in the wake of the prison riots.

Bottom Line – Numbers and Commodities

Generally, the bottom line of the prison business is reliably in the black. After all, the per diem rate paid by the federal government continues to rise as do the number of inmates – driven mostly by drug arrests and most recently by huge surges of arrests of immigrants.

Immigrant imprisonment is especially profitable because these inmates are overwhelmingly “low security” prisoners with little or no history of violence, thereby requiring fewer guards and less costly infrastructure (dorms instead of individual cells, for example). 

Another plus for the bottom line is that the imprisonment of immigrant inmates doesn’t require the same degree of rehabilitation programs – given that they won’t be reentering American society and will, upon being discharged from federal prison, be transferred to Immigration and Customs Enforcement (ICE) for removal from the country.

Yet the prison business is not simply a calculation of expenses and revenues based on market demand and supply.  

Market terminology prevails in the prison business, not only among the private prison firms like GEO and the prison owners like Reeves County. Supply and demand, costs and benefits, efficiencies and profits are also the frameworks used by the federal outsourcers of inmates, mainly BOP, US Marshals Service, Office of Federal Detention Trustee, and ICE.

The free population of Pecos and the county officials found themselves scrambling to make new calculations about the profitability of their prison enterprise in late 2008 and early 2009 when two inmate riots sparked by patterns of medical negligence and abuse threatened the prison industry’s bottom line.

All three sections of the prison complex – the newest RCDC III on December 12-13, 2008 followed by similar disturbances at RCDC I and II from January 31 through February 5, 2009 --were damaged by fire and smoke.

At first glance, the damage wasn’t so extensive, despite the harrowing images of plumes of smoke billowing up over the prison complex on the edge of town.  The shock came when county officials were told by BOP and the insurance companies that the older prison facilities couldn’t simply be repaired but needed to be reconstructed to meet new construction regulations and BOP guidelines, such as the installment of a fire-sprinkler system and an infirmary – which, shamefully, was never included in the initial plans for the low-cost, high-profit economic development project undertaken by the county in the mid-1980s.  

Discounting Inmates

One of the weak links of the prison business is that as much as the public and private prison profiteers consider inmates and detainees as products and commodities -- in keeping with the market logic of the business – these incarcerated individuals cannot simply be measured by the prison beds they occupy and the per-diems they bring with them. Their humanity and dignity, long abused, cannot be endlessly suppressed in the interests of profit.

At some point, the inhumane treatment common at the Reeves County Detention Center was bound to explode in human indignation, such as occurred on December 12 when fellow inmates rioted after learning that Jesus Manuel Galindo, an epileptic, suffered a gran mal seizure in solitary confinement where he was placed, purportedly, for “medical observation.” (See Tom Barry, “Death In Texas,” Boston Review, December 2009).

The county faced mounting reconstruction costs in 2009 and 2010, rising to nearly $45 million.  Insurance payments covered about half those costs. But to get the prison complex back into full operation and to ensure that the BOP would again beginning shipping immigrant prisoners to Pecos, the county was obligated to issue in 2010 the latest in a series of seven bond certificates to complement the insurance payments.

Unlike previous bond sales, the 2010 issuance wasn’t an investment in prison expansion but rather a desperate option to ensure that the community’s prison business would survive.

Even though bond rates stand at historic lows, the yields on the 2010 bonds (escalating over ten years 6.25% to 8%) and other recent Reeves County bonds are at least a couple of points higher than average because of the county’s downgraded bond ratings. That means that the county is paying higher interest rates than other counties for its bonds projects – not only its prison projects but also general obligation bonds for libraries and other public infrastructure -- because of the riskier status of its ventures.

The recovery of the Pecos, Reeves County, and its prison complex after two major prison riots more than two years ago, however, must be acknowledged as  a testament to adaptability and vitality of  America’s experiment in public-private business.

On the surface, things have returned to normal in this West Texas prison town. Only close observers would notice the changes in the reconstructed prison complex – still an extensive compound of cheap prefabricated buildings spread over a few hundred acres enclosed by layers of razor-wire fencing.

Chained to Debt

But the free people of Reeves County now have a much higher debt-servicing burden. The prison does indeed mean “big bucks.”  More than 25 years after the county first entered the prison business, it faces a principal debt of $100.5 million and a total debt-servicing burden of $135.8 million, according to figures included in the 2010 bond certificate.

The Texas Bond Review Board reported that as of August 2010 the per capita obligation for the county’s 11, 046 residents on the prison revenue bonds stood at $8,744.  But that understates the actual per capita obligation since it is a factor only of the prison debt principal, which the actual debt, including interests, is more than a third higher.

Then there is an issue that Reeves County has more than 3,500 phantom residents – individuals who can’t vote, don’t pay taxes, and are never seen, namely those residing in the prison. 

But they are represented since under the prison-based gerrymandering system in Texas, congressional and legislative districts count as residents – although not likely as constituents – for purposes of political representation and the apportioning of federal and state funds. 

(Next: High Finance in a Poor Prison Town)

No comments: