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Thursday, May 26, 2011

Bombshell Bipartisanship

Bipartisanship isn’t always what it’s cracked up to be – an antidote to congressional bickering that prevents Congress from getting anything done.

Bipartisanship is still alive and well in Congress, despite what pundits say. When it comes to the nation’s security or homeland security, liberals and conservatives often get along famously – joining together to defend the military-industrial complex, even against the Pentagon’s own initiatives to cut waste.

We saw this bipartisanship in sharp focus this month when Republican and Democratic members of the House Armed Services Committee – chaired by shameless military-contractor shill Buck McKeon (R-Cal.) -- formed a common defense against the Department of Defense.

What DOD Secretary Robert Gates lambasted as government waste and pork, House members from both parties defended as government subsidies and waste.

Ranking member of the pork-laden Air and Land Forces Subcommittee Silvestre Reyes, a Democrat with a secure seat in El Paso, has joined with his Republican colleagues to resist Pentagon efforts to cut wasteful and outdated spending projects.

Reyes and U.S. Cong. Roscoe Bartlett (R-Md) have teamed up to oppose cuts in the president’s 2012 budget and to remove those cuts in the budget markup process. Bartlett is the chair of the Tactical Air and Land Forces Subcommittee.

The F-35 stealth fighter program is a Pentagon favorite. Manufactured by Lockheed Martin, the F-35 Joint Strike Force program will cost the nation about $1 trillion dollars over the next fifty years, not counting the $385 billion already scheduled to purchase the fighters over the next twenty years.

Lockheed Martin is a top campaign donor to members of the Armed Forces Committee and its various subcommittees. The company, which is the country’s leading security contractor, ranks as the top donor to Reyes.

Following Lockheed Martin on the list of Reyes’ leading donors are SAIC, Raytheon, Honeywell, General Dynamics, Boeing, Hunt Companies, Mantech, Northrop Grumman, and L-3 Communications.

Lockheed Martin is also the leading contributor to Congressman Bartlett, whose top contributions come from the Defense Aerospace sector.

Despite the jaw-dropping price tag, the Pentagon stands behind the F-35 as a worthy (albeit pricey at $113 million each and a third more expensive to operate that existing similar fighters) upgrade and replacement of the F-16 and F-18 fighters.

But the Pentagon thinks it wasteful for Congress to continue its annual funding to develop two different engines for the same aircraft.

The administration’s 2012 budget slashed funding for this duplicative development and ordered work to stop on this duplicative development project that has cost $3 billion over the past 14 years.

YetReyes, along with Republicans on the subcommittee, has included budget markups to sustain the widely discredited alternative engine program, costing a million dollars every day. The duplicative engine is being developed by General Electric and Rolls-Royce, while the main engine project is contracted to Pratt and Whitney.

In May 2010 Gates spoke out against congressional initiatives supported by Reyes and his colleagues to support the second engine project:

The Bush administration opposed this engine. The Obama administration opposes it. We have recommended for several years now against funding this engine, considering it a waste of money. To argue that we should add another $3 billion in what we regard as waste…frankly, I don’t track the logic.

Attempting to find a logic in most military-industrial complex programs is a challenge, if one doesn’t acknowledge the central imperative guiding many congressional members – keep campaign donors happy and keep security dollars flowing to their districts.

According to the Center for Responsive Politics, GE spent more on lobbying than any other company in the last decade.

The stated logic of the two-track F-35 engine project is that taxpayers will benefit from having two security contractors competing to develop a new propulsion engine because the competition will eventually bring the price down.

But most observers, other than GE representatives and the congressional members themselves, point out the F-35 program is monumentally expensive and there is no guarantee or reason to believe that the two-tracked engine development project will lead to cost savings. More waste and pork is the common observation.

Fighting to Keep Old Tanks Running

The same type of bipartisanship in support of duplicative engine projects for a trillion dollar fighter is also on display in the Reyes-Bartlett pork-driven markups in support of the Bradley Fighting Vehicle and the Abrams tank.

This bipartisan deficit-building team is also resisting the Pentagon’s own efforts to cut the funding of these two tanks that date to the early days of the cold war. General Dynamics builds the Abrams tanks, while BAE Systems builds the Bradley Fighting Vehicles – both of which the Pentagon says are outdated and should be replaced by the Army’s high-priority Ground Combat Vehicle program.

It’s not that either Reyes or Bartlett oppose the Army’s GVS. It’s simply that they think we should also keep on producing the old tanks, too. In other words, the more military contracting the better, even though it may be wasteful, opposed by the military itself, and lacks any security justification.

According to Bartlett, echoing the General Dynamics lobbying team,

“The workers and companies in our industrial base supply chains can’t be turned off and on like a light switch….Our country has to maintain the capability to build and field modernized Abrams tanks and Bradley Fighting Vehicles.”

For his part, Reyes long promoted the Pentagon’s controversial Future Combat Systems program, whose main contractor was Boeing, and resisted the Pentagon’s decision two years ago to terminate key FCS components – which directly benefitted the El Paso area through their development and testing at Ft. Bliss.

On May 3, Reyes boasted to his constituents not that he, as the ranking member of the main congressional oversight program for the military’s tactical air and land programs, is playing an instrumental role in cutting waste and pork.

Rather he announced that he been working to in increase the military budget – including a provision in the FY 2012 National Defense Authorization Act that will “impact the El Paso region” through “$425 million in additional funding for the modernization of Abrams tanks and Bradley fighting vehicles.”

For more information: 

Tom Barry, “Reyes the Rainmaker,” CIP Americas Program, September 2009, at: http://www.cipamericas.org/archives/1858

Bill Hartung, Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex (New York: Nation Books, 2011).

Wednesday, May 25, 2011

Pecos Prison Town Blues: “Contract Confinement” for BOP’s Immigrant Inmates

Reserved (but empty) parking space at Reeves County
Detention Center in Pecos, Texas/Photo by Tom Barry

 (Latest in the Border Lines’ “Pecos Prison Town Blues” series of investigative articles on the Reeves County Detention Center and the business of immigrant imprisonment. For more background, see Tom Barry, “A Death in Texas,” Boston Review, November 2009.)

GEO Group, the private prison corporation that manages the nation’s largest immigrant prison in the West Texas town of Pecos, has been in the vanguard of the federal government’s privatization of immigrant incarceration.

Despite a long history of guard abuse, wrongful deaths, inmate escapes, suicides, and contract violations, GEO since the mid-1980s has counted on near-annual increases in contract beds from the federal government.

The Bureau of Prisons (BOP) didn’t reevaluate its contracts, for example, with GEO and Reeves County after inmate riots two years ago over medical care abuses and the common use of solitary confinement. Instead, BOP increased the contract award and approved the GEO-directed reconstruction plan whose central feature is the prison’s new electronic surveillance system.

GEO Group (formerly Wackenhut) was the beneficiary of the second immigrant detention contract from the Immigration and Naturalization Service (INS) in 1987. (In 1984 the newly formed and politically connected Corrections Corporation of America received the first INS contract.) 

Today, GEO Group is the second largest contractor (after CCA) for the Immigration and Customs Enforcement (ICE) with seven detention centers and another one under construction – for a total of 7, 183 beds.

Ten years after the private security broke new ground in the then emerging private prison industry by investing in the business of immigrant detention, Wackenhut was contracted by BOP in 1997 to manage the agency’s first large-scale privately managed secure prison.

Never before had BOP turned over one of its prisons to a private firm. The agency began experimenting with privatization not with the general inmate population but with nonviolent immigrant inmates serving sentences for immigration violations and drug control violations.

In 1988 the BOP began its outsourcing of immigrant inmates when it signed an intergovernmental agreement with Reeves County, which in 1986 had opened the new county-owned and (at that time) county-operated Reeves County Law Enforcement Center for business.

Today, BOP continues to work closely with local governments such as Reeves County in housing immigrant inmates but it no longer institutes these arrangements through intergovernmental agreements but rather through joint contracts with local governments and private operators – like Reeves County and GEO in the case of the Pecos immigrant prison complex.

GEO Group is also a favored contractor for the immigrant prisons outsourced by the U.S. Marshals Service.

In its earnings reports GEO routinely ascribes its growth to the booming sector of immigrant imprisonment, especially the sharpening criminal alien focus through the Secure Communities Initiative and other ICE programs.  In its third quarter 2009 report, for example, GEO executives observed that “this federal initiative to target, detain, and deport “criminal aliens” throughout the country will continue to drive the need for immigration detention beds over the next several years.”

The Taft Correctional Institution was the first of twelve contract facilities for “criminal aliens.” All BOP prisons for immigrants are privately managed.


Because they are run by private firms and also because they hold immigrants who are deported after serving their 1-6 year sentences, these criminal alien prisons, like the prison complex in Pecos, constitute a type of penal colony that is operated with little transparency or accountability.

All twelve of these BOP immigrant prisons operate through outsourcing contracts called Criminal Alien Requirements (CARs). Corrections Corporation of America (CCA) holds five CAR contracts, GEO has five, and Management and Training Corporation (MTC) holds two.

BOP Privately-Managed Immigrant Prisons
Facility/Manager
State
Count
ADAMS COUNTY CORR CTR (CCA)
  MS 
  2,553 
BIG SPRING CI (GEO)
  TX 
  3,472 
CIBOLA COUNTY CI (CCA)
  NM 
  1,081 
D. RAY JAMES CORR FACL (GEO)
  GA 
  2,331 
DALBY CI (MTC)
  TX 
  1,872 
EDEN CI (CCA)
  TX 
  1,548 
MCRAE CI (CCA)
  GA 
  1,711 
MOSHANNON VALLEY CI (GEO)
  PA 
  1,493 
NE OHIO CORR CTR CI (CCA)
  OH 
  1,483 
REEVES CI (GEO)
  TX 
  2,337 
REEVES DC (GEO)
  TX 
  1,348 
TAFT CI (MTC)
  CA 
  1,753 

Flexibility in Immigrant Imprisonment

Since the mid-1980s [BOP] has “contracted for bed space to confine…low security, non-U.S. citizen inmates with relatively short sentences.” BOP says that “such contracting gives the Bureau the flexibility to manage rapidly growing inmate populations and to help control overcrowding.”

BOP’s budget for contract facilities has steadily increased since the late 1990s, rising from $238 million in 1998 to $798 million in 2010.  Almost every year since 1998 the BOP budget has included special authorizations for new contract beds, virtually all of which have been for low-security “criminal aliens,” mostly immigration law violators.  

BOP’s commitment to immigrant outsourcing in immigrant-only prisons run by private operators solidified in 2004. As detailed in the 2010 prison bond offering for the reconstruction of the Reeves County Detention Complex, the bond underwriting company Carlyle Capital Markets of Dallas observed:

 “[B]y 2005 the federal budget optimistically reported, based on the anticipated growth in the federal detainee population, that ‘during 2004/2005 the number of detainees in state, local, and private prisons is expected to represent approximately 77% of the federally detained population.”
The bond offering, which aimed to persuade bond buyers of the profitability of private prisons, pointed to the pro-privatization language in the BOP’s 2005 budget:

 “The 2005 Budget places a moratorium on new prison construction while promoting more aggressive BOP contracting with State, local, and private sector providers. This approach is consistent with a [Program Assessment]  analysis  [suggesting] that BOP take greater advantage of public and private sector bed space to meet its capacity requirements.”
This privatization and outsourcing focus continued through the Bush administration and has also been the policy of the Obama administration which has repeatedly increased BOP spending for “contract confinement” of immigrants by BOP.

In President Bush’s 2009 budget request, the administration explained: “Using contract beds for the confinement of low-security inmates [immigrants in CAR facilities] provides a flexible approach to manage this population.”

BOP’s growth in contract confinement has been almost exclusively limited to low-security noncitizen inmates – thereby limiting its outsourcing to a rising but narrow component of its inmate population. An even greater source of per-diem payments from the federal government come from the U.S. Marshals Service and Immigration and Customs Enforcement.

In the case of the USMS, like BOP this Justice Department agency that has custody over pre-sentenced inmates has also created a network of special immigrant prisons over the past decade. Although USMS normally transfers most inmates to the BOP after sentencing, its detention centers for immigrants commonly hold immigrant inmates who have been sentenced for short periods (mostly under a year) for illegal entry and reentry violations.  

For its part, ICE is no longer creating its own detention centers, which it euphemistically calls processing centers, but for the past decade or more has been outsourcing all of increased population to privately managed detention centers – which now account for 49% of ICE detainees.

BOP has been the central and usually the sole provider of outsourced inmates to the Reeves County Detention Center since 1988. Today, RCDC benefits from two CAR contracts – one for the RCDC I and II prisons, and another for the 2001 expansion called RCDC III.

With recent reconstruction underwritten in part (in addition to insurance payments after the 2008-2009 disturbances) by the $19.7 million bond issue in 2010 by the county, the total complex currently has a 4,000-bed capacity, up from the 3,722 capacity prior to the prison riots.

(Next: Who Really Owns the Reeves County Detention Center?)

Tuesday, May 24, 2011

Pecos Prison Blues: Investing in Immigrant Imprisonment

Protest in front of Reeves County Courthouse/Barry Dec. 2009

(Part of a continuing Border Lines series on the Reeves County Detention Center in Pecos, Texas.)

The generally favorable prospects for the private prison industry are somewhat clouded by tight state budgets that are causing state governments to reevaluate tough sentencing laws, as well as by steadily declining crime rates.

But prison investors and the private prison firms have been able to count on the federal government to keep the business of renting out prison beds thriving. A $19.7 million bond offering last year by Carlyle Capital Markets Inc. (CCMI) of Dallas on behalf of the county-owned Reeves County Detention Center in Pecos, Texas makes this clear.

Sold to private investors, the bonds were used to reconstruct and expand the West Texas prison after immigrant inmates rioted two times more than two years ago to protest the death of a fellow inmate from mistreatment and medical abuse at this 3,700-bed prison complex operated by GEO Group, the country’s second largest prison corporation. 

By way of explaining why bond buyers shouldn’t worry about the security of their investments, the bond company lays out in great detail over 28 pages in the bond offering the corrections, contracting, and budget trends that bode extremely well for investments in private incarceration. Basically, as CCMI explains that it is all about strong “market demand” and “supply.”

The bond offering states that the statistical data about the U.S. corrections system suggests:

“[L]ong term trends related to prison inmate population growth and greater acceptance of privatization of private contractions operations favor the continuation of, if not an increase in, the outsourcing of inmate and detainee bed space by the FBOP, ICE, and the USMS….”
The cited “statistical data” included in the offering includes the following:

·      *  “Approximately one in every 100 adults in the United States is currently in prison or jail, the highest incarceration/detention rate in the world.”

·      *  “The total U.S. corrections population increased more than 123% to 7.2 million over the past two decades.”
·       
*“ *"The anticipated future growth in prison populations is expected to exacerbate the current problem of overcrowding at both federal and state levels.”

·       * “According to the Bureau of Justice Statistics, as of 2007-2008, 19 states were operating at 100% or more of their institutions’ highest capacity, while facilities under the jurisdiction of FBOP alone operated at 137% of highest capacity.”

Also boding well for prison investors is the immigrant crackdown, as the bond offering enthusiastically notes, observing that immigrant prison beds have become a “significant source of demand that is expected to continue.”  The bond prospectus also points out that, according to the Bureau of Justice Statistics, “by 2007 immigration-related offenses had become the nation’s second most prevalent cause for arrests by federal agents.”

Immigrants have since the 1980s been the fastest growing population of federal prisons and detention centers. But until the mid-1990s this growth trend was driven primarily by the steady increase in immigrant detention by the Immigration and Naturalization Service and after 2003 by the newly created Immigration and Customs Enforcement agency.

However,  the hardening of federal laws regulating immigrants, both legal and illegal, during the 1990s (especially the Illegal Immigration Reform and Immigrant Responsibility Act of 1996) and the new initiatives such as Operation Streamline that created criminal consequences, namely prison, for immigration violations has  meant, that even when considered apart from ICE detainee populations, immigrants are also the fastest growing population of the BOP and USMS populations.

BOP’s inmate population rose from 58,000 inmates in 1989 to 140,000 in 2000. As the bond certificate observed, “Efforts to combat illegal drugs and illegal immigration contributed to significantly increased conviction rates.”

This trend has continued, especially with the widespread institution of a program of the Department of Homeland Security called the Secure Communities Initiative, which, according to the bond offering, “ aims to identify, incarcerate, and eventually deport after service of a sentence those illegal aliens who have been convicted of local, state, and federal crimes.”

Actually, Secure Communities throws a still wider net since, through a data-sharing and communications systems instituted by ICE, the initiative alerts ICE whenever anyone with an immigration violation is booked in local jails not when or if they are convicted. But Carlyle Capital Markets is right to underscore the fundamental role that this new federal immigration-enforcement initiative plays in driving up the number of immigrants that are being channeled into private prisons.

(Next: Rise of “Contract Confinement” of Immigrants by BOP)

Thursday, May 19, 2011

Deep in the Heart of West Texas Darkness

(Third in a continuing series on the immigrant prison business in Pecos, Texas.)

Outside prison during Jan./Feb riot/Photo by Tom Barry
Barry Friedman of Carlyle Capital Markets in Dallas once again came to the rescue in Reeves County.

Two successive riots in late 2008 and early 2009 over medical neglect by the immigrant inmates left the county-owned prison in Pecos badly damaged. The Bureau of Prisons (BOP) had removed several hundred inmates – and along with them bureau’s per diem payments. Rapidly accumulating reconstruction bills threatened not only the county’s capacity to meet its debt-servicing schedule on its outstanding prison bonds but also county’s depleted general operating fund.

While county officials fretted about the future of the community’s vaunted economic development project, Friedman went to work. No stranger to Pecos, Friedman has been involved in the prisons-for-profit project in this West Texas community since 1985.

At every step of the way – through three expansions of the Reeves County Detention Center – Friedman has arranged the funding and provided financial guidance. To keep the county and the prison from going under, Friedman has structured $170 million in revenue bond financing – known as lease-purchase bonds – to build, maintain, and expand the 3,752-bed prison for immigrants.

The Dallas-based bond broker boasts that he is “a friend of Reeves County.” Not only does Friedman count on the commissions from the bond sales, he was also hired by the county after the riots to serve as financial advisor (at $15,000 a month) – in an apparent conflict of interest -- to help Reeves sort its way out of the resulting financial crisis.

Friedman came to the community’s rescue with plan to refinance Reeve County’s existing prison debt and to sell nearly $20 million in new revenue bonds to cover prison reconstruction expenses not covered by insurance reimbursements.

Through the miracle of debt financing and speculative investment, the crises of county government and its prison complex have stabilized. Despite the debt restructuring and additional 2010 debt obligation, the county’s annual debt-service payments are only a million dollars higher – rising to $14.5 million -- than they were before the riots. Relieved to weather the immediate crisis, the Commissioners Court was unfazed that in just two years – in 2013 – it would need to pay an additional $5 million in debt serving. Nor was there any discussion of having a prison complex, whose value was estimated at $89 million after the latest expansion in 2007, with a debt of $100.5 million for the principal and a total debt-servicing burden of $135.8 million.

Under the present schedule, it won’t be until 2021 that Reeves County will retire its bond debt (if it doesn’t restructure as it has repeatedly done with past debt) and assume full ownership of the prison complex – by which time the prison will likely be substantially devalued and its BOP contracts long since expired.

A Town Dependency’s on Immigrants

It is hard to exaggerate the importance of the prison to the residents and economy of this isolated West Texas community. Expressing this utter dependence on the revenue and jobs from immigrant imprisonment, County Attorney Alva Alvarez lamented at a September 2009 county commission meeting: “Without that prison, basically, Reeves County is going under.”

The prison disturbances sparked no public discussion of the county’s responsibility to provide adequate medical care and decent conditions for the thousands of immigrants – most of whom are serving sentences for illegal reentry across the southwestern border – in their custody. Nor did the riots over prisoner abuse precipitate any reevaluation or reconsideration of the county’s prison-based economic development strategy.

At least when the prison is the issue, ethical or moral considerations simply don’t enter the discussion in Pecos. 

When talk about the Reeves County Detention Center does extend beyond issues of revenues, jobs, debt, and taxes, it is to blame the inmates. The immigrant prisoners are widely blamed for expecting too much and for costing the county too much. After all, as the logic goes, the more the county spends on the prison the less that is available for roads, education, the library, and other services -- and the more county residents have to pay in taxes.

Instead of eliciting sympathy, the prisoner protests over medical negligence and abuse at the prison stoked simmering resentments – over their expectations for medical care, dental care, affordable phone service when Reeves County residents themselves are having such a hard time making it and so many of them can’t afford the legendary American style of life.

Business as Usual

Driving across the immense nothingness to Pecos evokes a sense that you are traveling to a world apart.  It’s not exactly venturing into the heart of darkness. Yet there is an uneasy feeling of entering an unknown territory, where the unacceptable is accepted as business as usual.

It’s not this West Texas community is proud that it’s a prison town. But there is no shame either – even after the horrible death in solitary confinement (where he was placed not because of any disciplinary infraction but for medical observation) of Jesus Galindo, who suffered from severe epilepsy and was repeatedly denied proper medical treatment, that led to the first of the two prison protest riots in 2008-2009.

There is something irredeemably evil in Pecos, but hardly unique or even rare.

Virtually all the “criminal aliens” incarcerated in the county-owned prison are people of color, overwhelmingly poor Mexican men who have family members living in this country. But the pervasive apathy and absence in Pecos of any sense of responsibility about their immigrant charges are not the product, at least directly, of racism or an ethnic/cultural divide.

Several decades ago an Anglo elite ruled Reeves County. Today, though, the community is largely Hispanic, and the cast of county officials no longer routinely come from the caste of white ranchers, farmers, and oilmen that once constituted the area’s mini-oligarchy.

Seven of ten county residents are of Hispanic origin, and Hispanics are now the dominant presence in local politics. Eating out in Pecos means choosing among a half-dozen Mexican restaurants that offer the same bland fare of enchiladas and burritos. 

Pecos really isn’t that much different from most other American communities – local governments trying to balance budgets while providing needed services, people hanging on to jobs to pay the bills, the Walmart that is the town’s commercial center, a boarded-up downtown, with DVDs and cable the universal diversions.

What’s happening in Reeves County – and in three other similar criminal alien prisons in West Texas – is modern, reformed, progressive even when measured against the historic evils of penal colonies and prison farms in the South and elsewhere. The malevolence is found less in the prison conditions or treatment of individual inmates than in the bureaucracy of immigrant imprisonment.

Rules, regulations, procedures, inmate rights booklets, inspections, contracts, interagency and intergovernmental agreements, certificates, and even environmental assessments establish a framework of law and justice for the Reeves County Detention Center and the scores of other immigrant prisons. This framework lifts RCDC far above the standards that prevailed in the notorious prisons of America’s past or currently exist in the lawless prisons of Mexico – something that county residents are quick to point out.

Yet it is this very framework that enables the functioning of an immigrant penal system where justice, ethics, and decency are so starkly absent. The framework of regulations, contracts, and procedures devolves into a system where no one person or no one entity considers itself responsible. While on ugly display in Pecos, it is a system that is not native to West Texas but one that originates back east in Washington and Wall Street.

The federal bureaucracy of outsourcing immigrant prisoners, the bond financing system that allows local governments to build revenue-producing prisons, the private prison industry that enjoys the windfall of immigrant incarceration, and the processes of governance in Reeves County quickly rebounded from the shock of the immigrant protests.

The bureaucratic and financial structures that created this public-private prison enterprise and sustained it over the past 25 years quickly reassembled the building blocks for the renewed RCDC enterprise. 

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)

Tuesday, May 17, 2011

Pecos' Prison Town Blues

(The first of a series of articles on the Reeves County Detention Center in Pecos, Texas. The articles follow up my Death In Texas article in the Boston Review in November 2009.)

Pecos knows about economic ups and downs.

Abandonment and desolation prevail in this part of West Texas.

Hawks sit atop long-emptied cotton warehouses whose sheet-metal walls moan and clack in the winds that sweep sacross the high prairie.  Cotton was once king here. So, too, were cattle drives, oil and gas drilling, and the railroad.

The railroad runs through the center of town, but the Texas & Pacific Railway Station was boarded up long ago, and the trains that pass through Pecos just whistles past, leaving echoes of howling coyotes.

Since the early 1980s Pecos (seat of vast Reeves County) hasn’t experienced any major upswings. Occasional mini-booms fueled by spikes in energy prices have filled the county courthouse with agents of oil and gas speculators looking for cheap properties with possible energy reserves.

But there is scant hope that the glory days of past booms will return to Pecos. Keeping the town alive is the best that anyone here hopes for – and all those hopes are based on the jobs and revenue from the Reeves County Detention Center.

Not much has changed in Pecos since the mid-1980s when the county judge latched on the idea of tying the community’s future to America’s hardening criminal justice system and booming prison industry. Reeves County was the first Texas to tap municipal revenue bonds to build a prison with the express intent of making money.

There have been financial ups and downs – worst of all when the third expansion in 2003 to its prison complex lay unoccupied for nearly two years – but, as the county judge had predicted, imprisonment is a growth industry – a bubble pumped up by a never-ending flow of per diem payments from the government.  A speculative venture, no doubt, but one backed by the trust that our government will keep producing streams of inmates that it must outsource (since it is no longer building prisons or detention centers of its own).


No one here questions -- publicly at least -- the conventional wisdom that the Reeves County Detention Center has been good for Pecos and Reeves County. Now, 25 years after the prison opened, the people of Pecos still believe that their future is inextricably linked to the 485-acre prison that spreads out on the edge of town.

Phantom Residents

For the past three decades Reeves County has been losing population.  At the onset of the 1980s about 18,000 people made their homes here. By the 2000 census there were some five thousand fewer residents. Over the past decade the county has lost another 16% of its population – dropping to 11,062 inhabitants in 2008.

Yet even those numbers mask the actual outmigration from Pecos and the 2,642 sq.-mile Reeves County. Beginning in 1987 the federal government began shipping hundreds and later thousands of men into Pecos. Today, there are some 3,500 mostly Mexican men who reside in the Reeves County Detention Center on the edge of town.

Entering Pecos a highway sign boasts that the town has 9,000 residents. That’s true, according to census figures, but more than a third of them aren’t legal residents. They are what the Department of Homeland Security calls “criminal aliens,” who, after serving their sentences at the county-owned, privately operated prison, will be removed from the county -- and from the country.

While the precincts in Reeves County don’t count the inmate population, the congressional and state legislative districts do. The Prison Policy Institute, the Massachusetts-based prison-reform institute that opposes what it calls “prison-based gerrymandering,” says the practice violates the constitutional principle of  “One person, One vote.”

The politicians who represent Reeves County – U.S. Congressman Francisco Canseco, Texas State Senator Carlos Uresti (District 19) and Texas State Representative Pete Gallego – benefit from these phantom residents. According to the Prison Policy Institute, “When legislators claim people incarcerated in their districts are legitimate constituents, they award people who live close to the prison more of a say in government than everybody else.”
Since 2001 State Representative Harold Dutton, a Houston Democrat, has unsuccessfully championed legislation that would count state inmates from the communities they came from instead of where they are jailed.  In 2009, Dutton’s proposal failed to make it out of committee, but he intends to reintroduce the measure this year after the full census results are published.
According to a Texas Tribune article about inmate counts in political representation, the number of inmates in the state’s prison system alone is larger than the size of Dutton’s House district.
The Prison Policy Institute advocates two national solutions to the problem:
*      “Ideally, the U.S. Census Bureau would change where it counts incarcerated people. They should be counted as residents of their home — not prison — addresses. There is no time for that in 2010, but Texas should ask the Census Bureau for this change for 2020.
 *   “After the 2010 Census, the state and its local governments should, to the degree possible, count incarcerated people as residents of their home communities for redistricting purposes. Where that is not feasible, incarcerated people should be treated as providing unknown addresses instead of being used to pad the legislative districts that contain prisons.”
Institute director Peter Wagner observes that the practice of including inmates in electoral districts actually violates existing state law. The Texas Election Code defines “residence” as “domicile, that is, one's home and fixed place of habitation to which one intends to return after any temporary absence.... A person who is an inmate in a penal institution… does not, while an inmate, acquire residence at the place where the institution is located.”
Three states -- Delaware, Maryland, and New York -- have recently passed laws against prison-based gerrymandering. As the Prison Policy Institute notes, the New York Times hailed the New York law in an editorial declaring that ending prison-based gerrymandering will bring benefits to all, and calling for the new law to be emulated around the country.