BILL WOULD KEEP FEDERAL CASH, INMATES OUT OF PRIVATE PRISONS

Three Legislators From State Back Move To Slow Industry Growth

Legislation to slow the growth of the private prison industry
nationwide has been introduced in Congress, and three House members
from Wisconsin say they support it out of concern for community safety
and public oversight.

"Having a private prison corporation run by a board of directors or
CEO provides a very different level of accountability than that
provided by public servants where access is guaranteed," said U.S.
Rep. Tammy Baldwin, a Democrat from Madison and one of the three
supporting the effort.

Called the Public Safety Act, the legislation would prohibit the
federal Bureau of Prisons from using private prisons, and it would bar
states from using federal dollars to house inmates in such facilities.
Introduced by Rep. Ted Strickland (D-Ohio), the legislation has 108
House members listed as co-sponsors.

In Wisconsin, the federal legislation is also backed by Democratic
Reps. Gerald Kleczka and Ron Kind.

About 8,500 private prison beds are used by the federal Bureau of
Prisons for inmates - or about 2% of the total number of federal
inmates, authorities said. The federal legislation would have little
immediate impact on Wisconsin, which uses only state tax dollars for
private prison payments.

However, one privately developed prison is almost completed in
Stanley, at least one other private developer is eyeing Wisconsin, and
the possibility exists that they could seek to house federal inmates.

"I am troubled by questions regarding the quality of security and
staffing at private facilities," Kind said. "Private corrections
facilities, by nature, have profit - rather than public safety - as
their underlying motive. This encourages administrators to cut
corners, under-staff or even prolong prisoner stays. Finally, there
remains some question whether private prisons actually add rather than
reduce costs to taxpayers."

Kleczka said his "strong support" for the measure stemmed from his
belief that prisons are a fundamental responsibility of government.

Those charges have been vigorously rebutted by both Corrections
Corporation of America, the nation's largest private prison company,
and Wackenhut Corrections Corp., the second largest.

Private prisons own beds for an estimated 112,000 prisoners - enough
to house about 6% of the U.S. jail and prison population. CCA owns
about 58% of those beds.

A CCA spokeswoman said private prisons like those owned by CCA
"compare very favorably" with public prisons.

"We're not perfect," Susan Hart said. "No corrections provider is. But
if all the criticism were founded, we would not have the growth and
contract renewal rate we have."

Patrick Cannan, director of corporate relations for Wackenhut, said
his company got into the business to fill a need.

"There were federal court orders in about 30 states because those
prison systems were in trouble," he said. "Legislators were passing
laws so sentences were being extended. States needed to build prisons
very quickly, and we were able to do that."

However, state Attorney General James Doyle said Wisconsin, at least,
is known for good prisons and a sound corrections policy.

"The thought of private prisons in this state is so antithetical to
what you need for a good corrections policy," Doyle said. "Among the
very few functions that we should insist is done by the state, it
should be imprisoning other human beings. . . . It is the ultimate
exercise of authority by the state to say you have violated our laws
and we are now going to punish you by imprisoning you, and it should
be the state that in fact, then, imprisons people."

Two major federal government-sponsored studies on the industry in
recent years reached no definitive conclusions on the effectiveness of
private prisons.

Current data does not provide "strong evidence" of any general pattern
regarding costs and savings to states that use private prison beds,
according to a July 1998 study done for the federal Bureau of Prisons.
Likewise, the study said, no conclusions could be drawn about whether
services are better in the private or public sector. A 1996 General
Accounting Office study came to similar conclusions.

Many of the problems private prisons are having stem from experienced
inmates being rapidly thrown into a facility with inexperienced
correctional officers, said Richard Crane, an attorney who specializes
in helping states write contracts with private prison companies.

Crane, who was general counsel for CCA until 1987, said he is in favor
of prison privatization as long as there is strong regulatory control
written into competitive contracts.

Private prison companies also are under pressure from something that
could not be imagined with traditional prisons: the stock market.

"I read a financial article where some analyst said CCA's problem was
they're not ramping up fast enough." Crane said. "I felt like saying,
'Who the hell are you? All you know is money.' We're talking about
safety and security. The market wants to see these tremendous gains
every three months, and I think that has been a real detriment to
these private companies to be under that gun. They have this huge
conflict. One is to the stockholders who want to see this growth, and
the other is to the clients - the state."

The market value of publicly traded stock in both Wackenhut and Prison
Reality Trust - the publicly traded affiliate of CCA - is at an
all-time low, according to James R. McDonald, an investment research
analyst who specializes in private prison companies. A reorganization
of CCA about a year ago and bad publicity about problems in private
prisons have affected the stock market, he said.

However, he stressed, neither company is in danger of going
under.

"My fundamental belief is that this is a growth industry," said
McDonald, who works for First Analysis in Chicago.