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André Douglas Pond Cummings

For Complete Article See: André Douglas Pond Cummings, all Eyez on Me: America's War on Drugs and the Prison-industrial Complex, 15 Journal of Gender, Race and Justice 541 (Spring 2012) (152 Footnotes)

 

To answer the Why? question regarding the motivations behind the massive increase in incarcerated Americans, while crime rates are dropping precipitously, one must examine the underlying policies, structures, conflicts, and institutions that support the prison system in the United States. This analysis suggests that several constituencies benefit significantly from mass incarceration. One constituency consists of those who profit handsomely from an increase in American imprisonment. Another constituency includes those who gain power or electoral advantage from massively incarcerating Americans. This Part reviews corporate profiteers and political expediency as motivations underlying the prison-industrial complex.


A. Corporate Profiteering

The foundational tenet in U.S. corporate law is that a corporation exists to maximize the profits of its shareholders. Leaders of a corporation who fail to effectively enrich its shareholders can be held to violate management duties and responsibilities, and they may be court-ordered to increase profit payout to stakeholders.

A corporation is viewed as a fictional person under the law and as such, has the right to sue and be sued . . . . Of course, as a fictional person, the corporation cannot function without human management, so corporate law provides a management mechanism of shareholder ownership of a corporation with voting rights, an elected Board of Directors oversight regime where shareholders elect board members, and day-to-day business management by executives selected by the overseeing board. The CEO is the primary leader of the corporation and is tasked with managing the daily operations and also typically sits on the Board of Directors.

The Board of Directors, along with the day-to-day executives of the corporation, is responsible for achieving the corporation's ultimate objective--maximizing shareholder profit. With this basic principle in mind, it is critical to acknowledge that what was once a purely public responsibility, the incarceration of criminals in the United States, has given way to the corporatization and privatization trend of the U.S. prison regime. Privatizing imprisonment has proven to be enormously problematic in several under-the-radar ways.

First, the Board of Directors of a prison-building corporation is duty-bound to seek ways to increase its profit streams. One of the ways that a prison construction company can increase its profits is to win government contracts to build more and more prisons. Increasing incarceration rates in the United States have therefore become a corporate profit objective through the privatization of the prison system. In a recent annual filing, a publicly traded prison company, the Corrections Corporation of America (CCA) unabashedly described the climate and outlook for prison business going forward and provided a blueprint for increasing shareholder profit:

The significant expansion of the prison population in the United States has led to overcrowding in the federal and state prison systems, providing us with opportunities for growth . . . . We believe the long-term growth opportunities of our business remain very attractive as insufficient bed development by our customers should result in a return to the supply and demand imbalance that has been benefiting the private prison industry.

This CCA forward-looking projection came from management, who filed the annual statement with the Securities and Exchange Commission and then delivered it to shareholders. Seeing forward-looking profit statements in annual reports to shareholders from public companies that manufacture products or provide consumer services is a straightforward proposition. However, reading profit statements to shareholders from private prison construction and management companies like the one above, which must necessarily base their entire potential profit regime on a steady stream of clients (i.e., U.S. citizens sentenced to hard prison time), is an altogether different construction. The law requires private prison company management to maximize profits for shareholders, and a private prison corporation's most direct way to increase shareholder profit is to ensure that demand for its services (prison beds) increases. To expand profit, corporate management of private prison companies must hope for, even work for, an increase in the number of human beings incarcerated in the United States. Indeed, this work has been handsomely rewarded in recent years; reports issued in 2011 indicate that the two largest private prison companies, CCA and GEO Group (formerly Wackenhunt Corrections Corporation), together profited more than $2.9 billion in 2010. The question then becomes, how exactly do private prison corporations work for an increase in the number of persons incarcerated in the United States?

To increase profits at the rate indicated, private prison corporations hire lobbyists to increase prison populations and prison construction. The thought that the boards of directors of prison companies are hiring lobbying firms to assist them in privatizing public prisons and increasing prisoner populations is a terribly disturbing conceptualization. Lobbying to increase the stream of prisoners and lobbying for untethered, harsher sentencing regimes is not just unseemly, but inhumane, which leads to another hidden problem of prison privatization. Second, for the CEO who heads a private prison company, one seemingly appropriate action to increase profit for shareholders is to lobby state and federal legislatures to increase prison construction and, by implication, increase the flow of clients--prisoners--into the prison system. The amount of private prison company money spent on lobbying efforts has become dizzying. CCA spent more than $3 million on federal lobbying in 2005. The largest U.S. private prison companies together have spent dozens of millions of dollars lobbying both state and federal legislators since the origin of the U.S. private prison corporation.

Private prison lobbyists advocate on behalf of harsh legislative initiatives that would increase the number of individuals sentenced to prison. Because private prisons make money from putting people behind bars, their lobbying efforts focus on bills that affect incarceration and law enforcement, such as appropriations for corrections and detention. In addition, prison lobbyists battle for greater appropriations in expenditures in law enforcement and Homeland Security (border patrol), stricter immigration laws, and increased immigration detention. They also peddle influence with lawmakers who will implement draconian incarceration policies like the recent Arizona immigration legislation, titled The Support Our Law Enforcement and Safe Neighborhoods Act (SB 1070). Emerging reports indicate that private prison lobbyists literally drafted the legislation that became SB 1070, as the legislation introduced into the Arizona legislature was identical to the proposed bill language that emerged from prison lobby meetings with Arizona elected representatives.

Further, private corporations are free to make campaign contributions, and the private prison lobby contributes generously. In light of Citizens United v. Federal Election Commission, the private prison corporation's campaign contributions can now be made directly and in an unfettered manner, straight from the private prison company coffers into the hands of the federal and state legislators whom they hope to influence. The private prison companies allocate millions of dollars in campaign contributions to mostly incumbent politicians, seeking to garner influence in the legislative process, to continue privatizing the prison regime in the United States, and to receive favorable contracts for private prison construction.

Third, Wall Street banks and investors profit dramatically from the prison-industrial complex. Prison-construction bonds, often offered as revenue bonds, are one of the many sources of profitable investment for leading Wall Street financiers such as Merrill Lynch and Goldman Sachs. Tax-exempt bonds sold to underwrite new prison construction bring more than $2.3 billion in profit to Wall Street investment banks. Investment firms such as Morgan Stanley and Goldman Sachs form syndicates to buy the [prison] bonds at a discount, then resell them. Retailers market the bonds as safe long-term investments to consumers. Forbes magazine touts prison bonds as a smart and safe investment for investors looking for long-term financial security and excellent profit potential.

The corporatization of the prison system in the United States has perversely incentivized public corporations and Wall Street to work for mass incarceration and against prison reform and rehabilitation. The prison-industrial complex has simply become a cash cow for private prison corporations and Wall Street investment banks. Investors have a new stream of income opportunity through either purchasing public shares in a private prison company or purchasing bonds through Wall Street banks with little risk of default based on the funky lease-back strategy employed by states financing prison construction through prison bonds. Thirty years ago, investing in private prison companies was not an option. Additionally, Wall Street banks were not in a position to profit massively from prison construction. In the intervening decades, imprisoning U.S. citizens has morphed into a significant growth industry and profit stream.

Beyond the growth industry and profit stream, Professors Alexander, Richard Wilkinson, and Kate Pickett interrogate darker forces at work in the prison-industrial complex. The U.S. prison-industrial complex is reliant first and foremost on political decisions to address drug abuse from a criminal sanctions perspective rather than a health and addiction perspective. In order to control political and economic power, legislators turn drug use and abuse in the United States into an oligarchy of labor power wherein whites (corporate executives and shareholders) gain wealth while the system not only marginalizes minorities, but also indentures them as prison labor. As Alexander so deftly notes in The New Jim Crow, even when African-American and Latino inmates are released from prison, they are so far removed from the legitimate labor market that they are almost driven back into the drug markets or illegitimate labor markets and returned nearly inevitably to prison, through parole violations or new drug crimes. Our current prison regime in the United States therefore maintains political and economic control by keeping black and brown men powerless while simultaneously allowing prison corporations to maintain a steady client base and consequently to increase profit margins.


B. Political Expediency

Professor Bernard Harcourt, in his The Illusion of Free Markets: Punishment and the Myth of Natural Order, elegantly describes the political expediency in massively incarcerating poor individuals and the subtle connection between free-market advocacy and mass incarceration. Extrapolating from Harcourt, the War on Drugs is nothing more than a policy that fits seamlessly into a long global tradition of governments harshly imprisoning individuals while simultaneously freeing economic markets from regulation. Harcourt's The Illusion of Free Markets disabuses the notion that markets are free, as he demonstrates that capital markets require a significant degree of state and federal assistance --a fact that free-market fundamentalists conveniently ignore. Historically, across the world, nations that have emphasized unfettered markets, through working to preserve them or free them from regulation and oversight, have concurrently imposed upon their citizens harsh punishment regimes that increase imprisonment rates exponentially. It is as if the governing elite acknowledge that unfettered markets work to enrich the entrenched, while government-imposed incarceration both imprisons the society drag, and at the same time diverts the public attention away from the enriched entrenched and focuses it upon the incarcerated masses.

Harcourt's thesis is that governing elites rely upon notions of natural order in advocating for free markets while simultaneously using the construct of natural order to propound mass incarceration. If this is accurate, then the U.S. electoral and drug policy that began in the 1970s fits perfectly into this thesis Alexander described in The New Jim Crow. As incarceration rates exploded over the past two decades, politicians vigorously pursued efforts to deregulate the U.S. capital markets.

In the 1970s, Richard Nixon and his staff settled upon the Southern Strategy as an avenue to win elections and to perpetuate the United States's sordid racial past, including slavery and Jim Crow. By politically dividing blacks and poor southern whites purposely, Nixon began to forge a new Republican strategy that perseveres today. The division, coming upon the heels of the Civil Rights Act of 1964, began to use racial coding to subordinate African-American interests rather than the racist construction used in the Jim Crow era.

Racial coding has a long tradition in the United States. That it persists in the purportedly post-racial Obama era belies the very positioning of post-racialism and post-racialists. Racial coding entails engaging issues such as crime and welfare are now widely viewed as coded issues that play upon race--or more centrally, upon white Americans' negative views of black Americans--without explicitly raising the race card. By embracing coded issues, politicians and pundits are able to exploit white American's racial animosity and resentment toward minority Americans while diminishing the appearance of race hatred or race baiting.

Thus, in this new era of racial coding, politicians continue to paint African-Americans as undeserving recipients of welfare (the welfare queen), undeserving of mercy (Willie Horton ad), undeserving of education (backlash against affirmative action), undeserving of the right to vote (felon disenfranchisement and voting discrimination against the poor), and more deserving of prison than freedom (the crack epidemic and mandatory sentencing). This racial coding captured America's imagination and became the dominant political fascination of the country. Political figureheads primarily perpetuated these nefarious concepts, particularly Presidents Reagan, Bush, and Clinton, each of whom were intent on winning elections and simultaneously freeing the capital markets.

Fitting exactly into Harcourt's thesis and dating back to when legislatures punished crack cocaine offenses one hundred times more than powder cocaine, U.S. politicians have scrambled to win the title of toughest on crime. Meanwhile, these politicians voted often and repeatedly to deregulate the U.S. capital markets. When political power and entrenchment become intertwined with mass incarceration, the outcome is an increasing stream of prisoners, with little consideration given to reform or rehabilitation.

Conflict theory, or more accurately, conflict criminology as expanded in the 1970s by sociologists Austin Turk and William Chambliss among others, provides context for Harcourt's historical observations. Turk and Chambliss argue that those in power work diligently to maintain and increase their power by creating laws and policies that criminalize the powerless in order to ensure that the disaffected are unable to gain power. Alexander theorizes that the federalization and criminalization of the drug war was simply an instinctive response from the powerfully entrenched to the political gains that people of color made through the Civil Rights Movement in the 1960s. Harcourt theorizes that when elites in power work to maintain their influence and wealth (through rigged capital markets), the instinctive corollary is to develop ways to criminalize the powerless, all in order to maintain wealth, influence, and position. Simply stated, the War on Drugs perpetuates subordination of minority Americans, while it simultaneously enriches and protects the power of the elite.

 

. Tupac Shakur, All Eyez on Me, on All Eyez on Me (Death Row Records/Interscope Records 1996) (The Feds is watchin', n****z plottin' to get me; Will I survive, will I die?, Come on, let's picture the possibility; Givin' me charges, lawyers makin' a grip; I told the judge I was raised wrong, and that's why I blaze shit.).

[a1] . Associate Dean for Academic Affairs and Professor of Law, Indiana Tech Law School; former Professor of Law, West Virginia University College of Law (2003-2012); J.D., Howard University School of Law.

Vernellia R. Randall
Founder and Editor
Professor Emerita of Law
The University of Dayton School of Law

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