A major cause of the industry’s staying power is how deeply it has woven itself into the fabric of our public institutions and channels. What follows are some of the most invisible yet effective ways that the incarceration business embeds itself in our society like a splinter under the skin.
1. Bankrolling Small Towns Eloy, Arizona is a town of 10,500 whose financial health and civic culture basically revolve around the private prison system. It’s home to four CCA facilities, all migrant detention centers, and was paid a total $9 million in construction fees by CCA to build them. That revenue went to updating the city’s waterlines, purchasing more police cars and building a new playground, according to the Huffington Post.
2. Installing Friends in High Places The revolving door between public and private correctional institutions allots the punishment industry an untold degree of influence in public policy without requiring the disclosure of public-private ties.
3. Receiving Secret Subsidies In the construction and maintenance of their facilities, private prison firms have shrewdly secured the spoils of public money normally put aside for civic development projects.
4. Using Loopholes to Avoid Taxes Last year, both the GEO Group and CCA were granted permission by the IRS to restructure themselves into REITs (real estate investment trusts), a designation that lets them escape corporate income taxes. Instead of paying a corporate income tax, REITs dish out at least 90 percent of their taxable income to individual investors in the form of dividends. Investors then have to pay ordinary income taxes on those dividends, or at least that’s what is supposed to happen. Out of fear that the real estate industry had too little actual cash on hand to pay investors, the federal government has permitted REITs to pay their investors in dubiously valued stock rather than cash since 2009.